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TSXV VHI Daniel Matlow, President & CEO TSXV VHI CONFIDENTIAL • NOT FOR REDISTRIBUTION • MARCH 2018

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Page 1: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

T S X V V H I

Daniel Matlow, President & CEOTSXV VHI

CONFIDENTIAL • NOT FOR REDISTRIBUTION • MARCH 2018

Page 2: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

Reader’s Advisory (1 of 2)This corporate presentation dated October 2017 (the “Presentation”) has been prepared by management of Vitalhub Corp. (the “Corporation”), and is based on public information and the Corporation’s confidential information. This Presentation is for information purposes only and is being made available on a confidential basis solely to enable the prospective “accredited” and other qualified investors authorized by the Corporation to evaluate the securities of the Corporation (the “Securities”). This Presentation does not constitute an offer to sell to any person, or a general offer to the public of, or the general solicitation from the public of offers to subscribe or purchase, any of the Securities. Any unauthorized use of this Presentation is strictly prohibited. Distribution or copying of this Presentation, in whole or in part in any medium, to any person other than the prospective investor is prohibited without the prior written consent of the Corporation. The information contained in these slides, the Presentation made to you verbally and any other information provided to you (in writing or otherwise) in connection with the Corporation and its business (the “Presentation Materials”) is subject to updating, completion, revision, verification and amendment without notice which may result in material changes. The Presentation Materials are not intended to provide financial, tax, legal or accounting advice and do not purport to contain all the information that a prospective investor may require. Each prospective investor should perform and rely on its own investigation and analysis of the Corporation and the terms of any offering of the Securities, including the merits and risks involved, and are advised to seek their own professional advice on the legal, financial and taxation consequences of making an investment in the Corporation. The Securities are highly speculative.

No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon the Presentation Materials, and any representation to the contrary is an offence. Neither the Corporation nor any agent of the Corporation makes any representation or warranty, express or implied, and assumes no responsibility for the accuracy or completeness of the information contained in the Presentation Materials or any other oral or written communication transmitted to prospective investors, and nothing contained in this summary is, or shall be relied upon as, a promise or representation by the Corporation or any agent of the Corporation as to the past or future performance of the Corporation. The Corporation does not undertake to provide any additional further information or to enter into negotiations regarding the investment opportunity to which these Presentation Materials relate. The Corporation retains the right, at any time, to terminate any discussions or negotiations with prospective investors. In the event of such termination the Corporation will not be under any obligation to disclose the reasons for such termination nor will they have any liability to any recipient hereof for any costs whatsoever incurred in the consideration of the information contained in these Presentation Materials.

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TSX.V V H I

Reader’s Advisory (2 of 2)This presentation contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or “recurring” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward looking statements contained in this Presentation may include, but are not limited to statements with respect to the successful execution of the Corporation's business strategy (including its business model. M&A strategy and mission), the use and benefits of its products and services, the Corporation’s favourable position in the market on a go-forward basis, demographic and market size/trends, forecasts of revenue and financial projections/growth potential/opportunities, the completion of proposed acquisitions of target companies, the use of proceeds from the sale of the Corporation’s Securities, competitive analysis, proposed synergies, projected milestones, go-forward management of the Corporation, and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance, expected regulatory filings, review and approval dates, construction and start-up timelines and schedules, and statements related to the continued overall advancement of the Corporation’s projects. Forward-looking statements involve known and unknown risks, uncertainties and other factors, such as competition, technological changes, the changing needs of hospitals, the financial condition of Vitalhub’s current and potential customers, foreign currency exchange rates, as well as general economic conditions, which may cause the actual results, performance or achievements of Vitalhub to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this presentation.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward looking statements contained in this presentation are made as of the date hereof or the dates specifically referenced in this presentation, where applicable. Except as required by law, the Corporation undertakes no obligation to update publicly or to revise any forward looking statements that are contained or incorporated in this presentation. All forward looking statements contained in this presentation are expressly qualified by this cautionary statement.Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this presentation.

