KARMA

P2P lending platform Investor presentation

KARMA

PREMISES

Geographical Imbalance

• In developed countries: loan interest rates are very low, deposit rates are even negative.

• In developing countries: loan interest rates are very high, but entrepreneurs cannot get loans even if they accept the conditions.

• According to the World Bank, there is 2.1-2.6 trillion USD lack of credits in growing markets

• There are more than 1 billion potential investors all over the world and dozens of millions potential entrepreneurs-borrowers.

• There are trillions of dollars at the investors' disposal and this money doesn’t work due to the lack of investment opportunities.

• At the same time, entrepreneurs have difficulties attracting loans for business development.

Investment Imbalance

The 1st cross-border p2p (peer-to-peer) platform using blockchain technology in the world, where investors can directly provide loans to entrepreneurs from SME segment (small and medium enterpreneurs)

KARMA

HIGH-TECH. Deals registration, asset accounting and reputation storage in the blockchain. Smart scoring to reduce default risk. Document e-management with the digital signature use

PROFITABLE. No intermediaries: it means the higher income for an investor, and lower interest rates for borrowers. Both parties gain the benefit from the cross-border capital flows: investors from countries with low interest rates provide loans to borrowers from countries with high interest rates

CONVENIENT. Simple interfaces, personal account, mobile application and e-document management make communication between an investor and a borrower easier

SAFE. All transactions are 100% valid for both parties, even if they are from different countries

VIDEO PRESENTATION

BANKS VS P2P PLATFORMSBanks need a few months to approve the SME

loanIt takes a few days to make a decision on p2p-

platforms

Tight standards and numbed requirements for borrowers lead to a great number of lending

rejections

Investors are more flexible selecting the borrowers allowing more entrepreneurs to raise funds on p2p-

platforms

Banks prefer to provide secured credits, according to the regulator requirements

p2p services work with both secured and unsecured loans

It is very risky for SME to receive funds from a single bank or investor

Crowdlending (funding from a few private investors) is often used on p2p-platforms

Best case scenario is that investors income from deposits covers inflation

p2p services help investors and borrowers to contract in mutually beneficial terms

PROSPECTS OF P2P LENDING IN THE WORLD

• Over the past four years, the p2p-lending market has grown by more than 1000% achieving $119 billion (2018)

• According to Morgan Stanley estimates, this market will grow to almost $ 300 billion by 2020 and to $ 1 trillion by 2025.

• The loan portfolio of the American p2p-service Lending Club already amounts $ 35.9 billion, Prosper Funding - $ 8 billion of issued loans. Only in May 2018, the British service Zopa demonstrated an increase of loans volume by €99.2 million.

We propose a brand new model of credit relations

Economy of 18-20th

centuries

Economy of the future

The investor brings money to the bank, because he is not compitent and sufficiently informed for self-lending.

Investors BorrowersInvestor’s income Cash flow

Bank — center of expertise

Economy of 21st century

Marketing Specialist

Insurant

Lower Analist Realtor

Guarantor Collector Appraiser

Participants — center of expertise

p2p platform — center of expertise

Investor credits entrepreneur directly, independent peer-to-peer platform provides him expertise

Lending becomes transboundary. Expertises pass to independent participants, their efficiency is determined by the rating.

Costs for banks and insurers (30% of GDP)

The revenue of centralized p2p platform

The revenue is distributed among the decentralized community

Investor’s incomeInvestors Borrowers

Investors BorrowersInvestor’s income

COMPETITOR ANALYSISKarma is the 1st p2p platform for cross-border lending in fiat. It is cross-border lending that provides access to cheap money

to entrepreneurs from countries with high interest rates.Why none of competitors still didn't manage to solve the transborder problem?

PAYBACK IN CASE OF DEFAULT IN ANOTHER COUNTRY. It is quite evident that it is extremely difficult for investor to defend his interests abroad in case of default. It won't be profitable at all if investor operates small sums. Our solution. At the time of loan issue, investors will be able to buy an insurance option to sell the loan to the guarantor in case of default for the borrower. The price will be determined beforehand. The discount depends on the borrower's guarantee and reliability.

INTERBANK MONEY TRANSFERS. Bank control becomes harder from year to year. Banks request significant packages of documents for cross-border transfers often declining the transaction. Moreover, settlements under loan agreements are banned in many countries.Our solution. We will effect the cross-border money transfer, due to the blockchain technology. Karma will conduct all operational issues with banks.

EXCHANGE RATE RISK. There is no convenient mechanism for insurance exchange rate risk for small amounts of investments Our solution. We will create our own fund for currency risk insurance, which will further reinsure risk in international banks.

ORDER RATING SYSTEM

• Charged for useful activities towards the community

• Good Karma of each member increases the demand for his services or improves his loan conditions

• Financial condition assessment

• Work experience and education

• Project Estimation • More than 100 parameters of

estimation • Re-estimation in real-time

mode on a daily basis

• Real-estate, vehicles and equipment

• Different characteristics for collateral estimation: liquidity, cover ratio and so on.

