RISK FACTORS

Ouinex has carried out a review of the risks that may potentially have unfavorable effect on its business activity, its project and the tokens that it plans to issue. These risks have been categorized based on their nature.

ECONOMIC RISKS

Risk of a partial or total loss of investment Despite the efforts made by Ouinex to generate interest in the OUIX token, its price is constantly fluctuating and could drop significantly. Should this occur, subscribers could lose all or part of the investment made. Subscribers should not subscribe to OUIX
tokens if they are unable to bear the consequences of such a loss.

Currency risk In the event the OUIX tokens are traded on digital assets exchange markets, the value of the OUIX in euros or other fiat currencies will directly depend on the supply and demand of OUIX at a given time. Should the interest in the services associated with the OUIX decline, the price of the OUIX in euros – and by extension in any other currency – could significantly decrease. During this entire period, the rate of these crypto assets in euros – and by extension in any other currency – could fall significantly thereby exposing subscribers to the risk of fluctuation without being able to request reimbursement of their crypto assets.

Risk associated with the valuation of tokens The value of the OUIX token depends on supply and demand, which itself depends on the level of adoption of the “OUINEX” interface. It is understood that the adoption of such an interface measures the quantity of the value exchanged on the interface by its
users. Therefore, the lack of adoption of this interface could have a negative impact on the valuation of the OUIX. In addition, if the Issuer is placed under court-ordered reorganisation, liquidation or is wound up, the OUIX tokens could lose their entire value.

Risk of lack of liquidity of tokens To date, the OUIX cannot be exchanged on a trading or digital assets exchange platform, therefore the liquidity risk applies. Furthermore, if the OUIX tokens are listed on this type of platform, the ability to sell a large amount of OUIX tokens within a short space of time will depend on the liquidity available on the secondary markets for the OUIX token. However, should the interest in the services associated with the OUIX decline, the liquidity, volumes or exchange value for other digital assets or legal tender could be negatively impacted.

TECHNOLOGICAL RISKS

Risk of errors or security breaches enabling the hacking or theft of the Issuer’s data The smart contracts used in connection with the offering have all been audited and no known vulnerabilities have been detected. The Issuer has taken all reasonable steps in terms of cybersecurity to protect against the various known attacks. However, the Issuer disclaims all liability for any malfunctions or unexpected operations related to the Binance Smart Chain blockchain, loss of tokens by the buyer, hacking or any other situation that prevents the buyer from having access to its tokens.

Risk of loss or theft of the medium containing the subscriber’s private key A private key is similar to a unique password and is used to validate requests for transfers of one or more tokens on the Binance Smart Chain blockchain. Any third party who accesses the subscriber’s private key or the private key management system (called the “wallet”) can steal the funds and the tokens that are stored there. In the event of loss of the private key, the funds and tokens held will be permanently lost. The Issuer does not have the subscribers’ private keys and a private key should not be disclosed to any third party. Therefore, subscribers are responsible for keeping their private keys in a secure location. Subscribers are encouraged to use open source, recognized and audited wallets to securely manage their private keys.

Risks related to the functional scope of the Binance Smart Chain Contracts In principle, the computer code of a contract deployed on a blockchain cannot be changed. However, it may be necessary during the life cycle of a contract to change its functional scope. This includes the addition of features or security patches (e.g. a security shortcoming which was not detected during the audit work which would require modification of the Binance Smart Chain contract code to be corrected).

If the functional scope of the contract has to be changed, a new version of the contract could be introduced. This possibility of updating reduces the functional limits inherent to the immutable nature of a blockchain contract. Any update of the Binance Smart Chain contract will be subject to a security audit.

Risk of fraud on the Internet and spoofing There is a risk that malicious parties may try to defraud the subscribers via social media accounts which use the Issuer’s visual identity. Therefore, subscribers shall only use the Issuer’s official communication network, whose website is www.ouinex.com.

Risks regarding the hacking of non-blockchain applications The term “non-blockchain” (or “off chain”) applications refers to applications other than those deployed on the Binance Smart Chain blockchain. For operational purposes, this offering requires the use of blockchain applications and nonblockchain applications (e.g. the web server that hosts the subscription page for the offering). Should a hacker manage to trap the subscription page without the knowledge of the Issuer and the subscribers, the crypto asset funds initially intended for the OUIX subscription could be diverted to one or more Binance Smart Chain addresses controlled by the hacker, resulting in the irreversible loss of the subscriber’s crypto assets. To avoid any such risk, the Issuer has implemented the security measures. However, any successful attack represents a risk that OUIX token subscribers may partially or totally lose their funds.

RISKS ASSOCIATED WITH THE PROJECT

Risk of failure in the launch or the technical and operational development of the project The technological risk associated with the development of the interface seems low. However, the subscriber shall consider the risk that there is a difficulty in generating interest in the interface even though it is functional.

Risk of a substantial modification of the project and the rights related to the tokens The Issuer does not plan to change the features associated with the use of the OUIX token via the interface in the short term future. However, this possibility has not been ruled out.

Risk related to the absence of regular communication from the Issuer about its project or any event which may affect the project As of the launch of the “OUINEX”, the Issuer shall maintain a regular flow of communication with the holders of OUIX tokens, via multiple communication channels (e.g. newsletter, Twitter). The risk associated with the absence of regular communication from the Issuer about the project or any event which may have an impact on the project is considered low.

