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</div><!-- Field: Rule-Page --><div style="width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>UNITED
STATES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SECURITIES AND EXCHANGE COMMISSION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>WASHINGTON, DC 20549</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>FORM
<ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement">&#9744;</ix:nonNumeric>
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:DocumentAnnualReport">&#9746;</ix:nonNumeric>
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For
the fiscal year ended <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:DocumentPeriodEndDate"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-en" name="dei:CurrentFiscalYearEndDate">December 31</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:DocumentFiscalYearFocus">2022</ix:nonNumeric></ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport">&#9744;</ix:nonNumeric>
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For
the transition period from&#160;<span style="text-decoration:underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</span>&#160;to&#160;<span style="text-decoration:underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>OR</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport">&#9744;</ix:nonNumeric>
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Commission
File No.: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">333-233363</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityRegistrantName"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INX
LIMITED</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Exact name of registrant as specified in its charter)</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Not
Applicable</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<i>Translation
of Registrant&#8217;s name into English</i>)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:edgarprovcountryen" name="dei:EntityIncorporationStateCountryCode"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Gibraltar</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<i>Jurisdiction
of incorporation or organization</i>)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>57/63
Line Wall Road</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Gibraltar</ix:nonNumeric></ix:nonNumeric>,
<ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">GX11 1AA</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<i>Address
of principal executive offices</i>)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Shy
Datika</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>57/63
Line Wall Road</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Gibraltar</ix:nonNumeric></ix:nonNumeric>,
<ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode">GX11 1AA</ix:nonNumeric></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(<i>Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person</i>)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(b) of the Act: <b>None</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(g) of the Act:&#160;<b>None</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:&#160;INX Tokens</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
the number of outstanding shares of each of the issuer&#8217;s classes of capital or common stock as of December 31, 2022:&#160;<ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">47,635,875</ix:nonFraction>
ordinary shares of GBP 0.001 par value</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes&#160;&#160;&#160;&#160;&#9744;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric>&#160;&#160;&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this report is an annual or transition report, indicate by check mark if Registrant is not required to file reports pursuant to
Section&#160;13 or 15(d) of the Securities Exchange Act of 1934.
Yes&#160;&#160;&#160;&#160;&#9744;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric>&#160;&#160;&#160;&#9746;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the Registrant (1)&#160;has filed all reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2)&#160;has been subject to such filing requirements for the past 90 days.
<ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric>&#160;&#160;&#160;&#160;&#9746;&#160;&#160;No&#160;&#160;&#160;&#160;&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted&#160;pursuant
to Rule 405 of Regulation S-T (&#167; 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes&#160;&#160;&#160;&#9744;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">No</ix:nonNumeric>&#160;&#160;&#160;&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.
See definition of &#8220;accelerated filer&#8221;, &#8220;large accelerated filer&#8221;, and &#8220;emerging growth company&#8221; in
Rule 12b-2 of the Exchange Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated Filer &#9744;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated Filer &#9744;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory">Non-accelerated Filer</ix:nonNumeric> &#9746;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 25%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company <ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany">&#9746;</ix:nonNumeric></span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant has filed a report on and attestation to its management&#8217;s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag">&#9744;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
reflect the correction of an error to previously issued financial statements. &#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant&#8217;s executive officers during the relevant recovery period pursuant to &#167;240.10D-1(b). &#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.&#160;GAAP&#160;&#9744;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 68%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: hidden-fact-0">International Financial Reporting Standards as issued by the International Accounting Standards Board</span>&#160;&#9746;</span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other&#160;&#9744;</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
&#8220;Other&#8221; has been check in response to the previous question, by check mark which financial statement item Registrant has
elected to follow. Item&#160;17&#160;&#9744;&#160;&#160;&#160;&#160;Item&#160;18&#160;&#9744;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this is an annual report, indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes&#160;&#160;&#160;&#9744;&#160;&#160;&#160;No&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

</div><!-- Field: Rule-Page --><div style="width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="width: 100%">&#160;</td></tr></table></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">TABLE
OF CONTENTS</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#m_001">PART I</a>&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%"><a href="#m_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    1.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 4%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; width: 70%"><a href="#m_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    2.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OFFER
    STATISTICS AND EXPECTED TIMETABLE.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    3.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">KEY
    INFORMATION.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">[RESERVED].</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capitalization
    and Indebtedness.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reasons
    for the Offer and Use of Proceeds.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk
    Factors.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    4.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INFORMATION
    ON THE COMPANY.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">46</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">History
    and Development of the Company.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">46</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business
    Overview.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">49</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Organizational
    Structure.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">72</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_075"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_075"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
    Plants and Equipment.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">73</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    5.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">74</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
    Results.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">74</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
    and Capital Resources.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">83</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
    and Development.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">85</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trend
    Information.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">85</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Critical
    Accounting Estimates.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">85</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    6.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">88</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Directors
    and Senior Management.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">88</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Compensation.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">92</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Board
    Practices.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">97</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employees.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">106</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share
    Ownership.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">107</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure
    of a Registrant&#8217;s Action to Recover Erroneously Awarded Compensation</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">109</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    7.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">109</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Major
    Shareholders.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">109</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_028"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_028"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Related
    Party Transactions.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">110</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_029"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_029"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interests
    of Experts and Counsel.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">119</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_030"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    8.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_030"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
    INFORMATION.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">119</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
    Statements and Other Financial Information.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">119</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant
    Changes.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">119</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    9.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
    OFFER AND LISTING.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_034"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_034"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Offer
    and Listing Details.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_035"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_035"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Plan
    of Distribution.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_036"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_036"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Markets.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_037"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_037"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
    Shareholders.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_038"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_038"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dilution.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_039"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_039"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expenses
    of the Issue.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_040"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    10.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_040"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ADDITIONAL
    INFORMATION.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_041"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_041"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share
    Capital.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_042"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_042"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Memorandum
    and Articles of Association.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_043"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_043"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Material
    Contracts.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">120</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_044"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_044"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
    Controls.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">121</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_045"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_045"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taxation.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">121</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_046"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_046"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
    and Paying Agents.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">123</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_047"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">G.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_047"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Statement
    by Experts.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">123</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_048"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">H.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_048"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Documents
    on Display.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">123</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_049"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_049"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsidiary
    Information.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_050"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">J.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_050"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Annual
    Report to Security Holders.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>


</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: center; width: 100%"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></td></tr></table></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%"><a href="#m_051"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    11.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 4%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; width: 70%"><a href="#m_051"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center; width: 9%">124</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_052"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    12.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_052"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_053"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_053"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Debt
    Securities.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_054"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_054"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrants
    and Rights.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_055"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_055"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
    Securities.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_056"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_056"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">American
    Depositary Shares.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">124</td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><a href="#m_057"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART&#160;II&#160;</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">125</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_058"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    13.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_058"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">125</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_059"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    14.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_059"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">125</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_060"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    15.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_060"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTROLS
    AND PROCEDURES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">125</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#ITEM16"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
16.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#ITEM16">[RESERVED]</a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">126</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_062"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_062"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_062"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AUDIT
    COMMITTEE FINANCIAL EXPERT.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">126</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_063"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_063"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_063"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CODE
    OF ETHICS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">126</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_064"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_064"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_064"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">126</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_065"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_065"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_065"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_066"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_066"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_066"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_067"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_067"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_067"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CHANGE
    IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_068"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_068"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">G.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_068"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CORPORATE
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    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_069"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_069"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">H.</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_069"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MINE
    SAFETY DISCLOSURE.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    16. </span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I</span></a></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS </span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">127</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><a href="#m_071"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART&#160;III&#160;</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">128</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_072"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    17.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_072"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
    STATEMENTS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">128</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_073"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    18.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_073"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL
    STATEMENTS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">128</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><a href="#m_074"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM
    19.</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif"><a href="#m_074"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXHIBITS.</span></a></td>
    <td style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; text-align: center">129</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>GENERAL
INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
indicated otherwise by the context, all references in this report to <i>&#8220;INX Limited&#8221;, </i>the <i>&#8220;Company&#8221;,
&#8220;our Company&#8221;, &#8220;we&#8221;, &#8220;us&#8221;, &#8220;our&#8221;</i> or the &#8220;<i>Registrant</i>&#8221; are to INX
Limited and its subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-variant: small-caps"><b>EMERGING
GROWTH COMPANY</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an &#8220;emerging growth company&#8221;
as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified
reduced reporting and other burdens that are otherwise applicable to public companies that are not emerging growth companies. For example,
we have elected to rely on the following exemptions:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -21.25pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board, or the PCAOB,
    regarding mandatory audit firm rotation or a supplement to the auditor&#8217;s report providing additional information about the
    audit and the financial statements (auditor discussion and analysis); and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to
    Section 404 of the Sarbanes-Oxley Act of 2002;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may take advantage of the exemptions available for emerging growth companies for up to five years or such earlier time that we are no
longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue,
have more than $700 million in market value of the ordinary shares held by non-affiliates, or issue more than $1.0 billion of non-convertible
debt over a three-year period. We may choose to take advantage of some, but not all of these reduced burdens.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
should be noted that the JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply
with new or revised accounting standards applicable to public companies. We are choosing to &#8220;opt out&#8221; of this provision and,
as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the
extended transition period is irrevocable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PRESENTATION
OF FINANCIAL INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have included in this report our audited consolidated financial statements as of December 31, 2022. Our consolidated financial statements
appearing in this report are prepared in U.S. Dollars and in accordance with International Financial Reporting Standards, or IFRS, as
issued by the International Accounting Standards Board, or IASB, and are audited in accordance with the standards of the PCAOB.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MARKET,
INDUSTRY AND OTHER DATA</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
report includes market and industry data and forecasts that were obtained from third-party sources, industry publications and publicly
available information as well as industry data prepared by management on the basis of its knowledge of the industry in which INX operates
(including management&#8217;s estimates and assumptions relating to the industry based on that knowledge). Management&#8217;s knowledge
of the blockchain industry has been developed through its experience and participation in the industry. Management believes that its
industry data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or
completeness of this data. Third-party sources generally state that the information contained therein has been obtained from sources
believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. Although management believes
it to be reliable, INX has neither independently verified any of the data from management or third-party sources referred to in this
report, nor analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying
economic assumptions relied upon by such sources. In addition, assumptions and estimates of our and our industry&#8217;s future performance
are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Item 3.D &#8220;Risk
Factors&#8221; below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Statements
made in this report concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements
or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this report,
you may read the document itself for a complete description of its terms, and the summary included herein is qualified by reference to
the full text of the document which is incorporated by reference into this report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of the statements contained in this annual report with respect to our business, financial condition and results of operations are &#8220;forward-looking
statements&#8221; within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995, as amended,
and other federal securities laws. All statements other than statements of historical fact are forward-looking statements. The use of
the words &#8220;anticipate&#8221;, &#8220;believe&#8221;, &#8220;continue&#8221;, &#8220;could&#8221;, &#8220;estimate&#8221;, &#8220;expect&#8221;,
&#8220;intends&#8221;, &#8220;may&#8221;, &#8220;might&#8221;, &#8220;plan&#8221;, &#8220;possible&#8221;, &#8220;potential&#8221;, &#8220;predict&#8221;,
&#8220;project&#8221;, &#8220;should&#8221;, &#8220;would&#8221;, and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not a forward-looking statement. These statements involve known and unknown
risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied
in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking
statements included in this annual report should not be unduly relied upon. Any forward-looking statements are qualified in their entirety
by reference to the risk factors discussed throughout this annual report. Some of the risks, uncertainties and assumptions that could
cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not
limited to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to continue to develop our trading platforms as contemplated;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    slowing or stopping of the development or acceptance of blockchain assets;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    limitations of blockchain technology, which remains largely novel and untested;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    legal framework of regulations applicable to blockchain technologies, cryptocurrencies, security tokens and token offerings;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
    in how we are taxed;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    lack of any existing marketplace for blockchain assets;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    lack of a long operating history;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    impact of competition and new technologies;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to obtain government regulations and approvals;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">industry
    developments affecting our business, financial condition and results of operations;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to cooperate with third party collaborators, including contractors for the design, development and implementation of our
    trading platform infrastructure;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    operating performance and cash flow, or lack thereof;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">global
    market, political, and economic conditions; and</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">those
    factors referred to in &#8220;Risk Factors,&#8221; &#8220;Business,&#8221; and &#8220;Management&#8217;s Discussion and Analysis
    of Financial Condition and Results of Operations,&#8221; as well as in this report generally.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our
or our industry&#8217;s actual results, levels of activity, performance, or achievements to be materially different from those anticipated
by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading &#8220;Risk Factors&#8221;
and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels
of activity, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking
statements, whether as a result of new information, future events or otherwise, after the date of this report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking
statements. You should read this annual report and the documents that we reference herein and have filed as exhibits to the annual report
completely and with the understanding that our actual future results may be materially different from what we expect. You should assume
that the information appearing in this annual report is accurate as of the date hereof. Because the risk factors referred to in Item
3.D. &#8220;Risk Factors&#8221; of this annual report, could cause actual results or outcomes to differ materially from those expressed
in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements.
Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this annual
report, and particularly our forward-looking statements, by these cautionary statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 6; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: center; width: 100%"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iv<!-- Field: /Sequence --></td></tr></table></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
I</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ITEM
3. KEY INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
[RESERVED].</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Capitalization and Indebtedness.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Reasons for the Offer and Use of Proceeds.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="m_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Risk Factors.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 20-F. The
risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant
to an investment in our securities. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also
harm us. If any of these risks materialize our business, results of operations or financial condition could suffer, and the price of
our ordinary shares could decline substantially.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investing
in INX Tokens or indirectly in the Company by way of purchasing shares of our sole shareholder, The INX Digital Company Inc. (the &#8220;Parent
Shares&#8221; and the &#8220;Parent&#8221; or &#8220;TIDCI&#8221;, respectively) involves a high degree of risk. Our businesses face
significant risks and uncertainties. You should carefully consider the risks we describe below, along with all of the other information
set forth in this annual report, including the section entitled &#8220;Cautionary Note Regarding Forward-Looking Statements&#8221; and
our financial statements and the related notes beginning on page F-1, before deciding to purchase INX Tokens or Parent Shares. The risks
and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant
to initiating or maintaining an investment in any INXS or the Parent Shares. If any of these risks materialize, our business, results
of operations or financial condition could suffer, the price of INXS or Parent Shares could decline substantially and you could lose
part or all of your investment. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also
harm us and adversely affect your investment in INXS or the Parent Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
may lose all monies that you spend initiating or maintaining an investment in INXS or indirectly investing in the Company, by purchasing
the Parent Shares. If you are uncertain as to our business and operations or you are not prepared to lose all monies that you spend purchasing
INX Tokens or investing in the Company, we strongly urge you not to purchase any INX Tokens nor invest in the Company. We recommend you
consult legal, financial, tax and other professional advisors or experts for further guidance before participating in the offering of
our INX Token as further detailed in this report. Further, we recommend you consult independent legal advice in respect of the legality
of your participation in the INX Token sale.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not recommend that you purchase INX Tokens unless you have prior experience with cryptographic tokens, blockchain-based software and
distributed ledger technology and unless you have received independent professional advice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 7; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Summary
Risk Factors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is subject to numerous risks, as more fully described in the section titled &#8220;Risk Factors&#8221; immediately following
this summary. You should read and carefully consider these risks and all of the other information in this report, including the financial
statements and the related notes included elsewhere in this report, before deciding whether to invest in INX Tokens. In particular, such
risks include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            face the risk of operating as an unregistered exchange, unregistered broker-dealer or unregistered
                                            clearing agency in the U.S.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            crypto market was negatively impacted by the growth in crypto-related frauds, layoffs, and
                                            the ongoing liquidity crisis that led to bankruptcies by leading crypto companies.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            may not be able to continue development of the INX Digital, Inc. (&#8220;INXD&#8221;) and
                                            INXS trading platforms as contemplated or at all, or continue to receive the regulatory approvals
                                            necessary to operate our business as currently contemplated.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain
                                            networks represent a new and rapidly changing industry and there remains relatively limited
                                            use of blockchain networks and assets.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            prospect of INX Token holders receiving any distributions of our cumulative Adjusted Operating
                                            Cash Flow is highly uncertain.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain
                                            technology is an emerging technology that is novel and untested.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            legal framework of regulations applicable to blockchain technologies, cryptocurrencies, security
                                            tokens and token offerings is uncertain and evolving quickly.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax
                                            authorities may disagree with our tax positions with regard to the Company, its business
                                            and the INX Token and may ask us to revise these positions in a manner that could adversely
                                            affect you.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            prices of blockchain assets are extremely volatile and fluctuations in the price of blockchain
                                            assets could materially affect our profits.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            price of INX Tokens is subject to substantial volatility.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            market for trading blockchain assets is still in the early stages of development and we expect
                                            to face intense competition from both regulated and unregulated blockchain asset trading
                                            platforms.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            may not be able to prevent illegal activity from occurring over our platform, which could
                                            subject us to disciplinary action, including fines.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
                                            securities business and related clearing operations expose us to material default and liquidity
                                            risk.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Systems
                                            failures or capacity constraints could materially harm our ability to conduct our operations
                                            and execute our business strategy.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain
                                            assets and blockchain trading platforms remain susceptible to security breaches and cybercrime
                                            and the INX Token, the Company or our trading platforms may be a target of cyber security
                                            breaches or theft.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Company
                                            private keys that allow the unilateral transfer or &#8220;freezing&#8221; of INX Tokens may
                                            be compromised.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            tax characterization of INX Tokens is uncertain and you must seek your own tax advice in
                                            connection with purchasing INX Tokens.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></p><div>

</div><!-- Field: Page; Sequence: 8; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Financial Position and Need for Additional Capital</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have incurred significant losses and negative cash flows from operations since inception </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have incurred operating losses since our inception and have an accumulated a net deficit of $36.6 million. In addition to the accumulated
deficit, we have entered into contractual arrangements committing us to future expenses. Our proposed operations are subject to all business
risks associated with a new enterprise. The likelihood of our continuation of a viable business must be considered in light of the problems,
expenses, difficulties, complications, and delays frequently encountered in connection with the inception of a business operating in
a relatively new, highly competitive, and developing industry. There can be no assurance that we will ever generate operating profits
or develop and operate the business as planned. If we are unsuccessful at executing on our business plan, our business, prospects, and
results of operations may be materially adversely affected and investors may lose all or a substantial portion of their investment.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may need additional funding, which may not be available to us on acceptable terms or at all. If we are unable to raise capital when needed,
it may impair our growth or adversely impact our operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may need to raise additional capital to continue to expand our operations, pursue our growth strategies, fund needed capital expenditures,
and to respond to competitive pressures. We may not be able to obtain additional debt or equity financing on favorable terms, if at all,
which could impair our growth and adversely affect our operations. We may be required to accept terms that restrict our ability to incur
additional indebtedness or require us to maintain specified liquidity or other financial ratios or other terms that may not be in the
best interests of our stockholders. The failure to obtain additional debt or equity financing on satisfactory terms could materially
and adversely affect our financial condition, results of operations and business plans.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Risk
of increased losses or impairments in our investments could have an adverse effect on our financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
hold significant investments in marketable debt securities such as corporate and municipal bonds and notes. The fair value of these financial
instruments may be negatively affected by multiple factors including a downgrade of the credit rating or negative publicity of the issuer,
market conditions, fiscal policy, geopolitical restrictions and sanctions, among others. Decrease in the fair value of these investments
or distressed sale prior to the maturity at a price significantly below par value may negatively impact our shareholders&#8217; equity
and the Company&#8217;s financial position.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 9; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Regulation, Information Systems and Privacy Matters</b>&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
face the risk of operating as an unregistered exchange, unregistered broker-dealer or unregistered clearing agency in the U.S.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Any
platform that brings together purchasers and sellers of digital assets that are characterized as securities in the U.S. is generally subject
to registration as a national securities exchange, or must qualify for an exemption, such as by being operated by a registered broker-dealer
as an alternative trading system (or ATS).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
INX Securities trading platform is a registered broker-dealer and FINRA member that operates an SEC-recognized alternative trading system,
and the INX Digital trading platform is licensed, or otherwise qualified, to operate as a money transmitter in 43 U.S. states, plus Washington
D.C. and Puerto Rico. In the future, we may seek to obtain money transmitter licenses or otherwise become qualified to operate in additional
U.S. states. In addition, if in the future we determine to proceed with the establishment of a platform for the trading of cryptocurrency-based
derivatives, we would be required to seek registrations with other regulatory bodies, such as the CFTC. However, there can be no assurance
that our platform will qualify for additional registrations that we may seek in the future, with the SEC, FINRA, U.S. state regulators
and various other regulatory bodies, both in the U.S. and in other countries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">While
we take precautionary actions to prevent unauthorized access to our platform in the U.S. states in which we are not licensed to operate
as a money transmitter, such as the use of geofencing in our system (which disallows sign in if an individual is located in a state in
which we are not registered) and a review by our customer support team to verify the location of the user,&#160;in the event that an individual
in a jurisdiction in which we are not licensed to operate is able to access the INX Digital trading platform, we could be deemed to have
facilitated a transaction in a jurisdiction which we are not licensed to operate. If such an event occurs, we could be subject to significant
monetary penalties, censure or other actions, which could have a material and adverse effect on us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">In addition, while we do not believe that the INX Digital trading platform
is a securities exchange or ATS or is part of an unregistered exchange mechanism, regulators may determine that this is the case, and
we would then be required to register as a securities exchange or qualify and register as an ATS. Any determination that we operate or
have operated an unregistered exchange, unregistered broker-dealer or unregulated clearing agency could have a material adverse effect
on us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
obtain and process sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm our
reputation, as well as have an adverse effect on our business.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Various
local, state, federal laws and regulations apply to our collection, use, retention, protection, disclosure, transfer, and processing
of personal data. These data protection and privacy laws and regulations are subject to uncertainty and continue to evolve in ways that
could adversely impact our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the United States, state and federal lawmakers and regulatory authorities have increased their attention on the collection and use of
user data. In the United States, non-sensitive user data generally may be used under current rules and regulations, subject to certain
restrictions, so long as the person does not affirmatively &#8220;opt-out&#8221; of the collection or use of such data. If an &#8220;opt-in&#8221;
model or additional required &#8220;opt-outs&#8221; were to be adopted in the United States, less data may be available, and the cost
of data likely would increase.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
supervisory authorities continue to issue further guidance on personal data, we could suffer additional costs, complaints, regulatory
investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we
operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems
and operations and could adversely affect our financial results.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
obtain and process sensitive data, including personal data related to our customers and their transactions, such as their names, addresses,
social security numbers, visa information, copies of government-issued identification, facial recognition data (from scanning of photographs
for identity verification), trading data, tax identification, and bank account information. We face risks, including to our reputation,
in the handling and protection of this data, and these risks will increase as our business continues to expand, including through our
acquisition of, and investment in, other companies and technologies. Federal, state, and international laws and regulations governing
privacy, data protection, and e-commerce transactions require us to safeguard our customers&#8217;, employees&#8217;, and service providers&#8217;
personal data. All data that is collected is stored and retained in conjunction with applicable state laws and SEC recordkeeping requirements
under SEC Rule 17a-4.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have administrative, technical, and physical security measures and controls in place and maintain a robust information security program.
However, our security measures, or the security measures of companies we acquire, may be inadequate or breached as a result of third-party
action, employee or service provider error, malfeasance, malware, phishing, hacking attacks, system error, trickery, advances in computer
capabilities, new discoveries in the field of cryptography, inadequate facility security or otherwise, and, as a result, someone may
be able to obtain unauthorized access to sensitive information, including personal data, on our systems. We could be the target of a
cybersecurity incident, which could result in harm to our reputation and financial losses. Additionally, our customers have been and
could be targeted in cybersecurity incidents like an account takeover, which could result in harm to our reputation and financial losses.
Additionally, privacy and data protection laws are evolving, and these laws may be interpreted and applied in a manner that is inconsistent
with our data handling safeguards and practices that could result in fines, lawsuits, and other penalties, and significant changes to
our or our third-party partners&#8217; business practices and products and service offerings. Our future success depends on the reliability
and security of our platform. To the extent that the measures we, any companies we acquire, or our third-party business partners have
taken prove to be insufficient or inadequate, or to the extent we discover a security breach suffered by a company we acquire following
the closing of such acquisition, we may become subject to litigation, breach notification obligations, or regulatory or administrative
sanctions, which could result in significant fines, penalties, damages, harm to our reputation, or loss of customers. If our own confidential
business information or sensitive customer information were improperly disclosed, our business could be adversely affected. Additionally,
a party who circumvents our security measures could, among other effects, appropriate customer information or other proprietary data,
cause interruptions in our operations, or expose customers to hacks, viruses, and other disruptions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depending
on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may
also have obligations to notify customers and regulators about the incident, and we may need to provide some form of remedy, such as
a subscription to credit monitoring services, pay significant fines to one or more regulators, or pay compensation in connection with
a class-action settlement. Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another.
Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident
that compromises customer data. Additionally, the financial exposure from the events referenced above could either not be insured against
or not be fully covered through any insurance that we may maintain, and there can be no assurance that the limitations of liability in
any of our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events
referenced above. Any of the foregoing could have an adverse effect on our business, reputation, operating results, and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
we may be required to disclose personal data pursuant to demands from individuals, regulators, government agencies, and law enforcement
agencies in various jurisdictions with conflicting privacy and security laws, which could result in a breach of privacy and data protection
policies, notices, laws, rules, court orders, and regulations. Additionally, changes in the laws and regulations that govern our collection,
use, and disclosure of customer data could impose additional requirements with respect to the retention and security of customer data,
could limit our marketing activities, and have an adverse effect on our business, operating results, and financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The Company&#8217;s
policies or procedures for conducting due diligence for anti-money laundering, know your customer, and/or compliance with the Office of
Foreign Assets Control related requirements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company conducts KYC and
anti-money laundering (&#8220;AML&#8221;) for every user it onboards onto its platform, regardless of whether that customer wishes to
trade cryptocurrencies or security tokens. As part of that onboarding process, the Company uses a third-party provider to check the user
against numerous lists, including the OFAC sanctions list. User due diligence is performed at the time of onboarding before the account
is opened and before funds or assets are deposited into the user&#8217;s account on the trading platform. When a potential customer wants
to open an account with the Company, he or she completes the online investor application and submits this information for review. Upon
submission, the customer&#8217;s data is entered into our third-party service provider for verification against various sanctions lists
like OFAC sanctions list and software-defined networking (&#8220;SDN&#8221;) for AML purposes. In addition, there is also a physical review
of all the information by a customer specialist to confirm compliance with KYC checks and verifications. Upon successfully passing the
AML/KYC process, and acknowledging applicable agreements, the account would be deemed approved and eligible for trading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent reasonable and
practicable,&#160;we ensure that we have&#160;a&#160;reasonable belief that we know the true identity of our customers by using risk-based
procedures to verify and document the accuracy of the information we receive about our customers. Using manual and/or automated tools,&#160;our
team analyzes the information obtained to determine whether the information is sufficient to form&#160;a&#160;reasonable belief that we
know the true identity of the customer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As stated above, the Company
verifies&#160;user&#160;identity&#160;through&#160;proof of identification and proof of address documentation,&#160;with the intention
of forming&#160;a&#160;reasonable belief that we know the identity of the customer and that they are who they say they are. The Company
uses&#160;a&#160;third-party provider, Onfido, to process identity checks and verify their validity. The Onfido identity document check
consists of&#160;a&#160;visual image scan, which analyzes identification documents to verify that they are valid. Onfido also identifies
whether the identification document has been recorded as lost, stolen or compromised (i.e., through tampering, forgery and fraud). The
Company may ask for further documentation from users through an enhanced due diligence process if it deems this necessary in order to
comply with its regulatory&#160;requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company collects information
about each individual such that we can reasonably determine who the customer is&#160;and the nature of their business with the Company.
Such information is collected during the onboarding process where the applicant is requested to complete the &#8220;Personal Profile&#8221;
section, which includes questions in relation to their:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment: for example applicants are required to declare, amongst others, if they are&#160;a&#160;politically exposed person;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financials: for example applicants are required to declare, amongst others, their net income and net worth; and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment experience: for example applicants are required to declare, amongst others, their risk tolerance and investment goals.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally,&#160;all&#160;users&#160;are
subject to screening as part of the onboarding process. Screening is currently done via Onfido. Onfido uses the customer&#8217;s proof
of identification to perform screening, including OFAC screening,&#160;by gathering data from diverse government sources, international
regulators and law enforcement agencies and watchlists, which will scan for known or suspected entities and individuals who are associated
with money laundering, terrorism, financial fraud, arms proliferation, drug trafficking or are politically exposed persons. Depending
on the Onfido screening findings, if any, the INX team will perform the necessary reviews and escalate as per our defined processes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A person who tries to initiate
the onboarding process from a restricted jurisdiction, due to unauthorized location, sanctioned country or otherwise identified through
geofencing, will not be allowed to continue the onboarding process and will get a notification explaining that the person applied cannot
invest with the Company and cannot open an account on the platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we have implemented
controls and are working to implement additional controls and screening tools designed to prevent sanctions violations, there is no guarantee
that we will not inadvertently provide access to our products and services to unauthorized or sanctioned parties or jurisdictions in the
future.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Blockchain Assets</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Blockchain
is a nascent and rapidly changing technology and there remains relatively small use of blockchain networks and blockchain assets in the
retail and commercial marketplace. The slowing or stopping of the development or acceptance of blockchain networks may adversely affect
an investment in INX Tokens or in our Company.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
development of blockchain networks is a new and rapidly evolving industry that is subject to a high degree of uncertainty. Factors affecting
the further development of the blockchain industry include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    popularity or acceptance of the Bitcoin or Ethereum networks;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat
    currencies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">government
    and quasi-government regulation of blockchain networks and assets, including any restrictions on access, operation and use of blockchain
    networks and assets; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    general economic environment and conditions relating to blockchain networks and assets.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business model is dependent on continued investment in and development of the blockchain industry and related technologies. If investments
in the blockchain industry become less attractive to investors or innovators and developers, or if blockchain networks and assets do
not gain public acceptance or are not adopted and used by a substantial number of individuals, companies and other entities, it could
have a material adverse impact on our prospects and our operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 12; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
application of distributed ledger technology is novel and untested and may contain inherent flaws or limitations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain
is an emerging technology that offers new capabilities which are not fully proven in use. There are limited examples of the application
of distributed ledger technology. In most cases, software used by blockchain asset issuing entities will be in an early development stage
and still unproven. As with other novel software products, the computer code underpinning the INX Tokens and Ethereum blockchain may
contain errors, or function in unexpected ways. Insufficient testing of smart contract code, as well as the use of external code libraries,
may cause the software to break or function incorrectly. Any error or unexpected functionality may cause a decline in value of the INX
Token and result in substantial losses to purchasers of INX Tokens.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we discover errors or unexpected functionalities in the INX Token smart contract, we may make a determination that the INX Token smart
contract is defective and that its use should be discontinued. Although we intend to replace the INX Token and the INX Token smart contract
with a new token using a new smart contract in that situation, we may be required to take certain measures, such as freezing digital
wallet addresses so that such wallets cannot transfer INX Tokens, which may disrupt trading in the INX Tokens. Such a determination and
our subsequent deployment of a new smart contract and replacement token could have a material effect on the value of any investment in
the INX Token or our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
creation and operation of digital platforms for the public trading of blockchain assets will be subject to potential technical, legal
and regulatory constraints. There is no warranty that the process for receiving, use and ownership of blockchain assets will be uninterrupted
or error-free and there is an inherent risk that the software, network, blockchain assets and related technologies and theories could
contain undiscovered technical flaws or weaknesses, the cryptographic security measures that authenticate transactions and the distributed
ledger could be compromised, and breakdowns and trading halts could cause the partial or complete inability to use or loss of blockchain
assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
associated with the distributed ledger technology could affect our business directly or the market for blockchain assets generally. In
either case, the occurrence of these events could have a materially adverse effect on an investment in INX Tokens or the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
open-source structure of blockchain software means that blockchain networks may be susceptible to malicious cyber-attacks or may contain
exploitable flaws, which may result in security breaches and the loss or theft of blockchain assets.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
blockchain networks operate based on some form of open-source software. An open source project is not represented, maintained or monitored
by an official organization or authority. Because of the nature of open-source software projects, it may be easier for third parties
not affiliated with the issuer to introduce weaknesses or bugs into the core infrastructure elements of the blockchain network. This
could result in the corruption of the open-source code which may result in the loss or theft of blockchain assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Blockchain
networks may be the target of malicious attacks seeking to identify and exploit weaknesses in the software. Such events may result in
a loss of trust in the security and operation of blockchain networks and a decline in user activity which could have a negative impact
on the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 13; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Each
blockchain network, including the Ethereum network, is dependent upon its users and contributors, and actions taken, or not taken, by
the users or contributors of a blockchain network could damage its reputation and the reputation of blockchain networks generally. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Developers
and other contributors to blockchain network protocols generally maintain or develop those blockchain networks, including the verification
of transactions on such networks. Because the networks are decentralized, these contributors are generally not directly compensated for
their actions. Therefore, most blockchain networks provide that such contributors receive awards and transfer fees for recording transactions
and otherwise maintaining the blockchain network. Such fees are generally paid in the blockchain asset of that network.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
security and integrity of blockchain assets, including the value ascribed to blockchain assets, relies on the integrity of the underlying
blockchain networks. We are issuing the INX Token, an ERC20 blockchain asset that is programmed using a smart contract that is compatible
with the Ethereum blockchain.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the awards and fees paid for maintenance of a network are not sufficiently high to incentivize miners, miners may respond in a way that
reduces confidence in the blockchain network. To the extent that any miners cease to record transactions in solved blocks, transactions
that do not include the payment of a transfer fee will not be recorded on the blockchain until a block is solved by a miner who does
not require the payment of transfer fees. Any widespread delays in the recording of transactions could result in a loss of confidence
in the blockchain network and its assets. To the extent that this occurs with regard to blockchain networks that underlie the blockchain
assets traded on our platforms, including the Ethereum network, it could have a materially adverse effect on an investment in the Company.
To the extent that this occurs with regard to the Ethereum network, it could have a materially adverse effect on an investment in the
INX Token.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
prices of blockchain assets are extremely volatile. Fluctuations in the price of Bitcoin, Ether and/or other blockchain assets could
materially and adversely affect the Company.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
prices of blockchain assets such as Bitcoin and Ether have historically been subject to dramatic fluctuations and are highly volatile.
As relatively new products and technologies, blockchain assets have only recently become accepted as a means of payment for goods and
services, and such acceptance and use remains limited. Conversely, a significant portion of demand for blockchain assets is generated
by speculators and investors seeking to profit from the short- or long-term holding of blockchain assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, some blockchain industry participants have reported that a significant percentage of blockchain asset trading activity is artificial
or non-economic in nature and may represent attempts to manipulate the price of certain blockchain assets. For example, in a report published
by Bitwise Asset Management, Bitwise claimed that 95% of bitcoin trading activity appearing on 81 blockchain asset trading platforms
is fake. Bitwise&#8217;s report further stated that trading platforms and blockchain asset developers are incentivized to artificially
inflate trading volumes so that their platform or asset rises in league tables and gains prominence in the industry. As a result, trading
platforms or blockchain assets may seek to inflate demand for specific blockchain assets, or blockchain assets generally, which could
increase the volatility of that asset or blockchain asset trading prices generally.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market price of these blockchain assets, as well as other blockchain assets that may be developed in the future, may continue to be highly
volatile. A lack of expansion, or a contraction of adoption and use of blockchain assets, may result in increased volatility or a reduction
in the price of blockchain assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 14; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Several
additional factors may influence the market price of blockchain assets, including, but not limited to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    blockchain asset supply;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    blockchain asset demand, which can be influenced by the growth of retail merchants&#8217; and commercial businesses&#8217; acceptance
    of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain asset trading platforms
    and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets is safe and secure,
    and the regulatory restrictions on their use;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
    in the software, software requirements or hardware requirements underlying the blockchain networks;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
    in the rights, obligations, incentives, or rewards for the various participants in blockchain networks;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    cost of trading and transaction in blockchain assets, and whether such costs may become fixed or standardized;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
    rates;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fiat
    currency withdrawal and deposit policies of blockchain asset trading platforms and liquidity on such platforms;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
    and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in blockchain
    networks or blockchain assets;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Monetary
    policies of governments, trade restrictions, currency devaluations and revaluations;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regulatory
    measures, if any, that affect the use of blockchain assets;</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    maintenance and development of the open-source software utilized in blockchain networks;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
    or regional political, economic or financial events and situations; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expectations
    among blockchain network participants that the value of such blockchain assets will soon change.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
decrease in the price of a single blockchain asset may cause volatility in the entire blockchain industry and may affect other blockchain
assets. For example, a security breach that affects investor or user confidence in Ether or Bitcoin may affect the industry as a whole
and may also cause the price of other blockchain assets to fluctuate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
value of blockchain assets and fluctuations in the price of blockchain assets could materially and adversely affect our business and
investment in INX Tokens or the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
U.S. regulatory regimes governing blockchain technologies, blockchain assets and the purchase and sale of blockchain assets are uncertain,
and new regulations or policies may materially adversely affect the development of blockchain networks and the use of blockchain assets.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INX
Securities, LLC (&#8220;INXS&#8221;) is registered with FINRA and the Securities and Exchange Commission (&#8220;SEC&#8221;) as a broker-dealer
authorized to operate as an ATS that is allowed to facilitate the trading of security tokens in compliance with the SEC&#8217;s &#8220;Three-Step
Process.&#8221; Additionally, INXS is registered in all 50 U.S. states, the District of Columbia, and Puerto Rico, and is also permitted
to act as the broker-dealer of record in primary offerings for traditional and digital securities. As such, the Company has implemented
policies, processes, rules and procedures that govern the issuance and trading of security tokens on the INXS ATS.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
there is still significant uncertainty regarding the application of federal and state laws to the issuance and trading of crypto assets,
including regulations governing the conduct of market intermediaries to the trading of crypto assets that are securities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, various legislative and executive bodies in the United States and in other countries have shown that they intend to adopt legislation
to regulate the sale and use of blockchain assets. Such legislation may vary significantly among jurisdictions, which may subject participants
in the blockchain trading marketplace to different and perhaps contradictory requirements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
as firms in the financial services industry have experienced increased scrutiny in recent years, such regulatory or other actions may
lead to penalties, fines, disbarment and other sanctions which could place restrictions or limitations on our operations and otherwise
have a material adverse effect on our businesses. We could be exposed to substantial liability under federal and state laws and court
decisions, as well as rules and regulations promulgated and/or direct actions brought by the SEC, state securities regulators and other
U.S. regulatory agencies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we fail to qualify with any of these authorities, we may be unable to execute on, or be forced to cease operations contemplated under,
our business plan as a provider of financial services. This would have a broad impact on us and could have a material adverse effect
on our businesses, financial condition, results of operations and prospects and, as a result, investors could lose all or most of their
investment. In addition, any such action could also cause us significant reputational harm, which, in turn, could seriously harm the
Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">New
or changing laws and regulations or interpretations of existing laws and regulations, in the United States and elsewhere, may materially
and adversely impact the development and growth of blockchain networks and the adoption and use of blockchain assets. This is even more
so due to market conditions and recent growth in crypto-related frauds, layoffs, and the ongoing liquidity crisis that led to bankruptcies
by leading crypto companies. The imposition of restrictions on all blockchain assets, or certain blockchain assets, could affect the
value, liquidity and market price of blockchain assets subject to heighten regulation, by limiting access to marketplaces or exchanges
on which to trade such blockchain assets, or imposing restrictions on the structure, rights and transferability of such blockchain assets.
Some governments may seek to ban transactions in blockchain assets altogether. See &#8220;Item 1.B Business Overview &#8212; Regulatory
Oversight of Blockchain Assets.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may be prevented from entering, or it may be required to cease operations in, a jurisdiction that makes it illegal or commercially
unviable or undesirable to operate in such jurisdiction. Enforcement, or the threat of enforcement, may also drive a critical mass of
participants and trading activity away from regulated markets, such as those provided by INX Trading Solutions, (&#8220;INX Trading Solutions&#8221;
means the business conducted by the Company in the United States, which includes the INX Digital, Inc. (&#8220;INXD&#8221;) trading platform,
the INXS trading platform, and other related business activities), and toward unregulated exchanges. Although it is impossible to predict
the positions that will be taken by certain governments, any regulatory changes affecting blockchain assets could be substantial and
materially adverse to the development and growth of our business and investment in INX Tokens and the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may be deemed an underwriter under the Securities Act with regard to our role and involvement with respect to any initial offerings of
securities on the INXS ATS, and our failure to comply with applicable federal securities laws may expose us to legal liability. We may
be subject to disputes regarding the quality of trade execution, the settlement of trades or other matters relating to our services.
We may become subject to these claims as a result of any failures or malfunctions of our systems and services we provide.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
could incur significant legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit
or claim against us could have a material adverse effect on our business and reputation. To the extent we are found to have failed to
fulfill our regulatory obligations, we could lose our authorizations or licenses or become subject to conditions that could make future
operations more costly and impair our profitability.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
are subject to an extensive and highly-evolving regulatory landscape world-wide and any adverse changes to, or our failure to comply
with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The markets for digital securities
and cryptocurrencies are still new and rapidly emerging. As such, the Company is subject to an extensive and highly evolving regulatory
landscape. The Company&#8217;s business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives,
treaties, and legal and regulatory interpretations and guidance in the markets in which it operates, including those governing financial
services and banking, federal government contractors, trust companies, securities, derivative transactions and markets, broker-dealers
and alternative trading systems (&#8220;ATS&#8221;), crypto asset custody, exchange, and transfer, cross-border and domestic money and
crypto asset transmission, foreign currency exchange, privacy, data governance, data protection, cybersecurity, fraud detection, payment
services (including payment processing and settlement services), retail protection, competition, bankruptcy, tax, anti-bribery, economic
and trade sanctions, anti-money laundering, counter-terrorist financing and others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many of these legal and regulatory
regimes were adopted prior to currently available advanced technologies. As a result, some applicable laws and regulations world-wide
do not contemplate or address unique issues associated with the digital securities and cryptocurrencies, and are subject to significant
uncertainty, and vary widely across U.S. federal, state, and international jurisdictions. These legal and regulatory regimes, including
the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner
from one jurisdiction to another, and may conflict with one another.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This complexity and evolving
nature of the Company&#8217;s business and the significant uncertainty surrounding the regulation of the digital securities and cryptocurrencies
requires us to exercise our best judgment as to whether certain laws, rules, and regulations apply to the Company&#8217;s business, and
it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have misinterpreted any such
laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services,
reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect the Company&#8217;s
business, operating results, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to existing laws
and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in
other countries, may adopt new laws and regulations not yet in existence. For example, European Union legislation imposing additional
regulatory requirements in relation to crypto-related activities is expected in the intermediate term which, among other things, may
impose new or additional regulatory requirements on both crypto service providers and issuers of certain crypto assets, which may impact
our operations in the European Union.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, new interpretations
of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the digital
securities and cryptocurrencies economy as a whole and our legal and regulatory status in particular by changing how we operate our business,
how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our
compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain crypto asset transactions,
as has occurred in certain jurisdictions in the past. Those new laws, regulations, or interpretations may result in litigation, regulatory
investigations, and enforcement or other actions, including preventing or delaying the Company from offering certain products or services
offered by its competitors or could impact how the Company offers such products and services. Adverse changes to, or our failure to comply
with, any laws and regulations may have an adverse effect on our reputation and brand and our business, operating results, and financial
condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to existing laws
and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in other
countries, may adopt new laws and regulations not yet in existence. For example, European Union legislation imposing additional regulatory
requirements in relation to crypto-related activities is expected in the intermediate term which, among other things, may impose new or
additional regulatory requirements on both crypto service providers and issuers of certain crypto assets, which may impact our operations
in the European Union. Furthermore, new interpretations of existing laws and regulations may be issued by such bodies or the judiciary,
which may adversely impact the development of the digital securities and cryptocurrencies economy as a whole and our legal and regulatory
status in particular by changing how we operate our business, how our products and services are regulated, and what products or services
we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements,
or imposing a total ban on certain crypto asset transactions, as has occurred in certain jurisdictions in the past. Those new laws, regulations,
or interpretations may result in litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying
the Company from offering certain products or services offered by its competitors or could impact how the Company offers such products
and services. Adverse changes to, or our failure to comply with, any laws and regulations may have an adverse effect on our reputation
and brand and our business, operating results, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Blockchain assets also face
an uncertain regulatory landscape in many foreign jurisdictions. On September 4, 2017, the People&#8217;s Bank of China labeled blockchain
asset sales as &#8220;illegal and disruptive to economic and financial stability.&#8221; Previously, China had issued a notice that classified
bitcoin as legal and &#8220;virtual commodities;&#8221; however, the same notice restricted the banking and payment industries from using
bitcoin, creating uncertainty and limiting the ability of Bitcoin Exchanges to operate in the then-second largest bitcoin market. South
Korea&#8217;s Financial Services Commission likewise prohibited all forms of tokens on September 29, 2017. Japan has enacted a law regulating
virtual currencies which has brought Bitcoin exchanges under know-your-customer and anti-money laundering rules and resulted in the categorization
of Bitcoin as a kind of prepaid payment instrument. The law puts in place capital requirements for exchanges as well as cybersecurity
and operational stipulations. In addition, those exchanges are also required to conduct employee training programs and submit to annual
audits. To date, the Japanese Financial Services Agency (FSA) has granted licenses to 15 different cryptocurrencies or tokens trading
platforms. In November 2017, the Monetary Authority of Singapore (&#8220;MAS&#8221;) issued a statement that tokens sold through the blockchain
funding model may be considered securities under certain circumstances under Singapore law and provided case studies as examples of tokens
that do and do not constitute securities. Previously, the MAS had stated that other laws may apply to token sales, such as money laundering
and terrorism financing laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other jurisdictions are still
researching the subject. In September 2017, the Swiss Financial Market Supervisory Authority (&#8220;FINMA&#8221;) issued guidance that
it was investigating ICOs and that whenever FINMA is notified about ICO procedures that breach regulatory law or which seek to circumvent
financial market law it initiates enforcement proceedings. On February 16, 2018, FINMA publicly announced ICO guidelines. In December
2018, the Swiss Federal Council adopted a report on the legal framework for blockchain and distributed ledger technology in the financial
sector. In March 2019, the Federal Council initiated consultation with regard to specific amendments to federal law for the purpose of
adapting federal law to developments in distributed ledger technology. For additional information see &#8220;Item 1.B Business Overview
&#8212; Regulatory Oversight of Blockchain Assets.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, we offer and may
in the future offer products and services whose functionality or value depends in part on our management of token transaction smart contracts,
asset tracking, or other applications that provide novel forms of customer engagement and interaction delivered via blockchain protocols.
We may also offer products and services whose functionality or value depends on our ability to develop, integrate, or otherwise interact
with such applications within the bounds of our legal and compliance obligations. The legal and regulatory landscape for such products,
including the law governing the rights and obligations between and among smart contract developers and users and the extent to which such
relationships entail regulated activity is uncertain and rapidly evolving. Our interaction with those applications, and the interaction
of other blockchain users with any smart contracts or assets we may generate or control, could present legal, operational, reputational,
and regulatory risks for our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because we have offered and
will continue to offer a variety of innovative products and services to our customers, many of our offerings are subject to significant
regulatory uncertainty that we try to mitigate by adopting measures that do not necessarily apply to the Company&#8217;s current business
operation (see for example segregation of assets). There are substantial uncertainties on how these requirements would apply in practice,
and we may face substantial compliance costs to operationalize and comply with these rules. Certain products and services offered by us
that we believe are not subject to regulatory oversight or are only subject to certain regulatory regimes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It may be illegal now, or
in the future, to acquire, own, hold, sell or use INX Tokens in one or more countries, and ownership of, holding or trading in our Company&#8217;s
securities may also be considered illegal and subject to sanction. The regulation of blockchain assets remains uncertain or undefined
in many jurisdictions. Although we anticipate treating the INX Tokens as securities under the laws of all foreign jurisdictions and adhering
to such laws with regard to the offering and sale of INX Tokens abroad, one or more foreign governmental authorities, such as those in
China or Russia, may take regulatory action in the future that severely restricts the right to acquire, own, hold, sell or use blockchain
assets or to exchange blockchain assets for fiat currency. Such an action may result in the restriction of ownership, holding or trading
in the INX Token and other securities. Such restrictions may adversely affect the business or operations of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While we have implemented
policies and procedures designed to help monitor for and ensure compliance with existing and new laws and regulations, there can be no
assurance that we and our employees, contractors, and agents will not violate or otherwise fail to comply with such laws and regulations.
To the extent that we or our employees, contractors, or agents are deemed or alleged to have violated or failed to comply with any laws
or regulations, including related interpretations, orders, determinations, directives, or guidance, we or they could be subject to a litany
of civil, criminal, and administrative fines, penalties, orders and actions, including being required to suspend or terminate the offering
of certain products and services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Adverse changes to, or our
failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation and brand and
our business, operating results, and financial condition.<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
cannot assure that our policies and procedures in place to comply with applicable complex and evolving laws, regulations, and rules will
always be effective, which could have a negative impact on our business operations. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to comply with applicable complex and evolving laws, regulations, and rules is largely dependent on the establishment, maintenance,
and scaling of our compliance, audit, and reporting systems to continuously keep pace with our customer activity and transaction volume,
as well as our ability to attract and retain qualified compliance and other risk management personnel. While we have devoted significant
resources to develop policies and procedures to identify, monitor, and manage our risks, and expect to continue to do so in the future,
we cannot assure you that our policies and procedures are and will always be effective or that we have been and will always be successful
in monitoring or evaluating the risks to which we are or may be exposed in all market environments or against all types of risks, including
unidentified or unanticipated risks. Our risk management policies and procedures rely on a combination of technical and human controls
and supervision that are subject to error and failure. Some of our methods for managing risk are discretionary by nature and are based
on internally developed controls and observed historical market behavior, and also involve reliance on standard industry practices. These
methods may not adequately prevent losses, particularly as they relate to extreme market movements, which may be significantly greater
than historical fluctuations in the market. Our risk management policies and procedures also may not adequately prevent losses due to
technical errors if our testing and quality control practices are not effective in preventing failures. In addition, we may elect to
adjust our risk management policies and procedures to allow for an increase in risk tolerance, which could expose us to the risk of greater
losses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Certain
crypto assets in which we may in the future facilitate trading may be subject to regulatory authority by the CFTC. Any fraudulent or
manipulative activity in a crypto asset occurring on our platform could subject us to increased regulatory scrutiny, regulatory enforcement,
and litigation.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
CFTC has stated and judicial decisions involving CFTC enforcement actions have confirmed that certain crypto assets may fall within the
definition of a &#8220;commodity&#8221; under the Commodity Exchange Act (&#8220;CEA&#8221;). As a result, the CFTC would have general
enforcement authority to police against manipulation and fraud in at least some crypto asset markets. From time to time, manipulation,
fraud, and other forms of improper trading by market participants have resulted in, and may in the future result in, CFTC investigations,
inquiries, enforcement action, and similar actions by other regulators, government agencies, and civil litigation. Such investigations,
inquiries, enforcement actions, and litigation may cause us to incur substantial costs and could result in negative publicity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Certain
transactions in crypto assets may constitute &#8220;retail commodity transactions&#8221; subject to regulation by the CFTC as futures
contracts. If crypto asset transactions we facilitate are deemed to be such retail commodity transactions, we would be subject to additional
regulatory requirements, licenses and approvals, and potentially face regulatory enforcement, civil liability, and significant increased
compliance and operational costs.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
transaction in a commodity, including a crypto asset, entered into with or offered to retail investors using leverage, margin, or other
financing arrangements (a &#8220;retail commodity transaction&#8221;) is subject to CFTC regulation as a futures contract unless such
transaction results in actual delivery within 28 days. The meaning of &#8220;actual delivery&#8221; has been the subject of commentary
and litigation, and in 2020, the CFTC adopted interpretive guidance addressing the &#8220;actual delivery&#8221; of a crypto asset. To
the extent that crypto asset transactions that we facilitate or facilitated are deemed retail commodity transactions, including pursuant
to current or subsequent rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight, and
we could be subject to judicial or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations.
The CFTC has previously brought enforcement actions against entities engaged in retail commodity transactions without appropriate registrations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Particular
crypto assets or transactions therein could be deemed &#8220;commodity interests&#8221; (e.g., futures, options, swaps) or security-based
swaps subject to regulation by the CFTC or SEC, respectively. If a crypto asset that we facilitate trading in is deemed a commodity interest
or a security-based swap, we would be subject to additional regulatory requirements, registrations and approvals, and potentially face
regulatory enforcement, civil liability, and significant increased compliance and operational costs.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commodity
interests, as such term is defined by the CEA and CFTC rules and regulations, are subject to more extensive supervisory oversight by
the CFTC, including registrations of entities engaged in, and platforms offering commodity interest transactions. This CFTC authority
extends to crypto asset futures contracts and swaps, including transactions that are based on current and future prices of crypto assets
and indices of crypto assets. To the extent that a crypto asset in which we facilitate or facilitated trading or transactions in a crypto
asset which we facilitate or facilitated are deemed to fall within the definition of a commodity interest, including pursuant to subsequent
rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight and could be subject to judicial
or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations as an exchange (for example,
as a designated contract market for trading futures or options on futures, or as a swaps execution facility for trading swaps) or as
a registered intermediary (for example, as a futures commission merchant or introducing broker). Such actions could result in injunctions,
cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm. The CFTC has previously
brought enforcement actions against entities engaged in crypto asset activities for failure to obtain appropriate exchange, execution
facility and intermediary registrations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, the CFTC and
the SEC have jointly adopted regulations defining &#8220;security-based swaps,&#8221; which include swaps based on single securities and
narrow-based indices of securities. If a crypto asset is deemed to be a security, certain transactions referencing that crypto asset could
constitute a security-based swap. A crypto asset or transaction therein that is based on or references a security or index of securities,
whether or not such securities are themselves crypto assets, could also constitute a security-based swap. To the extent that a crypto
asset in which we facilitate or have facilitated trading or transactions in a crypto asset which we facilitate or have facilitated are
deemed to fall within the definition of a security-based swap, including pursuant to subsequent rulemaking or guidance by the CFTC or
SEC, we may be subject to additional regulatory requirements and oversight by the SEC and could be subject to judicial or administrative
sanctions if we do not or did not a relevant time possess appropriate registrations as an exchange (for example, as a security-based swaps
execution facility) or as a registered intermediary (for example, as a security-based swap dealer or broker-dealer). This could result
in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>If the Company fails
to properly characterize a digital asset listed for trading under applicable securities laws, it may be subject to regulatory scrutiny,
inquiries, investigations, fines, and other penalties, which may adversely affect the business, operating results, and its financial
condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC and its staff have
taken the position that many digital assets fall within the definition of a &#8220;security&#8221; under the U.S. federal securities laws.
The SEC has stated that the characterization of a digital asset as a security or non-security should be made by application of the Howey&#160;test,
which provides a multi-factor analysis for determining whether a digital asset is a security, as well as other case law and reports, orders
and statements issued by the SEC which provide guidance on when a digital asset should be treated as a security for purposes of US federal
securities laws.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Several foreign jurisdictions
have taken a broad-based approach to classifying crypto assets as &#8220;securities,&#8221; while other foreign jurisdictions, such as
Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain crypto assets may be deemed to be a &#8220;security&#8221;
under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations,
or directives that affect the characterization of crypto assets as &#8220;securities.&#8221;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The classification of a crypto
asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale,
trading, and clearing of such assets. For example, a crypto asset that is a security in the United States may generally only be offered
or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption
from registration.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has developed
specific criteria and follows its policies and procedures to analyze &#160;whether a digital asset could be deemed a &#8220;security&#8221;
under applicable laws prior to listing such asset on the INXD trading platform. The Company&#8217;s policies and procedures do not constitute
a legal standard, but rather represent the Company-developed model, which it uses to make a risk-based assessment regarding the likelihood
that a particular crypto asset could be deemed a &#8220;security&#8221; under applicable laws. Regardless of the conclusions, the Company
could be subject to legal or regulatory action in the event the SEC, a state or foreign regulatory authority, or a court were to determine
that a supported crypto asset currently traded on our INXD platform is a &#8220;security&#8221; under applicable laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The policy reviews a variety
of factors for each listing, including applying such review as it relates to the Howey test. The policy considers, among other things,
the use, purpose, and specific features of each crypto asset being considered. Once all of these assessments are completed and internally
approved by the relevant members of Company management, the assessment is reviewed and approved by the INXD Board of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will only approve
a listing that it reasonably determines is not used to circumvent laws and regulations or that may facilitate the obfuscation or concealment
of a customer&#8217;s or counterparty&#8217;s identity. Additionally, the Company will only approve cryptocurrencies that it reasonably
determines, using the above-described procedures, are not crypto assets that fall under the jurisdiction of securities regulations in
the U.S. and may seek the guidance of outside legal counsel in this determination. The Company will only permit the trading of a crypto
asset consistent with relevant consumer protection standards and that do not jeopardize INXD&#8217;s safety and soundness as a going concern.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company believes that
its process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent application of available
legal guidance. However, it recognizes that the application of securities laws to the specific facts and circumstances of crypto assets
may be complex, and that a listing determination does not guarantee any conclusion under the U.S. federal securities laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There can be no assurances
that we will properly characterize any given crypto asset as a security or non-security for purposes of determining whether our platform
will support trading of the crypto asset, or that the SEC, foreign regulatory authority, or a court, if the question was presented to
it, would agree with our assessment. If an applicable regulatory authority or a court, having final determinative authority on the subject,
were to determine that a supported crypto asset currently offered, sold, or traded on our INXD platform is a security, we could be subject
to judicial or administrative sanctions for failing to offer or sell the crypto asset in compliance with the registration or exemption
requirements. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement,
criminal liability, and reputational harm. Customers that traded such supported crypto assets on our platform and suffered trading losses
could also seek to rescind a transaction that we facilitated on the basis that it was conducted in violation of applicable law, which
could subject us to significant liability. We may also be required to cease facilitating transactions in the supported crypto asset other
than via our licensed subsidiaries, which could negatively impact our business, operating results, and financial condition. Furthermore,
if we remove any crypto assets from trading on our platform for any reason, our decision may be unpopular with users and may reduce our
ability to attract and retain customers, especially if such assets remain traded on unregulated exchanges, which includes many of our
competitors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, if Bitcoin, Ethereum,
or any other supported crypto asset is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding
in a court of law or otherwise, it may have adverse consequences for such supported crypto asset. For instance, all transactions in such
supported crypto assets would have to be registered with the SEC or other foreign authority, or conducted in accordance with an exemption
from registration, which could severely limit its liquidity, usability and transactability. Moreover, the networks on which such supported
crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could
effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the
general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto assets to be traded, cleared, and held
in custody as compared to other crypto assets that are not considered to be&#160;securities.&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Adding crypto assets to,
or removing from our platform</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has a policy and
process in place for adding new crypto asset securities and cryptocurrencies for listing or trading on its platform. The Company&#8217;s
legal and compliance teams, in cooperation with the Chief Compliance Officer, evaluate the legal, compliance, technology, cybersecurity,
and operational risks with respect to listing a cryptocurrency. The evaluation is done in the form of a due diligence checklist, upon
which the above parties have to signify approval, and once this is done, the checklist is then sent to the Board of Directors of INXD,
for a final review and approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">More specifically, the relevant
risk areas that INXD takes into consideration regarding each cryptocurrency include the overview and history, roadmap, business purpose,
usage, distribution and concentration, regulation, compliance obligations, Howey Test triggers, risk assessment, token type, white paper,
blockchain type, engineering, security and code, prototype, consensus process, network, operating costs, supply, rewards and penalties,
development team, and operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Adding the Millennium Sapphire,
Compound and Aave Tokens to our platform </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regarding the listing of the
Millennium Sapphire Security Token (&#8220;MSTO&#8221;) to our ATS for trading, MSTO first signed a listing agreement with INX and provided
due diligence items requested by the Company, pursuant to INXS&#8217; listing policy. Following review of all relevant documents submitted,
INXS verified that the primary offering was done in compliance with the exemptions for registration under Regulation D and Regulation
S of the Securities Act of 1933 which are specifically noted in the INXS Membership Agreement as valid primary exemptions for which INXS
can provide secondary market trading services. INXS reviews and signs off on all due diligence and listing agreements, including those
of MSTO. As part of additional due diligence, and since neither INXS, nor any of its affiliated entities, minted the security tokens,
INXS integrated the ATS settlement flow with MSTO&#8217;s ownership record holder (the &#8220;Digital Registrar&#8221;). A Digital Registrar
maintains books and records for security token issuers similar to the functions of a transfer agent in the United States. Once this integration
was tested and implemented, the security token was made available for trading on the ATS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regarding the addition of
the Compound and Aave tokens to our crypto asset trading platform, the Company respectfully advises the Staff that it followed the same
procedures described in the response to comment 3 above in determining to add these tokens to our trading platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt"><b><i>As we continue to expand
our business and customer base outside the United States, we may be vulnerable to risks related to unauthorized or impermissible customer
access outside of the jurisdictions in which we operate, which may result in significant legal and financial exposure, damage to our
reputation, and a loss of confidence in the services we provide</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As we expand and localize
our international activities, we have become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations
of both the jurisdictions in which we operate and those into which we offer services on a cross-border basis. For instance, financial
regulators outside the United States have increased scrutiny of crypto asset exchanges over time, such as by requiring crypto asset exchanges
operating in their local jurisdictions to be regulated and licensed under local laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regulators worldwide frequently
study each other&#8217;s approaches to the regulation of the crypto economy. Consequently, developments in one jurisdiction may influence
other jurisdictions and any such development may be extended to additional services and other jurisdictions. As a result, risks created
by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting our business in
another jurisdiction or involving another service. Conversely, if regulations diverge worldwide, we may face difficulty and increased
expenses adjusting our products, services, and other aspects of our business with the same effect. These risks are heightened as we face
increased competitive pressure from other similarly situated businesses engaging in regulatory arbitrage to avoid the compliance costs
associated with regulatory changes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although the Company monitors
closely the above mentioned risks and takes proactive steps to mitigate them, any breach or unauthorized customer access to products and
services outside jurisdictions in which we operate could result in significant legal and financial exposure, damage to our reputation,
and a loss of confidence in the services we provide that could potentially have an adverse effect on our business, while resulting in
regulatory penalties or the imposition of burdensome obligations by regulators.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><b><i>Use
of digital engagement practices (&#8220;DEP&#8221;) designed to engage with retail investors and provide educational tools</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends on our
ability to retain existing customers and attract new customers, including ecosystem partners, to increase engagement with our products,
services, and platform. To do so, we must continue to offer leading technologies and ensure that our products and services are secure,
reliable, and engaging. We must also expand our products and services, and offer competitive prices in an increasingly crowded and price-sensitive
market. There is no assurance that we will be able to continue to do so, that we will be able to retain our current customers or attract
new customers, or keep our customers engaged.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Used responsibly, DEPs provide
significant benefits to retail investors, including enhanced access to customized products and services, lower costs, access to a broader
range of products, better customer service, and improved compliance efforts leading to safer markets. Certain DEPs also raise potential
risks, highlighting the need to ensure investor protection in connection with their use. The existing regulatory regime, however, addresses
firms&#8217; use of DEPs, preserving their well-documented benefits, while appropriately managing potential risks and conflicts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Specifically, the primary
intersection between DEPs and our current regulatory regime are in two discrete areas:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">communications to retail investors (educational, informational, advertising, and marketing); and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FINRA&#8217;s communications
(and related) rules and guidance cover the former, and the SEC&#8217;s Regulation Best Interest (&#8220;Reg BI&#8221;) covers the latter.
The Company believes that the existing federal securities laws and regulations, and FINRA rules, are sufficient to fulfill the SEC&#8217;s
investor protection and market integrity missions with respect to DEPs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The genesis and growth of
DEPs in the securities industry today reflect the manner in which retail investors increasingly engage in every aspect of their lives,
that is, digitally, online, and interactively, using the latest technologies and platforms. It is also driven, in part, by the manner
in which many retail investors now choose to transact and invest, that is, on a self-directed basis (distinct from the model of receiving
recommendations from a dedicated financial advisor). Many retail investors want to make their own investment decisions and manage their
own investment risks, including market risks, product complexity, leverage, margin, and trading frequency. Regardless, for all retail
investors, DEPs provide the latest technologies, tools, information, data, and education to facilitate and enhance their investment experience.
DEPs can also offer retail investors a simplified, easily understandable path to effective financial planning and financial literacy at
their digital fingertips. Firms&#8217; use of DEPs helps meet the demand of retail investors to engage and transact in the manner of their
choosing. In meeting that demand, DEPs not only strengthen existing client relationships, but also have been appropriately credited with
improving investor access and opportunity on the latest investment platforms, resulting in a significant, well-documented increase in
retail investor participation in the capital markets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In fact, DEPs are providing
new useful channels for delivering investor education tools and resources to retail investors. Retail investors are better educating themselves
about the risks and features of prospective products and services, and ultimately, transacting in a manner that is consistent with their
investment goals and risk tolerance. Relevant studies support the view that effective DEP communications can help retail investors make
more responsible decisions and ultimately improve their financial outcomes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Investor protection is paramount
to our retail customers. Accordingly, the Company is cognizant of the potential risks associated with certain DEPs and the need to ensure
investor protection in connection with their use. While DEPs have the potential to encourage beneficial investor behavior, certain DEPs
may have the potential to encourage retail investors to transact in a manner that may be inconsistent with their investment goals or risk
tolerance. As the Commission notes, some have also expressed concerns that certain DEPs may encourage frequent trading, options trading,
trading on margin, and trading in complex securities products. The Company is not involved with any of the foregoing practices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, the Company does
not have any sophisticated digital engagement processes to engage retail customers. The Company allows pop-ups on its website, utilizes
user contests such as a recent World Cup contest amongst platform users, email marketing, and social media posts to bring attention to
potential users on the Company platform. The Company provides FAQs with videos and tutorials to develop and provides investment education
tools.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INX acknowledges the need
to address these potential conflicts. DEPs should never mislead clients and should always present information in a manner that is fair
and balanced. It is important to note, however, that these potential conflicts are not new to the industry. In fact, they are the same
potential conflicts that arises in connection with any medium or form of firm communication or engagement with a client. DEPs are merely
a different medium or form. And, as discussed further below, DEPs are already subject to the same compliance and regulatory obligations
that the firm owes with respect to every other communication or engagement with a client, including full disclosure of all relevant risks.
Preserving individual retail investors&#8217; interest in autonomy, preference, choice, and access to new investment opportunities, which
DEPs may facilitate, is essential to ensuring that these investors have the means to effectively manage their short- and long-term financial
objectives, and their wealth generally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed further below,
assuming firms are meeting their compliance and regulatory obligations with respect to DEP use under the current regulatory regime, there
is no new or different regulatory interest in preventing or limiting firms from using DEPs to facilitate the trading activities and investment
experiences in which these retail investors have chosen to engage.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For broker-dealers, these
provisions include, without limitation:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The anti-fraud provisions of the federal securities laws and FINRA rules;</span></td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Account opening, KYC, and other due diligence approval obligations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Standard of conduct;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure obligations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reporting and other financial responsibility requirements;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recordkeeping obligations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Customer complaints; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Privacy and cybersecurity.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing overview of
select rules and regulations, as well as additional regulatory obligations, demonstrate the comprehensive nature of broker-dealer regulation
generally, as well as the specific regulations relevant to the use of DEPs and related tools and methods today.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to educational
and informational communications to retail investors, as noted above, INX provides FAQs with videos and tutorials to develop and provide
investment education tools. Recently, the Company published &#8220;<i>The INX Way</i>,&#8221; which provides insight to retail investors
regarding security tokens and the basic concepts and foundations of this new innovative financial product.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed above, retail
investors derive significant benefits from tools that deliver education and information about financial services and products. All educational
and informational communications, like all communications generally, must be fair, balanced, and not misleading under our existing regulatory
regime. Retail investors are already well protected by these laws and rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to advertising
and marketing communications to retail investors, such communications are likewise already addressed by the existing ruleset. FINRA&#8217;s
communications rules already apply to all forms of electronic, hard copy, and other means of advertising and marketing communication,
and readily cover DEPs. DEP-related advertising and marketing communications should continue to be subject to, and regulated by these
well-established, existing regulatory standards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our use of DEPs may
be impacted by current and potential future regulations, which may adversely affect our business, operating results and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends on our
ability to retain existing customers and attract new customers, including ecosystem partners, to increase engagement with our products,
services, and platform, which is done in part by the use of DEPs. While DEPs have the potential to encourage beneficial investor behavior,
certain DEPs may have the potential to encourage retail investors to transact in a manner that may be inconsistent with their investment
goals or risk tolerance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The genesis and growth of
DEPs in the securities industry today has led to increased SEC scrutiny in the way companies utilize DEPs, including the risk that certain
DEPs may encourage frequent trading, options trading, trading on margin, and trading in complex securities products. Current and future
regulations regarding the use of DEPs may <span>subject us to audits, inquiries, whistleblower complaints,
adverse media coverage, investigations, severe criminal, or civil sanctions, damage our reputation, or result in fines or proceedings
by governmental agencies and private claims and litigation, any of which could adversely affect our business, operating results, and financial
condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>There
is a risk that, as we expand, we may assume liabilities for breaches experienced by any companies we acquire. Additionally, there are
potentially inconsistent world-wide government regulations pertaining to data protection and privacy. Despite our efforts to comply with
applicable laws, regulations and other obligations relating to privacy, data protection, and information security, it is possible that
our practices, offerings, or platform could fail, or be alleged to fail, to meet applicable requirements. For instance, the overall regulatory
framework governing the application of privacy laws to blockchain technology is still highly undeveloped and likely to evolve. Our failure,
or the failure by our third-party providers or partners, to comply with applicable laws or regulations and to prevent unauthorized access
to, or use or release of personal data, or the perception that any of the foregoing types of failure has occurred, even if unfounded,
could subject us to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, severe criminal, or civil sanctions,
damage our reputation, or result in fines or proceedings by governmental agencies and private claims and litigation, any of which could
adversely affect our business, operating results, and financial condition.</span></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Risks Related to Blockchain Assets</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our ability to continue
to develop our trading platforms faces operational, technological and regulatory challenges and we may not be able to continue to develop
this business as contemplated. &#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not be able to continue
to develop the platforms as contemplated by our business model. In addition, a number of factors could materially adversely affect our
ability to commercialize and generate any profits from our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The structuring and maintenance
and further development of our trading platforms could lead to unanticipated and substantial costs, delays or other operational or financial
difficulties. Our platforms are complex and their maintenance and further development requires the integration of multiple technologies
and the development of software.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There can be no assurance
that our platforms will gain the acceptance of customers or other market participants. Because blockchain asset trading is still in its
early stages, it is difficult to predict the preferences and requirements of blockchain asset traders and our platform design and technology
may be incompatible with new or emerging forms of blockchain assets or related technologies. Failure to achieve acceptance would impede
our ability to develop and sustain a commercial business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While the trading platform
of INXS is a registered broker-dealer and FINRA member that operates an SEC- recognized alternative trading system and that the INXD trading
platform is licensed as a money transmitter in certain states, there can be no assurance our platform will qualify for additional registrations
that we are seeking or we plan to seek with the SEC, FINRA, U.S. state regulators and various other regulatory bodies both in the U.S.
and in other countries, including Israel. We are licensed or otherwise qualified to operate as a money transmitter in 43 U.S. states plus
Washington D.C. and Puerto Rico. We intend to obtain money transmitter licenses or otherwise become qualified to operate in more U.S.
states by the end of 2023. In addition, if in the future we determine to proceed with the establishment of a platform for the trading
of cryptocurrency-based derivatives, we would be required to seek registrations with other regulatory bodies, such as the CFTC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may fail to qualify for
registrations under any of these authorities or we may be required to alter our business model as currently contemplated in order to meet
the requirements of these regulatory authorities. Either of these results would have a broad impact on us and could have a material adverse
effect on our businesses, financial condition, results of operations and prospects and, as a result, investors could lose all or most
of their investment.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because distributions to the
INX Token holders are dependent on our cash flow, our failure to continue to develop the Company platforms, failure of the platforms to
gain regulatory approvals or failure of the platforms to gain acceptance may prevent us from paying a distribution to the INX Token holders.
Such adverse effects would impact the utility, liquidity, and the trading price of INX Tokens and potentially render INX Tokens worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Firms in the financial services
industry have experienced increased scrutiny in recent years. Such regulatory or other actions may lead to penalties, fines, disbarment
and other sanctions which could place restrictions or limitations on our operations and otherwise have a material adverse effect on our
businesses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We expect to face intense
competition from other companies and, if we are not able to successfully compete, our business, financial condition and operating results
will be materially harmed. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The digital assets industry
is highly innovative and rapidly evolving, with frequent introductions of new products and services, and subject to uncertain and evolving
industry and regulatory requirements. Although we strongly believe that our key competitive advantage is the ability to offer digital
assets and security tokens on a single trading platform and within a regulated and fully transparent environment as a public company,
we expect competition to further intensify in the future as existing and new competitors introduce new products or enhance existing service
offerings. We compete against a number of companies that focus on traditional financial services and those that focus on blockchain-based
services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 25; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We expect to encounter competition
in all aspects of our business, including from entities having substantially greater capital and resources, offering a wide range of products
and services and in some cases operating under a different and possibly less stringent regulatory regime.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will face competition from
other securities, futures and securities option exchanges; over-the-counter markets (OTC); clearing organizations; large industry participants;
swap execution facilities; alternative trade execution facilities; technology firms, including electronic trading system developers, and
others. New entrants may enter the market with alternative methods of providing trade execution and related services, and existing competitors
may launch new initiatives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our main competitors fall
into the following categories:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">traditional financial technology
and brokerage firms that have entered the crypto asset market in recent years and offer overlapping features targeted at our customers;
and</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">companies focused on the crypto
asset market, some of whom adhere to local regulations and directly compete with our platform, and many who choose to operate outside
of local rules and regulations or in jurisdictions with less stringent local rules and regulations and are potentially able to more quickly
adapt to trends, support a greater number of crypto assets, and develop new crypto-based products and services due to a different standard
of regulatory scrutiny.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many of these competitors
have greater financial, marketing, technological and personnel resources than we do. In addition, many of our competitors may offer a
wider range of bundled services, have broader name recognition, and have larger customer bases than we do.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to our regulated status
in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and
services, including products and services that our unregulated or less regulated competitors are able to offer to a group that includes
many of our customers, which may adversely impact our business, financial condition, and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In recent years, our commitment
to compliance and the attendant customer-facing requirements, including customer due diligence requirements, have resulted in our customers
transferring significant funds and crypto assets to unregulated or less regulated competitors. We also have expended significant managerial,
operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions
in which we operate, and expect to continue to incur significant costs to comply with these requirements, which unregulated or less regulated
competitors have not had to incur.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many innovative start-up companies
and larger traditional financial services companies have made, and continue to make, significant investments in research and development,
and we expect these companies to continue to develop similar or superior products and technologies that compete with our products. Further,
more traditional financial and non-financial services businesses may choose to offer blockchain-based services in the future as the industry
gains adoption.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our existing competitors have,
and our potential competitors are expected to have, various competitive advantages over us, such as:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">the ability to trade crypto
assets and offer products and services that we do not support or offer on our platform (due to constraints from regulatory authorities,
our banking partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">greater name recognition, longer
operating histories, larger customer bases, and larger market shares;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">larger sales and marketing budgets
and organizations;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">greater resources to make acquisitions;</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

