January 2020 Update

Hello KADI Botanical Inc. shareholders,

It has been less than 3 months since our last update and we have some significant progress to report.

Patent News:

We are very pleased to report that we have now received notice from the Canadian Patent Office that the patent application for our solvent free extraction technology has been examined, accepted and will be granted as a patent imminently.

This is very good news since this patent application is the first National Phase patent application of the world wide Patent Cooperation Treaty (PCT). This allows duplicate patent granting in up to 153 member countries around the world.

We also have applied for patents in 5 non-PCT member countries, which are also progressing very well (Uruguay, Jamaica, Pakistan, Taiwan and Lebanon).

Industrial Scaled Centrifugal Electrostatic Precipitation Extraction (CEPE) system:

In our last news report we indicated that the CEPE technology development was continuing towards the design of an industrial scaled system.

In late November 2019, the 4 inventors of the technology held a design review and brain storming session in Nanaimo, BC, to begin planning the detail design of the industrial scale CEPE demonstrator machine.

This 3-day engineering session resulted in a number of innovative refinements to the planned machine based on the previous development work.

Several of the improvements to the system have since been tested and proven on the lab prototype CEPE, and have been included into the design of the industrial scale machine, which is progressing on schedule.

Suppliers and manufacturers for most of the components for the industrial scale CEPE have been selected and component manufacturing is expected to start before the middle of Q1 2020, with sub system testing planned to start before the end of Q2.