Ahwdrate®

Ahwdrate® FINALLY, NATURAL TASTES GREAT March 17, 2016 - CONFIDENTIAL MATERIALS THIS PRESENTATION IS CONFIDENTIAL. IT CONTAINS CONFIDENTIAL INFORMATION REGARDING E-HYDRATE, AND NO PORTION OF THIS PRESENTATION MAY BE DISSEMINATED, COPIED, TRANSMITTED OR DISCLOSED TO ANY THIRD PARTY OR USED BY THE INTENDED RECIPIENT FOR ANY PURPOSE OTHER THAN AS A BASIS FOR DISCUSSION BETWEEN RECIPIENT AND E-HYDRATE. THIS PRESENTATION DOES NOT INCLUDE ANY DISCUSSION Cf ANY RISK OR QUALIFICATION THAT SHOULD BE CONSIDERED WITH RESPECT TO THE INFORMATION CONTAINED HEREIN AND IS NOT A GUARANTEE OR ASSURANCE OF PERFORMANCE OR ANY INDICATION OF THE ECONOMIC OR OPERATIONAL PERFORMANCE OF &HYDRATE OR ANY PROJECT. NEITHER DOES THIS PRESENTATION ADDRESS THE LEGAL, FINANCIAL AND OPERATIONAL RISKS AND PARMETERS OF E-HYDRATE OR ANY SUCH PROJECT. WITHOUT LIMITING ANY OF THE FOREGOING, THIS PRESENTATION IS PROVIDED FOR CONVENIENCE ONLY AND RECIPIENT SHALL BE RESPONSIBLE FOR ITS OWN REVIEW AND PROJECTIONS. AND MAY NOT RELY ON ANY PART OF THIS PRESENTATION IN FORMULATING ITS DECISIONS OR ACTIONS. PROJECTIONS NECESSARILY ARE BASED UPON NUMEROUS ESTIMATES AND ASSUMPTIONS INCLUDING PARTICULARLY THAT E-HYDRATE WILL SUCCESSFULLY EXECUTE ITS BUSINESS PLAN ON A TIMELY BASIS AND ON REPRESENTATIONS REGARDING E-HYDRATE MADE TO E-HYDRATE BY THIRD PARTIES. THESE ESTIMATES AND ASSUMPTIONS ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES, CONTINGENCIES AND RISKS, MANY OF WHICH ME BEYOND E-HYDRATE'S CONTROL. ACTUAL RESULTS WILL VARY FROM THE PROJECTIONS, AND THESE VARIATIONS ARE LIKELY TO BE MATERIAL, AS FINANCIAL PROJECTIONS ARE NECESSARILY SPECULATIVE IN NATURE. YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION OR AS STATED IN THE PROJECTIONS EFTA01100156 E-hydrate Founders Dan Adler Focus: Business Development Joshua Shirk Focus: Product Development Vaughn Juares Focus: Marketing Strategy Dan Adler • Former VP Creative Development. Walt Disney Imagineering • Former CAAAgent / Executive CAA (Creative Artists Agency). Hollywood's Top Talent and Entertainment Business Firm • Built and launched CAA's New Media Department. Dating back to 1991 • Served as Managing Director of famed One Laptop Per Child's initiatives in Israel. • Served on California Film Commission as appointee of Gov. Arnold Schwarzenegger Joshua Shirk • A decade of product development, design and formulation experience • Personally developed dozens of innovative vitamin supplements and natural performance-enhancing consumable products • Strong relationships with major retailers and distributors in all channels of retail. big box. convenience, grocery, pharmacy • Former CEO / founder of health supplements company which reached 20.000 points of retail within first 18 months of business Vaughn Juares • Co-owner of 4 patents for social media content technologies and algorithms for social recommendation and syndication of content • Founder of SER International ad agency which serviced over 40% of all Spanish' language music releases for all major labels in North America by 2003 • Developed and oversaw execution of Mom Brands' (ready to eat cereal) retail launch in to mass big box retail • became most-selling item by weight in Walmart nationwide built active following of 1.000.000 + in less than 6 months • Former Executive Creative Director of North Woods Advertising M NOW ON THIS IS NATURAL FiYDRATION I hydrate /lark 5% of our profits are donated to benefit veterans through IAVA EFTA01100157 Notable E-hydrate Team Members Phil Kent Bill Nicholson Phil Kent • Former CEO of Turner Broadcasting System. Inc.. Responsible for ALL Turner Media Properties including. CNN Worldwide. TBS. TNT. Turner Classic Movies. Boomerang. CNN Headline News. CNN International. among others • Former CAA Agent (Hollywood's Top Talent and Entertainment Business Firm) • Recognized as a Top Media and Business Development Strategist Bill Nicholson • Founder