Crypto Blockchain Industries : FY 2022 - Consolidated Financial Statements

FY 2021-2022 MANAGEMENT REPORT &

CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS
I. MANAGEMENT REPORT ON THE GROUP.................................................................................................................	2
BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS ........................................................................................	2
COMPANY PRESENTATION .........................................................................................................................................	2
HIGHLIGHTS OF THE PERIOD........................................................................................................................................	3
ACCOUNTING RULES AND METHODS ........................................................................................................................	6
ANALYSIS OF THE INCOME STATEMENT AS AT MARCH 31, 2022 ...............................................................................	7
ANALYSIS OF THE BALANCE SHEET AS AT MARCH 31, 2022 ......................................................................................	9
RISK DISCLOSURES .....................................................................................................................................................	12
SUBSEQUENT EVENTS .................................................................................................................................................	19
EXECUTIVE COMPENSATION AND BENEFITS ............................................................................................................	19
WORKFORCE FOR FISCAL YEAR 2022-20222 ...........................................................................................................	21
CBI SA STOCK OPTION PLAN ....................................................................................................................................	21
II. CONSOLIDATED FINANCIAL STATEMENTS 2021-2022.........................................................................................	22
INCOME STATEMENT .................................................................................................................................................	22
BALANCE SHEET .........................................................................................................................................................	23
CASH FLOW STATEMENT............................................................................................................................................	24
STATEMENT OF CHANGE IN SHAREHOLDER'S EQUITY.............................................................................................	24
BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS ......................................................................................	24
COMPANY PRESENTATION .......................................................................................................................................	24
NOTES TO THE STATUTORY CONSOLIDATED STATEMENTS .......................................................................................	25
AUDITORS REPORT ON THE CONSOLIDATED STATEMENT .......................................................................................	47

1

MANAGEMENT REPORT - CONSOLIDATED FINANCIAL STATEMENTS 2021-2022

I. MANAGEMENT REPORT ON THE GROUP

CONSOLIDATED FINANCIAL STATEMENT

12-MONTH FINANCIAL PERIOD ENDED MARCH 31, 2022

BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS

Crypto Blockchain Industries, SA ("CBI" or the "Company") is a French-law company. The financial year of the Company is from April 1 to March 31.

The first half of Financial Year 2022 refers to the 6-month period from April 1, 2021 to September 30, 2021. Financial year 2022 refers to the 12-month period from April 1, 2021 to March 31, 2022.

The present financial statements are presented as at March 31, 2022 for the entire Financial Year 2022, i.e. April 1, 2021 to March 31, 2022.

The present financial statements have been prepared in accordance with IFRS accounting principles.

COMPANY PRESENTATION

CBI is one of the very few companies offering a global investment approach, covering all domains of the Crypto Blockchain Industries, investing after careful selection in the portions of the value chain offering the best opportunities:

• Operating Businesses: CBI controls, alone or with partners, its own blockchain business (transportation, games)
• Investments: CBI invests in start-up companies; CBI also invests and assists existing companies in a digital transition to the blockchain space
• Intellectual Properties: CBI can invest into property rights (IPs), building its own portfolio of IPs
• Portfolio Management: CBI holds and manages a portfolio of crypto-currencies and tokens, and also owns highly liquid assets such as cash and listed shares in the videogame/blockchain space

CBI's investment strategy is to keep investing in ongoing businesses and start-up companies, as well as crypto- currencies and tokens.

CBI's permanent focus is to build the portfolio, maximize Return On Investment and operate on very low overhead, targeting the best opportunities in the industry. CBI uses financing techniques to leverage its resources, with a constant focus on securing guarantees in order to protect the downside.

The complementary nature of these business lines enables the optimization of synergies.

