Introducing FIRST CURRENCY Overview Hybrid Money is an

Introducing FIRST CURRENCY

Overview Hybrid Money is an innovative financial transaction system that integrates traditional and digital currencies to facilitate fast and efficient electronic micro and macro transactions, as well as electronic transfer of funds within the ambit of the regulatory provisions of the regulatory body. It utilizes a well-secured and encrypted server-based intrabanking software application that seamlessly integrates local financial institutions, consumers, micro-financiers, merchants, public and private sectors. First Currency is a brand of Cluster Holdings, which is licensed in eight African countries and currently spreading to other parts of the world.

Overview Bank Note Hybrid Money Digital Money Hybrid Money is a regulated hybrid currency. It is regulated meaning it is accepted by Governments and/or Central Banks to operate in countries as a financial instrument (FINTECH).

About Us First Currencyis an emerging integrated payments system and e -commerce company that facilitates fast, efficient, and convenient financial transactions as well as exchange of value through its innovative system that integrates traditional currencies and digital money. Our flagship product; Hybrid Money is the brand name for the international product which is also known as First Currency. Hybrid money is covered by an international patent registered to the Cluster Holdings. .

Current Operations | Geographical Coverage & Relevant Figures GEOGRAPHICAL COVERAGE 1. Cameroun 2. Benin 3. Equatorial Guinée 4. Gabon 5. Togo 6. Burkina Faso 7. Cote d’Ivoire

Capabilities & Value Added Services

Hybrid Cowry enables… 1. MONEY TRANSFER FUNCTION: Send and receive money 2. SAVINGS FUNCTION: Deposit and withdraw money from your Hybrid account 3. E-COMMERCE FUNCTION: Pay and buy online services and goods 4. EXCHANGE FUNCTION: Issue electronic money locally

Beneficiaries of Hybrid Cowry Regulatory Body Hybrid Money delivers benefits that cuts across all its stakeholders. Agents Hybrid Money Non Subscribing Customers Subscribers

Beneficiaries of Hybrid Cowry REGULATORY BODY 1 Real-time tracking and monitoring of transactions 2 Transfer limits and frequency can be set 3 The system is configured based on State Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations 4 The system allows for reporting suspicious transactions to Financial Intelligence Unit (FIU) and other relevant agencies. 5 The Government’s cashless policy is enhanced. 6 It provides access to the unbanked public

Beneficiaries of Hybrid Cowry SUBSCRIBERS 1 Increases transaction security for consumers and merchants 2 Accelerates electronic transactions 3 Automatic currency conversions 4 Speed and convenience for users and merchants 5 Provides lower costs to electronic transactions 6 New option for electronic transactions 7 Eases purchases from merchant sites by providing alternative payment option 8 It enables Micro-Payments to be made without losses to customers or vendors 9 Users save money on mobile payment transactions

Beneficiaries of Hybrid Cowry NON SUBSCRIBING CUSTOMERS 1 Increases transaction security for consumers 2 Accelerates electronic transactions 3 Automatic currency conversions 4 Speed and convenience for users 5 Provides lower costs to electronic transactions 6 New option for electronic transactions

Beneficiaries of Hybrid Cowry AGENTS 1 Opportunity for job and wealth creation through the creation of Agents 2 It curbs the issue of cash theft at payment points

OPERATIONAL DYNAMICS

Operational Dynamics Point 1 The Cyber Treasury is a highly-secured and encrypted server-based intra-banking software application developed by First Currency. It serves as the Central Electronic Server for all Electronic Transactions and Activities. Key Features: - Multiple web technologies - AES (Advanced Encryption Standard), data storage - Availability of APIs for easy linking with other platforms - Multiple payment methods (Direct use of Currency No. and/or Public Key, Scanned, digital cheque) - Embedded with all six properties of money (divisibility, acceptability, legality, durability, transferability, scarcity)

Operational Dynamics Point 2 The Regulatory Body; the National body that regulates financial institutions and related organizations is provided access to consult live data from the Cyber Treasury in line with the provisions of the laws of the country of operation. The Cyber Treasury will also send Regulatory Body weekly reports of its financial transactions. Key Data: 1. List of clients, agents/bank branches, franchise partners/bank head offices 2. Money transfer transactions(send/receive) 3. Cash Deposits/Withdrawals 4. Generated income 5. Others as provided by Regulatory Body regulations.

