EFTA01100156.pdf

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 • Former VP Creative Development. Walt Disney Imagineering M NOW ON • Former CAAAgent / Executive CAA (Creative Artists Agency). Hollywood's Top Dan Adler Talent and Entertainment Business Firm THIS IS NATURAL FiYDRATION Focus: Business Development • 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 Joshua Shirk performance-enhancing consumable products Focus: Product Development • 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 Vaughn Juares • 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 Focus: Marketing Strategy • 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 I hydrate /lark 5% of our profits are donated to benefit veterans through IAVA EFTA01100157  Notable E-hydrate Team Members Phil Kent • Former CEO of Turner Broadcasting System. Inc.. Responsible for ALL Turner Phil Kent 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 Bill Nicholson • 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 • 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 Sofia Vergara • 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 VIII Inventive Natural a Electrolytes Innovative Package Tastes Great In Every Product ..... PRO1 LIN PROTEIN it Oft I ON-THE.Go Protein On-the-Go comes Consumers are demanding E-hydrates product lines all is in the world's most healthier products like provide more electrolytes I gig innovative ready-to-mix E-hydrate whldi are natural than leading sports drinks. pouch — just add water. AND taste great Protein On-the-Go is the E-hydrates one-of-a-kind E-hydrate products are a only protein powder with single-use packaging is great alternative for electrolytes in single-serve. easy to understand and for everyday consumers who ultra-portable pouches. consumers to get excited want to enjoy the foods about with little education. and supplements they E-hydrate helps maintain consume. ideal hydration levels. E-hydrates Patent•Pending RIM Pouch 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 $2739 30 COUNT BOX EFTA01100160  hydrate 2016 Assortment (New) vuue WNW It ON-gINTEE-gg PRQTr -,45!")1„4. • Kota KAN -go -Q.1 ON c.n.crint„ - 'Coo rtionic PROTEIN ON-THE -GO • 1?tena 2. • I IcreC011$ NAm OmbeCo soil Heath RIM ORDS Protein Owthe-Go RIM Ravi Prim Slit -$299. 9NGLE RTM POUCH $2.49 -$299. 9NGLE CE). PACKET I hiarS. Wu, Nice $9.99 - 111.49 • 3 COUNT BOX $7.49 $8.49 3 PAC< ECOt 12$Roth ISO CalOrIPC Pilarilnurnt. 4€ Supt. RimMent Mans Glsosurine MCI 1X04180100:1101rt 108 Notch TO CilMe. 2p SuPt Nglitets 250m Omm 3 Boord WWI Product R Ronda 2016*w:wawa Molt Fist ;Nairn dello soy my atter due to tottery COrrarrta aJ Rum imuhmmiTT EFTA01100161  Television Media TV Advertising Partners (Partial List) • Recent campaign began: December 26. 2015 hydrate iii ®CBS • "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- Paid Mainstream Media specific creative for female and male audiences • Women 25 - 49 • Men 25 - 49 NBC Radio Partners (Partial List) diV ((cSiriuslInt)) D oven ITC RADIO I. er sCLEARCHANNEL RADIO ENTERTAINMENT Pandora & Radio Media TELEVISION 0 • Recent campaign began: December 26. 2015 RADIO NETWORKS family SCBSRADIO • "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 N CARTOON NRTMORK. each audience. • Women 25 - 49 P RADIO PANDORA SkNIECn-tt • Men 25 - 49 • Click-through creative for Pandora with 'Get it at Target CTA and links to websites i71 EFTA01100162  Social & Earned Media • YouTube ht.jcirate) • Continue to promote through YouTube agency partners • Leverage influencer impression footprint • Typical influencer audiences - 50.000+ Marketing Tactics • Promoted placements - 1.2MM views per promo & Impact Overview • Facebook Continue to promoted through celebrity accounts Leverage influencer impression footprint TV Advertising Partners • Typical -50.000+ per influencer • Facebook Channel Ads Estimated Campaign Reach gt ocEis • Est. campaign impressions of greater than 18 Million • Pinterest • Ads and boosted content • Goal of 1 Million+ impressions per campaign MOnhty Meths Reach by Launch (Inpreslions) 100,000,000 + Tool Social Network NotchOwn) -225,000,000 NBC • Multiple simultaneous campaigns • Promoted through influencer networks • Twitter E-hydrate Facebook Growth • Promotion through paid influencer campaign fir/dote FBUstn as of Sopt 1.2015 E Ordeal* FBUsers Estimated by Feb 1.2015 • Boosted tweets • ENTENTE. WE- tt.1 • Metrics are variable and will be based on size of the influencers audience and their engagement metrics -6,000 260,000 + lark/II:11A family • Instagram E-hydrate Facebook Account Growth Ad placement as part of Instagram's new ad platform 300000 • E-hydrate is approved agency to place ads 225O00 • 80.000+ engagements 50000 • 2.8 Million impressions per promotion