The corporate purpose of the Company CBI, in accordance with article 2 of its by-laws, in France or abroad, directly or indirectly, is:

• the design, production, publishing and distribution of all blockchain, multimedia and other services providing an interactive experience, of any nature whatsoever, in any form including software, data processing and content - either interactive or otherwise - for all media and by means of all present and future means of communication;
• the purchase, sale, supply and more generally distribution of all products and services related to the foregoing;
• the creation, acquisition, use and management of intellectual and industrial property rights or other in rem and in personam rights, including by means of assignment, licensing, patents, trademarks and

2

MANAGEMENT REPORT - CONSOLIDATED FINANCIAL STATEMENTS 2021-2022

other copyrights;

• the acquisition, the search for partnerships and the acquisition of interests in other firms, including the formation of new entities and the issuance, subscription or transfer of securities in any business directly or indirectly related to the foregoing or to the products and ideas developed by the Company;
• and, more generally, any transactions with a purpose similar or related to the foregoing, or otherwise likely to benefit the Company.

HIGHLIGHTS OF THE PERIOD

The year 2021-2022 has allowed the company to establish the basis for its development and to start its activity. The highlights of the period are as follows:

1. Creation of the Crystal token (CRYS) and first sales

In September 2021, 600 million units of the Crystal (CRYS) token, the crypto-currency to be used in AlphaVerse, were created on the Binance Smart Chain.

The first sales of CRYS and NFTs occurred in November 2021.

2. Continued impact of the Covid-19 pandemic

In response to the current health crisis, the Company has taken the necessary measures to ensure the safety of its employees and the continuity of its operations, despite the continuation of work-at-home arrangements still in place as of the date of this document. The duration of this situation and its proportions are not predictable. The consequences vary considerably depending on the Company's various activities, with an expected negative impact on licensing activities due to delays in the renewal of license contracts. A positive impact has been observed for video game revenues.

The impact of Covid-19 is being closely monitored by the Company in order to take the necessary measures according to the situation.

3. Ukraine and Russia conflict:

Crypto Blockchain Industries (CBI) is not exposed with the situation in Russia and Ukraine. CBI does not have any suppliers, clients, employees, affiliates or financial link with Russia and Ukraine.

CBI monitors the situation in a daily basis and will take all necessaries actions to minimize the risk.

4. Investment in new projects:

One of the major goals of the Company is to develop an online persistent world operating on the blockchain, i.e. a "Metaverse" (as defined below). This Metaverse is called "AlphaVerse".

Such Metaverse will incorporate major brands, to attract more players by taking advantage of the awareness of such brands.

The Company has recently achieved major milestones:

Continued development of MetaCoaster universe:

• MetaCoaster is a blockchain theme park simulation game for the AlphaVerse metaverse. MetaCoaster will be free to access in AlphaVerse, with various modes from solo to multiplayer, with a wide range of challenges and experiences enabling the community to acquire virtual plots, build and develop theme parks, and organize tournaments. Players will have full responsibility for managing their parks: the plots and décor can be adjusted (locations of roller coasters, rides, restaurants, etc.) and attractions be built or demolished.

3

MANAGEMENT REPORT - CONSOLIDATED FINANCIAL STATEMENTS 2021-2022

Execution of licenses:

• United at Home: License with the charity program founded by David Guetta.
• Raverse collective: new partnership with the Raverse collective for the development of the AlphaVerse metaverse and NFT sales on the blockchain. With a view to diversifying the content, these universes, focused on digital arts and rave music, will be able to use explicit content from the Raverse collective. In every AlphaVerse world, young artists will be able to create their own communities, sharing and selling their creation, as well as developing new projects.
• Horyou: joining forces along with Horyou Foundation to create a metaverse and token focused on humanitarian action and preserving the planet. Horyou, a global platform promoting a more humanistic approach to technology by bringing together stakeholders promoting social good, will develop with CBI a dedicated universe - Horyou AlphaVerse - within its metaverse and NFTs. The licensing partnership between CBI and Horyou includes selling dedicated NFTs for this new universe within AlphaVerse, through the creation of a token called "LIGHTS".

The use of third-party licenses is always subject to prior approval of the rights owner.

Definition of a metaverse / Overview of the experience

The "Metaverse" refers to a shared online world developed featuring various themed or branded environments. Users can interact freely within them, sharing in virtual experiences that combine social interaction with the best of online gaming. Metaverses are composed of a series of 2D or 3D virtual plots that link into a homogenous universe. They may include some sections, parts, levels and/or which are not developed on a blockchain platform.