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TSX.V V H I

VitalHub Corp. – Company Overview

4

• High-growth strategy through the introduction of WellLinc Blockchain Solution using the Hyperledger Platform, combined with a reliable/profitable M&A “hedge” strategy

• Focused on the Mental Health and Long-Term Care space, to further extend organization's applications across the continuum of care

• New RTO completed in December 2016 (ticker VHI.V)

• SaaS-based, high-margin products that can be sold organically across the digital health marketplace, and cross-sold into acquired-companies’ install bases

• Management team and Board of Directors with proven success operating a publicly traded, Canadian-based Healthcare IT company

• Offshore research and development (“R&D”) strategy that cuts costs, increases margins, and produces synergized businesses and products offerings

Mental HealthLong-Term Care

Page 5: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

VitalHub Inc. – Company Principals

Dan Matlow(CEO and Founder, Medworxx)

• 30 years experience in technology field with focus on Health IT

• Track record of building and growing enterprise software companies

• Strong sales, marketing, and investor relations skills • Proven ability to grow internationally• Deep knowledge of the Healthcare IT marketplace

Vijit Coomara(Co-Founder and CTO, B Sharp)

• 30 years experience in development and tech • Extremely technically savvy, developing innovative

and disruptive technology solutions • Managed technological and architectural software

dev. of multiple projects across N.A. and Europe • Oversaw establishment of dev. hub in Sri Lanka

Niels Tofting(VP Sales, Logibec)

• 20 years of software experience • Developed and managed high-

performing sales teams Success supporting diverse vertical markets • Experience leading international

business development and growth

Robert Lazar(Co-Founder & CEO, B Sharp)

• 28 years experience• Expertise driving company performance

through post-sales management • Proven track record building both client

and business partnership relationships • IT consulting for $6B distributor and

retailer

Andre Vandenberk(CTO, Medworxx)

• Deep understanding of Healthcare IT• Technology visionary• 20 years experience in Product

Development• Strong ability to communicate

business value to an IT audience

5

Brian Goffenberg CA, CPA(CFO, Medworxx)

• 30 years experience, multiple CFO roles including Philips Lifeline (Canada), DWL, etc.

• Strong public market experience• Proven results-driven track record• Extensive financial governance

skills and experience

Peter Catford(Co-Founder and CEO of HInext Inc.)• 30+ of experience in healthcare information

systems development• Developed EHR software system installed in

85 organizations across N.A. • Adjunct Faculty UofT; informatics in the

Masters of Health Admin program (MHSc)• Past Chair of Ontario’s Health Informatics

Standards Council (OHISC)

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TSX.V V H I

• International Healthcare IT company that was publicly traded on the TSX.V• Unique Patient Flow solutions originating from use at Canadian hospitals• Solutions are used by over 70% of hospitals across Canada• Grew internationally to over $8 million in revenue across five countries • Share price grew from 5 cents in 2008 to 60 cents in 2015 (CAGR 30% beds under license)• Sold to Aptean, a subsidiary of Vista Equity Partners, in October 2015 for a valuation

of $20 million

Medworxx History

6

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TSX.V V H I

VitalHub Inc. – Board of Directors

Dan Matlow• President and CEO Vitalhub Inc.• 30 years experience• Former Founder and CEO of Medworxx Inc.

Proven Healthcare IT executive• Strong sales, marketing, and investor

relations skills • Proven ability to grow internationally

Roger Dent• Chief Executive and Director of

Quinsam Capital Corporation•Director of Acuity Ads Holdings Inc.• Former Portfolio Manager with Matrix

Fund Management• Former Director of research for CIBC

World Markets

Steve Garrington• Former Director of 3 public companies listed

on Canadian, Australian, and UK exchanges• Executive Vice President InterSystems Inc.• 30 years of Healthcare IT Experience with

a vast amount of International experience

Barry Tissenbaum• Retired fmr. Senior Partner with Ernst & Young• Currently serves on the Noranda Income Fund

Board, and is Chairman of the Audit Committee• Served on boards of many private and public

companies providing strategic accounting governance

Chris Schnarr•Managing Director of Lorian Group Inc.• 25 years public company and board experience

across a range of roles and industries• Currently Director, Chair of the Audit

Committee, and member of the Governance and Compensation Committees of Canopy Growth Corporation and Intrinsic 4D Inc.

