Eligma CEO Update - last 8 months of hard work resulting in some big milestones! We Deliver.

Before you start reading this report, I would like to thank everyone on my team, advisors and people who support our project.

People say many things behind imaginary doors of the Internet, and I saw many leaders take these evil tongues too seriously. People are people and that will not change until the day we all die. People are always striving for information and in that same way our community wants to know how the project is doing, is it still alive, is it making any progress and are we still on the same track as we were in the beginning. I understand that perfectly, but some things simply need to stay behind closed company doors for at least a while because the competition on the market is without a doubt watching every step we make and using the information we release to the public as a great data gathering and product development tool. This can sometimes be harmful for our project. There is another side to this coin, namely the majority of the crypto hype was built on words spoken and not on effort that companies should put forth. For that reason, people start to cling to words and not the execution. Words and ideas without the execution are nothing more than a delusion.

Companies sometimes just need time and many of them will change they directions to achieve their goals. I saw many people contributing to crypto projects because they believed they could make money overnight, but if a project is legit and defined seriously it will take years, maybe even decades for it to become really successful or profitable. For example, Jeff Bezos (CEO of Amazon) told his investors in Amazon’s growth phase that if they invested with the goal of short term profit they are not in the right place. He told all future investors that they should not invest if they are not planning to stick around for the long term. It is easy to play smart today and ask who would not want to invest in Amazon, but a decade ago people were wondering whether they should invest in Amazon or take their money elsewhere. What I want to say is that everything needs time and that success is a result of a long term process.

We were very busy in the last seven months although it might not have looked that way sometimes as we did not actively communicate with the outside world. We focused on the product, on the team and on the business. Everything else is just slowing us down and not speeding up our success. Some people liked the way we went about our business and some people did not but what it comes down to is if you want to make everybody happy do not be a leader but start selling ice cream.

It is sometimes hard to imagine that we finished our crowdsale only 10 months ago as it sometimes feels that it was actually years ago. We made a lot of progress and according to the roadmap in our whitepaper we are firmly on track. We deliver some things faster and some slower, but we are making BIG progress! Haters will hate, but we can actually show what we have accomplished. When it comes to changing the way people discover, purchase, track and resell products online and offline we managed to nail the purchase segment with Elipay. In the next 6 months we will nail the discover and track segment with Elly.com. Our endgame idea is to combine all segments into one product.

Below is a timeline of our progress and a few sentences describing what we are doing at the moment and where we are going.

What we have accomplished in the last eight months:

1. Eligma Progress Timetable

2. Eligma roadmap — overview

Before you go through it, please note that we have added so many things to the roadmap and developed them even if they were not in our original plan. Startups needs to be agile and the market will decide which direction we should take.

3. Elipay is transforming into GoCrypto.com

Elipay features that we have already developed:

• An embedded and fully compliant KYC process
• Enabling crypto payments through a mobile app where the user selects the desired cryptocurrency
• We implemented BTC, BCH, ETH and the ELI token and ERC-20 token support for simple integration
• Merchant-based fixed QR codes for easy scanning when cashier’s screen cannot be accessed
• Universal loyalty program based on ELI tokens, where each purchase is rewarded with up to 2% tokenback of purchased value
• Referral program where the user is rewarded when an invited friend becomes an active user and conducts his first purchase
• Peer-to-peer instant cryptocurrency transfers among Elipay users
• Online onboarding system for merchants
• A stand-alone POS web interface for merchants
• Simple API integration into existing POS solutions
• Detailed list of stores accepting Elipay, filtered by categories, favourites and distance from the user location
• Integration of fiat top-up for enabling convenient mobile phone purchases
• The option of purchasing with EUR is completed and internal testing is initiated

Elipay was created to bring the cryptocurrencies and the ideas behind them to the main stream. It did exactly that in Slovenia.

