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StageZero Life Sciences Ltd. Investor Presentation 2020

Oct 22, 2020

44586_rns_2020-10-22_c7ea560a-1839-4465-925a-fff84ac4f638.pdf

Investor Presentation

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COVID-19 Testing Partner CLIA-Certified Testing Capabilities in Richmond, Virginia Focussed on mRNA Expression for Early Cancer Detection

Presented by James Howard-Tripp Chairman & CEO

(TSX:SZLS)

October 20, 20201

Disclaimer

A preliminary short form prospectus containing important information relating to the securities described in this document has been filed with the securities commissions or regulatory authorities in British Columbia, Alberta and Ontario. The preliminary prospectus is still subject to completion or amendment. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities. Copies of the preliminary prospectus can be obtained by emailing Echelon Wealth Partners Inc., at [email protected].

There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

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Disclaimer

Cautionary Notes

Prospective investors should rely only on the information contained in the preliminary short form prospectus dated October 20, 2020 (the “ Preliminary Prospectus ”). This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the information contained in the Preliminary Prospectus. A prospective investor is not entitled to rely on parts of the information contained in this presentation to the exclusion of others. None of StageZero Life Sciences Ltd. (“StageZero”, the “Company”, “we”, “our”, or “us”), or Echelon Wealth Partners Inc. or Clarus Securities Inc. (collectively, the " Agents ") have authorized anyone to provide prospective purchasers with additional or different information. StageZero and the Agents are not offering to sell shares in any jurisdiction where the offer or sale of such securities is not permitted. An investment in the Company’s securities is subject to a number of risks that should be considered by a prospective purchaser. Prospective purchasers should carefully consider the risk factors described under “Risk Factors” in the Preliminary Prospectus before purchasing securities of the Company.

For prospective purchasers outside Canada, none of StageZero nor the Agents have done anything that would permit this offering or possession or distribution of the Preliminary Prospectus and final prospectus, or any amendment thereto, in any jurisdiction where action for that purpose is required, other than in Canada. Prospective purchasers are required to inform themselves about, and to observe any restrictions relating to, this offering and the possession or distribution of the Preliminary and final prospectus. In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Capitalized terms that are not defined in this presentation have the meanings ascribed to them in the Preliminary Prospectus. Any graphs, tables or other information in this presentation demonstrating the historical performance of StageZero or any other entity contained in this presentation are intended only to illustrate past performance of such entities and are not necessarily indicative of future results of StageZero.

This presentation contains “forward-looking information” for purposes of applicable securities laws (“ forward-looking statements ”). Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations or assumptions regarding the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking statements can be identified by words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “seek”, “target”, “potential”, “will”, “would”, “could”, “should”, “continue”, “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our financial performance, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. This forward-looking information includes, among other things, statements relating to: the expenses and timing of the completion of the offering; expectations regarding industry trends, overall market growth rates and our growth rates and growth strategies; our business plans and strategies; expectations regarding growth; our competitive position in our industry; and the proposed use of proceeds from this offering.

Although we base the forward-looking statements contained in this presentation on assumptions that we believe are reasonable, we caution you that actual results and developments (including our financial performance, financial condition and liquidity, and the development of the industry in which we operate) may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. Despite a careful process to prepare and review the forward-looking statements, there can be no assurance that the underlying opinions, estimates, and assumptions will prove to be correct. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” section of the Preliminary Prospectus.

The risk factors contained in the Preliminary Prospectus should not be construed as exhaustive and should be read with the other cautionary statements in the Preliminary Prospectus. Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in the Preliminary Prospectus or this presentation. If any of the these risks materialize, or if any of the above assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in the Preliminary Prospectus or this presentation. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement in this presentation is made as of the date of the Preliminary Prospectus, and, except as required by law, we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

United States Securities Laws

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. person absent registration or an applicable exemption from the registration requirements. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. “United States” and “U.S. person” shall have the meanings assigned to them in Regulation S under the U.S. Securities Act.

This presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sources referred to in this presentation, or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying assumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such information.