Risks related to a lack of visibility on the regulations applicable to the token offering in all the jurisdictions in which the tokens will be offered as well as the taxation applicable to token subscribers The taxation and accounting rules pertaining to the offering, sale or donation of OUIX tokens are governed by French law in force on the date of this document. No assurance can be given as to the consequences of any judicial or administrative decision or any amendment to the French legislation subsequent to the date of this document. Such a decision or amendment could have a negative impact for both the subscribers and the value of the OUIX tokens. Furthermore, the Issuer disclaims any liability in relation to the adoption of a European Union text harmonising the legal status of digital assets and which could have an impact on the current status of the OUIX tokens and the rights related thereto. Without being considered as contractual advice, it is recommended that all buyers seek legal and tax advice in order to be informed of the implications of buying OUIX tokens or concerning their exchange with other digital assets or legal tender especially as regards their nationality and place of residence.

Risk related to the use of the tokens Holders of OUIX tokens are responsible for their use. They shall also be responsible for the payment, purchase or sale of the tokens. The Issuer disclaims any liability should the tokens be used for the purchase, or the sale of products prohibited by law.

DESCRIPTION OF CYBER-SECURITY AND DETECTION OF TECHNICAL FAILURES

The Platform ‘s IT architecture is based on two network layers:

• The web network on which our platform is developed (also called web 2);
• The Ethereum blockchain network on which smart contracts and transactions of tokens and crypto-assets are carried out in a secure way (also called web 3).

The Platform has an SSL certificate and operates only in HTTPS.

No sensitive data is stored on the company ‘s servers .

The results of subscribers ‘ KYC/AML checks are kept on the SYNAPS site.

Tokens and crypto-currencies as well as all transactions are stored in the blockchain . The blockchain is backed up for life by all the nodes that make up the network. Transaction history is tamper-proof.

On the Platform , the systems put in place are:

• Protection against DDoS attacks;
• Daily backups of the database on a second server;
• Email alert if the site is down;
• Security software installed and updated;
• Firewall;
• Detection and blocking in the event of an attempt to modify the Binance address of an ICO smart contract ;
• Logging of all events related to the blockchain or users;
• Weekly system updates.

It is important to specify that in the event of a shutdown of the Platform, the operation of the blockchain, smart contracts and the use of tokens will remain functional. No disruption of the blockchain can be caused by the platform and vice versa. The two networks are independent and the malfunction of one cannot affect the other.

TAX REGIME IN FRANCE RELATED TO TOKEN PURCHASES IN FRANCE

On September 2, 2019, the Tax Administration updated the Official Bulletin of Public Finances (BOFIP), indicating the creation of a specific tax regime applicable to the disposals of digital assets carried out on an occasional basis, directly or indirectly by persons physical domiciled in France for tax purposes within the meaning of article 4B of the CGI (general tax code) (law n° 2018-1317 of December 28, 2018, of finances 2019, art. 41)

Article 41 of this law provides an appropriate framework for the taxation (income tax and social security contributions) of gains made on an occasional basis, from 1 January 2019, by individuals on the sale digital assets or rights relating thereto, codified in article 150 VH bis of the CGI . This regime concerns the tokens mentioned in article L552-2 of the CMF (monetary and financial code), excluding those meeting the characteristics of the financial instruments mentioned in article L211-1 of the CMF and the cash certificates mentioned in article L223-1 of the CMF.

Considering the frequency of exchanges likely to occur between digital assets, the latter do not constitute a taxable event at the time of their realization. Indeed, this triggering event occurs upon recognition of any overall annual capital gain realized in respect of the sale of digital assets against legal tender or against the obtaining of any service, good or advantage. This overall capital gain will therefore only be declared and taxed the year following that of its realization.

This overall capital gain is determined by adding together the capital gains and losses recorded on all the disposals of digital assets made during the tax year.

These capital gains or losses are equal to the difference between, on the one hand, the sale price and, on the other hand, the product of the total acquisition price of the entire portfolio of digital assets by the quotient of the sale price on the overall value of this portfolio. In addition, this new regime establishes an exemption threshold for persons carrying out disposals of digital assets whose sum of prices does not exceed €305 during a tax year.

The declarative methods are also simplified, the persons liable for the annual declaration provided for in article 170 of the CGI the total amount of the capital gain or loss realized in respect of the taxable transfers of the year. They attach to this declaration an appendix on which they mention and evaluate all the capital gains or losses realized when each of the taxable transfers carried out during the year or the prices of each of the transfers exempted in application of the B of II of article 150 VH bis of the CGI.

Finally, under this new regime, earnings are taxed at an overall rate of 30% (12.8% for income tax and 17.2% for social security contributions).

More synthetically, are taxable transactions:

• The counterpart of legal tender currency;
• The exchange of a good other than a digital asset;
• The cash exchange of a digital asset;
• The consideration for a service.

According to the Tax Administration, the criteria for the usual or occasional exercise of the activity result from the examination, on a case-by-case basis, of the factual circumstances in which the purchase and resale transactions are carried out. More concretely, the following criteria will be taken into consideration:

• The number of operations;
• The frequency of operations;

But above all, the importance of the income generated by the sales regarding your usual income.

It should be noted that natural person subscribers who, under the conditions referred to above, carry out usual operations on crypto-currencies are subject to income tax in the category of industrial and commercial profits.

Thus, the taxable income will be determined by adding up all the income and expenses for the financial year and will be subject to the income tax scale, the marginal rate of which is 45%. This income will also be subject to social security contributions at the rate of 17.2%.

It should be specified that in the event of a turnover of less than €70,000, the so-called “micro-BIC” regime could be applicable, allowing a reduction of 50% to be charged on this turnover. Deemed to consider all expenses incurred for the exercise of the activity.

Individuals, associations, companies not having the commercial form, domiciled or established in France, are required to declare, at the same time as their declaration of income or results, the references of the accounts of crypto assets opened, held, used or closed with companies, legal persons, institutions or organizations established abroad.

Thus, even if you have not withdrawn any gains in cryptocurrency during the year, you will be required to declare all your accounts opened abroad. This declaration is made using the following form: CERFA 3916 – Declaration by a resident of an account opened outside France.