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Funding proposal for launch of prostate cancer blood test in U.S.

OTraces, Inc. Cancer Blood Testing – a Novel Approach Superior Detection and Tumor Diagnosis Seeking Business Partners Worldwide April 2019 INVESTOR PRESENTATION. Funding proposal for launch of prostate cancer blood test in U.S. following final Johns Hopkins final validation.

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Funding proposal for launch of prostate cancer blood test in U.S.

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  1. OTraces, Inc.Cancer Blood Testing – a Novel Approach Superior Detection and Tumor DiagnosisSeeking Business Partners Worldwide April 2019INVESTOR PRESENTATION Funding proposal for launch of prostate cancer blood test in U.S. following final Johns Hopkins final validation .

  2. Novel SolutionBiological testing combined with math, physics andArtificial Intelligence (Machine Learning) – a cancer diagnostic first • Resolving complexity through intelligent noise suppression:  Well Established in Physics and Communications to Explore Space OTraces can track protein signatures in the tumor microenvironment (TME)  • Attainment of 90%+ accuracy (predictive power) in a simple serum test • Tracks cytokine activity and tumor progression– revealing new insights and pathways to develop active surveillance blood testing on a global scale. . Patented software and technology facilitates collaborations worldwide

  3. Predictive Power Track Record Consistent 90%+ Accuracy including blinded validations Blinded Validations were conducted with reagents and equipment supplied by OTraces, Tests were run within the Medical Center’s Clinical Laboratory, Cancer Score results scored blind by OTraces.

  4. Industry Competition– few rivals in PCa and none in the top accuracy range Prostate Ca Screening -- FDA approval required -- Prostate Ca Active Surveillance --- No approval required -- ctDNA liquid biopsy is not proven role in early detection

  5. Prostate CancerUnmet Medical Needs • Accurate Active Surveillance (AS) Blood Test • A leading cause of PCa death is undetected progression from moderate to aggressive and life-threatening tumors which are now often detected when it is “too late” • Current AS programs rely heavily on periodic PSA tests, biopsies and “watch-and-wait” approaches have been only marginally successful 2) Accurate Blood Screening Test to Replace PSA • PSA tests remain controversial and limited in value 32 years after their FDA approval --- 75-80% false positive rate has produced a high level of unnecessary, traumatic and costly intervention (biopsies, surgery, etc.) OTraces solves both of these problems – starting with the new AS test which the current $2mm funding will U.S. launch

  6. JHU Validation for PCa Active Surveillance (pending)Detecting Tumor Progression in Real Time OTraces (95% PP) Aggressive Tumor ? Biopsy ? Low Gleason Prostate Tumor This test could dominate the $200mm U.S. market for AS New Use Patent Claims Filed for Cytokine Biomarkers for detecting non-aggressive vs. aggressive PCa

  7. Breast and Lung Cancer Unmet worldwide need for new patient monitoring and surveillance blood tests • Accurate blood tests for monitoring breast and lung cancer patients post-treatment to determine tumor and immune status is a diagnostic void worldwide. • In China, there are 300mm women in the BCa screening population and far more in the lung cancer testing universe --- many of whom are potential candidates for active surveillance blood tests like ours’ --- to be developed by business partner(s) on a revenue-sharing basis. • OTraces has strong validation data on breast cancer (Gertsen Institute) that is equivalent in scope to Johns Hopkins and has promising data on lung cancer also Active surveillance blood testing is a massive opportunity led by OTraces technology in tumor progression where (as LDT tests) no regulatory approval will be required.

  8. Business Model and Growth Prospects • Accuracy-enhancing software is cloud-based and ready for global deployment. • Partners can improve their cancer test scores seamlessly and in real time. • Software is compatible with instrumentation/procedures used in labs worldwide so adoption can be rapid in markets like China. • Commercialization is accelerated by fact the LDT tests do not require FDA approval. • Superior active surveillance economics --- $760/test is the current standard for US reimbursement for prostate (90% gross margin). • Superior screening test economics -- $70/test for PSA test whereas our Cost of Goods Sold is less than $2.00/test panel. This compares with CGS of $50+ for ctDNA tests which are not accurate enough for screening and are not cost competitive.

  9. Proteomic Rationalization -- I(unpublished)Improved Accuracy Using OTraces -- Showing Just 2 Biomarkers 400 Women Beast Cancer, Gertsen Institute After: (Data Points Start of Resolve) Before: (Random Data Points) • Cancer • Not Cancer OTraces’ methodology spatially separates proteomic cancer activity (“needle”)from non-cancer variations (“haystack”). As biomarkers 3, 4 and 5 are added, rationalization increases separation as well as predictive power). Source: Results from 400 females taken at Gertsen Institute

  10. Proteomic Rationalization -- II(unpublished)Tracking Cancer Progression Starting with Initial Immune Surge 400 Women Beast Cancer, Gertsen Institute All 5 biomarkers in TME provide a longitudinal record of disease progression and immune response 500%surge in composite index (all 5) during transition from healthy (-1) to Stage 0 tumors. Potential longitudinal record of progression