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Com an Overview p y

  • StageZero Life Sciences is focused on:

  • PCR (swab and saliva) and antibody COVID-19 testing through the Company’s CLIA-certified[1] , CAP-accredited[2] lab in Richmond, Virginia

  • Interest in excess of 250,000 tests, expected to be valued between US$18M and US$31M) which will be recognized over the next six (6) to nine (9) months

  • Personalized health via telehealth telehealth are a management platform; capabilities key

component of StageZero’s ability to offer testing for COVID-19

  1. Commercializing proprietary and third-party clinical molecular cancer diagnostic tests

  2. Developing proprietary clinical molecular diagnostic tests for the early detection of cancer-related indications (Aristotle®)

  3. Clinical Laboratory Improvement Amendments 2. College of American Pathologists

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Mana ement Team & Board of Directors g

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James HowardTripp

• 20 years experience as a President, CEO and Director (often as Chairman)

• Previous President and CEO of Labopharm, overseeing the research, development, approval and launch of multiple products; lead product marketed in 19 countries (total end user sales of approximately $100 million)

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Harry Glorikian Director

Co-founded Scientia Advisors with 20 years of experience in the healthcare and life science industries

Held senior management positions at Applied Bio Systems, Signet Laboratories, and at X-Cell Laboratories, Inc. in California; deep commercial background in diagnostics, molecular biology, proteomics, cellular biology and biodefense

Chairman & CEO

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Rory Riggs Director

  • Managing Member of Balfour LLC

• Former President of Biomatrix, Inc., a NYSE-listed company which successfully developed and marketed one of the leading viscosupplementation products in the United States, Synvisc®, for the treatment of osteoarthritis

  • B.A. from Middlebury College, Vermont, and an MBA from the Graduate School of Business, Columbia University, New York

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Garth MacRae Director

Director of Dundee Corporation since 1991, a merchant bank and financial services company

Director of several other companies

Chartered Professional Accounting and a member of the Ontario Institute of Chartered Accountants

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Recent Develo ments p

  • Launched saliva-based PCR test, preparing for antigen and full respiratory panel testing (Oct. 2020)

  • Received interest for over 250,000 COVID-19 tests (May. 2020)

  • Raised $6.5M in capital via a private placement and prospectus offering (Dec. 2019 to Jun. 2020)

  • Aristotle® validated on approximately 2,900 patients; preparing for CAP validation and commercialization (H2 2020)

  • Successfully launched telehealth offering (launched Apr. 2019, expanded Nov. 2019)

  • Oncore Pharma signed first agreement with BodyCheck NL to distribute ColonSentry® in Benelux (Belgium, Netherlands, Luxembourg) (Oct. 2019)

  • Signed a Global Licensing and Services Agreement with Oncore Pharma (Jun. 2019)

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COVID-19: The Problem & O ortunit pp y

  • FDA has directed that only CLIA-certified high complexity labs can perform PCR and antibody testing for COVID-19

  • The Company has partnered with current and new service providers to offer COVID-19 testing

  • The COVID-19 tests are diagnostic platforms offered by Thermo Fisher Scientific, BTNX Inc., and Beckman Coulter Inc.

  • The Company is offering the COVID-19 tests on a direct cash pay basis

  • The Company believes that telehealth is likely to continue as a point of contact option for COVID-19 testing given lockdown initiatives currently in place in the US

  • Interest in excess of 250,000 tests, including from the City of Alpharetta (Georgia)

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COVID-19 Testin g

  • Interest in excess of 250,000 tests; capacity of 1,000 tests per day and ramping up to 3,000 per day; use of proceeds of the offering will greatly expand the Company’s testing capacity

  • COVID-19 tests priced between US$75 – US$150 (US$18M - US$31M in value)

Antibody

PCR

• The COVID-19 IgG/IgM Antibody Test is an invitro immunoassay for the direct and qualitative detection of anti-SARS-CoV-2 IgM and anti-SARS-CoV-2 IgG in human serum, plasma or venipuncture whole blood to aid in the diagnosis of COVID-19 in conjunction with clinical presentation and results of other laboratory tests • The antibody tests identify antibodies in the blood that are indicative of a past infection

• The COVID-19-PCR test is a real-time reverse transcription polymerase chain reaction (rRTPCR) test for the qualitative detection of nucleic acid from SARS-CoV-2 in specimens from individuals suspected of having COVID-19 • Test results indicate whether the patient has the COVID-19 infection at the time the test is administered

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The Testin Facilit g y

  • Located in Richmond, Virginia

  • Classified as a “high-complexity lab”

  • CLIA-certified and CAP accredited

  • Has all licenses to offer necessary required

  • laboratory testing services to patients in all fifty (50) states of the US

  • Constructed in 2013 and acquired for $3M; effective March 2016 owns 100% of the facility

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  • Capacity of 1,000 COVID-19 tests per day, ramping up to 3,000 tests per day via use of proceeds

Picture source: Company files

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Come for COVID Sta for Cancer , y

