Hi team ZLD, I posted some brief notes yesterday, but I said...

Hi team ZLD, I posted some brief notes yesterday, but I said that I'd type out more of a summary of notes taken during the teleconference for anyone that didn't get the chance to attend. I've tried to get as much info in as I could, but there's still some parts missing - if anyone else was listening in yesterday and wants to add in, or correct anything then please do!

I was pretty negative andfrustrated by the original announcement, felt it lacked details and any impacton the bottom line within 12 months, and frankly that it was fluff as a filleras they further delay other anns. The teleconference provided clarity aroundthe ann, and while I still don’t believe that it will provide any sustainedboost to the SP, I’m more comfortable with it as a mid-term value add, thanlong term.

I originally set out to ask the following questions:

1. DrFakorede is well established and has demonstrated a focus on the under-servedin his community within Mississippi. Has Dr Fakorede indicated intention tobroaden his attention beyond the state? The reason I ask this, is my concernthat as he is embedded in his local community, he would not have the time orthe capacity to manufacture, sell and commercialise the formulations on anational level.
2. Withthis agreement indicated as not actually being financially beneficial toZelira's bottom line for at least 12 months, how is the licensing of Hope andInsomnia in the universe of the US progressing? This is and has been the focusof Zelira to deliver value to its shareholders; are you still on track to launchin Q3 of 2020? And will the company see revenue as promised incalendar year 2020?

These were both broadly answered in Richardand Osagie’s discussions before we were able to ask questions. At the beginningthey said they’d be discussing the chronic pain trial and the partnership withCVSCM, and then also look to provide an update regarding insomnia and HOPE asit was getting ready to launch in the US.

Regarding CVSCM – it’s an opportunity to helpthe Peripheral Arterial Disease (MAD) market, which currently has very few therapeuticoutcomes available. Osagie took the lead on this one starting off byreiterating he doesn’t think people fully understand how valuable thistransaction is. He was chuckling a lot as he ran through the following points:1. It cost us nothing – it’s structured so that they pay us upfront for thepleasure (in the six-figures); 2. They will pay us an ongoing royalty (in thedouble digits); 3. Dr Fakorede has treated over 10,000 patients with variousforms of diabetes, and it considered a leading expert in this space; 4. Itmatches Zelira’s core strategy which is to bring validated products to themarketplace. By partnering with Dr Fakorede he has the capacity to validate theproduct, as he has/is associated with multiple facilities.

Further to the above, Zelira remains theowner of 100% of the product, IP, rights, everything; it gives us a USfootprint in this space which we do not need to fund ourselves; and theagreement is initially for 5 years (exact start date undisclosed) so ifcommercial potential isn’t met, we retain everything to market ourselves orwith someone else.

Osagie said "within the US the mostlikely outcome of this really cool deal we've done...is once we get clinicallyvalidated data, Dr Fakorede will get other partners to move the productacross the US.” So within this agreement Fakorede has the ability to partnerwith others direct with himself – and that answered a major concern of my own.

Lastly, this product is 100% CBD and derivedfrom hemp. As this is legal on a federal level in the US, there is nolimitation to where it can be sold; i.e. it’s not limited to 34 states.

Richard threw in a reminder about theAustralian deal from a few weeks ago where they’re paying us to trial anddevelop product.

Back to CVSCM: it works with our strategybecause the product starts in the US under the launch, learn strategy: Fakorede establishes data to demonstrate that it actually works.

ZLD then takes the data and uses it to trialin Australia - which then has the capacity to validate it. We can then look toreceive TGA approval in AUS and rest of the world to market ourselves; as wellas have Fakorede update the product already sold in the US – now as validated.

Osagie put in a big reminder and stated atlength the impact of COVID and the effect it has had on other businesses thatwe otherwise may have been developing a relationship with. But he did state: "wewill expect that as we finish the development of the products in the firstquarter of next year or there abouts, we should see Dr Farokede get these intothe markets". To me, that’s a shorter timeline than was originallyindicated in the announcement, so possibly sooner than originally stated –hopes aren’t up yet though.