  11. Growth PotentialTransactions and Events Likely to Accrue to Investors • Near Term Possibilities • Sale of U.S. prostate cancer AS test rights to large marketing partner • Sale of China rights for multiple cancer indications to share with new partners. • U.S./Canadian clinical trails for PCa screening test (subject to more funding) • European R&D project to determine biomarkers linked to lung cancer tumor formation (funded by sponsoring company) • Sale of rights tonon-core indications JHU Validation + Launch of AS Test in the U.S.  $2mm Current raise Growth largely financed by partners and accretive asset sales

  12. ManagementDeep Experience and Track Record • Keith Lingenfelter - Founder, CEO, and Member of the Board of Directors • IGEN International (SVP and General Manager Diagnostics) --sold to Roche for $1.5 billion. Abbott Labs – 25 yrs. senior experience in strategic marketing and product development. • Alain Cappeluti - Founder, Chief Financial Officer, Member of the Board of Directors and Lead Investor. • Senior experience with BioReliance, CFO at Human Genome Sciences, and Founder, CFO CoGenesys, sold to Teva for $400 million. • Dr. Richard Saul - Vice President, Research & Development • Founder of Axo Diagnostics, VP of Product Development at Celsis-Lumac plc, Director of Assay Development at IGEN International and at Baxter Diagnostics. • Suzana Radulovich, M.D., PhD. - Vice President and CLIA Lab Medical Director. • Numerous CLIA lab licenses; founder of 20/20 Gene Systems’ proteomic-based Advanced LDT for lung cancer.

  13. Scientific Advisory BoardKey opinion leaders in prostate and breast cancer research,biostatistics, clinical diagnostics and the Tumor Microenvironment • Kenneth Pienta, MD -- Johns Hopkins U. Medical School -- Donald S. Coffey professor of Urology and of oncology, pharmacology and molecular science, regarded as a leading expert in prostate cancer research. • Suresh Mohla, PhD-- National Cancer Institute (NCI) -- 26 years of senior research experience specializing in the tumor microenvironment. • Sujuan Ba, PhD -- National Institute for Cancer Research (NFCR) – CEO: leads global fund-raising, financial planning and research programs worldwide. • Brian Leyland-Jones, MD-- Avera Cancer Institute and Director of Darwin Foundation -- Molecular and Biological Research, and International leader in breast cancer research. • Rick Saul, PhD-- Vice President of R&D at OTraces with over 25 years of R&D leadership experience in the clinical diagnostics field.

  14. Intellectual PropertyMultiple Layers of Patent Protection -- OTraces seeking collaborations for key indications • Patents cover methods for achieving 90%+ predictive power and new use claims for TME functional proteins, as well as proteomic noise suppression and use of spatial proximity correlations. • Patents filed internationally. • Patents owned by OTraces and were developed by experts in math, physics, engineering, software design and biochemistry. ___________ To facilitate collaborations and control IP • IP is domiciled in FDA-compliant archival software housed in US based servers, controlled by OTraces, for cloud-based deployment to OTraces systems in the field and partners/collaborators WW.

  15. Summary of offering • JHU validation of prostate blood test nearing completion and final leg (active surveillance) looks even stronger (95%+). • Industry impact of this PCa study – largest in over 20 years – and US launch that follows not reflected in current $6M pre-money valuation. • Strategic interest is growing --- especially in new tests for breast and lung cancer patient monitoring and active surveillance. • Current valuation ($6mm pre-money) could be substantially lowered, in effect, by utilizing the Maryland Biotech ITC1 Subscription Agreement and Term Sheet on request --- and starting point for potential collaborations 1.MDBIITC is awarded annually to qualified equity investors on a first come, first served basis, and receipt is not guaranteed by OTraces. Investors must be a tax paying entity in any jurisdiction and file with the state normally by June 1st. For additional information, request MDBIITC Summary. 15

  16. Notice to New Investors • A one-on-one meeting with Dr. Pienta at JHU or conference call is recommended, as he is a leading research expert in prostate cancer and in the TME as discussed herein. • OTraces management is now in discussion with several companies about possible collaborations that may provide additional funding, most likely on a non-dilutive basis. Keith Lingenfelter

  17. Notice This document contains forward-looking statements that are based on management’s expectations and beliefs. These statements are subject to a number of factors which involve known and unknown risks, delays, uncertainties and other factors not under the Company’s control which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. The document does not constitute an offering document. This document is the sole responsibility of the Company. Information contained herein does not purport to be complete and is subject to certain qualifications and assumptions and should not be relied upon for making an investment in the Company’s securities or entering into any transaction in relation therewith. This information and opinions in this document as provided as of the date hereof and are subject to change without notice and, in furnishing this document, the Company does not agree to any obligation to provide the recipients with access to further information or to update or correct this document. These securities have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Act”). Accordingly, distribution of this document is limited to persons who meet certain financial qualifications and this document does not constitute an offer to sell or a solicitation of an offer to buy with any person who does not meet the financial qualifications. These securities have not been approved or disapproved by the Securities and Exchange Commission, nor has the Commission passed upon or endorsed the merits of the offering or the accuracy and adequacy of this document.

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