Operational Dynamics The Cyber Treasury is the central server-based platform from where; • • • Data is saved in an agreed document format, then sent to the Regulator via E-FASS for onward processing and use; Subscribers and customers sign in via their mobile devices to carry out transactions; Agents debit their accounts with traditional currency to create Hybrid Money equivalents for mobile transactions.

Operational Dynamics Point 3 The Partners/Agents will serve as a Physical Interface that facilitates the Conversion of Traditional Currencies into Digital Currency for digital transactions. - Franchise Partners: These are fundamentally Financial Institutions that will serve as physical operations hubs and interface between the Cyber Treasury and Agents - Agents: These are organizations or individuals that will serve as physical interface that facilitates the conversion of traditional currencies from subscribers/customers into digital currency for digital transactions and vice versa

Operational Dynamics Point 4 The Subscribers are individuals or groups who own Hybrid accounts and use it for electronic transactions

Operational Dynamics Point 5 The Non Subscribing Customers are individuals or groups who do not own Hybrid accounts, but use the platform for money transfers.

Operational Dynamics How it Works: STEP 1 1. An intending Subscriber signs up via www. 1 stcurrency. com to create a personal Hybrid Account and subsequently download the First Currency Mobile App, all in line with the provisions of the Regulatory Body for opening a bank account. Key Requirement: Internet-enabled Mobile Phone.

Operational Dynamics How it Works: STEP 2 a 2 a. A Subscriber makes deposit on traditional currency to the personal Hybrid Account via an Agent. The Partners/Agents (Franchise Partners & Agents) work collaboratively to convert the traditional currency deposited by a customer into its equivalent in digital currency into the depositor’s Hybrid Cowry account. The Subscriber can now make digital transactions built around interactions between customer’s mobile app and the Cyber Treasury.

Operational Dynamics How it Works: STEP 2 b 2 b. A Non subscribing customer can transfer money in traditional currency to another customer or subscriber anywhere via an Agent. The Agents (Franchise Partners & Agents) work collaboratively to convert the traditional currency from the customer into its equivalent in digital currency, which will be captured on the Cyber Treasury. The recipient of this money will then collect the equivalent of the money locally.

Operational Dynamics Key Transactions The transactions that can be performed by Subscribers and Non subscribing customers with Hybrid Money includes but not limited to: - Money Transfer (Traditional Currency) - Money Transfer (Digital Currency) - Online purchases and payments down to micro payments

Operational Dynamics How it Works: STEP 3 3. The Agents relates with the Cyber Treasury by debiting their account to create Hybrid Money equivalent, that is saved in the Cyber Treasury. And in the case of different currencies, all transaction are registered in the COR (Cowry). Conversion to other currencies are superficial.

SECURITY LEVELS

Security Level/ Architecture

AML & CFT

AML & CFT

AML & CFT Hybrid Money: AML/CFT Overview The objective of our AML/CFT feature is to mitigate the adverse effects of criminal economic activity in transactions and transfers in the Hybrid money system. Hybrid money has embedded frameworks that track the pattern(s) and volume of financial flows in our system within and between countries. The tracking system: • An internal AML/CFT framework; • Benchmarking with the Regulatory Body’s AML/CFT regulation and • Regional benchmarking with GIABA (ECOWAS Inter-Governmental Action Group against Money Laundering.

AML & CFT Anti-Money Laundering Controls: First Currency implements internal anti-money laundering controls which include; 1. Customer Due Diligence (‘CDD’) controls: This is applied when new accounts are being opened; the company have its own money laundering officer (MLRO) who is responsible for ensuring that the firm establishes and maintains effective systems and controls for compliance with the various requirements and standards under regulatory systems, and for countering the risk that the firm might be used for financial crime. 2. ‘Know Your Customer’ (‘KYC’) arrangements: Hybrid Cowry takes measures to verify the identity of its clients and assess potential risks of illegal intensions. 3. Suspicious Transaction Reporting (‘STR’) mechanisms: Hybrid money system has an inbuilt capacity to flag and report suspicious transactions.

