Smart asset financing

BlockState addresses an enormous market opportunity

Section 1

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Wealth* Real estate Debt capital

UninvestableInvestable

of global assets are not easily investable ($359tn)

*Global personal financial wealth". Investable: listed equity, funds, currency, deposits // Non-investable: Life insurance, pension funds, unlisted equitySources: Savills, McKinsey, Bloomberg, Bank of International Settlements (2017)

Most global assets are not accessible for the mass market

Global capital market infrastructure has not developed significantly throughout the past decades. Access is still

privileged to entities with large issuance volumes, financial resources and financial market know-how.

BlockState enables capital market access for illiquid assets

Most assets are poorly accessible.

Assets like SME equity, real estate and other

non-bankable/illiquid assets are not easily

accessible for most investors.

Access is restricted to private equity, hedge

funds or large asset managers. Transferability

is limited to inefficient OTC transactions.

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Our technology enables access.

Asset tokenisation allows issuers to target

both retail and institutional investors faster

and more (cost-) efficiently.

Fractional ownership, transferability of

assets and a streamlined investor UX allow

issuers to address a much broader market.

BlockState provides poorly accessible assets like SME equity or real estate with fungibility, liquidity and easy lifecycle

management. Tokenisation maximises efficiency in the issuing process and our strong partners secure deal flow.

Real estate Non-bankable assetsSME equity

- Local asset class

- High demand, but low liquidity

- Big tranches and large tickets

- Most SME equity is unlisted

- Bond issuance is not provided

- Limited options beyond loans

- Only accessible to insiders

- Often large ticket sizes

- No or limited transferability

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While SMEs, real estate and a range of “non-bankable” assets represent a large part of global value, capital market

access for these assets is characterised by information asymmetry, poor investor access and high transaction costs.

There is a huge global financing gap for many asset classes

Fractional ownership TransferabilityLow-cost issuance

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Tokenisation bears several advantages that fundamentally improve market access for asset holders and investors.

Besides reducing the general costs of issuance, tokenisation improves both the access and attractiveness of assets.

Digital management Fast executionLiquidity premium

Tokenisation disintermediates the

issuance process, saving valuable

time and resources.

Assets with high minimum ticket

sizes can be fractionalised without

any extra cost.

A fully digital infrastructure enables

the instantaneous and global

transfer of asset ownership.

Secondary market listing provides

liquidity, enabling a premium of up

to 20% for issuers.

Smart contracts enable digitised

shareholder registries, automated

reporting and corporate actions.

By standardizing and automating the

issuance and management process,

we minimise the time to market.

Tokenisation is ideal to connect issuers with investors

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Leading institutions like KPMG, Deloitte and the World Economic Forum project that ten percent of the global GDP

will be tokenised by 2025-2027, opening up a huge market potential for STO providers.

$88tnProjected global

GDP by 2025*

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/shifting-tides-global-economic-scenarios-for-2015-25

10%Total global assets tokenised by 2025

$8.8tnGlobal market size

tokenised assets (2025)

1%Market share

captured by 2025

2%Commission fee on

issued volume

$1.8bnRevenue potential

by 2025

x

x

=

=

Tokenisation will disrupt a trillion dollar market

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Name Jurisdiction STOs Status Valuation/FundingDaura CH Planned: 5 Operational n/aEdexa LI Planned: 1 Operational €4.9m (expected funding)Harbor US 1 REIT; Vol. = $20m Operational $40m (funding)Indiegogo US Launched: 1; Vol. = $18m Operational $56.5m (funding)Liquid EU, SE Planned: 3 Operational n/aNeufund EU Planned: 10+; Own STO Operational €125m (valuation)Polymath US 6+; Vol. = $210m Operational $30m (market cap)Securitize US 7+; Vol. = $500m Operational $12.8m (funding)STOBox Global None In development $9m (valuation)Swarm Global 6+; Vol. = $130m+ Operational $5.5m (ICO funding)Tokenize EU EU Planned: 1; Launched: 2; Vol. = $3.6m+ Operational n/aValidity Labs CH Planned: 3 Operational n/a

Based on publicly available data

The market is seeing the first STO providers kicking off

A few players are emerging in the US and Asia, but Europe is underserved. Most providers are inflexible due to a

holistic in-house offering. We believe that leveraging the ecosystem’s networks and capabilities will be key to success.

BlockState is building a security tokenisation ecosystem.

Section 2

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Execution

Access

Distribution

Setup

Legal docs

Tech setup

Management

Maintenance

Reporting

InvestorsIssuers

BlockState offers a one-stop asset tokenisation solution

/

Tokenisation is only half the story. Using a holistic approach, BlockState provides issuers with support along the entire

issuance process and connects them to a strong financial service ecosystem for private placement and liquidity.

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Week1 Week3 Week8

Project planning

• Project assessment

• Financial structuring

Legal setup

• Termsheets

• Incorporation docs

• Shareholder agreement

• Prospectus

Technical setup

• Smart contract

• Investor onboarding

• KYC/ AML set-up

Issuance

• Start of subscription

• Onboarding

• Distribution

Week10

Definition of scope and general setup of the offering

Preparation of documents based on agreed terms

Implementation of smart contract and investor frontend

10 weeks from assessment to issuance

Depending on the scope and individual requirements of the issuance project, BlockState can set up and launch a

Security Token Offering in as little as 10 weeks from initial assessment.

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BlockState provides full lifecycle management solutions. From legally binding structuring and issuance via smart

contracts, cap table management to automated reporting – our interfaces vastly simplify asset management.

