QUARTERLY REPORTQ3 2018

October 2018

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CONTENTS

INTRODUCTION ......................................................................................................................................................2

HYPERION STRATEGY ............................................................................................................................................3

INVESTMENTS ........................................................................................................................................................3

INVESTMENT UPDATES .........................................................................................................................................4

IHF LISTING .............................................................................................................................................................6

WRAP UP .................................................................................................................................................................7

HYPERION TIMELINE ..............................................................................................................................................8

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INTRODUCTIONThe quarter has seen the continuation of the bear market and the general decline in the value of cryptocurrencies. The flight to the relative safety of Bitcoin has been evident with its proportion of the crypto market capitalization rising from 43% to the re-establishment of dominance at 51%. Alternative cryptocurrencies have declined more so than Bitcoin, as have ICOs whose successes have been almost entirely dependent on overall market sentiment. ICO fundraising has been on a down-trend since January with market pressure being exerted on investors. This reality-check afforded to ICOs by the sobering market has made clear the delineations between speculation and substance and is ultimately positive for the space moving forward.

A fundamental premise of the Hyperion fund is its focus on fundamentals, meaning investments have been made in projects that possess the qualities necessary to survive different market regimes. Though market sentiment will always affect valuations, the long-term case for Hyperion’s investments remains strong. Their focus on delivering tangible value means the investment case is not reliant on a buoyant market necessarily returning at any point in the future.

The crypto-economy has received a steady drumbeat of positive news over the quarter, with the announcement of Bakkt being the most prominent. Bakkt aims to build a platform that allows individuals and institutions greater access to digital assets. It is backed by the Intercontinental Exchange (ICE, owner of the NYSE) and will, in 2018, use futures market infrastructure to introduce physically delivered Bitcoin to Global Markets. This firmly cements digital assets as part of the global economic infrastructure and supports the efficacy of the ICO model. This model will undoubtedly continue to develop, and likely change substantially, but the debate of whether or not the space will continue can be considered put to rest.

The IHF token began trading on 17 September with prices in the region of the accounting NAV. This represents a substantial gain in terms of ETH, which accounted for the majority of the Hyperion raise. Volume, however, remains low, indicating that holders of the token either have a long-term view on the fund, or a higher expected value.

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CIARAN MACDEVETTE VP of Analytics

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HYPERION STRATEGYThe ICO market has been under pressure recently with very few listings providing a positive ROI for investors. Invictus Hyperion sees most of this downside being attributable to general market sentiment and the strong correlation amongst crypto assets. The conviction we have in our underlying holdings has not changed, and we continue to see great potential in each of our investments. A significant amount of capital has been raised over the past year and projects are utilizing these funds to rollout their roadmaps and flesh out their networks. The only way to see price recovery without speculation is through utility value, which will start to surface over the coming months and years as these projects start to deliver on their proposals.

Having said that, it is important to protect investors from downside risk during times of market distress. Hyperion has ensured that each of its investments have professionally vetted purchase agreements, with investor protection at the forefront. The fund has also leveraged its resources and experience to negotiate the best terms and commercials possible for its investors to limit downside risk.

During the course of 2017 and early 2018, nearly every ICO produced a positive return for investors who were able to consolidate profits during the market bull run. Invictus see the ICO market characteristics reverting towards its traditional Venture Capital predecessor, whereby realistic value propositions will need to be offered and only a few startups will be successful. It is therefore important that the fund has sufficient diversification to limit its exposure to any one project. Losses in the Venture Capital arena are inevitable. What’s important is that a healthy liquidity cycle is maintained and that behavioral biases don’t prevent us from suffering loss aversion.

The blockchain industry is still in its infancy, and a significant amount of supporting infrastructure is still being produced and implemented to allow for seamless adoption and utilization. Hyperion is continually reviewing new investment opportunities that complement this revolutionary movement, through both direct applications and active analyst research. The fund will aim to invest in ICOs and companies that solve real-world inefficiencies. The adoption of these solutions rest on their ability to provide a clear benefit to each party in the supply and demand ecosystem of their respective industries. The fund will also be paying close attention to the evolution of the security token ecosystem. We see great potential in the ability to securitize assets on the blockchain and will be looking at investment categories across the value chain, as well as the underlying blockchain infrastructure.