Richard discussed PAD a bit further, what itis, the potential market both domestic and international. I didn’t actually getthe figures, but there is a reasonably large market for something that doesn’thave many current remedies.

Osagie wanted to cut in with “two quickcomments” there – the consequences of PAD are that a high percentage of casesleads to amputation, so anything that is developed that can potentially avoidthis would be highly sought after. And 2nd is that that PAD segways intochronic pain. This disease does result in a lot of pain to the patient.Therefore, we continue to use our unique IP portfolio to build out our capacityto address pain; i.e. broadening IP portfolio so that there is a footprint inevery type of pain.

So there is the potential for multiple remediesfor each client being treated; or multiple sales in one transaction.

Hopkins went on to discuss the recent trialbjective was to introduce CBD into a patient group suffering chronic pain in asafe manner. Safety was the first endpoint; second endpoint is to see what thereaction is and at what dose; as well as whether it improved any other areas oflife?

There were no serious adverse events - anyevents were resolved in 3-5 hours after taking the medication; and now thisopens up to phase 2 in clinical opportunities.

Further clinical trials are on the cards forthis; and separately parkinsons in the US later in the year, possibly earlynext year. This will be a key strategic play for our IP.

Regarding HOPE, they quoted that they are "stillon track for that in 2020" launch in Aus. I personally think they reallyneed to deliver on this timeline. They are pretty comfortable with how they areproceeding, Osagie said "we are moving at lightning speed" and Richardsaid we’re at least 12-18 months ahead of any other competitor, so we stillhave the first mover advantage. As the company is building they are attractinginvestors who understand and appreciate the portfolio. It’s not about what willhappen tomorrow, etc. etc.

Can also quote him saying that "willhave three products launched in Australia … another two products launched,minimum, in the US, and we may have more". This was with reference tocalendar year 2020. So they’ve promised big things.

With regard to the insomnia trial from April,they’ve put together all the design and paraphernalia for this, and maintainthey expect to have the product in the Australian market by August-September.HOPE is expected to be going at the same speed for Aus.

They were asked about pain products whichthey are currently keeping very close to their chest. They didn’t say anythingmore than that they will be disclosing more information early in the new year,and that these will be very disruptive to the existing market. They’re notready to talk about it yet or give too much information away to thecompetition. But they are very excited for the potential here.

I asked about the progress of HOPE outside ofLouisiana – I don’t think Osagie appreciated the question as much because hewas quick to remind me that he’s not sure if I’ve seen the latest reports, butthey’re in the midst of a pandemic; and other businesses are currently morefocused on making sure they and their staff don’t die, as oppose to progressingopportunities. That aside, they said that they had advanced discussions whichhave now been in place for sometime, but the impact of the spread of COVID isaffecting going any further. They are confident that things will fall intoplace here when things get better.

In terms of Pennsylvania though, it continuesto grow in an appropriate manner – all things considered – and they’re veryhappy with it. This gives them a high level of confidence for what could orshould happen in other markets. They’re also able to draw on their experiencestaking HOPE to market here, to adjust and advise new partners as they marketelsewhere.

They said Australia will see the benefits ofthis when they launch HOPE 1 and 2 here. As HOPE 1 and 2 target differentclusters of symptoms, they’ve found that a patient may use #1 in the morning,and #2 for different symptoms in the evening; and so they’re collating all thisdata when marketing it further.

Additionally, a certain percentage of peopleare accessing HOPE and not using it for Autism, so they’re trying to learn moreabout what other conditions people are essentially self-treating themselveswith, and this may lead down a new avenue for us. This reiterates the launch,learn, develop strategy.

Coming from the indicative market, they’revery excited about the prospects coming to Australia.

The last question related to Emerald (EMD)and Richard explained a bit more that real world data complements any clinical data,which will ultimately be taken to the FDA. Australia is considered one of thebest countries in the world for obtaining real world data - so partnering withEMD (Emerald) is a prime opportunity to complement our clinical data, and tomould trials around.