Corporate Presentation December 1, 2016 - OTC:DTHR

Corporate Presentation
December 1, 2016
OTC:DTHR

Forward-looking Statement
THIS PRESENTATION (TOGETHER WITH ANY OTHER INFORMATION THAT MAY BE FURNISHED TO YOU BY THE COMPANY) CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED OR INCORPORATED
BY REFERENCE IN THIS MEMORANDUM, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING OUR FUTURE FINANCIAL POSITION,
BUSINESS STRATEGY, BUDGETS, PROJECTED REVENUES, PROJECTED COSTS AND PLANS AND OBJECTIVE OF MANAGEMENT FOR FUTURE
OPERATIONS, ARE FORWARD-LOOKING STATEMENTS. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY
TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “COULD,” “WOULD,” “EXPECT,” “PLAN,” “ANTICIPATE,” “BELIEVE,” “ESTIMATE,”
“CONTINUE,” OR THE NEGATIVE OF SUCH TERMS OR OTHER SIMILAR EXPRESSIONS.
THE COMPANY HAS BASED THESE FORWARD-LOOKING STATEMENTS ON ITS CURRENT EXPECTATIONS AND PROJECTIONS ABOUT FUTURE
EVENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND ASSUMPTIONS
ABOUT THE COMPANY AND ITS BUSINESS PLAN, THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR
ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. MANY OF THESE FACTORS ARE SET FORTH AND DISCUSSED IN THIS
MEMORANDUM IN THE SECTION CAPTIONED “RISKS FACTORS.”
WE CAUTION INVESTORS NOT TO RELY UNDULY ON ANY FORWARD-LOOKING STATEMENTS AND URGE YOU TO CONSIDER CAREFULLY THE
RISKS DESCRIBED HEREIN AND IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME, INCLUDING OUR
MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT FORMS 10-Q, WHICH ARE AVAILABLE ON DTHERA.COM AND THE SEC’S
WEBSITE AT SEC.GOV.
SHOULD ANY OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD ANY OF OUR ASSUMPTIONS PROVE INCORRECT, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE INCLUDED WITHIN THESE FORWARD-LOOKING STATEMENTS. ALL SUBSEQUENT WRITTEN
AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON THE COMPANY’S BEHALF, ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THESE CAUTIONARY STATEMENTS. PURCHASERS OF THE SECURITIES SHOULD NOT PLACE
UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE MADE. THE COMPANY EXPRESSLY
DISCLAIMS ANY OBLIGATION OR INTENTION TO UPDATE OR REVISE OUR FORWARD-LOOKING STATEMENTS BASED ON CHANGES IN
INTERNAL ESTIMATES OR EXPECTATIONS OR OTHERWISE.

                                                                                                                 2

Dthera Sciences
•   Dthera Sciences (OTC: DTHR) is a publicly-traded Digital Therapeutics company based in
    San Diego that is working to improve Quality of Life (QoL) and reduce anxiety in patients
    with Alzheimer’s and Dementia

     • It is one of the few Digital Therapeutics companies focused on Alzheimer’s and
       Dementia and may be the first one publicly listed

•   The Company was formed through the merger of Knowledge Machine and EveryStory,
    Inc. and the acquisition of the SeniorsInTouch intellectual property portfolio

•   The Company’s lead product is an artificial intelligence-powered digital health platform
    that collects photos and audio from family members and creates hyper-personalized
    video stories sent to the patients

•   The product is presently in a clinical trial (n=20) with the University of California San
    Diego to test its effectiveness as a scalable form of Reminiscence Therapy and will
    announce results in Q1 2017

                                                                                                3

Capital Structure
As of December 1, 2016
Ticker on OTC:                     DTHR
Share Price:                       $2.20
Shares Outstanding:                36 Million
Market Cap:                        $79 million
Management Ownership:              39%
Law Firm                           Kirton McConkie (Salt Lake City)
PCAOB Auditors                     Sadler, Gibb & Associates, LLC (3627) (Salt Lake City)

                      https://www.bloomberg.com/quote/DTHR:US

                                                                                     4

Management Team
Edward Cox - Chief Executive Officer since Sept 2016
• Chief Executive Officer - EveryStory 2015
• Executive Officer - Apricus Biosciences (NASDAQ:APRI) 2009 to 2014
      • Head of Global Business Development, Commercial Development, Investor Relations,
          and Corporate Development
• President and Director - Bio-Quant, Inc. 2007 to 2009 (Bio-Quant successfully merged with
   Apricus thereby going public on the NASDAQ)
• Prior to 2007, served as an executive or board member of both public and private companies
   in the areas of Healthcare, Life Science, Technology and Resources
• Masters from the Warrington College of Business at the University of Florida

David Keene - Chief Technology Officer since Sept 2016
• Founder and Chief Technology Officer - EveryStory 2013
• Chief Architect - Commerce Platform for Trion Worlds, Inc. 2010 – 2013
      • Led the senior engineer team through the design and architecture process to create an
         innovative, world class commerce platform
• Senior Architect - PlayStation Network for Sony Network Entertainment (“SNE”) 2006 to 2010
      • Managed integrations with multiple SNE global partner groups, implemented an
         innovative recommendation system
      • Senior Engineer - Sony Online Entertainment 2004 to 2006

                                                                                       5

Board & Advisors
Larry Morgan - Board Member since Sept 2016
• Board Member - EveryStory 2015
• President and CEO of The Noble Group, Board member & CFO Tech Coast Angels
• Investment committee for the Triton Fund
• Over 25 years of global experience in the telecom, IT services, and enterprise restructuring

