EFTA01088054.pdf

*BitFury SECURING THE BLOCKCHAIN February 2015 STRICTLY CONFIDENTIAL This document is strictly confidential to the recipient may not be distributed to the press or any other person, and may not be reproduced in any other form. No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of BitFury or any of its shareholders, directors, officers or employees or any other person as to the accuracy or completeness of the information contained in this document and no liability whatsoever is accepted by BitFury or its affiliates, advisors, agents, directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any errors or omissions of information or use of such information or otherwise arising in connection therewith. Certain information in this document is forward-looking and reflects BitFury's current expectations and projections about future events, which reflect various assumptions made by BitFury. These assumptions may or may not prove to be correct and no representation is made as to the accuracy of such information. EFTA01088054 Technological Platforms for Disruption Bitfury The PC Era The Internet Era The Blockchain Era Semiconductor Technology TCP/IP Protocol Bitcoin Protocol coin 1 16 Microsoft Go .)81C. ' kJ amazon 14t" BitFuryapo Blockchain — an amazing new technology ...+ Digital payments ...* Digital currency Digital contracts BitFury Company Confidential EFTA01088055 Bitcoin — The Missing Protocol for Moving Value Bitfury TCP IP FTP transmission internet file transfer control protocol protocol protocol SMTP HTTP UDP email web browser user datagram transmission protocol protocol protocol DNS TLS/SS domain name cryptographic money protocol security protocol Blockchain powered by Bitcoin Protocol is a game changer BitFury Company Confidential EFTA01088056 Bitcoin is Much More than Money and Payments BitFury Monetary transactions Contractual transactions Payment processing Capital markets ✓ Cash management V Asset/title insurance Trusted Foreign exchange and Escrow management Transfer/wire Verified Trust management . ._Transactions v Remittances ✓ Patent registrations Donations ✓ Notary services Bitcoin Protocol Blockchain Ledger BitFury Company Confidential EFTA01088057 Year 2014 — Continued, Strong Bitcoin Adoption 'et? Bitfury Bitcoin Wallets Merchants Accepting Bitcoin 7 9M 82 000 3 2M 35,903 • • Commerce LDec'13 De: 14 Deei3 Dec'14 Bitcoin Network Hash Rate Number of GitHub Repositories (PH) 23 249 335 10 LA Technology Dec'13 Dec'14 Dec.3 Dec '4 Cumulative VC Investments VC-backed Start-ups fig $5 0 8 M 4500 142 0 $98M ■ Dec'13 Jan'15 Dec ? Industry SOURCE: COINDESK; BITCOINPULSE; BitFury Company Confidential PANTERA CAPITAL EFTA01088058 Merchants Accepting Bitcoin TO BitFury I . Microsoft TigerDirect.com CLSII IN , EFIV OR K overstock.com PayPal O Square TIME Oc 4 0 irckBooks WoRDPREss 110 zynga Expedia I4 S BitFury Company Confidential EFTA01088059  Bitcoin Transaction Growth Bitfury 3,000,000 2,500,000 2.000.000 1,500,000 1,000,000 500,000 0:7‘ );Ss. efrCi 04. eber \ te g •Sr \40 e 1• 3 V g V N ib Neb 1113 oe 14 / t‘ "P t 4 Nta 14 / 1'4 coefrq ÷04. I\b` Der Source: Blockchain.info (Bitcoin transactions per month) • # BTC transactions Transactions showing robust growth EFTA01088060  II BitFury *0 I earl the industry as the most trusted and reliable processor of transactions on Blockchain BitFury Company Confidential EFTA01088061 We are the Foundation of the Bitcoin Ecosystem 1 BitFury Merchant I ATM, Cards, Trust- -N Payment Services based Services bitpay coinbase 6.6 i..ftiassu ciRcLas . Robocom co coif ,J \ il (,...i ...1.