7

Mohan Plakkot• Partner and Chief Strategist at Valsef Capital, a

private investment company focusing on public software companies• Experience in fortune 500 financial software

and services company•MBA in Strategy and Finance, with experience

in structuring M&A transactions for internet assets

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TSX.V V H I

Purchased by key former members of the Medworxx management team in May of 2016

Closing of qualifying transaction and public offering

VitalHub grew out of a collaboration between Mount Sinai Hospital in Toronto and MaRSInnovation

Acquired B-Sharp Technologies, 24-person offshore development team, currently generating CAD $1.4M in recurring revenue

Acquired H.I. Next Inc., large US install base, As of Jan 2018 it has since been generating CAD 3.1M in annual revenue, $2.4M in recurring revenue

VitalHub Timeline

20162014 2017 CURRENTIntroduction of WellLinc, VitalHub’s proprietary electronic health record (“EHR") interoperability solution powered by blockchain technology, and built on the Hyperledger Platform

8

JAN 2018

FEB 2018 - Acquired Clarity Health, Ontario Mental Health-based assessments, $200k in recurring revenue

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TSX.V V H I

Blockchain Solutions to Healthcare

Challenges

The digital healthcare marketplace has experienced transformative growth over the past 15 years, redefining the delivery

of care. This comes with extreme pressure to regulate costs while

providing high-quality care to patients.

The problem is that growing demand for healthcare services and integrated-care delivery creates an unaddressed need for information technology solutions that remove

middlemen, reduce costs, and promote privacy and security.

Blockchain applications can benefit the healthcare ecosystem as a whole,

alleviating several major challenges to the industry; supporting seamless information sharing that can eliminate the duplication, errors and inconsistencies that arise with

traditional, centralized data storage.

9 (Source: Dash, Majumdar, and Gunjikar, “Blockchain: A Healthcare Industry View”, Capgemini 2017.)

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TSX.V V H I10

Blockchain Technology for Healthcare Industry

Explosive Growth

Early Profitability

Expectation: $1M+ Projects

M&A – Buying Assessment-Based Assets

Blockchain – Future Healthcare Solutions

LEGEND

Phase I: Proof of Concept/ Pilot Projects

Phase II: Production Use

Phase III: Full-Scale Production ($1M+ Gov’t & Int’l Projects)

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TSX.V V H I

Healthcare – Explosive Blockchain Opportunity

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Unlocking Siloed Healthcare Information Securely with a

Decentralized Encrypted Ledger

Siloed Healthcare Information

Barriers limiting the effective use and accessibility of siloed

healthcare databases

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TSX.V V H I

Validation – Blockchain Technology in Healthcare

“Blockchain technologies hold the promise to unite the disparate processes in healthcare, increase data flow and liquidity, reduce costs, and improve patient experience and outcomes.” (Source: “The Potential for Blockchain Technology in Health IT”, HIMSS, March 1 2017)

“[…] We believe Blockchain has a huge potential to become the next big technology-innovation engine. Blockchain applications for patient-data portability, interoperability, care-delivery management, and administration can provide the answers to make challenges facing the industry.” (Source: “Blockchain: A Healthcare Industry View”, (Source: Dash, Majumdar, and Gunjikar, “Blockchain: A Healthcare Industry View”, Capgemini 2017.)

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“Blockchain solutions for financial services have received the maximum investments. Healthcare has the most aggressive plans to deploy Blockchain-based applications across multiple use cases during 2017.” (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.)

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TSX.V V H I13

At its core, Blockchain would offer the potential of a shared platform that decentralizes health data ensuring access control, authenticity, and integrity of protected health information.

Curr

ent

Chal

leng

es Interoperability Gaps: Lack of interoperability costs 150,000 lives and $18.6 billion per year.

Need for Longitudinal Health Records: 46% of US clinicians do not have a complete view of their patients’ health history/ records. Further, individuals cannot view a unified medical record or pass it on to clinicians.

High Error Rates with Centralized Health IT Systems: Error rates for successfully identification or integration of a file are 25% for hospitals and health systems; and as high as 50%–60% outside hospitals.

Key Blockchain FeaturesAccess to historic and real-time patient data on Blockchain, cryptographically secure and irrevocable or immutable. Identity management with predefined user access rules peer-to-peer network; multi-party collaboration health bank for remunerative commons.

Storage of genomics and user- generated data securely with access control.

Use Case 1 – Healthcare Data Exchange & Interoperability

(Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.)

Page 14: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

WellLinc – Blockchain Interoperability Solution

14

Standardized Assessments

Hospitals

Physicians

Community Health Centers

WellLinc is a decentralized blockchain solution that enables interoperable, secure sharing, storage, and tracking of mental health records between multiple stakeholders and jurisdictions across multiple technology platforms

Page 15: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

Use Case 1 – Healthcare Data Exchange & Interoperability

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(i) Blockchain-enabled health IT systems that can provide technological solutions to many challenges, including health data interoperability, integrity and security, portable user-owned data and other areas.