Don Sapaugh - Lead Strategic Advisor: Senior Living
• Founder, President and CEO of TrinityCare Senior Living, led the merger of TrinityCare with a
   public hospital system company and produced nearly $30mm in EBITDA and several hundred
   million dollars in market capitalization
• Chief Financial Officer in five different general acute care and psychiatric hospitals with
   Hospital Corporation of America (HCA)
• Nearly 30 years of experience in Senior Living

Bill Kuncz - Lead Strategic Advisor: Finances & Accounting
• EveryStory’s Chief Financial Advisor 2015 - 2016
• CFO, VP and Secretary of GreatCall (creator of the Jitterbug cellphone ) December 2006 –
     2015. Leadership contributions helped produce 34 consecutive quarters of growth in revenue
     and annual revenue of over $230M, 2009- Winner of San Diego CFO of the Year Award
• Nearly 20 years of successful CFO leadership experience
                                                                                           6

Reminiscence Therapy (RT)
•   Reminiscence Therapy (RT) involves either discussing or reviewing recognizable
    memories, typically by looking at photos, and either hearing or discussing the familiar
    stories related to them

•   RT has been shown to be very effective at reducing anxiety and increasing the overall
    Quality of Life (QoL) in Alzheimer’s and Dementia patients in nearly a dozen clinical trials
    and has been in use for nearly 30 years

•   The Problem: Although RT is very effective, it is also very labor intensive and hard to
    scale

                                                                                           7

Digital Therapeutics
 •    Digital Therapeutics (sometimes called “software-as-a-drug”) is a new subsection of
      digital health that strives to directly deliver a therapy via use or interaction with
      software technology

 •    The goal of Digital Therapeutics is to mirror an already effective treatment therapy but
      use technology to scale to a large patient population, thereby amplifying doctors’ and
      nurses’ care, changing patient behavior, and most importantly, reducing costs of care

 •    The market size is, which is
      currently estimated to be several
      hundred million in annual revenue
      is forecasted to reach nearly $6
      billion over the next 5 years*

                                                                                              8
2016 research report by Goldman Sachs and supplementary Psilos research *

Digital Therapeutics Peer Companies
 •    The Digital Therapeutics market which is currently in its earliest stage, just a few dozen
      companies, is projected to reach a few hundred companies by 2020*

 •    The following is a list of companies that have defined themselves specifically as Digital
      Therapeutic companies along with the indications they are pursuing

     Disease & Indication Focus          Companies
     Diabetes and obesity                Omada Health, WellDoc, Glooko, Noom
     Heart Disease                       Twine, Canary Health
     Mental illness                      COBALT, Ginger.io, Sleepio
     Neurological disorders              Jintronix
     Respiratory conditions              Chrono Therapeutics, 2Morrow Inc, Claritas MindSciences,
                                         Propeller Health, DigiThera

                                                                                               9
2016 research report by Goldman Sachs and supplementary Psilos research *

Dthera’s Lead Product
 •   Dthera has created one of the first Digital Therapeutics using Reminiscence Therapy to
     target anxiety in Alzheimer's and dementia patients
 •   Using Dthera’s product, EveryStory, Reminiscence Therapy will finally be able to be
     scaled to potentially hundreds of thousands of patients
 •   Dthera’s already-issued patent granting broad intellectual property protection within the
     Senior Living market is a major advantage that the company has over future competition
      •   Senior Citizen Communication System            Number: US 7721946 B2
      •   File Date: Feb 21st, 2007                      Publication Date: May 25th, 2010
      •   Summary: A system and method is disclosed whereby a patient at a senior care facility can
          send and receive messages via the Internet. Tools are provided to manage the patients, the
          patient's relative contact, mail and photo collection.

                                                                                                 10
https://www.google.com/patents/US7721946

How the Product Works
   •   By interacting with our Artificial Intelligence system (Rachel),
       friends and family simply upload photos and record audio clips
   •   The platform then turns those individual photos and short audio
       clips into elegant documentary-like videos and pushes them
       directly to the patient’s tablet thereby delivering the
       Reminiscence Therapy
   •   There is no interface for the patient to learn, simply picking up the
       tablet plays the stories and putting it down stops them

                                                                     11

Markets: Senior Living and
                   Alzheimer’s & Dementia
 •   The scale of the markets Dthera is moving into is enormous with both Alzheimer’s care
     and Senior Living reaching in the millions of patients and hundreds of billions of dollars

 •   The Senior Living housing market was recently valued at more than $300 billion*

      • There are 1.4 million people in nursing homes and another 700,000 in residential
        care communities

      • More than 50% of the residents in assisted living have some form of dementia
        or cognitive impairment

 •   The annual cost of care of Alzheimer’s and Dementia in the US is $230 billion

      • Costs required for the care of Alzheimer’s & Dementia patients are as much five
        times ($77,381 per year) as someone of the same age without dementia ($15,550
        per year) mostly as a result of costs not directly driven by the disease

      • An estimated 5.4 million Americans of all ages have Alzheimer’s disease (2016)

                                                                                           12
AEW Capital Management and Newcastle Investment*

Business Model/ Go-to-market
•   The Company plans to partner directly with Senior Living/Long Term Care management
    firms by offering their facilities a revenue share model

•   During Q1 2017 the Company intends to roll the product out in a select group of facilities
    as part of a pilot program

•   Upon the announcement of the clinical trial results (Q1 2017) the Company will begin
    charging a subscription fee for the product (Q2 2017)

•   The product will be paid for by the patient’s family and will be approximately $30 per
    month or $300 a year

                                                                                        13

Key Milestones
 The clinical trial is already underway with University of California San Diego
 The clinical trial will be complete and data will be announced in Q1 2017
 The Company will begin rolling out the product to a first wave of Senior Living facilities
  via a pilot program in Q1 2017
 The Company intends to begin revenue generation upon the announcement of the
  clinical trials results (Q2 2017)

                                                                                        14