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</div><p style="margin: 0">&#160;</p><div>


</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">larger and more mature intellectual
property portfolios;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">established core business models
outside of the trading of crypto assets, allowing them to operate on lesser margins or at a loss;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">operations in certain jurisdictions
with lower compliance costs and greater flexibility to explore new product offerings; and</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">substantially greater financial,
technical, and other resources.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to develop competitive
advantages will require continued enhancements to our products, investment in the development of our services, additional marketing activities
and enhanced customer support services. There can be no assurance that we will have resources to make sufficient investments in the development
of our services, that our competitors will not devote significantly more resources to competing services or that we will otherwise be
successful in developing market share. If competitors offer superior services, our market share could be affected and this would adversely
impact our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Failure to keep up
with rapid changes in industry-leading technology, products and services could negatively impact our results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial services industry
is subject to rapid technological change and evolving industry standards. User demands become greater and more sophisticated as the dissemination
of products and information to customers increases. If we are unable to anticipate and respond to the demand for new services, products
and technologies, innovate in a timely and cost-effective manner and adapt to technological advancements and changing standards, we may
be unable to compete effectively, which could have a material adverse effect on our business. Many of our competitors have significantly
greater resources than we do to fund research and development initiatives. Moreover, the development of technology-based services is a
complex and time-consuming process. New products and enhancements to existing products can require long development and testing periods.
Significant delays in new product releases, failure to meet key deadlines, or significant problems in creating new products could negatively
impact our revenues and profits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The extent to which
blockchain assets are used to fund criminal or terrorist enterprises or launder the proceeds of illegal activities could materially impact
our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The potential, or perceived
potential, for anonymity in transfers of bitcoin and similar blockchain assets, as well as the decentralized nature of blockchain networks,
has led some terrorist groups and other criminals to solicit bitcoins and other blockchain assets for capital raising purposes. As blockchain
assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies have been examining
the operations of blockchain assets, their users and exchanges, concerning the use of blockchain assets for the purpose of laundering
the proceeds of illegal activities or funding criminal or terrorist enterprises.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the current
market, new blockchain networks or similar technologies may be developed to provide more anonymity and less traceability. There is also
the potential that other blockchain asset trading platforms may court such illicit activity by not adhering to know-your-customer and
anti-money laundering practices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not be able to prevent
illegal activity from occurring over our platforms. We may be unable to detect the unauthorized use of a KYC/AML vetted account on one
of our platforms. Further, we may be unable to verify whether private keys for wallets containing INX Tokens have been transferred to
third parties who have not completed our KYC/AML process. Although we have implemented procedures that will ensure that we remain in compliance
with our KYC/AML obligations, we may not be successful in deterring or identifying illegal activity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The use of blockchain assets
for illegal purposes, or the perception of such use, over our platforms or on other trading platforms could result in significant legal
and financial exposure, damage to our reputation, damage to the reputation of blockchain assets and a loss of confidence in the services
provided by our platforms and the blockchain asset community as a whole. Our failure to meet our KYC/AML requirements could result in
regulatory penalties which could have a materially adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We may not have sufficient
cash flow from operating activities, cash on hand and the ability to obtain borrowing capacity to finance required capital expenditures,
fund strategic initiatives and meet our other cash needs. These obligations require a significant amount of cash, and we may need additional
funds, which may not be readily available.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The viability of our business
is dependent on the availability of adequate capital to develop and maintain our business and meet our regulatory capital requirements.
We will need to continue to invest in our operations for the foreseeable future to carry out our business plan. If our business does not
attract clients and does not achieve the expected operating results, we will need to seek additional financing or revise our business
plan. Our ability to borrow additional funds may be impacted by financial lending institutions&#8217; ability or willingness to lend to
us on commercially acceptable terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Low levels of operating cash
flow together with limited access to capital or credit in the future could have an impact on our ability to meet our regulatory capital
requirements, invest in our software and infrastructure, engage in strategic initiatives, make acquisitions or strategic investments in
other companies, react to changing economic and business conditions, repay our outstanding debt, or make dividend payments. Such outcomes
could have an adverse effect on our business, financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our securities business
exposes us to capital requirements and regulatory risk.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Broker-dealers are also subject
to regulatory capital requirements promulgated by the applicable regulatory and exchange authorities of the countries in which they operate.
The failure to maintain required regulatory capital may lead to suspension or revocation of a broker-dealer registration and suspension
or expulsion by a regulatory body. If existing cash together with cash from operations are not sufficient, we may need to reject orders
from clients and we may ultimately breach regulatory capital requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, if our broker-dealer
subsidiaries are subject to new or modified regulatory capital rules or requirements, or fines, penalties or sanctions due to increased
or more stringent enforcement, it could materially limit or reduce the liquidity we may need to expand or even maintain our then-present
levels of business, which could have a material adverse effect on our business, results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We may be unable to
maintain minimum net capital that meets regulatory requirements. Further, our commitment to maintain the Cash Fund or other regulatory
reserves may limit our ability to invest in our future growth.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a broker-dealer, we must
maintain minimum net capital that satisfies the requirements under Rule 15c3-1 under the Exchange Act. Depending upon our future business
activities, we may become subject to additional capital requirements in the United States or other foreign jurisdictions in which we may
conduct business in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;In the U.S., we have
obtained licenses to operate as money transmitters (or the equivalent in the states where such licenses or equivalent are required to
conduct our business), as well as in the District of Columbia and Puerto Rico. As a licensed money transmitter, we are subject to, among
other things, capital requirements including the net worth of our subsidiary, INXD.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Current and future regulations
may require us to accumulate capital reserves in our subsidiaries which could limit our ability to carry on or expand our operations or
may result in higher than anticipated costs for financing our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we have established
a Cash Fund, as defined below, by reserving 75% of the gross proceeds less payments to underwriters from our initial public offering in
excess of $25 million to be available to cover customer and Company losses, if any, that result from cybersecurity breaches or theft,
errors in execution of the trading platform or its technology, and counterparty defaults, including instances where counterparties lack
sufficient collateral to cover losses. We refer to this amount as our &#8220;Cash Fund&#8221; or &#8220;Reserve Fund.&#8221; The Cash
Fund is intended to provide additional protection to our customers and maintain the financial stability of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we invest a significant
level of resources in the continued development and operation of our trading platform and the development of our service offering. We
cannot guarantee that we will have or will maintain sufficient funding to continue investing in our business and successfully execute
our business plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our reserves are insufficient
to cover our future liabilities, we may be required to raise additional capital. Any one or all of these outcomes may have a material
effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>There can be no assurance
that we will have sufficient assets or that we will be able to obtain and maintain liability insurance on acceptable terms or with adequate
coverage to cover our liabilities.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our platform or the INX
Token is alleged to have a flaw or is hacked such that our customers suffer significant losses, we may be subject to significant liability
claims or regulatory action. To mitigate this risk, we have established a Cash Fund by reserving 75% of the gross proceeds less payments
to underwriters from our initial public offering in excess of $25 million to be available to cover customer and Company losses, if any,
that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty defaults,
including instances where counterparties lack sufficient collateral to cover losses. The Company utilizes the Cash Fund only in response
to these events. However, the Cash Fund may be insufficient to cover all losses associated with significant liability claims. Further,
the Company does not plan to replenish the Cash Fund after our initial public offering and after it has been used for these purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, insurance coverage
against such losses is expensive and may not be available in the future on acceptable terms, or at all. Available insurance coverage may
be subject to unfavorable terms and conditions and require payments of significant deductibles, or it may not be sufficient to cover all
losses in the case of a claim. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against
potential liability claims could result in us becoming subject to significant liabilities that are uninsured.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Risks to customers&#8217;
assets in the event of insolvency or bankruptcy of any INX entity</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Customer custodial assets
represent restricted funds maintained in segregated accounts that are held in accounts for the exclusive benefit of customers. The <span>Company
holds liquid assets, as defined by applicable regulatory requirements equal to at least 100% of the aggregate amount of all customers
custodial liabilities. </span>All customer funds are held in their original currency one-to-one at the firm&#8217;s digital assets custodian
as well as at a specifically designated U.S. bank account. The firm does not hypothecate, invest or use customer funds for any other purpose.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company places great importance
on safeguarding customers&#8217; crypto assets. The Company is in the process of implementing a segregation of customer funds following
the CFTC segregation model under the CEA Rule 1.20, <i>Futures customer funds to be segregated and separately accounted for, </i>to the
extent feasible and available. We intend to achieve this protection by amending contractual agreements with our custodian and banks holding
customer funds. Such amendments, among other related provisions, will include the addition of a written segregation acknowledgement letter
issued by our custodian and banks acknowledging certain accounts to be specifically designated as holding customer funds and prohibit
the right of offset between customer and house assets deposited by INX and held by such custodians and banks. The key objective of the
contractual revisions is to separate assets held in specifically designated customer accounts from the Company&#8217;s general estate,
thus making them bankruptcy remote and not subject to claims of general creditors, a required practice under CFTC rules, and a framework
that we believe can be similarly applied by digital assets intermediaries. The Company expected to implement the segregation requirement
during the first half of 2023, subject to custodian and banks&#8217; cooperation, however, due to recent developments in the banking industry
and failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank in March 2023, this implementation will be delayed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to this segregation
mechanism, the Company is in the process of modifying its services agreements with the custodian holding digital assets in specifically
designated, and titled as such, custodial accounts on a segregated basis for the sole benefit of the Company&#8217;s customers. Under
such agreements, assets held in segregated accounts are intended to be recognized as customer property and in the event that the Company
becomes subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, under the segregation acknowledgement
terms between the Company and the bank or the custodian, the Company believes that the bank or the custodian would have no obligation
to release customer funds and digital assets held in the custodial accounts, except upon instructions of the trustee in bankruptcy or
pursuant to a bankruptcy court order. Moreover, the segregation requirement prohibits the right of offset between customer and proprietary
assets held by the bank or the custodian.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, because custodially
held crypto assets may be considered to be the property of a bankruptcy estate, the crypto assets held in custody by BitGo Trust Company,
Inc. (&#8220;BitGo Trust&#8221;), on behalf of our customers could be treated as property of a bankruptcy estate in the event of the insolvency
or bankruptcy of an INX entity and consequently our customers could be treated as general unsecured creditors in bankruptcy proceedings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, the Company believes
that a court would not treat customers&#8217; crypto assets as part of the Company&#8217;s general estate; however, due to the novelty
of crypto assets, there can be no assurance that a bankruptcy court would not determine to include these customer assets as part of our
bankruptcy estate in the event of our insolvency or bankruptcy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our failure to safeguard
and manage our customers&#8217; fiat currencies and crypto assets could adversely impact our business, operating results, and financial
condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022,&#160;our
customer funds&#160;in fiat were&#160;held with our partnering banks,&#160;Metropolitan Commercial Bank and Evolve Bank and Trust,&#160;which
are not affiliated with INX. &#160;As of the date hereof, all such customer assets held at the Metropolitan Commercial Bank have been
transferred to the Byline Bank, which is currently the bank where all customer assets for clients trading digital assets are held under
a specifically designated custodial account. Byline Bank is not affiliated with INX. Customer funds for clients trading security tokens
continue to be held at Evolve Bank and Trust under individual accounts for each client.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Supported crypto assets are
not insured or guaranteed by any government or government agency. The ability to manage and accurately safeguard customer assets requires
a high level of internal controls. As our business continues to grow and we expand our product and service offerings, we must continue
to strengthen our associated internal controls and ensure that our partners do the same. Our success and the success of our offerings
requires significant public confidence in our and our partners&#8217; ability to properly manage customers&#8217; balances and handle
large and growing transaction volumes and amounts of customer funds. In addition, we are dependent on our partners&#8217; operations,
liquidity, and financial condition for the proper maintenance, use, and safekeeping of these customer assets. Any failure by us or our
partners to maintain the necessary controls or to manage customer crypto assets and funds appropriately and in compliance with applicable
regulatory requirements could result in reputational harm, litigation, regulatory enforcement actions, significant financial losses, lead
customers to discontinue or reduce their use of our services, and result in significant penalties and fines and additional restrictions,
which could adversely impact our business, operating results, and financial condition.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, because custodially
held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold
in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured
creditors. This may result in customers finding our custodial services more risky and less attractive and any failure to increase our
customer base, discontinuation or reduction in use of our platform and products by existing customers as a result could adversely impact
our business, operating results, and financial condition.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Our
security technology is designed to prevent, detect, and mitigate inappropriate access to our systems, by internal or external threats.
We believe we have developed and maintained administrative, technical, and physical safeguards designed to comply with applicable legal
requirements and industry standards. However, it is nevertheless possible that hackers, employees or service providers acting contrary
to our policies, or others could circumvent these safeguards to improperly access our systems or documents, or the systems or documents
of our business partners, agents, or service providers, and improperly access, obtain, misuse customer crypto assets and funds. The methods
used to obtain unauthorized access, disable, or degrade service or sabotage systems are also constantly changing and evolving and may
be difficult to anticipate or detect for long periods of time.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Any
loss of customer cash or crypto assets could result in a substantial business disruption, adverse reputational impact, inability to compete
with our competitors, and regulatory investigations, inquiries, or actions. Also, any security incident resulting in a compromise of
customer assets could result in substantial costs to us and require us to notify impacted individuals, and in some cases regulators,
of a possible or actual incident, expose us to regulatory enforcement actions, including substantial fines, limit our ability to provide
services, subject us to litigation, significant financial losses, damage our reputation, and adversely affect our business, operating
results, financial condition, and cash flows.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We may experience systems
failures or capacity constraints that could materially harm our ability to conduct our operations and execute our business strategy.
</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are heavily dependent on
the capacity, reliability and security of the computer and communications systems and software supporting our operations. We receive and/or
process a large portion of our trade orders through electronic means, such as through public and private communications networks. Our
systems, or those of our third party providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing
one or more of the following to occur:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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service to our customers;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">slower response times and delays
in our customers&#8217; trade execution and processing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">failed settlement of trades;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">incomplete or inaccurate accounting,
recording or processing of trades;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">financial losses;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">security breaches;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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claims;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">loss of customers; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">regulatory sanctions.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of our systems do not
operate properly, are compromised or are disabled, including as a result of system failure, employee or customer error or misuse of our
systems, we could suffer financial loss, liability to customers, regulatory intervention or reputational damage that could affect demand
by current and potential users of our market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will need to continue to
upgrade, expand and increase the capacity of our systems as our business grows and as we execute our business strategy. Although many
of our systems are designed to accommodate additional volume and products and services without redesign or replacement, we will need to
continue to make significant investments in additional hardware and software to accommodate the increases in volume of transactions and
order transaction traffic and to provide processing services to third parties. If we cannot increase the capacity and capabilities of
our systems to accommodate an increasing volume of transactions and to execute our business strategy, our ability to maintain or expand
our businesses would be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We may face cyber-attack
and other cyber security risks.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We regard the secure transmission
of confidential information and the ability to continuously transact and clear on our electronic trading platforms as critical elements
of our operations. Our technology, our people and those of our third party service providers and our customers may be vulnerable to targeted
attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, firewall or encryption failures and other
security problems. Attackers may seek to steal information about our technology, financial data or user information or take other actions
that would be damaging to the Company and/or holders of INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, as the regulatory
environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly
changing requirements applicable to our business, compliance with those requirements could also result in additional costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The INX Token Distributed
Ledger is publicly available. The misuse or theft of this information may give rise to breaches of privacy laws, fines and sanctions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For many blockchain assets,
distributed ledgers are used to record transfers of ownership of the asset. Information regarding ownership is most commonly represented
by ledger balances and an owner&#8217;s public wallet address. Such information includes the complete transfer history from the inception
of the respective blockchain asset and such information regarding ownership of the assets, including the public wallet address, is generally
available to the public. For many blockchain assets, personal identifying information that is used to associate a public wallet address
with its owner is typically maintained in a separate database that is not exposed to the public.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are a number of data
protection, security, privacy and other government- and industry-specific requirements that are implicated by utilizing a distributed
ledger. If blockchain networks are unable to satisfy data protection, security, privacy, and other government-and industry-specific requirements,
their growth could be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Security attacks against
the Company could result in a loss of the Company&#8217;s blockchain assets, including the INX Tokens, theft of personal information
of our customers or damage to our reputation and our brand, each of which could adversely affect an investment in INX Tokens or the Company.
We could be required to incur significant expense to protect our systems and/or investigate any alleged attack.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Security breaches, computer
malware and computer hacking attacks have been a prevalent concern since the launch of blockchain networks. In 2022, $3.8 billion in cryptocurrency
was reported stolen from cryptocurrency exchanges and investors. One notable theft during 2022 was more than $600 million worth of blockchain
assets stolen from a video game network. Our security system and operational infrastructure may be breached due to the actions of outside
parties, error or malfeasance of an employee of ours, or otherwise. Techniques used to obtain unauthorized access, disable or degrade
service, or sabotage systems change frequently and may be designed to remain dormant until a predetermined event. Outside parties may
also attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure.
Furthermore, we believe that, as our assets grow, the Company may become a more appealing target for security threats such as hackers
and malware.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Company holds
private keys that allow it or its transfer agent, as applicable, the ability to &#8220;freeze&#8221; or automatically reject any digital
wallet address from participating in transfers of INX Tokens, or unilaterally transfer INX Tokens out of a third-party digital wallet.
If such private keys are compromised, all owners of INX Tokens are at risk of losing the ability to transfer their INX Token out of their
digital wallet or they may have their INX Token transferred out of their digital wallet without their permission.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our security measures may
prove insufficient depending upon the attack or threat posed. We may be unable to anticipate these techniques or implement adequate preventative
measures. As a result, an unauthorized party may obtain access to our private keys, company and customer data or blockchain assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any such breach or unauthorized
access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the services we
provide that could potentially have an adverse effect on our business, while resulting in regulatory penalties or the imposition of burdensome
obligations by regulators. In the event of a security breach, we may be forced to cease operations, or suffer a reduction in assets, the
occurrence of each of which could adversely affect an investment in the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We are subject to risks
in using third-party service providers, including custodians and other agents.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We depend on the services
of custodians and other agents and third-party service providers to carry out certain transactions and other business functions (including
without limitation, Bitgo Trust, our custodian). Errors and mistakes made by these third parties may be attributed to us and subject us
to reputational damage, penalties or losses. We may be unsuccessful in seeking reimbursement or indemnification from these third-party
service providers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, in the event
of the insolvency of a custodian, we may be unable to recover equivalent assets in full as we may rank among the custodian&#8217;s unsecured
creditors in relation to its assets. In addition, a custodian may not segregate our cash (including funds of our customers) from its own
cash, and therefore we may rank as unsecured creditors in relation to that cash. The inability to recover assets from the custodian could
have a material adverse effect on our results of operations, financial condition and cash flow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The counterparty to one or
more of our contractual arrangements could default on its obligations under the contract. Default risk may arise from events or circumstances
that are difficult to detect, foresee or evaluate. In addition, the default by large market participants that the market experienced led
to significant liquidity problems for other market participants, which could in turn expose us to significant losses. If a counterparty
defaults, we may be unable to take action to cover the exposure and could incur material losses and legal and reputational damages. We
may not accurately anticipate the impact of market stress or counterparty financial condition and, as a result, we could take insufficient
action to reduce these risks effectively, which, if left unmitigated, could have a material adverse effect on our results of operations,
financial condition and cash flow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are not restricted from
dealing with any particular counterparty or from concentrating any or all of our transactions with one counterparty. The consolidation
and elimination of counterparties may increase our concentration of counterparty risk.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The loss of key personnel
could have a material adverse effect on us. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends solely
on the continued services of key personnel, particularly senior management and officers of the company, who have extensive market knowledge
and long-standing industry relationships. In particular, our reputation among and our relationships with key blockchain industry leaders
are the direct result of a significant investment of time and effort by our senior management to build credibility in a highly specialized
industry. The loss of services of any member of senior management could diminish our business and growth opportunities and our relationships
with key leaders in the blockchain industry and could have a material adverse effect on us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our business will be
adversely affected if we are unable to attract and retain talented employees, including sales, technology, operations and development
professionals.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business operations will
require highly specialized knowledge of the financial industry and of technological innovation as it applies to the financial industry.
If we are unable to hire or retain the services of talented employees, including executive officers, other key management and sales, technology,
operations and development professionals, we would be at a competitive disadvantage. In addition, recruitment and retention of qualified
staff could result in substantial additional costs. The loss of the services of one or more of our executive officers or other key professionals
or our inability to attract, retain and motivate qualified personnel, could have a material adverse effect on our ability to operate our
business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We have not identified
all the persons that we will need to hire to provide services and functions critical to the development of the business and no assurance
can be given that we will be able to hire the necessary persons on acceptable terms, if at all.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business has not identified
all the persons that we will need to hire to provide services and functions critical to the continued development of the business. If
we are unable to hire persons with the necessary expertise on terms acceptable to us then we will not be able to continue to develop our
business as contemplated. Further, even if we are able to hire such service providers, they might be unable to meet our specifications
and requirements, which could have a material adverse effect on our ability to develop and evolve our business plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The size, nature and
complexity of the Company&#8217;s business could make it susceptible legal proceedings which may have an adverse effect on our reputation
and brand and our business, operating results, and financial condition</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The size, nature and complexity
of the Company&#8217;s business could make it susceptible to various claims, both in litigation and binding arbitration proceedings, legal
proceedings, and government investigations, due to the heightened regulatory scrutiny following the recent disruptions in the crypto asset
markets. The Company believes that since the digital asset industry generally is a relatively new business sector, it is more likely subject
to government investigation and regulatory determination, particularly following the recent cryptocurrency market participant bankruptcies.
Any claims, regulatory proceedings or litigation that could arise in the course of the Company&#8217;s business could have a material
adverse effect on the Company, its business or operations, or the industry as a whole.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 33; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The scope, determination,
and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are
subject cannot be predicted with certainty, and may result in:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">substantial payments to satisfy judgments, fines, or penalties;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">substantial outside counsel, advisor, and consultant fees
and costs;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">substantial administrative costs, including arbitration fees;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">additional compliance and licensure requirements;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">loss or non-renewal of existing licenses or authorizations,
or prohibition from or delays in obtaining additional licenses or authorizations, required for our business;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">loss of productivity and high demands on employee time;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">criminal sanctions or consent decrees;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">termination of certain employees, including members of our
executive team;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">barring of certain employees from participating in our business
in whole or in part;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">orders that restrict our business or prevent us from offering
certain products or services;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">changes to our business model and practices;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">delays to planned transactions, product launches or improvements;
and</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">damage to our brand and reputation.</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, we believe increasingly
strict legal and regulatory requirements and additional regulatory investigations and enforcement, any of which could occur or intensify,
may result in changes to our business, as well as increased costs, and supervision and examination for ourselves, our affiliates, and
service providers. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations,
and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors
or could impact how we offer such products and services. Adverse changes to, or our failure to comply with, any laws and regulations have
had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of this date, the Company
is not aware of any legal proceedings or government investigations, pending or known to be threatened, in the United States or in other
jurisdictions against the Company or its affiliates. However, the Company may be subject to regulatory oversight by numerous state, federal,
and foreign regulators and we may become subject to various legal proceedings, inquiries, investigations, and demand letters that arise
in the course of our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>As a financial services
provider, we might be subjected to significant litigation risk and potential commodity and securities law liability. </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many aspects of our business
involve substantial litigation risks. We could be exposed to substantial liability under federal and state laws and court decisions, as
well as rules and regulations promulgated and/or direct actions brought by the SEC, state securities regulators and other U.S. regulatory
agencies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These
risks include, among others, potential liability from disputes over terms of a trade, the claim that a system failure or delay caused
monetary losses to a customer, that we entered into an unauthorized transaction, that we provided materially false or misleading statements
in connection with a transaction or that we failed to effectively fulfill our regulatory oversight responsibilities. We may be deemed
an underwriter under the Securities Act with regard to our role and involvement with respect to any initial offerings of securities on
the INXS trading platform, and our failure to comply with applicable federal securities laws may expose us to legal liability. We may
be subject to disputes regarding the quality of trade execution, the settlement of trades or other matters relating to our services. We
may become subject to these claims as a result of failures or malfunctions of our systems and services we provide.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We could incur significant
legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit or claim against us
could have a material adverse effect on our business and our reputation. To the extent we are found to have failed to fulfill our regulatory
obligations, we could lose our authorizations or licenses or become subject to conditions that could make future operations more costly
and impairing our profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>Our compliance and risk management programs
might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.
</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to comply with
applicable laws and rules is largely dependent on our establishment and maintenance of compliance, review and reporting systems, as well
as our ability to attract and retain qualified compliance and other risk management personnel. We face the risk of significant intervention
by regulatory authorities, including extensive examination and surveillance activity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While we have devoted significant
resources to develop our compliance policies and procedures and expect to continue to do so in the future, we cannot assure you that our
compliance policies and procedures will always be effective or that we will always be successful in monitoring or evaluating our risks.
In the case of alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative
proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which could be significant.
Any of these outcomes may adversely affect our reputation, financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Operational risks,
such as misconduct and errors of our employees or entities with which we do business, are difficult to detect and deter and could cause
us reputational and financial harm.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our employees and agents could
engage in misconduct which may include conducting and concealing unauthorized activities, improper use or unauthorized disclosure of confidential
information. We are at risk that our employees may engage in insider trading of the digital assets listed on one of our platforms which
may lead to corporate actions, such as a suspension of trading, and legal actions that could have an adverse effect on the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, our employees could
make errors in recording or executing transactions for customers which would cause us to enter into transactions that customers may disavow
and refuse to settle.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is not always possible
to deter misconduct by our employees, and the precautions we take to prevent and detect this activity may not be effective in all cases.
Our ability to detect and prevent errors or misconduct by entities with which we do business may be even more limited. Such misconduct
could subject us to financial losses or regulatory sanctions and materially harm our reputation, financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Our operations of businesses
outside of the United States and our acceptance of currencies other than the U.S. Dollar will subject us to currency fluctuation risk.
</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to expand globally
and portions of our revenues and expenses will be denominated in currencies other than the U.S. dollar. Because our financial statements
are presented in U.S. dollars, we must translate non-U.S. dollar denominated revenues, income and expenses, as well as assets and liabilities,
into U.S. dollars at exchange rates in effect during or at the end of each reporting period. These fluctuations may materially impact
the translation of our non-U.S. results of operations and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Increases or decreases in
the value of the U.S. dollar against these other currencies may affect our operating results and the value of assets and liabilities denominated
in foreign currencies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We accept certain cryptocurrencies
as fees for services. Our holding of these cryptocurrencies will subject us to risks due to fluctuations in the value of these cryptocurrencies.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We accept certain cryptocurrencies
as payment fees for services. These cryptocurrencies will be held until sold. Proceeds from the sale of such cryptocurrencies will be dependent on the U.S. dollar trading
value for the respective cryptocurrency based on the relevant market or markets for that cryptocurrency. Decreases in the trading value
of a cryptocurrency while it is held by us will result in a decrease in the operating results of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Crypto assets as payment
fees for crypto and security token services.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With regards to trading of
digital assets, a transaction fee is charged and deducted from the customer account at the time of the order execution. The transaction
fee is set as a percentage of the transaction value based on the fee schedule published on the Company&#8217;s website (https://www.inx.co/fee-schedules/)
and is charged in the currency of the consideration paid by the customer. For example, if a customer buys BTC with USD, the transaction
fee would be charged in USD. The same process is followed with regards to transactions where one digital asset is purchased for another,
for example, BTC is purchased with ETH. In this example, the transaction fee would be charged in ETH.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These cryptocurrencies will
be held until sold. Proceeds from the sale of such cryptocurrencies will be dependent on the U.S. dollar trading value for the respective
cryptocurrency based on the relevant market or markets for that cryptocurrency. Decreases in the fair value of a cryptocurrency while
it is held by us will result in a decrease in the operating results of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To minimize market risk, the
Company follows its policy on converting digital assets earned as transaction fees into U.S. dollars if such amounts exceed internally
established limits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We may not be able
to successfully execute our business strategy if we are deemed to be an investment company under the Investment Company Act of 1940.&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, under the Investment
Company Act, a U.S. company that does not qualify to use one of the &#8220;private investment company&#8221; (or other specialized) exemptions
from investment company status, that has made (or proposes to make) a public offering of its securities and that is, or hold itself out
as being, engaged primarily in the business of investing, reinvesting or trading in securities must register, and is subject to regulation,
as an investment company under that Act. In addition, in general, investment company status may apply (again, unless a specialized exemption
is available) because a company owns &#8220;investment securities&#8221; (essentially, non-controlling interests in other companies&#8217;
securities or controlling interests in companies that have the characteristics of an investment company) constituting more than 40% of
the value of the investing company&#8217;s unconsolidated assets (disregarding U.S. government securities and &#8220;cash items&#8221;).
We intend that our future activities will not cause us to be considered an investment company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, our subsidiaries,
INXD and INXS, are engaged in the trading of cryptocurrencies and security tokens, respectively. INXS engages in trading security tokens
that constitute securities. We believe that INXS qualifies to utilize an exemption from investment company status under Section 3(c)(2)
of the Investment Company Act that applies to entities &#8220;primarily engaged in the business of underwriting and distributing securities
issued by other persons, selling securities to customers, acting as broker, and acting as market intermediary, or any one or more of such
activities, whose gross income normally is derived principally from such business and related activities.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, we believe that
the cryptocurrencies that we or our subsidiaries will own and trade in will not be securities. In the case of trading in security tokens
by a subsidiary that qualifies to use the Section 3(c)(2) exemption from investment company status, our ownership interest in that subsidiary
will not constitute an &#8220;investment security&#8221; (as a result of the availability of the exemption). As a result, we believe we
will not be primarily engaged in the business of investing, reinvesting or trading in securities and that investment securities will not
constitute more than 40% of the unconsolidated value of our total assets after eliminating holdings in U.S. government securities and
cash items.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While we believe that our
business activities do not cause us to be an investment company, if we were deemed to be, and were required to register as, an investment
company, we would be forced to comply with substantive requirements under the Investment Company Act, including limitations on our ability
to borrow, limitations on our capital structure, limitations on our ability to issue additional common stock, restrictions on acquisitions
of interests in associated companies, prohibitions on transactions with affiliates, restrictions on specific investments, and compliance
with governance, reporting, record keeping, voting, proxy disclosure and other statutory requirements and related rules and regulations.
If we were forced to comply with those requirements, we would be required to change our structure and future operations from our current
plans, could be prevented from successfully executing our business strategy and could be required to cease business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>We need to implement
strict finance and accounting systems, procedures and controls to operate our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are required to comply
with a variety of reporting, accounting and other rules and regulations. Compliance with these requirements is expensive. We need to implement
strict finance and accounting systems, procedures and controls to satisfy our reporting requirements and these requirements may increase
our costs and require additional management time and resources. However, as an &#8220;emerging growth company&#8221; as defined in the
JOBS Act we may not be required to, among other things, provide an auditor&#8217;s attestation report on our system of internal controls
over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act or comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor&#8217;s report providing additional information about the audit
and the financial statements (auditor discussion and analysis). We have not completed an assessment, nor have our auditors tested, our
systems of internal controls. For as long as we are an &#8220;emerging growth company&#8221; under the JOBS Act, our independent registered
public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant
to Section 404. If our internal controls have undetected weaknesses or our internal control over financial reporting is determined to
be ineffective, such failure could cause investors to lose confidence in our reported financial information, negatively affect the market
price of the INX Token and adversely impact our business and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Negative publicity
could damage our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Developing and maintaining
our reputation is critical to attracting and retaining customers and investors and for maintaining our relationships with our regulators.
Our success depends on our ability to complete development of, successfully implement, and maintain the electronic trading systems that
have the functionality, performance, reliability and speed required by our customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Crypto asset platforms are
still relatively new. Many of our competitors are unlicensed, unregulated, operate without supervision by any governmental authorities,
and do not provide the public with significant information regarding their ownership structure, management team, corporate practices,
cybersecurity, and regulatory compliance. As a result, customers and the general public may lose confidence in crypto asset platforms,
including regulated platforms like ours.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since the inception of the
crypto economy, numerous crypto asset platforms have been sued, investigated, or shut down due to fraud, manipulative practices, business
failure, and security breaches. In many of these instances, customers of these platforms were not compensated or made whole for their
losses. Larger platforms like us are more appealing targets for hackers and malware, and may also be more likely to be targets of regulatory
enforcement actions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, there have been
reports that a significant amount of crypto asset trading volume on crypto asset platforms is fabricated and false in nature, with a specific
focus on unregulated platforms located outside the United States. Such reports may indicate that the market for crypto asset platform
activities is significantly smaller than otherwise understood.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Negative perception, a lack
of stability and standardized regulation in the crypto economy, and the closure or temporary shutdown of crypto asset platforms due to
fraud, business failure, hackers or malware, or government mandated regulation, and associated losses suffered by customers may reduce
confidence in the crypto economy and result in greater volatility of the prices of assets, including significant depreciation in value.
Any of these events could have an adverse impact on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, although we
are not directly connected to the recent crypto asset market events, we may still suffer reputational harm due to our association with
the crypto asset industry in light of the recent disruption in the crypto asset markets. Ongoing and future regulation and regulatory
actions could significantly restrict or eliminate the market for or uses of certain crypto assets and/or may adversely affect the Company&#8217;s
business, reputation, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Negative publicity regarding
our Company, INX Tokens, our key personnel or blockchain assets generally, whether based upon fact, allegation or perception and whether
justified or not, could give rise to reputational risk which could significantly harm our business prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some of those risks include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">any significant disruption in our products and services, in
our information technology systems, or in any of the blockchain networks we support, could result in a loss of customers or funds and
adversely impact our brand and reputation and our business, operating results, and financial condition;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">cyberattacks and security breaches of our platform, or those
impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating results, and financial
condition;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">we are subject to an extensive and highly-evolving regulatory
landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation,
business, operating results, and financial condition;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">security issues, bugs, and software errors have been identified
with many crypto assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also
inherent security weaknesses in some crypto assets, such as when creators of certain crypto networks use procedures that could allow
hackers to counterfeit tokens. Any weaknesses identified with a crypto asset could adversely affect its price, security, liquidity, and
adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating
the actions of the computers) obtains a majority of the compute or staking power on a crypto network, as has happened in the past, it
may be able to manipulate transactions, which could cause financial losses to holders, damage the network&#8217;s reputation and security,
and adversely affect its value.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our brand and reputation are
key assets and a competitive advantage. Maintaining, protecting, and enhancing our brand depends largely on the success of our marketing
efforts, ability to provide consistent, high-quality, and secure products, services, features, and support, and our ability to successfully
secure, maintain, and defend our rights to use the &#8220;INX&#8221; trademark and other trademarks important to our brand. We believe
that the importance of our brand will increase as competition further intensifies. Our brand and reputation could be harmed if we fail
to achieve these objectives or if our public image were to be tarnished by negative publicity, unexpected events, or actions by third
parties. Unfavorable publicity about us, including our products, services, technology, customer service, personnel, and crypto asset or
crypto asset platforms generally could diminish confidence in, and the use of, our products and services. Moreover, to the extent that
we acquire a company and maintain that acquired company&#8217;s separate brand, we could experience brand dilution or fail to retain positive
impressions of our own brand to the extent such impressions are instead attributed to the acquired company&#8217;s brand.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We, as well as many of
our potential customers, engage with third party suppliers and service providers for certain important services. An interruption or cessation
of an important supply or service by any third party could have a material adverse effect on our business, including revenues derived
from our customers&#8217; trading activity. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are engaged with a number
of suppliers, such as banking, clearing and settlement organizations, on-line service providers, data processors, and software and hardware
vendors, for elements of our trading, clearing and other systems, as well as communications and networking equipment, computer hardware
and software and related support and maintenance. We also engage with third parties to provide Internet, telecommunication and fiber optic
network connectivity to our data centers. Many of our customers rely on third parties, such as independent software vendors, to provide
them with front-end systems to access our platform and other back office systems for their trade processing and risk management needs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->32<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot guarantee that these
service providers will make the necessary monetary and time investments to provide services for our INX Trading Solutions model and changes
to our interfaces and functionality that occur as we develop our business. To the extent any of our service providers or the organizations
that provide services to our customers in connection with their trading activities cease to provide these services in an efficient, cost-effective
manner or fail to adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading
volume, lower revenues and higher costs which could adversely affect an investment in the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>The price of crypto
assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant volatility.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
price of crypto assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant
volatility. For instance, in 2021, the value of certain crypto assets, including Bitcoin, experienced steep increases in value. The increases
in value of certain crypto assets, including Bitcoin, from 2016 to 2017, and then again in 2021, were followed by a steep decline in 2018
and again in 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">In
December 2020, CryptoCompare and the University of Sussex Business School launched The Bitcoin Volatility Index (BVIN). The index measures
the implied volatility of bitcoin &#8212; the view on volatility over the next 30 days held by bitcoin option traders. Other VIX indices
are used for settlement prices of volatility futures contracts in traditional markets. The index represents a valuable tool for institutional
investors to price bitcoin volatility risk, and hedge and trade on bitcoin volatility. Between January 1, 2021 and April 28, 2023, the
index varied between 50.57% and 174.29%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The price and trading volume
of any crypto asset is subject to significant uncertainty and volatility, depending on a number of factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">market conditions of, and overall sentiment towards, crypto
assets;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">changes in liquidity, market-making volume, and trading activities;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">trading activities on other crypto platforms worldwide, many
of which may be unregulated, and may include manipulative activities;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">investment and trading activities of highly active retail
and institutional users, speculators, miners, and investors;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the speed and rate at which crypto is able to gain adoption
as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at
all;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">decreased user and investor confidence in crypto assets and
crypto platforms;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">negative publicity and events relating to the crypto economy;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">unpredictable social media coverage or &#8220;trending&#8221;
of, or other rumors and market speculation regarding crypto assets;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the ability for crypto assets to meet user and investor demands;</td>
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<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the functionality and utility of crypto assets and their associated
ecosystems and networks, including crypto assets designed for use in various applications;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">retail user preferences and perceived value of crypto assets
and crypto asset markets;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">increased competition from other payment services or other
crypto assets that exhibit better speed, security, scalability, or other characteristics;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">regulatory or legislative changes and updates affecting the
crypto economy;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the characterization of crypto assets under the laws of various
jurisdictions around the world;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the adoption of unfavorable taxation policies on crypto asset
investments by governmental entities;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the maintenance, troubleshooting, and development of the blockchain
networks underlying crypto assets, including by miners, validators, and developers worldwide;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the ability for crypto networks to attract and retain miners
or validators to secure and confirm transactions accurately and efficiently;</td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><p style="margin: 0"></p><div>

