The Pulse Beverage Corporation Corporate Presentation
Disclaimer and Forward Looking StatementsThis presentation is prepared by The Pulse Beverage Corporation (the “Company”), and is solely for the purpose of corporatecommunication and general reference only. The presentation is not intended as an offer to sell or to solicit an offer to buy or form anybasis of investment decision for any class of securities of the Company in any jurisdiction. All such information should not be used orrelied on without professional advice.The presentation is a brief summary in nature and does not purport to be a complete description of the Company, its business, itscurrent or historical operation results or its future business prospects.The presentation contains certain forward looking statements with respect to the financial conditions, results, operations and businessof the Company. The statements and forecasts involve risk and uncertainly because they relate to events and depend on circumstancesthat occur in the future. There are a number of factors that could cause actual results or developments to differ materially from thoseexpress or implied by these forward looking statements and forecasts.This presentation is provided without any warranty or representation of any kind, either express or implied. The Company specificallydisclaims all responsibility in respect of any use or reliance of any information, whether financial or otherwise, contained in thispresentation. The statements contained within this presentation have not been evaluated by the Food and Drug Administration. TheCompany’s products are not intended to diagnose, treat, cure or prevent any disease.This presentation contains forward‐looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934, including statements regarding the business of the Company and its industry generally, businessstrategy and prospects. These statements are based on the Company’s estimates, projections, beliefs and assumptions and are notguarantees of future performance. The Company cautions that these statements are subject to various known and unknown risks andthat actual results may differ materially from those expressed in forward‐looking statements. The Company undertakes no duty toupdate these forward looking statements except as required by law.
Investment ProfileExchange/Symbol: OTCQB: PLSBAs of September 30, 2012, 2012:Shares Outstanding: 36 millionMarket Cap: $18 millionCurrent Stock Price: $0.503 Month Average Trading Volume: 30,000 shares per dayShareholders ≈ 3,000www.pulsebeverage.comThe Pulse Beverage Corporation intends to list on a more senior exchange such as AMEX or NASDAQ as soon as it completes a financing which will allow it to qualify.
Company Overview• The Pulse Beverage Corporation (“Pulse”) is based in Northglenn, Colorado and was formed by successful beverage industry veterans for the purpose of exploiting niche markets in the beverage industry.• Pulse’s mission is to be one of the market leaders in the development and marketing of nutritional/functional beverage products that provide REAL health benefits to a significant segment of the population and are convenient and appealing to consumers.• Pulse has assembled an outstanding management team of beverage industry executives that have successfully launched and/or managed the distribution for more than twenty‐five major brands over the past twenty years and have strong relationships with distributors and buyers who supply thousands of retail outlets, supermarkets, convenience stores and mass merchants.• Pulse’s initial products consist of PULSE® Heart Health, Women’s Health and Men’s Health Formulas and Cabana™ 100% Natural Lemonade.
Initial Development and Acquisition• The PULSE® brand of beverages was formulated under license by a major healthcare company that spent in excess of $10 million formulating, developing and initially marketing the PULSE® brand.• The PULSE® brand of beverages was formulated to be scientifically effective by containing ingredients that are widely considered to be critical to adult health including liposome nanotechnology that introduces the ingredients into the beverage in a format that allows the body to absorb the nutrients.• Pulse has free and clear ownership of the formulations, rights and trademarks relating to the PULSE® brand of beverages including the right to use the following Side‐Panel Statement: “Formulation developed under license from BAXTER HEALTHCARE CORPORATION”. This right is in perpetuity without royalties.