of ldeasphere. owners of TWINLABS. CPG Nutrition / Supplements • Former COO of Amway • Led Amway Business in to Multiple Billions of Dollars with Worldwide Expansion • Cabinet Advisor to President G. Ford • Cofounder of Successful Ventures with Anthony Robbins. Rob Lowe. etc. Sofia Vergara Sofia Vergara • Star of ABC hit television program •Modern Family' (Currently Top 5 in TV Ratings) • 37th Most Powerful Woman in the World as Rated by Forbes List 2014 • Among the Most-Recognizable People in the World with Mass Market Appeal • Captures Attention of General and Hispanic Markets in North America • Commands a Social Media Footprint of Nearly 250.000.000 Users (via LWE) • Aspirational Role Model and Trend-Setter Especially Among Females 34 55 EFTA01100158 Why E-hydrate is Different hydrate ..... PRO1 LIN PROTEIN it Oft I ON-THE.Go I gig is E-hydrates Patent•Pending RIM Pouch VIII Inventive Innovative Package Protein On-the-Go comes in the world's most innovative ready-to-mix pouch — just add water. E-hydrates one-of-a-kind single-use packaging is easy to understand and for consumers to get excited about with little education. Natural Tastes Great Consumers are demanding healthier products like E-hydrate whldi are natural AND taste great E-hydrate products are a great alternative for everyday consumers who want to enjoy the foods and supplements they consume. a Electrolytes In Every Product E-hydrates product lines all provide more electrolytes than leading sports drinks. Protein On-the-Go is the only protein powder with electrolytes in single-serve. ultra-portable pouches. E-hydrate helps maintain ideal hydration levels. EFTA01100159 hydrate 2015 Assortment F1'14 - Suggested Retail Price Chart Protein On-the.Go RTM/Powder Hydration • Energy Drink Mix KIDS Hydration • Immunity Drink Mix &CAA. Electrolytes • Energy Gel 53.49 • $3.99 -iviele Protein On•the-Go wit • Single Stick Pack $0.99 Sink Stick Pack $1.99 Sitgle Gel Psk 59.99 • $11.49 COUNT BOX $9.99 10 COUNT BOX $9.99. 10 CO U\T DOX $44.99 • 24 PACK DOX $27.99 - 30 COUNT BOX $2739 30 COUNT BOX EFTA01100160 WNW It PRQTr ON -Q.1 -go c.n.crint„ - 'Coo rtionic hydrate 2016 Assortment (New) Ravi Prim Wu, Nice RimMent Nglitets NAm OmbeCo soil Heath RIM Slit -$299. 9NGLE RTM POUCH $9.99 - 111.49 • 3 COUNT BOX 12$ Roth ISO CalOrIPC Pilarilnurnt. 4€ Supt. Mans Glsosurine MCI 1X04180100:1101rt 250m Omm 3 ORDS Protein Owthe-Go RIM $2.49 -$299. 9NGLE CE). PACKET $7.49 $8.49 3 PAC< ECOt 108 Notch TO CilMe. 2p SuPt vuue ON-gINTEE-gg -,45!")1„4. • Kota KAN Boord WWI Product R Ronda 2016*w:wawa Molt Fist ;Nairn dello soy my atter due to tottery COrrarrta aJ Rum imuhmmiTT PROTEIN ON-THE-GO 2. • 1?tena • I IcreC011$ I hiarS. EFTA01100161 hydrate Paid Mainstream Media Radio Partners (Partial List) ((cSiriuslInt)) ITC RADIO resCLEARCHANNEL RADIO RADIO NETWORKS SCBSRADIO P PANDORA SkNIECn-tt RADIO Television Media • Recent campaign began: December 26. 2015 • "Get it at Target" CTA on all TV spot creative • -31MM-ilmo TV ad impact @ $230k/mo cost Targeted TV and cable campaign with specific channel- specific creative for female and male audiences • Women 25 - 49 • Men 25 - 49 Pandora & Radio Media • Recent campaign began: December 26. 2015 • "Get it at Target.' CTA on all radio spot creative • -$300k/mo TV ad impact @ $50k/mo cost • Targeted Pandora and broadcast / satellite radio campaign with specific channel-specific creative for each audience. • Women 25 - 49 • Men 25 - 49 • Click-through creative for Pandora with 'Get it at Target CTA and links to websites TV Advertising Partners (Partial List) diV D oven I. N CARTOON NRTMORK. iii ®CBS NBC ENTERTAINMENT TELEVISION i71 0 family EFTA01100162 ht.jcirate) Marketing Tactics & Impact Overview TV Advertising Partners gt ocEis NBC • ENTENTE. WE- tt.1 lark/II:11A family Social & Earned Media • YouTube • Continue to promote through YouTube agency partners • Leverage influencer impression