• People can use and pay with crypto at 286 locations throughout Slovenia in seconds.
• People can transfer crypto for free anywhere in the world between Elipay wallets in seconds.
• People are being rewarded through our universal loyalty program and we enable merchants to reward customers even more in the future and maintain a great relationship with them.
• We enabled different kind of crypto currencies as payment options and focused on a custodial wallet mainly because of regulators.
• We created an online POS that can be integrated with any ERP provider in a matter of minutes and implemented at any location or merchant.
• ELI has become an official payment method for all our merchants. You can use and pay with ELI tokens anywhere where Elipay is accepted.

Next steps:

1. Integration of the Bitcoin.com non-custodial wallet so our users can decide which wallet they want to use. In this way the registration process will be much shorter, and the Bitcoin.com Wallet will be wide spread at all Elipay locations.
2. Eligma is partnering with a global exchange to enable simple exchanging of cryptocurrencies in Elipay so my mom can buy crypto with no hustle. We are trying to make this process so simple that anyone can use it.
3. Elipay is going global. Maybe you are asking yourself why we are still not in the UK, but the answer is obvious. Nothing regarding Brexit is clear and it could cost us a lot of money and effort. We decided to wait and focus on other markets until things on the island are clear.
4. When we combine the 4 features ­­- buying and selling crypto, paying with crypto, transferring crypto and using crypto as a reward system for merchants — we will create a unique product that deserves a stronger name for a wider spread. We have chosen the name GoCrypto.com and will be rebranding Elipay in the upcoming months.
5. With the Elipay / GoCrypto POS we will aim to become one of the biggest ERP providers that enable crypto payments in the offline world.
6. Last but not least — what if Eligma receives an e-money licence? Stay tuned.

4. HelloElly will be replaced with the first version of our main product, Elly.com.

HelloElly.com was a great test. I am sure we would create something amazing if we kept on working on the chatbot and the AI behind it, but the question is would people really use it. Maybe chatbots are still too advanced for people or we just do not accept them yet…well, we have one developed and we will put it on standby for now and move towards Elly.com. It is still a very important achievement for us as its AI part is being developed further and that is crucial for us. Anyone can create or buy a chatbot but developing the AI behind it is the tough part.

So what is Elly.com all about? Well, it is a first step towards developing the discovery and track segment from our whitepaper and it is a pretty cool thing. It will be a simple tool in the beginning, but in time it will become more and more powerful.

ELLY.COM is a fun and smart solution which will optimize consumers’ shopping experience by saving their time and money. Without changing their habits!

We are currently collecting and testing a complex product database from several sources (purchase receipts, weekly merchant deals, e-commerce, in-store data, etc.) and joining them into a single mega database.

With a bigger database, we will be able to offer shoppers advanced analytics and recommendations to shop more efficiently and healthy (by implementing AI and machine learning models).

Elly.com will:

• select best weekly retailers’ deals adjusted to consumers’ lifestyle and past purchases
• save time they currently spend on checking weekly flyers or comparing retailers’ deals
• become their smart shopping list
• help reduce their monthly grocery costs
• help them track their grocery costs by categories
• tell them how much their purchase would cost at other retailers

5. Eligma creates Eligma Labs and partners with Spartan Solutions with regards to blockchain development.

We are a blockchain company, so for me it is normal to have a blockchain team under our roof. I really liked the technology that was introduced to me by Spartan Solutions and we made a decision that developing advanced technologies on the blockchain for Eligma is the right focus. We brought all the technologies that were ever created by Spartan Solutions under our wing and we are now modifying them so they can be used by Eligma. But because we saw that these technologies can also be a great benefit for other blockchain companies, we started to offer them to others and Eligma has started to build a great revenue stream with them (sharing model 50%/50%). At the same time, Eligma Labs is working on our payment processor, digital item profile on the blockchain, escrow on the blockchain and many other things.

I can assure you that there is nothing better than having your own blockchain team that can build almost anything…and still help other blockchain companies.