Management dashboard Reporting dashboard

Compliant reporting and analytics are

provided automatically.

Financial reports are created and

distributed with the click of a button.

Issuance dashboard

We guide our clients through the

definition of their STO, step by step.

We generate a legally binding smart

contract to tokenise assets.

Issuers can manage their cap table

via a management dashboard.

Features include corporate actions

and investor communications.

Our intuitive interfaces streamline lifecycle management

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Setup fee Commission fee

€30k – €90k

Depends on complexity

of project setup

0.75% - 4%

Depends on volume

and type of asset

+

Our simple pricing ensures cash flow and significant upside

A set-up fee is charged prior to STO to validate interest and provide early cash flow, while the issuance volume based

commission captures the larger part of revenue created with a client.

Revenue per client

€60k - €300k

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SMEs have a high stake in the provision of alternative funding solutions including capital increases through equity

token offerings (ETO) and debt products (e.g. tokenised bonds), making them the ideal focus for market entry.In

vest

or ty

pe

by st

age

Lifecycle stage: Incorporation Seed Growth Late IPO

Founder & FF x xBusiness angels x xCrowd x xVC x x xPrivate equity x xStrategist x xAsset managers x

Access x x xFractionalisation x x xTransferability x x x xLiquidity x x xLow issuance costs xFast time to market xTo

keni

satio

n be

nefit

We focus on SME equity and debt for market entry

BlockState team, traction and Security Token Offering

Section 3

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A team of seasoned founders, financial and tech experts

Ludwig SchrittenloherCredit Portfolio Pictet, formerly Credit Suisse

Dr. Martin SchröderDirector, SMBC Nikko Capital Markets

Executives

Advisors

Paul ClaudiusCEOSerial entrepreneur & investor;Corporate finance, strategy expert.

Michael WeberCFOInvestment banker and serial entrepreneur; regulation and financial expert.

Patrick StorcheneggerCo-founder Ethereum Foundation

Bertjan JanzenPartner PWC Netherlands

Martin HoblerSerial entrepreneur and investor

Julian TrautweinHead of CommsAirbnb

Andre VoineaETPs and Asset Management expert

Phillipp SchoppmannGoogle, Humboldt University

Samuel BrackCTOFinTech developer; cryptography & blockchain expert.

Carl BrunsCMOSerial entrepreneur and venture developer; operations and marketing expert.

Bernhard RobbelVice President Houlihan Lokey

Christopher KraftExecutive Director Perella Weinberg

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Type Jurisdiction Category Status Issuance volume

SME DE Consumer Letter of Intent CHF5m

Non-bankable asset CH Natural resources Letter of Intent €10-15m

Non-bankable asset DE Digital Assets Letter of Intent €30m

SME CH Blockchain Engagement letter €4m

SME CH Media Engagement letter €5m

Real estate CH Project Preliminary €30m

Non-bankable asset CH Art Preliminary €10m (TBD)

SME CH Blockchain Preliminary €15m

With four letters of intent signed and continued interest from a range of diverse asset classes and industries, we are

set to tokenise assets in excess of EUR >100mn. Projects scheduled for H2 2019/H1 2020 include the following:

Our deal pipeline is filled and interest is growing

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BlockState in the international press

The funds raised in the upcoming STO will be used to further develop our technology to enable further cost

efficiencies and use cases. In addition, we will intensify business development in non-EU countries.

Excerpt

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Angel round closed

BlockState STO

Operational break even

Top 3 in Europe for digital asset issuance (by fee)

Scaling non-European market (UAE/ SEA )

First client signed

STO launchpad go-live

First STO clientonboarding

First client STO launch

> 5 STOs conducted

Automation of underwriting process

B2B interface for whitelabel solutions

Q1 2019

Q22019

Q32019

Q42019

H12020

H22020 2021 2022

Prod

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Private chain option (R3 Corda) Interoperability with

leading secondary markets

Service blueprint for 5 asset types in CH & EUR

Milestones and product / business development

Main sale start: June 18, 2019 at 07:00 CEST

Main sale end: July 12, 2019 at 17:00 CEST

Settlement date: July 30, 2019 at 13:00 CEST

Jurisdiction: Switzerland

Whitelist/KYC: Required (Fractal ID)

Website: Visit

General

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Token name: BKN

Token type: Tokenized Share of Swiss stock company

Token rights: Ownership, Voting, Dividends

Platform: Ethereum (ERC-20)

Volume issued: EUR 2.000.000

Valuation: EUR 20.000.000

Restricted: USA, Korea, Iraq, Iran + more

Currencies: EUR, CHF, BTC, ETH

Token

The BlockState STO

BlockState will hold a security token offering under Swiss regulation, issuing tokenised company equity to institutional,

professional and retail investors globally.

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Use of STO funds

The funds raised in the upcoming STO will be used to develop our technology, building inter-chain compatibility and

enable further cost-efficiencies and verticals. In addition, we will intensify business development in non-EU countries.

Legal & Administration25% of funds (€500.000)

Research & Development40% of funds (€800.000)

Sales & Marketing35% of funds (€700.000)

Total funding target:

€2.000.000

www.blockstate.com

Smart asset financing

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www.blockstate.com

Please note that this non-binding draft version of the BlockStateSTO deck is for advertisement purposes only and does notconstitute a binding offer nor a solicitation of an offer to purchasetoken-based stocks.

Only the official version of the securities prospectus, to bepublished and found under blockstate.com/sto/blockstate, isbinding and authorised for the public offering of token-basedstocks.

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