Q3 / 2019 Modern Lifestyle Products€¦ · distributors offering a combined 6000 +/- B2B reps...

CORPORATE PRESENTATION

Q3 / 2019

Modern Lifestyle Products

©2019 FYTO BRANDS International 2

Information contained in this presentation is the property of FYTO BRANDS International Inc. (“FYTO BRANDS International” or the “Company”). This presentation does not constitute, or form part

of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company, nor shall it, or the fact of its communication, form the basis of, or

be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever with respect to such securities. The communication of this presentation in or to

persons in certain jurisdictions may be restricted by law and persons who may receive communication of this presentation should inform themselves about, and observe, any such restrictions in

advance of communication to them of this presentation. No securities exchange or affiliated service provider has reviewed or accepts responsibility for the adequacy or accuracy of the content of

this presentation.

The material contained in this presentation is provided solely for your general knowledge and is not intended to be a comprehensive review of all matters and developments concerning

FYTO BRANDS International or its affiliates. The Company has taken all reasonable care in producing the information contained in this presentation. This information may contain technical or other

inaccuracies, omissions, or typographical errors, for which FYTO BRANDS International assumes no responsibility. FYTO BRANDS International makes no representation or warranty regarding,

and assumes no responsibility for, the use, validity, accuracy, completeness, reliability or currency of any claims, statements or information in this presentation.

To the extent permitted by law, FYTO BRANDS International and its employees, agents, affiliates and consultants exclude all liability for any loss or damage arising from the use of, or reliance on,

any such information, whether or not caused by any negligent act or omission. Statements in this presentation other than purely historical information, including statements relating to

FYTO BRANDS International future plans, objectives or expected results, constitute forward-looking statements within the meaning of the U.S. federal and Canadian securities laws. Forward-

looking statements are based on numerous assumptions and are subject to the risks and uncertainties inherent in FYTO BRANDS International business, including risks inherent in early to

development stage start-up ventures. These may include the state of the legal cannabis sector, global market conditions, the ability of the Company to identify and acquire key assets, the nature of

potential business acquisitions, the ability of the Company to secure product distribution agreements, capital expenditures, successful development of technologies, products and trademarks,

currency fluctuations, government policy and regulation, geopolitical uncertainty and environmental regulation. As a result, actual results may vary materially from those described in the forward-

looking statements. FYTO BRANDS International disclaims any obligation to update any forward-looking statements.

This presentation was prepared to assist interested parties in making their own assessment of FYTO BRANDS International and its business plans and does not purport to contain all of the

information that a prospective investor may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company, its assets and the information provided in

this presentation. Any and all statements, forecasts, projections and estimates contained in this presentation are based on management’s current knowledge and no representation or warranty is

made as to their accuracy and/or reliability.


H I G H L I G H T SFYTO BRANDS INTERNATIONAL was founded to

become the global leader in the development, marketing

and distribution of scientifically formulated, CBD-infused

functional beverages, wellness and dietary supplements.B U S I N E S S M O D E L :

Lifestyle Branded Products distributed B2B Wholesale & B2C Retail.

Currently generating recurring revenues.

M U L T I - D I S T R I B U T I O N C H A N N E L S :

Beverages & Lifestyle products:

• Office Coffee Service (OCS) Operators distribute to workplace end-

users either directly or online.

• Distribution Network: wholesalers to retail operators,

• Online B2C.

F I R S T T O M A R K E T

Distributed beverages, wellness products and supplements initially

targeting corporate, institutional, and Consumer Package Goods

(CPG) markets.

O C S B E V E R A G E D I S T R I B U T I O N

Channel market through a network of OCS operators (there are

approximately 2,300 OCS operators throughout North America supplying

3.5 million breakrooms with access to 157 million employees*). *statista.com

R E T A I L D I S T R I B U T I O N

Wholesale distributers to retail consumers alongside brand recognition

marketing efforts.

O N L I N E D I S T R I B U T I O N

Available direct to consumers, as well as wholesale and retail markets

FYTO BRANDS INTERNATIONAL IS…

FOCUSED ON CBD infused product development and distribution. Our proprietary IP

innovation is consolidated under an integrated ‘house of brands’ marketing concept

using a dual channel sales strategy; selling into the Office Coffee Services (OCS)

sector plus mainstream retail & grocery channels.