</div><!-- Field: Page; Sequence: 39; Value: 1 --><div>
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</div><p style="margin: 0">&#160;</p><div>


</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">legal and regulatory changes affecting the operations of miners
and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory
requirements as a result of growing environmental concerns around the use of energy in bitcoin and other proof-of-work mining activities;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">ongoing technological viability and security of crypto assets
and their associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">fees and speed associated with processing crypto asset transactions,
including on the underlying blockchain networks and on crypto platforms;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">financial strength of market participants;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the availability and cost of funding and capital;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the liquidity of crypto platforms;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">interruptions in service from or failures of major crypto
platforms;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">availability of an active derivatives market for various crypto
assets;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">availability of banking and payment services to support crypto-related
projects;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">level of interest rates and inflation;</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">monetary policies of governments, trade restrictions, and
fiat currency devaluations; and</td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">national and international economic and political conditions.</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no assurance that
any supported crypto asset will maintain its value or that there will be meaningful levels of trading activities. In the event that the
price of crypto assets or the demand for trading crypto assets decline, our business, operating results, and financial condition would
be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">New or changing laws and regulations
or interpretations of existing laws and regulations, in the United States and elsewhere, may materially and adversely impact the development
and growth of blockchain networks and the adoption and use of blockchain assets. The imposition of restrictions on all blockchain assets,
or certain blockchain assets, could affect the value, liquidity and market price of blockchain assets subject to heighten regulation,
by limiting access to marketplaces or exchanges on which to trade such blockchain assets, or imposing restrictions on the structure, rights
and transferability of such blockchain assets. Some governments may seek to ban transactions in blockchain assets altogether.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The crypto asset market has
been characterized by significant volatility and unexpected price movements. Certain crypto assets may become more volatile and less liquid
in a very short period of time, resulting in market prices being subject to erratic and abrupt market movement, which could harm our business.
For instance, abrupt changes in volatility or market movement can lead to extreme pressures on our platform and infrastructure that can
lead to inadvertent suspension of services across parts of the platform or the entire platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Our revenues and profits
will be substantially dependent on the trading volume in our markets. Our revenues and profits would be adversely affected if we are unable
to develop and continually increase our trading volume on either of our trading platforms. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The success of our business
depends, in part, on our ability to continually increase our trading volume; further develop and expand our product offerings or execution
facilities; and attract and retain new customers. Our success also depends on our ability to offer competitive prices and services in
an increasingly price-sensitive business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot provide assurances
that we will be able to develop and expand product lines, that we will be able to attract and retain customers or that we will be able
to modify our pricing structure to compete effectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 40; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Trading volumes on blockchain
asset trading platforms have historically been volatile. Such volatility may be the result of various factors, including fluctuations
in the price of blockchain assets or periods of rapid expansion and contraction of adoption and use of blockchain assets. Trading volume
will also be directly affected by domestic and international factors that are beyond our control, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">economic, political and geopolitical
market conditions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">legislative and regulatory changes,
including any direct or indirect restrictions on or increased costs associated with trading in our markets;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">broad trends in the industry
and financial markets;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">shifts in global or regional
demand or supply in commodities underlying our products;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">competition;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">changes in government monetary
policies, especially the regulation of tokens and the number of registered token offerings;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">availability of capital to our
market participants and their appetite for risk-taking;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">levels of assets under management;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">pandemics affecting our customer
base or our ability to operate our markets; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">consolidation in our customer
base and within our industry.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any one or more of these factors
may contribute to reduced activity in our markets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Declines in trading volume
may negatively impact market liquidity, which could lead to further loss of trading volume. Material decreases in trading volume would
have a material adverse effect on our financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><b>A
significant amount of the trading volume on our platform is derived from a relatively small number of customers, and the loss of these
customers, or a reduction in their trading volume, could have an adverse effect on our business, operating results, and financial condition.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">A
relatively small number of institutional market makers and high-transaction volume retail customers account for a significant portion
of the trading volume on our platform and the related net transactional revenue. For the year ended December 31, 2022, our top ten institutional
market makers and high-transaction volume retail customers accounted for, in the aggregate, approximately 88% of our trading volume, and
our top two customers accounted for approximately 65% of our trading volume.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">We
expect significant trading volume and net revenue attributable to these customers to continue for the foreseeable future. As a result,
a loss of these customers, or a reduction in their trading volume, and our inability to replace these customers, could have an adverse
effect on our business, operating results, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">If
we fail to retain existing customers or add new customers, or if our customers decrease their level of engagement with our products, services
and platform, our business, operating results, and financial condition may be significantly harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Any number of factors
can negatively affect customer retention, growth, and engagement, including if:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">customers increasingly engage
with competing products and services, including products and services that we are unable to offer due to regulatory reasons;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">we fail to introduce new and
improved products and services, or if we introduce new products or services that are not favorably received;</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td>&#160;</td><td style="text-align: left">&#160;</td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">we fail to support new and in-demand
crypto assets or if we elect to support crypto assets with negative reputations;</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><!-- Field: Page; Sequence: 41; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>



