Crypto Blockchain Industries : FY 2023 - Annual Report - Consolidated and Statutory Financial Statements

Annual report

2022-2023

April 1st, 2022 - March 31, 2023

ANNUAL ACCOUNTS 2022-2023

CONTENTS

I. GROUP MANAGEMENT REPORT	2
BASIS OF PRESENTATION	2
COMPANY PRESENTATION	2
HIGHLIGHTS OF THE YEAR	4
ACCOUNTING PRINCIPLES AND METHODS	6
ANALYSIS OF INCOME STATEMENT AT MARCH 31, 2023	7
BALANCE SHEET ANALYSIS AT MARCH 31, 2023	9
RISK FACTORS	13
POST-BALANCE SHEET EVENTS	18
COMPENSATION PACKAGES	20
WORKFORCE FOR FISCAL 2022-2023	21
CBI SA - STOCK OPTION PLAN	21
II. CONSOLIDATED FINANCIAL STATEMENTS	22
INCOME STATEMENT	22
BALANCE SHEET	23
CASH FLOW STATEMENT	24
CHANGES IN SHAREHOLDERS' EQUITY	25
BASIS OF PRESENTATION	26
COMPANY PRESENTATION	26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	28
STATUTORY AUDITORS' REPORT	48
III. MANAGEMENT REPORT	49
BASIS OF PRESENTATION	49
COMPANY PRESENTATION	49
HIGHLIGHTS OF THE YEAR	51
ACCOUNTING PRINCIPLES AND METHODS	52
ANALYSIS OF INCOME STATEMENT AT MARCH 31, 2023	54
BALANCE SHEET ANALYSIS AT MARCH 31, 202 3	57
RISK FACTORS	60
POST-BALANCE SHEET EVENTS	65
COMPENSATION PACKAGES	65
WORKFORCE FOR FISCAL YEAR 2022-2023	67
STOCK OPTION PLAN	67
REPORT ON CORPORATE GOVERNANCE	68
IV. STATUTORY FINANCIAL STATEMENTS	71
INCOME STATEMENT	71
BALANCE SHEET	72
CHANGES IN SHAREHOLDERS' EQUITY	73
BASIS OF PRESENTATION	74
COMPANY PRESENTATION	74
NOTES TO THE STATUTORY FINANCIAL STATEMENTS	76
STATUTORY AUDITORS' REPORT ON THE FINANCIAL STATEMENTS	94
V. STATUTORY AUDITORS' SPECIAL REPORT ON REGULATED AGREEMENTS	96

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ANNUAL ACCOUNTS 2022-2023

I. GROUP MANAGEMENT REPORT

CONSOLIDATED FINANCIAL STATEMENTS

12-MONTH PERIOD ENDED MARCH 31, 2023

BASIS OF PRESENTATION

Crypto Blockchain Industries, SA ("CBI" or the "Company") is a company incorporated under the laws of France.

The financial year runs from April 1st, 2022 to March 31, 2023.

The financial statements are presented as at March 31, 2023 for the entire 2023 fiscal year, from April 1st, 2022 to March 31, 2023.

The scope of consolidation (referred to as the "Group") comprises CBI and 2 subsidiaries, OP Productions and Free Reign East.

The financial statements are presented in accordance with IFRS accounting principles.

COMPANY PRESENTATION

CBI is one of the few companies offering a global investment approach covering all the main aspects of blockchain. CBI, after a meticulous review of projects, invests in those aspects of blockchain offering the best estimated opportunities:

• Operational activities: CBI controls, alone or in partnership, the business (transport, video games) ;
• Investments: CBI invests in start-ups; CBI also invests to help companies successfully transition to the blockchain world;
• Intellectual property rights: CBI can invest in intellectual property rights (IPs), or create its own portfolio;
• Portfolio management: CBI holds and manages crypto-currencies and tokens, and also holds liquid assets such as shares in listed blockchain and gaming companies.

CBI's strategy is to invest in operational activities and start-ups, as well as in crypto-currencies and tokens.

To offer greater flexibility and optimize the chances of commercial success, CBI also offers payment options in traditional currencies where technically feasible.