INVESTMENTS

Investment Amount Date Sector

$1,000,000 05/06/2018 Infrastructure

$614,000 07/06/2018 Transportation

$825,000 12/06/2018 Infrastructure

$762,400 20/06/2018 Gaming

$250,000 17/07/2018 Digital Content

$1,510,000 11/07/2018 Trading

$259,000 23/07/2018 Interoperability

$256,800 21/08/2018 Gaming

$754,000 16/09/2018 Financial Services

*Investment amounts include associated legal fees. Where investments were denominated in ETH, a snapshot dollar value of the transaction was taken at the time of transfer.

ANDREW KNIGHT Fund Manager

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Investment Cost Breakdown Sector Breakdown

DAV9.9%

Transportation9.9%

Financial Services9.9%

Digital Content4.0%

Trading24.2%

Infrastructure29.3%

Gaming16.4%

Interoperability4.2%

Stackr12.1%

Wemark4.0%

Equiti Games4.1%

Quantfury24.2%

NOIA16.0%

Lightstreams13.2%

Gamedex12.2%

Menlo One4.2%

The above charts illustrate the breakdown of funds allocated since inception until the end of Q3 2018. Hyperion, for both legal and competitive business reasons, needs to keep the market value and performance data of listed investments private as providing this data allows for the commercial terms to be “reverse engineered”, thereby disclosing proprietary information. The fund is therefore only able to disclose a breakdown of unlisted investments at cost, and a total market value of listed investments once more than one has listed.

INVESTMENT UPDATESInvictus Hyperion is in regular contact with the companies we have invested in. In many cases, we have formed a strategic partnership whereby Invictus Capital plays an instrumental role during the ICO and beyond. Some brief investor updates are provided below for each of our underlying holdings:

NOIA’s 12 out of 40 repositories on Github (https://github.com/noia-network/) have already been made public. The Master Node, Content Scaling Layer and Controller Node parts and internal helper tools remain proprietary for now. You can download Node Client software from GitHub repository (https://github.com/noia-network/noia-node-gui/releases) and run it on your Windows, Linux or Mac machine. NOIA has created a state of the art technology with an innovative way of multiplexing WebRTC connection through two ports, which makes it more secure and easier to set up for their users while retaining all performance and encryption properties. SDK is open sourced and tailored for different scenarios including streaming videos and files, and also has wrappers for popular frameworks like React and Angular. NOIA launched the Testnet Phase 1 programme where they reward the community for running the node client on their computers and NAS devices. NOIA currently have around 4,500 nodes (650 on average active at any moment). Their target is to have 10,000 nodes by the end of this year. First clients (content publishers/owner) are scheduled for Q4 2018.

DAV is the first of Hyperion’s investments to list at the end of August. The tokens initially started trading on IDEX, a decentralized exchange, with centralized exchanges HitBTC and BitForex following in early September. Although the ROI has been less than exemplary so far, we see this more as a function of the general market than an accurate reflection of value. DAV is still well on track to deliver on their proposed roadmap. As of October 1, a new Chief Marketing Officer will take the helm on their growth efforts as they proceed with product development. They have met every milestone according to their roadmap so far, including most recently their autonomous boat mission milestone, and are on track for their Q4 milestones which include the decentralized ride-hailing network. DAV is also in the process of shifting to a new forum to engage the community on a deeper level rather than focusing on the growth of numbers. Finally, they will be announcing their first cadre of DAV Ambassadors, who are trusted community members that will share the DAV vision globally. The company recognizes the hugely depressed markets and are taking this opportunity to build up and take full advantage for when the tides turn, together with their community.

www.noia.network

www.dav.network

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Lightstreams have just released the first alpha version of the Lightstreams software that can be downloaded and installed. A new executive member, Andrew Zappella has joined the team. Andrew has a track record of delivering outstanding results, having already successfully exited his startup that was bought by Trivago and proceeded to co-found other projects in the hospitality and marketing industries. Andrew and Michael Smolenski, the CEO of Lightstreams, have just returned from China where they launched FanBase, the first application that will be released on Lightstreams. This is a community building application that brings artists (musicians) and fans together through an individualized “Artist Branded Currency”.

Gamedex have had an exceptionally busy and successful quarter. The team, having doubled in size, have moved into new offices and launched their new website. The community has been responding well with the Gamedex Telegram reaching over 10,000 members and the TGE whitelist achieving similar numbers. The Gamedex team have been pursuing global business development which has included presentations in Hong Kong and Singapore and the founding of the Gamedex Alliance, an association of blockchain game studios who share Gamedex’s mission and believe in their plan for implementation. Gamedex have also partnered with ChainLink and joined forces with Bancor to power the future of decentralized games. Gamedex has been well received by top rating agencies and awarded excellent reviews. The exciting release of their MVP will be arriving soon with a new ERC standard ready to be announced.