ALREADY REVENUE-POSITIVE with established nationwide base of high profile

distributors offering a combined 6000 +/- B2B reps pitching our product lineup and

supported by corporate territory reps.

DEPLOYING NANO BEVERAGE TECHNOLOGY for formulation of new products

and private label offerings. Technology licensing structure provides multi-year

revenues multiplied by potential for numerous simultaneous agreements.

LEVERAGING OUR CURRENT MANUFACTURING FACILITIES and established

access to other key manufacturing assets. Established global distribution channels

from North America to Europe.


F E AT U R E S

Significant product

differentiation.

Transparent supply chain promotes

corporate responsibility.

Similar to existing non-CBD products

but with higher margins.

Attracts new users and creates

customer loyalty opportunities.

Contemporary appeal

to millennial workforce.

Ability to extend new segments based

on enhanced formulations, perceived

culture and cost.

Product positioning aligned with

innovative culture.

Capability to pivot and rapidly

introduce new brands subject

to trend data.


G L O B A L

S T R AT E G YWorkplace to Retail

Wholesale & Online


CBD products target entire wholesale segments long

dominated by major players.

Office Coffee Services (OCS) is a less well known, high

margin distribution network able to introduce new products

into consumer workspaces.

Interest in health and wellness products growing exponentially.

CBD infused sector is a prospective high growth vertical

segment.

Beverage and Wellness distribution systems are well

established and open to new and profitable offerings.

Retail global distribution is increasingly aware and eager for

new segment offerings.

Direct-to-Consumer (DTC) and Online distribution have

proven impact in key cannabis-friendly markets.


OCS Market(Office Coffee Services)

Source: Office Coffee Service operator numbers in the table above are based on internal company

estimates derived from a collaborative effort between NCBD and executive staff at the National

Automated Merchandising Association (NAMA)

Category # of CompaniesTotal Machines

on Location

$ Volume

in Category% of Market

A 5 750,000 $1,020,000,000 25%

B 25 420,000 $720,000,000 16%

C 70 680,000 $900,000,000 19%

D 400 680,000 $900,000,000 19%

E 500 400,000 $480,000,000 10%

F 1300 600,000 $720,000,000 15%

TOTAL 2,310 3,530,000 $4,740,000,000 100%

OFFICE COFFEE SERVICES (DEFINED)

OCS operators in the USA derive greater

than 51% of their revenues from the sale of

coffee and related beverages. These

operators supply 3.53 million office break

rooms in the USA.



O U R O C S

C L I E N T S

Management has proven experience working with

and introducing OCS channel market beverages

to and through a number of key organizations

Office Coffee Services (OCS) Distributors

FYTO BRANDS International is already working

or in discussions with all the above.


Total Market Potential2,495,000± breakrooms (125± million employees)

FYTO BRANDS International Year 5 Projection73,000± breakrooms (3.6± million employees)

NON-ENTERPRISE

OPERATORS 1,770,000± breakrooms,

(88.5± million employees)

COMPASS GROUP300,000± breakrooms

(15± million employees)

ARAMARK191,000± breakrooms


STAPLES107,000± breakrooms


DS SERVICES127,000± breakrooms


OCS MARKET POTENTIAL

* Office Coffee Service operator numbers based on estimates derived from National Automated Merchandising Association (NAMA)


Launch and Initial Focus: OCS markets, Micro Markets, Pantry, Vending

Concurrent Distribution: Wholesale to Retail Outlets

Long Term Goal: Home Delivery And Online

D I S T R I B U T I O N O V E R V I E W

Current OCS operator’s micro market locations ($3.3 billion in sales in

2018 with 23,681 locations)

USG co-op > 11,000 micro market locations

North American and UK inside sales division for OCS and retail market

Fully licensed and approved global distribution channels

Online markets to grow and maintain significant revenue opportunities

through advanced online marketing and direct-to-consumer sales..

Retail demand increases exponentially as a result of workplace and

vending markets.

Co-promotion online platforms with established vendors

Chain and Independent Health Food Stores

Grocery Stores

Convenience Stores

Drug Stores

Mass Retail

Online Sales

O C S M AR K E T S AN D B E Y O N D


US Launch (Phase One)

Sales and Distribution

Initial Launch Territories

Phase 1 Sales Representatives

CBD Friendly Market Launch Phase 1


Activated Nano works with manufacturers of

infused CBD products to create next generation

brand leaders.