The Beverage Industry and Market• Non‐alcoholic beverages are among the most widely distributed food products in the world and are being sold through more than 400,000 retailers in the United States. • The United States has more than 2,600 beverage companies and 500 bottlers of beverage products. Collectively they account for more than $105 billion in annual sales. It is estimated that globally more than $300 billion worth of non‐alcoholic beverages are sold annually. The beverage market is controlled by two giants, Coca‐ Cola and Pepsico controlling over 70% of the beverage market.• Industry watchers and the beverage giants believe that growth will be largely confined to niche nutritional and functional beverages which are non‐carbonated.• Coca‐Cola has stated that they are searching for another billion dollar brand and is betting that the next big beverage will be a niche product. Coca‐Cola’s VEB group is hoping to cultivate the next billion‐dollar brand and has identified PULSE® as the direction the market is going. Coca‐Cola has stated that one million cases and/or $20m in revenues is their “proof of concept” benchmark.• It is common for these industry giants to acquire successful brands from smaller companies, typically for a negotiated multiple of sales revenues. It is our goal to have one or more of our brands in a position to be acquired.
Comparison to Other New Beverage Companieswith Emerging Growth BrandsThe PULSE® brand is NOT an emerging growth brand as in excess of $10m was spent by a major healthcare company developing and extensively and successfully test marketing the PULSE® brand in Chicago and Phoenix. Pulse has assembled a professional team of beverage industry experts, each having over 25 years of experience in the beverage industry:• Robert Yates, CEO, was a major contributor to the success of the CLEARLY CANADIAN beverage brand at a time when he was responsible for $50m of CLEARLY’s $178m in annual sales and went on to develop and successfully launch his own KWENCHER® brand building it into 1.7 million cases in 2 yrs.• Paddy Sheya, National Sales Manager, has worked with Robert Yates for over 18 years and owned his own beverage company.• Ron Kendrick, Chief of Product Development was the Vice President of Operations and Product Development for Clearly Canadian for over 17 years and was instrumental in developing the PULSE line of products for Baxter Healthcare.• Bruce Horton, Advisory Board Member, was the CFO, Director and Co‐founder of CLEARLY CANADIAN. Under his tenure, Clearly sales grew from zero to $178m.
Comparison to Other New Beverage Companieswith Emerging Growth Brands Continues….. KEY TO SUCCESS is Pulse’s ability to rapidly develop a distribution network to distribute its beverage brands. Beverage companies that fail generally fail because they didn’t have the contacts and experience to rapidly build a distribution network. The VEB unit of Coca‐Cola has expressed to Pulse Management that the beverage industry is trending to the niche beverage products such as PULSE®. VEB has expressed that nutraceutial beverages that are scientifically formulated, having sufficient dosages of active ingredients to help maintain or make a difference to your health is where the beverage industry is trending quickly. The PULSE® brand is 2 to 3 years ahead in development compared to other “emerging” brands for the following reasons: Scientifically developed PULSE® brand has had in excess of $10 million spent on product formulation and extensive and successful test marketing. Seasoned management team each having 25+ years in the beverage industry with proven track records. VEB unit of Coca‐Cola’s expressed interest in the PULSE® brand. An existing extensive distribution network which is expanding across North America and Internationally ‐ A MAJOR KEY TO SUCCESS.
Prominent Industry AcquisitionsVitamin Water® ‐ Coca‐Cola® purchased Vitamin Water® for a reported $3.4 billion when they were selling approximately 10 million cases per year and had approximately $200m in sales.SOBE® ‐ Pepsi‐Cola® purchased SOBE® for a reported $378 million when they were selling approximately 3 million cases per year and had approximately $60m in sales.FUZE® ‐ Coca‐Cola® purchased FUZE® for a reported $300 million when FUZE®, at the time, was selling approximately 7 million cases per year and had approximately $140m in sales.Rock Star Energy Drink® ‐ Coca‐Cola® purchased the distribution rights for an undisclosed amount and owns the right of first refusal to purchase the Rock Star Energy Drink® brand which is currently selling approximately 8 million cases per year.Arizona Iced Tea® ‐ turned down an offer from Coca‐Cola® for $2.1 billion. At the time of the offer, Arizona Iced Tea® was selling approximately 25 million cases per year and $500m in sales.Honest Tea® – Coca‐Cola purchased this brand in Q‐2 of 2011 for a reported $400 million when it was selling approximately 1.4 million cases per annum.