AML & CFT Anti-Money Laundering Controls: key components of anti-money laundering controls embedded in First Currency system: 1. Risk scoring of customer details 2. Profiling & trending analysis routines to detect behavioural deviations 3. Automated alerting & case management mechanisms 4. Suspicious transaction/activity reporting procedures 5. Data retention & audit capabilities to support post-event investigations 6. Case management & investigation capabilities designed to identify perpetrators 7. Training of staff

AML & CFT First Currency applies a mix of due diligence and the secure retention of both customer and transactional data as its main mechanism for ensuring compliance with the CFT. Counter Terrorist Funding

RISK ASSESMENT & MITIGATION STRATEGY

Risk Assessment & Mitigation Strategy Overview Hybrid Cowry adopts a holistic view of risk considering its function in two high risk sectors - financial and technology (financial technology) industries. Our risk assessment and mitigation strategy serves as the basis for deciding appropriate counter measures Hybrid Money will adopt in reducing incidence and impact of risks. Our risk assessment mechanism is used to assess the state of our overall IT infrastructure as ingredients for decision making. It affords us the benefits of: • Identifying financial & security vulnerabilities; • Identifying the maturity levels of existing security controls; • Improving Hybrid Money’s organization wide security policies; • Gauging security awareness and readiness; • Justifying our level of investment in financial & technology security measures. Hybrid Money risk assessment system makes for an effective protection of our enterprise and products against external potential & actual risks.

Risk Assessment & Mitigation Strategy TECHNOLOGY RISKS S/N RISKS PROBABLE CAUSE PROBABILITY IMPACT MITIGATION OF OCCURANCE 1 System Crash Targeted Cyber Low Attack High a. Cloud Backup, redundant server b. Use of System harvesters and Re-Injection Technology. (Hybrid Cowry System harvests information continually. And in the event of a system crash, the harvested information will be re-injected into the system in 5 minutes). 2 Data Corruption Targeted Cyber Low Attack High Same as in No. 1 3 Info Criminal Attack Low Theft/Hacking High a. Data Encryption b. Standard due diligence for financial transactions

Risk Assessment & Mitigation Strategy TECHNOLOGY RISKS S/N 4 5 RISKS Internal denial of service attacks (Cybercrime). External denial of service attacks (Cybercrime). MITIGATION • Number of transactions are controlled • Flag pattern and volume of transactions • Transaction limitations apply to traditional accounts • Firewalls • High level server security

Risk Assessment & Mitigation Strategy OPERATIONAL RISKS S/N 1 2 3 RISKS MITIGATION FRAUD AGAINST SUBSCRIBERS • Data encryption (e. g. possible theft of their balances • Multiple way authentication is used through staff involvement or • Every transaction has an audit trail technical means). • Real time SMS alert • Safe guard leading to possible quarantine measures REPUDIATION FRAUD BY • Revalidation at every stage of transaction SUBSCRIBERS (i. e. “I didn’t make that • Transaction traceability transfer – my phone was stolen. ”) COERCION OF CUSTOMERS TO MAKE • Transaction traceability PAYMENTS AGAINST THEIR WILL • Transacting through the Hybrid treasury prevents round tripping

Risk Assessment & Mitigation Strategy FOREX RISKS S/N RISKS MITIGATION 1 Currency fluctuations Clearing mechanism involves movement of data and not cash

Risk Assessment & Mitigation Strategy FINANCIAL RISKS S/N RISKS MITIGATION 1 Payout/ Cash out failure Building capital base from: - Revenue from customers subscription - Investors funds 2 Account Reconciliation Maintaining cash reserves domiciled with commercial Banks

IMPLICATIONS OF 50% SUCCESS OR FAILURE RATE

Implication of 50% Success & Failure Rate Probability of success for innovations Product/market Probability of success Count Percent A new product in a new market 1 in 20 5% An old proven product in a new market 1 in 4 25% A new product in an old market 1 in 2 50% An old product in an old market About 1 in 2 50% Source: A. T. Kearny Assessing First Currency’s market potential with the probability of success index situates Hybrid Money at a minimum of 50% on this innovation success determination scale.

Implication of 50% Success & Failure Rate The diffusion curve, also known as the “S” curve is a graphical representation of the declining of an existing technology due to its obsolescence and or the introduction of an emerging technology Innovation players refers to five groups of people according to their rate of adoption of new technologies, namely: • Innovators • Early adopters • Early majority • Late majority • Laggards The diffusion curve here depicts the emergence of Hybrid Money in 2019 with an accelerated growth rate. The expected growth rate of Hybrid Money is premised on proven innovation concepts such as –the innovation players as outlined by Rogers (1964).

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