footprint • Typical influencer audiences - 50.000+ • Promoted placements - 1.2MM views per promo • Facebook Continue to promoted through celebrity accounts Leverage influencer impression footprint • Typical -50.000+ per influencer • Facebook Channel Ads • Est. campaign impressions of greater than 18 Million • Pinterest • Ads and boosted content • Goal of 1 Million+ impressions per campaign • Multiple simultaneous campaigns • Promoted through influencer networks • Twitter • Promotion through paid influencer campaign • Boosted tweets • Metrics are variable and will be based on size of the influencers audience and their engagement metrics • Instagram Ad placement as part of Instagram's new ad platform • E-hydrate is approved agency to place ads • 80.000+ engagements • 2.8 Million impressions per promotion based on CPE Ern Estimated Campaign Reach MOnhty Meths Reach by Launch (Inpreslions) Tool Social Network NotchOwn) 100,000,000 + -225,000,000 E-hydrate Facebook Growth fir/dote FBUstn as of Sopt 1.2015 E Ordeal* FBUsers Estimated by Feb 1.2015 -6,000 260,000 + 300000 225O00 50000 750O0 E-hydrate Facebook Account Growth 0 Sept Oct Nov Dec EFTA01100163 hydrate Events & Sponsorship Sports-Related Athlete Sponsorship and Events E-hydrate's event marketing will reach hundreds of thousands at events and drives home "buy now* call-to-action OANIGEN TO CALWOONIA UR of Sports-Related Brand Building NASCAR Xfmity Series partnership with Derrick Cope • Millions of brand impressions through media (NBC) • Focused on male demographic in Target-dense areas • Dallas • Phoenix • Las Vegas • Southern California • Florida • Tens of thousands of samplings and trial at events • "Buy Now call to action with samples • List building for stet it at Target.' follow up emails Athlete Sponsorship on local and regional level • Thousands of brand impressions and samplings at events • "Buy Now call to action with samples • Social media content produced by athletes drives brand E-hydrate supports police and fire athletics. NACAR Sponsorship 11111 i nirtitONA - .51111 _. we .....zir 201B Reaches millions of fans on NBC and NBC Sports and tens of thousands at NASCAR events. NBC EFTA01100164 by diatP Distribution Outlook North American Distribution Pipeline TARGET c: Left oN,NNN,NN,NNN "-I-A,RocheBros. t••• Unified qroce,rs.. '' 11tiV00 KeHE Day-6. ingles ' rN„ GELSON'S VIT" LUNDS You're in for something fresh. - shauKs hilmalth EFTA01100165 hydrate Retail Placement Highlights P1111 ,i, • PROI LAN ();, 1 t 1L VU joisS ia Anticipated Sales Highlights for 2016 Q1 & Q2 • Target Stores • Expansion of Protein On-the-Go with 'ACTIVE and "KIDS' lines • Gelson's Grocery • End-cap program in negotiation. • GNC • Anticipated PO for 3.300 locations to start and expand thereafter. • Ingles Grocery • End-cap program in negotiations • Hy-Vee • End-cap program in negotiations • PO Anticipated before close of Q1 • E-hydrate Listed in KeHE system • Strategic move allows for placement opportunity with Whole Foods. etc.. • Walgreens • 6-7.000 locations possible placement in June • Q3 to over 10.000 points of distribution possible. • CVS • Meeting set for Q1 • High interest from retailer due to Walgreens and national presence in Target. • US Military Commissaries may place RTM and tubs in all 300 bases. This consumer base is core to our target market with a high percentage of sales in the protein segment. Placement could be on shelves. March. end of Q1 • Hi Health. Phoenix based chain with forty locations will place PO for possible end of Q1 placement. May include entire product line • Costco national buyer contacted E-hydrate • Requested immediate meeting which will take place by end of first week in February. • Raley's and Bristol Farms • Expected placement in Q2 EFTA01100166 6 hydrate Proposed Use of Funds & P/L Health and Wellness Consumer Spending by Category • Food / Beverage • Health / Beauty • Other Goods Source: The Nielsen Company. 