</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">there are changes in sentiment about the quality or usefulness of our products
and services or concerns related to privacy, security, or other factors;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                         </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify">there are adverse changes in our products and services that are mandated by legislation, regulatory authorities,
or litigation;</td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                        </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">customers perceive the crypto assets on our platform to be bad investments,
or experience significant losses in investments made on our platform;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                      </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">technical or other problems prevent us from delivering our products and
services with the speed, functionality, security, and reliability that our customers expect;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                                             </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">cybersecurity incidents, employee or service provider misconduct, or other
unforeseen activities cause losses to us or our customers, including losses to assets held by us on behalf of our customers;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                                                                             </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">modifications to our pricing model or modifications by competitors to their
pricing;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                         </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">we fail to provide adequate customer service;</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                                                                                                                                 </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">regulatory and governmental bodies in countries that we target for expansion
express negative views towards crypto asset trading platforms and, more broadly, the digital asset economy; or</span></td></tr><tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                                                               </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top">
<td style="text-align: justify; width: 0.5in"></td><td style="text-align: justify; width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-size: 10pt">we or other companies in our industry are the subject of adverse media reports
or other negative publicity.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">From
time to time, certain of these factors have negatively affected customer retention, growth, and engagement to varying degrees. If we are
unable to maintain or increase our customer base and customer engagement, our revenue and financial results may be adversely affected.
Any decrease in user retention, growth, or engagement could render our products and services less attractive to customers, which may have
an adverse impact on our revenue, business, operating results, and financial condition. If our customer growth rate slows or declines,
we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive
growth of revenue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The revaluation of the
INX Token liability to fair value for each reporting period may have a negative effect on our equity and our comprehensive income.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As more fully described in
the notes to our financial statements, the INX Token is presented as a liability on our consolidated balance sheet, which is remeasured
at each reporting period to fair value with changes in fair value recorded in profit or loss.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair market value of the
INX Tokens, based on the quoted market price, is subject to fluctuations due to a number of factors, including fluctuations in the Company&#8217;s
results of operations and macro-economic factors. Accordingly, the financial liability measured at fair market value also fluctuates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The remeasurement of the INX
Token liability to fair value in each reporting period may have a negative effect on our equity and our comprehensive income.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We have an evolving business
model. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As blockchain assets and blockchain
technologies become more widely available, we expect the services and products associated with them to evolve. As a result, to stay current
with the industry, our business model may need to evolve as well. From time to time we may modify aspects of our business model relating
to our product mix and service offerings. We cannot offer any assurance that these or any other modifications will be successful or will
not result in harm to the business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth
and negatively affect our operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We may have difficulty
executing our growth strategy and maintaining our growth effectively. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our growth requires additional
investment in personnel, facilities, information technology infrastructure and financial and management systems and controls and may place
a significant strain on our management and resources. Our growth strategy also may subject us to increased legal, compliance and regulatory
obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 42; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no guarantee that
our efforts will be successful. We may not be able to implement important strategic initiatives in accordance with our expectations, including
that the strategic initiatives could result in additional unanticipated costs, which may result in an adverse impact on our business and
financial results. Unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated
with our growth, our future profitability could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We intend to explore acquisitions,
other investments and strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses.
Any such transaction may not produce the results we anticipate, which could adversely affect our business and the price of INX Tokens.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to explore and pursue
acquisitions, strategic partnerships, joint ventures and other alliances to strengthen our business and grow our company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for acquisitions
and strategic opportunities is highly competitive, especially in light of recent merger and acquisition activity in our industry. In addition,
these transactions entail numerous operational and financial risks, including but not limited to difficulties in valuing acquired businesses,
combining personnel and firm cultures, integrating acquired products, services and operations, achieving anticipated synergies that were
inherent in our valuation assumptions, exposure to unknown material liabilities, the potential loss of key vendors, clients or employees
of acquired companies, incurrence of substantial debt or dilutive issuance of equity securities to pay for acquisitions, higher-than expected
acquisition or integration costs, write-downs of assets or impairment charges, increased amortization expenses and decreased earnings,
revenue or cash flow from dispositions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may be unable to identify
strategic opportunities or we may be unable to negotiate or finance future transactions on terms favorable to us. To the extent we enter
into joint ventures and alliances, we may experience difficulties in the development and expansion of the business of any newly formed
ventures, in the exercise of influence over the activities of any ventures in which we do not have a controlling interest, as well as
encounter potential conflicts with our joint venture or alliance partners.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not realize the anticipated
growth and other benefits from our growth initiatives and investments, which may have an adverse impact on our financial condition and
operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The Company is dependent
in part on the data center facilities of third parties. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s infrastructure
network may be established in whole or in part through servers which it owns and/or houses at the location facilities of third parties,
and/or servers that it rents at data center facilities of third parties. If the Company is unable to secure or renew its data facility
leases on commercially reasonable terms or at all, the Company may be required to transfer its servers to a new data center facility,
and may incur significant costs and possible service interruption in connection with the relocation. These facilities are also vulnerable
to damage or interruption from, among others, natural disasters, arson, terrorist attacks, power losses, and telecommunication failures.
Additionally, the third party providers of such facilities may suffer a breach of security as a result of third party action, employee
error, malfeasance or otherwise, and a third party may obtain unauthorized access to the data in such servers. The Company and the providers
of such facilities may be unable to anticipate these techniques or to implement adequate preventive measures.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Our business may be adversely
affected by the impact of coronavirus, other epidemics or pandemics, acts of God, wars, insurrections, riots, infrastructure failures,
and other force majeure events.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Public health epidemics or
outbreaks could adversely impact our business. In early 2020, an outbreak of the novel strain of a coronavirus, which causes a disease
named COVID-19, spread worldwide, including to Israel and the United States. As a result of the coronavirus pandemic, governments and
industries have instituted drastic actions to contain the coronavirus or treat its impact. Such actions, including bans on international
and domestic travel, quarantines, and prohibitions on accessing work sites, have caused significant disruptions to global and local economies
and have led to dramatic volatility in the capital markets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The extent to which the coronavirus
pandemic, other epidemics or pandemics, acts of God, wars, insurrections, riots, infrastructure failures, and other force majeure events,
impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Factors
that may result in material delays and complications with respect to our business, financial condition and results of operation include
the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. In particular,
the continued spread of the coronavirus globally could adversely impact our operations, including the development of our platforms within
our expected timeframes, our workforce, including the health and safety of our employees and our ability to complete recruitment for open
positions on our team, and our ability to raise capital. In addition, the coronavirus pandemic could affect the operations of key governmental
agencies, such as the SEC and CFTC, which may delay the development and regulatory approval necessary to operate our platforms. Each of
these factors could have an adverse impact on our business, financial condition and results of operation.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>General global market and
economic conditions may have an adverse impact on the Company&#8217;s operating performance, results of operations and/or cash flow.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Weakness in the economy could
have a negative effect on the Company&#8217;s business, operations and financial condition, including decreases in revenue and operating
cash flow, and inability to attract future equity and/or debt financing on commercially reasonable terms. Additionally, in a down-cycle
economic environment, the Company may experience the negative effects of a slowdown in trading and usage of the Company&#8217;s business
platform and may delay or cancel the development, structuring, licensing and/or launch of any Token functionality. Suppliers with which
the Company engages for servers, bandwidth, location and other services could also be negatively impacted by economic conditions that,
in turn, could have a negative impact on the Company&#8217;s operations or expenses. There can be no assurance, therefore, that current
economic conditions or worsening economic conditions or a prolonged or recurring recession will not have a significant, adverse impact
on the Company&#8217;s business, financial condition and results of operations, and hence, the Company&#8217;s business platform and/or
the ability to develop, structure, license and/or launch any Token functionality. Any such circumstances may then correspondingly negatively
impact the functionality, liquidity, and/or trading price of INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Several recent company
failures and bankruptcies have adversely affected our industry.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2022, several companies
in the broader digital asset space failed or filed for bankruptcy protection. These companies include, but are not limited to FTX, Blockfi,
Celsius, and Voyager. It is uncertain if failures of companies in the industry will continue at an inordinate rate. The Company&#8217;s
business does not have a direct exposure to, and the Company is not a creditor of, any of the cryptocurrency market participants that
recently filed for bankruptcy protection. At the time of filing this 20-F report, we have no assets, material or otherwise, that may not
be recovered due to these bankruptcies, and we have no direct exposure to any other counterparties, customers, custodians or other crypto
asset market participants known to have (i) experienced excessive redemptions or suspended redemptions or withdrawal of crypto assets,
(ii) their crypto assets of their customers unaccounted for, or (iii) experienced material corporate compliance failures. Our business,
financial condition and results of operations may not be immune to unfavorable investor sentiment resulting from these recent developments
in the broader cryptocurrency industry. Also, as circumstances develop, additional companies might find themselves in a similar unfavorable
position that might have a direct effect on the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, while the Company
has not been directly affected by recent crypto market events, our business, financial condition and results of operations may still be
adversely affected by recent industry-wide adverse developments beyond our control. The bankruptcy filings of crypto companies over the
last several months and other developments in the broader cryptocurrency space will likely attract heightened regulatory scrutiny from
U.S. regulatory agencies and others. Increasing regulation and regulatory scrutiny may result in new costs for the Company and Company&#8217;s
management having to devote increased time and attention to regulatory matters, and potentially change aspects of the Company&#8217;s
business. In addition, regulatory developments and/or the Company&#8217;s business activities may require the Company to comply with certain
regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result
in changes to our business, as well as increased costs, and supervision and examination for ourselves and our service providers. Moreover,
new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions.
Adverse changes to, or our failure to comply with, any laws and regulations, may have an adverse effect on our reputation and brand and
our business, operating results, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, although we
are not directly connected to the recent cryptocurrency market events, we may still suffer reputational harm due to our association with
the cryptocurrency industry in light of the recent disruption in the crypto asset markets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Recent bank failures in
the U.S. may adversely affect our business and the industry we operate in.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During March 2023, the banking
industry in the U.S. experienced disruptions, characterized by the failure of Silvergate Bank, Silicon Valley Bank, and Signature Bank.
All three banks serviced the digital asset industry and provided services that facilitated the transmission of money across the industry
and between industry participants. While the Company was not directly affected by the failure of these three banks and did not hold any
Company or customer funds at these banks, our business, financial condition and results of operations may still be adversely affected
by these developments. First, the operation and business activity of companies within the cryptocurrency space might be damaged or encumbered.
Secondly, other banks may also encounter similar problems in the near future, that will result in their failure. For these reasons and
others, the Company might be directly or indirectly affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, these bank failures
will likely attract heightened regulatory scrutiny from U.S. regulatory agencies and others. Increasing regulation and regulatory scrutiny
may result in new costs for the Company and Company&#8217;s management having to devote increased time and attention to regulatory matters,
and potentially change aspects of the Company&#8217;s business. In addition, regulatory developments and/or the Company&#8217;s business
activities may require the Company to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and
any regulatory investigations and enforcement may result in changes to our business, as well as increased costs, and supervision and examination
for ourselves and our service providers. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory
investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations, may have
an adverse effect on our reputation and brand and our business, operating results, and financial condition. Further, these bank failures
may hinder our ability to acquire bank accounts or payment services in the future. It is also unknown if additional bank failures will
occur in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>RISKS RELATED TO AN INVESTMENT IN OUR TOKENS </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We have limited operating
history and therefore valuation of the INX Token is difficult.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The value of the INX Token
is influenced by the supply of the INX Token, the market&#8217;s perception of the INX Token&#8217;s value and the liquidity for Tokens
on a secondary market. The original purchase price of the INX Token in our initial public offering -has not been indicative of the market
price of INX Tokens in the secondary market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our INX Token does not
gain public acceptance or is not traded by a substantial number of individuals, companies and other entities, it could have a material
adverse impact on the value of the INX Token.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The prospect of any holder
of INX Tokens to receive any cash distributions from us is uncertain.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the INX Token Purchase
Agreement, holders of INX Tokens as of March 31 of a year following a year end for which there was positive cumulative Adjusted Operating
Cash Flow are entitled to receive a pro rata cash distribution equal to 40% of our cumulative Adjusted Operating Cash Flow. The pro rata
distribution of our cumulative Adjusted Operating Cash Flow is not self-executing and requires that our board of directors approve the
Company&#8217;s financial statements and calculate such distribution in good faith. Although such annual calculation is based on the cash
flow from operating activities reflected in the consolidated statement of cash flow of our Company that is included in the audited consolidated
financial statements of our Company and its subsidiaries, neither the calculation of the cumulative Adjusted Operating Cash Flow nor any
pro rata distributions thereof to holders of INX Tokens will be audited at the time of any distribution. Further, the general public will
not be able to independently verify the number of INX Tokens outstanding that are entitled to share in the distribution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, as of December 31,
2022, cumulative Adjusted Operating Cash Flow was approximately negative $56.4 million. Because each INX Token holder&#8217;s right to
a pro rata distribution is based on our cumulative Adjusted Operating Cash Flow, no distribution will be made to INX Token holders, if
at all, until the Company generates positive Adjusted Operating Cash Flows that exceeds this deficit. Therefore, the token holders may
not receive a pro rata distribution even in years in which we are profitable due to our historical losses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we may elect
to operate our business and pursue business strategies, such as acquisitions and the development of our products and services, which could
adversely affect our ability to generate positive net operating cash flow. Our cumulative Adjusted Operating Cash Flow will increase or
decrease based on the difference between our cash inflows and outflows. Although we may generate cash inflow from daily operations through
trading fees and other services, such amount will be reduced by cash outflows from our operations, including cash payments to our service
providers, our employees, taxes, fees, and other operating expenses. To the extent that we engage in acquisitions, we may expend significant
cash in order to integrate such businesses, products, technologies or personnel. As a result of our expenditures, we may never generate
a positive cumulative Adjusted Operating Cash Flow and may never pay any cash distributions, which could adversely affect the value of
INX Tokens. As a result, the prospect of any holder of INX Tokens to receive any cash distributions from us is uncertain.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, each INX Token holder&#8217;s
right to the pro rata portion of the distribution for any given year is subject to charges related to banking fees, transaction fees and/or
Ethereum gas fees required to be paid with respect to the transfer of funds or Ether to such holder. Thus, with respect to any year during
which the amount to be distributed to an individual INX Token holder is less than the amount of fees relating to such transfer, no distribution
will be made to that individual INX Token holder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The trading price of our
INX Tokens is volatile. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading price of our INX
Tokens is volatile. The INX Token is not issued by any central bank nor is it backed by any hard assets or other credit. Consequently,
investors may not be able to liquidate their investment at a price that reflects the value of the business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading volume of INX
Tokens could affect their price volatility.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although our Board of Directors
approved repurchase of INX Tokens by the Company (up to a certain yearly amount) we do not have a token repurchase policy. Accordingly,
nothing obligates us to repurchase any specific number of INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, the trading price
of INX Tokens could be significantly affected by any number of factors including volatility in the broader market for blockchain assets,
changes in analyst earnings estimates, fluctuations in our results of operations, shifting investor perceptions, dilution (in both monetary
and percentage amounts) from future sales or issuances of INX Tokens by the Company, large purchases or sales by a significant INX Token
holder or by the Company, the announcement of new products or the occurrence of any of the events described within this &#8220;Risk Factors&#8221;
section.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any of these factors could
adversely affect the trading price of INX Tokens. Market volatility of the INX Token may affect the value of investment by token holders
and could subject us to litigation. Securities litigation against us could result in substantial costs and divert our management&#8217;s
attention from achieving business objectives, which could harm our business. We are currently not subject to any token holder litigation
and continue to aggressively pursue our business objectives toward gaining profitability, which ultimately leads to fulfilling the purpose
of the INX Token, which is to share in profitability of the Company by token holders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Our decision to introduce
or suspend promotional incentives for the use of INX Tokens to pay transaction fees on the INX.One trading platform or for holding INX
Tokens could impact the trading price of INX Tokens.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This offer may entitle owners
to, at a minimum, a ten percent (10%) discount as compared to fees paid using other currencies. From time to time, the Company or INXS
may offer additional discounts for the use of INX Tokens as payment for INXS transaction fees such that the aggregate discount exceeds
ten percent (10%). In addition, although the INX Tokens may not be used as payment for transaction fees on the INXD trading platform,
we intend from time to time to offer promotional discounts on transaction fees on the INXD trading platform to record holders of INX Tokens.
Such discounts, as well as discounts on the INXS Trading Platform in excess of 10%, are promotional incentives that are governed by the
terms and conditions for use of the trading platform and are not rights granted to the holders of INX Tokens through the INX Token Purchase
Agreement or otherwise. The value and percentage of any such discount is subject to change at the sole discretion of INX with reasonable
notice to INX Token holders and participants on the INX.One trading Platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Decisions to set or change
the transaction fees for trades executed on our trading platforms or to change the discount applied to transaction fees on our trading
platform may impact the trading price of INX Tokens or may result in increased volatility in the price of INX Tokens, especially during
periods surrounding the announcement to institute or terminate any fee discount. The decision to reverse or suspend any discounts could
negatively impact the trading price of INX Tokens and, as a result, the trading price of INX Tokens may not accurately reflect the value
of the public&#8217;s perception and acceptance of other rights and characteristics of the INX Tokens. Registered exchanges may decline
to list INX Tokens if this feature violates applicable listing standards or ATSs may decide not to make INX Tokens available for trading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to making decisions
to set the rate for the transaction fees on our trading platform and the level of additional discounts, if any, offered to holders of
INX Tokens, the Company will consider various factors such as the profitability of our trading platform, the effect of such changes on
current holders of INX Tokens, and whether such changes will discourage investors from purchasing INX Tokens in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the INX Token Purchase
Agreement, holders of INX Tokens are entitled to receive a pro rata cash distribution equal to 40% of our cumulative Adjusted Operating
Cash Flow. This means that the portion of any cash distribution allocated to each INX Token is in part determined by the number of outstanding
INX Tokens that are not owned by the Company or any subsidiary of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We anticipate that users of
the INX.One platform will be incentivized to hold INX Tokens to be entitled to transaction fees discounts on the platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Large swings in the use of
INX Tokens as payment for transaction fees or future issuances of INX Tokens equity or convertible debt securities could cause INX Token
holders to suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior
to those of our then-existing capital stock. Any debt financing secured by us in the future could involve restrictive covenants relating
to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional
capital and to pursue business opportunities. If we cannot raise additional funds when we need them, our business and prospects could
fail or be materially and adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>INX Token holders may not
have full or any recourse in the event that the Company enters into insolvency, liquidation, dissolution, reorganization or bankruptcy
and the Company may incur debt that ranks equally with, or senior to, the rights of the INX Token holders.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the INX Token
Purchase Agreement, if (i) the Company permanently discontinued all the activities of INX Trading Solutions and there is no successor
conducting a substantially similar business that assumes the obligations of the Company with regard to the INX Tokens and (ii) an &#8220;Insolvency
Event&#8221; (as defined in the INX Token Purchase Agreement) occurs, then the Company shall be deemed to be in default of its obligations
under the INX Token Purchase Agreement, which breach shall create a claim in favor of INX Token holders that may be asserted by INX Token
holders against the Company in any proceeding arising from such Insolvency Event. The claim amount will be determined by the liquidator,
a court of competent jurisdiction overseeing the liquidation, or some other authority pursuant to applicable insolvency law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends that the
INX Token holders will be unsecured creditors of the Company and would therefore rank <i>pari passu</i> with all the other unsecured creditors
of the Company and senior to the claims of holders of the Company&#8217;s shares. Further, the Company has caused its sole shareholder,
TIDCI, and shall cause its future shareholders, to enter an agreement, pursuant to which such shareholders (a) irrevocably subordinate
their rights to receive any distributions and payments from the Company prior to the payment in full by the Company of all distributions
owed to INX Token holders, and (b) irrevocably waive and subordinate their rights, in the event of an Insolvency Event, to any cash held
in the Cash Fund. However, the Cash Fund will not be held in an escrow or trust account, but rather, will be held in a separate bank account
controlled by the Company. In the case of an Insolvency Event, a liquidator, court or other applicable authority may determine that INX
Token holders are not entitled to any payment from the Company&#8217;s assets or that the INX Token holders&#8217; claims are not senior
in right to claims or interests of the Company&#8217;s shareholders, in particular the shareholders who have not agreed to subordinate
their rights to the claims of INX Token holders. In addition, the Company may incur debt (including secured debt) that ranks equally with,
or senior to, the rights of INX Token holders, as well as holders of other preferential claims under relevant insolvency laws. In the
case of an Insolvency Event, holders of debt instruments ranking senior to INX Tokens may be entitled to receive payment in full before
INX Token holders receive any distribution, including distributions of Adjusted Operating Cash Flow and distributions from the Cash Fund.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>INX Token holders do not
have a perfected security interest in either the Cash Fund, or their Pro Rata Portion of the Distributable Amount of the cumulative Adjusted
Operating Cash Flow. There is no guarantee that an INX Token holder will receive any funds following an Insolvency Event. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After repaying such senior
creditors, the Company may not have sufficient assets, if any, remaining for payment of any obligations that it owes to INX Token holders.
Further, if it is determined that the Company&#8217;s obligations to INX Token holders rank equally with other debt, INX Token holders
may share on an equal basis with other creditors. However, the Company may not have sufficient assets, if any, remaining for payment of
obligations owed to INX Token holders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The tax characterization
of INX Tokens is uncertain. You must seek your own tax advice in connection with purchasing INX Tokens, which may result in adverse tax
consequences to you, including withholding taxes, income taxes and tax reporting requirements. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The treatment of INX Tokens
for U.S. federal income tax purposes is uncertain. Due to the new and evolving nature of digital currencies, tokens and blockchain assets,
and a general absence of clearly controlling authority with respect to these assets, many significant aspects of the U.S. federal income
tax treatment of digital currencies are uncertain. It is unclear what guidance on the treatment of tokens and blockchain for U.S. federal
income tax purposes may be issued in the future. Future developments regarding the treatment of tokens or blockchain assets for U.S. federal
income tax purposes could adversely affect an investment in INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company does not intend
to request a ruling from the Internal Revenue Service (&#8220;IRS&#8221;) on these issues. The IRS has ruled on the tax treatment of bitcoin
and other cryptocurrencies. In Notice 2014-21 (the &#8220;Notice&#8221;) the Service held that digital &#8220;currencies&#8221; are treated
like property and that each transaction using these currencies is a separate taxable event. The IRS stated in the Notice that, for U.S.
federal income tax purposes, (i) digital currency is &#8220;property&#8221; that is not currency and (ii) digital currency may be held
as a capital asset. There can be no assurance that the IRS will not alter its position with respect to digital currency in the future
or that a court would uphold the treatment set forth in the Notice.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Notice does not address
other significant aspects of the U.S. federal income tax treatment of tokens or blockchain assets, including: the tax characterization
of tokens which possess other non-currency-like rights or powers (so called &#8220;utility&#8221; tokens) or tokens which provide a share
of profits to holders. Moreover, there is no authority on the circumstances in which profit-sharing tokens such as INX Tokens may be treated
as equity or stock in the Company for U.S. federal income tax (or other tax) purposes. If INX Tokens were characterized as equity interests
in the Company for U.S. federal income purposes, U.S. holders of INX Tokens would be subject additional tax consequences and related reporting
considerations applicable to holders of stock in a foreign company, including the possible application of rules relating to passive foreign
investment companies (or &#8220;PFICs&#8221;) and controlled foreign corporations (&#8220;CFCs&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The tax characterization of
INX Tokens is uncertain. Token holders must seek their own tax advice in connection with purchasing Tokens, which may result in adverse
tax consequences, including withholding taxes, income taxes and tax reporting requirements. Prospective investors are urged to consult
their tax advisers regarding the uncertainty regarding tax consequences of an investment in INX Tokens and in blockchain assets in general.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>INX Token holders will
not be afforded an opportunity to vote in the election of directors and significant corporate transactions, such as a merger or other
sale of our company or its assets, and may not realize any benefit from such transactions.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although the INX Token is
an equity security, as such term is defined in Section 3(a)(11) of the Exchange Act, the rights that attach to an INX Token are materially
different from the rights that are typically associated with equity securities such as common shares. As holders of a non-voting security,
INX Token holders have no influence over our corporate governance policies and affairs, and INX Token holders will not be afforded an
opportunity to vote on any matters affecting the Company, including the election of directors, related party transactions or significant
corporate transactions such as a merger, or sale of the Company or its assets. INX Token holders are not afforded the same protections
generally as shareholders of other publicly traded companies. Further, INX Token holders may not benefit from a sale of the Company or
its assets in the same way that our shareholders will benefit, if at all. Your only opportunity to affect an investment decision regarding
the Company, if at all, may be limited to selling your INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The interests of our shareholders
may conflict with the interests of INX Token holders.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our directors are nominated
and elected by a majority of our shareholders and their interests in our business may differ from the interests of INX Token holders.
Our directors will have no fiduciary obligations to act in the interests of INX Token holders. Mr. Shy Datika, one of our founders, our
President, Chief Executive Officer (&#8220;CEO&#8221;) and a member of our Board of Directors, controls approximately 20% of the voting
power of the share capital of our sole shareholder, TIDCI, and as such, Mr. Datika and the other shareholders of our sole shareholder
have significant influence over management and affairs and all other matters of the Company, including significant corporate transactions,
such as a merger or other sale of our Company or its assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The INX Tokens are not
currently registered under the Exchange Act.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Token is an equity
security as such term is defined in Section 3(a)(11) of the Exchange Act; however, The INX Tokens are not currently registered under the
Exchange Act, however, the Company is currently required to file annual and other periodic reports pursuant to Section 15(d) of the Exchange
Act, as required by a foreign private issuer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends to register
the INX Tokens in accordance with Section 12(g) of the Exchange Act at the same time or immediately after filing this report. However,
if the Company does not continue to be subject to, or voluntarily comply with, the periodic reporting and other obligations of the Exchange
Act, you may not be able to access regular publicly available reports about us and you will not be entitled to the same type of disclosure
in relation to critical corporate events as if we were subject to the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>The INX Token Purchase
Agreement includes exclusive venue and jurisdiction provisions. By purchasing INX Tokens, an investor is irrevocably consenting to these
provisions regarding claims, suits, actions or proceedings, and submitting to the exclusive jurisdiction of Delaware courts. The INX Token
Purchase Agreement also provides that the Company will not be responsible for any losses except those arising from the Company&#8217;s
gross negligence, fraud or willful misconduct.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Token Purchase Agreement
is governed by Delaware law and includes exclusive venue and jurisdiction provisions designating Delaware courts as the exclusive venue
for most claims, suits, actions and proceedings involving us or our officers, directors and employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">By purchasing an INX Token,
an investor is irrevocably consenting to these limitations and provisions regarding claims, suits, actions or proceedings and submitting
to the exclusive jurisdiction of Delaware courts. If a dispute were to arise between an investor and us or our officers, directors or
employees, the investor may be required to travel to Delaware in order to pursue its legal remedies and participate in any proceeding
in Delaware courts which may be an inconvenient or distant location and which is considered to be a more corporate friendly environment.
In addition, the choice of forum provision may limit an investor&#8217;s ability to bring a claim in a judicial forum that it finds favorable
for disputes with us. These provisions may have the effect of discouraging lawsuits and limiting an investors&#8217; ability to obtain
a favorable judicial forum for disputes against us and our directors and officers.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This provision does not, nor
is intended to, apply to claims under the federal securities laws. By agreeing to this limitation of liability, investors will not be
deemed to have waived the Company&#8217;s compliance with federal securities laws and the rules and regulations thereunder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Token Purchase Agreement
also includes a provision limiting our liability, to the maximum extent permitted by applicable law, for any losses the investor may incur,
except for such losses that arise from our gross negligence, fraud or willful misconduct. By purchasing an INX Token, an investor is agreeing
to this limitation of liability which could reduce its ability to recover damages from us if we act in a manner that causes investors
to incur losses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>It may be illegal now,
or in the future, to acquire, own, hold, sell or use INX Tokens in one or more countries, and ownership of, holding or trading in our
Company&#8217;s securities may also be considered illegal and subject to sanction.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The regulation of blockchain
assets remains uncertain or undefined in many jurisdictions. Although we anticipate treating the INX Tokens as securities under the laws
of all foreign jurisdictions and adhering to such laws with regard to the offering and sale of INX Tokens abroad, one or more foreign
governmental authorities, such as those in China, may take regulatory action in the future that severely restricts the right to acquire,
own, hold, sell or use blockchain assets or to exchange blockchain assets for fiat currency. Such an action may result in the restriction
of ownership, holding or trading in the INX Token and other securities. Such restrictions may adversely affect an investment in the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>RISKS RELATING TO INTELLECTUAL PROPERTY RIGHTS
AND DISPUTES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We may be unable to protect
our proprietary technology and to obtain trademark protection for our marks.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends to a significant
degree upon the protection of our software and other proprietary intellectual property rights. We may be unable to bring enforcement actions
under the laws of the US or other countries to protect our intellectual property rights, which could have a material adverse effect on
our business. Further, we may not be able to secure protection for our service marks or trademarks in the United States or elsewhere as
we expand internationally. Our competitors might adopt service marks or trademarks similar to our marks or might try to prevent us from
using our marks. Any claim by another party against us or customer confusion related to our trademarks, or our failure to obtain trademark
registration, could have a material adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We may not be able to enforce
protection of our intellectual property rights under the laws of other countries.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do business internationally
and consequently we are subject to risks of doing business internationally, including uncertainty regarding liability for the listings
and other content provided by our users, and differing intellectual property laws, which may provide insufficient protection for our intellectual
property. Any such difficulties could have a material adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>RISKS RELATED TO INCORPORATION IN GIBRALTAR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>We are a &#8220;foreign
private issuer&#8221; and we cannot be certain if the reduced reporting requirements applicable to foreign private issuers will make owning
INX Tokens less attractive to investors.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a foreign private issuer,
we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Securities Exchange Act
of 1934, or the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent
than those of U.S. domestic reporting companies. For example, we will not be required to issue proxy statements that comply with the requirements
applicable to U.S. domestic reporting companies. We will also have four months after the end of each fiscal year to file our annual reports
with the SEC and will not be required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore,
our officers, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities
and from the short-swing profit liability provisions contained in Section&#160;16 of the Exchange Act. These exemptions and leniencies,
along with other corporate governance exemptions resulting from our ability to rely on home country rules, will reduce the frequency and
scope of information and protections to which you may otherwise have been eligible in relation to a U.S. domestic reporting company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We would lose our foreign
private issuer status if more than fifty percent of our outstanding voting securities are directly or indirectly owned of record by residents
of the United States and any of the following three circumstances applies: (i) the majority of our executive officers or directors are
U.S. citizens or residents; (ii) more than 50% of our assets are located in the U.S.; or (iii) our business is administered principally
in the U.S. Since our Parent Shares are listed on the NEO Exchange in Canada and given the level of our intended business contacts with
the United States, we may lose our status as a foreign private issuer should more than fifty percent of our voting securities be held
of record by residents of the United States. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign
private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a
U.S. domestic reporting company may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic
reports and registration statements on U.S. domestic reporting company forms with the SEC, which are more detailed and extensive than
the forms available to a foreign private issuer. We may also be required to modify certain of our policies to comply with accepted governance
practices associated with U.S. domestic reporting companies. Such conversion and modifications will involve additional costs. In addition,
we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available
to foreign private issuers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>It may be difficult to
enforce a U.S. judgment against us, our officers and directors, and the experts named in this report, or to assert U.S. securities laws
claims or serve process on our officers and directors and these experts.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We were incorporated in Gibraltar,
and a significant part of our operations are currently located in the State of Israel. Therefore, it may be difficult to enforce a U.S.
court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S.
or Gibraltar court, or to affect service of process upon these persons in the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, it may be difficult
for an investor, or any other person or entity, to assert U.S. securities law claims in original actions instituted in Gibraltar. This
is for two principal reasons: 1) because the Gibraltar courts may regard the U.S. law in question to be a penal, revenue or public law
and therefore, under Gibraltar law, not capable of direct or indirect enforcement in the Gibraltar courts, or 2) because the Gibraltar
court may stay the claim on the grounds that Gibraltar is not an appropriate forum (&#8220;forum non conveniens&#8221;). If U.S. law is
found to be applicable to a claim which the Gibraltar court can and is prepared to hear, the content of applicable U.S. law must be proved
as a fact by expert witnesses, which can be a time-consuming and costly process. If proceedings were to be brought in Gibraltar, all procedural
matters would be governed by Gibraltar law. There is little case law addressing the matters described above that would be binding case
law in a Gibraltar court.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>RISKS RELATED TO DOING BUSINESS IN ISRAEL</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Potential political, economic,
and military instability in the State of Israel, where some of our senior management and our research and development facilities are located,
may adversely impact our results of operations.</b>&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our offices and operations
are currently located in the State of Israel and in the United States. In addition, certain of our employees, officers, and directors
are residents of Israel. Accordingly, political, economic, and military conditions in Israel directly affect our business. Since the State
of Israel was established in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries. Any hostilities
involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn
in the economic or financial condition of Israel, could adversely impact our operations.&#160;<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Israeli Government initiative
to amend Israeli Legislation concerning Government, Judiciary and Administration Procedures may adversely impact our results of operations
</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli government is
advancing significant changes in Israeli legislation concerning judicial nomination and oversight. If such proposals are enacted by the
Israeli Knesset, they will change the current balance between the three branches of government in Israel in a manner that is expected
to add significant power to the executive and the legislative branches.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Such changes may have actual
or perceived effects regarding the risks associated with conducting business or investing in Israel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since the proposals have not
yet been enacted as law, the uncertainty of their effect on the Company and its business may not be estimated at this time. However, since
certain of our offices and operations are currently located in the State of Israel and since certain of our employees, officers, and directors
are residents of Israel, such initiative may adversely impact our results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Our operations may be disrupted
by the obligations of personnel to perform military service.</b>&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain of our employees,
officers and directors are based in Israel. Some of our employees and consultants may be called upon to perform up to 36 days (and in
some cases more) of annual military reserve duty until they reach the age of 40 (and in some cases, up to 45 or older) and, in emergency
circumstances, could be called to immediate and unlimited active duty. In the event of severe unrest or other conflict, individuals could
be required to serve in the military for extended periods of time. Our operations could be disrupted by the absence of a significant number
of our employees related to military service or the absence for extended periods of one or more of our key employees for military service.
Such disruption could materially adversely affect our business and results of operations.&#160;<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 4. <span style="font-variant: small-caps">INFORMATION ON THE
COMPANY</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. History and Development of the Company.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are a Gibraltar private
company limited by shares, incorporated on November 27, 2017 under the Gibraltar Companies Act. We were originally incorporated under
the name &#8220;INX Holdings Ltd.&#8221; On December 17, 2017, we changed our name to our current name, INX Limited.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 16, 2021, we were
registered as a foreign company in Israel with the Israeli Registrar of Companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 10, 2022, Valdy
Investments Ltd. (&#8220;Valdy&#8221;), a company incorporated under the provincial Business Corporations Act (British Columbia), entered
into a definitive securities exchange agreement with INX, whereby INX became a wholly owned subsidiary of Valdy (the &#8220;Parent Company&#8221;).
The Transaction resulted in a reverse takeover transaction whereby current shareholders of INX (pre-transaction) became majority shareholders
of the Parent Company. The combined entities (the &#8220;Resulting Issuer&#8221;) continues the business. Also, as a result of the transaction,
Valdy changed its name to The INX Digital Company Inc.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is engaged in
the operation and development of a digital asset and a security token trading platform and other services and products related to the
fully integrated and regulated solutions for trading of blockchain assets. In 2021, the Company completed a SEC registered initial public
offering of the INX Token. The offering of the INX Token was registered under the United States Securities Act of 1933 and, in such registration,
the INX Token is deemed to be an &#8220;equity security&#8221; under relevant SEC rules and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->46<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Subsidiaries </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">The Company operates through the following wholly-owned subsidiaries:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.5in">&#160;</td>
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">INX Digital, Inc. (&#8220;INXD&#8221;), a Delaware corporation, is
licensed or otherwise cleared to operate in 43 U.S. states plus Washington D.C. and Puerto Rico as a money transmitter to operate a trading
platform for cryptocurrencies. INXD launched a cryptocurrency trading platform on April 29, 2021, which was developed by INX Limited and is
operated by INXD. Select digital assets are supported for trading on the INX Digital platform such as (identified by symbol): AAVE, AVAXC,
BTC, CRV, ETH, FTM, LINK, LTC, MATIC, UNI, USDC, AND ZEC.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">INX Services, Inc., a Delaware corporation, which currently is a dormant entity.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX Solutions Limited is incorporated in
Gibraltar as a private company limited by shares. INX Solutions Limited was a dormant company until the end of March 2022. INX Solutions
Limited provides liquidity and risk management services. It commenced operations during the second quarter of 2022.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Midgard Technologies Ltd.
    (&#8220;Midgard&#8221;) is a company incorporated under the laws of the State of Israel. Midgard serves as the research and
    development arm of INX Limited and was acquired on April 1, 2021. Midgard provides software development services for the group and
    holds the related intellectual property.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">INX Securities, LLC (&#8220;INXS&#8221;) (formerly known as: Openfinance Securities, LLC), is a Pennsylvania limited liability company. INXS is recognized in the U.S. as a SEC registered Broker Dealer and is an SEC registered Alternative Trading System (&#8220;ATS&#8221;).&#160;&#160;INXS was purchased by INX on May&#160;10, 2021 as part of the Asset Purchase Agreement with Openfinance Holdings, Inc. and certain subsidiaries of Openfinance Holdings, Inc., dated January 12, 2021. After closing on the acquisition, the company&#8217;s name was changed from Openfinance Securities, LLC to INX Securities, LLC.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Securities Exchange
Agreement</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 10, 2022, Valdy
Investments Ltd. (&#8220;Valdy&#8221;), a Capital Pool Company (CPC) incorporated under the laws of British Columbia, Canada, acquired
all of the issued and outstanding securities of the Company (including all outstanding options and warrants) from the holders thereof
by way of a securities exchange, in accordance with the terms and conditions of the Amended and Restated Security Exchange Agreement dated
November 3, 2021, as amended (the &#8220;Security Exchange Agreement&#8221;), whereby, at the closing, then current holders of shares
and options to purchase shares of the Company were issued an aggregate of 175,000,000 common shares of the combined entity and the Company
became a wholly owned subsidiary of Valdy (the &#8220;Valdy Transaction&#8221;). The shareholders of Valdy received 5,124,740 common shares
of the combined entity. Additional securities of the combined entity were issued to consultants of the Company and to principals of Valdy
as set forth in the Security Exchange Agreement. Following the closing of the Valdy Transaction, Valdy changed its name to &#8220;The
INX Digital Company, Inc.&#8221; For more information on the Security Exchange Agreement, see &#8220;Item 7, Part A &#8211; Major Shareholders
and Related Party Transactions &#8211; Major Shareholders &#8211; Changes in Percentage Ownership by Major Shareholders &#8211; Security
Exchange Agreement.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Consolidation</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Immediately prior to the completion
of the Valdy Transaction, on January 10, 2022, Valdy completed a consolidation (the &#8220;<span style="text-decoration:underline">Consolidation</span>&#8221;) of the (pre-Valdy
Transaction) issued and outstanding Valdy Shares, on the basis of one (1) post-Consolidation Valdy Share for each 2.7266667 pre-Consolidation
Valdy Shares, such that the number of Valdy common shares outstanding immediately prior to the completion of the Valdy Transaction was
3,844,740 on a fully-diluted basis<b>. </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Concurrent Financing</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In parallel with the Valdy
Transaction, on April 1, 2021, the Company completed a private placement of 31,680,000 subscription receipts, at a price of CAD$ 1.25
per receipt (the &#8220;<span style="text-decoration:underline">Concurrent Financing</span>&#8221;). Each receipt entitled its holder to receive a unit (&#8220;INX Unit&#8221;)
comprised of one ordinary share of the Company (&#8220;<span style="text-decoration:underline">Ordinary Share</span>&#8221;) and one half of one warrant to purchase one Ordinary
Share (at a price of CAD$ 1.88 per share) (&#8220;each, an &#8220;INX Financing Warrant&#8221;). The Ordinary Shares and warrants issued
pursuant to the subscription receipts were exchanged for comparable securities of Valdy on closing of the Valdy Transaction. The Company
raised an aggregate amount of $31.3 million pursuant to the Concurrent Financing. In consideration for their services to the Company,
the Company&#8217;s financial advisors received cash compensation and options to purchase ordinary shares of Valdy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Token Offering&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As further detailed in this
report, the Company is the world&#8217;s first company to debut and successfully complete an SEC-registered IPO of a blockchain security
token (the &#8220;INX Token&#8221;).&#160; On August 20, 2020, the public offering of the INX Token (the &#8220;Token Offering&#8221;)
was registered under the United States Securities Act of 1933 and, in such registration, the INX Token is deemed to be an &#8220;equity
security&#8221; under relevant SEC rules and regulations. On April 22, 2021, the Token Offering was completed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Token Offering,
the Company raised $84.0 million, pursuant to the sale of 93,409,410 INX Tokens (excluding the sale of INX Tokens described below). Additionally,
the Company raised $7,621,778, pursuant to the sale of 10,386,148 INX Tokens through private placements, which were subject to a 12-month
lockup.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Token Offering,
INX Tokens were bought by more than 7,200 retail and institutional investors in 75 countries, with more than 61,000 investors expressing
interest but unable to invest in the Token Offering, in part due to the U.S. blue sky restrictions.&#160;&#160; In June 2021, it came
to the attention of the Company that during the course of the Token Offering as it related to Canada, the Company did not take all steps
that may be required under Canadian securities laws. As a result, the Company elected to unwind the transactions forthwith by canceling
the 1,948,483 INX Tokens that were sold to such purchasers and refunding US$1,753,635 representing the full purchase price of the INX
Tokens sold.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>General</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ordinary shares of the
Company (the &#8220;INX Shares&#8221;) have never been listed for public trading.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INX Limited&#8217;s registered
office is located at 57/63 Line Wall Road, Gibraltar, GX11 1AA. INX Limited has an office located in Israel, where a majority of its senior
officers are currently based.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC maintains an internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC at http://www.sec.gov. Our website is https://www.inx.co/. The reference to our website is an inactive textual reference only and
information contained in, or that can be accessed through, our website is not part of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Business Overview.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Background &amp; Current Market&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Blockchain Technology and Blockchain Assets </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Blockchain technology is a
digital record or ledger of transaction data that is permanently recorded in files called &#8220;blocks.&#8221; Each blockchain is founded
upon software source code that establishes and governs its cryptographic system for verifying transactions.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In traditional blockchain
networks, copies of the blockchain ledger are stored in a decentralized manner on computers across a peer-to-peer network. Users of the
blockchain network maintain a copy of the ledger with all copies of the ledger synchronized through a consensus algorithm. Protocols included
in the source code govern the rules, operations, and communications of the underlying blockchain network, including the validation of
new blocks that contain an updated ledger reflecting new transactions.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This lack of a single point
of data collection is believed to enhance the security of traditional blockchain networks and blockchain assets. Nonetheless, blockchain
assets and blockchain trading platforms remain susceptible to security breaches and cybercrime. In 2022, $3.8 billion in cryptocurrency
was reported stolen from cryptocurrency exchanges and investors. One notable theft during 2022 was more than $600 million worth of blockchain
assets stolen from a video game network. Variations on traditional blockchain networks include &#8220;permissioned&#8221; blockchains,
in which a limited number of pre-selected users monitor and validate transactions (or add &#8220;blocks&#8221; to the chain). In a fully
centralized blockchain, one organization monitors and validates transactions. Such blockchain ledgers may be viewable by the public or
viewing ledger information may be restricted.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Blockchain assets are assets
that utilize blockchain ledgers to record their creation, ownership, and transfer of ownership. Blockchain assets have generally been
created and used in two broad contexts: within blockchain protocol layers and within application layers. Blockchain assets used at the
protocol layer are generally intended to create financial incentives that drive the underlying blockchain network to verify and authorize
the creation of a new block to update the ledger of ownership. Network participants may receive a fee, generally paid in the protocol&#8217;s
native blockchain asset, for validating the authenticity of a new block. A blockchain asset used at the application layer is not designed
to incentivize validation of new blocks on the blockchain. However, the ledger of ownership of an application blockchain asset, including
the record of transfers of such blockchain assets, is recorded on blocks added to the underlying blockchain. For example, Bitcoin and
Ether are protocol blockchain assets used on the Bitcoin and Ethereum blockchains, respectively. The INX Token is an application blockchain
asset that is recorded on the Ethereum blockchain.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ownership of a blockchain
asset is established by recording on the blockchain ledger the owner&#8217;s unique identifier address, or &#8220;public address,&#8221;
and the amount of the asset held by such address. When a blockchain asset is transferred, the ledger records the sender&#8217;s public
address, the recipient&#8217;s public address and the amount of digital assets transferred. Authorization of the transfer requires the
sender&#8217;s digital signature and a transfer fee.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Digital signatures are generated
by use of the private key associated with the relevant public address. The public address is publicly known so that it may be used to
direct transfers of the blockchain asset. Private keys are used to sign transactions that initiate the transfer of blockchain assets from
a sender&#8217;s public address to a recipient&#8217;s public address. Only the private key associated with a particular public address
can digitally sign a transaction proposing a transfer of the blockchain asset from one public address to another. Similar to a digital
password, if an unauthorized third person learns of a user&#8217;s private key, that third person could forge the user&#8217;s digital
signature and transfer blockchain assets from the user&#8217;s public address to another public address, thereby transferring ownership
of the user&#8217;s blockchain assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Blockchain Asset Classes </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Blockchain assets exist as
a digital representation of value or rights, including rights to an underlying asset. Some blockchain assets may be viewed as having intrinsic
value. In addition, the blockchain asset may be tethered to the value of another asset or may be a representation of contractual rights.
Almost any asset can be &#8220;tokenized,&#8221; meaning that title to the asset, including any rights associated with such title, can
be recorded on a blockchain ledger. To this point, blockchain assets may be used to pay for goods and services, may entitle the owner
to certain rights, or may represent assets that have traditionally existed off the blockchain.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have identified and targeted
our business operations around two emerging blockchain asset classes: cryptocurrencies and security tokens.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A &#8220;cryptocurrency,&#8221;
also known as a digital currency or virtual currency, is a digital representation of value that functions as a medium of exchange, a unit
of account, or a store of value. Cryptocurrencies are generally used as a substitute for fiat currencies as a means of paying for goods
or services or transferring value. While there remains considerable regulatory uncertainty as to which specific blockchain assets qualify
as &#8220;cryptocurrencies&#8221; and which are &#8220;digital securities&#8221; (and therefore subject to securities laws), a &#8220;cryptocurrency,&#8221;
as the term is used in this report, is not a &#8220;security&#8221; as that term is defined under U.S. federal Securities Laws. Bitcoin
and Ether are examples of well-known cryptocurrencies.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A &#8220;digital security&#8221;
is a blockchain asset that falls within the definition of a security under federal securities laws. On April 3, 2019, the Strategic Hub
for Innovation and Financial Technology (FinHub) of the SEC published informal guidance, titled &#8220;Framework for &#8216;Investment
Contract&#8217; Analysis of Digital Assets&#8221; (the &#8220;Framework&#8221;), which provides analytical tools for determining whether
a blockchain asset is a security under federal securities laws. In the Framework, the SEC uses the term &#8220;digital asset&#8221; to
refer to an asset that is issued and transferred using distributed ledger or blockchain technology. In this report, we use the term &#8220;blockchain
asset&#8221; to distinguish between assets that are recorded and stored using blockchain technology and assets that may be stored in digital
form, but which do not utilize blockchain technology. In addition, the SEC has not used the term &#8220;digital security.&#8221; The Framework
provides a list of factors to consider when determining whether a digital asset offered for sale is a security. The factors included in
the Framework are based on an analysis of whether the blockchain asset is an &#8220;investment contract&#8221; as that term was first
used by the Supreme Court in SEC v. Howey, 328 U.S. 293 (1946), and which has been further clarified through subsequent case law.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC staff has acknowledged
that determining whether a blockchain asset is a security can require a careful analysis of the nature of the blockchain asset and how
it is offered and sold. Further, the SEC staff acknowledged that a blockchain asset that is initially sold as a security may, at a later
point, no longer meet the characteristics of a security. The Framework represents the views of the SEC staff, and it is not a rule, regulation,
or statement of the SEC and it is not binding on the SEC.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To determine the character
of a blockchain asset and whether it should be traded on the INXD trading platform or the INXS Trading Platform, we have sought the guidance
of nationally recognized outside legal counsel. In certain instances, we may seek a declaratory judgment or no action relief from the
relevant regulatory agency prior to deciding whether to permit the trading of an asset on one of our platforms.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Markets for Blockchain Assets </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for blockchain
assets has grown dramatically including through dramatic volatility since blockchain assets were first introduced in 2009 with the launch
of Bitcoin. According to CoinMarketCap.com, as of March 17, 2023, blockchain assets had a total market capitalization of approximately
$1.12 trillion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some blockchain industry participants
have reported that a significant percentage of blockchain asset trading activity is artificial or non-economic in nature and may represent
attempts to manipulate the price of certain blockchain assets. For example, according to a report published by Bitwise Asset Management,
95% of bitcoin trading activity appearing on 81 blockchain asset trading platforms is fake. Bitwise&#8217;s report further stated that
trading platforms and blockchain asset developers are incentivized to artificially inflate trading volumes so that their platform or asset
rises in league tables and gains prominence in the industry. As a result, trading platforms or blockchain assets may seek to inflate demand
for specific blockchain assets, or blockchain assets generally, which could increase the volatility of that asset or blockchain asset
trading prices generally.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On the digital securities
side, we believe that this nascent market is beginning to blossom. As of August 2021, the total digital securities market capitalization
crossed the US$1 billion threshold, up over 20% from the prior month. Over 90% of all trading was done on the INXS trading platform ($567
million) and INXS&#8217; closest competitor, tZero ($405 million). Trading volumes for digital securities grew by over 27% on a month-over-month
basis in August 2021; INXS and tZero accounted for approximately 88% of that volume.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Blockchain Asset Exchanges </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that there is a
growing institutional interest in operating regulated blockchain asset exchanges and trading platforms and utilizing blockchain assets
in bank financing practices.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to CoinMarketCap.com,
over 200 blockchain asset trading platforms provide basic buy and sell services for one or more blockchain assets. On March 17, 2023,
over 45 of those trading platforms had average daily trading volumes over US$400 million, approximately 20 of which had daily trading
volumes over US$1 billion. Top blockchain&#160;asset trading platforms, based on USD daily trading volume, include Binance, OKEx, Coinbase,
and Gate.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 16, 2018, the
SEC&#8217;s Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets issued the Statement
on Digital Asset Securities Issuance and Trading addressing the SEC&#8217;s enforcement actions involving and relating to digital asset
securities. The Statement confirmed the applicability of the U.S. federal securities law framework to new and emerging technologies, such
as blockchain, and provided a summary of the circumstances under which the SEC has taken enforcement action against participants in the
marketplace for digital asset securities, including actions against initial offerings and sales of securities and actors and institutions
that develop and facilitate the secondary market for securities.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, the CFTC has stated
that virtual currencies, like Bitcoin, may be commodities that are within the purview of the CFTC. However, beyond its anti-fraud and
anti-&#160;manipulation authorities, the CFTC generally does not oversee &#8220;spot&#8221; or cash market exchanges and transactions
involving cryptocurrencies that do not utilize margin, leverage, or financing.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to CoinMarketCap.com,
as of March 17, 2023, around 30 cryptocurrency derivatives exchanges were operating, with 24-hour trade volumes of over $300 million.
Top derivatives exchanges (by volume) include Binance, OKEx, and Bybit.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because of the uncertainty
built into a &#8220;facts and circumstances&#8221; analysis, as well as general regulatory uncertainty worldwide, companies have begun
to structure their blockchain assets as securities and conduct sales of their blockchain assets as securities offerings. As blockchain
assets take on the attributes of securities and market makers expand the breadth of blockchain asset trading products into spot, futures
and derivative trading instruments, the need and demand for a regulated blockchain asset trading solution continues to grow.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Opportunities in the Current Market</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As blockchain assets are sorted
into cryptocurrencies and digital securities, the need and demand for regulated trading solutions for each asset class continues to grow.&#160;&#160;
However, current platforms or exchange markets that permit the trading of blockchain assets have the following shortcomings:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Lack of Trading History.</i></b> Some blockchain asset trading platforms do not or cannot present the entire history of trades to exchange participants in a manner that would be requested by a regulator. This lack of trading history does not allow regulatory agencies to effectively monitor transactions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Lack of Regulatory Compliance</i></b>. Many blockchain asset trading platforms are not prepared to comply (or are not willing to comply) with regulatory requirements imposed by federal and state securities law. Blockchain asset trading platforms assume less responsibility for what takes place on their platforms as compared to regulated exchanges. For example, blockchain asset trading platforms are generally unable to verify the legitimate origin of funds in a trade and therefore cannot confirm that the trades are not in violation of anti-money laundering laws. In addition, current blockchain asset trading platforms do not provide traditional trading protections, such as liquidity reserves, making professional traders unable or reluctant to conduct trading on these exchanges. The lack of compliant exchanges for the trading of blockchain assets leads to low customer and public confidence in both the exchanges and the blockchain assets traded.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Lack of Technological Capability</i></b>. Blockchain asset trading platforms generally do not have the technological capability to handle the large trading volumes or capture trades for multiple simultaneous trading requests without disruption or significant errors. The technology of many blockchain asset trading platforms was not developed to handle the dramatic growth in demand to engage in blockchain trades and the market has witnessed exchange outages, sometimes for many hours, pricing errors, lack of user access to their funds, and other service-related complaints.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Lack of Fee Transparency</i></b>. There is currently no clear market standard for fees for trading blockchain assets. This is particularly true in the retail market, where many trading platforms do not separately state the transaction fee but instead include any fees as part of the price of the blockchain asset. In this way, many unregulated exchanges do not disclose their fees, creating uncertainty regarding the cost of trading.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Poor Price Discovery</i></b>. Blockchain asset trading platforms experience inefficiencies in the form of significant arbitrage due to recurrent operational issues including temporary service outages and other temporary restrictions on access to the trading platform, the ability to withdraw or deposit fiat currencies and cryptocurrencies, or otherwise perform a trade on the platform. This creates significant exposure to arbitrage trading between exchanges. Further, the operator of a blockchain asset trading platform may trade on its own behalf on the trading platform. Doing so provides liquidity to platform participants. However, it also presents potential conflicts of interest, such as front-running customer order flow and engaging in price manipulation. By acting as a trading participant on one&#8217;s own platform, trading platforms may artificially inflate or deflate prices, which impairs market pricing discovery.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These weaknesses in current
blockchain asset trading platforms reveal a significant opportunity in the blockchain asset industry for market development through operations
and services that provide functionality, transparency and trading platforms backed by cash reserves similar to those of regulated trading
marketplaces.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->52<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX Trading Solutions, also known as INX.One, a Single Regulated
Ecosystem for Trading Blockchain Assets </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that we have a
comprehensive solution to the issues that we have identified.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since our inception, we have
sought to become a regulated digital hub, aiming to offer all digital services, whether with cryptocurrencies, digital securities or derivatives,
under a regulated umbrella.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The first stage involved cementing
our place in the United States as we began by obtaining money transmitter licenses, a broker/dealer and an ATS (registered under the SEC
and FINRA) for digital assets. We are qualified to operate as a money transmitter in forty-three (43) U.S. states plus Washington D.C.
and Puerto Rico. We intend to obtain money transmitter licenses or otherwise become qualified to operate in more US states by the end
of the 2023 calendar year. We started our international expansion with the purchase of an institutional FX trading operation in Israel,
seeking to bridge the gap between the mostly retail world and the largest financial institutions. This interdealer broker has relationships
with over 50 tier-1 and tier-2 global banks (including: Citibank, HSBC, Goldman Sachs, Morgan Stanley, JP Morgan and others) focusing
on OTC trading of FX, interest rates and other derivative products. This broker is an NFA member registered under the CFTC as an introducing
broker and swap firm and holds other licenses in Israel.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 14, 2022, we
launched INX.One. a single point of entry with one onboarding process and a unified graphic user interface for both:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify">The digital asset platform operated through our subsidiary INX Digital Inc., which offers trading on digital
assets that do not constitute securities (e.g. Bitcoin and Ethereum), and</td></tr><tr style="vertical-align: top">
<td>&#160;</td><td>&#160;</td><td style="text-align: justify">&#160;</td></tr>
                                                                                   </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify">The digital security platform operated through our subsidiary INXS, which offers trading and investing
in digital assets that do constitute securities under applicable securities laws (such as the INX Token and tokens of other issuers who
chose to issue a digital security).</td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We offer professional traders
and retail and institutional investors trading platforms with established practices common in other regulated financial services markets,
such as customary trading and settlement procedures, regulatory compliance, capital and liquidity reserves and operational transparency.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also created the INX Token,
an ERC-1404 blockchain asset that is programmed using a smart contract that is compatible with the Ethereum blockchain (the &#8220;<span style="text-decoration:underline">INX
Token</span>&#8221;), which was offered to the public from August 20,2020 and closed on April 22, 2021. For more information see below &#8220;The
INX Token&#8221; and Item 4, Part A &#8211; &#8220;Information on the Company - History and Development of the Company &#8211; The Token
Offering.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We designed our platforms
to provide the following solutions to the problems identified above, which we believe makes the INXD trading platform, the INXS trading
platform and our related business activities (collectively, the &#8220;INX Trading Solutions&#8221;) an attractive choice for the trading
of blockchain assets:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Robust Pre-Trade and Post-Trade Services</i></b>. We have developed trading features to permit clients to continually monitor and manage blotter, position, and other technical analysis. We also offer investment tools during the pre-trading period and provide trade confirmations, reporting and access to pricing data during the post-trading period. We intend to continue with the development of additional features and improvements to our pre-trade and post-trade services.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Historical Trading Record</i></b>. Beginning with the first recorded transaction on the INX Trading Solutions trading platforms, we apply anti-money laundering (&#8220;<span style="text-decoration:underline">AML</span>&#8221;) and &#8220;Know Your Client&#8221; (&#8220;<span style="text-decoration:underline">KYC</span>&#8221;) procedures for all account holders and provide transparency so that clients have the ability to review all activities taken by them. We believe that this accessibility will supplement the transparency of blockchain assets.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Regulation and Safeguards</i></b>. We believe
    that regulatory oversight will instill greater confidence in our trading platforms compared to unregulated blockchain asset trading platforms.
    As the ownership of blockchain assets becomes more commonplace and professional traders continue to analyze and enter the blockchain asset
    marketplace, we believe that clients will expect regulatory safeguards&#160;for blockchain asset trading, comparable to the current fiat
    and securities exchanges. All customers of INX Trading Solutions, whether trading cryptocurrencies or security tokens, are required to
    complete KYC/AML checks in compliance with applicable laws and regulations. Blockchain assets traded on the INXD trading platform are
    transferred to a digital wallet held by one of our custodians.</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Blockchain assets traded on the INXD trading platform
    are transferred to a digital wallet held by one of our custodians, which transfer is recorded on the blockchain ledger that underlies
    such blockchain asset. Once a blockchain asset is deposited with our custodian, none of the trading transactions performed on the INXD
    trading platform are recorded on a blockchain ledger. Trades on our trading platforms are recorded only on our internal centralized servers,
    and they are then reflected in each customer&#8217;s respective account. A transfer of a blockchain asset is recorded on its underlying
    blockchain ledger when the owner of the blockchain asset wishes to withdraw the blockchain asset from their account. In this event, the
    blockchain asset is transferred from our respective custodian&#8217;s digital wallet to the customer&#8217;s private digital wallet. Digital
    securities traded on the INXS ATS are reflected via bids and offers in the order book visible to approved&#160;users on INXS. Each user
    self-custodies the digital security in their own digital wallet. Trades are executed based on user instructions using API connections
    to third party custodians and blockchain&#160;distributed ledger technology.</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have a cyber security function that ensures
    that transfers in and out of our respective custodian&#8217;s digital wallet will be done after full verification of the person that requested
    the withdrawal. The procedure includes user credential verification plus a one-time password that is replaced every 30 seconds. The customer
    gets a dedicated unique cryptographic application that generates unique passwords every 30 seconds while we have a second unique key that
    enables the verification of the one-time password. The used technology implements the PPK algorithm which is considered to highly strengthen
    the security of the customer&#8217;s account. Alex Weinert, Group Program Manager for Identity Security and Protection at Microsoft said,
    &#8220;Based on our studies, your account is more than 99.9% less likely to be compromised if you use MFA (Multi- Factor Authentication).&#8221;<sup>8
    </sup>Our system, after verifying the client&#8217;s one-time password, sends a verification email with a short expiration to get additional
    client verification for the withdrawal request. A withdrawal request will be approved only after a completion of all the above steps.
    In addition to robust policies and procedures that govern the onboarding of customers to INXD trading platform, including both AML and
    KYC screening and controls, fiat withdrawal requests are screened by operations staff to match the account credentials and identifying
    information to the receiving bank account information provided for the withdrawals (i.e. first-party wires only). Discrepancies in information
    are investigated by operations staff and escalated to compliance staff for further review, if necessary, in-line with the suspicious activity
    escalation procedures in the policies referenced above. Similarly, regarding crypto withdrawal requests, our industry-leading vendor Elliptic
    analyzes the blockchain and risk scores the recipient wallets (barring a de minimis or market maker transfer), allowing our operations
    staff to timely screen withdrawal and approve, deny, or escalate to our compliance staff for further review, if necessary.&#160;&#160;&#160;</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b><i>Reserve Fund</i></b>. We provide additional comfort to our customers with respect to the financial stability of the Company by allocating a reserve fund of $36.0 million (the &#8220;Reserve Fund&#8221;), out of the funds raised in the Token Offering, which fund is available to cover customer and Company losses, if any, that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses.&#160;&#160;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our Robust Technology</i></b>. &#160;We
    are developing technology to support rapid trading activity. Our platforms are custom-built to support the growing blockchain asset market,
    and to scale along with the continued growth of the market.</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The architecture for the INX Trading Solutions
    matching engine is such that all orders are matched based on a &#8220;first in, first out&#8221; (&#8220;<span style="text-decoration:underline">FIFO</span>&#8221;) asset-management
    and valuation method in which assets produced or acquired first are sold, used, or disposed of first. Orders in different markets/pairs
    are processed in parallel to provide the fastest possible execution. To facilitate liquidity and support a vibrant trading market on our
    trading platforms, we offer incentives to attract high volume traders and establish strategic partnerships with market makers. INX Trading
    Solutions enables trading via web portal and application programming interface solutions (&#8220;<span style="text-decoration:underline">API</span>&#8221;).&#160;The INXS ATS
    allows users to place bids and offers in digital&#160;securities such as the INX Token. All orders are placed in the order book which
    are visible to all approved users of the ATS. The ATS only accepts limit orders placed by each user. The system will automatically execute
    the best bids or offers in the order book.&#160; The ATS enables this peer-to-peer trading for approved users that have passed the KYC/AML
    requirements of INXS.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><p style="margin-top: 0; margin-bottom: 0"><b><i>Transaction Fee Transparency</i></b>. We have established transaction fees as a percentage of the trade price of each trade executed on our trading platform INX.One. Transaction fees must be paid, (a) for transactions in digital assets in the currency or cryptocurrency that is received by the customer for the purchase or sale associated with the transaction fee, and (b) for transactions in security tokens in US Dollars.&#160;The transaction fees are published and updated from to time on our website available at https://www.inx.co/fee-schedules/</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">&#160;</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">For example, if a customer buys BTC with USD, the transaction fee would be charged from that customer in BTC. The same process is followed with regards to transactions where one digital asset is purchased for another. For example, if BTC is purchased with ETH, the transaction fee would be charged from the buyer in BTC.</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">&#160;</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">With regards to trading of security tokens, the transaction fee is charged and deducted from both customers&#8217; bank accounts (the buyer and the seller) in USD at the time of the order execution. The transaction fee is similarly set as a percentage of the transaction value based on the fee schedule referred to above. In addition, there is an ethereum settlement fee paid by both the buyer and seller per order, which covers the blockchain costs associated with the order&#8217;s execution.</p></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of this Annual
Report on Form 20-F, we offer services in the following crypto assets and security tokens you offer services in on INX Trading Solutions,
also known as INX.One:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; ">
    <td style="border-bottom: Black 1.5pt solid; width: 49%; font-weight: bold; text-align: center">INX Digital</td><td style="padding-bottom: 1.5pt; text-align: center; width: 2%; font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 49%; font-weight: bold; text-align: center">INX Securities</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center">BTC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">INX</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: center">ETH</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">MSTO</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center">ZEC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">BCAP</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: center">LTC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">Spice</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center">USDC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">PRTS</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: center">AVAXC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">SCI2</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center">LINK</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">TXC</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: center">MATIC</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">TRZX</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center">FTM</td><td style="text-align: center">&#160;</td>
    <td style="text-align: center">ATX</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On the&#160;INX Digital&#160;platform,
the&#160;digital assets are offered in the following 43 U.S. jurisdictions, plus Washington D.C. and Puerto Rico, as well as in foreign
jurisdictions that we believe we have the right to operate in: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut,
Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma,
Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and
Wyoming. &#160;For these assets, the Company&#160;offers listing and trading services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On the&#160;INX Securities&#160;platform,&#160;the
security tokens are listed for trading in all 50 U.S. states, as well as in foreign jurisdictions that we believe we have the right to
operate in. For these security tokens, in addition to listing and trading services,&#160;the Company&#160;also offers&#160;placement agent
services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that our use of
the Ethereum blockchain to create the INX Token has the following benefits, which we believe makes the INX Token an attractive choice:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the future, we intend to
establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment
of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly,
there is no assurance that such a trading platform will ever be developed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><b>Technology and Product Development </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We designed our trading platforms
to provide clients with a multi-currency non-biased execution trading solution and to eventually function as broker, execution, and clearing
agent. We provide trading of different types of digital blockchain assets, including cryptocurrencies and security tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our goal in the development
of INX Trading Solutions is to offer professionals in the financial services community a comprehensive, interactive platform that allows
for seamless integrated trading, real-time risk management and reporting and administration tools. The INX Trading Solutions will help
our customers automate and coordinate front-office trading functions, middle-office risk management and reporting functions, and back-office
accounting functions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Trading Solutions
website serves as a single entry point for our customers. Once logged in, customers are able to access the INX Digital tab for the trading
of cryptocurrencies, and the INXS tab for the trading of digital securities, in each case subject to the satisfaction of applicable regulatory
requirements. The INX Digital and the INXS tabs are separate and distinct trading platforms under one similar user interface with a single
point of entry and onboarding process. As we further develop and update our trading platforms, we intend to add functionalities across
the entire transaction lifecycle, as well as other information and features. Our platforms do not support cross-asset (i.e., digital securities
for cryptocurrency) trading, nor will we permit the settlement of securities transactions in cryptocurrency, at least until such time
as the regulatory uncertainty regarding such transactions is resolved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We developed and operate each
of our trading platforms through certain of our subsidiaries and these functions are separated by entity as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We utilize key criteria in
the selection of our leadership team and team members. This includes relevant experience in platform development (designing, building,
and operating trading platforms), trading, financial markets, digital assets, regulations, legal or compliance skills, foreign exchange,
and money transmission. Multiple team members are involved in hiring potential candidates and screening for relevant experience. Multiple
interviews and reference checks are conducted for each role, and where appropriate, background checks and/or police report screening is
mandatory. Licensed individuals are registered with relevant regulatory authorities. Potential team members are also evaluated based on
their experience operating within regulated businesses, especially of a financial nature.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading platforms to be
operated by each entity will support &#8220;straight through processing&#8221; of orders received from customers. As such, orders and
resulting trades will be recorded on internal databases and will be reflected in customer accounts without any intervention. Both INX
Digital, Inc. and INXS, LLC employ staff to monitor trading activity and support customers. Each entity also employs supervising managers
to oversee the trading and settlement process.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our proprietary order management
software, which is utilized by both INXD and INXS has a rules engine that ensures sufficient funds or fully paid assets are available
to cover orders, prior to their submission.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>INX Digital Trading Platform</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We developed the INXD trading
platform and tested its trading capabilities from a functional and load perspective. We have completed the minimum viable product of the
platform that includes the architecture design, trading functionalities and the user interface and experience. To be able to handle large
amounts of traffic and transactions, we are currently working on scaling the capabilities of the system from an architecture and application
level. We are putting in place fail safe and recovery processes in case of system failure that are designed to inherently respond in a
way that will cause no or minimal harm to core trading data.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Customers of the INXD trading
platform will be entitled to discounts on trading fees charged by the Company, providing that they hold INX Tokens. Discounts will be
granted according to different tiers, allowing for larger discounts given to customers who hold a larger number of INX Tokens.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have
registered INX Digital with FinCEN as a federal money service business.&#160; In addition, as of April 30, 2023, we have been issued a
license by the following U.S. states, territories, and districts: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, District
of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Nebraska,
New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Vermont, Washington, and West Virginia, and have submitted notifications or are otherwise qualified to operate (based on being
exempted from any licensing requirement or notice requirement) in the following States: California, Colorado, Indiana, Massachusetts,
Michigan, Missouri, Montana, Pennsylvania, Utah, Wisconsin, and Wyoming. INX Digital is now eligible to operate as proposed in those jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INXD trading platform
incorporates a secure trading and matching engine, which has high frequency transaction capabilities and supports a range of standard
order types. We also developed an API interface for broker-dealers, traders and market makers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The architecture for the INXD
trading platform allows all orders to be matched based on a FIFO logic. Orders in different markets/pairs are processed in parallel to
provide the fastest possible execution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have designed trading features
to permit clients to continually monitor and manage blotter, position, and other technical analysis. We also offer investment tools during
the pre-trading period and provide trade confirmations, reporting and access to pricing data during the post-trading period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Custody of Client Assets on the INXD trading
platform</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INXD receives custodian services
for cryptocurrencies held on behalf of the clients of our INXD trading platform from BitGo Trust Company (&#8220;BitGo Trust&#8221;),
a trust company under &#167;51-A of the South Dakota Banking Law and is licensed to act as custodian of its client&#8217;s digital assets
on its client&#8217;s behalf. BitGo Trust describes itself as a &#8220;qualified custodian&#8221; as defined in Rule 206(4)-2 promulgated
under the Investment Advisers Act of 1940.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that BitGo Trust,
together with its affiliate BitGo, Inc. (together, &#8220;BitGo&#8221;), is a leading provider of custody and wallet services for cryptocurrency
trading, with a high degree of electronic and physical security, as well as transaction processing and reporting. BitGo Trust is independent
from INX.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">BitGo offers two types of
services; a hot wallet solution and a cold storage solution. INXD is contracted with BitGo Trust for both services. A hot wallet is a
multi-signature storage solution, which requires two of three private keys to transfer digital assets. Pursuant to our agreement with
BitGo, INX is holding two of the keys, and BitGo, Inc. is holding the other key. Two keys are created whenever INX establishes a BitGo
hot wallet, a primary key (used to authorize transactions) and a backup key (used to recover the wallet, if the wallet password is lost
or if BitGo Inc. ceases operations).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The third key is used by BitGo
Inc. to co-sign transactions; this key is created by BitGo&#8217;s servers and is known only to BitGo, Inc., to mitigate the risk of an
unauthorized transfer of assets. All multi-signature wallets require that INXD and BitGo Inc. must act together to transfer assets. INXD
is maintaining an omnibus wallet at BitGo Inc. for each type of asset to be traded on our platform, which will be designated for the exclusive
benefit of customers. We currently store the cryptocurrency assets held by us with BitGo Inc. using properly constructed policies in conjunction
with multiple admins on the wallets which are a key element in keeping funds safe.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">BitGo Trust&#8217;s cold storage
solution outsources key management and security to BitGo Trust. Cold storage is offline storage; it is the most secure way to store digital
assets, as it is never connected to a network. INXD will transfer cryptocurrency assets from its hot wallet to cold storage at BitGo Trust;
BitGo Trust, as custodian, will safeguard cryptocurrency assets for our customers. To initiate a transfer from cold storage to a Company
hot wallet, we will specify the amount to transfer and submit the request to BitGo Trust. BitGo Trust will contact us, to conduct an out-of-band
video verification to confirm the transfer is legitimate and that a Company authorized signatory approves it. BitGo Trust will then generate
the transaction and sign it securely offline with the user key that BitGo Trust holds in custody. Once half-signed, BitGo Trust will bring
the transaction back online, and upload it to the platform. After key policies are evaluated and satisfied, BitGo Inc. will then sign
the transaction with the BitGo Inc. key. Once completely signed, BitGo Inc. will broadcast the transaction to the blockchain, and the
cryptocurrency assets will be transferred from cold storage to the appropriate Company hot wallet. This separation of functions makes
our operations more secure because, among other reasons, we only need to keep a hot wallet sufficiently funded to service withdrawals.
We plan to use cold storage to store the majority of the cryptocurrency assets held by us when they become material, because cold storage
provides greater asset protection through policies and physical security.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Company assets that are held
using BitGo Inc. multi-signature solution and properly constructed policies used in conjunction with multiple admins on a wallet, which
are a key element in keeping funds safe.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">BitGo Trust&#8217;s custodial
services are provided pursuant to a custodial services agreement dated August 21, 2020 (as amended on January 8, 2021 and March 1, 2021,
the &#8220;Custodial Services Agreement&#8221;) between INXD and BitGo Trust. For its custodial services, BitGo Trust receives an onboarding
fee and receives a monthly custody fee equal to an annualized percentage of the market value of the assets under custody (subject to
a minimum monthly charge). BitGo Trust also receives various transaction-based fees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Custodial Services Agreement
is for an initial term of one year and has been automatically extended for one-year periods, unless terminated by either party by delivery
of a written notice at least 60-days prior to the expiration of the then-current term. INXD may also terminate the Custodial Services
Agreement for any reason upon 30 days&#8217; prior written notice.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Custodial Services Agreement summarizes the material terms of the Custodial Services Agreement but is not a complete description.&#160;For
more details about the Custodial Services Agreement, please refer to the full text of the Custodial Services Agreement, which is attached
as Exhibit 4.13 to the Company&#8217;s Annual Report on Form 20-F.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the Custodial
Services Agreement, on August 17, 2020 the parties thereto entered into an Electronic Trading Agreement (the &#8220;Electronic Trading
Agreement&#8221;) in connection with BitGo Trust&#8217;s services to INXD and the access granted to INXD by BitGo Trust to BitGo Trust&#8217;s
proprietary electronic trading system (the &#8220;BitGo System&#8221;). The Electronic Trading Agreement includes, without limitation,
terms of use of the BitGo System by INXD, disclaimers by BitGo Trust and limitations to its responsibly and liability in connection with
the BitGo System, undertakings by INXD to indemnify BitGo under certain circumstances, and the right of BitGo Trust to terminate the Electronic
Trading Agreement at its discretion and without cause upon a 30 days&#8217; notice. INXD&#8217;s access and use of the BitGo Trust&#8217;s
proprietary electronic trading system is further subject to execution of, and to the terms that were determined by, the Custodial Services
Agreement and a clearing and settlement addendum with BitGo Trust. BitGo Trust and its affiliates retain all rights, title and interest
in and to the BitGo System, including all source code, object code, data, information, copyrights, trademarks, patents, inventions and
trade secrets embodied therein, and all other rights not expressly granted to INXD pursuant to the Electronic Trading Agreement. The Electronic
Trading Agreement is governed by the laws of California, USA and includes a binding arbitration clause pursuant to the Commercial Arbitration
Rules of the American Arbitration Authority.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As stated in INXD&#8217;s
Custodian Services Agreement with BitGo, BitGo obtains and maintains insurance coverage in such types and amounts as are commercially
reasonable for the custodial services provided. Any insurance related to theft of coins will apply to custodial services only (where keys
are held by Trust Company, i.e., &#8220;cost storage&#8221;) and not to non-custodial accounts (where keys are held by client, i.e., &#8220;hot-wallets&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, there is about
$2.2M USD of customers&#8217; funds held by BitGo.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INX committed to reserve 75%
of the gross proceeds less payments to underwriters from its&#160;initial public offering in excess of $25,000 to be available to cover
customer and INX&#8217;s losses, if any, that result from cybersecurity breaches or theft, errors in execution of the trading platform
or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses. INX
refers to this amount as the &#8220;Reserve Fund&#8221;. As of December 31, 2022, INX has segregated $36,023,000, which is restricted
as the Reserve Fund. The Reserve Fund is comprised of cash and cash equivalents, U.S. Treasury securities and corporate bonds held at
banks and brokerage firms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 13, 2021, the INX&#8217;s
Board of Directors approved the investment policy of the Reserve Fund (the &#8220;Investment Policy&#8221;).&#160; Per the Investment
Policy, as amended on August 11, 2022, the Reserve Fund, post the amendment, shall be invested as follows: minimum 15% in cash and bank
deposits, up to 70% in U.S Treasury securities, up to 20% shall be invested in exchange traded funds and up to 50% in corporate bonds
and other instruments with lowest investment grade rating of BBB.&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>INXS Trading Platform</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Company owns INXS, a Pennsylvania
limited liability company, that is registered in the United States as a broker-dealer, a FINRA member, and that operates and is registered
as an Alternative Trading System by the SEC. We count INXS&#8217;s broker-dealer/ATS - including its digital security listings and client
base - among our wholly owned subsidiaries.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INXS was developed as a platform
for investors that trade (buy and sell) securities and would like to enrich their portfolios with a new type of securities, also known
as &#8220;digital securities.&#8221;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INXS Trading Platform
opens access to a new stream of market liquidity that comes from the alternative asset markets. The INXS Trading Platform manages to complete
transactions without the need to custody the clients&#8217; tokens nor funds and still provides full confidence to the seller and the
buyer that the trade will be completed based on their firm orders.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are continuing the maintenance
and development of the INXS Trading Platform in order to create additional ways of trading digital securities. We listed the INX Token
on the INXS Trading Platform in July 2021. Customers of INXS will be entitled to discounts on trading fees charged by the company, providing
that they hold INX Tokens. Discounts will be granted according to different tiers, allowing for larger discounts given to customers who
hold a larger number of INX Tokens.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The INX Token</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We developed the INX Token,
an ERC-1404 blockchain asset that is programmed using a smart contract that is compatible with the Ethereum blockchain, which was offered
to the public from August 20, 2020 to April 22, 2021. For more information regarding the initial offering of the INX Tokens with the SEC,
see &#8220;Item 4, Part A &#8211; Information on the Company - History and Development of the Company &#8211; The Token Offering.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2021, we listed the
INX Token on the INXS Trading Platform. We developed our token smart contract based on the &#8220;ERC-1404: Simple Restricted Token Standard.&#8221;
ERC-1404 is designed for security tokens, tokenized securities and other tokens that carry complex compliance requirements. ERC-1404 is
a token standard developed with corporate governance, banking, and securities laws in mind. It is fully open source, which is paramount
to ensuring its security, quality and interoperability. ERC-1404 carries all of the same benefits of an ERC-20 token, it is simple, easy
to deploy and interoperable with the entire Ethereum universe, with a few key improvements that allow issuers to enforce regulatory transfer
restrictions and maintain compliance with KYC/AML rules as well as the ability to recover tokens in case of wallet loss. The INX Token/smart
contract passed an external audit test by Quantstamp.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We engaged Quantstamp, a blockchain
security firm, a leader in blockchain security, having performed over 200 audits and secured over US$100 billion in value, to perform
an audit of the INX Token smart contract code, which was completed on December 12, 2019 (the &#8220;INX Contract Audit&#8221;). Quantstamp&#8217;s
team has decades of combined experience in formal verification, static analysis, and software verification. Through their services, Quantstamp
has assisted blockchain projects globally with its white glove security auditing services, and has secured billions of dollars in transaction
value for blockchain applications. Quantstamp is also dedicated to research and development in the form of collaborations with leading
academic institutions such as National University of Singapore and MIT (Massachusetts Institute of Technology). Quantstamp has experience
with auditing various blockchain platforms including Ethereum, Binance Chain, Hyperledger, EOS, and Corda, and languages including Solidity
and Vyper.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Contract Audit is
intended to evaluate security-related issues, code quality, adherence to specification and best practices and it includes a manual review
of code and a comparison to specifications of the code. Quantstamp reviewed the INX Token smart contract for vulnerabilities related to
transaction-ordering dependence, timestamp dependence, mishandled exceptions and call stack limits, reentrancy and cross-function vulnerabilities,
logical oversights, access control, code clones, functionality duplication, gas usage and arbitrary token minting. The INX Contract Audit
is not an endorsement of the reliability or effectiveness of the INX Token smart contract, but rather it is limited to an assessment of
its logic and implementation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the INX Contract Audit,
Quantstamp identified two specific risks: (i) the ability of a hacker to delay the release of INX Tokens by other holders as a means to
get a trading advantage, and (ii) the risk to users if the Company&#8217;s private keys are compromised. Quantstamp advised that the Company
take caution in using particular functions when transaction ordering. Quantstamp also advised that the Company disclose the risk associated
with theft or loss of its private keys having the ability to revoke INX Tokens from a third-party account or time-lock INX Tokens of such
accounts. The Company has acknowledged each of these risks and has taken security precautions with regards to each.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The INX Tokens are accessible
only from secure Ethereum wallets and have a recovery mechanism that allows the Company under certain circumstances to protect the INX
Token holder even in the case of loss of wallet credentials.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prospective investors who
were duly identified through KYC/AML procedures were able to purchase the INX Token under the INX Token Purchase Agreement, which all
initial purchasers of INX Tokens in the offering of the INX Token with the SEC are a party to, and which sets forth the rights of each
INX Token holder with regard to the INX Tokens held by such holder.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of INX Tokens are
entitled to receive an annual pro rata distribution of 40% of the Company&#8217;s cumulative net cash flow from operating activities (since
the Company&#8217;s inception (September 1, 2017)), excluding any cash proceeds from an initial sale by the Company of an INX Token (&#8220;Adjusted
Operating Cash Flow&#8221;). INX&#8217;s profit share model makes these INX Token holders beneficiaries of the growth and success of INX&#8217;s
business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The distribution is calculated
on an annual basis and paid on or before April 30 to parties (other than the Company or its subsidiaries) that hold INX Tokens on the
preceding March 31. Each annual distribution is based on INX&#8217;s cumulative Adjusted Operating Cash Flow (net of cash flows which
have already formed the basis for a prior distribution), calculated as of December 31 of the year prior to the distribution. However,
because each INX Token holder&#8217;s right to a pro rata distribution is based on our cumulative Adjusted Operating Cash Flow, no distribution
will be made to INX Token holders, if at all, until the Company generates positive cumulative Adjusted Operating Cash Flows. As of December
31, 2022, cumulative Adjusted Operating Cash Flow was negative $56.4 million. The distribution to INX Token holders is a contractual obligation
of the Company and a right of each INX Token holder of record as of March 31 of a year following a year end for which there was positive
cumulative Adjusted Operating Cash Flow. However, the pro-rata distribution of the Company&#8217;s cumulative Adjusted Operating Cash
Flow is not self- executing and requires the approval of the Company&#8217;s financial statements and calculation of such distributions
in good faith by the Company&#8217;s Board of Directors. For purposes of the calculation of the Adjusted Operating Cash Flow, cash flow
from the sale and purchase of blockchain assets, including cash flow from the sale and purchase of the INX Token (excluding cash proceeds
from an Initial Sale) and cash flow for interest paid and interest received, will be included in the calculation of Adjusted Operating
Cash Flow regardless of their classification in the consolidated statement of cash flow of the Company. An &#8220;Initial Sale&#8221;
refers to the first sale and transfer of the respective INX Token by the Company to an initial purchaser. Distributions will be paid either
in U.S. Dollars to an INX Token holder&#8217;s bank account or in Ether which will be transferred to the INX Token holders&#8217; wallet
that is recorded on the INX Token Distributed Ledger (as defined in the Token Offering).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, holders of INX
Tokens will be entitled to, at a minimum, a 10% discount on the payment of transaction fees on the INX trading platform, INX.One. Customers
of INX will be entitled to discounts on trading fees charged by the Company, provided that they hold INX Tokens. Discounts will be granted
according to different tiers, allowing for larger discounts given to customers who hold a larger number of INX Tokens. The Company does
not currently accept INX Tokens as payment for its services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of INX Tokens have
contractual rights determined by the INX Token Purchase Agreement. Pursuant to the terms of the INX Token Purchase Agreement, ownership
of the INX Tokens and all rights under the INX Token Purchase Agreement are contingent upon holders of INX Tokens satisfying the Company&#8217;s
KYC/AML procedures, including any requirements to periodically or otherwise update information provided to the Company. Transfer of INX
Tokens would include similar rights and obligations toward the new holder of the INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Rights of INX Token Holders Upon a Failure or a Change of Control. Each INX Token held by parties other than the Company shall entitle its holder to receive a pro rata portion (based upon the number of INX Tokens then outstanding) of the Cash Fund, if any of the following occur:</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.75in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">-</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">The Company fails to operate a bona fide trading platform that permits the spot trading of Bitcoin and Ethereum by December 31, 2021, (a milestone which has, as of the date hereof, been achieved); or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.75in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">-</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends that the
INX Token holders will be unsecured creditors of the Company and would therefore rank pari passu with all the other unsecured creditors
of the Company and senior to the claims of holders of the Company&#8217;s shares. On closing of the transactions contemplated by the Security
Exchange Agreement, TIDCI entered an agreement with the Company (the &#8220;Waiver and Subordination Undertaking&#8221;), pursuant to
which TIDCI will (a) irrevocably subordinate its rights to receive any distributions and payments from the Company prior to the payment
in full by the Company of all distributions owed to INX Token holders, and (b) irrevocably waive and subordinate its rights, in the event
of an Insolvency Event, to any cash held in the Cash Fund.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Cash Fund is not held
in an escrow or trust account, but rather, is held in a separate bank account or accounts controlled by the Company. The Cash Fund can
be used only for very specific designated purposes, under certain pre-identified circumstances, such as for covering losses of the Company
and its clients that result from cybersecurity breaches or theft, errors in the execution of the trading platform or its technology, and
counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses, or for the purpose of payment
to holders of INX Tokens (other than to the Company itself) in the event of a change of control in the Company. In addition, payment of
funds held in the Cash Fund is subject to the approval of the Board of Directors of the Company which always consists of a majority of
independent board members. In the case of an Insolvency Event, a liquidator, court or other applicable authority may determine that INX
Token holders are not entitled to any payment from the Company&#8217;s assets or that the INX Token holders&#8217; claims are not senior
in right to claims or interests of the Company&#8217;s shareholders, in particular the shareholders who have not agreed to subordinate
their rights to the claims of INX Token holders. In addition, the Company may incur debt (including secured debt) that ranks equally with,
or senior to, the rights of INX Token holders. In the case of an Insolvency Event, holders of debt instruments ranking senior to INX Tokens,
as well as holders of other preferential claims under relevant insolvency laws, may be entitled to receive payment in full before INX
Token holders receive any distribution, including distributions of Adjusted Operating Cash Flow and distributions from the Cash Fund.
INX Token holders do not have a perfected security interest in either the Cash Fund, or their Pro Rata Portion (as such term is defined
in the Token Offering) of the Distributable Amount (as such term is defined in the Token Offering) of the cumulative Adjusted Operating
Cash Flow. There is no guarantee that an INX Token holder will receive any funds following an Insolvency Event (as such term is defined
in the Token Offering).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Future Development </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We plan to further develop
our products and business, and in particular, to conduct the following development activities:&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">Develop full solution to support onboarding and trading of institutions&#160;-&#160;front and back office.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 0.5in; text-align: justify">&#160;</td>
<td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
<td style="text-align: justify"><span style="font-size: 10pt">Create the infrastructure to develop and launch new digital assets and/or integration with third party providers for specific solutions. INX intends to establish a platform for the trading of cryptocurrency-based futures, options and swaps. INX has taken no steps towards the establishment of such a platform, which will require both the development of technological solutions as well as applicable regulatory approvals, and accordingly, there is no assurance that such a trading platform will ever be developed. </span></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify"><span style="font-size: 10pt">&#9679; </span></td>
<td>Execute the full vision of one regulated hub for digital assets &#8211; all under the same platform and share common processes (such as: registration, onboarding, trading, support). &#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td>
<td>&#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify"><span style="font-size: 10pt">&#9679; </span></td>
<td style="text-align: justify"><span style="font-size: 10pt">Develop automated know-your-client (KYC) and anti-money laundering (AML) procedures.</span></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify"><span style="font-size: 10pt">&#9679; </span></td>
<td style="text-align: justify"><span style="font-size: 10pt">Develop and launch a mobile application for digital securities trading.</span></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify"><span style="font-size: 10pt">&#9679; </span></td>
<td style="text-align: justify"><span style="font-size: 10pt">Add additional payment methods for INX Trading Solutions.</span></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify">&#160;</td>
<td style="text-align: justify"><span style="font-size: 10pt">&#9679; </span></td>
<td style="text-align: justify"><span style="font-size: 10pt">Develop multi-blockchain support for the INXS platform.</span></td></tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Our Growth Strategies </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that as INX Trading
Solutions completes each phase of development, which we expect will increase the number of high-volume blockchain assets included on our
platforms, our business operations will grow and enable us to launch several growth strategies, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt"><span style="text-decoration:underline">Active expansion of institutional blockchain asset trading and large-scale block transactions</span>. We promote our trading platforms and related services with institutional and other accredited investors such as family offices, hedge funds and others who require access to platforms for trading cryptocurrencies or security tokens, including trades in large-scale block transactions.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><span style="text-decoration:underline">Fully monetize market data and connectivity</span>. We aim to serve as a hub for blockchain asset traders, institutional investors, commercial banks and individuals trading blockchain assets. As we attract more clients, we expect that we will accumulate non-proprietary big-data relating to trading behavior and related market statistics. We plan to use this data for internal use and as a product to be sold to institutional investors and trade analysts.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><span style="text-decoration:underline">Strategic opportunities</span>. Upon completion of development phases, we plan to pursue strategic alliances with commercial banks and other licensed and regulated blockchain asset trading platforms for the expansion of our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><span style="text-decoration:underline">The INX Token</span><i>.</i> Use of the INX Token is intended to create a &#8220;virtuous cycle,&#8221; where users will get benefits to buy INX Tokens. For example, INX Token holders may be entitled to&#160;a minimum of 10% discount on the trading fees on the INXS Trading Platform. This, in turn, may increase the value of the INX Token as the number of users on the INXS Trading Platform grows. In addition, holders of INX Tokens will be entitled to a distribution based on our net cash flow from operating activities, excluding any cash proceeds from an initial sale by the Company of an INX Token. Our profit share model makes these INX Token holders beneficiaries of the growth and success of the Company&#8217;s operations. The Company has not allocated for issuance and has no current intention to issue 35 million of the 200 million INX Tokens that have been created. In addition, the Company may reserve an additional 20% of INX Tokens received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed 35 million plus 50% of the number of INX Tokens sold by the Company to the public pursuant to our initial public offering and subsequent offerings of INX Tokens (excluding re-issuances of reacquired INX Tokens), up to a maximum of 100 million INX Tokens. The Company does not intend to issue these reserved INX Tokens for general fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations of the Company if the Board of Directors determines that the Company has net cash balances sufficient to fund less than six months of the Company&#8217;s operations. We intend to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to limit the dilution to INX Token holders.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 0.5in">&#160;</td>
<td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
<td style="text-align: justify"><span style="font-size: 10pt"><span style="text-decoration:underline">Single integrated solution</span>. We believe that developing INX Trading Solutions with the capability to provide customers with a single integrated solution to access an array of services and features will be preferred by participants in the financial services community and will attract high volume traders who need a multifunctional trading solution. We intend to bolster our competitive position by developing platforms for a wide breadth of asset classes, each platform with a suite of workflow functionalities across the entire transaction lifecycle, including pre-trade, trade and post-trade services. In the future, the Company intends to establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly, there is no assurance that such a trading platform will ever be developed.</span></td></tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Competition</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We face intense competition
in the blockchain asset trading market on a global level. As of April 30, 2023, top blockchain asset trading platforms, based on USD daily
trading volume, include Binance, Coinbase Exchange, Kraken, Bitstamp, KuCoin and bybit.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An ever-growing number of
previously unregulated trading platforms have announced intentions to operate as a regulated broker-dealers, or as otherwise regulated
entities either under the federal securities laws, U.S. state or local laws or, as applicable, the laws of other jurisdictions (outside
the U.S.) such as the EU. The market for trading blockchain assets has generated considerable interest and is continually evolving with
new entrants to the market. In addition, established financial institutions have expressed interest in operating regulated blockchain
asset exchanges or trading platforms and utilizing blockchain assets in bank financing practices.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For example, in January
2019, t0.com, Inc. announced that its security token trading platform was operational and began trading tZERO token, in compliance
with SEC and FINRA regulations. Coinbase and Uphold, two blockchain asset trading platforms, have each announced plans seek to SEC
approval to operate trading platforms for trading blockchain assets that are securities, and on April 14, 2021, Coinbase listed its
shares on the Nasdaq stock exchange. In September 2021, Securitize Markets launched secondary trading for digital
securities.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for trading blockchain
assets is developing and we anticipate new entrants to the market and competition to intensify in the future. Our future competitors may
have greater resources than us and there can be no assurance that we will have the financial and operational resources necessary to carry
out our business plan and successfully compete with our competitors.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Regulation of our Trading Solution</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have registered
INX Digital with FinCEN as a federal money service business.&#160; In addition, as of April 30, 2023, we have been issued a license by
the following U.S. states, territories, and districts: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, District of Columbia,
Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Nebraska, New Hampshire,
New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Vermont,
Washington, and West Virginia, and have submitted notifications or are otherwise qualified to operate (based on being exempted from any
licensing requirement or notice requirement) in the following States: California, Colorado, Indiana, Massachusetts, Michigan, Missouri,
Montana, Pennsylvania, Utah, Wisconsin, and Wyoming. INX Digital is now eligible to operate as proposed in those jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">INXS was accredited by FINRA
as a registered broker-dealer and by the SEC as a recognized alternative trading system based on the licenses of Openfinance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the future, we intend to
establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment
of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly,
there is no assurance that such a trading platform will ever be developed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Regulation of Our Trading Platforms and
Our Subsidiaries</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial services industry
is subject to extensive regulation under both federal and state laws. Regulators that oversee our business activities are charged with
ensuring the integrity of the financial markets and the protection of customers and other third parties who engage in the financial markets.
Registration as a money transmitter, broker-dealer, and alternative trading system subject our subsidiaries to laws and regulations covering
all aspects of financial services, including sales methods, trade practices, use and safekeeping of clients&#8217; funds and other assets,
minimum capital requirements, record keeping, financing of securities purchases and conduct of directors, officers and employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Regulation of Money Transmitters</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The vast majority of States
maintain &#8220;money transmitter&#8221;, &#8220;money service business&#8221; or &#8220;check casher&#8221; licensing and regulatory
regimes, which generally govern entities that are in the business of taking possession of, providing non-bank storage services for and
transferring funds. These state licensing regimes vary from jurisdiction to jurisdiction and, while certain states have issued guidance
indicating that its licensing requirements do not apply to virtual currency, the majority of states have either affirmatively stated that
certain virtual currency activities are covered by their licensing regime or have been silent on the issue. Many jurisdictions maintain
exemptions and/or exceptions to their respective licensing regimes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At a federal level, the activity
regulated by state licenses also may make the relevant actor a &#8220;money transmitter&#8221; or &#8220;provider of prepaid access,&#8221;
each of which is considered a &#8220;money service business&#8221; (&#8220;MSB&#8221;) that must be registered with FinCEN unless otherwise
exempt. MSBs are subject to regulatory oversight and enforcement by FinCEN. MSBs are subject to the Bank Secrecy Act, as amended by the
USA PATRIOT Act of 2001 (&#8220;BSA&#8221;). MSBs must register with FinCEN and implement a compliance program appropriately tailored
to the MSBs&#8217; money laundering and financial crime risks. An MSB&#8217;s compliance program must incorporate relevant reporting,
recordkeeping and anti-money laundering controls and processes, including, to the extent applicable to the MSB&#8217;s business know-your-customer
controls, transaction monitoring, filing of suspicious activity reports (&#8220;SARs&#8221;), and sharing information with other financial
institutions under Section 314(b) of the USA PATRIOT Act, the &#8220;Funds Transfer Rule,&#8221; or the &#8220;Funds Travel Rule.&#8221;
On March 18, 2013 and May 9, 2019, FinCEN issued guidance concerning virtual currency and MSB licensing requirements in which FinCEN identified
&#8220;administrators&#8221; or &#8220;exchangers&#8221; of virtual currencies as MSBs, unless an exemption applies. There are various
exemptions to the MSB registration requirements. For example, entities that are &#8220;registered with, and functionally regulated or
examined by, the SEC or the CFTC&#8221; are exempt from federal MSB registration and reporting obligations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Larger money transmitters
may also be subject to direct supervision by the Consumer Financial Protection Bureau (the &#8220;CFPB&#8221;) and are required to provide
additional consumer information and disclosures, adopt error resolution standards and adjust refund procedures for international transactions
originating in the United States in a manner consistent with the Remittance Transfer Rule (a rule issued by the CFPB pursuant to the Dodd-Frank
Act). In addition, the CFPB may adopt other regulations governing consumer financial services, including regulations defining unfair,
deceptive, or abusive acts or practices, and new model disclosures. In addition, money transmitters may be subject to periodic examination
by the CFPB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have registered INX Digital
with FinCEN as a federal MSB and we have notified or intend to notify and/or register with state regulators in compliance with state money
transmitter requirements. We do not currently intend to rely on any state or federal exemptions to registering as an MSB, including any
exemptions relating to registration with and regulation by the SEC or CFTC, and we intend to monitor all legislative and regulatory developments
with respect to the BSA, including the publication of further rulings or guidance by FinCEN, and to make revisions to INX Digital&#8217;s
compliance program when appropriate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Broker-Dealer Regulation</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the United States, the
SEC is the federal agency responsible for the administration of the federal securities laws, with certain standard setting and monitoring
responsibilities delegated to self-regulatory organizations (&#8220;SROs&#8221;). Of these SROs, the regulation of broker-dealers is principally
the function of FINRA and every firm and broker that sells securities to the public in the United States must be licensed and registered
by FINRA. National securities exchanges, such as the New York Stock Exchange, also regulate and monitor broker-dealer activity. In addition
to federal and SRO oversight, securities firms are also subject to regulation by state securities administrators in those states in which
they conduct business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Broker-dealers, like other
securities market participants, must comply with the general &#8220;antifraud&#8221; provisions of the federal securities laws. The &#8220;antifraud&#8221;
provisions prohibit misstatements or misleading omissions of material facts, and fraudulent or manipulative acts and practices, in connection
with the purchase or sale of securities, and broker-dealers must conduct their activities to avoid these kinds of practices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Broker-dealers must also comply
with many requirements that are designed to maintain high industry standards. Broker-dealers owe their customers a duty: a) of fair dealing,
b) to recommend only those specific investments or overall investment strategies that are suitable, c) to seek to obtain the most favorable
terms available under the circumstances for its orders (best execution), d) to provide at or before the completion of transaction certain
information (including the identifying the securities involved in the transaction and compensation related to the transaction), and e)
to provide notice about purchasing securities on credit, among other disclosure requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Broker-dealers are also subject
to broad obligations under the Bank Secrecy Act to guard against money laundering and terrorist financing which include requirements to
file reports or retain records relating to suspicious transactions, customer identity, large cash transactions, cross-border currency
movement, foreign bank accounts and wire transfers, among other things.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Every U.S.-registered broker-dealer
is also subject to the Uniform Net Capital Requirements. The Uniform Net Capital Requirements are designed to ensure financial soundness
and liquidity by prohibiting a broker or dealer from engaging in business at a time when it does not satisfy minimum net capital requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the United States, net
capital is essentially defined as net worth (assets minus liabilities), plus qualifying subordinated borrowings and less certain mandatory
deductions that result from excluding assets that are not readily convertible into cash and from conservatively valuing certain other
assets, such as a firm&#8217;s positions in securities. Among these deductions are adjustments, which are referred to as &#8220;haircuts,&#8221;
in the market value of securities positions to reflect the market risk of such positions prior to their liquidation or disposition. The
Uniform Net Capital Requirements also impose a minimum ratio of equity to subordinated debt which may be included in net capital.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regulations have been adopted
by the SEC that prohibit the withdrawal of equity capital of a broker-dealer, restrict the ability of a broker-dealer to distribute or
engage in any transaction with a parent company or an affiliate that results in a reduction of equity capital or to provide an unsecured
loan or advance against equity capital for the direct or indirect benefit of certain persons related to the broker-dealer (including partners
and affiliates) if the broker-dealer&#8217;s net capital is, or would be as a result of such withdrawal, distribution, loan or advance,
below specified thresholds of excess net capital. In addition, the SEC&#8217;s regulations require certain notifications to be provided
in advance of such withdrawals, distributions, reductions, loans and advances that exceed in the aggregate 30% of excess net capital within
any 30 day period, and the SEC has the authority to restrict, for up to 20 business days, such withdrawal, distribution or reduction of
capital if the SEC concludes that it may be detrimental to the financial integrity of the broker-dealer or may expose its customers or
creditors to loss. Notice is required following any such withdrawal, distribution, reduction, loan or advance that exceeds in the aggregate
20% of excess net capital within any 30 day period. The SEC&#8217;s regulations limiting withdrawals of excess net capital do not preclude
the payment to employees of &#8220;reasonable compensation.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compliance with the Uniform
Net Capital Requirements may limit the extent and nature of our operations requiring the use of our registered broker-dealer subsidiaries&#8217;
capital and could also restrict or preclude our ability to withdraw capital from our broker-dealer subsidiaries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Regulation ATS</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regulation ATS permits a U.S.
ATS to match orders submitted by buyers and sellers without having to register as a national securities exchange. An ATS, although functionally
an exchange, is regulated as a broker-dealer. In order to acquire the status of an ATS, a firm must first be registered as a broker-dealer,
and then file an initial operation report with respect to the trading system on Form ATS. The Form ATS must provide detailed information
regarding the types of subscribers it expects to admit to the system, the securities it expects to trade, the manner in which the system
operates, including how orders are entered and transactions executed, reported, cleared and settled, as well as all relevant infrastructure
and procedures concerning system access, capacity, supervision, security, contingency planning and subscriber compliance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The initial operation report
must be accurate and kept current. The Commission does not issue approval orders for Form ATS filings; however, the Form ATS is not considered
filed unless it complies with all applicable requirements under Regulation ATS. Regulation ATS contains provisions concerning the system&#8217;s
operations, including: fair access to the trading system; fees charged; the display of orders and the ability to execute orders; system
capacity, integrity and security; record keeping and reporting; and procedures to ensure the confidential treatment of trading information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An ATS must also comply with
any applicable SRO rules and with state laws relating to alternative trading systems and relating to the offer or sale of securities or
the registration or regulation of persons or entities affecting securities transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Futures Exchanges, Clearing Houses, and Swaps
</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The CFTC is the federal agency
primarily responsible for the administration of federal commodities laws, including the adoption of rules applicable to Futures Commissions
Merchants, Designated Contract Markets and Swap Execution Facilities. The operations of U.S. futures exchanges, clearing houses, swap
data repository and swap execution facilities are subject to extensive regulation by the CFTC. The CFTC carries out the regulation of
the futures and swaps markets and clearing houses in accordance with the provisions of the CEA as amended by, among others, the Commodity
Futures Modernization Act and Dodd-Frank.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulatory Oversight of Blockchain Assets </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a summary
of recent demonstrations of regulatory action taken with regard to blockchain assets. We believe that these actions will impact the Company;
however, regulation of the blockchain industry is evolving rapidly. The regulatory landscape may differ from country to country, but we
expect for the foreseeable future that regulators will maintain an increased focus on blockchain assets. In addition, the SEC, FINRA,
and courts have continued, and likely will continue, to promulgate statements, enforcement actions and rulings, as applicable, interpreting
the characterization of blockchain assets, the issuance of blockchain assets and regulating behavior in the market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regulation of blockchain assets
by U.S. federal and state governments, foreign governments and self-regulatory organizations remains in its early stages. As blockchain
assets have grown in popularity and in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies such as the SEC,
the CFTC, FinCEN and the Federal Bureau of Investigation, have begun to examine the nature of blockchain assets and the markets on which
they are traded.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC has taken various
actions against persons or entities misusing blockchain assets, including virtual currencies, in connection with fraudulent schemes, inaccurate
and inadequate publicly disseminated information, and the offering of unregistered securities. In addition, on July 25, 2017, the SEC
issued Release No. 81207 (&#8220;the DAO Report&#8221;), in which it analyzed a certain issuance of tokens, and indicated that &#8220;whether
or not a particular transaction involves the offer and sale of a security &#8211; regardless of the terminology used &#8211; will depend
on the facts and circumstances, including the economic realities of the transaction.&#8221; The SEC clarified that the registration requirements&#8221;
apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a
decentralized autonomous organization, regardless whether those securities are &#8230;distributed in certificated form or through distributed
ledger technology&#8230;&#8221; On December 4, 2017 and December 11, 2017, the SEC announced enforcement actions relating to the PlexCoin
and Munchee token launches, respectively. Also on December 11, 2017, SEC Chairman Jay Clayton published a public statement entitled &#8220;Cryptocurrencies
and Initial Coin Offerings.&#8221; The SEC has made a concerted effort to monitor the ICO market and address&#8212;through the DAO Report
and the more recent SEC guidance&#8212;transactions and behaviors it believes are both inconsistent with and in violation of U.S. securities
laws. In early 2018, media reports indicated that the SEC has subpoenaed around 80 cryptocurrency firms as part of a targeted probe. On
March 7, 2018, the Divisions of Enforcement and Trading and Markets issued a public statement stating that many digital assets are likely
to be securities under the federal securities laws and urged investors to use platforms for trading such assets that are registered with
the SEC, such as a national securities exchange, ATS, or broker-dealer. Since March 2018, the SEC has continued to bring enforcement actions
and make public statements which further supports its view that blockchain assets should be treated as securities in almost all cases.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In December 2020 the SEC <span>filed
an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they illegally
sold a cryptocurrency, XPR and raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The
SEC also sued blockchain-based publishing company LBRY Inc,. alleging LBRY offered and sold &#8220;LBRY Credits&#8221; or &#8220;LBC&#8221;
without registering them as securities in violation of the US federal securities laws. A US District Court judge in New Hampshire ruled
that no reasonable jury could reject the SEC&#8217;s claim that LBRY offered LBC as an investment in its content distribution network and therefore,
securities. LBC did not sell the tokens through an initial coin offering (ICO), but instead sold LBC directly through the LBRY application.
LBRY attempted to argue that LBC had utility and were able to be used as currency on the platform early on to compensate creators and
incentivize users. LBRY CEO noted the judge&#8217;s decision in this case &#8220;threatens the entire US cryptocurrency industry&#8221; by setting
a standard that would deem &#8220;almost every cryptocurrency&#8221; a security. As this case was heard in the US First District, it does
not necessarily impact any decision in the Ripple case held in the Second District. Meanwhile, Chairman Gensler has stated he believes
that the vast majority of cryptocurrency tokens he has seen are securities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>More
recently, in December of last year, the SEC filed a complaint against Thor Technologies for the sale of its Thor tokens as unregistered
securities from its 2018 ICO. The SEC highlighted in its complaint that the Thor tokens were marketed as an investment, and Thor did not
give proper disclosures to investors regarding its financial condition and ability to generate profits.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The
SEC charged the FTX Trading Ltd. CEO and co-founder with defrauding investors through its crypto asset trading platform, FTX, with investigations
of other securities law violations ongoing. The CEO of FTX and various alleged celebrity endorsers were also sued in a potential class
action lawsuit for engaging in the unlawful sale of unregistered securities, deceptive and unfair business practices and participation
in a civil conspiracy akin to a &#8220;Ponzi scheme.&#8221; However, this is only one of many during 2022, and we will highlight a few notable
ones below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>In
July of last year, the SEC filed a complaint against a Coinbase Global, Inc., employee and two others alleging insider trading in violation
of the federal securities laws. In its complaint, the SEC points to nine different crypto assets and alleges that these are all &#8220;crypto
asset securities.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>The
SEC continues to focus on the cryptocurrency industry and we expect digital asset regulation to remain a priority in the near future.
The SEC&#8217;s Division of Enforcement nearly doubled the size of its Crypto Assets and Cyber Unit last year, allocating more resources to
enforcement in the crypto markets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 3, 2019, the Strategic
Hub for Innovation and Financial Technology (FinHub) of the SEC published informal guidance, titled &#8220;Framework for &#8216;Investment
Contract&#8217; Analysis of Digital Assets&#8221; (the Framework), which provides analytical tools for determining whether a blockchain
asset is a security under the U.S. federal securities laws. In the Framework, the SEC uses the term &#8220;digital asset&#8221; to refer
to an asset that is issued and transferred using distributed ledger or blockchain technology. In this report, we use the term &#8220;blockchain
asset&#8221; to distinguish between assets that are recorded and stored using blockchain technology and assets that may be stored in digital
form but which do not utilize blockchain technology. In addition, the SEC has not used the term &#8220;security token.&#8221; The Framework
provides a list of factors to consider when determining whether a digital asset offered for sale is a security. The factors included in
the Framework are based on an analysis of whether the blockchain asset is an &#8220;investment contract&#8221; as that term was first
used by the Supreme Court in <i>SEC v. Howey</i>, 328 U.S. 293 (1946), and which has been further clarified through subsequent case law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The CFTC has asserted the
belief that bitcoin and other virtual currencies meet the definition of a commodity and that the CFTC has regulatory authority over futures
and other derivatives based on virtual currencies, subject to facts and circumstances. The CFTC defined &#8220;virtual currencies&#8221;
as &#8220;a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value, but does
not have legal tender status in any jurisdiction. Bitcoin and other virtual currencies are distinct from &#8216;real&#8217; currencies,
which are the coin and paper money of the United States or another country that are designated as legal tender, circulate, and are customarily
used and accepted as a medium of exchange in the country of issuance.&#8221; Although the CFTC maintains regulatory oversight of the commodities
markets, beyond its anti-fraud and anti- manipulation authorities, the CFTC generally does not oversee &#8220;spot&#8221; or cash market
exchanges and transactions involving virtual currencies that do not utilize margin, leverage, or financing. In late 2022, <span>CFTC
Chair Rostin Behnam has requested &#8220;clear authority to impose [the CFTC&#8217;s] traditional regulatory regime over the digital asset
commodity market.&#8221; Earlier this year, bipartisan legislators in the U.S. Congress introduced competing bills that would each establish
a crypto market intermediary registration regime overseen by the CFTC. These bills are likely to be reintroduced in 2023. After recent
crypto market events, a comprehensive crypto bill that expands the CFTC&#8217;s jurisdiction may see broad support and if passed, would
impact the Company.</span> &#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to relevant state
money transmitter and securities laws, local state regulators may also regulate or seek to regulate blockchain assets. In July 2014, the
New York State Department of Financial Services (the &#8220;NYSDFS&#8221;) proposed the first state regulatory framework for licensing
participants in &#8220;virtual currency business activity.&#8221; The regulations, known as the &#8220;BitLicense,&#8221; are intended
to focus on consumer protection and, after the closure of an initial comment period that yielded 3,746 formal public comments and a re-proposal,
the NYSDFS issued its final BitLicense regulatory framework in June 2015. The BitLicense regulates the conduct of businesses that are
involved in &#8220;virtual currencies&#8221; in New York or with New York customers and prohibits any person or entity involved in such
activity to conduct activities without a license. Not all regulations of blockchain assets are restrictive. For example, on June 28, 2014,
California repealed a provision of its Corporations Code that prohibited corporations from using alternative forms of currency or value.
The bill indirectly authorizes the use of bitcoin as an alternative form of money in the state.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The IRS has released guidance
treating bitcoin as property that is not currency for U.S. federal income tax purposes. Taxing authorities of a number of U.S. states
have also issued their own guidance regarding the tax treatment of bitcoin for state income or sales tax purposes. The treatment of blockchain
assets may be the subject of contemplated tax reform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 13, 2017, the
European Securities and Markets Authority (&#8220;ESMA&#8221;) issued two statements, the first statement was intended to warn investors
of the inherent risks of ICOs, and the second statement sought to alert companies involved in ICOS to the need to meet relevant EU and
member state regulatory requirements. On February 12 2018, ESMA issued another EU-wide warning to consumers about the risks of buying
virtual currencies. In July 2018, The EU Fifth Anti Money Laundering Directive (EU) 2018/843 came into force and extended the scope of
KYC/AML regulations pertaining to virtual currency exchange platforms and wallet providers.&#160; On January 9 2019, both ESMA as well
as the European Banking Authority published reports on crypto-assets and assessed the suitability of the existing regulatory framework
relating to these instruments. In October 2021, the FATF updated its 2019 Guidance for a risk-based approach to virtual assets and virtual
asset service providers (&#8220;VASPs&#8221;). The update focused mainly on helping countries and VASPs understand their anti-money laundering
and counter-terrorist financial obligations, whilst also providing guidance on how to effectively implement the FATF&#8217;s requirements
as they apply to this sector. On 30 June 2022, the new EU Market in Crypto-assets Regulation (MiCA) was agreed on between the European
Commission, the European Parliament, and the Council of the European Union. MiCA intends to regulate crypto assets and their service providers
through a single licensing regime across all Member States by 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Blockchain assets also face
an uncertain regulatory landscape in many foreign jurisdictions. On September 4, 2017, the People&#8217;s Bank of China labeled blockchain
asset sales as &#8220;illegal and disruptive to economic and financial stability.&#8221; Previously, China had issued a notice that classified
bitcoin as legal and &#8220;virtual commodities;&#8221; however, the same notice restricted the banking and payment industries from using
bitcoin, creating uncertainty and limiting the ability of Bitcoin Exchanges to operate in the then-second largest bitcoin market. South
Korea&#8217;s Financial Services Commission likewise prohibited all forms of tokens on September 29, 2017. Japan has enacted a law regulating
virtual currencies which has brought Bitcoin exchanges under know-your-customer and anti-money laundering rules and resulted in the categorization
of Bitcoin as a kind of prepaid payment instrument. The law puts in place capital requirements for exchanges as well as cybersecurity
and operational stipulations. In addition, those exchanges are also required to conduct employee training programs and submit to annual
audits. To date, the Japanese Financial Services Agency (FSA) has granted licenses to 15 different cryptocurrencies or tokens trading
platforms. In November 2017, the Monetary Authority of Singapore (&#8220;MAS&#8221;) issued a statement that tokens sold through the blockchain
funding model may be considered securities under certain circumstances under Singapore law and provided case studies as examples of tokens
that do and do not constitute securities. Previously, the MAS had stated that other laws may apply to token sales, such as money laundering
and terrorism financing laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other jurisdictions are still researching the subject. In September
2017, FINMA issued guidance that it was investigating ICOs and that whenever FINMA is notified about ICO procedures that breach regulatory
law or which seek to circumvent financial market law it initiates enforcement proceedings. On February 16, 2018, FINMA publicly announced
ICO guidelines. In December 2018, the Swiss Federal Council adopted a report on the legal framework for blockchain and distributed ledger
technology in the financial sector. In March 2019, the Federal Council initiated consultation with regard to specific amendments to federal
law for the purpose of adapting federal law to developments in distributed ledger technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In December 2017, the UK Financial
Conduct Authority (&#8220;FCA&#8221;) issued a statement on distributed ledger technology which said, in part, that the FCA will gather
further evidence and conduct a deeper examination of the ICO market and that its findings will help to determine whether or not there
is need for further regulatory action. In June 2018, an amendment to the Tel Aviv Stock Exchange Ltd. (&#8220;TASE&#8221;) regulations
entered into effect, under which shares of companies operating in the field of cryptographic currencies will be excluded and / or not
included in the TASE indices, if such a company is engaged in the holding, investing or mining of distributed cryptographic currencies,
and the TASE Indices Committee decides that this activity is material or expected to be material to the company&#8217;s business. The
Israel Securities Authority (ISA) has previously indicated that to date, there is uncertainty as to the format and extent of the regulation
that will apply to the various activities in cryptographic currencies - especially those of decentralized currencies without any centralized
entity, such as Bitcoin, in terms of taxation, prevention of money laundering and terrorism, cyber security and investor protection. In
addition, the ISA has appointed a special committee authorized to examine the regulation of issuances of cryptographic currencies to the
public.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In its final report, published
in March 2019, the special committee recommended, among other things, focusing on the following: establishing a dedicated disclosure regime
to adjust to the unique characteristics of such activities; formation by a number of Israeli regulatory authorities (among others, the
Bank of Israel, Israeli Tax Authority, Anti-Money-Laundering Authority, Ministry of Finance, Justice Department, Israeli National Cyber
Directorate and ISA) of a &#8216;regulatory sandbox&#8217; with the aim of creating a harmonious government policy and the removal of
barriers to domestic industry in the field of cryptographic assets; and examining a better suitable regulatory framework for the trading
activity of cryptographic assets that are deemed securities. In addition, the special committee final report further provided the following
initial regulatory guidelines to this field:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) the question of whether
a cryptocurrency will be considered a security will be decided according to the totality of the circumstances and characteristics of each
case on its merits against the background of the purposes of the Israeli law;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) cryptographic currencies
that grant rights similar to those of traditional securities such as shares, bonds or participation units will be considered securities.
This category includes, for example, tokens who grant rights to participate in revenue or profits generated from an enterprise; tokens
granting rights to receive payments, fixed or variable, whether by way of the allocation of additional currencies or by way of redemption
of currencies; or tokens granting ownership rights or membership in an enterprise whose purpose is to generate an economic yield;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) blockchain assets intended
to be used as a method of payment, clearing or exchange only, other than in a specific enterprise, which do not confer additional rights
and are not controlled by a central entity, shall not typically be considered a security;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(4) blockchain assets that
embody a right to a product or service and are purchased for consumption and use only shall not typically be considered securities; and</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(5) a public offering of a
cryptographic currency falling within the definition of a security is subject to the requirement to publish a prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In&#160;Canada,&#160;the&#160;Canadian
Securities Administrators (the&#160;&#8220;CSA&#8221;),&#160;the&#160;umbrella group for&#160;the&#160;provincial and territorial securities
regulators, have generally taken&#160;the&#160;position that securities laws apply&#160;to&#160;cryptocurrencies.&#160;The&#160;CSA, beginning&#160;in&#160;2017,
has published a series of Staff Notices outlining their position and explaining how securities laws apply&#160;to&#160;various aspects
of&#160;the&#160;cryptocurrency industry.&#160;The&#160;majority of those Staff Notices have dealt with&#160;the&#160;question of when
a cryptocurrency constitutes a security for securities law purposes, as well as providing specific regulatory guidance for cryptocurrency
trading platforms that have Canadian resident customers and other businesses that hold cryptocurrencies on behalf of Canadian clients.
As&#160;the&#160;Company does not have Canadian clients, or other Canadian operations, such regulatory guidance does not apply&#160;to&#160;the&#160;Company.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Government of Gibraltar
enacted the Financial Services (Distributed Ledger Technology Providers) Regulations (the &#8220;DLT Regulations&#8221;) which came into
effect on January 1, 2018. The primary purpose of the DLT Regulations is to create a safe environment for DLT-related businesses to operate
and innovate, while simultaneously protecting consumers and safeguarding Gibraltar&#8217;s reputation as a trusted and stable global business
hub. In April 2022, Gibraltar introduced the 10<sup>th</sup> core principle of their DLT Regulations, Market Integrity. This principle
focuses on combating market and price manipulation, as well as any other activity that may negatively affect the reputation of Gibraltar&#8217;s
digital asset market. The integrity of these markets is a key focus and Gibraltar intends to remain at the forefront of standard setting
in the industry. Companies which use blockchain technology to store or transmit value belonging to others by way of business are caught
by the DLT Regulations and require a license in Gibraltar. The activity of undertaking a token sale does not automatically fall within
the scope of the DLT Regulations, however, this will depend on the manner in which the sale of tokens is structured and the characteristics
of the token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>European Regulation</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The recent extension of anti-money
laundering requirements to certain crypto-related activities by the European Union&#8217;s Fifth Money Laundering Directive has increased
the regulatory compliance burden for our business in Europe and, as a result of the fragmented approach to the implementation of its provisions,
resulted in distinct and divergent national licensing and registration regimes for us in different E.U. member states. Further E.U.-level
legislation imposing additional regulatory requirements in relation to crypto-related activities is also expected in the near term, such
as with the enactment of the Markets in Crypto-Assets Regulation (&#8220;MiCA&#8221;). Among other provisions, MiCA is expected to introduce
a comprehensive authorization and compliance regime for crypto asset service providers and a disclosure regime for the issuers of certain
crypto assets, which is expected to impact our operations in the European Union. For example, the requirements of privacy and data protection
laws in the European Union, United States, and elsewhere are typically founded on the premise of centralized, data-controller-based data
processing, and require fulfilling, among other things, individual rights to access or delete one&#8217;s data. This creates unique compliance
challenges given the nature of blockchain&#8217;s peer-to-peer network architecture, lack of centralized control, immutability, and perpetual
data storage.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The European Commission has
published and moved to implement the following EU legislation, relevant to crypto-assets: a directive introducing targeted amendments
to the existing extensive body of EU financial services legislative and regulatory instruments. These are to accommodate the Markets in
Crypto-Assets (MiCA) regime and the Pilot DLT Market Infrastructure Regulation (PDMIR). EU regulation on digital operational resilience
for the financial sector (DORA), which received final agreement in November 2022 and is awaiting signature and official publication. In
addition, updates are expected on the harmonisation of the EU AML framework, including the introduction of a single pan-EU AML Authority.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Markets in Crypto-Assets
(MiCA) Regulation is expected to enter into force in 2023. After formal approval by the Council of the EU, MiCA will be published in the
EU&#8217;s Official Journal and enter into force 20 days later. MiCA will generally start applying after a transitional period of 18 months,
meaning that MiCA will likely take effect no earlier than Q3 2024. MiCA is intended to close gaps in existing EU financial services legislation
by establishing a harmonized set of rules for crypto-assets and related activities and services at EU level. MiCA intends to providing
legal certainty for crypto-assets not covered by existing EU legislation. The legislation would regulate issuance and trading of crypto-assets
as well as the management of the underlying assets, where applicable, with additional regulatory rules.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MiCA is part of a broader
digital finance package, which, inter alia, also includes the Digital Operational Resilience Act (DORA) which received final agreement
in November 2022 and is awaiting signature and official publication; and the DLT Pilot Regime Regulation which creating a sandbox regime
for private sector participants developing infrastructure for the trading and settlement of crypto-assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>United Kingdom</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In October 2022, the House
of Commons voted to give HM Treasury (HMT) the power to make cryptoassets a regulated financial instrument. The vote clarifies that &#8216;Digital
Settlement Assets&#8217; can be brought within the scope of the existing provisions of the Financial Services and Markets Act 2000. If
they are brought within scope, cryptoassets will be treated like other forms of financial assets. The new legislation is included in the
Financial Services and Markets Bill 2022 (FSMB). Tokens currently unregulated, but could be captured under the FSMB, subject to regulatory
outcomes, including utility tokens, which can be redeemed for access to a specific product or service and unbacked exchange tokens or
cryptocurrencies, which are usually decentralized and designed to be used primarily as a medium of exchange.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In June 2022, HMT confirmed
it would extend information sharing requirements for wire transfers (known as the Travel Rule) to include cryptoassets. From September
2023, firms will be required to collect beneficiary and originator information for transactions with an &#8216;elevated risk of illicit
finance&#8217;, as defined in the legislation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, there are other
rules expected this year such as final rules on managing the failure of systemic stablecoin firms by HMT, expected in 2023; Consultations
on proposed regulatory framework for systemic stablecoins, systemic wallets as well as proposed authorization and supervision regime by
the Bank of England, expected in 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Japan</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Japanese government has
announced plans to introduce new rules to mitigate money laundering through crypto. Expected to take effect in 2023, the regulations will
provide Japanese authorities with additional monitoring capabilities to track virtual currency transfers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Japan&#8217;s Act on Prevention
of Transfer of Criminal Proceeds will be amended to implement these changes. If approved, cryptoassets will be brought under the travel
rule as recommended by the Financial Action Task Force (FATF) in its targeted update on the implementation of FATF standards on virtual
assets (VAs) and virtual asset service providers (VASPs).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The new rules focus on remittances
and sharing know your customer Know-Your-Client-related information. Under the regulations, exchange operators must share customer information,
including the customer&#8217;s name and address, when tokens are moved between platforms. VASPs that violate the rules will be subject
to administrative guidance and criminal penalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, we have treated,
and we anticipate continuing to treat, the INX Tokens as securities under the laws of all foreign jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Organizational Structure.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Parent </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TIDCI was incorporated under
the Business Corporations Act (British Columbia) (&#8220;BCBCA&#8221;) on August 22, 2018, as evidenced by a Certificate of Incorporation
issued pursuant to the provisions of the BCBCA under the name &#8220;Valdy Investments Ltd.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 27, 2019, Valdy completed
its initial public offering of common shares as a CPC, pursuant to which it issued 2,500,000 common shares (&#8220;Valdy Shares&#8221;)
at a price of CAD$0.10 per Valdy Share for gross proceeds of CAD$250,000. The Valdy Shares were listed on the TSXV on May 29, 2019, under
the symbol &#8220;VLDY.P&#8221; until November 16, 2021, when they were voluntarily delisted from the TSXV.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TIDCI consolidated its issued
and outstanding common shares (the &#8220;Consolidation&#8221;) on the basis of one (1) post-Consolidation Share for every 2.7266667 pre-Consolidation
Shares outstanding on a fully-diluted basis such that immediately prior to the Closing, there were 5,124,740 Shares outstanding on a fully-diluted
basis (&#8220;post consolidated shares&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TIDCI issued to the shareholders
of INX (excluding holders of INX Financing Shares) consideration of an aggregate of 167,331,410 post-Consolidation common shares. The
common shares issued to holders of INX Financing Shares were issued on a 1:1 basis, and all other common shares will be issued on the
basis of 10.4871348 common shares for each INX Share (the &#8220;Conversion Ratio&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 10, 2022, the Valdy
Transaction was completed, pursuant to which Valdy acquired all of the issued and outstanding securities of the Company (including all
outstanding options and warrants) from the INX Securityholders by way of a securities exchange, in accordance with the terms and conditions
of the Security Exchange Agreement dated November 3, 2021, whereby its name was changed from &#8220;Valdy Investments Ltd.&#8221; to &#8220;The
INX Digital Company, Inc.&#8221; For more information on the Security Exchange Agreement, see &#8220;Item 7, Part A &#8211; Major Shareholders
and Related Party Transactions &#8211; Major Shareholders &#8211; Changes in Percentage Ownership by Major Shareholders - Security Exchange
Agreement.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TIDCI has obtained a final
approval from the NEO Exchange to list the Valdy Shares on the NEO Exchange under the symbol &#8220;INXD&#8221; upon fulfilling all listing
requirements of the NEO Exchange and as of January 24, 2022 the shares of TIDCI are traded on the NEO Exchange under such symbol.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>List of Subsidiaries</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth
the legal name, location and country of incorporation and percentage ownership of each of our current principal operating subsidiaries:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Subsidiary Name</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Country of Incorporation</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Ownership<br/>
 Percentage</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left; padding-bottom: 1.5pt">INX Digital, Inc.</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 30%; text-align: left; padding-bottom: 1.5pt">United States (Delaware)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 12%; text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">INX Services, Inc.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">United States (Delaware)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">INX Solutions Limited</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">Gibraltar</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Midgard Technologies Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">Israel</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">INX Securities, LLC</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">United States (Pennsylvania)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">I.L.S. Brokers Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">Israel</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">INX Digital Assets UK Limited</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">UK</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">INX Transfer Agent LLC</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">United States (Delaware)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">INX EU Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">Cyprus</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">100%</td></tr>
  </table><div>