(ii) Blockchain could enable data exchange systems that are cryptographically secured and irrevocable, enabling seamless access to historic and real-time patient data, while eliminating the burden and cost of data reconciliation.

(iii) The recent collaboration between Guardtime, the data-centric security company, and the Estonian eHealth Foundation to secure the health records of one million Estonian citizens using its proprietary Keyless Signature Infrastructure (KSI) is a classic example of Blockchain technology.

(Source: "Does Blockchain Have A Place In Healthcare?" Forbes, www.forbes.com, May 8, 2017.)

Page 16: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

Distribution Strategy

System IntegratorsVendors/Consulting Partners

Management team has successfully sold internationally through system integrators, and has proven large project implementation skills.

VitalHub’s entire platform is being built on Hyperledger Technology Set.

Direct Sales

16

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TSX.V V H I

Blockchain Pricing Strategy

Recurring Revenue Stream

•One-time and ongoing• Implementation and Training• Best practice and advisory

consulting fees

One Time Consulting Fees

• BaaS-based, long-term annual-use contracts (i.e. 5-years)• Annual fees based on usage and

amount of data• High-margin products

$

$17

Expectation: Blockchain projects

will be large in nature

Large government and international projects

(large in nature)

Blockchain as a Service (BaaS)

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TSX.V V H I

M&A Strategy

VitalHub’s strategy is to rapidly increase growth and profitability by combining like software companies focused in the Healthcare IT area

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Reduce R&D SpendReduction of R&D

costs by moving dev offshore with a

significantly reduced wage structure

Consolidate G&AConsolidation of

finance and administration into a central

functional area

Optimize S&MImplementation

of effective sales and marketing

processes

Cross-Selling ProductsUpselling VitalHub mHealth platform into install base

Build Mobile SolutionsCreate mobile versions of legacy apps mobile and upsell into existing

install bases

Sell OrganicallyDevelop and sell

new VitalHub products into large

growth markets

Global mHealth market projection 22% CAGR

Page 19: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

M&A Strategy

Reduce costs by 20% through synergistic reductions and utilization of cost effective offshore resources

Target 20%-30% EBITDA with cross-selling and synergistic cost reductions including

effective offshore development work

1.0-2.5xPurchase companies between

1.0x-2.5x revenue multiple

20% 20%-30%

Have identified 15 companies primarily in Canada, UK and Australia

that are looking for exits

Target companies are synergistic with annual revenues of $1M-$7M, profitable with limited

growth, and have not adopted a mobile strategy

Combination of cash and stockusing the public markets

VitalHub mHealth solution will be sold to target install bases19

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TSX.V V H I

Target Companies – Acquisition Characteristics

Target Companies possess these qualities• Recurring revenue above 60% of total revenue• Breakeven or profitable• Owner operated businesses with limited outside investment• Large component of expense is on research and

development vs. sales and marketing• Little commercialization or sales and marketing expertise• Significant customer base with minimal retention issues• Limited or no expansion beyond geographical boundaries

creating a large growth barrier• Ability to upsell to existing install bases of target companies

by bringing their product into a mobile environment

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TSX.V V H I

VitalHub – Acquisition #1

1. Mobile health enterprise software solutions vendor

2. Current revenues of $560k per annum

3. $490k annual recurring revenue

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4. Over $7M invested in R&D since inception5. Roots within MaRS and Mount Sinai

hospital in Toronto6. Recent Sales and Marketing initiatives

driving growing pipeline

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TSX.V V H I

VitalHub – The Integrated Mobility Solution

VitalHub acts as a bridge, aggregating, consolidating, and porting data from siloed legacy health systems into an easy to use mobile format.

VitalHub is an innovative solution that provides hospitals and vendors with an enabling technology that integrates and optimizes information across existing digital health systems.

Strong mobility IP allows the data of siloed legacy health systems to be made easily available for mobile consumption, simplifying availability and access for clinicians.