Telehealth and COVID 19

  • Leverage the Company’s MyCancerRisk telehealth platform to request COVID-19 test and communicate results; many physicians offices are closed; many patients are at home; a solution is telehealth and mobile phlebotomists

  • The Company believes that COVID-19 is expected to remain an active virus affecting human populations for the next 15-21 months

New Partners

  • Mercer’s VIP Program

  • Companies/Employers eg: travel groups/airlines

  • Large Physician Groups eg: urgent care centers

  • States, Counties, Cities

Aristotle®

  • Publish data, clinically validate, prepare for first commercial launch

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Telehealth for COVID-19 & Be ond – What We’ve Built y

  • Online store for taking secure payments

  • Network of who are licensed in all states to tests and on physicians fifty (50) prescribe follow-up

  • elevated scores

  • Adopted a HIPAA[1] compliant portal solution to collect and protect patient data

  • Grown network to 8,000+ draw sites and 10,000 mobile phlebotomists in US through the Company’s partner physicians

Sample Doctor Patient Results Collection Administered by partner The Company reports the Reviews patient data and Registers and pays online for physicians at a lab or patient’s results back to physicians and writes order tests home patients

  1. Health Insurance Portability and Accountability Act

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Telehealth Model At-A-Glance

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Demand for Telehealth Solutions is Growin Ra idl g p y

  • Outside of COVID-19, the global telehealth market was valued at US$50B in 2018 and is predicted to reach US$267B by 2026[1]

  • 74% of employers in the US now offer telehealth as a covered benefit[2]

  • Americans age 45-54 and 65+ are most likely to delay needed care due to wait times[3]

  • On average, it takes approximately 21 days for a patient to see a primary care provider[4]

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  • 66% of consumers are willing to use telehealth to get faster service and cost savings[5]

1. Source: Fortune Business Insights: Telehealth: Global Market Analysis, Insights, and Forecasts, 2019-2026. 2. Source: Kaiser Permanente, “KFF Employer Health Benefits Survey 2018” (2018).

4.

5.

Source: AthenaInsight, “The doctor will see you…sometime” (December 11, 2017). Source: American Well, “Telehealth Index: 2019 Consumer Survey” (2019).

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3. Source: American Well, “Telehealth Index: 2019 Consumer Survey” (2019).

Addressin Consumer and Em lo er Needs g p y

  • The Company believes that patients increasingly want healthcare, including laboratory diagnostic testing, at their convenience and without the need to travel or wait

  • Cancer costs the economy billions; roughly $171B a year and rising[1]

  • The Centers for Disease Control and Prevention predicts cancer will be the leading cause of death in 2020; 40% of cancers are still diagnosed in the late stages[2]

  • Cancer is the #1 catastrophic claim to employers and a small number of claimants drive the majority of the cost[3]

Cancer Costs4 Cancer Costs4 Cancer Costs4
Type Early Stage Late Stage
Colorectal $33,000 $120,000
Lung $34,000 $240,000
Prostate $4,300 $100,000
Breast $82,000 $134,000

1. Source: See generally Centres for Disease Control and Prevention, “Cancer” (April 15, 2020). 2. Source: Ibid.

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3. Source: Sun Life Financial, Inc. “SunLife Stop Loss Research Report” (2019). 4. Source: Ibid.

The Sentinel Princi le® – Patented Technolo p gy

  • Circulating blood reflects, in a detectable way, what is occurring throughout the body

  • Subtle changes that occur in cells due to disease trigger detectable changes in mRNA expression[1]

  • The Company’s flagship test derived from the Sentinel Principle®, known as ColonSentry®, measures the expression levels of seven genes (ANXA3, CLEC4D, LMNB1, PRRG4, TNFAIP6, IL2RB, and VNN1)

  • Validated in a study of 10,000 patients in North America[2]

  • Demonstrated to find cancer early (Stage 1 and 2), but also at Stage 3 and 4[3]

  • Elevated test results are highly predictive of left and right sided colorectal cancer[4]

  • Negative predictive value is 99.6%[4]

1. Source: Liew CC, Ma J, Tang HC, et al. The peripheral blood transcriptome dynamically reflects system wide biology: a potential diagnostic tool. J Lab Clin Med. 2006 Mar;147(3):126-32. 2. Source: Marshall KW, Mohr S, Khettabi FE, et al. A blood-based biomarker panel for stratifying current risk for colorectal cancer. Int J Cancer 2010;126(5):1177-86. 3. Source: Ibid.

4. Source: Chao S, Ying J, Liew G, et al. Blood RNA biomarker panel detects both left- and right-sided colorectal neoplasms: a case- control study. J Exp Clin Cancer Res. 2013 Jul 23; 32:44.

