Investor presentation for the first multicurrency crypto currency exchange.

1. Proprietary & Confidential
November 2014
INVESTOR PRESENTATION

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WHAT IS BITCOIN
AND
MARKET OPPORTUNITY

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What is Bitcoin
Bitcoin is digital money used directly between people to buy
goods and services. Cryptography is used to make it
impossible for anyone to spend funds from another user's
wallet and can be used to encrypt a wallet so it can't be used
without a password. This type of security is also used for
credit card transactions and electronic bank transfers.
Similar to any other currency, such as US dollars, it requires a
wallet - digital wallet to be precise. It is used to send and to
receive payments using unique addresses. No coin can be
reproduced or double spent. Unlike current digital wallet
solutions, Bitcoin transactions are independent of card
networks and cost a fraction of the traditional debit card
interchange fees.
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Ben Bernanke’s letter to Congress: Bitcoin and
other virtual currencies “may hold long-term
promise.”
“We ought to uphold America’s position as
center of technical innovation by welcoming the
new currency - but that can’t be done without
government safeguards and regulations.”
Sen. Tom Carper
Congressional Hearing on Virtual Currency
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Bitcoin Transactional Network is Growing Rapidly
Over 80K transactions take place daily and these
numbers are growing rapidly, as awareness grows.
FROM 0 TO 28 MILLION
TRANSACTIONS ANNUALLY
IN LESS THAN 3 YEARS
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Million USD
AUG
$160B
Sizing Up Today's Bitcoin Market and Growth
$87B WORTH OF BITCOINS
WERE TRANSFERRED WITHIN BITCOIN
NETWORK AMONG USERS IN NOVEMBER 2013
$20B
BITCOIN
EXCHANGE
MARKET
$120M
BITCOIN
MERCHANT
PROCESSING
Number of merchants
accepting Bitcoins
grew from 6K in 2012
to 20K in 2013.
The total Bitcoin market size was $87B in November and the exchange
segment grew from $1.5B to $20B from August to November.

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Dollar Volume is to Reach $160B in 5 Years
Million USD
AUG
$160B
The Bitcoin exchange market exploded from $50M to $20B in one year and is limited
only by the lack of connection with brick and mortar banking financial systems.

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WHO WE ARE
AND
WHAT NOVELTY LAB OFFERS