22

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TSX.V V H I

VitalHub packages information and data, making it more accessible for mobile use

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VitalHub’s mHealth Solution

VH Chart Real-time patient information at the

point of need on any mobile device

VH Engage Communication tools enabling hospitals to interact with patients

and families

VH Physician Onboarding Communicate with all your

physicians using mobile devices for easy physician

onboard and ongoing target communication

VH Task ManagerAssign, schedule

and monitor employee tasks in all healthcare

settings using mobile devices

VH Family PortalProviding family members

with real-time information on the health and mental status

of their loved ones

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TSX.V V H I

Acquisition #2: B Sharp Technologies (Oct 2017)• 20 year old Canadian company • $2.3 million (CAD) annual revenue• $1.5 million (CAD) recurring revenue• CEO and CTO possess strong app

development and operational skills and will join management team• Domain and healthcare development expertise

Five Products with an Emphasis on Mental Health• Cardiac Electronic Health Records • Mental Health EHR solution• Long term Care EHR solution• Pharmacy Solution• AIDS EHR

40 CanadianHospital Customers

24Source: Information provided by B Sharp Technologies and has not been independently verified by the Corporation. The Corporation or its agents undertake no obligation to comment on analysis, expectations or statements made by third parties in relation to B Sharp Technologies, its security or their respective financial or operating results.

Page 25: VitalHub - Healthcare and Blockchain Deck - March 28 2018vitalhub.com/.../vitalhub-healthcare-and-blockchain-deck-march-29-2018.pdf · Blockchain Solutions to Healthcare Challenges

TSX.V V H I

B Sharp Technologies: Offshore Development Team

Twenty-four member offshore development team located in Sri Lanka

Strong offshore base to develop and grow Blockchain solutions

Characteristics• In operation since 2008• Team of 24 developers• Average salary of $18k (CAD) per year• Average tenure of 4 years • Total cost of operation is $600k (CAD) per year 24 Member Offshore

Development Team

Colombo, Sri Lanka

25Source: Information provided by B Sharp Technologies and has not been independently verified by the Corporation. The Corporation or its agents undertake no obligation to comment on analysis, expectations or statements made by third parties in relation to B Sharp Technologies, its security or their respective financial or operating results.

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TSX.V V H I

Acquisition #3: H.I. Next Inc. (Jan 2018)

• 19 year old company with large U.S. install• 80 Behavioral Health Institution Customers• $3.1 million (CAD) annual revenue• $2.4 million (CAD) recurring revenue• Mental Health EHR sold both in Canada and the U.S.• CEO is the former CIO of CAMH with large

knowledge base especially in the mental health area• Strong U.S. partner driving sales• Opportunity to significantly lower R&D costs• Mental health and clinical domain expertise

U.S. business primary growth area

40 U.S. Behavioral Health Institution Customers +40 in Canada

26

Source: Information provided by H.I. Next Inc., and has not been independently verified by the Corporation. The Corporation or its agents undertake no obligation to comment on analysis, expectations or statements made by third parties in relation to H.I. Next Inc., its security or their respective financial or operating results.

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TSX.V V H I

Upsell VitalHubMobility Solution toTarget Companies’ Install Bases

M&A Synergies Result in EBITDA Growth

27 TSX.V V H I

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TSX.V V H I28

Shares %

Current Shareholding 124,885,709 100.0%

Public 78,835,166 61.5%

Management control 48,050,543 38.5%

Total 124,885,709 100.0%

Approximately 21% of the public float is held by institutions.

Estimated Capital Structure Post M&A

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TSX.V V H I

Post M&A – Estimated P&L (Pre-Blockchain)

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% Revenue % OPEX % Revenue $

Revenue $ 6,457,968 100% 100% $ 10,000,000

OPEX $ 6,940,504 107% 100% 65% $ 6,500,000

S&M $ 1,057,846 16% 15% 15% $ 1,500,000

G&A $ 1,259,312 20% 18% 15% $ 1,500,000

R&D $ 4,623,346 72% 67% 35% $ 3,500,000

Loss $ (482,536) -7% 35% $ 3,500,000

Reduced R&D Spend

Consolidated G&A

Optimized S&M

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TSX.V V H I

Comparable Companies

30

$33M $9.35 5.5x $322M $54.20 4.5x

2.4B $739.0 6.5x $66M $16.25 3.2x $333M $66.75 6.3x

Revenue* Share Price Revenue multiple

$224M $37.02 12.7x

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TSX.V V H I

Recent Transaction – QHR: Canadian EMR Company(TSX.V)

31

$M

$10M

$20M

$30M

2013 2014 2015 Sale

Revenue Net (loss) earnings

QHR recently announced its sale to Loblawsfor $170M – 5x multiple of revenue

QHR Operations

Note: This transaction is in no way indicative of transactions currently available to or contemplated by the Corporation. The economics for the transaction presented in this slide, including the revenue multiples and historical trading prices, are not typical and there can be no guarantee that the Corporation will be able to complete a similar transaction or any transaction at all.

