Claro Scientific LaboratoriesA Urine Drug Test that detects relapse sooner, faster, more often -

improving Rehab outcomes triggering a “Life Changing Conversation”

Drug Addiction Markets, Opportunity and ProductCurrent testing strategy – doesn’t catch cheatersDisruptive technology – changes how we testSurveillance tool measures treatment effectivenessBetter outcomes ↑ reimbursementColorado University Anschutz Medical School originsResume operations - commercial reference lab

Series A preferred - $500K Series B – $1 – 1.5M -

3-5 year exit - $50M revenue target

Drug Addiction

Crisis

• Fatal ODs > automobile, gun deaths• Top Google click phrase “Addiction

Recovery” • Mental health/addiction given Parity • Addiction recovery requires Drug Testing

• Easy to cheat current strategy• Claro – cost effective, true assessment of

ongoing drug use

• Success = Abstinence

Current methodology ‘sucks’

Antibody - Binding = signal• Relies on drug shape• Lots of shapes fit False Positive• High false negative result

• 29% opioids• 35% benzodiazapines• 43% amphetamines• 40% cocaine

• Confirm adds days & costs to results

This process will catch cheaters

Report 18 calibrators, 9 QCs, 100 samples32,000 data points

Urine barcoded Robotics 10X vs manual

Cloud based interface

=Sciex LC/MS/MS

Report

5

Immuno assays (IA) catch the big fish

But what about the little fish Claro has a fine

mesh net (LC/MS/MS)

We catch big and little fish with our advanced technology

Your bladder is a pond – what might be swimming around in it

Specimen adulteration- cut the net so even big fish get away

Can’t cut our net

Value proposition• Current testing is two phased and seriously flawed

• Screen (coarse net)• Clinician must confirm with LC/MS/MS• Adds $450 - $8500 bills and 3-7 days

• Claro – one rapid test for $250• Catch all fish at once (fine net)• Surveillance tool can optimize outcomes• Patients get better sooner• Better reimbursement

Catch all the fish

Claro Business Proposition

Large market

Hot space

Well vetted braintrust and

assets

High value service

proposition

Strong team and

plan

Multibillion dollar market, high profile

growing problem

Roots at CU Anschutz 4 year operating history

Delighted client base~$700K revenue

Market Validated

High science, client focused solutions

Excellent value

Deep operating, administrative and experienced leadership

Better faster actionable results lower cost, improved outcomesdrives VALUE

Competition’s business based on antiquated screen and confirm Hurdle to change strategy - throws away large segment of testing revenue

Test smarter,

less often,

yet deeper

• IA screening• 3X per week $380 - $960 month• Confirm big fish - more cost $$$

• ClaroLabs• Claro screen and confirm 2X a month = $500/month • Find all the fish at ½ price, faster cheaper

• COG • $5 fixed cost – labor, consumables, overhead• $10 - $20 for shipping or sample collection• Medicaid reimbursement - $250 • 10X margins

ClaroLabs has

already been

successful at CU

• Market validated ($700K/year)• Former customers waiting for restart• New guidelines favor ‘value based’ testing• Drug testing is part of treating drug addiction• Expanding market • Optimize treatment/outcomes• Improves reimbursement rates

Market potential -

$6.3B by 2019

• ~1% market share = $50M target• Market Segments

• Addiction recovery• Pain • Direct to consumer • Mandated Neonatal drug testing• DOT testing

• Timely introduction• Expanding epidemic • Outcomes based reimbursement model

Competitive

Landscape

National and Regional Reference Labs• Millennium - restructuring after $246M fine• Dominion – screen and pick panels• Ameritox - pain focus• Cordant – criminal justice focus

• Locked into screen and confirm, menu picks• Panels maximize revenue• Could mimic Claro approach• Competitors buy Claro package with royalty

Forecast

Year 1 Year 2 Year 3 Year 4 Year 5 Billings $ 1,600 $ 11,025 $ 20,700 $ 27,275 $ 34,650 Gross Receipts 275 9,975 19,550 25,025 34,650