</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The contractual relationship
between the Company and the following Company Subsidiaries: INX Digital, INX Services, INXS and Midgard, and between ILSB and INX UK are
administered by a series of intercompany agreements that include services agreements, license agreements, loan agreements and expense
sharing agreements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For more information on our
subsidiaries, see &#8220;Item 4, Part A &#8211; &#8220;Information on the Company - History and Development of the Company.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_075"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>D. Property, Plant and Equipment.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than computer equipment
used in operations, the Company currently does not own or hold any tangible fixed assets, including real property, plant or equipment,
whether by leasehold or otherwise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_076"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 4A. UNRESOLVED STAFF COMMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->73<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><div><a id="m_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Operating Results</b>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><i>You should read the following
discussion and analysis of our financial condition and results of operations together with the section titled &#8220;Selected Financial
Data&#8221; and our financial statements and related notes included elsewhere in this report. This discussion and other parts of this
report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations,
and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those discussed in the section titled &#8220;Risk Factors.&#8221;
</i>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Nature of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">The Company was incorporated
on November 27, 2017 and, through its subsidiaries, is engaged in the operation and ongoing development of an integrated and regulated
solution for trading of blockchain assets on a digital asset and security token trading platform called INX.One. The Company also provides
other services and products related to the trading of blockchain assets. INX.One is designed to offer both security tokens and digital
assets under a single platform and to help customers automate and coordinate front-office trading functions, middle-office risk management
and reporting functions, as well as operations and accounting functions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>INX Token</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">As part of its blockchain ecosystem, the Company
created the INX Token (the &#8220;INX Token&#8221;), and on August 20, 2020, the SEC acknowledged the effectiveness of the F-1 Registration
Statement that was filed by INX with the SEC and declared effectiveness of the INX Token Offering (&#8220;the Offering&#8221;). In such
Offering, INX offered up to 130 million INX Tokens at a price of $0.90 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The INX Token was offered to the public on August
24, 2020, and closed on April 22, 2021, when the Offering was completed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The Company is the world&#8217;s first company to debut
and successfully complete an SEC-registered IPO of a blockchain security token (the INX Token). The public offering of the INX Token was
registered under the United States Securities Act of 1933 and, in such registration, the INX Token is deemed to be an &#8220;equity security&#8221;
under relevant SEC rules and regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span>In July
2021, INX listed the INX Token for trading on the INXS Trading Platform, rebranded since then to INX.One.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">INX has not allocated for issuance and does not
intend to issue 35 million of the 200 million INX Tokens that have been created. The Company may reserve an additional 20% of INX Tokens
received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed 35 million plus 50% of the
number of INX Tokens sold by the Company to the public pursuant to the Offering and subsequent offerings of INX Tokens (excluding re-issuances
of reacquired INX Tokens), up to a maximum of 100 million INX Tokens. The Company does not intend to issue these reserved INX Tokens for
general fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations
of the Company if the Board of Directors of it determines that the Company has net cash balances sufficient to fund less than nine months
of its operations. The Company intends to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to
limit dilution to INX Token holders. As of December 31, 2022, the Company held approximately 67.5 million INX Tokens in reserve.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->74<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Following an amendment to the INX Token rights
which was approved by the Board of Directors of the Company on May 17, 2019 (the &#8220;Token Rights Amendment&#8221;), the holders of
INX Tokens (other than INX) are entitled to receive a pro rata distribution of 40% of the Company&#8217;s net cash flow from operating
activities, excluding any cash proceeds from an initial sale by the Company of an INX Token (the &#8220;Adjusted Operating Cash Flow&#8221;).
The distribution is based on the Company&#8217;s cumulative Adjusted Operating Cash Flow, net of cash flows which have already formed
a basis for a prior distribution, calculated as of December 31 of each year. The distribution is to be paid to parties (other than the
Company) holding INX Tokens as of March 31 of the following year on April 30th, commencing with the first distribution to be paid, if
at all. As of December 31, 2022, the cumulative adjusted operating cash flow activity was negative, and therefore no distribution is expected
to be paid on April 30, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">We plan to offer holders of INX Tokens an entitlement
to, at a minimum, a 10% discount on the payment of transaction fees on the INX.One Trading Platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Results of Operations for the year ended December 31, 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Revenues</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s
operations consist of two segments which represent the two lines of business for which the Company expects to earn income, incur
costs and allocate resources: digital assets and brokerage. The Company generated $4,273,000 in net revenue for the year ended
December 31, 2022, consisting of $3,621,000 revenue from brokerage fees related to our FX business and $874,000 from transaction,
trading and listing fees as well as net loss on digital assets utilized in operations of $222,000 related to our security token and
digital assets business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net loss on digital assets utilized in operations of $222,000 included
gross sales of $8,724,000, less cost of digital assets of $8,758,000, less change in revaluation loss of $188,000, which mainly relates
to liquidity providing and risk management trading activity initiated during 2022 by one of the subsidiaries.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Digital assets segment:</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Trading and transaction
fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">Trading fee revenue consists
of transaction revenue generated from trading and transaction fees from trades in security tokens and digital assets that occur on our
INX.One platform. Trading fees earned are based on the price and quantity of the digital asset that is bought, sold, or converted and
are published on our website (https://www.inx.co/fee-schedules/). Transaction fees may be either set as a fixed fee per transaction or
as a percentage of the amount traded. Transaction revenue is recognized at the time the transaction is processed and is directly correlated
with trading and transaction volume.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Listing fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2022, we launched primary
offerings of security tokens issued by our issuer clients on our trading platform INX.One. This service is offered by our SEC broker-dealer
subsidiary INXS. Similar to the INX Token, security tokens listed by us are registered with the SEC and are deemed to be an &#8220;equity
security&#8221; under relevant SEC rules and regulations. After the primary offerings are completed, tokens are expected to trade on INX.One
is the secondary market. Listing fees are generated on each primary raise and are directly correlated to the total capital raised by the
issuer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Brokergage segment:&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Brokerage fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Brokerage fees revenue consists
of brokerage fees generated from trading in foreign exchange markets with global forex dealers and banks by one of our subsidiaries ILSB.
Transactions denominated in foreign currency are recorded at the representative rate of exchange on the date of the transaction. Revenues
from brokerage services are recorded on the date the service is provided or the operation is carried out, and are based on notional amounts
traded.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Key Business Metrics</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Security Token and Digital
Asset Business</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">For our security token and digital assets business,
we use the following key business metrics to evaluate our business, measure performance and make strategic decisions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left; padding-bottom: 1.5pt; text-indent: -0.15in; padding-left: 0.15in">Number of Verified Accounts	</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">30,584</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">23,856</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">2,833</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.15in; padding-left: 0.15in">Trading Volume	</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">66,744,966</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">58,663,116</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: center">$</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.15in; padding-left: 0.15in">Customer Assets on Platform	</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">2,608,749</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">4,270,194</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: center">$</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 81; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->75<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We define &#8220;Verified
Accounts&#8221; as all retail institutional customers that have registered and successfully onboarded onto our platform and have established
an account as of the date of measurement. Verified Users are an indication of our growth. These customers have demonstrated an interest
in our platform or direct intent to invest and transact in security tokens and digital assets. Number of Verified Accounts represents
our customer acquisition pace. Verified Accounts may overstate the number of unique customers who have established an account on our platform
as one customer may register for, and use, multiple accounts.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We define &#8220;Trading Volume&#8221;
as the total U.S. dollar equivalent value of spot matched trades transacted between a buyer and seller through our platform during the
period of measurement. Trading Volume represents the product of the quantity of asset transacted and the trade price at the time the transaction
was executed. As trading activity directly impacts transaction revenue, we believe this measure is a reflection of liquidity on our order
books, trading health, and the underlying growth of the digital asset economy. Generally, Trading Volume on our platform is primarily
influenced by the price of security tokens and digital assets, price volatility and macroeconomic conditions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We define &#8220;Customer
Assets on Platform&#8221; as the aggregate of customer digital asset liabilities and customer custodial fiat liabilities, set forth on
our consolidated balance sheet under Customer Funds, plus customer fiat balances and security token balances held in self-custody by customers
of INXS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The value of Assets on Platform
is driven by three factors &#8211; the price, quantity, and type of digital asset or security token held by customers on our platform.
Changes in the price and quantity or type of digital asset or security token held on our platform, can result in the increase or decrease
in Assets on Platform in a particular period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>FX Business</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For our FX business, we use
total notional amount traded to evaluate this business, measure performance and make strategic decisions. During the years ended December
31, 2022 and 2021, our subsidiary ILSB traded total notional amounts of approximately $88.7 billion and $86.7 billion, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Total Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating expenses for the
year ended December 31, 2022, were $19.0 million, and they consist of research and development, sales and marketing and general and administrative
expenses, net of the gain from the fair value adjustment of INX Token warrants.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Research and development expenses, of $5.3 million, primarily consisted of costs of our research and development personnel and other
development-related expenses.</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Sales and marketing expenses of $6.5 million primarily comprised
of personnel cost, promotional campaigns and other marketing costs incurred mainly related to the digital assets business segment.</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">General and administrative expenses of $15.5 million, mainly
include the cost of personnel, compliance and legal costs, software and technology infrastructure, audit services and insurance.</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Operating expenses include a positive fair value adjustment
of the INX Token warrant liability for warrants granted to employees and service providers of $8.3 million.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Net income</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net income for the year
ended December 31, 2022, was approximately $211.3 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Adjusted Operating Cash
Flow (Negative)</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Adjusted Operating Cash
Flow for the year ended December 31, 2022, was approximately negative $22.3 million. The cumulative Adjusted Operating Cash Flow as of
December 31, 2022, was approximately negative $56.7 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 82; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->76<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2022:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; font-weight: bold; text-align: justify; text-indent: -0.125in; padding-left: 0.125in">Cumulative Adjusted Operating Cash Flow as of December 31, 2021</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">(34,374,000</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; text-indent: -0.125in; padding-left: 0.125in">Less: Net cash used in operating activities in the year ended December 31, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(22,305,000</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: -0.125in; padding-left: 0.125in">Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2021 that formed the basis of distribution paid to INX Token holders on April 30, 2022 (there was no distribution)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; text-indent: -0.125in; padding-left: 0.125in">Plus: Proceeds from INX Tokens in the year ended December 31, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Less: Proceeds from initial sale of INX Tokens in the year ended December 31, 2022</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: justify; text-indent: -0.125in; padding-left: 0.125in">Cumulative Adjusted Operating Cash Flow as of December 31, 2022</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(56,679,000</td><td style="font-weight: bold; text-align: left">)</td></tr>
  </table><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Results of Operations for the year ended December 31, 2021</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Revenues</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company generated $2.5
million in revenue for the year ended December 31, 2021, consisting of $2.3 million in revenue from brokerage fees related to our FX business
and $0.3 million from transaction and trading fees related to our digital asset and security token business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Total Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating expenses for the
year ended December 31, 2021 were $56 million and they mainly consist of research and development, sales and marketing, and general and
administrative expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Research and development expenses, of $3.9 million, primarily includes costs of our research and
                                                                                                                                                      development personnel and other development-related expenses.</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Sales and marketing expenses of $6.4 million, is primarily comprised
of personnel costs and marketing costs incurred in connection with our initial public offering.</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">General and administrative expenses, of $33.1 million, include
costs of personnel, costs associated with the registration of our platform, as well as legal and other services related to our initial
public offering.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
<tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#8722;</span></td><td style="text-align: justify">Operating expenses include a negative fair value adjustment of the
INX Token warrant liability for warrants granted to employees and service providers of $12.6 million.</td>
</tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Net Loss </i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net loss for the year
ended December 31, 2021 was approximately $215.2 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Adjusted Operating Cash
Flow (Negative)</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Adjusted Operating Cash
Flow for the year ended December 31, 2021 was approximately negative $22.0 million. The cumulative Adjusted Operating Cash Flow as of
December 31, 2021 was approximately negative $34.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2021:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0in 0in 0in 0.125in; width: 88%; font-weight: bold; text-align: justify; text-indent: -0.125in">Cumulative Adjusted Operating Cash Flow as of December 31, 2020</td><td style="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 9%; font-weight: bold; text-align: right">(12,419,000</td><td style="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding: 0in 0in 0in 0.125in; text-align: justify; text-indent: -0.125in">Less: Net cash used in operating activities in the year ended December 31, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(21,955,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0in 0in 0in 0.125in; text-align: justify; text-indent: -0.125in">Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2020 that formed the basis of distribution paid to INX Token holders on April 30, 2021 (there was no distribution)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding: 0in 0in 0in 0.125in; text-align: justify; text-indent: -0.125in">Plus: Proceeds from INX Tokens in the year ended December 31, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">81,340,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0in 0in 1.5pt 0.125in; text-align: justify; text-indent: -0.125in">Less: Proceeds from initial sale of INX Tokens in the year ended December 31, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(81,340,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding: 0in 0in 0in 0.125in; font-weight: bold; text-align: justify; text-indent: -0.125in">Cumulative Adjusted Operating Cash Flow as of December 31, 2021</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 83; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Results of Operations for the year ended December 31, 2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>Total Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating expenses for the
year ended December 31, 2020 were $11.8 million, and they consist of research and development, sales and marketing and general and administrative
expenses. Research and development expenses, which amounted to $1.6 million, include the cost of development of our trading platform and
are primarily comprised of costs of our research and development personnel and other development-related expenses. Sales and marketing
expenses amounted to $2.2 million, primarily comprised of costs of personnel and other marketing costs incurred in connection with our
initial public offering. General and administrative expenses, which amounted to $8.1 million, include costs of personnel, costs associated
with the registration of our platform, as well as legal and other services related to our initial public offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Net Loss</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net loss for the year
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Adjusted Operating Cash
Flow (Negative)</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Adjusted Operating Cash
Flow for the year ended December 31, 2020 was approximately negative $6.1 million. The cumulative Adjusted Operating Cash Flow as of December
31, 2020 was approximately negative $12.4 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2020:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0in 0in 0in 0.125in; width: 88%; font-weight: bold; text-align: justify; text-indent: -0.125in">Cumulative Adjusted Operating Cash Flow as of December 31, 2019</td><td style="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 9%; font-weight: bold; text-align: right">(6,364,000</td><td style="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(6,055,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding: 0in 0in 0in 0.125in; text-align: justify; text-indent: -0.125in">Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2019 that formed the basis of distribution paid to INX Token holders on April 30, 2020 (there was no distribution)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">(12,419,000</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 84; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->78<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Comparison
of operating results for the year ended December 31, 2022 and 2021</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span>The following
table presents an overview of our results of operations for year ended December 31, 2022 and 2021:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span>(U.S. Dollars
in thousands, except share and per share data)</span></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>



</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(6,512</td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(15,450</td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(677</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(427</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 85; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->79<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Research
and Development Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span>We
incurred $5.3 million in research and development expenses for the year ended December 31, 2022, compared to $3.9 million for the year
ended December 31, 2021. Research and Development expenses increased by $1.4 million for the year ended December 31, 2022 compared to
the year ended December 31, 2021. This increase was primarily driven by an increase of $2.7 million in personnel cost and cost and services
related to the development of our trading platform, which is offset by the decrease in share-based compensation expense of $1.1 million,
respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Sales
and Marketing Expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>We
incurred $6.5 million in sales and marketing expenses during the year ended December 31, 2022, compared to $6.4 million for the year ended
December 31, 2021. Sales and marketing expenses increased by $0.1 million for the year ended December 31, 2022 compared to the year ended
December 31, 2021. This net increase was primarily driven by decreases in share-based compensation expenses of $1.1 million,which is offset
by increases in token-based compensation of $0.3 million, personnel costs of $0.5 million, other marketing costs of $0.3 million and customer
support expenses of $0.1 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>General
and Administrative expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>We
incurred $15.5 million in general and administrative expenses during the year ended December 31, 2022, compared to $33.1 million for the
year ended December 31, 2021, a decrease of $17.6 million, primarily driven by decreases in share-based and token-based compensation expense
of $7.6 million and $6.0 million, respectively, a decrease in IPO related costs of $5.2 million, and $1.5 million decrease related to
compliance and registration fees. The decrease offsets the increase in personnel costs of $0.8 million, an increase in amortization expense
of $0.6 million, an increase in right-of-asset depreciation of $0.4 million, an increase in software and technology of $0.3 million, and
an increase in other operation costs of $0.6 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Change
in fair value of INX Token and INX Token warrants</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Our
balance sheet as of December 31, 2022 includes the INX Token liability of $56.9 million compared to $282.6 million as of December 31,
2021. Based on the terms of the INX Token, the INX Token is a hybrid financial instrument and under the applicable accounting standards
it is presented as a financial liability on our consolidated balance sheet due to the right of the INX Token holders to use the INX Token
to pay transaction fees on the INX.One Trading Platform.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>On December
31, 2022 and 2021, we measured the INX Token at fair value based on the closing market price of the INX Token (see further details in
Note</span> 11 <span>in the audited consolidated financial statements).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Also,
as of December 31, 2022 and December 31, 2021 the total amount of outstanding INX Token warrants the Company has granted to
directors, employees and service providers is 6,972,192 and 5,660,861, respectively. The INX Token warrant liability of $1.6 million and $9.8 million at December 31, 2022
and 2021, respectively, is presented at fair value based on Black-Scholes pricing model. (see further details in Note </span>12 <span>in
the financial statements).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Changes
in fair value of the liabilities noted above are recorded through profit or loss in our consolidated statements of comprehensive income
(loss). During the year ended December 31, 2022, the fair value of INX Tokens and INX Token warrant liabilities decreased by $226 million
and $8.2 million, respectively, which is recorded as a gain in the statement of comprehensive income (loss).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 86; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->80<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>INX Token Valuation</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The fair value of each INX Token as of December
31, 2022, and December 31, 2021, was $0.43 and $2.20, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Net income
(loss)</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Net
income for the year ended December 31, 2022, was $211.3 million compared to net loss of $215.2 million, for the year ended December
31, 2021, an increase of $426.5 million. A substantial portion of this increase, specifically $387.2 and $20.1 million, is
attributable to the change in the fair value of the liabilities related to INX Tokens and INX Token warrants, respectively, from
December 31, 2021 to December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Total
comprehensive income (loss)</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Total
comprehensive income for the year ended December 31, 2022, was $209.9 million compared to total comprehensive loss of $215.1 million,
for year ended December 31, 2021, an increase of $425.0 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><i>Adjusted
Operating Cash Flow</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Adjusted
Operating Cash Flow for the year ended December 31, 2022, was negative $22.3, compared to an Adjusted Operating Cash Flow of negative
$22.0 for the year ended December 31, 2021, an increase in negative cash-flows from operations of $0.3 million that resulted from an increase
in our loss from operations between the compared periods.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span><b>Comparison of year ended December
31, 2021 and 202</b></span><b>0</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span>The following
table presents an overview of our results of operations for year ended December 31, 2021 and 2020:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(U.S. Dollars in thousands, except share and per
share data)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 87; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->81<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Research and Development Expenses&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We incurred $3.9 million in
research and development expenses for the year ended December 31, 2021, compared to $1.6 million for the year ended December 31, 2020.
Research and development expenses increased by $2.3 million for the year ended December 31, 2021 compared to the year ended December 31,
2020. This increase was primarily driven by increases in share-based compensation expense of $0.8 million, and an increase in personnel
cost of $1.5 million and other cost and services related to the development of our trading platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Sales and Marketing Expenses&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We incurred $6.4 million in
sales and marketing expenses for the year ended December 31, 2021, compared to $2.2 million for the year ended December 31, 2020. Sales
and marketing expenses increased by $4.2 million during the year ended December 31, 2021 compared to the year ended December 31, 2020.
This increase was primarily driven by increases in share-based compensation expense of $1.9 million, an increase in personnel costs of
$1.8 million and an increase in other marketing costs in connection with our initial public offering of $0.8 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>General and Administrative expenses </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We incurred $33.1 million
in general and administrative expenses for the year ended December 31, 2021, compared to $8.1 million for the year ended December 31,
2020, an increase of $25.0 million, primarily driven by increases in share-based compensation expense of $7.6 million, an increase in
personnel costs of $4.3 million, an increase in legal and offering related services of $4.9 million, an increase in compliance and registration
fees of $1.9 million and an increase in other operation costs of $3.0 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Change in fair value of INX Token and INX Token
warrants</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our consolidated balance sheet
as of December 31, 2021 includes INX Token liability of $282.6 million compared to $24.1 million as of December 31, 2020. Based on the
terms of the INX Token, the INX Token is a hybrid financial instrument and under the applicable accounting standards it is presented as
a financial liability on our consolidated balance sheet due to the right of the INX Token holders to use the INX token to pay transaction
fees on the INX Trading Platform. At December 31, 2021, we measured the INX Token at fair value based on the closing market price of the
INX Token as of December 31, 2021. At December 31, 2020, we measured the INX Token at fair value based on the closing marketing price
and the offering price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Also, as of December 31, 2021
and December 31, 2020 the total amount of outstanding INX Token warrants the Company has granted to directors, employees and service providers
is </span> 5,660,861 and 5,926,083, respectively. The related liability in the amount of $9.8 million and $4.3 million as of December 31, 2021 and 2020, respectively is presented
at fair value based on Black-Scholes pricing model.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Changes in fair value of the
liabilities noted above are recorded through profit or loss in our consolidated statements of comprehensive income (loss). During the
year ended December 31, 2021, the fair value of INX Token liability increased by $258.6 million and the liability for INX Token grant
commitments increased by $5.6 million, which is recorded as a net loss in the statement of comprehensive income(loss).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 88; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->82<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Loss and total comprehensive loss</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Loss and total comprehensive
loss for the year ended December 31, 2021, was $215.3 million compared to net loss of $24.3 million, for year ended December 31, 2020,
an increase of $190.9 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Adjusted Operating Cash Flow</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Adjusted Operating Cash Flow
for the year ended December 31, 2021, was negative $22.0 million, compared to an Adjusted Operating Cash Flow of negative $6.1 million
for the year ended December 31, 2020, an increase in negative cash-flows from operations of $15.9 million that resulted from an increase
in our loss from operations between the compared periods and decrease in fair value of our digital assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&#160;</p><div>

