Report for ccFound investors and fans for 2Q 2024

Informationally: the original report was prepared in Polish. Automatic translations in other languages may contain slight errors. Dear investors and ccFound users! In the second quarter of 2024, 2026 users registered on ccFound, of which 1366 confirmed registration, which is 67%. A total of 802 new users joined the platform on the recommendation of others. There are currently 281 courses on the platform. This is already a significant number of educational resources. So far, 80 trainers have joined our platform. In the second quarter of 2024, users gained access to 1399 courses, of which 127 were paid courses. The total value of all courses published on ccFound is currently 15,879 USD (62,880 PLN). There are a total of 133 groups on the platform, 29 of which are paid. Paid groups may be particularly attractive to users looking for more advanced content or connections. We believe that paid communities are the future of education. The market has moved away from selling knowledge in the form of just video recordings, and the trend is towards enabling people to ask questions and stay in constant contact with others who are serious about a specific field of knowledge. The total monthly cost of joining all paid groups on ccFound is currently 1623 USD (6427 PLN). The total value of groups with one-time access is 190 USD (752 PLN). The longest offered period is an annual subscription, which costs $20,317 (80,455 PLN) for access to all groups. Just a reminder, we currently do not advertise the platform as a social medium for ordinary users. We verified in previous months that acquiring a community in this way simply doesn't work. We are now focusing on acquiring experts, as I wrote in a mini report here: https://ccfound.com/pl/articles/12579/co-teraz-robimy-ccfound-szybka-aktualizacja-27-05-2024 MARKETING and SALES - segment straight from Adrian Main assumptions: Spreading awareness of what ccFound is before the token is listed on the exchange. During this period, videos were created on my YouTube channel that explained what the platform is about. These videos were viewed by almost 8,000 people. https://www.youtube.com/watch?v=je--ueeKhiM https://www.youtube.com/watch?v=z0MrBb9dRH0&t=3s https://www.youtube.com/watch?v=fcUnuh9sIjE&t=358s https://www.youtube.com/watch?v=vENPUzJkS6w&t=44s The next step was to introduce the subscription product "Virtual Real Estate." By June 20, I spent 25,078 PLN on promoting the product, and 7,072 PLN was recovered. 87 accesses to Virtual Real Estate were sold for 47 PLN and 13 for 497 PLN (annual access). In total, 100 people bought the product. Customer acquisition cost: 250.78 PLN. The customer acquisition cost was too high, so I changed tactics. A trial subscription was introduced on ccFound. The strategy is now simple. We offer customers 8 marketing courses for 1 PLN as a trial. This way, we encourage people to get into the subscription product. Of course, we lose on customer acquisition, but after 7 days, we start earning. From June 20 to July 12, I spent 7,629 PLN on advertising. 50 trial accesses to Virtual Real Estate were sold. Customer acquisition cost: 152.58 PLN. In total, I spent 32,707 PLN on promotion. The new approach proved to be much better (customer acquisition cost is 98.20 PLN cheaper). Additionally, the pace of acquiring new customers has accelerated. Although the customer acquisition costs are still very high, we are in the testing phase. If we can figure out which ads sell and what arguments convince customers to subscribe, we can scale the offer. Currently, the program has 151 participants, and new materials are added every month. Despite acquiring customers at a loss (in the initial phase), we will observe two things: my clients, whom I teach, will start selling their courses and attracting users to the platform, I will start earning from subscription renewals, allowing me to reinvest those funds in acquiring new customers. Assuming that current customers will subscribe on average for 5 months, then (151 x 47 PLN) x 5 = 35,485 PLN - this gives us a full return on our previous investment. Plans for the coming weeks. Create a knowledge base in the form of a challenge for ccFound. Every new ccFound user will be able to go through a multi-day challenge where I will teach them how to earn on the platform. Materials will be free. Once the platform has the option for payments in Polish złoty, I will update my current courses. I will be teaching current and new clients how to sell using ccFound (so far, I've taught how to sell on Wordpress with plugins or directed them to our platform's competitors). Now we want to attract customers from the market because we have an offer that is hard to refuse, and ccFound will have full functionality and a clear vision. [End of Adrian's section] PLATFORM AND TOKEN We launched additional translations into Swedish and Vietnamese. At the moment, we will not be adding more languages because we have other priorities, such as adding the Polish złoty as the settlement currency. We will allow the languages added so far to function - there are already enough of them - and we want to stabilize the results in Google search, for which the intensive addition of translations looks unusual. As you can see, we are dynamically changing priorities. We are now focusing on allowing experts to improve their conversions, and for local clients, such as those from Poland, local currency support is crucial. We have optimized the views for non-logged-in users (new homepage) and after logging in - the client panel is displayed by default, and after switching to the wall, we have removed all distracting elements. We are moving towards minimalism and analyzing the user's path so they know exactly what they can do on this platform. Additionally, on the wall, each user has the "Subscribed Only" filter enabled by default so they do not see content or groups that do not interest them. The filter can be turned off at any time by expanding the filter tab on the homepage - or in the profile settings. We have added a "trial" feature to paid groups. Now authors can set access to a product for a lower amount for a specified time, e.g., 7 PLN for a week of trial access. After this period, the full amount for the product will be charged. Initial tests have shown that this could be the main way for experts to sell groups to new people. We have refined and optimized the automatic invoicing system for experts and their clients. Invoices