Wemark has concluded their token sale, reaching their hard-cap before the public sale went live. This is a testament to how much potential this project has in terms of disrupting a highly monopolized industry. The team has distributed their tokens, however, they remain locked for the time being. Wemark has their alpha version live on their website whereby the public can search and view a large database of stock. The team is currently preparing to launch their marketplace in conjunction with their liquidity and market making providers. The company keeps onboarding new content providers to its marketplace constantly, marking it as one of the highest quality and modern collections in the space today. According to the team, we can expect a series of big and exciting announcements over the next few months.

The Hyperion fund recently released a medium article announcing their strategic partnership with Quantfury. We are incredibly excited about the future potential the team, lead by Gregory Kim, has to offer. Quantfury is a next-generation trading platform that will offer unprecedented access to both digital and capital markets under exceptional trading conditions. The beta program for its iOS and Android app is about to be launched worldwide in the coming weeks over Q4 2018. The company is in the final stages of structuring its ITO, where the app will be launched during its token sale. Quantfury allows its users, who are crypto-holders, to trade without commissions or leverage fees, with the best market bid and ask prices. Hyperion will be releasing their formal investment report in the fourth quarter, following the publication of the Quantfury white paper.

Menlo One aims to promote ease-of-access for developing decentralized applications and allow for interoperability between different distributed ledger technology networks. Menlo One is currently in the middle of their public sale ICO of which they have sold approximately $3 million in ONE tokens which will power the next generation of dApps. The team is launching a consumer-facing product built with their framework which token buyers can use the ONE tokens on the day the tokens are unlocked (press release coming soon). Several exchanges are lined up to list the ONE tokens, which will be announced post token sale. The team has unveiled a partnership with White Rabbit ICO’s who will be using their framework on their leading ICO community site.

www.wemark.com

www.quantfury.com

www.menlo.one

www.gamedex.co

www.lightstreams.network

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Since forming a partnership with Equiti Games, we are exceptionally proud of how much they have achieved over the past few months. The team won the $2M grand prize at the 2018 Founders World Championship startup competition in San Francisco run by F50 Ventures. The prize includes $1M in direct investment, $500k in marketing support and $500k towards exchange listing fees. In addition, during October Equiti Games will be at San Francisco blockchain week, and in November F50 Ventures will be taking Equiti Games on an Asian roadshow as they showcase their startup. Equiti Games public sale is scheduled for Q4 2018.

Stackr is the most recent Hyperion Investment which we announced here. Invictus Capital and Stackr have formed a strategic partnership to merge both the traditional and digital asset space to provide an investment solution that caters for all investors. Stackr has released their whitepaper which can be found on their website. The CEO, Cobus Kruger, has been attending various investor roadshows and conferences in South East Asia during the course of September which has so far been exceptionally well received. The Stackr public sale will be taking place in Q1 2019 and a formal investment report has been released by Hyperion in early October. Invictus Capital and the Hyperion Fund will be working closely with the founding team over the coming months to ensure the success of this ground-breaking initiative.

IHF LISTINGThe key benefits of the Hyperion Fund, and the IHF token are to give democratized access and exposure to early-stage investing in the blockchain economy. Liquidity is another critical factor that allows investors to buy and sell IHF, even if the underlying investments in the fund are illiquid. We achieved this by listing IHF on two prominent exchanges:

1. IDEX - a decentralized exchange known for its ease of use and reliability, with an IHF/ETH pair.

2. Liquid - developed by QUOINE, founded in 2014, is a unified, globally-sourced trading platform that bridges the worlds of fiat and crypto. Hyperion is listed with IHF/BTC and IHF/ETH pairs. Liquid is also listing many new projects, and we foresee opportunities to list Hyperion Fund projects on the exchange, in the near future.

We negotiated an exchange listing fee rebate for investors that successfully sign up to the Liquid exchange using our referral link and deposit funds by 17 November 2018. The Hyperion Fund stands to recoup a substantial portion of the exchange listing fee so please sign up and start trading by using our referral link.

With more liquidity and exposure, we can expect the demand for the IHF token, and increased demand for the access to early-stage venture capital investing that Hyperion Fund provides.