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TSX.V V H I

VitalHub Inc. – Summary

32

• TSX.V listed Healthcare IT company creating innovative Blockchain technology platform

• Proven management team and board with strong track record, ability to execute, and public markets experience

• Focused M&A strategy positioned for rapid growth, with 15 potential acquisition targets identified (profitable “hedge” strategy, providing real downside protection)

• Offshore R&D strategy that cuts costs, increases margins, improves efficiency; and enables the scalability, growth, and development of Blockchain solutions

Mental HealthLong-Term Care

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TSX.V V H I

Statutory rights for subscribers resident in Ontario and Saskatchewan: (1/2)

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Section 130.1 of the Securities Act (Ontario) (the “Ontario Act”) and Section 138 of the Securities Act (Saskatchewan) (the “Saskatchewan Act”) provides that every purchaser of securities pursuant to an offering memorandum shall have a statutory right of action for damages or rescission against the issuer and any selling security holder in the event that the offering memorandum contains any untrue statement of a material fact or omits to contain a material fact that is required or that is necessary in order to make any statement herein or therein not misleading in the light of the circumstances in which it was made (a “Misrepresentation”). A purchaser who purchases securities offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied upon the Misrepresentation, a right of action for damages or, alternatively, while still the owner of the securities, for rescission against the issuer and any selling security holder provided that:a) if the purchaser exercises its right of rescission, it shall cease to have a right of action for damages as against the issuer and the selling security

holders, if any;b) the issuer and the selling security holders, if any, will not be liable if they prove that the purchaser purchased the securities with knowledge of the

Misrepresentation;c) the issuer and the selling security holders, if any, will not be liable for all or any portion of damages that it proves do not represent the depreciation

in value of the securities as a result of the Misrepresentation relied upon; andd) in no case shall the amount recoverable exceed the price at which the securities were offered.

Section 138 of the Ontario Act, and Section 147 of the Saskatchewan Act provide that no action shall be commenced to enforce these rights more than:a) in the case of an action for rescission, 180 days from the day of the transaction that gave rise to the cause of action; orb) in the case of an action for damages, the earlier of:

I. 180 days from the day that the purchaser first had knowledge of the facts giving rise to the cause of action; orII. three years from the day of the transaction that gave rise to the cause of action.

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Statutory rights for subscribers resident in Ontario and Saskatchewan: (2/2)

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The rights referred to in section 130.1 of the Securities Act (Ontario) do not apply in respect of an offering memorandum delivered to a prospective purchaser in connection with a distribution made in reliance on the exemption from the prospectus requirement in section 2.3 of National Instrument 45-106 (the “accredited investor” exemption) if the prospective purchaser is:

a) a Canadian financial institution or a Schedule Ill bank,b) the Business Development Bank of Canada incorporated under the Business Development Bank

of Canada Act (Canada), orc) a subsidiary of any person referred to in paragraphs (a) and (b), if the person owns all of the voting securities of the subsidiary, except the voting

securities required by law to be owned by directors of that subsidiary.

Pursuant to Section 80.1(3) of the Saskatchewan Act, a purchaser who has received an amended offering memorandum delivered in accordance with subsection 80.1(3) of the Saskatchewan Act has a right to withdraw from the agreement to purchase the securities by delivering a notice to the person who or company that is selling the securities, indicating the purchaser’s intention not to be bound by the purchase agreement, provided such notice is delivered by the purchaser within two business days of receiving the amended offering memorandum.Similar rights of rescission are available to subscribers resident in Alberta pursuant to the provisions of Section 204 of the Securities Act (Alberta). Subscribers in Alberta are advised to consult the Securities Act (Alberta) for the specific language pertaining to their rights.

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Appendix I: Future Adoption of Blockchain in Healthcare

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Which solution/improvement has the most potential to drive Blockchain adoption across the Healthcare industry?