</div><div><a id="m_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>B. Liquidity and Capital Resources.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Capital resources</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022, our
operating capital of $29.5 million is held in cash and cash equivalents, U.S. Treasury securities, and marketable corporate bonds as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(U.S. Dollars in thousands)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Reserve Fund (otherwise referred to as Cash
Fund)</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, as of December
31, 2022 and 2021, INX has segregated $36,023, which is restricted as the Reserve Fund set aside to cover customer and INX&#8217;s losses, if
any, that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty
defaults, including instances where counterparties lack sufficient collateral to cover losses. The Reserve Fund is comprised of cash and
cash equivalents, U.S. Treasury securities and corporate bonds held at banks and brokerage firms as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(U.S. Dollars in thousands)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 89; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Digital assets</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022 and
2021, we held $2.6 million and $1 million, respectively, of digital assets for operating purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; padding-top: 0in; text-align: justify; padding-right: 0in; padding-left: 0in; text-indent: 0in"><span style="font-size: 10pt"><b>Coin Symbol</b></span></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
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 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
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2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-top: 0in; text-align: justify; padding-right: 0in; padding-left: 0in; text-indent: 0in">&#160;</td><td>&#160;</td>
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</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify">All digital assets are classified as Level 2 in the fair
value hierarchy.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Material cash commitments and contractual obligations</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">As of December 31, 2022 and 2021, we have the
following short and long-term cash commitments and contractual obligations:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">(U.S. Dollars in thousands)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are required to hold corporate
liquid assets or net worth at our subsidiaries to meet capital requirements established by our regulators based on statutory net capital
requirements. We are in compliance with these capital requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Operating capital</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, although we have
generated brokerage fee revenue through ILSB as well as trading and transaction fees, and listing fees earned on our security token and
digital assets business offered by INXS and INX Digital, we have mainly financed our operations through equity investments made by our
shareholders and the INX Token Offering in the US and the Valdy Transaction in Canada.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future expenditures and
capital requirements will depend on numerous factors, including our growth, our ability to acquire and retain new clients utilizing our
services and attract issuers to issue security tokens and list them on INX.One for trading, as well as the continuing market acceptance
of our products and services and digital assets and blockchain technology and overall economic conditions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that our existing
operating capital is sufficient in both the short and long term to meet our operating requirements, including meeting our working capital
and capital expenditure requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>C. Research and development, patents and licenses,
etc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For information concerning
our research and development policies and a description of the amount spent during each of the last four fiscal years on company-sponsored
research and development activities, see &#8220;Item 5. Operating and Financial Review and Prospects&#8212;Results of Operations.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="m_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>D. Trend Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See &#8220;Item 4, Item 5.A&#8221;
and &#8220;Item 5.B.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>E. Critical Accounting Estimates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Critical Accounting Policies and Estimates
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements have been prepared in accordance with International Accounting Standards (&#8220;IFRS&#8221;) as issued by the International
Accounting Standards Board (&#8220;IASB&#8221;) and interpretations of the International Reporting Interpretations Committee (&#8220;IFRIC&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with IFRS, in
preparing our financial statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of net revenues and
expenses during the reported period. We develop and periodically change these estimates and assumptions based on historical experience
and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many aspects of the digital
currency and blockchain industry have not yet been addressed by current IFRS guidance. The Company is required to make significant assumptions
and judgments as to its accounting policies and the application thereof, which is disclosed in the notes to the consolidated financial
statements. If specific guidance is enacted by the IASB in the future, the impact may result in changes to the Company&#8217;s profit
or loss and financial position as currently presented.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 91; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->85<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The critical accounting policies
requiring estimates, assumptions and judgments that we believe have the most significant impact on our financial statements are described
below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Financial liabilities at fair value through
profit or loss - INX Token liability:</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on the terms of the
INX Token, the INX Token is a hybrid financial instrument. The host instrument is a financial liability due to the right of the INX Token
holder to use the INX Token to pay transaction fees on the INX One Trading Platform. The INX Token is considered a puttable instrument
which is a financial liability in accordance with IAS 32, Financial Instruments: Presentation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s obligation
to distribute annually to the INX Token holders 40% of the Company&#8217;s Adjusted Operating Cash Flow is an embedded derivative. The
Company views the Company&#8217;s operating cash flows as a financial variable, and therefore, the embedded derivative requires bifurcation
pursuant to IFRS 9. The Company elected in accordance with IAS 9 to designate the entire financial liability (including the embedded derivative)
at fair value through profit and loss.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, the INX Token
liability is remeasured to fair value at the end of each reporting period through profit or loss. The change in the fair value of the
INX Token liability that is attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded
derivative, to the extent there are any, would be presented in other comprehensive income. The remaining amount of the change in the fair
value of the INX Token liability would be presented in profit or loss. At December&#160;31, 2022, all change in fair value of the INX
Token liability is included in profit or loss.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When the INX Token is used
to pay for services provided by the Company, the respective portion of the INX Token liability is derecognized and revenue is recognized.
The fair value of INX Tokens issued in consideration for services to be provided to the Company (through its subsidiaries) is recognized
as compensation expense when services are provided.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Impairment of goodwill</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company reviews goodwill
for impairment at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing
use of the cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable
discount rate for those cash flows.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Discount rate for a lease liability</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When the Company is unable
to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing
rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security,
the funds necessary to obtain an asset of similar economic environment. When there are no financing transactions that can serve as a basis,
the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from
the lease contract&#8217;s conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert in determining
the incremental borrowing rate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 92; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->86<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Revenue recognition:</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The Company determines revenue recognition from
contracts with customers through the following steps:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Identification of the contract with the customer;</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Identification of performance obligations in the contract;</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Determination of transaction price;</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Allocation of the transaction price to the performance obligations
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</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Recognition of the revenue when, or as, the Company satisfies
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</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">In determining the amount of revenue from contracts
with customers, the Company evaluates whether it is a principal or an agent in the arrangement. The Company is a principal when the Company
controls the promised goods or services before transferring them to the customer. In these circumstances, the Company recognizes revenue
for the gross amount of the consideration. When the Company is an agent, it recognizes revenue for the net amount of the consideration,
after deducting the amount due to the principal.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Brokerage fees revenue is recorded according to
the date the service was provided, or the operation was carried out.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Trading fees revenue includes revenue from transaction
and trading fees charged to customers utilizing the Company&#8217;s trading platform and are presented on a net basis. The Company&#8217;s
service consists of a single performance obligation to provide a matching service when customers buy, sell, or convert digital assets.
The Company does not control the digital asset being provided before it is transferred to the buyer, does not have inventory risk related
to the digital asset, and is not responsible for the settlement of the digital asset. The Company also does not set the price for the
digital asset as the price is a market rate established by users of the platform. As a result, the Company acts as an agent in facilitating
the ability for a customer to purchase digital assets from another customer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Trading fees charged on the INX.One trading platform
are recognized as revenue when the Company&#8217;s obligation is satisfied, the promised services are transferred to the customer and
the customer obtains control. Contracts with customers are usually open-ended and can be terminated by either party without a termination
penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The transaction
price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf
of third parties (such as taxes).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="text-indent: 0.5in; font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The Company also recognizes revenue from buying
and selling digital assets it owns. Such revenue is recognized in the gross amount of consideration received on sales less the cost of
digital assets sold.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 6. <span style="font-variant: small-caps">DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Directors and Senior Management.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table sets forth certain information
relating to our &#160;executive officers and board members, including their ages, as of April 30, 2023. Unless otherwise stated, the address
for our senior management is at the Company&#8217;s registered office currently located at 57/63 Line Wall Road, Gibraltar, GX11 1AA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 30%"><span style="font-size: 10pt"><b>Name</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 8%; text-align: center"><span style="font-size: 10pt"><b>Age</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 60%; text-align: center"><span style="font-size: 10pt"><b>Position</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Shy Datika</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">54</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director, President &amp; CEO</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-size: 10pt">Itai Avneri</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">49</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Deputy CEO &amp; Chief Operating Officer</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Maia Naor </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">39</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Product Officer</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-size: 10pt">Jonathan Azeroual </span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">36</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Blockchain Officer</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Alan Silbert</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">50</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Director; Chief Executive Officer of North America</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-size: 10pt">Keren Avidar</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">46</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Global General Counsel</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Paz Diamant</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">54</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Technology Officer</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-size: 10pt">Renata Szkoda</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">46</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Financial Officer </span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">Vlad Uchenik</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt">53</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Chief Compliance Officer; Chief Executive Officer of INXS</span></td></tr>
  <tr>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">David Weild (1)</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">66</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Independent Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Nicholas Thadaney (1) (2)(3)</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">54</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Independent Director</span></td></tr>
  <tr>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Thomas Lewis (1) (2)(3)</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">70</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Independent Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Hilary Kramer (2)(3)</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">59 </span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Independent Director</span></td></tr>
  <tr>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Demetra Kalogerou</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-size: 10pt">54</span></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom"><span style="font-size: 10pt">Independent Director</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Under Gibraltar law, directors
are appointed indefinitely unless their appointment specifies a defined period. Our directors were not appointed with a specified defined
period of term.</span></td>
</tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(1) </td><td style="text-align: justify">Member of the Compensation Committee</td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(2) </td><td style="text-align: justify">Member of the Audit Committee</td></tr>
     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: left">(3) </td><td style="text-align: justify">Member of the Nominating and Governance Committee</td></tr>
     </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><i>Mr. Shy Datika</i> is one
of our founders and has served as our President since 2017 and CEO since 2022. Mr. Datika has also been a member of the board of directors
since December 2021. Mr. Datika has more than 25 years of experience in the banking and finance industry. As founder and former Chief
Executive Officer of ILS Brokers, a multinational brokerage house based in Tel-Aviv, Israel, Mr. Datika has a significant role in the
adoption of electronic trading in the global OTC foreign exchange (OTC Forex) market as well as in the brokerage activity and online trading&#160;business.
During the last 20 years, Mr. Datika has been extensively involved in financial technology (&#8220;fin-tech&#8221;) as an investor, director
or manager of several companies, including as CEO of ForexManage Ltd., a software company providing professional technology platform solutions
for institutional risk management and trading activities in the forex and interest rate derivatives markets for the banking industry,
any option, Ouroboros Ltd (CySec licenced CIF) and as an independent (external) director and the Chairman of the Investment Committee
and member of the Audit Committee of Altshuler Shaham provident funds and Pension Ltd. Prior to that, he was a senior dealer in Bank Hapoalim
heading the G7 spot desk. Mr. Datika possesses broad knowledge in the areas of fin-tech and trading and has an extensive track record
in building sustainable businesses in the financial market. Mr. Datika serves as a director on the board of numerous private companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><i>Mr. Itai Avneri</i>
has served as our Deputy CEO since March 2022 and our Chief Operating Officer since January 2021. Mr. Avneri brings over 20 years of executive
management experience into this role. His commercial work spans a variety of technology companies, including from June 2015 to June 2017,
COO of anyoption, and former Playtech Group-CMO and CEO of the Israel office. Since 2018 Mr. Avneri has served on the advisory boards
of various enterprises including Reality Races, Layer11, Groupiez and BeexOS. Mr. Avneri has led the launch of multiple financial services
and products in Europe and South Africa among other regulated jurisdictions. He designed and built advanced information systems with specializations
in trading, BI &amp; CRM solutions, marketing and KYC automation as well as payments and integration hubs. His in-depth knowledge and
hands-on experience on all aspects of online business (B2B &amp; B2C), marketing, technology and finance will play a key role at INX Limited.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Ms. Maia Naor</i> has served
as our Chief Product Officer and has been with the Company since its founding. Ms. Naor has ten years of fin-tech experience working for
companies across Europe and Israel. From 2010 until July 2017, Ms. Naor served as Vice President &#8211; Product in Anyoption Ltd., a
leading European regulated trading group where she oversaw the planning, implementation and launch of several financial services and computer-internet-based
and cellular-based trading applications. Ms. Naor also gained experience in building and training teams of data scientists that supported
the growth and optimization of the trading products. Ms. Naor is a graduate of the Tel Aviv University School of Economics and the Tel
Aviv University School of Mathematical Sciences, with honors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Jonathan Azeroual</i>
has served as our Chief Blockchain Officer our incorporation. Mr. Azeroual has over 10 years of broad financial experience working for
banks, hedge funds, brokerage firms in various analytical, operational or executive positions in Paris&#8217;, New York&#8217;s, and London&#8217;s
financial markets. He is the co-founder and, from July 2015 until December 2017, served as Chief Executive Officer of Bsave Ltd., a UK
company which operates a Bitcoin savings platform. He also currently works for Redwood Digital Fund as a member of their Trading &amp;
Investment Services team. He currently serves on the board of directors of Redwood Digital Offshore Fund I, Ltd. From June 2016 to February
2017, he was a member of the Trading &amp; Investment Services group at Hadas Capital. Between October 2014 and October 2015 he was an
algorithmic trader for Colley Cooper Capital. Prior to that, starting in 2012 until October 2014, he served as an institutional sales
trader for Sunrise Brokers. He graduated with honors and holds a postgraduate degree in Financial and Statistical Engineering from Paris-Dauphine
University and holds ESCP Europe Advanced Master in Finance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Alan Silbert</i> has
served as our Secretary and our Chief Executive Officer of North America since April 2021. Mr. Silbert has been our director since March
2018. He joined the Company in March 2018 as Executive Managing Director. Mr. Silbert is responsible for Company operations in North America,
and his responsibilities include facilitating the build-out of the director and advisor team, raising capital, growing operations and
infrastructure for North American operations and leading regulatory and licensing processes. From December 2015 until March 2018, he was
Senior Vice President at Capital One Commercial Banking, serving on the Asset Based Lending and Life Science Finance/Venture Debt teams.
Prior to that, he was Senior Vice President at GE Capital and Vice President at Merrill Lynch Capital. From February 2013 until October
2017, he served as founder and Chief Executive Officer of BitPremier LLC, a bitcoin luxury marketplace. Mr. Silbert received his BS in
Business Administration with a concentration in Finance from Towson University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Paz Diamant</i> has
served as our Chief Technology Officer since July 2020. Mr. Diamant has more than 25 years of experience in the banking and financial
technology industry. From November 2013 to January 2020, Mr. Diamant held several roles at eToro, a worldwide leading social investment
network, where he was most recently Managing Director of R&amp;D and Product. In that role he directed the design, development, and deployment
of the company&#8217;s cloud-based exchange system, and was responsible for the development of eToro&#8217;s complicated hedging algorithms.
While at eToro, Mr. Diamant managed R&amp;D teams for several years while implementing cutting-edge, cloud-based technologies successfully.
From October 2002 to January 2011, Mr. Diamant was the founder and Chief Executive Officer of ForexManage Ltd., a leading provider of
advanced, real-time, risk management and foreign exchange online trading technologies for the banking industry. Through his role at ForexManage,
Mr. Diamant had a significant role in the adoption of advanced risk management models in major European banks and brokerage houses. Mr.
Diamant holds a BS in Physics from the Technion - Israel Institute of Technology, where he graduated cum laude, and an MBA, Finance from
Bar-Ilan University.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mrs. Renata Szkoda</i>
is our Chief Financial Officer. Ms. Szkoda brings with her over 20 years of experience and financial leadership in regulated capital markets
and financial services industry. Ms. Szkoda has deep expertise in financial regulation and a strong record of building financial and operational
infrastructure to enable business expansion within regulated environments. She was previously the Director of Finance at Galaxy Digital,
a financial services and investment management firm focused on digital assets. Prior to that, Ms. Szkoda was the Chief Financial Officer
at Blue Fire Capital, proprietary trading firm based in Chicago, Chief Financial Officer of KCG Futures, the division of KCG Americas
(KCG), a self-clearing futures commission merchant (FCM) and the Senior Vice President, Accounting and Finance at Rosenthal Collins Group
(RCG), a FCM based in Chicago where she oversaw the finance and treasury operations. Prior to her employment at RCG, Ms. Szkoda was a
senior audit manager in the Financial Services Practice Group of RSM McGladrey, providing audit and consulting services to a variety of
financial services firms, including securities broker-dealers, futures commission merchants, hedge funds, investment advisors, market
specialists and commodity pools. Ms. Szkoda is a CPA and holds a Bachelors of Science in Accounting from University of Illinois at Chicago.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><i>Ms.&#160;Keren
Avidar</i> is Global General Counsel. Ms. Avidar brings with her over 20 years of legal experience in the fintech industry.&#160; Ms. Avidar has an extensive knowledge of worldwide financial markets, for both regulated and unregulated markets, best practice standards
in the industry and regulatory requirements. Ms. Avidar has a strong record of building legal and regulatory infrastructure to enable
business operation and expansion within the financial environment. Ms. Avidar managed her own practice while advising her clients on all
aspects of their daily operations and business concerns, she was previously the General Legal Counsel at Final Group, a leader in algorithmic
trading worldwide, she was an associate at S. Horowitz &amp; Co., one of Israel&#8217;s largest law firms, an associate at Fried, Frank,
Harris, Shriver and Jacobson LLP, an international law firm headquartered in New York City. Ms. Avidar was admitted to practice law in
Israel in 2001 and in New York in 2005. She holds a LLB from Middlesex University, London and LLM from Tel Aviv University.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Vlad Uchenik</i> is
Chief Compliance Officer for the INX Trading Solutions group of companies and the Chief Executive Officer of INXS. Mr. Uchenik has over
26 years of experience in the financial services industry. Vlad is currently CEO and CCO for INXS (formerly Openfinance Securities, LLC,
Sageworks Capital, LLC and Raiseworks), and has been in the role since 2013. Mr. Uchenik was responsible for getting regulatory approval
for the first ATS that traded digital securities in the secondary market, with the first trade occurring in November 2018. Mr. Uchenik
also previously worked as CCO for Eagliew Securities, LLC, as CCO for iTB Securities LLC, a fixed income ATS trading platform BD, and
as COO and CCO for InterMerchant Securities, LLC in New York. Prior to that, Mr. Uchenik was the Chief Operating, Compliance and Financial
Officer of Jesup &amp; Lamont Securities Corp supervising over 150 registered reps. Mr. Uchenik was also the COO/CCO of Safdie Investment
Services Corp., a boutique BD and Investment Advisor, and served as the VP of Regulatory Risk and Control for US Trust&#8217;s Operations
Division where his responsibilities included overseeing the risk and compliance measures in operations for the BD, 4 SEC IAs, a National
Bank, &#8217;40 Act mutual funds and a Trust company. Mr. Uchenik also held a CCO role with BBVA Securities Corp in New York and was CCO/COO
for Security Financial Network in Phoenixville, PA. Mr. Uchenik has the FINRA Series 4, 7, 24, 28, 53, 63 and 65 licenses. Mr. Uchenik
has an undergraduate degree in Business Management from Rutgers University in New Brunswick, NJ and a master&#8217;s degree in Finance
from Temple University in Philadelphia, PA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. David Weild</i> has
been an independent director of the Company since April 2018. Mr. Weild is founder, chairman and CEO of Weild &amp; Co., Inc., parent
company of the investment banking firm Weild Capital, LLC. Prior to Weild &amp; Co., Mr. Weild was vice chairman of NASDAQ, president
of PrudentialFinancial.com and head of corporate finance and equity capital markets at Prudential Securities, Inc. Mr. Weild holds an
M.B.A. from the Stern School of Business and a B.A. from Wesleyan University, and also studied at the Sorbonne, Ecoles des Hautes Etudes
Commerciales (HEC Paris) and the Stockholm School of Economics. Mr. Weild is currently on the boards of BioSig Technologies, Inc. and
<span>Scopus Biopharma, Inc., and previously served on the board of </span>PAVmed Inc. From September
2010 to June 2011, Mr. Weild served on the board of Helium.com, until it was acquired by R.R. Donnelly &amp; Sons Co. Since 2003, Mr.
Weild was a director and then chairman of the board of the 9-11 charity Tuesday&#8217;s Children. He became chairman emeritus in October
2016. Mr. Weild brings extensive financial, economic, stock exchange, capital markets, and small company expertise to the Company gained
throughout his career on Wall Street. He is a recognized expert in capital markets and has spoken at the White House, Congress, the SEC,
OECD and the G-20 on how market structure can be better to improve capital formation and economic growth.&#160;<span>Mr.
Weild co-authored a number of definitive white papers that were the key catalysts for new legislation and regulatory reforms, including
the JOBS Act. </span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Nicholas (Nick) Thadaney
</i>has been an independent director of the Company since July 2018.&#160;He most recently founded Partners Capital Corp. in 2019, a firm
focused on advising, co-investing and partnering with entrepreneurs and their management teams to accelerate the growth of their businesses
through innovative capital and strategic solutions. Mr. Thadaney was previously President and Chief Executive Officer, Global Equity Capital
Markets, and a member of the senior management team of TMX Group until February 2018. In his roles with TMX Group, Mr. Thadaney was responsible
for all equity listing and trading activity across the company&#8217;s equities markets and alternative trading systems, including heading
the Toronto Stock Exchange, TSX Venture Exchange, Alpha, TMX Select, and TSX Private Markets.&#160; He also oversaw TSX Trust - TMX Group&#8217;s
transfer agency and corporate trust services provider. Prior to joining TMX Group in 2015, Mr. Thadaney was Chief Executive Officer of
ITG Canada Corp. (now Virtu Financial) since 2005, with responsibility for managing all aspects of the business, as well as a Member of
ITG&#8217;s Global Executive Committee. He joined ITG Canada as Director of Sales and Trading in 2000. Before his tenure at ITG, Mr. Thadaney
was Vice-President, Business Development (Equities) at C.T. Securities Inc.(Canada Trust), which was later acquired by T.D. Securities
Inc.(TD Bank) in 1999. Mr. Thadaney has been a board &amp; committee member of a number of prominent businesses, industry associations,
and registered charities, including: Bermuda Stock Exchange; CanDeal; Investment Industry Regulatory Organization of Canada (IIROC); Investment
Industry Association of Canada; JA (Junior Achievement) Canada; Mount Sinai Hospital Asset Management Industry Hold&#8217;em for Life
Charity (Co-Chair); Toronto Financial Services Alliance (now Toronto Finance International); Young Presidents Organization (Ontario Chapter);
and the World Federation of Exchanges SME Advisory Board. Mr. Thadaney also currently serves as a senior advisor to a number of firms
and a director on the boards of Coinsquare Inc., Tetra Trust Company and Agrinam Acquisition Corporation.<i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Mr. Thomas K. Lewis, Jr</i>.
has been an independent director of the Company since October 2018. Mr. Lewis was the Founder of Noble 4 Advisors, LLC, a company he founded
in September 2012 that develops and provides methodologies, technologies and guidance that assist boards, CEOs, investors and senior executives
in defining and implementing plans to improve operating performance. Mr. Lewis retired from Noble 4 Advisors in January 2020. Mr. Lewis
has served as CEO of four companies, including The Green Exchange, a federally regulated futures and options exchange in New York and
London, from September 2009 to July 2012; Automated Power Exchange Inc. (APX), a venture-backed wholesale power markets and renewable
energy services provider, from August 2003 to October 2007; Ameritrade, an online retail broker, from February 1999 to August 2000; and
Campus Pipeline, an educational software company. Prior to that, Mr. Lewis served in technology leadership positions with American Express,
Credit Suisse First Boston, USF&amp;G Insurance and Marriott Corporation. Mr. Lewis has served on the boards of The New York Ledger Exchange,
aka LedgerX (from 2014 to 2017), Green Exchange Holdings, LLC (2009 to 2012), Evolution Markets, Inc. (2007 to 2009), Automated Power
Exchange Inc. (2003 to 2007) and Neovest Holdings, Inc. (2001 to 2004). Mr. Lewis has served on the advisory board of Xpansiv Limited,
a global marketplace for ESG commodities, including carbon, RECs, digital fuels, and water rights, since 2021. Mr. Lewis holds an honorary
doctorate, a master&#8217;s degree in computer and information science, and a bachelor&#8217;s degree, magna cum laude, in business administration
from the University of New Haven in Connecticut, where he was honored as a distinguished alumnus. He served as chairman of the Board of
Trustees of the Henry Lee Institute of Forensic Science, and served for twelve years as a member of the Board of Trustees of the University
of New Haven. He has also served as a member of the Advisory Board of the Johns Hopkins Carey Business School at Johns Hopkins University.
Mr. Lewis served as Executive in Residence and Assistant Professor at Johns Hopkins University, Carey Business School. Mr. Lewis also
served as the head of technology for the Executive Office of the President of the United States during the Ronald Reagan Administration.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Ms. Hilary Kramer</i> has
been an independent director of the Company since January 2022. Ms. Hilary Kramer is a former analyst and investment banker at Morgan
Stanley and Lehman Brothers, founded and ran a long-short hedge fund, GreenTech Research LLC, and has been chief investment officer overseeing
more than $5 billion of debt and equity portfolios. Ms. Kramer served as the co-head and board member of a $1.0 billion private equity
fund jointly owned by Hicks, Muse that developed and invested in new programming content as well as serving on the advisory board of numerous
companies including DirecTV International, Spalding and Evenflo. Ms. Kramer has served as a director to four publicly-traded companies
and consults in family offices and institutions, such as Montgomery Asset Management, Freddie Mac, and families on the Forbes list of
global billionaires ranging from Latin America to the Middle East. Ms. Kramer authors seven subscription-based investment newsletters
and has a nationally syndicated investment radio show, Kramer&#8217;s Millionaire Maker, on the Salem Network in 140 markets. In 2020,
Ms.&#160;Kramer was awarded the Gracie Award for best syndicated national radio show. She is the author of Ahead of the Curve (Simon &amp;
Schuster 2007) and The Little Book of Big Profits from Small Stocks (Wiley 2012). Her latest book, Game Changing Investing (Regnery 2020)
is on the best- selling lists at &#8220;The Wall Street Journal&#8221;, &#8220;USA TODAY&#8221; and on Amazon.com. Ms. Kramer was a founding
member of the Wall Street Journal Women in Business. In 2011, Ms.&#160;Kramer received the Certified Fraud Examiner (CFE) designation
and has been an investigator and expert witness on compliance, board governance, executive compensation, portfolio structure and investment
suitability cases. Ms. Kramer holds an MBA from the Wharton School of the University of Pennsylvania and a BA with honors from Wellesley
College.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Ms. Demetra Kalogerou</i>
has been an independent director of the Company since February 2022. Mrs. Demetra also currently serves as a non-executive independent
board member of the listed company Swissquote Group Holding Ltd., and of the private company ecombx Ltd. Ms.&#160;Kalogerou (BSc, MSc,
MPhil) from September 2011 to September 2021 was the Chairwoman of CYSEC, the independent public supervisory Authority responsible for
the supervision of the Capital Markets, the investment services market, all the transactions in transferable securities and other financial
instruments carried in and out of the Republic of Cyprus and the collective investment and asset management sector. It also supervises
firms offering administrative services as well as Crypto Exchanges only in terms of AML issues and financial terrorism. From 2011 to 2021,
she participated in the board of supervisors of the European Securities and Markets Authority (ESMA). Also, from November 2012 until February
2021, she was a member of the Cyprus Public Audit Oversight Board, which has been established for the oversight of auditors and audit
firms. Furthermore, from November 2019 until June 2021 Mrs. Kalogerou chaired the ad-hoc tripartite committee and she was also a member
of the four-party committee concerning the investigation of&#160; the naturalization of all persons done through the CIP. Additionally
from September 2013 until June 2014, Mrs. Kalogerou has been a member of the Resolution Authority, with the Minister of Finance and the
Governor of Central Bank of Cyprus, which supervised the implementation of the resolution of financial institutions in Cyprus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Arrangements Concerning Election of Directors; Family Relationships</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There are no family relationships between any of
the directors or members of senior management named above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 35.45pt">We are not aware of any arrangements or understandings
with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or
member of senior management.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.45pt">&#160;</p><div>

</div><div><a id="m_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Compensation.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Compensation of Senior Management and Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Director is entitled
to receive an option to purchase 3,500 INX Tokens each month at an exercise price equal to the fair market value of the INX Token at the
date of the grant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compensation provided to key
management personnel and directors for the years ended December 31, 2022, and 2021 and 2020 was as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(U.S. Dollars in thousands)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&#160;</p><div>

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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,852</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify">See Note 18 to the consolidated audited financial statements as of December 31, 2022 for description
                                                    of options granted by Parent to employees of the Company that are exercisable into Common shares of Parent.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-indent: -28.35pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For additional information, see &#8220;Item 7.B
Related Party Transactions <i>&#8211;</i> Relationships and Transactions with Directors and Executive Officers.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>Equity Compensation Plan Information&#160;&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 22, 2021, the
Company&#8217;s board of directors adopted the INX Limited Share Ownership and Award Plan (2021) (the &#8220;Plan&#8221;) and, on March
18, 2021, the Company&#8217;s shareholders approved the Plan. The Plan provided for the grant of options to purchase Ordinary Shares and
restricted shares to such employees, directors and consultants engaged by the Company or any of its affiliates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Plan provides for the
grant of options to purchase Ordinary Shares and restricted shares of INX to such employees, directors and consultants engaged by INX
or any of its affiliates. The Plan further provides for the grant of options and restricted shares to service providers, and includes
U.S. and Israeli appendices that further specify the terms and conditions of grants of options and restricted shares to such grantees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of the Valdy
Transaction, all outstanding INX Options were exchanged for Valdy Consideration Options, which are governed by the Omnibus Equity Incentive
Compensation Plan of TIDCI (the &#8220;TIDCI Equity Incentive Plan&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Commencing as of the completion
of the Valdy Transaction, following which, all our outstanding share capital is held by TIDCI, we do not intend to grant to employees,
directors and consultants engaged by the Company or any of its affiliates any share awards pursuant to the Plan. Commencing as of such
date, share award compensation are granted to employees, directors and consultants engaged by the Company or any of its affiliates pursuant
to the TIDCI Equity Incentive Plan. The Plan is used solely for grant of Token awards as described below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><span style="text-decoration:underline">Grant of Token
Awards under the Plan</span></b>:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Token Plan Awards</span>.
On March 31, 2022, our Board of Directors and the Board of Directors of our Parent (acting as our general meeting) approved certain changes
to our Plan (including to the Plans&#8217; US and Israeli Appendices) in connection with grant of INX Tokens, restricted INX Tokens and
options to purchase INX Tokens (collectively, &#8220;Token Awards&#8221;) pursuant to the provisions of the Plan.&#160;The Plan provides
for the grant of Token Awards to employees, directors and consultants who are Gibraltar citizens and others who are not Gibraltar citizens,
and includes U.S. and Israeli appendices that further specify the terms and conditions of grants of Token Awards to such non-Gibraltar
grantees.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Authorized Tokens for Grant
under the Plan</span>. Subject to certain capitalization adjustments, the aggregate number of INX Tokens that may be issued pursuant to Token
Awards under the Plan may not exceed 17,373,438 INX Tokens.&#160;&#160;Tokens subject to Token Awards granted under the Plan that expire,
become un-exercisable or are canceled, forfeited to or repurchased by the Company due to the failure to vest, or otherwise terminated
without having been exercised or settled in full, in accordance with the Plan, shall revert to and again become available for issuance
under the Plan (unless the Plan has terminated). This includes INX Tokens that are reacquired pursuant to any forfeiture provision, right
of repurchase or redemption or INX Tokens that are used to satisfy the exercise or purchase price for the award or any tax withholding
obligations related to an award.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Plan Administration</span>.
The Company&#8217;s board of directors administers and interprets the provisions of the Plan. Under the Plan, the Company&#8217;s board
of directors has the authority to, among other things, determine award grantees, the numbers and types of Token Awards to be granted,
the applicable fair market value and the provisions of each Token Award, including the period of their exercisability and the vesting
schedule applicable to a Token Award, construe and interpret the Plan and awards granted thereunder, prescribe, amend and rescind rules
and regulations for the administration of the Plan, and accelerate the vesting of awards.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Options for INX Tokens</span>.
Options to purchase INX Tokens are granted under option agreements adopted by the Company&#8217;s board of directors. The Company&#8217;s
board of directors determines the exercise price for Tokens, within the terms and conditions of the Plan. Options granted under the Plan
vest at the rate specified in the option agreements and option rules as determined by the Company&#8217;s board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="margin: 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="margin: 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s board
of directors determines the term of options for Tokens granted under the Plan, up to a maximum of 15 years, or 10 years for its US grantees.
If a grantee&#8217;s service relationship with the Company or any of its affiliates ceases for any reason other than disability or death
or Cause (as such term is defined below), the grantee may generally exercise any vested awards for a period of up to 90 days following
the cessation of service, or such other period of time set forth in the option agreement. If a grantee&#8217;s service relationship with
the Company or any of its affiliates ceases by reason of death or disability (as determined by the Company&#8217;s board of directors
in its absolute discretion), the award shall remain exercisable for a period of one year following such termination (but only to the extent
exercisable at termination of engagement or appointment, as the case may be, and not beyond the scheduled expiration date). If a grantee&#8217;s
service relationship with the Company or any of its affiliates ceases by reason of retirement, pursuant to applicable law with the approval
of the Company&#8217;s board of directors, the award shall remain exercisable for a period of one hundred and eighty (180) days following
such termination (but only to the extent exercisable at termination of engagement or appointment, as the case may be, and not beyond the
scheduled expiration date). If a grantee&#8217;s service relationship with the Company or any of its affiliates ceases for Cause, as shall
be determined by the Company&#8217;s board of directors, all awards held by or on behalf of such grantee shall immediately expire upon
the earlier of such termination or notice of termination. In no event may an option be exercised beyond the expiration of its term.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the Plan,
the term &#8220;Cause&#8221; means any of (i) a material breach by the grantee of the grantee&#8217;s obligations under any agreement
with the Company or any related company; (ii) the commission by the grantee of an act of fraud or embezzlement against the Company or
any related company or the willful taking of action injurious to the business or prospects of the Company or any related company; (iii)
the conviction of the grantee of a felony; and (iv) the grantee&#8217;s involvement in an act or omission which constitutes breach of
trust between the grantee and the Company or any related company.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The exercise price for INX
Tokens issued under the Plan is generally payable in cash or cash equivalents or other forms of consideration determined by the Company&#8217;s
board of directors, including but not limited to a cashless exercise.&#160;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless the Company&#8217;s
board of directors provides otherwise, options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Restricted Tokens</span>.
Restricted Tokens may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by the Company&#8217;s board of directors. The Company&#8217;s board of directors determines the terms and conditions of
restricted Tokens, including vesting and forfeiture terms. If a participant&#8217;s service relationship with the Company ends for any
reason, the Company may receive any or all of the INX Tokens held by the participant that have not vested as of the date the participant
terminates service with the Company through a forfeiture condition or a repurchase right.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Significant Event</span>.
In the event of (a) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation, other
than a transaction in which the holders of INX Shares (on an as converted basis) immediately prior thereto have the same, or substantially
similar, proportionate ownership of shares (on an as converted basis) of the surviving corporation immediately after the transaction and
a transaction in which the holders of INX Shares (on an as converted basis) immediately prior thereto own a majority of the voting power
of the surviving corporation; or (b) any sale, exchange or other transfer (in one transaction or a series of related transactions) of
all or substantially all the assets or all or substantially all of the outstanding and issued shares of the Company; each outstanding
award will be treated as the Company&#8217;s board of directors determines, unless in each case the applicable award agreement provides
otherwise. The Board may, but shall not be obligated to, determine that a certain portion of the outstanding awards held by or for the
benefit of any grantee and which have not yet vested shall be accelerated and become immediately vested and exercisable.&#160;&#160;The
Board is not obligated to treat all awards similarly.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Plan Amendment or Termination</span>.
The Company&#8217;s board of directors may at any time amend, alter, suspend or terminate the Plan. Certain amendments, alterations, or
the suspension or discontinuance of the Plan may require the written consent of holders of outstanding awards. Certain material amendments
also require the approval of the Company&#8217;s shareholders. Unless sooner terminated, the Plan terminates in February 2036.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><span style="text-decoration:underline">Grant of TIDCI Share
Awards under the TIDCI Equity Incentive Plan</span></b>:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">Commencing as of the completion
of the Valdy Transaction, certain employees, directors and consultants engaged by the Company or any of its affiliates are being compensated
by grant of share awards of TIDCI pursuant to the TIDCI Equity Incentive Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The TIDCI Equity Incentive
Plan provides for the grant of shares of TIDCI, options to purchase shares of TIDCI, restricted shares of TIDCI and restricted share units
of TIDCI and it includes US and Israeli appendices that further specify the terms and conditions of grants of share awards to US and Israeli
grantees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Authorized Shares</span>.
Subject to certain capitalization adjustments, the aggregate number of TIDCI shares that may be issued pursuant to share awards under
the TIDCI Equity Incentive Plan may not exceed 25,352,832 shares. Should any award for any reason expire or be canceled prior to its exercise
or relinquishment in full, the share underlying to such award may again, according to the TIDCI Board&#8217;s sole and absolute discretion,
be subject to an award under the TIDCI Equity Incentive Plan, provided, however, that shares that have actually been issued under the
TIDCI Equity Incentive Plan shall not be returned to the TIDCI Equity Incentive Plan and shall not become available for future distribution
under the TIDCI Equity Incentive Plan. The aggregate number of shares to be delivered upon the exercise of all awards granted under the
TIDCI Equity Incentive Plan shall not exceed the maximum number of shares permitted under the rule of any stock exchange on which shares
are then listed or other regulatory body having jurisdiction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Plan Administration</span>.
The TIDCI Board administers and interprets the provisions of the TIDCI Equity Incentive Plan. Under the TIDCI Equity Incentive Plan, the
TIDCI Board has the authority to, among other things, determine award grantees, the numbers and types of share awards to be granted, applicable
market value and the provisions of each share award, including the period of their exercisability and the vesting schedule applicable
to a share award, construe and interpret the TIDCI Equity Incentive Plan and awards granted thereunder, prescribe, amend and rescind rules
and regulations for the administration of the TIDCI Equity Incentive Plan, and accelerate the vesting of awards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Share Options</span>. Options
to purchase TIDCI shares are granted under option agreements adopted by the TIDCI&#8217;s Board. TIDCI&#8217;s Board determines the exercise
price for share options, within the terms and conditions of the TIDCI Equity Incentive Plan. Options granted under the TIDCI Equity Incentive
Plan vest at the rate specified in the share option agreements and option rules as determined by the TIDCI Board.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The TIDCI&#8217;s Board determines
the term of share options granted under the TIDCI Equity Incentive Plan, up to a maximum of 10 years. If a grantee&#8217;s service relationship
with TIDCI or any of its affiliates ceases for any reason other than disability or death or Cause (as such term is defined below), the
grantee may generally exercise any vested awards for a period of up to 90 days following the cessation of service, or such other period
of time set forth in the option agreement. If a grantee&#8217;s service relationship with TIDCI or any of its affiliates ceases by reason
of death or disability (as determined by the TIDCI&#8217;s Board in its absolute discretion), the award shall remain exercisable for a
period of one year following such termination (but only to the extent exercisable at termination of engagement or appointment, as the
case may be, and not beyond the scheduled expiration date). If a grantee&#8217;s service relationship with the TIDCI or any of its affiliates
ceases by reason of retirement, pursuant to applicable law with the approval of the TIDCI&#8217;s Board, the award shall remain exercisable
for a period of one hundred and eighty (180) days following such termination (but only to the extent exercisable at termination of engagement
or appointment, as the case may be, and not beyond the scheduled expiration date). If a grantee&#8217;s service relationship with the
Company or any of its affiliates ceases for Cause, as shall be determined by TIDCI&#8217;s Board, all awards held by or on behalf of such
grantee shall immediately expire upon the earlier of such termination or notice of termination. In no event may an option be exercised
beyond the expiration of its term.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the TIDCI
Equity Incentive Plan, the term &#8220;Cause&#8221; means any of (i) a material breach by the grantee of the grantee&#8217;s obligations
under any agreement with the TIDCI or any subsidiary; (ii) the commission by the grantee of an act of fraud or embezzlement against TIDCI
or any subsidiary or the willful taking of action injurious to the business or prospects of TIDCI or any subsidiary; (iii) the conviction
of the grantee of a felony; and (iv) the grantee&#8217;s involvement in an act or omission which constitutes breach of trust between the
grantee and the TIDCI or any subsidiary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The exercise price for shares
issued under the TIDCI Equity Incentive Plan are generally payable in cash or cash equivalents or other forms of consideration determined
by TIDCI&#8217;s Board, including but not limited to a cashless exercise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless TIDCI&#8217;s Board
provides otherwise, options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">TIDCI&#8217;s Board may award
options to purchase shares of the TIDCI to any eligible grantee. Each option granted under the TIDCI Equity Incentive Plan shall be evidenced
by a written agreement between TIDCI and the grantee, in such form as TIDCI&#8217;s Board shall from time to time approve. The options
shall be subject to all applicable terms of the TIDCI Equity Incentive Plan. The provisions of the various option agreements entered into
under the TIDCI Equity Incentive Plan need not be identical.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Limitations on Grants.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The TIDCI Equity Incentive
Plan provides that-</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 0.25in; font-size: 10pt; text-align: justify">&#9676;</td>
    <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt">Awards granted to any one individual in any 12-month period cannot exceed more than 5% of the issued TIDCI shares, unless TIDCI has obtained disinterested shareholder approval.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; font-size: 10pt; text-align: justify">&#9676;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">Awards granted to any one consultant, in aggregate, in any 12-month period cannot exceed more than 2% of the issued TIDCI shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">Stock options granted to all persons, in aggregate, conducting investor relations activities in any 12-month period cannot exceed more than 2% of the issued TIDCI shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Restricted Shares</span>.
Restricted shares may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by TIDCI&#8217;s Board. TIDCI&#8217;s Board determines the terms and conditions of restricted shares, including vesting
and forfeiture terms. If a participant&#8217;s service relationship with TIDCI ends for any reason, TIDCI may receive any or all of the
shares held by the participant that have not vested as of the date the participant terminates service with TIDCI through a forfeiture
condition or a repurchase right.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Restricted Share Units</span>.
Restricted share units may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by TIDCI&#8217;s Board. TIDCI&#8217;s Board determines the terms and conditions of restricted share units, including vesting
and forfeiture terms. If a participant&#8217;s service relationship with TIDCI ends for any reason, TIDCI may receive any or all of the
shares held by the participant that have not vested as of the date the participant terminates service with TIDCI through a forfeiture
condition or a repurchase right.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Changes to Capital Structure</span>.
In the event of any dividend or other distribution, recapitalization, share split, reverse share split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or other change in TIDCI&#8217;s corporate structure affecting its shares,
TIDCI Board may make any adjustments it deems appropriate, including in the aggregate number and class of shares available under the TIDCI
Equity Incentive Plan, and TIDCI Board&#8217;s determination in this regard shall be conclusive.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Significant Event</span>.
In the event of the consummation of a Significant Event (as defined below) or the adoption of any plan or proposal for the liquidation
or dissolution of TIDCI, then, notwithstanding any contrary vesting periods in any agreement or in the TIDCI Equity Incentive Plan, and
unless in each case the applicable agreement provides otherwise, TIDCI Board may, but shall not be obligated to, determine that a certain
portion of the outstanding awards held by or for the benefit of any grantee and which have not yet vested shall be accelerated and become
immediately vested and exercisable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the TIDCI
Equity Incentive Plan, the term &#8220;Significant Event&#8221; means each of the following: (a) a takeover bid (as defined in the Act),
which is successful in acquiring shares, (b) a change of control of the TIDCI Board resulting from the election by the members of TIDCI
of less than a majority of the persons nominated for election by management of TIDCI, (c) any consolidation, plan of arrangement or amalgamation
of TIDCI, other than a transaction in which the holders of shares immediately prior thereto have the same, or substantially similar, proportionate
ownership of shares of the surviving or resulting entity immediately after the transaction and a transaction in which the holders of shares
immediately prior thereto own a majority of the voting power of the surviving or resulting entity; (c) any sale, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all the assets or all or substantially all of the outstanding
and issued Shares of TIDCI; or (d) the dissolution of TIDCI business or the liquidation of its assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Board Practices</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Election of Directors; Independent Board Members</i></b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Companies Act, a
Gibraltar private company must have at least one director. Appointments of directors are performed by means of a vote at the general meeting
of shareholders, or by a resolution of the board if permitted by the memorandum or if the articles so provide. Our Articles of Association
provide that, any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director (a)
by ordinary resolution of the shareholders (members) (within the meaning given in section 200 of the Companies Act), or (b) by a decision
of our Board of Directors.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Our
Articles of Association also provide that, upon the effectiveness of the registration statement submitted as part of the Token Offering,
the Company shall maintain a Board consisting of a majority of independent directors, as defined by the NASAA Statements of Policy and
the UK Corporate Governance Code. We currently have seven (7) directors, five of whom are independent as such term is defined by the North
American Securities Administrators Association (NASAA) Statement of Policy Regarding Corporate Securities Definitions and the UK Corporate
Governance Code. There is no definition under Gibraltar law to the term &#8220;Independent Director.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, our Articles of Association
state that, in addition to any obligation, duty or consideration imposed on them by law, independent directors shall be required to consider
the interests of token holders in determining whether to approve or disapprove of the following events:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) a transaction with an
Affiliate (as such term is defined in the Articles);</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) a Deemed Liquidation (as
such term is defined in the Articles); and</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) an Insolvency (as such
term is defined in the Articles).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with all future
material affiliated transactions and loans, we will (i) make and enter into such transactions and loans on terms no less favorable to
us than those that can be obtained from unaffiliated third parties; (ii) obtain approval from a majority of our independent directors
of all future material transactions and loans, including any forgiveness of loans; and (iii) to the extent required by law, obtain shareholder
approval for any such transaction. Our officers and directors have considered their due diligence and assure that there is a reasonable
basis for these representations. Further, we have considered and decided to embody certain of these representations in our Articles of
Association. Our Articles of Association include a provision that any material transaction between the Company and an affiliate of the
Company must be approved by a majority (and at least two) of our independent directors who do not have an interest in the transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Articles of Association
provide that if the numbers of director votes for and against a proposal are equal, the chairman of the meeting has a casting vote.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Qualification of Directors</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The shareholding qualification
for directors may be fixed by the Company in general meeting, and unless and until so fixed no qualification shall be required.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Authority Granted to Directors</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to the Articles, the
directors are responsible for the management of the company&#8217;s business, for which purpose they may exercise all the powers of the
Company. Subject to the Articles, the directors may delegate any of the powers which are conferred on them under the Articles: (i) to
such person or committee; (ii) by such means (including by power of attorney) to such an extent; (iii) in relation to such matters or
territories; and (iv) on such terms and conditions; as they think fit. Committees to which the directors delegate any of their powers
must follow procedures which are based (as far as they are applicable) on those provisions of the articles which govern the taking of
decisions by directors. The directors may make rules of procedure for all or any committees, which prevail over rules derived from the
articles if they are not consistent with them.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Directors&#8217; Remuneration</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Directors may undertake any
services for the Company as determined by the Board of Directors. Directors are entitled to such remuneration as determined by the Board
of Directors: (a) for their services to the Company as directors, and (b) for any other services undertaken for the Company. Subject to
the Company&#8217;s articles of association, a director&#8217;s remuneration may take any form, and include any arrangements in connection
with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.
Unless otherwise determined by the Board of Directors, their remuneration accrues from day to day and directors are not accountable to
the Company for any remuneration that they receive as directors or as officers or employees of the Company&#8217;s subsidiaries or of
any other body corporate in which the Company is interested. The Company may pay any reasonable expenses which the directors properly
incur in connection with their attendance at: (a) meetings of directors or committees of directors, (b) general meetings, or (c) separate
meetings of the holders of any class of shares or of debentures of the company, or otherwise in connection with the exercise of their
powers and the discharge of their responsibilities in relation to the Company.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Corporate Governance</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under Gibraltar law, the Company
is governed in accordance with its memorandum and articles of association, the provisions of the Companies Act and other Gibraltar statutory
and common law principles. The Board is committed to the principles of corporate governance which it considers to be central to the effective
management of the business and to maintaining the confidence of investors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Differences between the Gibraltar Companies
Act and laws impacting Delaware companies</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Sarbanes-Oxley Act, as
well as related rules subsequently implemented by the SEC, requires foreign private issuers, such as us, to comply with various corporate
governance practices. Under those rules, we may elect to follow certain corporate governance practices permitted under the Companies Act,
in lieu of compliance with corresponding corporate governance requirements otherwise imposed by the SEC regulations for U.S. domestic
issuers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Companies Act and the
laws of Gibraltar affecting Gibraltar companies like us and our shareholders differ from laws applicable to U.S. corporations and their
shareholders. Set forth below is a summary of the significant differences between the provisions of the laws of Gibraltar applicable to
us and, for illustrative purposes only, the Delaware General Corporation Law (the &#8220;DGCL&#8221;), which governs companies incorporated
in the state of Delaware. The summary is not intended to be a complete discussion nor a comprehensive all included description of the
respective rights and it is qualified in its entirety by reference to Delaware law and the Companies Act, and as may be relevant, to our
Memorandum and our Articles of Association.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Number of Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
the Companies Act, every Gibraltar private limited company shall have at least one director and the number shall be fixed in the company&#8217;s
memorandum and articles of association.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Removal of Directors.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
the Gibraltar law, directors may be removed from office, with or without cause, in accordance with the provisions of their memorandum
and articles of association. Gibraltar law allows shareholders with sufficient majority to exercise a vote to remove directors. In addition,
under our Articles of Association, a person ceases to be a director as soon as: (a) that person ceases to be a director by virtue of any
provision of the Companies Act or the Gibraltar Insolvency Act 2011 or is prohibited from being a director by law; (b) a bankruptcy order
is made against that person; (c) a composition is made with that person&#8217;s creditors generally in satisfaction of that person&#8217;s
debts; (d) a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person
has become physically or mentally incapable of acting as a director and may remain so for more than three months; (e) notification is
received by the company from the director that the director is resigning from office, and such resignation has taken effect in accordance
with its terms. Under Delaware law, unless otherwise provided in the certificate of incorporation, directors may be removed from office,
with or without cause, by a majority stockholder vote, though in the case of a corporation whose board is classified, stockholders may
affect such removal only for cause.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Vacancies
on the Board of Directors</span>. Under the Companies Act, appointments of directors (other than nomination of directors via the general
meeting of shareholders) may also be made by a resolution of the board if allowed by the articles of association of the Gibraltar company.
Our Articles of Association provide that, any person who is willing to act as a director, and is permitted by law to do so, may be appointed
to be a director (a) by ordinary resolution of the shareholders (members) of the Gibraltar company (within the meaning given in section
200 of the Companies Act), or (b) by a decision of our Board of Directors. Under Delaware law, vacancies on a corporation&#8217;s board
of directors, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Shareholder/Stockholder
Meetings</span>. Under the Companies Act, annual general meetings of shareholders and extraordinary general meetings of shareholders (within
the meaning given in sections 193 and 195 of the Companies Act) shall be held at such place, on such date and at such time as may be designated
from time to time by the board of directors or as provided in the articles of association of the Gibraltar company, and extraordinary
general meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized under the
Companies Act or by the articles of association. With respect to notices of general meetings, subject to the provisions of the Companies
Act relating to <i>special resolutions</i>, seven days&#8217; notice at the least (exclusive of the day on which the notice is served
or deemed to be served, but inclusive of the day for which notice is given) specifying the place, the day and the hour of meeting and,
in case of special business, the general nature of that business shall be given in manner hereinafter mentioned, or in such other manner
(if any) as may be prescribed by the company in general meeting, to such persons as are, under the articles of association of the company,
entitled to receive such notices from the company; but with the consent of all the members entitled to receive notice of some particular
meeting, that meeting may be convened by such shorter notice and in such manner as those members may think fit. Meetings to resolve matters
requiring a special resolution necessitate a 21 day notice period.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">A
Gibraltar company can decide its own way of communicating with its shareholders, including publication of notice of meetings on a website
of a company (in accordance with the provision of the Companies Act). <i>Ordinary resolutions</i> (within the meaning given in section
200 of the Companies Act) at the general meetings are passed by a simple majority. <i>Extraordinary and special </i>resolutions (within
the meaning given in section 201 of the Companies Act) are passed by seventy-five percent (75%) majority. Under Delaware law, (i) the
annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the
board of directors or as provided in the certificate of incorporation or by the bylaw, and (ii) special meetings of the stockholders may
be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Shareholder
action by written consent</span>. Under the Companies Act, it is not necessary in the case of a Gibraltar private company to hold a general
meeting in order to pass an ordinary, an extraordinary, or a special resolution. Subject to provisions in the articles of the company,
such resolutions may be passed in writing by unanimous approval. Our Memorandum and Articles of Association currently provide such provisions.
Under the DGCL, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "></p><div>

</div><!-- Field: Page; Sequence: 105; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->99<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Preemptive
Rights</span>. Under Gibraltar law, rights of pre-emption can be worked into the articles of association of the company. However, in the
absence of such explicit rights, shareholders are not automatically entitled to benefit from preemptive rights. Under Delaware law, unless
otherwise provided in a corporation&#8217;s certificate of incorporation, a stockholder does not, by operation of law, possess preemptive
rights to subscribe to additional issuances of the corporation&#8217;s stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Liability
of Directors and Officers</span>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Pursuant
to s. 224 of the Companies Act, in a limited company the liability of the directors or managers, or of the managing director, if so provided
by the memorandum, may be unlimited, while s.225 of the Companies Act states that a limited company, if so authorized by its articles,
may by special resolution, alter its memorandum so as to render unlimited the liability of its directors or managers, or of any managing
director. Upon the passing of any such special resolution the provisions of the special resolution shall be as valid as if they had been
original contained in the memorandum. However, s. 231 (1) states that subject to its provisions, any provision, whether contained in the
articles of a company or in any contract with a company or otherwise, for exempting any director, manager or officer of the company from,
or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence,
default, breach of duty or breach of trust of which he may be guilty in relation to the company, shall be void. S. 231 (2) further states
that nothing shall preclude:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-size: 10pt">Any person, not being the company, indemnifying any director, manager or officer of the company against any such liability as referred to in subsection (1);</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">A
company from indemnifying any director, manager or officer of the company against any such liability incurred by him in defending any
proceedings, whether civil or criminal, in which judgment is given in his favor or in which he is acquitted or in connection with any
application under s. 477 in which relief is granted to him by the court.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
Delaware law, a corporation&#8217;s certificate of incorporation may include a provision eliminating or limiting the personal liability
of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision
can limit the liability of a director for:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">any transaction from which the director derives an improper personal benefit.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Standard
of Conduct for Directors</span>. Under Gibraltar law, directors are subject to various common law duties. Director&#8217;s duties are not
codified in Gibraltar and are not set in statute but derive from common law principles and case law. These significant duties and responsibilities
include the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to act in good faith and in the best interest of the company;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to not allow their interests to conflict with those of the company; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">to act with due care and skill.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Delaware
law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors
is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed
basis and in a manner they reasonably believe to be in the best interest of the stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Voting
Rights</span>. Under Gibraltar law, the basic presumption is that each shareholder is entitled to one vote for each share held. However,
the rights and entitlements attaching to shares of a Gibraltar company are set out in a company&#8217;s memorandum and articles of association
which can be modified to denote the rights and entitlements attaching to each type of share in the company. Certain shares may be granted
additional voting rights while others may only be entitled to financial remuneration and not voting rights. Delaware law provides that,
unless otherwise provided in the certificate of incorporation, each stockholder of capital stock is entitled to one vote for each share
of capital stock held by such stockholder, and blockchain assets are not considered capital stock unless expressly identified in the certificate
of incorporation of the company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="text-decoration:underline">Distribution
of periodic reports to shareholders; proxy solicitation</span>. Under the Companies Act, each company decides its own way of communicating
with its shareholders, however shareholders have a right to request certain information from the company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Quorum</span>. Under the Companies
Act, a company is entitled to determine in its memorandum of association and in its articles of association, the number of shareholders
and percentage of holdings required for a quorum at a shareholders meeting. Our Articles and our memorandum of association, or the Memorandum,
provides that two members present in person or by proxy shall constitute a quorum unless there shall at any time be one member in which
event such member alone shall have the authority to transact the business of a general meeting. &#160;An ordinary resolution of the members
(or of a class of members) can be passed by members representing a simple majority (i.e. more than 50%) of the total voting rights of
the members or, as the case may be, of the class of members. An extraordinary or special resolution of the members requires a majority
of not less than 75% of those members at a general meeting of which notice specifying the terms of the resolution and the intention to
propose the resolution as such a resolution has been given.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Nomination of our directors</span>.
Our directors are elected by an annual meeting of our shareholders to hold office until the next annual meeting following one year from
his or her election. The nominations of directors, which are presented to our shareholders by our Board, are generally made by the Board
itself, in accordance with the provisions of our Articles of Association and the Companies Act. Nominations need not be made by a nominating
committee of our Board consisting solely of independent directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Compensation of officers</span>.
Under the Companies Act and our Memorandum and Articles of Association, compensation of our officers requires approval by, our Board and,
at times, our shareholders. The Board will seek recommendations and approval from the Audit Committee.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Independent directors</span>.
A majority of the directors serving on our Board are to be &#8220;independent&#8221;, and in any case, we will at all times maintain a
Board with at least two directors who are independent. We define independence using both the North American Securities Administrators
Association (NASAA) Statement of Policy Regarding Corporate Securities Definitions and the UK Corporate Governance Code.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Gibraltar law does not require,
nor do our independent directors conduct, regularly scheduled meetings at which only they are present.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Shareholder approval</span>.
We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Act. The Companies
Act sets our various matters requiring shareholder approval. Notable examples of this include any amendments to the company&#8217;s Memorandum
and Articles of Association, any increase or reclassification of share capital and the issuance of dividends.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->101<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In particular, shareholder
approval shall be generally required for: (i) an acquisition of shares/assets of another company that involves the issuance of 20% or
more of the acquirer&#8217;s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the
target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment
of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible
into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5% shareholders)
if such equity is issued (or sold) at below the greater of the book or market value of shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, under Delaware
law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation,
sale, lease or exchange of all or substantially all of a corporation&#8217;s assets or dissolution requires:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the approval of the board of directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Mergers and similar arrangements</span>.
Under the Gibraltar law, there are various mechanisms to give effect to a merger or takeover. However, the most common way is pursuant
to the provisions of the Companies Act by way of scheme of arrangement. The procedure for a scheme of arrangement is set out at Part VIII
of the Companies Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In very general terms, a scheme
of arrangement is a compromise or arrangement between a company and its members. Under a scheme to effect a merger, the shares in one
Gibraltar company (target) would be exchanged by its shareholders for consideration shares and/or cash by another Gibraltar company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A brief overview of the process
is as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Court order for holding meeting</b>: an application may be made by a company or any member (or creditors) of such company to summon a meeting of members;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><b>Approval of members of merging companies</b>: The scheme is conditional on, amongst other things, the approval by shareholders; the statutory majority required to approve the scheme at the meeting is a 75% majority of those shareholders who are present and vote in person or who vote by proxy or at any adjournment thereof;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under Delaware law each corporation&#8217;s
board of directors must approve a merger agreement. The merger agreement must state, among other terms, the terms of the merger and method
of carrying out the merger. This agreement must then be approved by the majority vote of the outstanding stock entitled to vote at an
annual or special meeting of each corporation, and no class vote is required unless provided in the certificate of incorporation. Delaware
permits an agreement of merger to contain a provision allowing the agreement to be terminated by the board of directors of either corporation,
notwithstanding approval of the agreement by the stockholders of all or any of the corporations (1) at any time prior to the filing of
the agreement with the Secretary of State or (2) after filing if the agreement contains a post-filing effective time and an appropriate
filing is made with the Secretary of State to terminate the agreement before the effective time. In lieu of filing an agreement of merger,
the surviving corporation may file a certificate of merger, executed in accordance with Section 103 of the DGCL. The surviving corporation
is also permitted to amend and restate its certification of incorporation in its entirety. The agreement of merger may also provide that
it may be amended by the board of directors of either corporation prior to the time that the agreement filed with the Secretary of State
becomes effective, even after approval by stockholders, so long as any amendment made after such approval does not adversely affect the
rights of the stockholders of either corporation and does not change any term in the certificate of incorporation of the surviving corporation.
If the agreement is amended after filing but before becoming effective, an appropriate amendment must be filed with the Secretary of State.
If the surviving corporation is not a Delaware corporation, it must consent to service of process for enforcement of any obligation of
the corporation arising as a result of the merger; such obligations include any suit by a stockholder of the disappearing Delaware corporation
to enforce appraisal rights under Delaware law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->102<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a proposed merger or consolidation
for which appraisal rights are provided is to be submitted for approval at a shareholder meeting, the subject company must give notice
of the availability of appraisal rights to its shareholders at least 20 days prior to the meeting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A dissenting shareholder who
desires to exercise appraisal rights must (a) not vote in favor of the merger or consolidation; and (b) continuously hold the shares of
record from the date of making the demand through the effective date of the applicable merger or consolidation. Further, the dissenting
shareholder must deliver a written demand for appraisal to the company before the vote is taken. The Delaware Court of Chancery will determine
the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, together
with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the court will take
into account &#8220;all relevant factors.&#8221; Unless the Delaware Court of Chancery in its discretion determines otherwise, interest
from the effective date of the merger through the date of payment of the judgment will be compounded annually and accrue at 5% over the
Federal Reserve discount rate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Approval of Related Party
Transactions</span>. All related party transactions must be disclosed to the Company for approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions with interested
shareholders</span>. Delaware law contains a business combination statute applicable to Delaware public corporations whereby, unless the
corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited
from engaging in certain business combinations with an &#8220;interested shareholder&#8221; for three years following the date that such
person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more
of the target&#8217;s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential
acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,
among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either
the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential
acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target&#8217;s board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Companies Act has no direct
comparison, but it is worth noting that certain common law provisions relating, for example, to conflicts of interest and similar considerations,
may, depending on the facts, apply under Gibraltar law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Committees of the Board of Directors </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Gibraltar companies are not
required to establish any sub committees of the Board. Nevertheless, they have the power to create such subcommittees and delegate responsibilities
and oversight accordingly. Committees to which the directors delegate any of their powers must follow procedures which are based as far
as they are applicable on those provisions of the articles which govern the taking of decisions by directors. The directors may make rules
of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board has established
two committees: (1) an audit committee, and (2) a compensation committee. The members of the audit committee and the members of the compensation
committee were appointed by the Board.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 109; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->103<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Audit Committee</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Our
Board has adopted terms of reference for an audit committee, as customary for public companies, and established the committee upon the
closing of the Token Offering. The audit committee is currently and will be comprised of three members of the Board. The audit committee
has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company
is properly measured and reported on. It will receive and review reports from our management and auditors relating to the interim and
annual accounts and the accounting and internal control systems in use throughout the Company. The audit committee will meet not less
than once in each financial year and at such other times as circumstances require.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Our
Board of Directors has adopted an audit committee charter, which sets forth the responsibilities of the audit committee consistent with
SEC rules and regulations governing audit committee members, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 7%; text-align: justify">&#160;</td>
    <td style="width: 3%; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt">considering and making recommendations to our Board on our financial statements, reviewing and discussing the financial statements and presenting its recommendations with respect to the financial statements to the Board prior to the approval of the financial statements by our Board;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the Board in accordance with Gibraltar law;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; ">
    <td style="width: 7%; text-align: justify">&#160;</td>
    <td style="width: 3%; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt">recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; ">
    <td style="width: 7%; text-align: justify">&#160;</td>
    <td style="width: 3%; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt">recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our Board; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top; ">
    <td style="width: 7%; text-align: justify">&#160;</td>
    <td style="width: 3%; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="width: 90%; text-align: justify"><span style="font-size: 10pt">reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities&#8217; findings, receiving reports regarding irregularities and legal compliance, acting according to &#8220;whistleblower policy&#8221; and recommending to our Board if so required, and overseeing our policies and procedures regarding compliance to applicable financial and accounting related standards, rules and regulations.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Although
not required under Gibraltar law, the members of our audit committee will each be independent in accordance with the independence standard
that is applied to non-investment company issuers under Rule 10A-3 of the Exchange Act. All members of our audit committee will be financially
literate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Remuneration (Compensation) Committee</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Although
not required under Gibraltar law, our Board has also adopted terms of reference for a compensation committee and SEC rules and regulations,
and established the committee upon the closing of the Token Offering. The compensation committee is currently comprised of three members
of the Board. The members of our compensation committee will each be independent in accordance with the independence standard under Rule
10C-1 of the Exchange Act. The compensation committee will review the performance of management and make recommendations to our Board
on matters relating to their remuneration and terms of employment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Nominating and Corporate Governance Committee</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Although
not required under Gibraltar law, our Board has also adopted terms of reference for a Nominating and Corporate Governance Committee and
SEC rules and regulations, and established the committee on December 14th, 2021. The Nominating and Corporate Governance committee is
currently comprised of three members of the Board. The members of our Nominating and Corporate Governance committee will each be independent
in accordance with the independence standard under Rule 10C-1 of the Exchange Act. The Nominating and Corporate Governance committee will
exercise general oversight with respect to the governance of the Board of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Role of Board of Directors in Risk Oversight
Process</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Risk assessment and oversight
are an integral part of our governance and management processes and business strategy. Our Board encourages management to promote a culture
that incorporates risk management into our corporate strategy and day-to-day business operations, to discusses strategic and operational
risks at regular management meetings, and to conduct specific strategic planning and review sessions during the year that include a focused
discussion and analysis of the risks facing us. Throughout the year, senior management will review these risks with the Board at regular
board meetings as part of management presentations that focus on particular business functions, operations or strategies, and present
the steps taken by management to mitigate or eliminate such risks.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Appointment of Secretary</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Subject
to the provisions of the Companies Act, the secretary shall be appointed by the directors for such term, at such remuneration and upon
such conditions as they may think fit; and any secretary so appointed may be removed by them.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.1pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Family Relationships</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no family relationships
between any members of our executive management and our directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Approval of Related Party Transactions </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>General</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
Gibraltar law, related party transactions need to be disclosed to the board as such before the transaction. Details on the transaction
will appear as related party transactions in the notes of the accounts of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
the Companies Act, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described
above, if:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the office holder acts in good faith and the act or its approval does not cause harm to the company; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company&#8217;s approval of such matter.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>Duty to Disclose Personal
Interests</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">As
set out above, under Gibraltar law directors of the company have various common law and fiduciary duties to the company. These duties
are not codified in the Companies Act but are wide ranging and include a duty to not to allow their interests to conflict with those of
the company. They are therefore required to promptly disclose any direct or indirect personal interest that they may have and all related
material information known to them relating to any existing or proposed transaction by the company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All arrangements as to compensation
and indemnification or insurance of office holders require approval of the compensation committee and Board of Directors, and compensation
of office holders who are directors must be also approved, subject to certain exceptions, by the shareholders, in that order. If shareholders
of a company do not approve the compensation terms of office holders, other than directors, the compensation committee and Board of Directors
may override the shareholders&#8217; decision, subject to certain conditions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Exculpation and Indemnification of Directors
and Officers Indemnities</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
general common law position that a company can indemnify its directors has been circumscribed in Gibraltar by statutory enactment. Section
231 of the Companies Act imposes certain limits on the extent and scope of indemnification relieving directors of indemnification under
Gibraltar law. Section 231(1) prohibits indemnification for liability arising from their own negligence, default, breach of duty or breach
of trust. A provision in the articles of a company or a specific contract seeking to provide such indemnification is void. However, it
follows that apart from such restrictions, directors can in certain circumstances be indemnified (i.e. for matters not expressly prohibited).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Insurance</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Under
our Articles, the directors may decide to purchase and maintain insurance, at the expense of the company, for the benefit of any relevant
director in respect of any relevant loss. In this paragraph: (a) a &#8220;relevant director&#8221; means any director or former director
of the company or an associated company, (b) a &#8220;relevant loss&#8221; means any loss or liability which has been or may be incurred
by a relevant director in connection with that director&#8217;s duties or powers in relation to the company, any associated company or
any pension fund or employees&#8217; share scheme of the company or associated company, and (c) companies are associated if one is a subsidiary
of the other or both are subsidiaries of the same body corporate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><div><a id="m_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>D. Employees.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Each individual who provides services to us does
so through an employment, services, consulting or similar agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; vertical-align: bottom"><span style="font-size: 10pt"><b>Company<sup>(1)</sup></b></span></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: left; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 0.125in; text-indent: -0.125in; text-align: left">INX Digital, Inc. (US)</td><td>&#160;</td>
    <td style="text-align: left">United States</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 0.125in; text-indent: -0.125in; text-align: left">Midgard Technologies Ltd. (Israel)</td><td>&#160;</td>
    <td>Israel</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">24</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">37</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; padding-left: 0.125in; text-indent: -0.125in; text-align: left">I.L.S. Brokers Ltd. (Israel)</td><td>&#160;</td>
    <td>Israel</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">11</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">15</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">INX Securities , LLC</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">United States</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left; padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; padding-bottom: 1.5pt; vertical-align: top">Total</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">10</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">As a single employee/service provider
may be engaged in more than one activity, each employee/service provider is represented only once under the activity representing their
primary responsibility.</span></td>
</tr>
<tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(2)</span></td>
    <td><span style="font-size: 10pt">These employees/service providers are located in Israel.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(3)</span></td>
    <td><span style="font-size: 10pt">Employees/service providers of INX Digital also provide services to INXS.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 112; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->106<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>E. Share Ownership.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of April 28, 2023, 47,635,875 of our ordinary shares are outstanding.
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities
to persons who possess sole or shared voting or investment power with respect to those securities, and include shares subject to options
and warrants that are exercisable within 60&#160;days from the date of this report. Such shares are also deemed outstanding for purposes
of computing the percentage ownership of the person holding the option, but not the percentage ownership of any other person. As of April
28, 2023, none of the outstanding ordinary shares are held by U.S. Persons.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise indicated
below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares, except to
the extent that authority is shared by spouses under community property laws. None of our shareholders has informed us that he, she, or
it is affiliated with a registered broker-dealer or is in the business of underwriting securities. None of our shareholders has different
voting rights from other shareholders.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Ordinary <br/>
Shares <br/>
Beneficially <br/>
Owned</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
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of Ordinary <br/>
Shares <br/>
Beneficially <br/>
Owned</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The INX Digital Company Inc.<b>*</b></span></td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Alan Silbert</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Paz Diamant</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">David Weild</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Nicholas Thadaney</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Vlad Uchenik</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Some of the Senior Management
and Directors of the Company hold common shares of TIDCI and options to purchase common shares of TIDCI.</span></td>
</tr></table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">The address of Senior Management
and Directors is INX Limited&#8217;s registered office at 57/63 Line Wall Road, Gibraltar, GX11 1AA.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></p><div>