CBI's objective is to grow its portfolio of assets, optimize return on investment and operate with a limited level of fixed costs, focusing on the best opportunities in the industry. CBI uses leveraged financing techniques, while maintaining a priority on collateralization to minimize the level of risk.

The complementary nature of these activities also enables synergies to be created.

CBI: Strategy and development for a connected, open virtual world

The company's core business is currently focused on the development of AlphaVerse, a beautifully designed, feature-rich digital virtual world. AlphaVerse is organized around a central place, the "Hub", which connects numerous universes in the field of games and entertainment. AlphaVerse is an open and versatile Web3.0 online platform that offers gaming and interaction experiences, as well as content creation and sharing. AlphaVerse operates on the traditional side with payments in traditional currencies, and on the blockchain side with the major cryptocurrencies as well as the Crystal token ($CRYS), AlphaVerse's cryptocurrency, and the $FAV token, Football at AlphaVerse's cryptocurrency. 600 million units of the Crystal token have been created on the blockchain, with the first private sales already completed for US$ 1.8 million on a valuation basis of US$ 50.0 million for all Crystal tokens (i.e. US$ 0.083 per Crystal token). 11 billion units of the $FAV token have been created: the tokens will enable microtransactions in the Football at AlphaVerse universe, participation in quests or mini- games, the purchase of NFTs, the running of referral programs, access to discounts on purchases, or the earning of FAV tokens linked to the creativity or commitment of users, in the manner of a loyalty card. CBI aims to list $FAV in 2023.

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ANNUAL ACCOUNTS 2022-2023

Some universes are developed by CBI for its own account, others are developed by CBI in association with partners, and others by third parties with a view to being linked to AlphaVerse through the Hub. The Hub was first opened for testing in September 2022, generating many positive and enriching feedbacks. After an initial development phase during which priority was given to video games, music and the associative world, all leading fields bringing together vast international communities, the universes currently under development are as follows:

• MetaCoaster: an amusement park simulation game on blockchain. Users will be able to play solo to hone their skills, or take part in global park-building competitions and win cryptos.
• United At Home // Beat AlphaVerse: a universe dedicated to electronic music and philanthropy developed for and with the famous DJ and music producer David Guetta, in particular to deploy his "United at Home" charity program in the metaverse.
• HorYou AlphaVerse: a metaverse dedicated to social good, sustainability and the fight against climate change. Built in partnership with the Horyou social network and the Horyou Foundation.
• Qtopia AlphaVerse: a social metaverse for the LGBTQ community and its allies to connect with each other and trusted brands. In Qtopia, users can participate in activities, events and mini-games while giving back to charities important to the community.
• Artech AlphaVerse: those nostalgic for the digital art of the 90s will find their place in Artech. Artech is a metaverse entirely dedicated to digital art and artists, where we create an entire digital art ecosystem with artists, galleries, events and exhibitions through the use of NFT and blockchain technology.
• Chi Modu AlphaVerse: this metaverse provides a virtual space dedicated to the life and work of legendary photographer Chi Modu, where emerging artists can find the inspiration and resources to pursue their dreams while giving back to the community.
• Xave World: Xave AlphaVerse immerses the user in an open virtual world of constant expansion and evolution, where music fans discover a new world filled with music, incredible shows, festivals and events. This metaverse is currently being acquired by CBI, for $1 million mainly paid in CBI shares and an earn-out clause.
• Chain Games: Chain Games is a blockchain-integrated gaming network offering decentralized skill games, Skill-Based and Play-to-Earn contests, allowing players to earn crypto-currencies as a reward for their efforts. This world will be developed and operated by Chain Games.
• Rave Age: Rave Age is dedicated to the rave and electronic music community, its history, key figures and the latest industry news. Visitors to the Rave Age AlphaVerse will be able to watch videos, collect NFTs and share experiences and content related to rave culture and electronic music. Users will be able to organize artistic events, such as festivals, concerts and exhibitions around rave culture and the electronic music community.
• Soccer at AlphaVerse: Football at AlphaVerse is a world dedicated to soccer, in which visitors can move around the various emblematic locations of their favorite clubs and enjoy a variety of games and entertainment.