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VISION
An aspiration to become the first choice provider of digital
currencies exchanges for consumers and businesses. Offer
simple and easy to use e-commerce platform that will position us
as a top choice provider. Create the best platform for new digital
currencies. Create digital wallet solution that enables simple
payment, P2P transfers worldwide.
STRATEGY
Rapidly expand operations in less regulated countries. Pursue a
partnership with a 3rd party MSB in the US that can provide
licensed money transfer services including funds load, stored
value, and funds unload. Leverage partner’s existing agency
relationship legal structure with negotiated transaction-based and
other appropriate industry standard fees. Seek and employ best
and inexpensive programming talent in CIS countries. File patents
for digital wallet and unique trading algorithms.
TECHNOLOGY
/PLATFORMS
Finish development and planned expansions of our platform for
all cryptocurrency-related services. Outsource SaaS solutions for
customer verification, fraud prevention and AMK/KYC compliance.
Our Vision and Strategy
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One of the founders pioneered a competing digital
currency in early 2009. Our team of software
developers possesses superb knowledge of Bitcoin
technology and of digital currencies market.
UNMATCHED
INDUSTRY
EXPERTISE
LEGAL
EXPERTISE
Our legal counsel has 30 years of payment industry
experience and will help with navigating through
regulatory hurdles and with securing partnerships.
FLEXIBLE
PLATFORM
Our flexible platform offers the largest number of
digital currency services to date and allows for
broader business strategy.
INDUSTRY
RELATIONSHIPS
We have extensive contacts in the payments space.
Established relationships in US, EU and CIS
countries will simplify market entries.
What NoveltyLab Brings to The Table
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Money Slide or How We Make Money
NoveltyLab generates revenue from fees it
charges clients on the following transactions:
1% market share in 2015 will translate into processing of $400MM worth of Bitcoin
exchanges (principle) and result in $4MM revenue from mere 1% exchange fee.
Type of Transaction Fees
Bitcoin conversion exchange fees 1%
Bitcoin purchases with credit cards 3-5%
Merchant processing fees 0.5%
Fiat currency commission payout fees $20 fee plus 0.3-1% of the amount
Outgoing digital currency transfers < 0.01%
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Account Creation and Funding Process (example)
Customer
initiates
account
creation
NoveltyLab
collects identity
data through
online signup
process
MSB API is used
to verify identity
data and check
against OFAC
NoveltyLab
creates account
Customer
initiates
USD or Bitcoin
deposits
Customer
receives
notification
1
2 3 4
5
NoveltyLab credits
customers USD or
Bitcoin balance
6
MSB processes ACH
transfer or Novelty
Lab processes Bitcoin
transfer
7
8
systems
NoveltyLab’s Exchange is to offer:
▪ Access to account through
desktops and mobile devices
▪ Multichannel funding and
cash disbursement options
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BTC into USD Exchange Process (example)
Customer
requests
to sell
BTC
NoveltyLab
executes a trade
to convert BTC
into USD at
market rate
NoveltyLab
initiates ACH
transfer
Customer
requests USD
withdrawal
Customer
receives funds
1
2 3
4 6
7
NoveltyLab internally
credits USD to one
customer 's account
and BTC to another
5
systems
NoveltyLab’s Exchange Enables:
▪ Purchase of BTC’s with credit cards
▪ USD deposits for conversion into BTC
▪ BTC deposits for conversion into USD
▪ Withdrawal of USD
▪ Withdrawal of BTC
▪ Secure Bitcoin Storage
Money Transfer
Company processes
payment

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NoveltyLab Product Offering and Expansions
YEAR
SCOPE
1 2 3
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Property
NoveltyLab
HT
btcQuick,
money2btc
Coinbase MTgox CoinX Bitstamp
Multi-currency
Support
yes no no no no no
Fixed-rate Exchange yes yes yes no no no
Availability of Digital
Wallet Feature
yes no yes no no no
Purchase of BTC
with Credit Card
yes yes yes no no no
Compliance yes no yes yes yes yes
API for Third-party
Services
yes no no no no yes
Ripple Gateway yes no no no no yes
Competitive Analysis
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Our Core Team
Andrey Zamovskiy, Founder & CTO – Andrey is one of the leading experts in the Bitcoin field and a
pioneer of one of the decentralized digital currencies in 2009. He has more than 10 years in commercial web
development and started writing his own software at the age of 9. He released his own open source CMS,
when he was 14. Andrey was awarded 2nd place in 2011 best software architect competition in Ukraine. He
holds a bachelor’s degree in computer science and created his own cryptocurrency for his thesis project.
Taras Kuzin, CEO – Taras is seasoned entrepreneur, who has extensive contacts in the financial services
realm because of his previous work as a director at Western Union and First Data. Taras’s first currency
trade was executed in Hungary, in the early 90's, when he helped small business owners to convert Forints
into US dollars and German Marks. He holds an MBA degree from Purdue University and BA in marketing
from Dordt College.
Nickolay Babenko, Founder & COO – Nick has more than 7 years of experience in software development
in wide variety of roles. He is passionate about economics and process improvements driven by statistical
analysis. Nick has built and managed numerous great performing teams for a variety of projects. He holds a
bachelor’s degree in computer science from Ukrainian State Chemical Technology University. He also
attended MINI-MBA Professional program at City Business School in Russia.
Greg Bartels, Legal Counsel – Greg is a legal executive with 30 years of experience in contract law and
international business. During his impressive 16-year tenure with Western Union and First Data, he was a
respected advisor to senior management in the payments industry. Outside his corporate career with a
Fortune 100 money transfer business, Greg also served as Editor in Chief for Nebraska Law Review.
We also have access to a talent pool, including gifted software engineers and
industry experts, who will join Novelty Lab when we need them.
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CURRENT PERFORMANCE