Public Data Use cases (Provider Directory)

Eligibility

Claims

Interoperability of Electronic Health

Other

42.9%

7.1%

28.6%17.9%

3.5%

(Source: January 2017 Hyperledger Healthcare Working Group Survey, N=28

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Appendix II: 6 Big Themes for Blockchain Technology in Healthcare

“Blockchain technology potential applications

in some of the pressing needs of the

Healthcare industry.”

(Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.)

Health Data Interoperability Provide ubiquitous securityinfrastructure for seamless

health data exchange without reconciliation or trusted

3rd party.

Healthcare ConsumerismEnsure co-creation of trust andself- sovereignty for a patient-

centric Blockchain healthecosystem.

CybersecurityDistributed network consensus with cryptography techniques provides an additional layer of trust to minimize cybersecurity

threats for healthcare ITsystems.

Precision Medicine Practice Patients can permit access to

their anonymized personal health information for research

commons and remunerativemodels.

Healthcare Business ModelsTransform the digital health

economy to create new business and monetization models

for health asset exchange.

Value-Based CareTrusted workflows with

“single source of truth” provide radical new possibilities for

outcome-based care delivery and reimbursement

models.

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Appendix III: Adoption Timeline – Blockchain Healthcare Use Cases

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Digital Identity Verification/ Management

IoMT (medical asset management and device data exchange)

IoMT(Quantified self, home care)

National Medical/ HealthRecords (authenticity and integrity)

Smart Contracts (health vendorsRFPs and contract management)

Universal Health Recordsand Identities

Drug Supply Chain Provenance (drug counterfeiting and theft)

Health Token (HSN, research,wellness incentives)

Genomics and User-generated DataManagement

Claims Adjudication & BillingManagement/ RCM

Managing Pharma/Biopharma IP and Assets Transactions on Blockchain

Blockchain AI and AR/VRApplications

eConsenting(Research and clinical trials)

Clinical Trials Records Integrity and Exchange

Blockchain-based Wellness,Personal Coaching

Healthcare Data Storage, Access,and Analytics (on/off Blockchain)

Regulatory Audit and Adverse EventSafety Monitoring

Health Policy Voting

Note: Blockchain system adoption across these healthcare use cases demonstrate more convincing opportunities, albeit at varying degrees of adoption across countries and health systems.

Blockchain-based Learning HealthSystems and Advocates

Blockchain Technology Adoption Timeline Across Major Healthcare Applications/Use Cases, Global, 2016–2025Immediate (2016–2018) Short-Term future (2018-2021) Long-Term future (2021-2025)

(Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.)

Certainty of Adoption High Medium Low

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About 6% of all medical claims are denied due to incomplete or incorrect information. The Blockchain system could automate the claim process and dispel administration layers to reduce transaction costs and frauds.

Curr

ent

Chal

leng

es

Insurance notarization and medical billing frauds: An estimated 5%–10% of health care costs are fraudulent, resulting from excessive billing or billing for non-performed services. For example, in the United States alone, a Medicare fraud scheme incurred about $30 million in losses during 2016.

Inefficiencies with BIR activities: An estimated 15%–20% of health care spending and processing costs are associated with BIR activities. E.g., US BIR costs are projected to reach $315 billion dollars by 2018, up over 100% from 2007.

Key Blockchain FeaturesAutomates claim adjudication and payment processing.

Blockchain network consensus custody log to track each step of trustless exchange with predefined smart contracts.

Peer-to-peer insurance: Peer-evaluated and peer-adjudicated health claims.

Pay for outcomes and incentive-based behavioral health programs, leveraging smart contracting features.

Appendix IV: Use Case 2 – Claims Adjudication & Billing Management

(Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.)

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Appendix IV: Use Case 2 – Claims Adjudication & Billing Management

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(i) An estimated 5-10% of healthcare costs are fraudulent, resulting from excessive billing or billing for non-performed services.

(ii) Blockchain-based systems can provide realistic solutions for minimizing these medical billing-related frauds; by automating the majority of claim adjudication and payment processing activities, Blockchain systems could help to eliminate the need for intermediaries and reduce the administrative costs and time for providers and payers.

(iii) Recently, Gem Health, a provider of Blockchain application platforms for enterprises, has collaborated with Capital One to develop Blockchain-based healthcare claims management solutions.

(Source: "Does Blockchain Have A Place In Healthcare?" Forbes, www.forbes.com, May 8, 2017.)