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Findin Late-Sta e Cancer g g

  • Patients do not adhere to cancer screening

  • 33% of patients refuse colorectal cancer screening[1]

  • 70% of colorectal cancer deaths come from the 33% of patients who refuse screening[2]

  • There are gaps in current screening

  • PSA cannot

  • Prostate-Specific Antigen (“ ”) differentiate between prostate cancer and benign prostate conditions in men with elevated PSA[3]

  • Mammography misses 20% breast cancers and has sensitivity of 48% in women with dense breasts[4]

    3.

2. Source: Long-term Risk of Colorectal Cancer and Related Deaths After a Colonoscopy With Normal Findings; Jeffrey K. Lee, MD, MAS; 4. Christopher D. Jensen, PhD, MPH; Theodore R. Levin, MD; JAMA Internal Medicine, 2018.

  • The Company’s historical approximate customer segmentation for blood tests include:

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----- Start of picture text -----

10% 30%
Physician Patient Directed
Practices Testing
30% 30%
Health Employers
Systems
----- End of picture text -----

  • Source: Beckman Coulter, “New Prostate Cancer Blood Test Now Available in the US: Beckman Coulter’s Prostate Health Index (phi) Available Nationwide for Better Prostate Cancer Detection (April 24, 2014).

Source: Kolb TM1, Lichy J, Newhouse JH. Comparison of the performance of screening mammography, physical examination, and breast US and evaluation of factors that influence them: an analysis of 27,825 patient evaluations. Radiology. 2002 Oct;225(1):165-75.

1. Source: Joseph DA, King JB, Richards TB, Thomas CC, Richardson LC. “Use of colorectal cancer screening tests by state.” Preventing Chronic Disease 2018;15:170535.

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Aristotle®: Multi-Cancer Platform

  • Only one sample of blood required

  • 9 discrete cancers are detectable for women, 6 for men

  • High sensitivity and specificity

  • Can discriminate each cancer

  • Significant global revenue opportunity

Aristotle @ Optimum ROC Threshold[2]

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----- Start of picture text -----

Sens Spec
100%
80%
60%
40%
20%
0%
BldrCa CRC LvrCa NPC StmCa PrstCa BRstCa CrvxCa EdnmCa OvrCa
AUROC 0.997 0.966 0.999 1.000 0.998 0.990 0.998 0.997 0.998 0.996
97% 98% 100% 99% 100% 100% 100% 99% 97% 100% 97% 100% 98% 100% 99% 97% 99%
94% 95%
88%
----- End of picture text -----

  • Validation was conducted using blood samples from 2,852 subjects across 10 cancer types[1]

Nasopharyngeal Bladder Cancer Breast Cancer Ovarian Cancer Cancer Colorectal Cancer Stomach Cancer Cervical Cancer Liver Cancer Prostate Cancer Endometrial Cancer

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1. Source: A Dempsey, J. Howard Tripp, S. Chao, et al. Aristotle: A single blood test for pan-cancer screening, J Clin Oncol 38: 2020 (sppl; abstr e15037). 2. Source: Ibid.

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Commercializin Aristotle® g

  • Market to four channels as discussed on slide 16; physician practices, employers, heath care systems, and directly to patients

  • Beginning process with a novel group of cancer clinics

  • In discussions with large healthcare systems and several self-funded employer plans

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O ortunit Summar pp y y

  • StageZero Life Sciences is focused on:

  • PCR (swab and saliva), and antibody COVID-19 testing through the Company’s CLIA-certified, CAP-accredited lab in Richmond, Virginia

  • Interest in excess of 250,000 tests, expected to be valued between US$18M and US$31M) which will be recognized over the next six (6) to nine (9) months

  • Personalized health via telehealth telehealth are a management platform; capabilities key

component of StageZero’s ability to offer testing for COVID-19

  1. Commercializing proprietary and third-party clinical molecular cancer diagnostic tests

  2. Developing proprietary clinical molecular diagnostic tests for the early detection of cancer-related indications (Aristotle®)

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Pre-Mone Ca italization y p

Capitalization
Share Price (October 19, 2020) $0.85
Basic Shares Outstanding (As June 30, 2020) (post-consolidation basis) 48,940,134
Basic Market Capitalization $41,599,113
Plus: Warrants 19,781,923
Plus: Stock Options 3,610,655
Fully Diluted Shares Outstanding 72,332,712
F.D. Market Capitalization $61,482,805
Plus: Notes Payable and Long-Term Debt (As at June 30, 2020)1 $2,578,689
Less: Cash (As at June 30, 2020)1 $4,066,773
F.D. Enterprise Value $59,994,721

Figures converted to CAD at rate of 1.3628:1 CAD/USD; Bank of Canada rate as of June 30, 2020.