are sent to the email address and can be downloaded from the transaction history on the platform. We have improved the user experience of writing and adding comments so that it does not cause problems for users. We have achieved the first goal in Google search - 500 clicks per day. Currently, we have 400-500 clicks daily. We have launched the mechanism of unlocking locked investor tokens. Tokens will be released proportionally every day until August 17. Rewards have been distributed for staking $FOUND. In May, 1,406,647 tokens were distributed, and in June, 320,796 tokens were distributed. The total number of staked tokens is 137,935,744 and is steadily increasing. We have also decided that ccFOUND will allocate an additional million $FOUND for rewards for staking proportionally over the next three months. Staking tokens is very simple, and we do it on the website https://ccfound.com/pl/secured-area/wallet/stake We have provided an additional option to earn tokens by adding liquidity on PancakeSwap and staking Cake-LP tokens on the platform. $500 per day in FOUND tokens (from the company's budget) will be allocated for rewards for 100 days. The promotion ends on 08/02/2024. Adding liquidity is slightly more complicated. Here is a short instruction for advanced users: https://ccfound.com/pl/articles/12381/zwieksz-swoje-zarobki-dzieki-pancakeswap-i-ccfound A much more detailed step-by-step instruction I wrote here: https://ccfound.com/pl/articles/11900/jak-dodac-plynnosc-do-pary-walutowej-tokena-found-i-zarabiac-na-tym FINANCE At this moment, the company has savings of 2,370 million PLN (circa 598,000 USD). These funds should be sufficient to maintain the project until September 2025, but we are still waiting for a refund from the Tax Office (up to 1,366 million PLN, approximately 333,000 USD). The risk factor is whether and when these funds will be received. We are still waiting for the return of VAT for approximately 903,639 PLN for the years 2022 and 2023, which has led to a Customs and Tax Office audit. The audit should be completed in the next quarter. At the same time, there was a breakthrough in the almost 3-year-old case with the Tax Office in one of our companies - ccFOUND sp. z o.o. In September 2021, the Tax Office in Wrocław-Śródmieście initiated an audit to determine the correctness of settlements with the state budget regarding CIT tax. Against our interpretation by the National Chamber of Tax Advisers, the Tax Office classified FOUND tokens as a virtual currency. Then, the Tax Office demanded payment of almost 400,000.00 PLN in CIT tax, along with interest - as for tax arrears with the clause of "immediate enforceability." This meant that before the decision was delivered to us, the Office initiated enforcement proceedings without informing us of any amount to be paid. The amount to be paid also included the revenues of the limited partnership, which until 2020 were jointly settled with the limited liability company. Thanks to our quick response, we managed to avoid consequences and simply paid the determined tax. We filed a complaint with the Director of the Tax Administration Chamber, who partially overturned the decision of the Tax Office (regarding the limited partnership), but maintained the classification of the tokens as virtual currency against all logic. The arguments of the Tax Office and the DIAS were mainly based on the following assumptions: The token name implies from the outset that the asset is a cryptocurrency, and therefore a virtual currency. However, the mere use of a smart contract and the creation of an electronic record do not automatically make the asset a cryptocurrency. The tax interpretation for the limited partnership does not cover the operation of the limited liability company. However, we had interpretations for both companies, and additionally, they are the same entity linked personally and capital-wise. The law indicates that virtual currency is directly exchangeable assets into traditional currencies. The DIAS argued that the mere fact of being able to exchange the token for anything makes it a virtual currency. This argument was devoid of any sense because it roughly meant that apples and cars also fall into the category of virtual currency. On June 25, 2024, after nearly a 3-year battle, the Voivodeship Administrative Court overturned the decisions of the DIAS and the preceding decision, and awarded the cost of legal representation to ccFOUND in the amount of 6,917 PLN. As part of oral motives, it was indicated (I quote): Typing "tokens" into Google results in materials, including those from tax authorities, about the need to distinguish between crypto assets and cryptocurrencies. Not every token is a cryptocurrency, as in this case. We cannot accept the DIAS's position that tax interpretations cannot be applied to the limited liability company. This is the same project. The feature of exchangeability cannot be understood as the DIAS did. Everything is exchangeable - cars, things. Everything can be given some tangible value. CCFOUND tokens do not meet the definition of virtual currencies. In the near future, we will enter another procedure to claim the refund of overpaid CIT tax and wrongly paid interest. The level of absurdity in communication with the Tax Office and the lack of understanding for the project and our assumptions was so high that we often threw up our hands. However, it is good to know that common sense and logic have a chance to win, and it is worth using the appeals provided by Polish law. We are currently waiting to see if the Tax Office will appeal to the Supreme Administrative Court. At the same time, an audit is also underway in the limited partnership conducted by the same team. We fear a similar course of the case despite the officials being aware of the errors made. We recently received a decision to block over 325,000.00 PLN in our bank account. The team overseeing us is digging in and wants to issue a new decision reclassifying the token as a virtual currency, even though this decision was overturned by the DIAS and the NSA for our second company and was additionally confirmed by the National Chamber of Tax Advisers. From our perspective, this is clearly ill will on the part of the officials, and we intend to take action against them by submitting a complaint to the National Chamber of Tax Advisers, reporting the offense of persistent harassment by the taxpayer to the prosecutor's office, and bringing this matter to the media's attention.