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Our Transactions Are Growing in Both Segments
Nearly 4,000 clients a
month enter their credit
card information, but 95%
of transactions are
rejected by current
merchant processor!
PRINCIPLE
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We Have Over 3,000 Unique Visitors per Day
NoveltyLab is in the beta testing stage and these statistics
show organic traffic to our website.
Merchant Processing
Bitcoin Exchange
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USE OF FUNDS
AND
SUMMARY OF FINANCIALS

21. NoveltyLab Proforma Income Statement
(First 12 Months of Operations)
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Total
Number of US Transactions 0 0 0 0 0 1,000 2,000 4,000 8,000 16,000 32,000 64,000 127,000
Number of International Transactions 172 344 688 1,376 2,752 5,504 11,008 22,016 44,032 88,064 176,128 352,256 704,340
Average Transaction Size $100 $110 $121 $133 $146 $161 $177 $195 $214 $236 $259 $285 $314
Total Transactions Numbers Worldwide 172 344 688 1,376 2,752 6,504 13,008 26,016 52,032 104,064 208,128 416,256 831,340
Revenue
Revenue (Exchange & Merchant Processing) $156 $344 $757 $1,665 $3,663 $9,522 $20,947 $46,084 $101,386 $223,048 $490,706 $1,079,553 $1,977,830
Other Revenue $20 $32 $51 $82 $131 $210 $336 $537 $859 $1,374 $2,199 $3,518 $9,349
Total Revenue $176 $376 $808 $1,747 $3,794 $9,731 $21,283 $46,621 $102,245 $224,423 $492,905 $1,083,071 $1,987,179
Cost of Services Sold
Credit Card Processing Fees $78 $172 $378 $832 $1,831 $4,029 $8,863 $19,499 $42,899 $94,377 $207,630 $456,785 $837,374
Cost of Transactions through MSB's Partnerships $0 $0 $0 $0 $0 $1,025 $2,254 $4,960 $10,912 $24,006 $52,813 $116,188 $212,157
AML/KYC Compliance $22 $43 $86 $172 $344 $813 $1,626 $3,252 $6,504 $13,008 $26,016 $52,032 $103,918
Antifraud Service Fees (1 cent per transaction) $2 $3 $7 $14 $28 $65 $130 $260 $520 $1,041 $2,081 $4,163 $8,313
Total Cost of Services Sold $101 $218 $471 $1,018 $2,203 $5,932 $12,874 $27,971 $60,835 $132,431 $288,540 $629,168 $1,161,762
Gross Profit $75 $158 $337 $729 $1,591 $3,800 $8,409 $18,650 $41,410 $91,991 $204,365 $453,904 $825,417
Operating Expenses
Salaries & Benefits $38,000 $38,000 $38,000 $38,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $42,000 $488,000
Compliance Cost 0 0 10,000 0 0 50,000 0 0 0 0 0 0 60,000
Sales/Marketing/Advertising (5% Rev) 9 19 40 87 190 487 1,064 2,331 5,112 11,221 24,645 54,154 99,359
Credit Card Chargebacks (0.1% of credit card txns) 14 30 67 147 322 838 1,844 4,056 8,923 19,630 43,186 95,010 174,066
Legal (patents filing, legal advice and compaliance) 3,000 3,000 3,000 3,000 10,000 3,000 3,000 3,000 3,000 6,000 3,000 3,000 46,000
T&E (Business Development Trips) 0 3,000 3,000 2,500 2,500 2,500 2,500 1,500 1,500 1,500 1,500 1,500 23,500
Professional Memberships & Conferences 0 3,000 2,500 2,000 2,000 2,000 2,000 1,500 1,500 1,500 1,500 1,500 21,000
Equipment/Computers/etc. 0 5,000 0 0 0 5,000 0 0 0 0 0 0 10,000
Software R&D (e.g. Software Apps & Website) 800 800 800 800 800 800 1,500 1,500 1,500 1,500 1,500 1,500 13,800
Service Integration Fees (e.g. ZipZap sign up fees) 0 1,000 0 3,000 0 0 10,000 0 0 0 0 0 14,000
Other Operating Expenses (1% Rev) 2 4 8 17 38 97 213 466 1,022 2,244 4,929 10,831 19,872
Rent & Utilities US Office 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Rent & Utilities Office in Ukraine 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Business Insurance 0 0 0 2,000 0 0 0 0 0 0 0 0 2,000
Telephone, Cell Phone & Internet 450 450 450 450 450 450 450 450 450 450 450 450 5,400
Depreciation & Amortization 0 0 0 0 0 0 0 0 0 0 0 3,533 3,533
Impairment, Restructuring & Other Charges 0 0 0 0 0 0 0 0 0 0 0 0 0
Total operating expenses $45,274 $57,303 $60,865 $55,001 $61,300 $110,172 $67,571 $59,803 $68,007 $89,046 $125,711 $216,478 $1,016,531
Income (Loss) from Operations -$45,199 -$57,145 -$60,528 -$54,273 -$59,709 -$106,372 -$59,162 -$41,153 -$26,598 $2,945 $78,655 $237,426 -$191,114
Interest Expense, Net $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Income (Loss) before Income Taxes -$45,199 -$57,145 -$60,528 -$54,273 -$59,709 -$106,372 -$59,162 -$41,153 -$26,598 $2,945 $78,655 $237,426 -$191,114
Provision (Benefit) for Income Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Income (Loss) -$45,199 -$57,145 -$60,528 -$54,273 -$59,709 -$106,372 -$59,162 -$41,153 -$26,598 $2,945 $78,655 $237,426 -$191,114
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12 Months Proforma Income Statement