Product Mix• Pulse’s products are targeted at the nutritional and functional beverage segment of the non‐carbonated beverage market which Pulse believes has a potential market size in excess of $1 billion in sales annually. • Non‐carbonated beverages divide into a number of categories including energy and sports drinks, nutraceuticals, lemonades, teas, juices and bottled water. These beverage categories include a host of products that are fortified with vitamins, minerals and dietary supplements. • Pulse’s product mix is calculated to exploit niches that have been identified as either unoccupied or have yet to attract significant attention such as all‐natural lemonades and nutritional/functional beverages.• PULSE® brand of beverages are formulated and aimed at providing functional ingredients to specific health platforms. Pulse has recently improved the original Pulse® formulations by reducing the calories to not more than 55 calories per 8oz. serving.
Product MixPulse® brand of nutritional and functional beverages may be the only niche beverage line that has sufficient dosages of active functional ingredients to help maintain health and is presently comprised of three nutritional beverages in three functional health platforms: Pulse® ‐ Men’s Health Formula™, Pulse® ‐ Women’s Health Formula™ and Pulse® ‐ Heart Health Formula™ all in great tasting low calorie flavors.
Mens HealthPulse® ‐ Men’s Health Formula™ is a unique combination of nutritional ingredients loaded with a variety of powerful antioxidants that scavenge free radicals in our bodies. Free radicals are associated with aging, cardiovascular problems, cancer and other health concerns for the modern man. While it is designed to support areas such as prostate health in particular, the combination of green tea catechins, vitamins E & C, lycopene and selenium help men maintain a counter attack in the battle against free radical damage to their bodies.
Womens Health Pulse® ‐ Women’s Health Formula™ is a convenient nutritional beverage designed specifically for women. Our ability to be active and healthy is directly affected by the strength of our bodies. Pulse contains meaningful levels of the key ingredients that work in concert to enhance bone health throughout our lives – calcium, magnesium and Vitamin D. Additionally, these ingredients coupled with folic acid and other B vitamins help women prepare for pregnancy while soy isoflavones can help buffer symptoms of menopause. No matter the stage of life, Pulse helps you meet life head on.
Heart HealthPulse® ‐ Heart Health Formula™ contains safe and effective levels of a number of important heart and health friendly nutrients in a great tasting beverage. It has vitamin C and selenium, both of which are important nutrients to help maintain the health of your heart. Pulse® Heart Health is an excellent source of dietary fiber which helps to maintain healthy cholesterol levels within the normal range.
Cabana™ 100% Natural LemonadeCabana™ 100% Natural Lemonade is a refreshing, all‐natural, “good‐for‐you”, ready‐to‐drink lemonade in five distinct and great tasting flavors, offering a significant reduction in calories, only 60 calories and 12 grams of sugar per 8oz serving and no artificial sweeteners or coloring. To sweeten and reduce calories Pulse uses stevia, a South American herb used as a natural sweetener.
