000000_Synthonics_ChyloCureBook_Rev031919

RELATIONSHIP WITH SYNTHONICS Prior to the closing of the offering, Synthonics will assign all its intellectual property rights with respect to cannabinoid-based nutraceuticals to ChyloCure. Those intellectual property rights will include all rights under any patents and patent applications as well as all know-how and any related intellectual property later developed by Synthonics. Synthonics will assign those intellectual property rights pursuant to an exclusive non-royalty bearing license. In exchange for the exclusive right to practice Synthonics’ intellectual property in the field of cannabinoid-based nutraceuticals, ChyloCure will, subject to availability of funds, make a one-time payment of $250,000 to Synthonics and issue 300,000 shares of its common stock to Synthonics. Prior to the offering, ChyloCure will be a wholly-owned subsidiary of Synthonics. Assuming that the offer is fully subscribed and all investors convert their notes into equity at the voluntary conversion rate, Synthonics would hold 75% of the equity in ChyloCure and the initial investors would hold 25%. To facilitate the transfer of know-how and insure a smooth launch of ChyloCure’s business, Tom Piccariello, president and chief science officer of Synthonics, will serve as ChyloCure’s initial chief executive officer. ChyloCure will reimburse Synthonics for Dr. Piccariello’s time at a rate not to exceed $20,000 per quarter. In addition, Synthonics and ChyloCure will enter into a shared services agreement for the provision of scientific expertise, analytical services and the like. EXIT STRATEGY ChyloCure’s likely exit is through a public offering or sale or license to another player in the cannabis industry. ChyloCure’s valuation will thus depend on the success of chylobinoids in the market place and the regulatory environment for cannabis-based products. We would expect valuations to increase as the federal regulations become friendlier to hemp-based products and the market for cannabis- containing nutraceuticals evolves from a local to a national one.

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