-j. ..L maj . coinplug Exchanges ( Cloud Mining (Wallets, Vaults 4Inancial Service ®KCoin BITFINEX* d_OUDHASHING BITFINEXA Genesis Institutional WIN] ;tilt E7OP° Bit4X VAURUM ing ffhicraKen GAWMiners Deiiiptic .$TX TradeT- Transaction Processing Foundational '? BitFury GSticminer BITMAIN spondooliestech 2I . i1nCMiner 1 We Directly Benefit from Ecosystem Expansion Ecosystem Expands > Transactions Grow > BitFury Profits BitFury Company Confidential EFTA01088062 We are the Leader of Transaction Processing " BitFury Bitcoins Transaction Generations Generated Processor of Silicon to Date Execution AV BitFury Company Confidential 10 EFTA01088063 Full-Custom Silicon Advantage VS Others Full-Custom Standard-Cell (2 2 nm design) (28/20n2 Sponciookes 28nrn (join i erra 28nrn Streamlined design specifically tailored for the application 2x energy efficiency BitFury Company Confidential 11 EFTA01088064 Superior Chip Performance BitFury Energy Efficiency (Gigahashes per Joule) 10 10 8 6 5.0 4 3.0 2.0 2 1.4 1.5 1.6 1.0 BitFury BitFury BitFury Spondoolies Bitmain ASICMiner ASICMiner KnC Miner 16nm 28nm 55nm 28nm Tech 28nm 28nm 40nm 20nm Process Technology 16nm 28nm I 55nm 28nm 28nm 28nm 40nm 20nm Die Size 14mm2 14mm2 14mm2 100mm2 12mm2 12mm2 12mm2 300mm2 19x19mm 5mmx5mm 55x55mm Package TBD 7x7mm QFP 7x7mm QFP FCBGA 8x8mm QFP FCLGA 9x9mm QFN FCBGA Chip Performance (GH/s) 30 15 3.8 200 12.5 12.5 9.8 160 BitFury Company Confidential 12 EFTA01088065 Industry Bitcoin Price Breakeven Analysis • BitFury Fully Loaded Electricity Network Hash Rate Cost (per kw-mo) (petahashes) $30 $50 $80 $110 $140 300 350 400 500 600 0.20 $16 $27 $43 $59 $75 0.20 $44 $51 $58 $73 $88 0.30 $24 $40 $65 $89 $113 0.30 $66 $77 $88 $110 $131 0.50 $40 $67 $108 $148 $188 0.50 $110 $128 $146 $183 $219 0.70 $57 $94 $151 $207 $264 2 0.70 $153 $179 $204 $256 $307 0.90 $73 $121 $194 $267 $339 0.90 $197 $230 $263 $329 $394 1.10 $89 $148 $237 $326 $415 1.10 $241 $281 $321 $402 $482 1.30 $105 $175 $280 $385 $490 1.30 $285 $332 $380 $475 $569 Source: BitFury estimates Baseline industry assumptions: $80/kw-mo fully loaded electricity cost; 0.9 joules/gigahash, 295 petahashes for the Bitcoin network BitFury's technological edge translates into very competitive cost of mining Bitcoins BitFury Company Confidential 13 EFTA01088066 Competitive Landscape Bitfury Company Country Description Competitive Strength BitFury GLOBAL • Track record of delivering 4 successful chips • Commences production of 28nm chip — industry's leading performance @ 0.2 J/GH • Expansion into immersion cooling with acquisition of Allied Control • BITMAIN CHINA • China's largest Bitcoin mining company, 15% of the network • 28nm @ 0.51 J/GH • 16nm chip rollout postponed until Q3 2015 due to major delays at TSMC • New 28 nm chip @0.35 J/GH. Production starting in Spring 2015 • • Performance issues with last mining equipment Prisma Cetsicminer CHINA • Performance of Cloud-Mining service AMHash sub-par vs industry • Inefficient 20nm chip @ 0.6 J/GH *acne' SWEDEN • Fundraising significantly failed below target • Damaged reputation with retail customers. Class action lawsuits in USA • Stuck with a 40nm chip with average performance yields 21E USA • Investors not happy with mining profits • Late