Please check our partners and technologies at www.eligmalabs.com.

6. Eligma partners with Bitcoin.com to expedite the process of bringing crypto to the mainstream through the process of establishing Bitcoin Cities around the world and support of the noncustodial wallet Bitcoin.com.

If there is someone who made a really positive influence on me from the crypto world, it was Roger Ver from Bitcoin.com and Bitcoin Cash and CZ from Binance.

They are two individuals that are really trying to bring crypto to the world no matter what.

We met with Roger at DELTA Summit in 2018 (looking forward for DELTA Summit 2019 @Malta— dr. Abdalla Kablan really turned it into a great event) and from that point on we started to look in the same direction. I was in Japan last week and we made a big deal together where we partnered on multiple levels and you will hear about it in upcoming days and weeks. I can only say that the creation of a non-custodial wallet will be possible inside the Elipay, Elipay POS will accept the Bitcoin.com Wallet, new Bitcoin CitiesTM will be established and much more will be revealed.

There is another piece of excellent news. From now on it will be easier for us to reach the Bitcoin Cities’ potential as Eligma will also have two @bitcoin.com email addresses.

7. Eligma becomes the exclusive technology partner of the leading blockchain consulting and community management company in the world Amazix.

We crossed our paths with Amazix almost a year ago when we were still in the public crowdsale preparation phase. At the time we only knew they were the best community management company a project like ours could hope to have. We somehow managed to get to their CEO Jonas Sevel Karlberg and they agreed to do due diligence on our project for us to be able to hire them for community management. During our cooperation as a client/provider we got to know Amazix a lot more and liked their vision and effort towards offering an all-in-one support for blockchain/crypto companies. They now have several branches of operation but one they were lacking is the one we are thriving in ­- blockchain technologies. We started talking and after we agreed on key points we stepped into a partnership where Eligma became the exclusive technology partner of Amazix.

This partnership is already proving to be very effective and more information will be shared with you when possible.

8. Eligma partners with Bias Variance Labs for creating advanced AI-technologies

The BVLabs core team consists of established researchers and experts with long-standing experience in designing, developing and applying cutting-edge AI-methods for modelling and understanding complex and dynamic systems. We have been working with the team for more than half a year now and I must say I am very impressed with them. They are one of leading experts on machine learning in the region and that is why we strengthened our relationship through a partnership in the advanced machine learning solution area.

9. Regulators and Eligma

Additional services to Elipay have been approved by the Bank of Slovenia, which will enable more usability for Elipay users and increase their numbers. Additionally, Croatian National Bank formally confirmed Elipay’s business model in Croatia, which will allow internationalization of our services. Moreover, Financial Conduct Authority (FCA) in the UK introduced Eligma to its Innovate program and included us in their Guidance on Cryptoassets as an example of good practice.

Eligma is maintaining a strong relationship with all the relevant regulators in Slovenia and is proactively working together with them in order to assure lawful operations. We are always happy to provide relevant industry feedback to Slovenian as well as EU financial and other authorities to improve the regulatory environment and set high standards of conduct in Slovenia and the EU.

10. My thoughts on future development

We need to stay focused. We are now moving in two parallel directions. One for the GoCrypto.com and one for Elly.com. Both of them are costly but we are also seeing first revenues come in to Eligma and Eligma Labs. We now have around 40 people working for Eligma, 19 of them as full time employees and others as contractors. Partnering with other bigger players gives us credibility and growth.

The crypto market is not showing signs of recovery and listings on new exchanges at this moment do not make any sense. Our main concern is to focus on developing our product in a way that is sustainable, includes usability of the ELI token and involves international coverage. To ensure an even tighter focus, we stopped spending large amounts on marketing, PR and promotions because in this market that is a waste of resources.

So for my final thoughts: I am confident that we are moving into the right direction. We execute and do not wait for tomorrow.

Thank you for all your support and patience. One more time…We are all in.

Dejan Roljic