The Lemonade Market• Lemonade is America’s second favorite juice drink • 89% of juice drinkers consume lemonade – 36% as favorite• 56% of all teenagers prefer lemonade in the juice category ‐ African Americans 66%, females 61% • 52% of all people purchase a drink contained in a glass bottles ‐ the highest of any packaged container for a beverage The Lemonade Category in 2010 was a $350m business, up 32% from 2009 • Simply Lemonade is the leader in the category at $155m in sales in 2010, up 91% • Calypso sales were up 51% to $15m• Tropicana Lemonade grew at 233%
Media Commentary on Lemonade Market“Lemonade, that quintessential summertime drink, is becoming a drink for all seasons. No longer resigned to backyard barbecues and ball games, the category has seen a surge in year‐round consumption. Consumer demand for the beverage drove sales of single serving bottles to $154 million over the last 52 weeks, up 11.3 percent over the same period in 2010, according to Symphony/IRI data” Ray Latif, BevNet Magazine, September 13, 2011 “Bell Flavors & Fragrances, Northbrook, Ill., forecasted the Top 10 flavors for the food and beverage industry in 2012. The No. 1 beverage flavor on the list was Lemonade” BevNet Magazine, December 19, 2011
Competitive LandscapePulse® Heart Health, Women’s Health and Men’s Health FormulasGlaceau Vitamin Water ‐ Numerous beverages/flavors, zero calories, mostly trace amounts of vitamins and elements SoBe Lifewater ‐ Numerous beverages/flavors, varying calories, mostly trace amounts of vitamins and elements Function Drinks ‐ Three beverages/seven flavors, emphasis on detox/weight loss/energy, various antioxidantsNeuro ‐ Eight beverages/formulations/flavors, lightly carbonated, proprietary blends and vitaminsCabana™ 100% Natural LemonadesCalypso ‐ distributed in only 30% of the US market, leading brand, Five flavors, 20oz glass bottle, high in calories with artificial coloringArizona Iced Tea ‐ One flavor (lemonade/tea aka “Arnold Palmer”), 24oz canCountry Time Lemonade ‐ One flavor, 12oz can, high in caloriesSimply Lemonade ‐ One flavor, 13.5oz plastic bottle, natural lemon juice, high in caloriesHuberts Lemonade – all natural lemonade in a 16 oz bottle
Competitive DifferentiatorsMarket Environment• Societal shift away from carbonated beverages ‐ The PULSE® brand is supported by a growing consumer link between nutrition and wellness in convenient solutions.• Emergence of new product categories ‐ energy and sports drinks, teas, juices, flavored waters, functionals and lemonades.• Aging population – influencing the food and beverage industry and affecting everything from packaging and taste profiles to calories and contents.• Pulse’s targeted demographics are 30+ adults who want to feel 30+ for the rest of their lives. Differentiators• Pulse’s goal is to create a new functional product category that is focused on providing true and meaningful health and wellness benefits in a convenient, enjoyable and good tasting format.• Proprietary formulations and scientifically effective in the recommended serving sizes as part of a daily health regimen.• PULSE® formulas include functional ingredients that are widely considered to be critical to adult health including anti‐oxidants, vitamins, minerals, soluble fiber and soy isoflavones.• Cabana™ Lemonades are 100% natural, low calorie, and uniquely flavored.• Liposome nanotechnology to deliver non‐water soluble “actives” ingredients to the body.
Distribution and Sales StrategyPulse strategically determined to introduce its Cabana™ 100% Natural Lemonade brand ahead of the launch of its PULSE® beverages for the following reasons:• The lemonade beverage category offered immediate opportunity due to few competitors. The leader in the category has grown at a rate of 51% over the previous year• Lemonades are no longer considered a seasonal beverage and only one other competitor offers 100% natural ingredients• Messaging for Cabana™ 100% Natural Lemonades is straight‐forward: “Everyone knows what lemonade is”• Senior management’s years of establishing distributor contacts is allowing Pulse to quickly implement a strong distribution network for Cabana™ which will facilitate and expedite PULSE® brand introduction through this established network• Pulse successfully predicted efficient Cabana™ product penetration attracting a broad demographic without requiring consumer communicationPulse’s Key Strategy ‐ having successfully delivered its Cabana 100% Natural Lemonade product into its “Distribution System” it will be much easier to introduce the more complex PULSE® product with functional ingredients that have been proven to promote health. In essence “Red‐carpeting” the PULSE® brand into the established Distribution System.