We supply activated ingredients in water-based formulas through

licensed producers in Canada and the United States to manufactures

legally operating in the industry. Our products are CBD, THC, and

Whole Plant Oil based. They can be tailored to any application by

our staff of scientists and technicians.

Revenue generating with exclusive licensing agreements.

The Challenge: CBD product taste and delivery

The Solution: Nano Emulsions

Created in the

pharmaceutical industry

for enhanced delivery of

intravenous drugs.

Food grade nano

emulsions improve

digestibility, offer efficient

encapsulation, increased

bioavailability and

targeted delivery

Exceptional properties such

as high surface area,

transparent appearance

and robust stability.

Our TechnologyPowering the Next Generation of CBD Infused Products

CBD Drinks Confront a Serious Buzz Kill—They Taste Terrible

Small startup companies tinker with ways to dial down ‘oily grass’ flavors and related

undesired notes.

Traditional orally delivered cannabinoids take long to absorb (2hr+) and are poorly

bioavailable (2-10%).

DOSAGE CONTROL is essential


Water Based CBD Benefits

Stability

One of the largest challenges facing producers of

infused beverages is oil separation. In our ingredients

the oil is wholly encapsulated making it compatible with

water. Due to a variety of factors, the strength of our

encapsulation does not diminish over time.

Power

Activated formulas are at least 2.5 times more effective

than the same amount of refined cannabis oil. Making oil

compatible with water makes it fundamentally more

compatible with the human body. So less oil does more,

saving money and improving results.

Flexibility

Our formulas mix as naturally as milk into coffee.

No longer do you need to battle to get even distribution.

Just mix gently into the liquids you are using in your

products and you can be confident that distribution is

perfectly even.

Predictability

Modern consumers want to be in control of their

experience. Activated Nano infused products provide

consistent experiences from use to use. Predictability

breeds brand loyalty.

Speed

With formulas that act in as little as 3 minutes, there is

no other infused CBD technology that offers a speed

approaching traditional smoking. Activated Nano infused

products provide a situationally responsive method of

consumption that is entirely new.

Precision

Due to the enhanced predictability and efficacy of

Activated Nano’s formulas, micro-dosing and other

precision driven uses of CBD have never been more

practical or attainable to consumers.

For Manufacturers For Consumers


M A N U F A C T U R I N G

Facilities in California and Nevada

Aim to Meet Production Demands

Award-winning suppliers with secured access to highest quality botanical

and phytoceutical ingredients sourced directly from growers in 27 countries. Includes

award-winning organic teas, herbs, medicinal blends and related raw ingredients,

combined with custom formulation capabilities and state-of-the-art blending facilities.

Near term use of high efficiency manufacturing facilities in the US are positioned to

cost effectively supply finished goods under licensing agreements to UK/EU partners.

Our national sales and distribution structure allows us to

readily scale operations by leveraging proprietary and/or

acquired brand options.

The Company has proven its ability to execute the

development and distribution of consumer brands in

mainstream channels, which will serve as the roadmap of

its global CBD strategy.

Scientifically advanced CBD products designed for modern lifestyles

Our Brands

High growth beverage segment,

existing national clients, multiple

products, OCS strategy.

Health & Wellness sector,

existing clients, healthy,

nutritional, multiple products,

distributor/reseller friendly.

Powered by:Science-based CBD product development,

growing client list, national reach, ability to

infuse CBD into multiple products and

segments, delivers excellent margins.


Revenue Positive TEAJA Poised for CBD Boost

Now preparing to launch with Cannabidiol (CBD) and adaptogen powders.

TEAJA is currently working with all four of the largest OCS operators

including Canteen, Aramark, First Choice and DS Services to distribute

our loose leaf tea products to their clients which have access to over

725,000 breakrooms.

TEAJA has a national agreement with Staples USA (2,500 reps). TEAJA

Office products are now available on Staples.com,

Staplesadvantage.com and Quill.com. In addition, TEAJA has a national

agreement with Office Depot (1,700 reps) and their subsidiary Grand

and Toy across Canada. We are also working with W.B. Mason (800

reps) to create a marketing program.

TEAJA has shipped over 7500 Experience Kits representing a

975% placement growth in 26 months into leading global

brands such as LinkedIn, Shopify, Samsung, Uber,

Salesforce.com, SAP, Spotify, Netflix, Showtime, Tinder, Twitter,

Electronic Arts, Pokémon, Groupon, Nintendo, Mozilla, Raymond

James and Wayfair.


