Capdax — Factual Findings

EXECUTIVE SUMMARY OF ETHER (“ETH”) AND BITCOIN (“BTC”) FUNDS GATHERED AND SPENT FROM MAY 17, 2017 TO SEPTEMBER 2, 2019 AND THE BALANCE OF FUNDS REMAINING AS OF SEPTEMBER 2, 2019 OF THE CAPDAX PROJECT

Capdax commissioned an independent, chartered certified accountant to perform agreed-upon procedures on the Ether (“ETH”) And Bitcoin (“BTC”) funds gathered and spent from May 17, 2017 to September 2, 2019 and the balance of funds remaining as of September 2, 2019 of the Capdax Project. The procedures were undertaken in accordance with the applicable International Standard on Related Service 4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information.

As part of the agreed upon procedure, Capdax provided to the chartered accountant access to

– the BTC and ETH wallets used by Capdax, including in the case of BTC a verified export of the wallet history. In the case of ETH the activity and the balances were confirmed on the blockchain.

– cash-in-hand balances of accounts used in relation to the project including cash activity log sheet.

– ETH and BTC balance held in custody by 3rd party OTC partner, whose balance was verified by the partner.

Summary of factual findings and determination of XCD buy back rate:

1. Amounts received

When using the lock in rate for BTC/USD and ETH/USD which was applied throughout the seed and pre-sale rounds, the total amount received into BTC and ETH wallets was agreed as USD 11,812,805 using the data downloaded from both the “ETH” and “BTC” wallets used by Capdax and recomputing the amounts into USD using the lock rates provided by management announced during TGE as stated below:

• For conversion of ETH to USD, the rate of conversion used was 1 ETH to USD 934.32
• For conversion of BTC to USD, the rate of conversion used was 1 BTC to USD 9,711.90

However, taking into consideration the contribution of seed funds at an earlier time in 2017 when the rate of conversion was 1 BTC to USD 2,040.00 and applying the conversion rates at the time of commitment of those funds, the total amount received into BTC and ETH wallets was agreed as USD 9,959,451.

Of this total amounts received, 42.22% (USD 4,204,440) have been contributed by the founding members. Founding members contributed on the same terms as members of the public.

2. Fund movement

Total “ETH” and “BTC” expenditure was determined using the same data downloaded from both the “ETH” and “BTC” wallets and recomputing the amounts into USD using the actual rates at time of transaction:

• For conversion of ETH to USD, the rate of conversion was obtained from etherscan.io using historical $Price/Eth that is a column in the etherscan file download of the ETH wallet
• For conversion of BTC to USD, the rate of conversion was obtained from blockchain.com using the transaction hash unique to each transaction in the blockchain.

The procedure is targeted to account for approximately 85.0% of the total “ETH” and “BTC” expenditure. This limit was set as to not use more time and resources than necessary in verifying individual blockchain transactions with receiving parties. This level of scrutiny does provide sufficient evidence that the founders have not used Capdax’ funds to enrich themselves, taking into consideration the proportion of their personal contributions (42.22%).

a) Fair Value Loss

42.70% of the total amounts received is accounted for as fair value loss. This refers to the market depreciation over time of the tokens held in the Capdax wallets.

b) Actual expenditure

34.14% of the total amounts received is attributed to operational expenses over a period of two years, including legal fees, third party service provider costs, spending requests by operations manager and employee salaries. Founders were not eligible to draw salaries.

c) Refund of founders

Two of the initial founding members contributions were refunded as the team separated from them, in each case based on the actual rate at the time of the refund and proportional to the holdings of the company. For example, if at the time of the refund, the Capdax wallet had decreased in value by 50%, the founding member was paid out 50% of his initial tokens, downward adjusting the initial XCD/USD rate. Both combined, this made up 6.65% of the total amounts received.

d) Additional income generated from Forks

Income generated from the bitcoin fork amounts to an additional 2.66% of the total amounts received.

e) Total funds remaining

19.17% of the total amounts received is the funds remaining for the Capdax Project is 19.17% as of September 2, 2019.

3. Buy Back

Based on a proportional distribution of all remaining funds the conversion rate will be 1 ETH / 60,954.06 XCD.

Founding members will participate in the buy back on the same terms as members of the public.

For further clarifications, please reach out to Bothini Navaneethan via this digital form latest by September 27, 2019.