The Metaverse will be composed of several sub-universes, some of which will be branded and others not. CBI intends to acquire a wide variety of licenses in order to offer an expansive and diverse experience for users.

Third-party operators will be able to run their own sections under agreements with the metaverse, i.e. through revenue share. Each universe will provide its own unique feel, style, and experience for users, creating a rich world for players to interact in.

Some of the activities and games will be developed and operated by the publisher, while others will be run by the users themselves through the use of in-game tools.

Overall, the goal of the metaverse is to:

• Offer users interactive experiences directly created by the metaverse. This will include non-playable characters and "Players vs. Environment" settings for players.
• Offer tools to players so they can create their own experiences. The community will create their own games and assets through the use of in-game builders, which they can later monetize and sell (with a revenue share to the publisher - such as User Generated Content). For example, a player can create his or her own collection of NFTs and sell them to the other players, with a % being taken by the publisher

Timeline

CBI's goal is to launch a Beta version of the Metaverse in fiscal 2022/2023.

Sources of Revenue

The Company plans to derive its revenue through the following sources:

• Sale of Crystal Tokens
• Sale of virtual land NFTs
• Sale of infrastructure NFTs: This includes buildings, monuments, display galleries/museums, roads/bridges for use on within land parcels. There will be different types of buildings and vehicles. Roads, bridges, signage and equivalent items will also be made available.
• Sale of Avatars.
• Sale of consumables: this includes the following potions or digital consumable [weapons, ammo, food, drinks, gas, fuel for vehicles, etc..] that can be used for gameplay and for certain upgrades in

4

MANAGEMENT REPORT - CONSOLIDATED FINANCIAL STATEMENTS 2021-2022

the metaverse.

• Sale of cosmetics: this includes any type of digital wearable items (such as t-shirts or robes), customizable avatars, skins for avatars, digital pets, other assets.
• Sale of games inside the metaverse.

Additional licenses

The Company is in the process of negotiating additional brand licenses for the Metaverse, in many sectors such as music or beverage, in order to provide a broad experience to the players.

5. Rent for premises

The Company has entered into a lease agreement with respect to premises located at 68 bis rue Charles- Laffitte à Neuilly-sur-Seine (France) as from November 1, 2021, for a monthly lease of 25 000 euros. Mr. Frédéric Chesnais did abstain from voting as he is interested to this transaction since he has indirect ownership in the leased property.

6. Contribution in kind of September 2021

Ker Ventures contributed assets to the Company, in exchange for new shares being issued as well as a deferred payment recorded as a shareholder's loan. This asset contribution has been reviewed by Mr. Antoine Legoux, appointed on January 25, 2021 as Commissaire aux Apports by unanimous decision of the shareholders of the Company. The extraordinary meeting of shareholders of the Company has approved such contribution of assets and the issuance of the shares by Company on July 22, 2021.

Mr. Antoine Legoux delivered his report on May 12, 2021. In Section II.3 of such report, it was set forth that, in the event of a variation of more than 10% of the valuation of the listed assets, the shareholders would update the value of such listed assets by using a more recent reference.

In accordance with the provisions of such report, the valuation of the listed assets contributed (Atari shares, Atari tokens) has been updated given their intrinsic volatility. These listed assets have been valued on the basis of a six-monthvolume-weighted average, i.e. respectively euro 0,5582 per share for the 3,500,000 Atari shares and euro 0,311 per token for the 30,000,000 Atari Tokens, averages measured as at July 8, 2021.

There is no restriction on the use of cash available and of the assets of the Company, and the sale of the Atari tokens is partially restricted until March 31, 2022 so as not to add to the market volatility.

18,000,000 new shares were issued by the Company, for a nominal value of 18 million euros, together with a premium of 5 million euros, and a shareholder loan was entered into for the balance of 4.5 million euros. This shareholder loan does not bear interest.

Such contribution was completed on September 24, 2021, as follows:

As a result, as at September 30, 2021, the share capital of the Company amounts to 18,037,000 euros, divided in 18,037,000 shares of 1 euro of nominal each.

5