Distribution Network – Key to aSuccessful Beverage Company• Pulse has been very successful in developing an elaborate and credible product distribution system for its product offerings. What typically takes three to four years to build has taken Pulse’s management just one year to build.• Pulse’s distribution system presently includes over 78 distributors serving 38 States, Canada, Panama and Bermuda. Pulse’s distribution network includes 80% class “A” distributors. Class “A” distributors are distributors that carry major beverage brands such as: Anheuser‐Busch, MillerCoors, Pepsi, Coca‐Cola, RC and 7‐Up. These distributors provide full service product distribution at the highest level than smaller beverage distributors.• Pulse’s distribution system was strategically established behind the strength of its Cabana™ 100% Natural Lemonade which acceptance by distributors, retailers and consumers has exceeded expectations. • Pulse has been educating and pre‐selling its distributors as to the health benefits of its flagship product, Pulse® in three health platforms: Men’s Health Formula™, Women’s Health Formula™ and Heart Health Formula™. These products will be “red‐carpeted” into the extensive distribution network in place this fall.
Successful Launch of Cabana™ 100% Natural Lemonades• Response from distributors, retailers and consumers has exceeded expectations due to superior packaging, great taste, 100% natural ingredients and lower calories than competitors – 60 calories and only 12 grams of sugar per 8 oz serving. Any beverage under 20 grams of sugar is considered a “good‐for‐you” beverage.• By March 2013 the Cabana™ brand is expected to reach the 1,000,000 level of case sales on an annualized basis. This is a “proof of concept” in the eyes of the major beverage companies and the brand should be an acquisition target at that point. Most emerging brands do not achieve this annualized level of sales until years three or four after launch, if ever. • By comparison, it took New Leaf Tea and Jones Soda almost six years to reach 1,000,000 in annualized case sales.• Based on past acquisitions of successful beverage brands, and an independent valuation of a private 1,000,000 case sale per annum brand, Pulse’s Cabana™ 100% Natural Lemonade brand would have a significant value upon reaching an annual case sale level of 1,000,000.
PULSE® Brand Launch• Pulse intends to launch its Pulse® beverage brand in the fall of 2012. • Pre‐marketing with distributors is underway in conjunction with continued marketing of Cabana™ 100% Natural Lemonades and all distributors have expressed strong interest in adding Pulse® brand to their line‐up. • Pulse will position Pulse® brand line‐up as an extension of the successful lemonade launch through the enthusiastic participation of its established and growing distribution network across the United States and internationally. • Pulse® “functional” beverage line‐up requires increased educational messaging directed at beverage consumers in order to demonstrate the enhanced benefits predicted to drive sales growth. Pulse’s Chief of Product Development and his team have reduced calories, increased flavor profiles and have aligned the product with hot‐fill bottling processes which allows for all natural ingredients without the use of preservatives. • Educational process ‐ Dr. Peeke, Advisory Board Member, is a keynote speaker at nutritional and sports conferences throughout the year. Pulse plans to utilize this opportunity as part of the process to educate consumers. In addition, we plan to utilize a consumer website and all social media outlets and print ads in major beverage magazines.
Growth and Acquisition Strategy• Negotiate additional co‐packing contracts in strategic locations to more efficiently serve the entire North American market including Canada, Mexico and Central America. • Expand and improve the PULSE® brand by developing new proprietary formulations providing demonstrable clinical benefits such as: reducing sugar conversion in glucose to assist in preventing the onset of Type 2 diabetes, support good skin health, manage body weight, retard macular degeneration and preserve eyesight, and provide adolescents with a beverage that supplies all the building blocks they need for healthy growth. • Acquire products and/or secure distribution rights that complement or extend our current product mix. • Expand internationally in 2013 and into Asia in the second half of 2013. • Founding shareholders include strategic Asian partners for distribution into China and other major Asian markets including financing inventory, build‐out, branding and corporate co‐ listing on an Asian Stock Exchange.