Please refer to our exchange page on our website for an explanation of the various token Net Asset Values (NAVs).

www.gostackr.com

https://idex.market

https://www.liquid.com

JONTY BYLOS Business Development Manager

www.equiti.io

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WRAP UPQuarterly performanceA highly debated topic within cryptocurrency investing is how to measure performance. Alternative cryptocurrency assets’ (non-bitcoin assets) are often measured relative to bitcoin and initial coin/token offerings to the funding currency. This is relevant as most ICOs are funded with ETH from contributors. In most cases, ERC20 tokens initially become tradeable on decentralized exchanges with ETH pairs, and thus the argument for measuring an ICO portfolio in terms of ETH valuation along with USD and BTC is a strong one.

IHF has experienced a 35% reduction in USD value since inception. This is greatly attributed to the decline of the macro cryptocurrency market. The fund raised all of its capital in ETH and BTC, which saw a gradual decline over the past months in their USD value. The depreciation in the IHF/USD price is a direct result of this decline in the funds liquidity pool. Most ICOs have experienced a far greater decline than ICO platforms that host the underlying project assets. Ethereum is by far the industry leader with most ICOs developed to deploy on the Ethereum blockchain or simply utilizing it as a transfer mechanism of placeholder tokens that would later be interchangeable with the mainnet currency. In other words, several infrastructure DLT projects have had an ICO, but have not launched their native blockchain, or equivalent, and is currently using Ethereum. ICO crowdfunding has primarily used ETH rather than BTC as a value exchange, for this reason, it is necessary to compare growth versus the current cornerstone of ICO funding, Ethereum. Over the quarter IHF has appreciated by 61.15% relative to ETH.

Inception NAV (31 May)

Q2 NAV (30 June)

Q3 NAV (30 September)

U.S. $ *$9,400,335 $8,051,032 $6,106,223

IHF circulating supply 122,852,180 122,852,180 122,852,180

IHF/USD $0.0765 $0.0655 $0.0497

IHF/ETH 0.00013246 0.00014397 0.00021346

IHF/BTC 0.00001021 0.00001023 0.00000750

Hyperion ROI

-40

-30

-20

-10

0

10

20

30

40

50

60

70

80

-14.35%-24.16%

48.26%

-26.69%-35.04%

61.15%

-26.53%

6.69%0.23%

HUGO MAY Investment Analyst

Only one of Hyperion’s investments, DAV, has gone to market and made their token tradable on exchanges by the end of Q3. The result is that the NAV as of Q3 is highly dependable on the liquidity pool and cost of unlisted investments.

*By utilizing live pricing, Hyperion disclosed a total raise of $11,539,715 during the ICO period. The inception NAV is the value of all assets post ICO and is lower due to a reduction in ETH and BTC prices over the ICO period.

ROI Q2 2018 ROI Q3 2018 ROI Since Inception

IHF/USD IHF/ETH IHF/BTC

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HYPERION TIMELINE

23 MarchHyperion whitepaper release

31 MayHyperion ICO periodand launch of NAV

5 JuneHyperion investsin NOIA

12 JuneHyperion investsin Lightstreams

7 JuneHyperion investsin DAV

30 JuneEnd of Q2 NAV

27 JuneWemark Public

sale ends

21 AugustHyperion investsin Equiti Games

20 JuneHyperion investsin Gamedex

30 SeptemberEnd of Q3 NAV

25 JuneDAV Public saleends

11 JulyHyperion investsin Quantfury

17 JulyHyperion investsin Wemark

23 JulyHyperion investsin Menlo.One

23 AugustDAV tokens unlockfor trading

16 SeptemberHyperion investsin Stackr

17 SeptemberMenlo.One Publicsale starts

19 SeptemberIHF listed onLiquid.com

It is evident that the broader cryptocurrency ecosystem is still highly contingent on bitcoin’s price action. Most alternative assets experience a leveraged effect when bitcoin’s price experiences high volatility. Initial coin/asset offerings are at the extreme spectrum of the alternative crypto assets in terms of risk and thus one should sufficiently prepare when entering this market.

To ensure the longevity of the cryptocurrency venture fund, the underlying investments should to some sense represent the evolution of the token issuance market. For example currently, security tokens are experiencing the most significant push forward. It is imperative to consider the macro cryptocurrency market when analyzing investment opportunities.

The above makes it is challenging to invest within a cryptocurrency startup with the aim of a short-term return on investment. One should also expect that startups have a relatively high rate of failure. This should not deter one from acquiring well-diversified exposure within these high-risk investments, as their growth potential could significantly benefit an investment portfolio with a small allocation.