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Use of Proceeds

Minimum Offering Maximum Offering
Salaries and benefits for current employees for one year1 $1,155,000 $1,155,000
Salaries for additional full-time laboratory staff2 $1,335,000 $2,670,000
Purchase equipment, test reagents, and consumable materials (for
COVID-19 Tests and Aristotle®)3
$950,000 $1,900,000
Corporate marketing expenses4 $600,000 $3,000,000
Expansion of Richmond Laboratory5 $180,000 $180,000
General working capital purposes $140,032 $105,063
Total Net Proceeds $4,360,032 $9,010,063
  1. The Company intends to use its cash on hand to pay salaries and benefits for current employees.

  2. Under the Minimum Offering (as hereafter defined) scenario, the Company intends to hire an additional twelve (12) full-time employees. Under the Maximum Offering (as hereafter defined) scenario, the Company intends to hire twenty-four (24) additional full-time employees compared with only hiring twelve (12) additional full-time employees under the Minimum Offering scenario.

  3. The Company intends to purchase more equipment, test reagents, consumable materials for COVID-19 Tests and Aristotle® under the Maximum Offering scenario compared with the Minimum Offering scenario.

  4. The Company intend increase its spending in corporate marketing and advertising expenses under the Maximum Offering scenario to increase its market awareness in COVID-19 testing and liquid biopsy markets.

  5. The Company intends renegotiate its lease to increase the Richmond Laboratory by approximately 5,000 square feet.

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Term Sheet

Issuer: StageZero Life Sciences Ltd. (the " Company "). Marketed public offering (the “ Offering ”) of a minimum of 6,410,300 units and a maximum of 12,820,600 units (each, a “ Unit ” and collectively, the “ Units ”), with each Unit Issue: comprised of one common share in the Company (each, a “ Common Share ”) and one-half of one common share purchase warrant (each, a “ Warrant ”). Issue Price: C$0.78 per Unit. The Company will grant the Agents (as hereafter defined) an option to increase the size of the Offering by up to 15.0%, exercisable in whole or in part for Units, Common Over-Allotment Option: Shares, or Warrants, in any combination, at any time for a period of 30 days after and including the Closing Date (the “ Over-Allotment Option ”), for over-allotment and market stabilization purposes. Each Warrant entitles the holder thereof to acquire one Common Share for an exercise price of C$1.10 per Common Share for a period of 36 months following the Closing Warrants: Date. Overnight marketed offering of Units (i) by way of short form prospectus to be filed in British Columbia, Alberta, and Ontario, and (ii) as agreed to by the Agents and the Form of Offering: Company, outside of Canada without: (A) giving rise to any requirement under the laws of such jurisdiction to prepare and/or file a prospectus, registration statement or document having similar effect; or (B) creating any ongoing compliance or continuous disclosure obligations for the Company pursuant to the laws of such jurisdiction. Listing: The Common Shares are listed on the Toronto Stock Exchange under the symbol “SZLS”. Eligibility: The securities comprising the Units are eligible for Canadian RRSPs, RRIFs, DPSPs, TFSAs and RESPs. Agents: Echelon Wealth Partners Inc. and Clarus Securities Inc. (the “ Agents ”). The Company will pay to the Agents, on the Closing Date, a cash commission equal to 7% of the aggregate gross proceeds received from the sale of the Units sold in the Offering (including pursuant to the Over-Allotment Option). In addition, the Company shall issue warrants to the Agent (the " Broker Warrants ") equal to 7% of the number of Agent’s Fee: Units sold in the Offering (including pursuant to the Over-Allotment Option). Each Broker Warrant entitles the holder thereof to acquire one Common Share for an exercise price of C$0.85 per Common Share for a period of 36 months following the Closing Date (collectively, the " Agent’s Fee "). Closing Date: On or about November 12, 2020, or such other date as the Company and the Agents may agree (the “ Closing Date ”).

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Thank You

James Howard-Tripp

Chairman & CEO [email protected] T: +1 (855) 420 7140 x1

Rebecca Greco

Investor Relations

[email protected] T: +1 (855) 420 7140 x1838

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Twitter - @ StageZeroLS

Facebook - @StageZeroLifeSciences

LinkedIn - @stagezero-lifesciences

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