</div><!-- Field: Page; Sequence: 113; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->107<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, the following table sets forth information
with respect to the outstanding beneficial ownership of INX Tokens as of April 28 2023, by:</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">each of our executive officers
and directors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">each person or entity known
by us to beneficially own more than 5% of our outstanding shares; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-size: 10pt">all of our senior management
and directors as a group.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">INX<br/> Tokens<br/> Beneficially <br/> Owned</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">5% Shareholders</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">The INX Digital Company Inc.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Senior Management and Directors</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="width: 76%; padding-bottom: 1.5pt"><span style="font-size: 10pt">Shy Datika<sup>(1)</sup></span></td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">9,435,939</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; width: 9%; text-align: right">4.71</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Renata Szkoda<sup>(2)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">150,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Itai Avneri<sup>(3)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">460,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Maia Naor<sup>(4)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">1,062,499</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Jonathan Azeroual<sup>(5)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">875,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Alan Silbert<sup>(6)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">1,004,911</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Douglas Borthwick<sup>(7)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">1,195,158</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Paz Diamant<sup>(8)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">302,500</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">David Weild<sup>(9)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">438,667</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Nicholas Thadaney<sup>(10)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">438,667</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Thomas Lewis<sup>(11)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">438,667</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Hilary Kramer<sup>(12)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">52,500</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Demetra Kalogerou<sup>(13)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">49,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Vlad Uchenik<sup>(14)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">150,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt"><span style="font-size: 10pt">Keren Avidar<sup>(15)</sup></span></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">150,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right"><span style="font-size: 10pt">*</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All of the senior management and directors as a group (15 persons)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-size: 10pt">Less than 1%</span></td>
</tr></table><div>


</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Mr. Datika, one of our founders
and directors and our CEO and President, holds 9,435,939 INX Tokens through Triple V (1999) Ltd., a private company incorporated under
the laws of Israel, of which Mr. Datika is the sole shareholder.</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(2)</td><td style="text-align: justify">Mrs. Renata Szkoda, our Chief Financial Officer, holds 150,000
tokens held pursuant to an Restricted Token Award (&#8220;RTA&#8221;).</td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Mr. Avneri, our Chief Operating Officer, holds an option to purchase
360,000 INX Tokens at a price of $0.09 per Token and additional 100,000 at a price of $0.43 per Token, of which options to purchase 180,000
INX Tokens have vested or will vest within 60 days of April 28, 2023.</span></td>
</tr></table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Ms. Maia Naor, our Chief Product Officer, holds 937,499 INX Tokens,
and an option to purchase 125,000 INX Tokens at a price of $0.43 per INX Token, a, none of which have vested or will vest within 60 days
of April 28, 2023.</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">(5)</span></td>
    <td><span style="font-size: 10pt">Mr. Jonathan Azeroual, our Chief Blockchain Officer, holds 750,000 INX Tokens, and has an option to purchase 125,000 INX Tokens at a price of US$0.43 per INX Token, , none of which have vested or will vest within 60 days of April 28, 2023.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(6)</span></td>
    <td><span style="font-size: 10pt">Mr. Silbert, a director of the Company and Chief Executive Officer of North America, holds 1,004,911 INX Tokens.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(7)</span></td>
    <td><span style="font-size: 10pt">Mr. Borthwick holds 1,195,158 INX Tokens. Mr. Borthwick resigned from his position as Chief Business Officer (CBO) of the Company effective December 31, 2022, and entered into
a written agreement with the Company to serve on its advisory board, effective January 1, 2023.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(8)</span></td>
    <td><span style="font-size: 10pt">Mr. Diamant, our Chief Technology Officer, holds 50,000 INX Tokens, and options to purchase 200,000 INX Tokens, at the price of $0.08 per Token and additional 52,500 at an exercise price of $0.43 per INX Token, of which options to purchase 75,000 INX Tokens have vested or will vest within 60 days of April 28, 2023.&#160;&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(9)</span></td>
    <td><span style="font-size: 10pt">Mr. Weild, our director, &#160;holds options to purchase an aggregate amount of 438,667 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant .</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(10)</span></td>
    <td><span style="font-size: 10pt">Mr. Thadaney, our director, holds (i) 361,667 INX Tokens, (ii) options to purchase 77,000 INX
    Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant. &#160;</span></td></tr>
</table><div>

</div><p style="margin: 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->108<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-size: 10pt">(11)&#160;</span></td>
    <td><span style="font-size: 10pt">Mr. Lewis, our director, (i) holds 365,167 INX Tokens, and (ii) options to purchase 73,500 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant. </span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(12)&#160;</span></td>
    <td><span style="font-size: 10pt">Ms. Hilary Kramer, our director, holds options to purchase 52,500 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(13)&#160;</span></td>
    <td><span style="font-size: 10pt">Ms. Demetra Kalogerou, our director, holds &#160;options to purchase 49,000 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">(14)&#160;</span></td>
    <td><span style="font-size: 10pt">Mr. Vlad Uchenik, Chief Compliance Officer of the Company and Chief Executive Officer of INXS, holds 150,000 INX Tokens held pursuant to an RTA.</span></td></tr>
  <tr style="vertical-align: top">
    <td>(15)</td>
    <td>Ms. Keren Avidar, General Global Counsel, is entitled to receive an option to purchase 150,000 INX Tokens at an exercise price equal to
the fair market value of the Tokens as of the date of grant of the Tokens by INX Limited.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Share Ownership and Award Plan</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See &#8220;Item 6, B. Compensation
- Equity Compensation Plan Information&#8221; for a description of the Company&#8217;s Share Ownership and Award Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 31, 2022, our Board
of Directors and the Board of Directors of our Parent (acting as our general meeting) approved certain changes to our Plan (including
to the Plans&#8217; US and Israeli Appendixes) in connection with grant of INX Tokens, restricted INX Tokens and options to purchase INX
Tokens pursuant to the provisions of the Plan.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>F. Disclosure of a Registrant&#8217;s Action to Recover Erroneously
Awarded Compensation.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 7. <span style="font-variant: small-caps">MAJOR SHAREHOLDERS
AND RELATED PARTY TRANSACTIONS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Major Shareholders.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as set forth in &#8220;Item 6. Directors, Senior Management
and Employees&#8212;E. Share Ownership,&#8221; to the best of our knowledge, no other person who we know beneficially owns 5% or more
of our ordinary shares outstanding as of April 28, 2023. None of our shareholders has different voting rights from other shareholders.
Other than as described herein, to the best of our knowledge, we are not owned or controlled, directly or indirectly, by another corporation,
by any foreign government or by any natural person or legal persons, severally or jointly, and we are not aware of any arrangement that
may, at a subsequent date, result in a change of control of our company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Changes in Percentage Ownership by Major
Shareholders</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Security Exchange Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 31, 2021, the Company,
Valdy, certain Company securityholders, PI Financial Corp. and Eight Capital Inc. entered into the Security Exchange Agreement, for the
consummation of a securities exchange.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms of the
Security Exchange Agreement, on January 10, 2022, Valdy acquired all the issued and outstanding securities of the Company from the Company
Securityholders by way of a securities exchange, as follows:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(a)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Valdy acquired an aggregate
of 15,955,875 INX Shares (excluding the INX Shares issued pursuant to the Concurrent Financing (the &#8220;INX Financing Shares&#8221;))
from the holders thereof, and issued to such holders consideration of an aggregate of 167,331,410 post-Consolidation Valdy Shares, being
the product of the number of INX Shares acquired by the ratio of 10.4871348 Valdy Shares for each INX Share (the &#8220;Exchange Ratio&#8221;);</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(b)</span></td><td style="text-align: justify"><span style="font-size: 10pt">Valdy acquired an aggregate
of 31,680,000 INX Financing Shares from the holders thereof and issued to such holders consideration of an aggregate of 31,680,000 post-Consolidation
Valdy Shares;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(c)</span></td><td style="text-align: justify"><span style="font-size: 10pt">the holders of INX Options surrendered
for cancellation each INX Option held by them, and for each INX Option so surrendered, Valdy issued to such holder options to acquire
post-Consolidation Valdy Shares (the &#8220;Valdy Consideration Options&#8221;) having terms equivalent to the surrendered INX Option
with respect to exercise price, vesting conditions, and expiry date, but adjusted such that: (i) the number of post- Consolidation Valdy
Shares issuable pursuant to the Valdy Consideration Option shall be the product of the number of INX Shares issuable pursuant to the
INX Option and the Exchange Ratio; and (ii) the exercise price for each post-Consolidation Valdy Share issuable upon conversion of the
Valdy Consideration Option shall be equal to the exercise price of the INX Option divided by the Exchange Ratio;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->109<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
<tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="text-align: left; width: 0.25in"><span style="font-size: 10pt">(d)</span></td><td style="text-align: justify"><span style="font-size: 10pt">the holders of common share
purchase warrants which entitle the holder thereof to acquire one INX Share (the &#8220;INX Legacy Warrants&#8221;) surrendered for cancellation
each INX Legacy Warrant held by them, and for each INX Legacy Warrant so surrendered, Valdy issued to such holder warrants to purchase
post-Consolidation Valdy Shares (the &#8220;Valdy Consideration Warrants&#8221;) having terms equivalent to the surrendered INX Legacy
Warrant with respect to exercise price, the number of post-Consolidation Valdy Shares issuable pursuant thereto, and expiry date, but
adjusted such that: (i) the number of post-Consolidation Valdy Shares issuable pursuant to the Valdy Consideration Warrant shall be the
product of the number of INX Shares issuable pursuant to the INX Legacy Warrant and the Exchange Ratio; and (ii) the exercise price for
each post-Consolidation Valdy Share issuable upon conversion of the Valdy Consideration Warrant shall be equal to the exercise price
of the INX Legacy Warrant divided by the Exchange Ratio; and</span></td>
</tr>
</table><div>

</div><p style="margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
<tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="text-align: left; width: 0.25in"><span style="font-size: 10pt">(e)</span></td><td style="text-align: justify"><span style="font-size: 10pt">each warrant to purchase INX
Shares issued pursuant to the Concurrent Financing (&#8220;INX Financing Warrant&#8221;), in accordance with its terms, became exercisable
to purchase an equivalent number of post-Consolidation Valdy Shares at the same exercise price as the INX Shares to which such warrant
was previously exercisable for, and such INX Financing Warrant otherwise continued to be governed in accordance with its terms.</span></td>
</tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Record Holders</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of April 28, 2023, there was one holder of record of our shares that is
not incorporated in the United States.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><div><a id="m_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Related Party Transactions.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a description
of the material terms of those transactions with related parties to which we are party to date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Relationships and Transactions with Directors
and Executive Officers</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a description of the Valdy
Transaction and the Security Exchange Agreement, see &#8220;Item 4, Part A - History and Development of the Company&#8221; and &#8220;Item
7, Part A &#8211; Major Shareholders and Related Party Transactions &#8211; Major Shareholders &#8211; Changes in Percentage Ownership
by Major Shareholders &#8211; Security Exchange Agreement.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. James Crossley</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a Services Agreement,
dated March 8, 2018, between Bentley Limited and the Company (as amended on August 1, 2018, January 7, 2019, October 1, 2020 and April
1, 2021) the &#8220;Bentley Services Agreement&#8221;), Bentley Limited received the option to purchase 10,000 INX Tokens per month at
the price of $0.01 per Token, subject to a maximum of 100,000 INX Tokens. Options to purchase INX Tokens granted pursuant to the Bentley
Services Agreement were exercised for the maximum amount. On January 7, 2019, the Bentley Services Agreement was amended to include the
grant of options to Bentley Limited to purchase an additional 7,500 INX Tokens per month at the price of $0.01 per INX Token. On October
1, 2020, the Bentley Services Agreement was further amended such that Bentley Limited&#8217;s entitlement for INX Tokens ended on October
1, 2020. In the aggregate, 265,000 INX Tokens were issued pursuant to the Bentley Option Rights. As of the date hereof, Bentley Limited
has exercised all options to purchase INX Tokens under the Bentley Option Rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Bentley Services
Agreement, Bentley Limited provides services to the Company, including by way of Mr. James Crossley serving as a member of the Board of
Directors. On December 14, 2021, Mr. Crossley resigned from his position as a member of the Company&#8217;s Board and is now serving as
the Company&#8217;s Director of Business Development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. David Weild </i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Weild Engagement
Letter, Mr. Weild will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an option
to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing as of
June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the fair
market value of the INX tokens on the date of the grant and that such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mr. Weild has entered into
a written services agreement with our Company, pursuant to which Mr. Weild provides services to the Company as a member of the Board of
Directors (the &#8220;Weild Engagement Letter&#8221;). Mr. Weild currently serves as the Chairman of our Board of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Agreement with Weild Capital,
LLC (&#8220;Weild Capital&#8221;)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 2, 2023, TIDCI entered into and advisory services agreement
with Weild Capital LLC (dba Weild &amp; Co.) (&#8220;Weild Agreement&#8221;), a wholly-owned subsidiary of Weild &amp; Co., Inc., of which
Mr. David Weild is Chairman &amp; CEO. Mr. Weild serves as the Chairman of the board of TIDCI. Under the advisory agreement, TIDCI agreed
to pay Weild Capital a nonrefundable advisory fee of $90 plus a transaction fee of three and a half percent (3.5%) of the aggregate transaction
value up to $60,000, and four and a half percent (4.5%) of the aggregate transaction value in excess of $60,000, subject to a minimum
transaction fee of $1,400, to be paid upon closing. In addition, under the terms of the agreement, in the event that an investment transaction
is consummated within 12 months after the termination of the Weild Agreement, TIDCI is obligated to pay a financing placement fee equal
to five and half percent (5.5%) of gross proceeds received, excluding any proceeds provided by existing shareholders of TIDCI. Further,
Weild Capital shall receive warrants to purchase the equivalent securities on comparable terms subject to such investment transaction
in an amount equal to three percent (3%) of the gross proceeds received by TIDCI under the investment transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 6pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Nicholas Thadaney</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Transactions Involving the
Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Thadaney Engagement
Letter, Mr. Thadaney will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an
option to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing
as of June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the
fair market value of the INX Tokens on the date of the grant and that such options shall be granted following the end of each calendar
quarter, with respect to the months of services in such calendar quarter.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mr. Thadaney has entered into
a written services agreement with our Company, pursuant to which Mr. Thadaney provides services to the Company as a member of the Board
of Directors (the &#8220;Thadaney Engagement Letter&#8221;).</p><div>





</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Thomas Lewis</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Transactions Involving the
Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Lewis Engagement
Letter, Mr. Lewis will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an option
to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing as of
June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the fair
market value of the INX Tokens on the date of the grant and that such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mr. Lewis has entered into
a written services agreement with our Company, pursuant to which Mr. Lewis provides services to the Company as a member of the Board of
Directors (the &#8220;Lewis Engagement Letter&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Ms. Hilary Kramer</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 18pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Transactions Involving the
Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Kramer Engagement
Letter, Ms. Kramer will receive options to purchase 3,500 Tokens per each month of services to the Company at an exercise price equal
to the fair market value of the Tokens on the date of the grant. Such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Ms. Kramer has entered into
a written services agreement with our Company, pursuant to which Ms. Kramer provides services to the Company as a member of the Board
of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Ms. Demetra Kalogerou</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Transactions Involving the
Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Kalogerou Engagement
Letter, Ms. Kalogerou will receive options to purchase 3,500 Tokens per each month of services to the Company at an exercise price equal
to the fair market value of the Tokens on the date of the grant. Such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Ms. Kalogerou has entered into
a written services agreement with our Company, pursuant to which Ms. Kalogerou provides services to the Company as a member of the Board
of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Alan Silbert</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On June 25, 2018, Mr. Silbert
and INX Services entered into an Amended and Restated Executive Employment Agreement (effective March 1, 2018) as amended effective as
of November 1, 2019 (the &#8220;Silbert Previous Employment Agreement&#8221;), pursuant to which Mr. Silbert provided services to INX
Services and the Company, including Mr. Silbert&#8217;s service as a member of the Company&#8217;s Board of Directors and Executive Managing
Director of U.S. Operations of INX Services. On January 1, 2021, the Silbert Previous Employment Agreement was terminated, and INX Digital
and Mr. Silbert entered into an executive employment agreement, as amended on March 25, 2001 (effective April 1, 2021) (the &#8220;Silbert
Employment Agreement&#8221;), pursuant to which Mr. Silbert provides services to INX Digital and the Company, including Mr. Silbert&#8217;s
service as a member of the Company&#8217;s Board of Directors and Executive Managing Director of U.S. Operations of INX Digital. On April
1, 2021, Mr. Silbert&#8217;s title changed to CEO, North America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108pt; text-align: justify; text-indent: -108pt"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108pt; text-align: justify; text-indent: -108pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Transactions Involving the
Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Silbert Employment
Agreement, on February 20, 2021, Mr. Silbert was granted an option to purchase 500,000 INX Tokens at a price of $0.01 per Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Following the adoption of a
Share Ownership and Award Plan by the Company, Mr. Silbert was granted an option to purchase 287,290 Ordinary Shares of the Company constituting
3% of the share capital of the Company on a fully diluted basis at the date of the Original Silbert Employment Agreement, at a price per
share equal to its fair value as of the effective date of the Original Silbert Employment Agreement or $0.391904. 25% of the option shares
vest upon each anniversary of the Original Silbert Employment Agreement, such that the options would be fully vested and exercisable upon
the 4<sup>th </sup>anniversary of the Original Silbert Employment Agreement. Unvested options were subject to accelerated vesting upon
change of control of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Silbert pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108pt; text-align: justify; text-indent: -108pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On March 25, 2021, the Silbert
Employment Agreement was amended such that, effective as of April 1, 2021, Mr. Silbert was granted an additional option to purchase 200,000
INX Tokens at a price of $0.90 per Token, and an option to purchase 197,710 Ordinary Shares of the Company at a price per share equal
to $11.126. One thirty-sixth (1/36) of the Ordinary shares and INX Tokens underlying each option shall vest following lapse of each month
of Mr. Silbert&#8217;s continuous engagement by the Company, such that all such Ordinary shares and INX Tokens would become fully vested
by April 1, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 30, 2021, the Company&#8217;s
Board of Directors approved that (i) all unvested options to purchase INX Tokens that were granted to Mr. Silbert (&#8220;Silbert&#8217;s
Tokens&#8221;) shall accelerate and be fully vested commencing as of the date of such resolution and (ii) the entering into a customary
reverse vesting agreement with Mr. Silbert in connection with such accelerated options of Mr. Silbert pursuant to which the Company would
have the right to repurchase for cancellation Silbert&#8217;s Tokens in the event that the Silbert Employment Agreement is terminated
without cause or good reason as such terms are defined in the Silbert Employment Agreement. The Company&#8217;s repurchase right shall
lapse in equal parts on a monthly basis over the course of two (2) years and three (3) months commencing as of January 1, 2022, such that
the repurchase right will have fully lapsed on April 1, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 30, 2021, the Company&#8217;s
Board of Directors also approved the grant of an unsecured, non-recourse loan in the amount of US$404,129 bearing interest at a rate of
1.26% annually to Mr. Silbert (&#8220;Silbert Loan&#8221;) by INX Digital in connection with the exercise of a portion of his options
to purchase Silbert&#8217;s Tokens (the &#8220;Silbert Promissory Note&#8221;). On February 8, 2022, the Board of Directors of TIDCI approved
a grant of 100,000 INX Tokens to Mr. Silbert. Such INX Tokens were granted to Mr. Silbert on April 12, 2022 following the approval of
the changes to our Plan on March 31, 2022. On March 24, 2022, the Board of Directors of TIDCI approved an increase of the Silbert Loan
from US$ 404,129 to US$ 504,300. The Silbert Promissory Note was amended accordingly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Effective June 30, 2022, the
Company purchased 632,474 INX Tokens from Mr. Silbert, at a per token purchase price of US$0.80, and on the same date Mr. Silbert used
the aggregate proceeds from such purchase to repay the full balance of the Silbert Loan, in the amount of US$506,150, including accrued
interest On the same date, the Company&#8217;s Board of Directors also approved a grant of 837,385 INX Tokens subject to a Restricted
Token Agreement, subject to continuous engagement of Mr. Silbert with the Company or its affiliates, such that the tokens would be fully
vested on March 30, 2024. Upon separation or termination of employment with the Company, 731,830 of these tokens would be fully vested
on the date of termination of employment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mr. Silbert has entered into
a written employment agreement with INX Digital, pursuant to which he provides services, including as a member of the Board of Directors
of the Company, formerly as the Executive Managing Director of U.S. Operations of INX Digital, and commencing as of April 1, 2021 as the
Chief Executive Officer of North America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Shy Datika</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a Share Purchase Agreement,
dated September 26, 2017, between the Company and Triple-V (1999) Ltd. (Triple-V&#8221;), a company wholly owned by Mr. Shy Datika, one
of our founders, a member of our Board of Directors, President and CEO, the Company issued to Triple-V (1999) Ltd. 3,356,666 ordinary
shares of the Company, par value of GBP 0.001 (each an &#8220;Ordinary Share&#8221;), in consideration of $446,875.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Share Purchase Agreement,
the Company also issued to Triple-V 9,435,939 INX Tokens at a price of $0.01 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 25, 2019, Mr. Datika
invested an additional $150,000 in the Company pursuant to a Simple Agreement for Future Equity (the &#8220;SAFE&#8221;). Pursuant to
the terms of the SAFE, upon consummation of an investment round (in shares of capital stock of the Company) in the amount of not less
than $2 million (in addition to the funds raised under the SAFEs) (a &#8220;Qualifying Financing&#8221;), the funds raised under the SAFE
would have automatically been converted into the same class of shares of capital stock as those issued in the Qualifying Financing at
a price per share equal to the lower of: (i) a 25% discount on the base (undiscounted) price per share of the Qualifying Financing; and
(ii) US$ 1.367 (the &#8220;Default Price&#8221;). A Qualifying Financing was not consummated before April 25, 2020, and thus the funds
raised under the SAFE were automatically converted into Ordinary Shares at a price per share equal to the Default Price. Hence, under
the terms of the SAFE, on April 25, 2020, Mr. Datika received 109,729 Ordinary Shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the SAFE executed between Mr. Datika and the Company summarizes the material terms of the SAFE, but is not a complete description.
For more details, you should reference the full text of the SAFE executed between Mr. Datika and the Company, which is attached as Exhibit
4.14 hereto, and is incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 30, 2019 and November
29, 2019, Mr. Datika invested in the aggregate an additional $250,000 in the Company pursuant to Simple Agreements for Future Equity (the
&#8220;Second SAFE&#8221;). The Second SAFE would also be automatically converted into the same class of shares of capital stock as those
issued in a Qualifying Financing at a price per share equal to the lower of 25% discount on the base (undiscounted) price per share of
the Qualifying Financing, and $1.367 per share. If a Qualifying Financing was not consummated within 12 months commencing as of the Effective
Date (as such term is defined in the Second SAFE), the funds would automatically be converted at a price per share of $1.367. Hence, the
SAFE would have an anti-dilutive impact on the Qualifying Financing as the number of shares issued pursuant to the SAFE increased relative
to a decrease in the price per share of such Qualifying Financing. Notwithstanding an increased valuation, and thus increased price per
share, of a Qualifying Financing, Mr. Datika was entitled to a minimum of 182,882 Ordinary Shares.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the shares
issued to the investors upon conversion of the Second SAFE, upon such conversion the Second SAFE investors would be entitled to an option
to purchase additional shares, in the same amount and from the same class of the shares issued to them upon conversion of their investment
under the Second SAFE, for an exercise price of $1.953 per share. This option shall be valid for a period of 36 months commencing as of
the Effective Date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Qualifying Financing was
not consummated before August 30, 2020, and thus the funds raised under the Second SAFE were automatically converted into Ordinary Shares
at a price per share equal to $1.367. Hence, under the terms of one of the Second SAFEs, on August 30, 2020, Mr. Datika received 146,305
Ordinary Shares and Mr. Datika was entitled to an option to purchase 146,305 Ordinary Shares for an exercise price of $1.953 per share.
All of the options were exercised on September 13, 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Second SAFEs summarizes the material terms of the Second SAFE, but is not a complete description. For more details, you should
reference to the full text of the Second SAFE executed between Mr. Datika and the Company and Triple-V (1999) Ltd. and the Company, which
are attached as Exhibits 4.16 and 4.17 hereto, and is incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 31, 2020 and March
31, 2020, Mr. Datika invested in the aggregate an additional $100,000 in the Company pursuant to Simple Agreements for Future Equity (the
&#8220;Third SAFE&#8221;). The Third SAFE would also be automatically converted into the same class of shares of capital stock as those
issued in the Qualifying Financing at a price per share equal to the lower of, 25% discount on the base (undiscounted) price per share
of the Qualifying Financing, and $1.526 per share. If a Qualifying Financing was not consummated within 12 months commencing as of the
Effective Date (as such term is defined in the Third SAFE), the funds would automatically be converted at a price per share of $1.526.
Hence, the Third SAFE would have an anti-dilutive impact on the Qualifying Financing as the number of shares issued pursuant to the Third
SAFE increased relative to a decrease in the price per share of such Qualifying Financing. Notwithstanding an increased valuation, and
thus increased price per share, of a Qualifying Financing, Mr. Datika was entitled to a minimum of 65,530 Ordinary Shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the shares
issued to the investors upon conversion of the Third SAFE, the Third SAFE investors would be entitled to an option to purchase additional
identical number of shares, from the same class of the shares issued to them upon conversion of their investment under the Third SAFE,
for an exercise price of $1.696 per share. This option shall be valid for a period of 36 months commencing as of the Effective Date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Qualifying Financing was
not consummated before January 31, 2021, and thus the funds raised under the one of the Third SAFEs were automatically converted into
Ordinary Shares at a price per share equal to $1.526. Hence, under the terms of Third SAFE, on January 31, 2021 Mr. Datika received an
aggregate of 49,147 Ordinary Shares and Mr. Datika was be entitled to an option to purchase 49,147 Ordinary Shares for an exercise price
of $1.696 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Third SAFE summarizes the material terms of the Third SAFE, but is not a complete description. For more details, you should reference
to the full text of the Third SAFEs executed between Mr. Datika and the Company, which are attached as Exhibits 19 and 4.20 hereto, and
is incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 22, 2021, Mr. Datika
entered into the March 2021 Subscription Agreement with the Company, pursuant to which Mr. Datika provided to the Company CAD$ 75,000
in consideration for subscription receipts of the Company that were replaced at the closing of the Valdy Transaction by 60,000 Ordinary
Shares of Valdy and to an option to purchase 30,000 Ordinary Shares of Valdy at an exercise price of CAD$ 1.88 per share. <i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">In January 2023, Triple V (1999) Ltd. converted part of its Fees into
options to acquire 593,678 shares in the Company.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Triple-V (1999) Ltd. has entered
into a written services agreement with our Company, pursuant to which Triple-V, though the personal services of Mr. Datika, provides services
to the Company as shall be determined by our Board of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 28, 2021, our Board
of Directors appointed Mr. Datika as the CEO of the Company, upon and subject to closing of the Valdy Transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 14, 2021, Mr.
Datika was appointed as a member of the Company&#8217;s Board of Directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Ms. Maia Naor</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a Loan Agreement, dated
November 27, 2017, between the Company and Ms. Naor, our Chief Product Officer, the Company borrowed $40,635 from Ms. Naor. The term of
the loan is five years, and the outstanding balance shall become due and payable on the five-year anniversary of the Naor Loan Agreement
or upon the sooner of an IPO or a Deemed Liquidation Event (as such terms are defined in the Company&#8217;s Articles of Association).
The interest rate on the principal of the loan is an annual rate of 2% compounded annually (subject to adjustment from time to time by
the applicable Income Tax Ordinance).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Loan Agreement,
Ms. Naor was entitled, at any time and at her sole discretion, to convert outstanding principal and interest amounts of the loan agreement
into 333,333 Ordinary Shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors of TIDCI approved two grants of an aggregate
total amount of 786,535 Ordinary Shares of TIDCI to Ms. Naor pursuant to the terms of the Omnibus Equity Incentive Compensation Plan of
TIDCI , subject to the standard vesting provisions set forth in such plan. The exercise price of the shares underlying such grant shall
be equal to their fair market value on the date of each grant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of the Loan
Agreement, Ms. Naor purchased 937,499 INX Tokens issued by the Company at a price of $0.01 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 25, 2021, Ms.
Naor exercised her right to convert the outstanding principal and interest amounts of the loan agreement into 333,333 Ordinary Shares
of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mrs. Naor has an option to purchase 125,000 INX Tokens at a price of
$0.43 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered into
a services agreement with Midgard, an Israeli private company, pursuant to which Ms. Naor provided services to the Company as VP Product.
Ms. Naor&#8217;s services to the Company are rendered solely through Midgard. Prior to that, Ms. Naor provided services to the Company
pursuant to a services agreement directly with Ms. Naor and to an agreement between the Company and Shiran Communications Ltd. On April
1, 2021, Midgard was purchased by the Company. On June 1, 2021, Ms. Naor&#8217;s position changed to that of Chief Product Officer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Jonathan Azeroual</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a Share Purchase Agreement,
dated September 27, 2017, between the Company and Mr. Jonathan Azeroual, our Chief Blockchain Officer, the Company issued to Mr. Azeroual
377,500 Ordinary Shares in consideration of GBP 377.50. On January 7, 2019, the Board of Directors of the Company approved the issuance
to Mr. Azeroual of 33,391 Ordinary Shares in consideration of $34,860.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 393,268 Ordinary Shares of TIDCI to Mr. Azeroual pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI , subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See &#8220;Item 7.A Major
Shareholders.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Share Purchase Agreement
the Company also issued 750,000 INX Tokens to Mr. Azeroual at a price of $0.01 per Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Azeroual has an option
to purchase 125,000 INX Tokens at a price of $0.43 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Azeroual has entered into
a written services agreement with our Company, pursuant to which he provides services to the Company as its Vice President, Blockchain
Asset Strategy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Douglas Borthwick</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Borthwick Employment
Agreement, Mr. Borthwick was granted an option to purchase 103,929 INX Tokens at an exercise price of $0.065 per INX Token. On February
20, 2021, Mr. Borthwick received a one-time bonus in the amount of $200,000 and an option to purchase additional 259,821 INX Tokens at
an exercise price of $0.065 per INX Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the adoption of
a Share Ownership and Award Plan by the Company, Mr. Borthwick was granted with an option to purchase 194,937 Ordinary Shares of the Company,
at a price per share equal to its fair value as of September 1, 2019. 50% of the option shares vested on September 1, 2019. Thereafter,
on each anniversary of September 1, 2019, one-third (1/3) of the remaining unvested portion of the options shall vest, such that, subject
to the continuous engagement of Mr. Borthwick with the Company at such time, the options will be fully vested and exercisable upon September
1, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2020, Mr. Borthwick&#8217;s
Employment Agreement was amended such that, Mr. Borthwick&#8217;s monthly salary was increased to $15,000. Mr. Borthwick was also granted
an option to purchase 50,000 Tokens at an exercise price of $0.09 per INX Token, which option vested on February 20, 2021. Mr. Borthwick
was also granted an option to purchase 200,000 Tokens at an exercise price of $0.90 per INX Token, which option vests in accordance with
the following vesting schedule<i>: </i>25% vested on October 1, 2020 and, subject to Mr. Borthwick&#8217;s continuous engagement by the
Company, an additional 25% vest on the yearly anniversary of such date during each consecutive year thereafter, such that all such 200,000
INX Tokens shall become fully vested on October 1, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 25, 2021 Mr. Borthwick&#8217;s
Employment Agreement was amended such that, commencing as of April 1, 2021, Mr. Borthwick&#8217;s title changed to Company&#8217;s Chief
Business Officer (CBO) and Mr. Borthwick&#8217;s base salary increased to $23,000 per month. In addition, Mr. Borthwick was granted, effective
as of April 1, 2021, an additional option to purchase 200,000 INX Tokens at a price of $0.90 per Token, and with an option to purchase
206,000 Ordinary Shares of the Company at a price per share equal to $11.126. One thirty-sixth (1/36) of the Ordinary shares and INX Tokens
underlying each option shall vest following lapse of each month of Mr. Borthwick&#8217;s continuous engagement by the Company, such that
all such Ordinary shares and INX Tokens shall become fully vested on April 1, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 30, 2021, the
Company&#8217;s Board of Directors approved that (i) all unvested options to purchase INX Tokens that were granted to Mr. Borthwick (&#8220;Borthwick&#8217;s
Tokens&#8221;) shall accelerate and be fully vested commencing as of the date of such resolution and (ii) the entering into a customary
reverse vesting agreement with Mr. Borthwick in connection with such accelerated options of Mr. Borthwick pursuant to which the Company
would have the right to repurchase for cancellation Borthwick&#8217;s Tokens in the event that the Borthwick Employment Agreement is terminated
without cause or good reason as such terms are defined in the Borthwick Employment Agreement; The Company&#8217;s repurchase shall lapse
(A) with respect to 100,000 tokens (&#8220;Borthwick&#8217;s First Portion&#8221;)&#160;-&#160;on equal parts on a yearly basis over the
course of two (2) years commencing as of October 1, 2021, such that the repurchase right with respect to Borthwick&#8217;s First Portion
shall have fully lapsed on October 1, 2023; and (B) with respect to the remaining 150,000 tokens (&#8220;Borthwick&#8217;s Second Portion&#8221;)
&#8211; on equal parts on a monthly basis over the course of two (2) years and three (3) months commencing as of January 1, 2022, such
that the repurchase right with respect to Borthwick&#8217;s Second Portion shall have fully lapsed on April 1, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 30, 2021, the
Company&#8217;s Board of Directors also approved the grant of an unsecured, non-recourse loan in the amount of $610,777 bearing interest
at a rate of 1.26% annually to Mr. Borthwick (&#8220;Borthwick Loan&#8221;) by INX Digital in connection with the exercise of his options
to purchase Borthwick&#8217;s Tokens (the &#8220;Borthwick Promissory Note&#8221;). On February 8, 2022, the Board of Directors of TIDCI
approved a grant of 100,000 INX Tokens to Mr. Borthwick. Such INX Tokens were granted to Mr. Borthwick on April 12, 2022 following the
approval of the changes to our Plan on March 31, 2022. The Board of Directors of TIDCI also approved a grant of 509,617 Ordinary Shares
of TIDCI to Mr. Borthwick pursuant to the terms of the Omnibus Equity Incentive Compensation Plan of The TIDCI, subject to the standard
vesting provisions set forth in such plan. The exercise price of the shares underlying such grant shall be equal to their fair market
value on March 15, 2022 (the date of the grant). On March 24, 2022, the Board of Directors of TIDCI approved an increase of the Borthwick
Loan from $610,777 to $729,777. The Borthwick Promissory Note was amended accordingly.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective June 30, 2022, the
Company purchased 913,750 INX Tokens from Mr. Borthwick, at a per token purchase price of $0.80, and on the same date Mr. Borthwick used
the aggregate proceeds from such purchase to repay the full balance of the Borthwick Loan, in the amount of $732,529, including accrued
interest. On the same date, the Company&#8217;s Board of Directors also approved a grant of 1,195,158 INX Tokens subject to a Restricted
Token Agreement, with a monthly vesting schedule, subject to continuous engagement of Mr. Borthwick with the Company or its affiliates,
such that the tokens would be fully vested on June 30, 2025. Upon separation or termination of engagement with the Company as an employee
or advisor, 983,603 of these tokens would be fully vested on the date of termination of employment.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Borthwick resigned from
his position as Chief Business Officer (CBO) of the Company effective December 31, 2022, and entered into a written agreement with the
Company to serve on its advisory board, effective January 1, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Paz Diamant</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Mr. Diamant&#8217;s
Services Agreement, Mr. Diamant was granted options to purchase 50,000 Tokens, at the price of $0.08 per Token, which equals 10,000 Tokens
per month during the three months between the effective date of Mr. Diamant&#8217;s Services Agreement and October 2020, plus 20,000 INX
Tokens. Upon entering into an Employment Agreement, Mr. Diamant was granted an option to purchase an additional 200,000 INX Tokens at
an exercise price of $0.08 per INX Token. The options granted under the Employment Agreement shall vest, subject to Mr. Diamant&#8217;s
continued employment with the Company, over four years in equal amounts on each of the first four anniversaries of the effective date
of the Employment Agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Company undertook
that upon and subject to the adoption of a Share Ownership and Award Plan by the Company and approval of the Company&#8217;s board of
directors, Mr. Diamant shall receive an option to purchase 67,158 Ordinary Shares of the Company. 20% of the option shares will vest on
the first anniversary of the grant date. Thereafter, 5% of the options shares vest at the end of each quarter during the four (4) years
after the first anniversary of the grant date, such that the options will be fully vested and exercisable upon the 5<sup>th </sup>anniversary
of the grant date. The option to purchase Ordinary Shares is subject to the continued employment of Mr. Diamant with the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 8, 2022, the Board of Directors of TIDCI replaced such
commitment to issue options to purchase shares of the Company with a grant of 607,698 Restricted Shares of TIDCI (net number of Restricted
Shares, issued on a &#8220;cashless basis&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Diamant holds 50,000 INX
Tokens, and options to purchase 200,000 INX Tokens, at the price of $0.08 per Token and additional 52,500 INX Tokens at an exercise price
of $0.43 per INX Token</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Diamant has entered into
a written services agreement with the Company, pursuant to which he provides services as its Chief Technology Officer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Itai Avneri</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Mr. Avneri&#8217;s
Services Agreement, Mr. Avneri was granted an option to purchase 180,000 INX Tokens at a price of $0.09 per Token, and an option to purchase
additional 180,000 INX Tokens upon the earlier of June 30, 2020 or the execution of the Avneri Employment Agreement with the Company.
In addition, upon and subject to the adoption of a Share Ownership and Award Plan by the Company, the Company undertook that Mr. Avneri
shall receive an option to purchase 269,640 Ordinary Shares of the Company and additional 269,640 Ordinary Shares upon the execution of
the Avneri Employment Agreement with the Company. 25% of the option shares will vest on the first anniversary of the grant date. Thereafter,
subject to Mr. Avneri&#8217;s continuous engagement with the Company, one-twelfth (1/12) of the remaining unvested options vest at the
end of each quarter during the three (3) years after the first anniversary of the grant date, such that the options will be fully vested
and exercisable upon the fourth anniversary of the grant date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 8, 2022, the Board
of Directors of TIDCI replaced such commitment to issue options to purchase shares of the Company with a grant of 4,428,434 Restricted
Shares of TIDCI (net number of Restricted Shares, issued on a &#8220;cashless basis&#8221;). In addition, on the same date, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Avneri pursuant to the terms of the Omnibus Equity Incentive
Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares underlying
such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Avneri holds an option
to purchase 360,000 INX Tokens at a price of $0.09 per Token and additional 100,000 INX Tokens at a price of $0.43 per Token.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In January 2023, Mr. Avneri
converted part of his salary into options to acquire 319,043 shares in the TIDCI.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Avneri has entered into
a written services agreement with the Company, pursuant to which he provides services as its Chief Operating Officer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Mr. Vladislav Uchenik</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Uchenik serves as the
Chief Executive Officer and Chief Compliance Officer for INXS, pursuant to an offer letter with the INX Digital.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Uchenik pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).&#160;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Uchenik holds 150,000
INX Tokens pursuant to an RTA.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><i>Ms. Keren Avidar</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Management, Services or
Consulting Agreement</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ms. Avidar serves as the Global
General Counsel, pursuant to an Employment Agreement entered into with Midgard Technologies Ltd. in September 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Employment Agreement,
Ms. Avidar was granted an equity compensation award of Common Shares of INXD under the Omnibus Equity Incentive Compensation of INXD as
follows: An option to purchase 1,325,946 Common Shares, constituting 0.5% of the share capital of INXD on a fully diluted basis as of
the Grant Date, at a price per share at the Market Value (as such term is defined under the INXD Plan) per each Option Share on the Grant
Date. The Option will vest and become exercisable as follows: 1/3 of the Option shall vest upon each anniversary of the Grant Date such
that subject to the continuous engagement of the Employee with the Company at such time, the entire Option shall be vested and exercisable
upon the 3<sup>rd</sup> anniversary of the Grant Date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Employment Agreement,
Ms. Avidar was also granted an option to purchase 150,000 INX Tokens. The exercise price of the Tokens shall be the equal to the fair
market value of the Tokens as of the date of grant of the Tokens by INX Limited. The Tokens shall vest over a period of three (3) years
during Employee&#8217;s engagement with the Company, such that 1/3 of the Tokens shall vest upon each anniversary of the Effective Date,
such that the Tokens will be fully vested and exercisable upon the 3<sup>rd</sup> anniversary of the Effective Date, subject to continuous
engagement of the Employee with the Company or any of its affiliates at such time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><i>Ms. Renata Szkoda</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 2, 2022, Ms. Szkoda
entered into an Executive Employment Agreement with INX Digital, Inc. and INX Limited to serve as the Chief Financial Officer of the INX
group.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Transactions Involving
the Company&#8217;s Securities</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Executive Employment
Agreement, Ms. Szkoda was granted an option to purchase 150,000 INX Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ms. Szkoda was also granted
an option to purchase a number of Option Shares constituting 0.50% of the share capital of TINXDCO on a fully diluted basis as of the
Grant Date at a price per share at the Fair Market Value (&#8220;FMV&#8221;) per each Option Share on the Grant Date. The Option will
vest and become exercisable as follows: 1/4 of the Option shall vest upon each anniversary of the Effective Date subject to the continuous
engagement of the Executive with the Company at such time, such that, subject to the continuous engagement of the Executive with the Company
at such time, the entire Option shall be vested and exercisable upon the 4th anniversary of the Agreement&#8217;s Effective Date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Agreements with Other Interested Parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><span style="text-decoration:underline">A-Labs</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company and A-Labs Finance
and Advisory Ltd. (&#8220;A-Labs&#8221;), a limited liability company registered under the laws of the state of Israel, entered into the
A-Labs Engagement Agreement dated September 26, 2017, as amended in December 2017 and January 31, 2018. A-Labs, a shareholder of the Company,
provided services to the Company which included, among others, development, planning, management, execution, branding and marketing outside
of the US with relation to the Offering of the INX Tokens on behalf of the Company (the &#8220;A-Labs Agreement&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 7, 2019, the Board
of Directors of the Company approved the issuance to A-Labs of 47,893 Ordinary Shares in consideration of $50,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 25, 2019, A-Labs
invested an additional $100,000 in the Company pursuant to a SAFE dated as of such date. On April 25, 2020, under the terms of the SAFE,
A-Labs received 73,152 Ordinary Shares. See <i>&#8220;</i>Item 7.B Related Party Transactions <i>&#8211; </i>Relationships and Transactions
with Directors and Executive Officers &#8211; Mr. Shy Datika &#8211; Transactions Involving the Company&#8217;s Securities<i>&#8221; </i>for
a summary of the material terms of the SAFE.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 7, 2020, A-Labs invested
an additional $30,000 in the Company pursuant to a Third SAFE dated as of such date. Under the terms of the Third SAFE, A-Labs is entitled
to a minimum of 19,659 Ordinary Shares. See &#8220;Item 7.B Related Party Transactions &#8211; Relationships and Transactions with Directors
and Executive Officers &#8211; Mr. Shy Datika &#8211; Transactions Involving the Company&#8217;s Securities&#8221; for a summary of the
material terms of the SAFE and Third SAFE.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Qualifying Financing was
not consummated before March 7, 2021, and thus the funds raised under the Third SAFEs were automatically converted into Ordinary Shares
at a price per share equal to $1.526. Hence, under the terms of Third SAFE, on March 7, 2021 A-Labs received 19,659 Ordinary Shares and
A-Labs will be entitled to an option to purchase 19,659 Ordinary Shares for an exercise price of $1.696 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing descriptions
of the SAFE and Third SAFE executed between A-Labs and the Company summarizes the material terms of the SAFE and Third SAFE but are not
complete descriptions. For more details, you should reference to the full text of the SAFE and Third SAFE executed between A-Labs and
the Company, which are attached as Exhibits 4.15 and 4.21 hereto, and incorporated herein by reference.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 22, 2021, A-Labs
(for itself and/or on behalf of any affiliate or fund or other investment vehicle managed by A-Labs or an affiliate thereof) entered into
the March 2021 Subscription Agreement with the Company, pursuant to which A-Labs provided to the Company CAD$ 2,487,500 in consideration
for subscription receipts of the Company that was replaced at the closing of the Valdy Transaction by 1,990,000 Ordinary Shares of Valdy
and an option to purchase 995,000 Ordinary Shares of Valdy at an exercise price of CAD$ 1.88 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In consideration for the advisory
services, during 2021, the Company paid A-Labs $4.1 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A-Labs also received a grant
of 4,550,000 INX Tokens at a fair value of $6. In addition, pursuant to an agreement signed contemporaneously with the A-Labs Agreement,
the Company issued 1,120,000 Ordinary shares to A-Labs. The fair value of the shares issued of $136,000, was deemed as additional consideration
for the services to be provided by A-Labs and was recorded during the year ended December 31, 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, on July 29, 2021,
the Company made a payment to A-Labs of $1.0 million and granted A-Labs with an option to purchase 1,527,084 Tokens. These options were
exercised during 2022 and vest on July 12, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_029"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>C. Interests of Experts and Counsel.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 8. <span style="font-variant: small-caps">FINANCIAL
INFORMATION.</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-variant: small-caps">&#160;</span></p><div>

</div><div><a id="m_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>A. Consolidated Statements and Other Financial
Information.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See &#8220;Item 18. Financial
Statements.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Legal Proceedings</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time we may be
subject to legal proceedings and claims in the ordinary course of business. We are not involved in any material legal proceedings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Dividends</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have never declared or
paid cash dividends to our shareholders. Currently we do not intend to pay cash dividends. We currently intend to reinvest any future
earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion
of our Board of Directors and will depend on a number of factors, including future earnings, our financial condition, operating results,
contractual restrictions, capital requirements, business prospects, applicable law and other factors our Board of Directors may deem relevant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Significant Changes.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">None.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_033"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 9. <span style="font-variant: small-caps">THE OFFER AND LISTING</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_034"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Offer and Listing Details.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our Parent has listed its common shares on the
NEO Exchange in Canada and on the OTCQB exchange in the United States (operated by OTC Markets). No trading market currently exists for
our Ordinary Shares in the United States or elsewhere.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_035"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Plan of Distribution.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_036"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Markets.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Our Parent has listed its common shares on the
NEO Exchange in Canada and on the OTCQB exchange in the United States (operated by OTC Markets). No trading market currently exists for
our Ordinary Shares in the United States or elsewhere.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;&#160;&#160;</p><div>