Management and Advisory TeamPresident, CEO and Board Member, Robert Yates, is a seasoned business executive with over 20 years in the beverage industry. His previous distribution company generated approximately $50 million in annual sales and was the most successful master licensee for Clearly Canadian Beverage Corporation through much of Canada and the U.S. His distribution portfolio has included numerous well‐known beverages including Monster Energy Drink®, AriZona® Iced Tea, Rock Star Energy Drink®, Vitamin Water®, and Perrier®. Bob successfully launched his own brand, Kwencher, which he built into a 1.7 million case brand in less than two years.National Sales Manager and Board Member , Paddy Sheya, has over 30 years of international executive sales and distribution management experience in the beverage industry. He has an extensive track record in the development of brands and in building sales and distribution systems from the ground up to multi‐million case sales. Notable examples include leading Clearly Canadian® from nil to 4.8 million cases in less than 3 years, and managing Kwencher® sales from nil to 1.7 million cases in less than 2 years.VP and Eastern Sales Manager , Robert Watkins, has over 27 years of international executive sales and distribution management experience in the beverage industry. Proven record in the development of brands and in building beverage brand sales and distribution systems from the ground up to multi‐million case sales. Ex national and international sales manager for Bai Brands throughout the East coast and parts of the Mid‐west, Dubai and the Caribbean. 2007 to 2010; was Operations and International Business Manager for New Leaf Teas in the mid‐south and the Caribbean. Previously on‐premise sales manager for Red Bull NA; District Manager and Marketing/Merchandising Manager for Oak Beverages in the NYC market.
Management and Advisory TeamChief of Product Development, Ron Kendrick, has been in the beverage industry for over 30 years. Ron was previously with Clearly Canadian Beverage Corporation for over twelve years where he managed supply and logistical operations during a time when Clearly Canadian sales grew from zero to $180 million. He subsequently founded Catalyst Development Inc. and was instrumental in the creation of formulations for many companies including the PULSE® products for Baxter Healthcare.Advisory Board Member, Bruce Horton, co‐founded Clearly Canadian Beverage Corporation where he served as CFO and Director from 1987 to 1997. During his ten year tenure, Clearly Canadian’s sales grew from zero to $178 million.Advisory Board Member, Dr. Pam Peeke, MD, is an internationally recognized expert, physician, scientist and author in the fields of nutrition, stress, fitness and public health. Dr. Peeke is a Pew Foundation Scholar in nutrition and metabolism and is a Fellow of the American College of Physicians. She serves as Chief Medical Correspondent for Discovery Health TV, and has a national bestselling book, Fit to Live. Major magazines, television and radio networks interview her as a regular in‐studio science and health news commentator. Dr. Peeke is chief lifestyle expert for WebMD’s 50 million members and serves as spokesperson for the American College of Sports Medicine. Advisory Board Member, Don Prest, is a financial consultant competent in accounting, auditing and US GAAP financial reporting. Mr. Prest was CFO of Omnicity Corp, a public Wireless Internet Service Provider from 2009 to 2011 and CFO of Power Air Corp, a public fuel cell company, from 2005 to 2008. From 1993 to 2008 he served as practice head for a large US public company accounting firm.
CorporateCompany Contact Information Legal CounselBob Yates, Chief Executive Officer Hart & Trinen LLP11678 N Huron Street 1624 Washington StreetNorthglenn, CO, 80234 Denver, CO, USA 80203Phone: 720‐382‐5476Email: firstname.lastname@example.org Investor and Broker Relations Acorn Management Partners LLCShareholder Relations Lance A. BeckhamMartin E. Janis & Company, Inc. Phone: +1‐678‐368‐4012Phone: +1‐877‐302‐6404 Email: Email: email@example.com firstname.lastname@example.orgTransfer Agent AuditorsHolladay Stock Transfer, Inc. Weaver, Martin & Samyn LLC 2939 North 67th Place 411 Valentine Rd, Suite 300Scottsdale, AZ, USA 85251 Kansas City MO, USA 64111 OTCBB: PLSB www.pulsebeverage .com
Thank YouPULSE® and PULSE: NUTRITION MADE SIMPLE® are registered trademarks of The Pulse Beverage Corporation.