with chip rollout spondooliostech ISRAEL • Latest machines not performing as desired • Raised insignificant capital to compete • Chip parameters below desired COINTERRA USA • Default on loan with investors OUT • Presently in bankruptcy courts, filed Chapter 7 • PetaOne system failed to perform as declared likePEERNOVA • USA • Exited mining business to focus on enterprise applications OUT W BUTTERFLYLABS USA • Defaulted on prepayments with customers • Presently in bankruptcy courts OUT • Defaulted on prepayments with customers -e HashFast USA • Presently in bankruptcy courts OUT Chip "Arms Race" is coming to an end. Final battle: BitFury vs BitMain BitFury Company Confidential EFTA01088067 Transactions on Blockchain — Immense Opportunity1BitFury Non-Cash Transactions Per Year 621 bin 600 bin look 400 bin 388 bin CAGR 200 bin 500% CAGR 132 bin 21% 2014 2019 ■ Bitcoin ❑ Non-Cash ex-Bitcoin SOURCE: BLOCKCHAIN, MCKINSEY, BI INTELLIGENCE, BITFURY ESTIMATES Blockchain transactions have an opportunity to grow alongside Non-Cash (Visa; Mastercard; Amex; Paypal; Western Union and others) BitFury Company Confidential 15 EFTA01088068 Bitcoin Transaction Fees — A Massive Opportunity 1 BitFury Bitcoin Transaction Fees $7 bin $7 bin $6 bin $5 bin $4 bin $3 bin $2 bin $1 bin $2 bin $3 min 2014 2019 - 300°/0 CAGR 2019 - 500°/0 CAGR ■ BitFury Market Share n Rest of Market SOURCE: BLOCKCHAIN, MCKINSEY, BI INTELLIGENCE (”) BitFury @ 30% of the Bitcoin transaction processing market; $0.05 fee per transaction Blockchain can save consumers up to 95% on transaction fees BitFury Company Confidential i6 EFTA01088069  BitFury Revenue *BitFury $1,745M +84% Transaction Fees •All Other Revenue $1,173M +71% 18% $771M +ss kor $547M $324M +;3;Y. $85M (Fiscal Year, ends 31-Mar) 2015 2016 2017 2018 2019 2020 Gross Profit $42M $181M $280M $429M $738M $1,359M Operating Margin 48% 50% 47% 47% 47% 47% Net Income S37M $146M $230M $334M $578M $1,068M SOURCE: BITFURY UNAUDITED RESULTS, ESTIMATES BitFury Company Confidential 17 EFTA01088070 Fundraising: Rounds A and B 1 - ?, - BitFury Series A - $20M Funding in May 2014 sr Capital returned 3x faster than originally anticipated BINARY Bill Tai Jonathan Teo FINANCIAL LLEN5 PUG, Cryptocurrency Partners GEORGIAN CO-INVESTMENT 413 INVESTMENT • Vis FUND COMPANY Series B - $20M Funding in October 2014 ✓ Successfully taped-out a new 28 nm chip; silicon available sr Acquired immersion cooling technology sr Secured new data center capacity for roll-out BitFury Company Confidential EFTA01088071 Clear Path to Liquidity Bitfury Momentum ✓ Opened offices in San Francisco, Amsterdam and Riga ✓ Established DCs in Finland, Positioned for Iceland and Georgia US-listed !PO ✓ Finalizing establishing DC in USA ✓ Success in 55nm and 28nm chips ✓ Formed top team and board ✓ Attracted significant capital Why we are succeeding ' Unparalleled understanding of ASIC chip design and production Constantly optimizing supply chain Vito BitFury Insight into Bitcoin Ecosystem: Wallets, Exchanges, Financial Services v Track record of international execution BitFury Company Confidential EFTA01088072 The BitFu O. sortunit -1?k BitFury Clear Attractive Industry Ninja Team Business Leadership with Proven Model Successes Multiple Technology Global Advantages Infrastructure in Place BitFury THE MOST TRUSTED AND RELIABLE PROCESSOR OF TRANSACTIONS ON BLOCKCHAIN BitFury Company Confidential 20 EFTA01088073