In addition to AlphaVerse, CBI invests and shares its expertise in various projects related to blockchain technology. In particular, CBI has invested in four companies: two premium video games that are currently being adapted to incorporate blockchain technologies (OP Productions, LLC and Free Reign East, LLC), a transportation marketplace company developing a blockchain-based solution (National Carrier Exchange) and a talent management agency (Blockchain Artists Agency) that targets celebrities from all walks of life to develop their image on blockchain, notably through NFTs and community animation tools.

In accordance with Article 2 of the Articles of Association, CBI's corporate purpose is, in France or abroad, directly or indirectly:

• The creation and marketing of digital assets, particularly on blockchain;
• The design, production, publishing and distribution of all multimedia and audiovisual products and works, in particular for leisure purposes, in any form whatsoever and in particular in the form of software, data processing or interactive or non-interactive content, on any medium and through any current or future means of communication;

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ANNUAL ACCOUNTS 2022-2023

• The acquisition of any company, entity, business or other undertaking that is active in blockchain or is likely to evolve in whole or in part in this field, regardless of the type of activity named ;
• Production of all kinds of leisure, sports, audiovisual and other activities;
• The creation, acquisition, operation and management of intellectual and industrial property rights or other real or personal rights, in particular by way of assignment, licensing, patents, trademarks or other rights of use;
• The purchase, sale, supply and, more generally, the distribution of all products and services related to the above-mentioned purpose;
• Acquiring, seeking partnerships with and acquiring interests in any form whatsoever, in particular by creation, issue, subscription or contribution, in any activity directly or indirectly related to the above- mentioned purpose or to the products and themes developed by the Company;
  and, more generally, any transactions whatsoever relating directly or indirectly to the above objects or to any similar or related objects likely to facilitate the Company's development.

HIGHLIGHTS OF THE YEAR

Fiscal year 2022-2023 was marked by the opening of the metaverse, AlphaVerse, for the first user tests and the announcement of new universes, including one dedicated to soccer. On the financial front, the year was also marked by a capital increase by way of an offer carried out in February 2023.

Highlights of the period were as follows:

1. Change of listing compartment: On August 3, 2022, CBI announced its effective transfer from listing group E1 (private placement) to listing group E2 (public offering) on the Euronext Growth Paris market.
2. Chain Games: On July 26, 2022, CBI signed a partnership agreement with Chain Games, publisher of Skill-Basedand Play-to-Earn games, for the creation of spaces dedicated to these games and the development of content in the AlphaVerse, with a license fee of US$2 million for the benefit of CBI. CBI and Chain Games have entered into a series of agreements, under which :
3. 1. the Company sold Chain Games the right to own a space in the Hub, for US$2 million paid by Chain Games in CHAIN tokens
   2. the Company and Chain Games have agreed to share future revenues generated in this area of the Hub
   3. Chain Games has agreed to develop a separate world, with the Company entitled to a share of the revenues generated by this separate world.
   4. the Company has retained Chain Games as its strategic advisor for the next 5 years, in exchange for CBI shares and CRYS tokens

3. Amendment to liquidity contract with TSAF: On September 5, 2022, 200,000 euros in cash

were withdrawn from the liquidity contract with TSAF.

4 Opening of AlphaVerse: On September 21, 2022, CBI opened the central part (the Hub) of its AlphaVerse metaverse in a test phase for the first players from its community.

5. Repayment of the loan of 2 million CBI shares: On July 29, 2022, the Company entered

into an amendment to the loan agreement granted on April 21, 2022 by Ker Ventures SARL in order to prepay the loan of 2 million CBI shares by issuing and delivering an identical number of CBI shares.

6 Loan agreement for 5 million CBI shares: On July 29, 2022, the Company entered into a loan agreement for 5 million CBI shares with its main shareholder, Ker Ventures, SARL. The loan is short-term, valued at 5 million euros, and bears interest at 2% per annum. It is a regulated agreement. The loan will be taken out at a later date, as and when the Company's needs arise.

7. Amendment to the July 29, 2022 loan Agreement: On January 3, 2023, the Company

entered into an amendment to the July 29, 2022 loan agreement with Ker Ventures SARL to extend the loan

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