• Option for collateral selling in case of default

REPUTATION (KARMA) SMART SCORING COLLATERAL

• Idea creation • Testing the market • Fund-raising for the project

launch

• Establishing the MVP Platform • Initial product exploitation • Operational breakeven • Fund-raising for business

development in 2019

• Implementing the cross-border functions

• Implementing the currency hedging

• Launching the project at least in 3 regions besides Russia

• Fund-raising for business development in 2020

• The platform presence regions is increasing to 20

• Platform development due to the sale of franchises and the purchase of local p2p companies

BUSINESS PLAN

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNSTIONAL EXPANSION

2015 2018 2019 2020 2021

Breakeven point

• Token emission based on the Grаphene blockchain

• Launching the crypto pawnshop

• Launching MVP Karma 2.0 (fiat loans option):

a. Market of orders b. E-document flow c. Routing of payments through

nominal bank account • Launching own blockchain • Launching mobile application for

investors • KRM implementation for service fee

• Implementation of the cross-border functions

• Implementation of the currency hedging

• Decentralization of scoring and analysis

• Online monitoring of borrower’s financial status

• Expanding the acting parts in the ecosystem

• Improvement and modification of functionality

2015 2018 2019 2020 2021

TECHNOLOGICAL PLAN

Breakeven point

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNSTIONAL EXPANSION

FINANCIAL PLAN

2018 2019 2020 20211Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Operational performanceVolume of transactions, million USD 0 0,5 3 12 16 21 28 38 50 66 88 117 156 208 276 368

Commission 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

RevenueRevenue million USD 0,0 0,0 0,1 0,4 0,5 0,6 0,8 1,1 1,5 2,0 2,7 3,5 4,7 6,2 8,3 11,0

ExpensesExpenses, million USD 0,49 0,51 0,55 0,49 0,60 0,74 0,91 1,12 1,38 1,70 2,09 2,57 3,16 3,88 4,78 5,88Profit, million USD -0,49 -0,50 -0,46 -0,13 -0,12 -0,10 -0,06 0,00 0,12 0,30 0,56 0,96 1,53 2,35 3,52 5,15

Operational break-even in Q4 2019 Increase the volume of loans issued by 33% quarterly (conservative forecast)

Organize the loans issuance for $ 1 billion in 2021

KARMA TOKEN ECONOMY

• All commissions in the ecosystem are payed on the basis of Karma-token (KRM) • The average commission is 3% from the transaction • The more transactions in the ecosystem, the more commission value, the higher demand for KRM • With basic amount of tokens and growing demand the token price will raise • Additional options for those with more than 1 000 000 KRM: ✓Priority access to new applications from investors and borrowers ✓50% discount for transactions inside the platform

• Decisions concerning new emissions and key directions for the development are taken on the open vote basis (top 15 delegates of the network)

Token Issue:

2018 2019 2020

Transaction volume, USD 15 mln 100 mln 300 mln

Commission volume, USD 450k 3 mln 9 mln

Forecast for economic development:

2018 2019 2020

Volume, USD 7 mln 25 mln 100 mln

Price, USD 0,01 0,025 0,1

KARMA NOWThe international community includes 10,000+ people worldwide

2 successful rounds of crowdfunding: $ 0.5 million in August 2017 and $ 10 million in December 2017.

More than 2,000 private investors all over the world have supported Karma project

The alpha version of the online Karma platform has been launched where test transactions were made recorded in the block and processed with a smart contract

Tokens are available on 2 exchanges from Top-10

INFORMATION DISCLOSURE

VIDEO PRESENTATION

WHITE PAPER

KARMA BLOG

1Q18 PROJECT DEVELOPMENT REPORT

2Q18 DEVELOPMENT REPORT

СURRENT BALANCE + EXPENSES REPORT

KARMA FOUNDERSArtem Laptev Founder, Investment director

Since 2010 has managed private p2p-investment fund for SME. Developed own scoring strategy with stable and positive results More than 10 years of portfolio management experience in financial industry: Troika Dialog, Sberbank. International CFA-certified financial analyst.

George Goognin Founder, Evangelist

Ph.D in Economy Math Models. Vice chairman of the Russian Parliament Blockchain Experts Chamber. IT-career since 2002, first IT-startup made in 2008. Ex-Chief Operating Officer in ADV web-integrator, TOP3 in Russia. Clients: MOEX, VTB, X5 Retail, Apple, Samsung, LEGO, Nike. Co-founder of digital business school RIK, over 1000 students taught.

KARMA TEAM

Software Engineer, C/C++ developer. Architect of IT infrastructure. Highly qualified expert for high loads and parallel computing. Market data expert. More than 15-years experience as Head of Web Technologies Division Trading and Clearing Systems Center at MOEX.

Denis Svinarchuk Evgeny Kovalev

Head of Legal Department

Dmitry Bolshakov

Head of Credit Analysis Department

Alexey Opanasenko

17-years working experience in Moscow commercial banks, 12 years of them - head of credit departments: all types of corporate lending and crediting VIP-persons.

More than 20 years experience in the jurisprudence. For the last 10 years he worked as a Head of legal departments in systemically-important Russian banks. The founder of the web service that automatize legal services.

Over 20 years experience of full-stack web-applications development, making site architecture particularly for MICEX. Participated in creating open source libraries (ruby and nodejs).

CTO Head of Front-end department

ADDITIONAL INFORMATION

P2P DEVELOPMENT IN RUSSIA

There is a favorable environment for p2p-lending development in Russia. The bill of alternative ways of fund-raising has been supported by government in 2018

The President of Russian Federation instructed the government to increase the share of SMEs in Russian GDP from 20% to 40% by 2025

According to the Central Bank, the volume of transactions on crowdfunding web-sites in 2017 increased by 85%, exceeding 11 billion rubles.

In the next 7 years, the credit need for SMEs will amount from 5 to 10 trillion rubles

In 2018, the volume of P2P-lending in Russia will be 24 million dollars. According to forecasts it will grow by 47.8% per year and by 2022 will be 113.4 million dollars.

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8

15

23

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Current volume of   p2p credits

2 billion rubles

Current volume of   SME loans

4.5 trillion rubles

SMEs need for development

10 trillion rubles

Population deposits in banks 25 trillion

rubles

SMEs’ FINANCING

Source: https://www.statista.com/outlook/338/149/marketplace-lending--personal-/russia

Web: karma.red Telegram: t.me/karmaproject

Facebook: facebook.com/karma.blockchain/

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