2013 RAPID DISTRIBUTION EXPANSION E-hydrate is currently on pace to have presence in -85% of all grocery stores in the US by end of Q3 2016. VISIBILITY WILL AID SELLTHROUGH End cap programs will be implemented with each new retailer to enhance brand visibility. Additionally, E-hydrate will be featured with end caps in the top Target Store locations nationwide in mid-2016. High visibility will encourage sell through and strengthen the brand. KEY COMPANY HIGHLIGHTS • Major retail chains are coming online in 2016 (see next page) • Gross margins are increasing as volume and sourcing optimizes • E-hydrate fills the increased consumer demand for healthy and natural nutrition options • Online sales illustrate customer return rates to be growing and have been as high as 62% Description 2015** 2016 2017 2018 EXPENSES Marketing and (1.476) $ (5.300) $ (12.600) $ (16.570) COGS S (569) (8.340) $ (11.230) $ (21.400) General and Admin (502) $ (5.400) $ (6.302) $ (11.600) Other Expenses S (31) (140) (100) $ (112) INCOME Target 1.098 $ 4.400 $ 7.430 $ 14.300 Other Retail 16 13.200 24.300 $ 34.600 Online $ 12 $ 1.200 $ 4.800 $ 11.700 GAIN / LOSS (1.452) $ (380) $ 6.298 $ 10.918 EBITDA x 7 N/A N/A 44,086 76,426 GROSS SALES X 7 N/A $ 131,600 $ 255,710 $ 424,200 ** Notice: This document reflects non-audited, preliminary financials. Online sales are growing • Average growth rate 100%+ month over month • Predicted online sales of 510.000+ / month by Feb '16 • Affiliate marketing program started Q1 2016 EFTA01100167 An d rc5te ., Retail Placement Rollout Retail Placements » 441r II E-hydrates first retail relationship began with high- end grocery chain. Lunds and Byerly's in Minnesota. TARGET. POs received for LIVE WEL L nationwide orders 1111tiVe Orders confirmed GELSONS T II E MARKET Goes live end of March 2016 ingles Product launches in retail nationwide with Target Stores Sept 2015 Currently live in stores Dec 2015 Dave ' s Seen liellet Ilenrit• PO expected in Q2 2016 'wiry CS -- hi-health Orders Confirmed *Mad Orders Confirmed shawl a Launch expected to include every military base • • You're in for something fresh: meuer Orders Confirmed Orders Confirmed 'la Roche Bros. I JP' PO expected in Q2 2016 Q1 2016 Q2 2016 Time and Potential Revenues » • Sales estimates are not guaranteed and based on a number of factors. Actual results may vary. UPCOMING PLACEMENTS Likely placement in June 2016 in -6.500 locations Talks have begun to carry E-hydrate at all CVS stores nationwide in late 2016 pharmacy" Costco contacted E-hydrate with the possibility to carry the products in late 2016 Cosra? WHOLESA Q3 2016 Target POs received for KIDS and TARGET. ACTIVE Protein On.theCo Sales Estimates by End of Q2': Q4 2016 Pr• Sales Estimates by End of Q4*: High: 45.000.000 High: 417.500.000 Low: 42.700.000 Low: 49.950.000 EFTA01100168 hydrate Community Outreach A Communities A In Schools SAN FE RNANI:O VALLEY AND GREATER LOS ANGELES E-hydrate Supports the Community &HYDRATE SUPPORTS THE COMMUNITY E•hydrate believes in partnering with strong community organizations & causes which reflect the principles of the company and of E•hydrate's target customers. One key initiative the company undertook at launch was a donation of 5% of its profits to Iraq and Afghanistan Veterans of America (IAVA) in 2014. &HYDRATE SUPPORTS PROGRAMS THAT MATTER With the launch of the &hydrate Kids' line. the company is planning to donate the 5% of proceeds to a more kid-focused organizations. for example. Communities in Schools (OS) is at the top of the list (One of our principals has been on its National Leadership Council for well over a decade). We know that encouraging trial and support among family- focused shoppers is a good message to send and an important reflection of our any's ideals. • 9 :4 ••• uu FOR ACTIVE KIDS EFTA01100169 drafe® hydrate FINALLY. NATURAL TASTES GREAT THANK YOU EFTA01100170