Products in Advanced Stage of Development

Single portion pyramid bags.

Single portion tea based adaptogen powders.

Hemp derived Cannabidiol (CBD) infused tea based

powder offerings.

With the impending approval of the 2018 Farm Bill in the USA,

hemp will no longer be considered a controlled substance

which will allow CBD’s to be sold legally in all 50 states.

Alcoholic beverage giant Constellation Brands is investing $4

billion in the marijuana and CBD company, Canopy Growth to

participate in this sector. Other major brands are also looking

to invest. Heineken is also producing a CBD infused beer.


VAYU is a line of phytonutritional dietary

supplements based on traditional methods

of using plants to rejuvenate, heal and restore

the body to its optimum performance.

Licensed by Health Canada as Natural Health Products,

and available in the US as dietary supplements

All ingredients are grown without the use of chemical fertilizers

and toxic pesticides

Non-GMO, gluten free, dairy free, vegan, and Kosher certified

Certified Organic tea base ingredients which are highly soluble for optimum

bioavailability

Pre-launched with LOI’s ranging from wellness spas to retail


VAYU offers a complete innovative

solution for providing phytonutrient

and mineral supplements.

Elegant and convenient displays for in-spa / in-clinic use

Attractive, sustainable retail packaging with sleek, high-end boxes

A selection of 6 products plus a variety pack

Each box is labeled with benefits, ingredients and usage instructions

Sales support across North America


*Mordor Intelligence Report Sept. 2018

**Brightfield Group market report Sept 2018

***Zion Market Research 2017 Forecast, 2016 - 2022

T H E C B D M A R K E T

The global cannabis beverages market,

valued at approximately USD 1.61 billion in 2018

is expected to generate around USD 4.6 billion

by 2025at a CAGR of approximately

15.6% between 2019 and 2025.**

The 2018 Farm Bill paved the way for

the emerging CBD industry, from beverages

to beauty products, and the market potential

has become substantial.

The North American functional beverages

market is expected to grow at a CAGR of

7.86% in the next 5 years and reach USD

68.8 billion by the end of 2023.*

The emerging North American CBD market was estimated in

2018 at USD 591 million. With new regulations taking effect

throughout the continent, the North American CBD market is

expected to surpass the marijuana market, grow nearly 40

times and hit USD 22 billion by 2022.**

Future Target Market(under consideration)

Global Sports Nutrition

Est. $28.37 billion by 2022***


I N D U S T R Y I N V E S T M E N T S

Aurora Cannabis (ACB-TSX) & Alcanna (CLIQ-TSX)

In February 2018 Aurora announced an investment of CAD 103.5 million

for 19.9% stake in Alcanna with option to increase to 40%.

Molson Coors (TAP-NYSE) & Hydropothecary (HEXO-TSX)

In October 2018 Molson Coors Canada and HEXO formed a joint venture,

Truss, to develop non-alcoholic, cannabis-infused beverages for the

Canadian market following legalization.

Constellation Brands (STZ-NYSE) & Canopy (WEED-TSX)

In August 2018 Constellation Brands announced a USD 4 billion increase stake

in Canopy (up to 50%). The first investment was USD 245 million for 9.9%stake.

The current US opportunity is estimated at USD 50 billion. The global opportunity

is estimated to reach USD 227 billion by 2032.

Cronos Group (CRON-NASDAQ) & Altria (MO-NYSE)

In December 2018 Cronos Group announced an investment of CAD 2.4 billion from

the Altria Group which gives Altria a 45% stake in the company, with option to

increase up to 55%.

NOTABLE SECTOR INVESTMENTS


S U M M A RY

CONCEPT KEY DRIVERS PROJECTED OUTCOME

First of its kind beverage marketer targets

robust vertical segments

Subsequent adoption leverages

introduction to broader markets

Initial marketing delivers wide interest

and access to nationwide retail sales

Unique lifestyle & wellness products

infused with CBD

Innovative distribution via

workplace & lifestyle introduction

Partnerships with OCS marketing

organizations hungry for innovative products

Enthusiastic adoption

Rapid manufacturing and deployment

Year-over-year sales growth

Thank YouFYTO BRANDS INTERNATIONAL INC.

2710 - 200 GRANVILLE ST.

VANCOUVER, BC V6C 1S4

[email protected]

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