Less: uncollectable (69) (2,494) (4,888) (6,256) (8,663)

Net Cash received 206 7,481 14,662 18,769 25,987

Expenses: COS & Equip Leasing 525 1,949 3,506 4,578 5,716 Sales & Marketing 81 443 736 1,012 1,364 SG&A 715 1,463 2,040 2,352 2,583

CAPEX 44 38 46 54 62 Total expenses 1,365 3,893 6,328 7,996 9,725

Net cash inc/(dec) (1,159) 3,588 8,334 10,773 16,262

Beginning Cash * 1,500 341 3,929 12,263 23,036

Ending Cash $ 341 $ 3,929 $ 12,263 $ 23,036 $ 39,298

* Assumes $1.5M Series A financing

Experienced Management Team

Layne Los, PhD – CEO - Serial entrepreneur, analytical, tech sales background

Lab creation at Bristol Myers Squibb, Merck, AAI, Cornell’s Equine Drug testing lab

Scott Kragerud, MS, CSO - Founder - Alpine Diagnostics – sets up turnkey UDT Lab

Sciex field application scientist, automation, UDT KOLJeff Dekker, CPA – CFO - Vice President of Finance, Controller at GlobeImmune

Financial projections/modelingJeffrey Galinkin, MD – Medical Director (Co-founder of Claro)

• Professor Analgesics and AddictionTerri Breitwieser – QA, billing and reimbursement expert

Consultant focused on Urine drug testing labs billing and regulatory complianceBaharak Davari –Lab Manager (original team)

Manages UDT lab in at AnschutzJacek Klepacki, PhD - Sr. Scientist (original team)

Method Development/validation scientist of the ClaroLabs assay

Phased restart - minimize risks, quick to revenue and profitability

Lab Lease, order

instruments

Lab setup equipment

method validation

CLIA Certificati

on Revenue

generating samples

Scaling Operation (second funding round if needed)

Intensive S&M

Activity

Profitability

R&DNew

services/technology

Acquisition 2 - 4X revenue

FundingSeries A$500K or$2.0M

0 3 6 9 12 18 24 36- 60

Schedule first customers

Add new technology and services

Drugs of Abuse and Clinical Lab AcquisitionsAcquiror Acqiree Revenue

(millions)Price

(millions)Rev.

Mltpl.Date

LabCorp Covance $2,600 $5,600 2.2 2015LabCorp Sequenom $128 $302 2.4 2015LabCorp LipoScience $52 $85 1.6 2014Quest Diagnostics Solstas Lab Partners $450 $572 1.3 2014Alere eScreen $120 $340 2.8 2012LabCorp Genzyme Genetics $371 $925 2.5 2010LabCorp Monogram Bioscience $64 $107 1.7 2009Inverness Med. Innov. Concateno $76 $106 1.4 2009Quest Diagnostics Lab One $300 $934 3.1 2005

Very few reasonably sized acquisitions with enough information to be relevant. Too many small, sometimes family run companies changing hands rather than go bankrupt.

Pieces queued up for a restart

• A need for our test• Product durability, reliability, sensitivity and

value • Demonstrated market uptake• Lab Space - Class A• Basic Lab equipment purchased • Scientists with exact experience committed• Incentivized ‘Rock Star’ management team • Clear path to revenue and profitability

Phase I

• Seed funding of $500K – Where that gets us• CLIA accreditation• Revenue generating assay• Sweat equity from Sr. Staff

• Use of funds • Lab Supervisor, IT and office support salaries• Lab and Office space • Instrument lease for LC/MS/MS (likely Sciex) • Colorado Sales support

• Functioning business

17

Phase II redundan

cy capacity

automation

expertise ($1-1.5M)

Scale operationUse of funds

• Second and third Instrument• CAP certification• Add staff • Bar coding• Billing and sample management automation• Expand Sales efforts • Cash flow

• Profitable business

18

Terms for New

Financing

• $500,00 in Series A Preferred in Claro Scientific Laboratories, a Delaware C corporation

• Board composed of CEO, two Series A investors, and two outsiders approved by other board members