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5 Year P&L and Margins
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*** Based on current business trending and proforma cash flow statement, we expect to be cash flow
positive in Q3 2014.
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Market Size (Million USD) $20,000 $40,000 $80,000 $136,000 $144,160
NoveltyLab Market Share 1% 2% 4% 8% 10%
Transactions Volume 831,340 3,200,000 9,142,857 27,200,000 36,040,000
Number of Customers 290,969 896,000 2,133,333 5,440,000 6,307,000
Total Revenue $1,987,179 $56,000,000 $224,000,000 $761,600,000 $1,009,120,000
COSS 1,161,762 33,152,000 132,053,333 448,294,857 582,136,100
Gross Profit 825,417 22,848,000 91,946,667 313,305,143 426,983,900
Gross Margin 41.54% 40.80% 41.05% 41.14% 42.31%
Operating Expenses 1,016,531 7,218,933 17,660,733 55,536,833 74,238,533
EBITDA -187,580 15,639,600 74,310,467 257,847,643 352,902,700
Operating Margin -9.44% 27.93% 33.17% 33.86% 34.97%
Net Income -$191,114 $9,300,995 $44,571,560 $154,660,986 $211,647,220
Net Profit Margin -9.62% 16.61% 19.90% 20.31% 20.97%

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Use of Funds
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Capital will be used to achieve the
following milestones:
❑ secure money transmitter licenses (we’re having late
stage discussions with several payment companies),
❑ complete development of the next generation platform,
❑ expand in less regulated markets,
❑ establish a banking relationship (verbal agreement),
❑ sign contract with a new payment processor(s).

24. Andrey Zamovskiy Nickolay Babenko Taras Kuzin
CTO COO CEO
415.625.3497 415.670.9022 720.431.2208
andrey@noveltylab.com nick@noveltylab.com tk@noveltylab.com
Proprietary & Confidential
NoveltyLab, Inc.
www.NoveltyLab.com