based on CPE 750O0 Ern 0 Sept Oct Nov Dec EFTA01100163  Sports-Related Brand Building NACAR Sponsorship NASCAR Xfmity Series partnership with Derrick Cope hydrate • Millions of brand impressions through media (NBC) i nirtitONA - • Focused on male demographic in Target-dense areas Events & Sponsorship • Dallas .51111 we .....zir 11111_.201B Sports-Related • Phoenix • Las Vegas • Southern California Athlete Sponsorship and Events • 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 E-hydrate's event marketing will reach • Thousands of brand impressions and samplings at events hundreds of thousands at events and • "Buy Now call to action with samples Reaches millions of fans on NBC and NBC Sports drives home "buy now* call-to-action • Social media content produced by athletes drives brand and tens of thousands at NASCAR events. OANIGEN TOUR of CALWOONIA E-hydrate supports police and fire athletics. NBC EFTA01100164  North American Distribution Pipeline by diatP c: Left oN,NNN,NN,NNN Distribution Outlook TARGET "-IA - ,RocheBros. Unified t••• qroce,rs.. '' KeHE 11tiV00 Day rN„ -6. ingles ' VIT" GELSON'S LUNDS - shauKs You're in for something fresh. hilmalth EFTA01100165  Anticipated Sales Highlights for 2016 Q1 & Q2 • Target Stores hydrate • Expansion of Protein On-the-Go with 'ACTIVE and "KIDS' lines • Gelson's Grocery • End-cap program in negotiation. • GNC Retail Placement Highlights • Anticipated PO for 3.300 locations to start and expand thereafter. • Ingles Grocery • End-cap program in negotiations • Hy-Vee ,i, P1111 • 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. PROI LAN • US Military Commissaries may place RTM and tubs in all 300 bases. This consumer base is core to our target ();, 1 t 1L VU 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 joisS ai • 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 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. hydrate VISIBILITY WILL AID SELLTHROUGH Proposed Use of Funds & P/L 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 Health and Wellness Consumer encourage sell through and strengthen the brand. Spending by Category KEY COMPANY HIGHLIGHTS • Food / Beverage • Health / Beauty • Major retail chains are coming online in 2016 (see next page) • Other Goods • Gross margins are increasing as volume and sourcing optimizes • E-hydrate fills the increased consumer demand for healthy and natural nutrition options Source: The Nielsen Company. 2013 • 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 Online sales are growing GAIN / LOSS (1.452) $ (380) $ 6.298 $ 10.918 • Average growth rate 100%+ month over month EBITDA x 7 N/A N/A 44,086 76,426 • Predicted online sales of 510.000+ / month by Feb '16 GROSS SALES X 7 N/A $ 131,600 $ 255,710 $ 424,200 • Affiliate marketing program started Q1 2016 ** Notice: This document reflects non-audited, preliminary financials. EFTA01100167  • Sales estimates are not guaranteed and based An Retail Placement Rollout d rc5te ., LIVE WEL L POs received for nationwide orders Dave ' s on a number of factors. Actual results may vary. UPCOMING PLACEMENTS Talks have begun II 441r 1111tiVe Orders confirmed 'wiry Seen liellet Ilenrit• PO expected in Q2 2016 to carry E-hydrate at all CVS stores nationwide in late 2016 CS -- Likely placement in E-hydrates first hi-health June 2016 in retail relationship Orders Confirmed began with high- GELSONS -6.500 locations pharmacy" a T II E MARKET end grocery chain. Lunds and Byerly's Goes live end of in Minnesota. March 2016 Costco contacted ingles Launch expected to E-hydrate with the possibility to carry the products in late Currently live *Mad include every 2016 in stores Orders Confirmed military base Cosra? Retail Placements » WHOLESA TARGET. shawl Product launches in retail nationwide meuer • • You're in for something fresh: Orders Confirmed with Target Stores Orders Confirmed 'la I JP' Roche Bros. PO expected in Q2 2016 Sept 2015 Dec 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Pr• Sales Estimates by End of Q2': Sales Estimates by End of Q4*: Time and Potential Revenues » Target POs received for KIDS and High: 45.000.000 High: 417.500.000 TARGET. ACTIVE Protein On.theCo Low: 42.700.000 Low: 49.950.000 EFTA01100168  E-hydrate Supports the Community &HYDRATE SUPPORTS THE COMMUNITY • 9 :4 ••• uu E•hydrate believes in partnering with strong community organizations & causes which FOR ACTIVE KIDS 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 hydrate and Afghanistan Veterans of America (IAVA) in 2014. &HYDRATE SUPPORTS PROGRAMS THAT MATTER Community Outreach 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. A Communities A In Schools SAN FE RNANI:O VALLEY AND GREATER LOS ANGELES EFTA01100169 hydrate drafe® FINALLY. NATURAL TASTES GREAT THANK YOU EFTA01100170