• $1.72 per share, new investors will hold 12.5% of Claro after financing

• Other standard Series A preferred terms as the most senior and only preferred security

The Ask

Series A preferred with $4M Valuation$500K = 12.5 % equity

Series B – $6M valuation$1.5M = 25 % Equity

Growth to $50M revenue in 3-5 years$100M- $200M acquisition

Series A preferred $100K = $2.5 - $5MSeries B $150K = $2.5 - $5M

Capitalization TablePre-Close New Mgmt Post SeriesCommon Options A Closing

Current LLC ownership

46% Founder 461,659 46% 461,659 23% 461,659 20%26% CU Doctor #1 258,642 26% 258,642 13% 258,642 11%11% Outside Investor 107,720 11% 107,720 5% 107,720 5%9% CU Doctor #2 91,581 9% 91,581 5% 91,581 4%2% CU 20,343 2% 20,343 1% 50,580 2% note 16% Options 60,053 6% 60,053 3% 60,053 3%

100% 999,998 999,998 1,030,235

600,000 LL 30% 600,000 26%400,000 ISO 20% 400,000 17%

1,999,998 2,030,235

$500,000 $1.72 per share Series A preferred 291,265 12.5% $500,000 $1.72TOTAL 2,321,500 100% $3,485,207.40 Pre-Money

note 1: MUST BE HELD AT 2% due to CU - TTO license up to $2M

Drug Addiction Crisis

Drug ODs > car & gun deathsOld strategy flawedRecovery requires abstinenceSurveillance tool Optimize clinical outcomes ↑ reimbursement rates

Claro is

Market validatedMost advancedEfficientCost effectiveBest Value

Phase I – $500KCLIA certificationRevenue generating

Phase II – 1.5MRedundancyScale operationSales ramp up

Current methodology SucksOnly big fish

=

Efficient High tech answer

Back pocket slides

ClaroLabs provides a surveillance tool• With the advent of the National Outcome Measures that each state is now

required to report to the federal government as part of the block grant process, independent verification of a client's use at intake, improvements during treatment and abstinence at discharge is highly valuable. This will allow treatment programs to demonstrate their effectiveness and be in a better position to advocate continued or increased funding.*

• ClaroLab’s surveillance tool can truly measure abstinence the marker for addict success, individual counselors and clinics effectiveness.

• ClaroLabs will provide feedback on what training and approaches improve client abstinence rates which increases reimbursement.

• ClaroLabs data feeds a treatment optimization platform – secondary business*Drug Testing White Paper Amer. Soc. Addic. 10/26/2013 Med.

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Expansion – surrounding states, nation wide royalty play, new services and technology

• Clinical Chemistry/Genomics –

• Multi State expansion into CA, UT, NM, AZ, NV

• Direct to consumer – Walgreen, Walmart, our website ($189 kit)

• Saliva and hair testing for specific niches

• DOT testing – poorly served, low quality, higher pricing

• License the assay (510K?) to go national (Patentable IP)

• MMJ testing for pesticides, fungicides, mildewcides

• Drug Metabolism – Met-ID and production

Claro Corporate History• The company was founded in 2010 to pursue banned substance testing for the sports industry in

a contracted collaboration with the CU School of Medicine• After spending 18 months developing a broad based, 100+ drug, multiplexing assay for drug

testing, Claro refocused the testing services on the larger market of Urine Drug testing for the medical and recovery industry

• During 2012-2014 CU spent over $1.5M on equipment and hired a staff of five dedicated employees to address growing demand to support the collaboration

• Claro has invested over $1.5m in the development of software to support analytical analysis, reporting and customer management

• As the customer base grew, is was recognized that additional capital would be required to grow the business. CU would not support outside investors being involved; in 2015 the collaboration was terminated. Claro holds the rights to the trade secret analytical methods and owns the software used for analytical analysis, sample reporting and customer management.

Role for Founder prior employees• Existing investors committed to $125K of the $500k Financing• Founder available to be on Board• Many of the the employees of the CU laboratory are available and

interested in joining Claro