</div><div><a id="m_037"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>D. Selling Shareholders.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_038"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>E. Dilution.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_039"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>F. Expenses of the Issue.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_040"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 10. <span style="font-variant: small-caps">ADDITIONAL INFORMATION</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_041"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Share Capital.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Not
applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><div><a id="m_042"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>B. Memorandum and Articles of Association.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 18, 2021, the shareholders
of the Company approved the amendment of the Third Amended and Restated Articles of Association of the Company. Pursuant to such amendment,
Article 80.D(f) shall be amended such that the Bring Along and Forced Sale provisions of the Articles shall not be terminated upon the
completion of the Token Offering.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="m_043"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>C. Material Contracts.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not entered into any
material contract within the two years prior to the date of this annual report on Form 20F, other than contracts entered into in the ordinary
course of business, or as otherwise described herein in &#8220;Item 4.A. History and Development of the Company&#8221; above, &#8220;Item&#160;4.B.
Business Overview&#8221; above, &#8220;Item&#160;7A. Major Shareholders&#8221; above, or &#8220;Item&#160;8B. Significant Changes.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 15, 2022, INX
entered into a shareholders&#8217; and joint venture agreement with SICPA SA, a company organized under the laws of Switzerland, Mr. Yosef
Meir Cohen and Mr. Hagai Itkin (&#8220;SICPA Agreement&#8221;), whereby parties to the agreement have agreed to joint their expertise
and collaborate to develop central bank digital currency solutions with the utilization of blockchain technology. Subsequently, for the
purpose of executing joint objectives under the SICPA Agreement, the parties agreed to form SICPA INX SA (&#8220;SICPA INX&#8221;), an
entity organized under the laws of Switzerland. All parties to the agreement are to become shareholders of SICPA INX, with INX&#8217;s
share of the issued and outstanding share capital to be 33 percent. Also, under the SICPA Agreement, INX is entitled to introduce a new
partner within the first year from the date of the agreement, which, if approved by the majority shareholder, would be entitled to receive
a maximum number of shares constituting 16.5 percent of the issued and outstanding share capital of SICPA INX, which shall be reduced
from INX&#8217;s initial allocation of shares. In relation to the SICPA Agreement, INX also intends to enter into a service agreement
with SICPA INX to license its technology and provide technology support and management services for a period of one year in return for
compensation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_044"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>D. Exchange Controls.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividends paid or deemed to
be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax under Part XIII of the Tax Act. The default
rate of withholding tax is 25% of the gross dividend paid to a non-resident of Canada.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Treaty, the rate
of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend. In the case of a U.S. Holder
that is a corporation owning at least 10% of the&#160;Company&#8217;s voting shares, the applicable withholding rate is 5% of the gross
dividend, provided the U.S. Holder can establish entitlement to the benefits of the Treaty.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as provided in the
Investment Canada Act, or the Act, there are no limitations under the laws of Canada, the Province of British Columbia or in the charter
or any other constituent documents of the Company on the right of foreigners to hold or vote the ordinary shares of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following discussion summarizes
the principal features of the Investment Canada Act for a non-resident who proposes to acquire the ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Investment Canada Act
generally prohibits an &#8220;entity&#8221; that is not Canadian-controlled from effecting an acquisition of control of a Canadian business
that exceeds the applicable financial threshold for review, unless after review, the Director of Investments appointed by the Minister
responsible for the Investment Canada Act is satisfied that the investment is likely to be of net benefit to Canada. The financial thresholds
for review vary according to whether the direct acquisition of control is made by (i) an investor that is controlled by nationals of a
specified free trade party; (ii) a national of a World Trade Organization (WTO) member state; or (iii) a state-owned enterprise. Any investment,
regardless of the applicable financial threshold for review, may be reviewed on national security grounds. An acquisition of control is
presumed to occur under the Investment Canada Act if a non-Canadian acquires a majority of the ordinary shares. An acquisition resulting
in the non-Canadian purchaser holding one third or more, but less than a majority, of the ordinary shares would be presumed to be an acquisition
of control of the Company unless it could be established that, on the acquisition, the Company was not controlled in fact by the acquirer
through the ownership of the ordinary shares. Certain transactions relating to the ordinary shares would be exempt from the Investment
Canada Act, including: (a) an acquisition of the ordinary shares by a person in the ordinary course of that person&#8217;s business as
a trader or dealer in securities; (b) an acquisition of control of the Company in connection with the realization of security granted
for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and (c) an acquisition
of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate
direct or indirect control in fact of the Company, through the ownership of the ordinary shares, remained unchanged</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_045"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>E. Taxation.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>U.S. Federal Income Tax
Considerations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Set forth below is a discussion,
in summary form, of certain United States federal income tax consequences relating to the acquisition, ownership and disposition of Tokens.
This summary does not attempt to present all aspects of the United States federal income tax laws or any state, local or foreign laws
that may affect an interest in Tokens. Financial institutions, insurance companies, tax-exempt entities, purchasers subject to the alternative
minimum tax and other purchasers of special status must consult with their own professional tax advisors regarding a prospective or current
investment in INX Tokens. This summary is by nature general in nature and should not be construed as tax advice to any prospective purchaser
or current INX Token holder. No ruling has been or will be requested from the IRS and no assurance can be given that the IRS will agree
with the tax consequences described in this summary. The following discussion assumes that each purchaser will acquire Tokens as a capital
asset (generally, property held for investment). This description is based on the U.S. Internal Revenue Code of 1986, as amended, (the
&#8220;Code&#8221;), existing, proposed and temporary U.S. Treasury Regulations and judicial and administrative interpretations thereof,
in each case as available on the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could
affect the tax consequences described below. The following discussion is limited to prospective purchasers and current INX Token holders
who are &#8220;United States Persons&#8221; within the meaning of the Code. Each prospective purchaser and current INX Token holder should
consult with its own tax adviser in order to fully understand the United States federal, state, local and foreign income tax consequences
of purchasing or holding an interest in Tokens. No formal or legal tax advice is hereby given to any prospective purchaser or current
INX Token holder, and no prospective purchaser and or INX Token holder may rely on the Company&#8217;s statements regarding the anticipated
tax consequences of purchasing, holding and disposing of Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Transactions involving Tokens
are relatively new and it is more than likely that the IRS will issue guidance, possibly with retroactive effect, impacting the taxation
of participating in the purchase, ownership and disposition of Tokens. Such future tax guidance from the IRS (or guidance resulting from
future judicial decisions) could negatively impact purchasers of Tokens.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Character of Tokens</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no regulations,
published rulings or judicial decisions involving the characterization for US federal income tax purposes of instruments with substantially
the same terms as the INX Tokens.&#160; It is also unclear what guidance on the characterization and treatment of tokens for U.S. federal
income tax purposes may be issued in the future.&#160; Thus, the characterization and treatment of INX Tokens for U.S. federal income
tax purposes is uncertain.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The IRS has ruled on the tax
treatment of virtual currencies. In Notice 2014-21, the IRS held that digital currencies (i) are &#8220;property&#8221; that is not currency
for US federal income tax purposes and (ii) may be held as a capital asset.&#160;&#160; The Notice does not address other aspects of the
U.S. federal income tax treatment of tokens, including the tax characterization of tokens which possess non-currency rights or powers
(so called &#8220;utility&#8221; tokens) or tokens which provide a share of profits to holders.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, there is no authority
on the circumstances in which profit-sharing tokens such as INX Tokens may be treated as equity in the Company for U.S. federal income
tax purposes.&#160;&#160; It should be expected, however, that the IRS or a court would determine the characterization of tokens based
on a consideration and weighing of the characteristics of these instruments.&#160; Based on the characteristics of the INX Tokens, the
Company intends to treat the INX Tokens as property that is not an equity interest in the Company for US federal income tax purposes.&#160;
This treatment is supported by the following characteristics:(i) distribution rights on the INX Tokens are (a) based on annual net cash
flow from operating activities rather than earnings and profits of the Company and (b) entitlements pursuant to the terms of the INX Tokens
without any action to declare a payment (distribution) required by Company&#8217;s board of directors, (ii) no participation rights in
residual property of the Company on liquidation along with common equity and no specified liquidation preference typical with preferred
equity and (iii) no voting rights.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other characterizations of
the INX Tokens are possible, including the possible characterization as equity of the Company. If INX Tokens were characterized as equity
interests in the Company for U.S. federal income purposes, U.S. holders of INX Tokens would be subject additional tax consequences and
related reporting considerations applicable to holders of stock in a foreign company, including the possible application of rules relating
to PFICs and CFCs.&#160; The summary below assumes that INX Tokens will not constitute an equity interest in the Company for U.S. federal
income tax purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Potential purchasers and current
INX Token holders are strongly advised to consult their own tax advisors as to the US federal income tax characterization of the INX Tokens
and the consequences to them of the various alternative characterizations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Treatment of Token Sales.
The issuance of Tokens to a purchaser will be treated as a taxable sale of property by the Company to the purchaser. A purchaser should
not be taxed upon the acquisition of Tokens. A purchaser should generally have a tax basis for U.S. federal income tax purposes in INX
Tokens it acquires from the Company equal to the value of the purchase price paid by such purchaser for INX Tokens. The purchaser&#8217;s
holding period in INX Tokens should begin on the day INX Tokens are issued to the purchaser.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Disposition of Tokens. A Token
holder who sells, exchanges, or otherwise disposes of Tokens for cash or other property (including pursuant to an exchange of such Tokens
for other convertible virtual currency) should, pursuant to Internal Revenue Service Notice 2014-21, recognize capital gain or loss in
an amount equal to the difference between the fair market value of the property received in exchange for such Tokens and the purchaser&#8217;s
adjusted tax basis in INX Tokens. This capital gain may be long term if the purchaser has held his Tokens for more than one year prior
to disposition. Preferential tax rates for long term capital gain will generally apply to non-corporate U.S. Holders. Any gain or loss
realized by a U.S. Holder on the sale, exchange, or other disposition of Tokens should generally be treated as from sources within the
United States for U.S. foreign tax credit purposes. The deductibility of capital losses for U.S. federal income tax purposes is subject
to limitations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Treatment of Profit-Share
Distributions. U.S. holders of Tokens are required to include in gross income the amount of any distribution paid with respect to their
Tokens. The source of distributions paid in respect of INX Tokens for U.S. foreign tax credit purposes is not clear.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">EACH PURCHASER SHOULD SEEK,
AND MUST DEPEND UPON, THE ADVICE OF HIS OR HER TAX ADVISOR WITH RESPECT TO THEIR PURCHASE OWNERSHIP AND DISPOSITION OF TOKENS, AND EACH
PURCHASER IS RESPONSIBLE FOR THE FEES OF SUCH ADVISOR. NOTHING IN THIS ANNUAL REPORT ON FORM 20-F IS OR SHOULD BE CONSTRUED AS LEGAL OR
TAX ADVICE TO A PURCHASER. PURCHASERS SHOULD BE AWARE THAT THE INTERNAL REVENUE SERVICE MAY NOT AGREE WITH ALL TAX POSITIONS TAKEN BY
THE COMPANY AND THAT CHANGES TO THE INTERNAL REVENUE CODE OR THE REGULATIONS OR RULINGS THEREUNDER OR COURT DECISIONS AFTER THE DATE OF
THIS REPORT MAY CHANGE THE ANTICIPATED TAX TREATMENT TO A PURCHASER. THE COMPANY WILL NOT OBTAIN ANY RULING FROM THE INTERNAL REVENUE
SERVICE WITH REGARD TO THE TAX CONSEQUENCES OF PURCHASES OF TOKENS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">THE TAX TREATMENT OF INX TOKENS
IS UNCERTAIN AND THERE MAY BE ADVERSE TAX CONSEQUENCES FOR PURCHASERS UPON CERTAIN FUTURE EVENTS. A PURCHASE OF TOKENS MAY RESULT IN ADVERSE
TAX CONSEQUENCES TO PURCHASERS, INCLUDING WITHHOLDING TAXES, INCOME TAXES AND TAX REPORTING REQUIREMENTS. EACH PURCHASER SHOULD CONSULT
WITH AND MUST RELY UPON THE ADVICE OF ITS OWN PROFESSIONAL TAX ADVISORS WITH RESPECT TO THE UNITED STATES TAX TREATMENT OF TOKENS.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_046"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>F. Dividends and Paying Agents.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_047"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>G. Statement by Experts.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_048"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>H. Documents on Display.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to certain
information reporting requirements of the Exchange Act, applicable to foreign private issuers and under those requirements will file reports
with the SEC. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. Our filings with the SEC will also be available to the public through
the SEC&#8217;s website at www.sec.gov.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a foreign private issuer,
we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors
and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the
Exchange Act. In addition, we will not be required under the Exchange Act to file annual, quarterly and current reports and financial
statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act.
However, we will file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC,
an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and may submit
to the SEC, on a Form 6-K, unaudited quarterly financial information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We maintain a corporate website
https://www.INX.co. Information contained on, or that can be accessed through, our website and the other websites referenced above do
not constitute a part of this annual report. We have included these website addresses in this report solely as inactive textual references.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_049"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>I. Subsidiary Information.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_050"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>J. Annual Report to Security Holders.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_051"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 11. <span style="font-variant: small-caps">QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Foreign Exchange Risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not been exposed to
material risks due to changes in foreign exchange rates, and we have not used any derivative financial instruments to manage our foreign
exchange risk exposure.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;<i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Interest Rate Risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not been exposed to
material risks due to changes in market interest rates, and we have not used any derivative financial instruments to manage our interest
risk exposure.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have invested a portion
of our operating funds and a portion of the Reserve Fund in interest-earning instruments. Investments in both fixed rate and floating
rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely
impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Credit Risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Credit risk is the risk that a counterparty to
a financial instrument will fail to discharge an obligation or commitment that it has entered into, causing the other party to incur a
financial loss. The Company&#8217;s cash and cash equivalents, investments and digital assets are exposed to credit risk. The Company
limits its credit risk by placing its assets with high credit quality banks, financial institutions and digital assets custodians that
are believed to have sufficient capital to meet their obligations. While the Company intends to only transact with counterparties that
it believes to be creditworthy there can be no assurance that a counterparty will not default and that the Company will not sustain a
material loss as a result. It is the Company&#8217;s policy to monitor the creditworthiness of its counterparties and to minimize the
concentration of credit risk to mitigate significant loss caused by potential counterparty&#8217;s failure.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Market Risk</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Market risk is the risk that
the value of financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate
risk or foreign currency risk), whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments
traded in a market or market segment. All investments present a risk of loss of capital. The maximum risk resulting from financial instruments
is equivalent to their fair value. The Company&#8217;s investments are susceptible to market risk arising from uncertainties about future
prices of the instruments. The Company manages this risk through the various investment strategies within the parameters of the Company&#8217;s
investment guidelines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_052"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 12. <span style="font-variant: small-caps">DESCRIPTION OF SECURITIES
OTHER THAN EQUITY SECURITIES</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><div><a id="m_053"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>A. Debt Securities.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_054"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>B. Warrants and Rights.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_055"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>C. Other Securities.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_056"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>D. American Depositary Shares.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->124<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_057"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART II</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="m_058"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 13. <span style="font-variant: small-caps">DEFAULTS, DIVIDEND
ARREARAGES AND DELINQUENCIES</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_059"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 14. <span style="font-variant: small-caps">MATERIAL MODIFICATIONS
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt"><b>&#160;</b></p><div>

</div><div><a id="m_060"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 15. <span style="font-variant: small-caps">CONTROLS AND PROCEDURES</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>(a) Disclosure Controls
and Procedures </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management, with the participation
of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) as of December 31, 2022 (the &#8220;Evaluation Date&#8221;). Based on such evaluation, those officers
have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective in recording, processing, summarizing
and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information
is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>(b) Management&#8217;s
annual report on internal control over financial reporting</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management is responsible
for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company&#8217;s
principal executive and principal financial officers and effected by the company&#8217;s board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect our transactions and asset dispositions;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">provide reasonable assurance that transactions are recorded
as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">provide reasonable assurance that receipts and expenditures
are made only in accordance with authorizations of our management and board of directors (as appropriate); and</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">provide reasonable assurance regarding the prevention or timely
detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to its inherent limitations,
internal controls over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the supervision and
with the participation of our management, including our CEO, and our CFO, we assessed the effectiveness of our internal control over financial
reporting as of December 31, 2022 based on the framework for Internal Control-Integrated Framework set forth by The Committee of Sponsoring
Organizations of the Treadway Commission (COSO) (2013).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on our assessment and
this framework, our management concluded that our internal controls over financial reporting were effective as of December 31, 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 131; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->125<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>(c) Attestation Report of the Registered Public
Accounting Firm</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">This
Annual Report on Form 20-F does not include an attestation report of our independent registered public accounting firm regarding internal
control over financial reporting due to an exemption for emerging growth companies provided in the JOBS Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <b>(d) Changes in Internal Control over Financial Reporting</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">During
the year ended December 31, 2022, there were no changes in our internal control over financial reporting that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&#160;</p><div>

</div><div><a id="ITEM16"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM
16. [RESERVED]</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&#160;</p><div>





</div><div><a id="m_062"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently no independent Audit
Committee member is an&#8221; audit&#160;committee&#160;financial&#160;expert&#8221;, as that term is defined by the SEC in its final rules
implementing Section 407 of the Sarbanes-Oxley Act of 2002, because, after self-evaluation, our Audit Committee members&#160;did&#160;not
consider themselves, individually, as an &#8220;audit&#160;committee&#160;financial&#160;expert&#8221;. However, our Audit Committee members
and our Board of Directors believe that our Audit Committee members are nonetheless qualified to carry out their duties on the Audit Committee
given their experience and other qualifications in financial matters.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_063"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16B. CODE OF ETHICS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have adopted a Code of
Business Ethics applicable to all of our directors and employees, including our chief executive officer, chief financial officer, controller
or principal accounting officer, and other persons performing similar functions, which is a &#8220;code of ethics&#8221; as defined in
Item 16B of Form 20-F promulgated by the SEC. The full text of the Code of Business Ethics is posted on our website at INX.co. Information
contained on, or that can be accessed through, our website does not constitute a part of this report and is not incorporated by reference
herein.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_064"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth
the aggregate fees billed for professional services rendered by our principal auditors for the years ended December 31, 2022 and 2021,
for various types of services and a brief description of the nature of such services. Kost Forer Gabbay &amp; Kasierer, a member of Ernst
&amp; Young Global and an independent registered public accounting firm, was our principal auditors for the year ended December 31, 2022
and 2021. We currently expect Kost Forer Gabbay &amp; Kasierer to serve as our principal auditors for the year ended December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(U.S. dollars in thousands)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year&#160;Ended&#160;December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Services Rendered</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">(U.S.&#160;dollars&#160;in&#160;thousands)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: justify; padding-bottom: 1.5pt">Audit services (1)</td><td style="width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">490</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">345</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt">Total</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">490</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">345</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-size: 10pt">These include professional
services rendered by the principal accountant for the audit of the registrant&#8217;s annual financial statements, including audited
financial statements that were included in registration statements filed as part of our initial public offering.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_065"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_066"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16E. PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATED PURCHASERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_067"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16F. CHANGE IN REGISTRANT&#8217;S CERTIFYING
ACCOUNTANT</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_068"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16G. CORPORATE GOVERNANCE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_069"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16H. MINE SAFETY DISCLOSURE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="m_070"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="m_071"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART III</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="m_072"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 17. <span style="font-variant: small-caps">FINANCIAL
STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have elected to provide
consolidated financial statements and related information pursuant to Item&#160;18.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><div><a id="m_073"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>ITEM 18. <span style="font-variant: small-caps">FINANCIAL
STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated audited financial
statements and the related notes required by this Item are included in this annual report on Form 20-F beginning on page&#160;F-1.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->128<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_001.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>AS OF DECEMBER 31, 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>U.S. DOLLARS IN THOUSANDS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INDEX</b></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; "> <td style="width: 90%; padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: black 1.5pt solid; width: 10%; text-align: center"><span style="font-size: 10pt"><b>Page</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_001">Report of Independent Registered Public Accounting Firm <i>(PCAOB ID:
<ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">1281</ix:nonNumeric>)</i></a></b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-2</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_002">Consolidated Balance Sheets</a></b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-3 &#8211; F-4</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_003">Consolidated Statements of Comprehensivee Income (Loss)</a> </b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-5</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_004">Consolidated Statements of Changes in Equity</a></b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-6 &#8211; F-7</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_005">Consolidated Statements of Cash Flows</a></b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-8&#160;-&#160;F-9</b></span></td></tr> <tr style="vertical-align: bottom; "> <td>&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td><span style="font-size: 10pt"><b><a href="#f_006">Notes to Consolidated Financial Statements</a></b></span></td> <td style="text-align: center"><span style="font-size: 10pt"><b>F-10 - F-50</b></span></td></tr> </table><div>
</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">- - - - - - - - - - -</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>


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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="text-align: left; width: 25%; vertical-align: top"><img alt="" src="image_002.jpg"/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p></td>
    <td style="text-align: left; width: 40%; vertical-align: top"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Kost Forer Gabbay&#160;&amp; Kasierer</b></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">144 Menachem Begin Road, Building A</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tel-Aviv 6492102, Israel</p></td>
    <td style="text-align: left; width: 35%; vertical-align: top"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tel: +972-3-6232525</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fax: +972-3-5622555</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ey.com</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>To the Shareholders and Board of Directors of</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">We
have audited the accompanying consolidated balance sheets of INX Limited (the &#8220;Company&#8221;) and its subsidiaries as of December
31, 2022 and 2021, the related consolidated statements of comprehensive income (loss), changes in equity and cash flows for each of the
three years in the period ended December 31, 2022 (collectively referred to as the &#8220;financial statements&#8221;), and the related
notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2022, in conformity with International Financial Reporting Standards, as issued by the International Accounting Standard Board.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">These
financial statements are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company&#8217;s internal control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">KOST FORER GABBAY&#160;&amp;
KASIERER</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">A Member of Ernst&#160;&amp; Young Global</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">We have served as the Company&#8217;s auditor
since its incorporation in 2017.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Tel-Aviv, Israel</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">May 1, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share and per share data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Note</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Assets</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Current assets:</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
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    <td style="width: 9%; text-align: center">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalents" scale="3" unitRef="usd">19,781</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Cash and cash equivalents held in Reserve Fund</td><td>&#160;</td>
    <td style="text-align: center">5</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center">6</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center">7</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 137 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share and per share data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Note</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify"><b>Liabilities and Equity </b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="text-align: justify"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="text-align: justify"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify"><b>Current liabilities:</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="text-align: justify"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td colspan="2" style="text-align: justify"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; width: 66%; text-align: justify">Accounts payable and accrued expenses</td><td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: right">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:TradeAndOtherCurrentPayables" scale="3" unitRef="usd">2,298</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:TradeAndOtherCurrentPayables" scale="3" unitRef="usd">3,170</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: justify">Funds due to customers</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FundsDueToCustomers" scale="3" unitRef="usd">2,609</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FundsDueToCustomers" scale="3" unitRef="usd">4,270</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: justify">Lease liability</td><td>&#160;</td>
    <td style="text-align: center">16</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentLeaseLiabilities" scale="3" unitRef="usd">519</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentLeaseLiabilities" scale="3" unitRef="usd">319</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: justify">INX Token liability</td><td>&#160;</td>
    <td style="text-align: center">11</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenLiabilities" scale="3" unitRef="usd">56,847</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenLiabilities" scale="3" unitRef="usd">282,642</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: justify">INX Token warrant liability</td><td>&#160;</td>
    <td style="text-align: center">12</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenWarrantsLiabilities" scale="3" unitRef="usd">1,580</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: justify; padding-bottom: 1.5pt">Contingent consideration liability</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">4</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-7">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ContingentConsiderationLiability" scale="3" unitRef="usd">400</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Total current liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentLiabilities" scale="3" unitRef="usd">63,853</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Accumulated deficit</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 138 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share and per share data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Note</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Revenue:</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 9%; text-align: center">22</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center">22</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-13">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-15">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Fair value adjustment of INX Token
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    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left">Unrealized gain (loss) on INX Tokens issued, net</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left">Finance income</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:FinanceIncome" scale="3" unitRef="usd">787</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-19">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Finance expense</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:FinanceIncomeCost" scale="3" sign="-" unitRef="usd">677</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:FinanceIncomeCost" scale="3" sign="-" unitRef="usd">427</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:FinanceIncomeCost" scale="3" sign="-" unitRef="usd">23</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Income (loss) before tax</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLossBeforeTax" scale="3" unitRef="usd">211,453</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLossBeforeTax" scale="3" sign="-" unitRef="usd">215,078</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLossBeforeTax" scale="3" sign="-" unitRef="usd">24,331</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Tax expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">24</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncomeTaxExpenseContinuingOperations" scale="3" unitRef="usd">119</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncomeTaxExpenseContinuingOperations" scale="3" unitRef="usd">157</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-20">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net income (loss)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" unitRef="usd">211,334</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" sign="-" unitRef="usd">215,235</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" sign="-" unitRef="usd">24,331</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left">Amounts that will be or that have
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left">Realized (gain) loss on securities at fair value through
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-21">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-22">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left">Unrealized loss on securities at fair value through other
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:GainsLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeNetOfTax" scale="3" sign="-" unitRef="usd">1,353</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-23">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-24">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt">Adjustments arising from translating
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share and per share data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="white-space: nowrap; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-56">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-59">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-60">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-65">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-66">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-68">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Share-based compensation</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-70">&#160;</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-71">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-73">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-74">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt">Balance as of December 31, 2020</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c24" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:Equity" scale="3" unitRef="usd">46</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-75">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-76">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c27" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:Equity" scale="3" sign="-" unitRef="usd">32,667</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Net loss</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-77">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-78">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-79">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-80">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-81">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-82">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c35" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" sign="-" unitRef="usd">215,235</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Foreign currency translation</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-83">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-84">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-85">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-86">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-87">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c34" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ForeignCurrencyTranslations" scale="3" unitRef="usd">188</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-88">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ForeignCurrencyTranslations" scale="3" unitRef="usd">188</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Contribution to equity by a controlling shareholder (Note
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"><span style="font-size: 10pt">(*)</span></td> <td><ix:footnote id="ix_0_footnote" xml:lang="en-US"><span style="font-size: 10pt">Less than $1</span></ix:footnote></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 140 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share and per share data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="white-space: nowrap; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Foreign currency translation</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Surrender and cancellation of private placement warrants
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Share-based compensation</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in; text-align: left">(*)</td><td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US">See Note 17.</ix:footnote></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in; text-align: left">(**)</td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US">As of December 31, 2022 the balance includes the net loss on foreign currency translation of $325 and the net loss on financial assets measured at fair value of $929.</ix:footnote></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED STATEMENTS OF CASH
FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Net cash flows from operating activities:</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; width: 64%; text-align: left">Net income (loss) for the period</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" unitRef="usd">211,334</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" sign="-" unitRef="usd">215,235</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProfitLoss" scale="3" sign="-" unitRef="usd">24,331</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Adjustments to reconcile net income (loss) to net cash
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Share-based compensation</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForSharebasedPayments" scale="3" unitRef="usd">1,135</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForSharebasedPayments" scale="3" unitRef="usd">10,899</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForSharebasedPayments" scale="3" unitRef="usd">570</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Net loss on investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:GainsLossesOnDisposalsOfInvestments" scale="3" unitRef="usd">214</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:GainsLossesOnDisposalsOfInvestments" scale="3" unitRef="usd">97</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-152">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Financial expenses, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:OtherExpenseByNature" scale="3" unitRef="usd">677</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:OtherExpenseByNature" scale="3" unitRef="usd">55</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-153">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Taxes on income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForIncomeTaxExpense" scale="3" unitRef="usd">119</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForIncomeTaxExpense" scale="3" unitRef="usd">157</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-154">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Depreciation of equipment and right-of-use-assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDepreciationExpense" scale="3" unitRef="usd">610</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDepreciationExpense" scale="3" unitRef="usd">137</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDepreciationExpense" scale="3" unitRef="usd">3</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Amortization of intangible assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForAmortisationExpense" scale="3" unitRef="usd">581</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForAmortisationExpense" scale="3" unitRef="usd">130</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-155">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Amortization of premium paid on investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AmortisationExpense" scale="3" unitRef="usd">247</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-156">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-157">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">INX Token-based compensation</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenbasedCompensation" scale="3" sign="-" unitRef="usd">6,902</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenbasedCompensation" scale="3" unitRef="usd">19,801</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenbasedCompensation" scale="3" unitRef="usd">4,142</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Unrealized net (gain) loss on INX Tokens issued</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FairValueAdjustmentOfINXTokenLiability" scale="3" sign="-" unitRef="usd">226,044</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FairValueAdjustmentOfINXTokenLiability" scale="3" unitRef="usd">161,173</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FairValueAdjustmentOfINXTokenLiability" scale="3" unitRef="usd">12,518</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Impairment expense on digital assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ImpairmentOfCryptocurrencies" scale="3" unitRef="usd">72</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ImpairmentOfCryptocurrencies" scale="3" unitRef="usd">80</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Revaluation of lease liability and right-of-use assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:InterestOnLeaseLiabilities" scale="3" sign="-" unitRef="usd">148</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-159">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-160">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Changes in operating assets and liabilities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease in trade receivables</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDecreaseIncreaseInTradeAccountReceivable" scale="3" unitRef="usd">328</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDecreaseIncreaseInTradeAccountReceivable" scale="3" unitRef="usd">215</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-161">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease in prepaid expenses, other receivables and receivable
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IncreaseInPrepaidExpensesAndRelatedParties" scale="3" sign="-" unitRef="usd">225</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IncreaseInPrepaidExpensesAndRelatedParties" scale="3" sign="-" unitRef="usd">278</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IncreaseInPrepaidExpensesAndRelatedParties" scale="3" sign="-" unitRef="usd">161</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase in derivative assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsForDecreaseIncreaseInDerivativeFinancialAssets" scale="3" unitRef="usd">1,072</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-162">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-163">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase in digital assets, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IncreaseInDigitalAssetsNet" scale="3" unitRef="usd">1,669</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-164">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-165">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase from revaluation of contingent liability</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-166">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IncreaseFromRevaluationOfOFNsContingentLiability" scale="3" sign="-" unitRef="usd">96</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-167">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase (decrease) in accounts payable and accrued expenses</td><td>&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-176">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-179">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 142 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>CONSOLIDATED STATEMENTS OF CASH
FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Proceeds from exercise of option under SAFE agreements</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-185">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-186">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Repayment of contingent consideration liability</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-187">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-188">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash provided
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsDiscontinuedOperations" scale="3" sign="-" unitRef="usd">20,963</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsDiscontinuedOperations" scale="3" unitRef="usd">38,987</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsDiscontinuedOperations" scale="3" unitRef="usd">7,502</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Cash and cash equivalents at beginning
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">46,568</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c28" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">7,581</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c13" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">79</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Cash and cash
    equivalents at end of year</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">25,605</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">46,568</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction contextRef="c28" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale" scale="3" unitRef="usd">7,581</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-decoration: underline; text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Significant
    non-cash transactions:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Premium on exercise of shares by
    related party</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProceedsFromExerciseOfOptions" scale="3" unitRef="usd">9</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ProceedsFromExerciseOfOptions" scale="3" unitRef="usd">75</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Contribution to equity by controlling
    shareholder</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-190">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ContributionToEquityByControllingShareholders" scale="3" unitRef="usd">582</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-191">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Conversion of convertible loan</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-192">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ConversionOfConvertibleLoan" scale="3" unitRef="usd">148</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-193">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">INX Token Offering proceeds received
    in digital assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-194">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:INXTokenOfferingProceedsReceivedInCryptocurrencies" scale="3" unitRef="usd">49,488</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-195">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Proceeds from Exercise of SAFE
    warrant by related party</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-196">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-197">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ProceedsFromExerciseOfSAFEWarrantByRelatedParty" scale="3" unitRef="usd">278</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 1.5pt">Proceeds from exercise of share option</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-198">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ReceivableInRespectOfExerciseOfShareOption" scale="3" unitRef="usd">1,500</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-199">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Right-of-use asset recognized with
    corresponding lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:RightofuseAssetsIncreaseDecreaseInRevaluationSurplus" scale="3" unitRef="usd">827</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:RightofuseAssetsIncreaseDecreaseInRevaluationSurplus" scale="3" unitRef="usd">654</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-200">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Repayment of loan receivable from
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying notes are an integral part of the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 143 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1: NATURE OF OPERATIONS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_2" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX Limited (the &#8220;Company&#8221; or &#8220;INX&#8221;),
a company incorporated on November 17, 2017, with registered office at 57/63 Line Wall Road, Gibraltar.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_3" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company and its subsidiaries are engaged
in the operation and ongoing development of integrated and regulated solutions for trading of blockchain assets on a digital asset and
security token trading platform, and providing other services and products related to the trading of blockchain assets. The INX.One trading
platform is designed to help customers automate and coordinate front-office trading functions, middle-office risk management and reporting
functions, as well as operations and accounting functions. The Company charges fees at a transaction level. The transaction fee is calculated
based on volume and the value of the transaction. The transaction fee is collected from customers at the time the transaction is executed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_4" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX also completed a SEC registered initial public
offering of the INX Token. The offering of the INX Token was registered under the United States Securities Act of 1933 and, in such registration,
the INX Token is deemed to be an &#8220;equity security&#8221; under relevant SEC rules and regulations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_5" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company operates in the following reportable
segments:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_6" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Digital
                                            assets segment - offers integrated, regulated solution for trading blockchain assets that
                                            includes a digital asset and security token trading platform, and other services and products
                                            related to the trading of digital assets.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_7" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_6"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Brokerage
                                            segment - facilitates financial transactions between financial institutions and offers a
                                            full range of brokerage services to banks worldwide.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_8" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements of the
Company as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022, were authorized for
issuance in accordance with a resolution of the board of directors on April 27, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_9" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>INX Token</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_10" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As part of the Company&#8217;s blockchain ecosystem,
INX created the INX Token (the &#8220;INX Token&#8221;), and on August 20, 2020, the U.S Securities and Exchange Commission (the &#8220;SEC&#8221;)
acknowledged the effectiveness of the F-1 Registration Statement that was filed by INX with the SEC and declared the effectiveness of
the initial public offering of INX Tokens (&#8220;The INX Token Offering&#8221; or &#8220;the Offering&#8221;) pursuant to which INX
offered up to&#160;<ix:nonFraction contextRef="c53" decimals="-6" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokens" scale="6" unitRef="shares">130</ix:nonFraction>&#160;million INX Tokens at a price of $<ix:nonFraction contextRef="c53" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:PricePerToken" scale="0" unitRef="usdPershares">0.90</ix:nonFraction>&#160;per INX Token.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_11" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The INX Token was offered to the public on August
24, 2020, and closed on April 22, 2021, when the Offering was completed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_12" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2021, INX listed the INX Token for trading
on the trading platform for &#8220;digital securities,&#8221; i.e., digital assets that constitute securities under the applicable law,
operated through INX&#8217;s subsidiary, INX Securities, LLC (formerly the &#8220;INX Securities Trading Platform&#8221;, rebranded in
2022 as INX.One).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_13" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX has not allocated for issuance and does not
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received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed <ix:nonFraction contextRef="c0" decimals="-6" format="ixt:num-dot-decimal" name="ck0001725882:TokensReservedNotExceed" scale="6" unitRef="usd">35</ix:nonFraction> million plus <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokensSoldPercentage" scale="-2" unitRef="pure">50</ix:nonFraction>% of the
number of INX Tokens sold by INX to the public pursuant to the Offering and subsequent offerings of INX Tokens (excluding re-issuances
of reacquired INX Tokens), up to a maximum of <ix:nonFraction contextRef="c0" decimals="-6" format="ixt:num-dot-decimal" name="ck0001725882:AmountOfMaximumTokens" scale="6" unitRef="usd">100</ix:nonFraction> million INX Tokens. INX does not intend to issue these reserved INX Tokens for general
fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations of
INX if the Board of Directors of INX determines that INX has net cash balances sufficient to fund less than nine months of its operations.
INX intends to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to limit dilution to INX Token
holders. As of December 31, 2022, the Company held approximately <ix:nonFraction contextRef="c0" decimals="-5" format="ixt:num-dot-decimal" name="ck0001725882:CompanyHeldTokens" scale="6" unitRef="usd">67.5</ix:nonFraction> million INX Tokens in reserve.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 144 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1: NATURE OF OPERATIONS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_14" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Following an amendment to the INX Token rights
which was approved by the Board of Directors of the Company on May 17, 2019 (the &#8220;Token Rights Amendment&#8221;), the holders of
INX Tokens (other than INX) are entitled to receive a pro rata distribution of&#160;<ix:nonFraction contextRef="c54" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:ReceiveProRataDistribution" scale="-2" unitRef="pure">40</ix:nonFraction>% of INX&#8217;s net cash flow from operating activities,
excluding any cash proceeds from an initial sale by INX of an INX Token (the &#8220;Adjusted Operating Cash Flow&#8221;). The distribution
is based on INX&#8217;s cumulative Adjusted Operating Cash Flow, net of cash flows which have already formed a basis for a prior distribution,
calculated as of December 31 of each year. The distribution is to be paid to parties (other than INX) holding INX Tokens as of March
31 of the following year on April 30th, commencing with the first distribution to be paid, if at all. As of December 31, 2022, the INX
cumulative adjusted operating cash flow activity was negative, and therefore no distribution is expected on April 30, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_15" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holders of INX Tokens are also entitled to, at
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_16" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Securities Exchange Agreement</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_17" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 31, 2021, the Company entered into a
definitive securities exchange agreement (the &#8220;Original Securities Exchange Agreement&#8221;) with The INX Digital Company, Inc.
(formerly - Valdy Investments Ltd.) (&#8220;Valdy&#8221;), a company incorporated under the provincial Business Corporations Act (British
Columbia) and the securityholders of INX (the &#8220;INX Securityholders&#8221;), whereby Valdy, subject to the completion, acquired
all issued and outstanding securities of INX (the &#8220;Transaction&#8221;). The Original Securities Exchange Agreement was amended
by Valdy, INX, PI Financial Corp. and Eight Capital entering into an Amendment to the Securities Exchange Agreement dated as of July
23, 2021 (the &#8220;Amendment&#8221;), and together with the Original Securities Exchange Agreement, (the &#8220;Amended Agreement&#8221;),
among other things, extended the deadline for completion of the Transaction to January 24, 2022, subject to possible earlier termination.
Subsequently, Valdy, INX, the INX Securityholders, PI Financial Corp. and Eight Capital entered into an Amended and Restated Securities
Exchange Agreement dated as of November 3, 2021 (the &#8220;Amended and Restated Securities Exchange Agreement&#8221;) which replaced
and superseded the Amended Agreement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_18" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 10, 2022, Valdy completed the Transaction
with INX, whereby INX became a wholly owned subsidiary of Valdy, (the &#8220;Parent Company&#8221;). The Transaction resulted in a reverse
takeover transaction whereby current shareholders of INX (pre-transaction) became majority shareholders of the Parent Company. The combined
entities (the &#8220;Resulting Issuer&#8221;) continues the business.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_19" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 31, 2021, the Parent Company received
conditional approval from the Neo Exchange Inc. (&#8220;Neo Exchange&#8221;) to list the combined entity (the &#8220;Resulting Issuer&#8221;)
shares. Also, on January 24, 2022, the Parent Company&#8217;s shares started to trade on the NEO Exchange.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_20" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Organizational Structure</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_21" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company also operates through the following
wholly owned subsidiaries:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_22" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_21"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Digital, Inc. (&#8220;INXD&#8221;), a Delaware corporation, is registered in 43 US states
                                            plus Washington D.C. and Puerto Rico as a money transmitter to operate a trading platform
                                            for digital assets. INXD launched a digital assets trading platform on April 29, 2021, which
                                            was developed by INX and is operated by INXD. Select digital assets are supported for trading
                                            on the INXD platform, such as (identified by symbol): AAVE, AVAX, BTC, COMP, CRV, ETH, FTM,
                                            GYEN, LINK, LTC, MANA, MATIC, SAND, UNI, USDC, ZEC, ZUSD.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_23" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_22"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Securities, LLC (Previously named: Openfinance Securities, LLC) (&#8220;INXS&#8221;), a Pennsylvania
                                            limited liability company. INXS is recognized in the US as a SEC registered Broker Dealer
                                            and is an SEC registered Alternative Trading System (&#8220;ATS&#8221;). INXS was purchased
                                            by INX on May 10, 2021 as part of the Asset Purchase Agreement with Openfinance Holdings,
                                            Inc. and certain subsidiaries of Openfinance Holdings, Inc., dated January 12, 2021. After
                                            closing on the acquisition, the company&#8217;s name was changed from Openfinance Securities,
                                            LLC to INX Securities, LLC.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 145 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1: NATURE OF OPERATIONS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_24" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_23"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">I.L.S.
                                            Brokers Ltd. (&#8220;ILSB&#8221;), a company incorporated under the laws of the State of
                                            Israel, was purchased by INX, pursuant to the share purchase agreement between INX and the
                                            shareholders of ILSB, dated June 9, 2021, for the purchase of all of the issued outstanding
                                            shares of ILSB.&#160;ILSB is a multinational brokerage house, established in 2001, that facilitates
                                            financial transactions between banks and offers a full range of brokerage services to several
                                            leading banks worldwide. ILSB&#8217;s main field of operation is foreign exchange and interest
                                            rate derivatives services. ILSB&#8217;s activities are regulated by the Israeli Capital Market
                                            Authority, Insurance and Savings and are registered with the U.S. National Futures Association
                                            (&#8220;NFA&#8221;) (authorized by the U.S. Commodity Futures Trading Commission (&#8220;CFTC&#8221;)).
                                            ILSB holds the following license: Provider of Financial Services in Israel and an introducing
                                            broker (IB) license from NFA (CFTC) in the US.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_25" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_24"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Midgard
                                            Technologies Ltd. (&#8220;Midgard&#8221;) is a company incorporated under the laws of the
                                            State of Israel. Midgard had served as the research and development arm of INX since November
                                            1, 2020 and was acquired on April 1, 2021. Midgard provides software development services
                                            for the group and holds the related intellectual property.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_26" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_25"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Transfer Agent LLC (previously named TokenSoft LLC) (&#8220;INX Transfer Agent&#8221;), a
                                            Delaware limited liability company. INX Transfer Agent is a transfer agent registered with
                                            the SEC and was acquired by INX pursuant to a purchase agreement dated December 28, 2021
                                            for a nominal consideration.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_27" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_26"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Solutions Limited, incorporated by INX in Gibraltar as a private company limited by shares.
                                            INX Solutions Limited provides liquidity and risk management services, it commenced operations
                                            during the second quarter of 2022.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_28" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following subsidiaries are currently dormant:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_29" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_28"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Digital Assets UK Limited (Previously named: ILSB UK Limited) (&#8220;INX UK&#8221;), a company
                                            incorporated under the laws of England and Wales. INX acquired all issued and outstanding
                                            shares of INX UK on July 13, 2021, from Mr. James Crossley, former board member of INX, in
                                            consideration for an inconsequential amount of cash.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_30" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_29"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">&#9679;</td><td style="text-align: justify">INX
                                            EU Ltd. (&#8220;INX EU&#8221;), a company incorporated under the laws of Cyprus.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -18pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_31" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_30"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">INX
                                            Services, Inc., a Delaware corporation.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_32" id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Assessment of going concern</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify">These consolidated financial statements
have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future
and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. As of December 31,
2022, the Company had an accumulated deficit of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AccumulatedDeficit" scale="3" unitRef="usd">36,568</ix:nonFraction>. During the year ended December 31, 2022, the Company incurred an operating loss
of $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:OperatingLossCarryforward" scale="3" unitRef="usd">14,701</ix:nonFraction> and negative cash flow from operating activities of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashFlowsFromUsedInOperations" scale="3" unitRef="usd">22,305</ix:nonFraction>. Based on the Company&#8217;s existing cash funds and the working
capital in the amount of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AdjustmentsToReconcileProfitLossOtherThanChangesInWorkingCapital" scale="3" unitRef="usd">27,200</ix:nonFraction> as of December 31, 2022 (excluding assets held in the Reserve Fund and the INX Token liability), and
management&#8217;s projections of the operating results for the next twelve months, management concluded that the Company has sufficient
funds to continue its operations and meet its obligations for a period of at least twelve months from the date the financial statements
were authorized for issuance.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 146 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_2" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following accounting policies have been applied
consistently in these consolidated financial statements for the periods presented, unless otherwise stated.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_3" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="_ExplanationOfMeasurementBasesUsedInPreparingFinancialStatements-c0_cont_1" escape="true" name="ifrs-full:ExplanationOfMeasurementBasesUsedInPreparingFinancialStatements"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">a.</td><td style="text-align: justify">Basis of presentation of the financial statements:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_4" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_3"><ix:continuation continuedAt="_ExplanationOfMeasurementBasesUsedInPreparingFinancialStatements-c0_cont_2" id="_ExplanationOfMeasurementBasesUsedInPreparingFinancialStatements-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">These consolidated financial statements
have been prepared in accordance with International Accounting Standards (&#8220;IFRS&#8221;) as issued by the International Accounting
Standards Board (&#8220;IASB&#8221;) and interpretations of the International Reporting Interpretations Committee (&#8220;IFRIC&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_5" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_4"><ix:continuation id="_ExplanationOfMeasurementBasesUsedInPreparingFinancialStatements-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The consolidated financial statements
have been prepared on a historical cost basis, except certain financial instruments which are measured at fair value and digital assets
which are measured at fair value less cost to sell through profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_6" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_5"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_ConsolidatedFinancialStatementsPolicyTextBlock-c0_cont_1" escape="true" name="ck0001725882:ConsolidatedFinancialStatementsPolicyTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">b.</td><td style="text-align: justify">Consolidated financial statements:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_7" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_6"><ix:continuation continuedAt="ck0001725882_ConsolidatedFinancialStatementsPolicyTextBlock-c0_cont_2" id="ck0001725882_ConsolidatedFinancialStatementsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The consolidated financial statements
comprise the financial statements of the Company and companies that are controlled by the Company (subsidiaries). Control is achieved
when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control.
The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -18pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_8" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_7"><ix:continuation id="ck0001725882_ConsolidatedFinancialStatementsPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The financial statements of the Company
and of the subsidiaries are prepared as of the same dates and periods. The consolidated financial statements are prepared using uniform
accounting policies by all companies in the Group. Significant intra group balances and transactions and gains or losses resulting from
intragroup transactions are eliminated in full in the consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_9" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_8"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">c.</td><td style="text-align: justify">Functional and presentation currencies:</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_10" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_9"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">1.</td><td style="text-align: justify">Functional currency
                                            and presentation currency:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 17.85pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_11" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_10"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The consolidated financial statements
are presented in U.S. dollars.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.7pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_12" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_11"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The Company determines the functional
currency of each entity through an analysis of the consideration factors identified in International Accounting Standard (&#8220;IAS&#8221;)
21.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_13" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_12"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Assets, including fair value adjustments
upon acquisition, and liabilities of an investee which is a foreign operation, are translated at the closing rate at each reporting date.
Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized
in other comprehensive income (loss).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_14" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_13"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_6" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Upon the full or partial disposal
of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which
had been recognized in</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_15" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_14"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_7" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">other comprehensive income is carried
to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the
relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_16" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_15"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_8" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">2.</td><td style="text-align: justify">Transactions, assets and liabilities in foreign
                                            currency:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_17" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_16"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_9" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Transactions denominated in foreign
currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary
assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange
rate at that date. Exchange rate differences, other than those capitalized to qualifying assets or accounted for as hedging transactions
in equity, are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost
are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency
and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value
was determined.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 147 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_18" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_17"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_10" id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">3.</td><td style="text-align: justify">Index-linked monetary items:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_19" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_18"><ix:continuation id="_DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Monetary assets and liabilities linked
to the changes in the Israeli Consumer Price Index (&#8220;Israeli CPI&#8221;) are adjusted at the relevant index at each reporting date
according to the terms of the agreement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_20" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_19"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfUseOfEstimatesAndJudgements"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">d.</td><td style="text-align: justify">Use of estimates and judgements:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_21" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_20"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_2" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The preparation of the consolidated
financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from those
estimates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_22" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_21"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_3" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Key assumptions made in the consolidated
financial statements concerning uncertainties at the reporting date that may result in a material adjustment to the carrying amount of
the INX Token liability and INX Token warrant liability within the next financial year are discussed in Note 11 and Note 12.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_23" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_22"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_4" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Many aspects of the digital currency
and blockchain industry have not yet been addressed by current IFRS guidance. The Company is required to make significant assumptions
and judgments as to its accounting policies and the application thereof, which is disclosed in the notes to the consolidated financial
statements. If specific guidance is enacted by the IASB in the future, the impact may result in changes to the Company&#8217;s profit
or loss and financial position as currently presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_24" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_23"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_5" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Discount rate for a lease liability</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_25" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_24"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_6" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">When the Company is unable to readily
determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate.
That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security,
the funds necessary to obtain an asset of similar economic environment. When there are no financing transactions that can serve as a
basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving
from the lease contract&#8217;s conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert
in determining the incremental borrowing rate.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_26" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_25"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_7" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Impairment of goodwill</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_27" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_26"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_8" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Group reviews goodwill for impairment
at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing use of the
cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable discount
rate for those cash flows.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 148 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_28" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_27"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_9" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Deferred tax assets</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_29" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_28"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_10" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Deferred tax assets are recognized
for unused carryforward tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be
available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax
assets that can be recognized, based upon the timing and level of future taxable profits, its source and the tax planning strategy.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_30" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_29"><ix:continuation continuedAt="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_11" id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_10"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">e.</td><td style="text-align: justify">Cash and cash equivalents:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_31" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_30"><ix:continuation id="ck0001725882_DisclosureOfUseOfEstimatesAndJudgements-c0_cont_11"><ix:continuation id="_DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Cash and cash equivalents may include
demand deposits and short-term, highly liquid investments that are readily convertible to cash with an original maturity of three months
or less from the date of investment and are redeemable on demand without penalty.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_32" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_31"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">f.</td><td style="text-align: justify">Financial instruments:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_33" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_32"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">1.</td><td style="text-align: justify">Financial assets, including short-term and
                                            certain long-term investments, INX Tokens, digital assets, derivative assets are initially
                                            recognized at fair value plus directly attributable transaction costs, except for financial
                                            assets measured at fair value through profit or loss in respect of which transaction costs
                                            are recorded in profit or loss.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_34" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_33"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The Company classifies and measures
debt instruments in the financial statements based on the following criteria:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_35" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_34"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">-</td><td style="text-align: justify">The Company&#8217;s business model for managing financial
assets; and</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_36" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_35"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">-</td><td style="text-align: justify">The contractual cash flow terms of the financial asset.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_37" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_36"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_6" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">a)</td><td style="text-align: justify">Debt instruments are
                                            measured at fair value through other comprehensive income when:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5cm; text-align: justify; text-indent: -28.3pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_38" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_37"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_7" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The Company&#8217;s business model is to
hold the financial assets in order to both collect their contractual cash flows and to sell the financial assets, and the contractual
terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_39" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_38"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_8" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">After initial recognition, the instruments
in this category are measured at fair value. Gains or losses from fair value adjustments, excluding interest and exchange rate differences,
are recognized in other comprehensive income.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5cm; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_40" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_39"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_9" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">b)</td><td style="text-align: justify">Debt instruments are
                                            measured at fair value through profit or loss when:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5cm; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_41" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_40"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_10" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">A financial asset which is a debt
instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial
recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or
loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_42" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_41"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_11" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">c)</td><td style="text-align: justify">Derivative instruments</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_43" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_42"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_12" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">As part of its risk management activities,
the Company enters into derivatives such as digital currency forwards. A digital currency forward is an exchange traded contract which
represents a legal agreement to either buy or sell a referenced digital asset at a predetermined price at some time in the future. Digital
assets forwards held by the Company are settled in a stable coin. The derivatives are carried at fair value and any realized and unrealized
gains (losses) on derivatives are recognized through profit and loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 149 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_44" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_43"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_13" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_12"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">2.</td><td style="text-align: justify">Loans and receivables are held to collect
                                            contractual cash flows and give rise to cash flows representing solely payments of principal
                                            and interest. These are measured subsequent to initial recognition at amortized cost.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_45" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_44"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_14" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Impairment of financial assets:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_46" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_45"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_15" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">At the end of each reporting period,
the Company evaluates the loss allowance for financial debt instruments which are not measured at fair value through profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_47" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_46"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_16" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The Company has short-term financial
assets such as trade receivables in respect of which the Company applies the simplified approach in IFRS 9 and measures the loss allowance
in an amount equal to the lifetime expected credit losses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_48" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_47"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_17" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The Company grants its customers
interest-free credit for periods of 30-90 days. As of December 31, 2022 and 2021, there were no material past-due accounts. Accordingly,
the allowance for doubtful accounts is immaterial.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_49" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_48"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_18" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_17"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">3.</td><td style="text-align: justify">Derecognition of financial assets</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_50" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_49"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_19" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">A financial asset is derecognized
only when:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_51" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_50"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_20" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_19"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 54pt"></td><td style="width: 18pt">a.</td><td style="text-align: justify">The contractual rights to the cash flows
                                            from the financial asset has expired; or</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_52" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_51"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_21" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_20"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 54pt"></td><td style="width: 18pt">b.</td><td style="text-align: justify">The Company has transferred substantially
                                            all the risks and rewards deriving from the contractual rights to receive cash flows from
                                            the financial asset or has neither transferred nor retained substantially all the risks and
                                            rewards of the asset, but has transferred control of the asset; or</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_53" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_52"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_22" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_21"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 54pt"></td><td style="width: 18pt">c.</td><td style="text-align: justify">The Company has retained its contractual
                                            rights to receive cash flows from the financial asset but has assumed a contractual obligation
                                            to pay the cash flows in full without material delay to a third party.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_54" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_53"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_23" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_22"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">4.</td><td style="text-align: justify">Financial liabilities:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_55" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_54"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_24" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Financial liabilities are initially
recognized at fair value. After initial recognition, the accounting treatment of financial liabilities is based on their classification
as follows:&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_56" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_55"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_25" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_24"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 36pt"></td><td style="width: 20.8pt">a)</td><td style="text-align: justify">Financial liabilities at amortized cost:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_57" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_56"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_26" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">After initial recognition, loans
and other liabilities are measured based on their terms at amortized cost less directly attributable transaction costs using the effective
interest method.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_58" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_57"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_27" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_26"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 36pt"></td><td style="width: 18pt">b)</td><td style="text-align: justify">Financial liabilities at fair value through
                                            profit or loss:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_59" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_58"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_28" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">These liabilities include financial
liabilities held for trading (including the INX Token warrant liability), contingent consideration liability recognized in a business
combination and financial liabilities designated upon initial recognition as at fair value through profit or loss. Changes in the fair
value of liabilities held for trading and contingent consideration are recognized in profit or loss in finance expenses. Based on the
terms of the INX Token, as described in Note 1, the INX Token is a hybrid financial instrument. The host instrument is a financial liability
due to the right of the INX Token holder to use the INX Token to pay transactions fees on the INX.One Trading Platform. The INX Token
is considered a puttable instrument which is a financial liability in accordance with IAS 32, Financial Instruments: Presentation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_60" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_59"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_29" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">INX&#8217;s obligation to make a
pro rata distribution annually to the INX Token holders from INX&#8217;s Adjusted Operating Cash Flow is an embedded derivative. The
Company views INX&#8217;s operating cash flows as a financial variable, and therefore, the embedded derivative requires bifurcation pursuant
to IFRS 9. The Company elected, in accordance with IFRS 9, to designate the entire financial liability (including the embedded derivative)
at fair value through profit and loss. Accordingly, the INX Token liability and the INX Token warrant liability are remeasured to fair
value at the end of each reporting period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 150 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_61" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_60"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_30" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">The change in the fair value of the
INX Token liability that is attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded
derivative, to the extent there are any, would be presented in other comprehensive income. The remaining amount of the change in the
fair value of the INX Token liability would be presented in profit or loss. At December 31, 2022, all change in fair value of the INX
Token liability is included in profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 104pt; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_62" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_61"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_31" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">When the INX Token is used to pay
for services provided by INX, the respective portion of the INX Token liability is derecognized and revenue is recognized. The fair value
of INX Tokens issued in consideration for services to be provided to the Company (through its subsidiaries) is recognized as compensation
expense when services are provided.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_63" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_62"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_32" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_31"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">5.</td><td>Offsetting financial instruments:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_64" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_63"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_33" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Financial assets and financial liabilities
are offset, and the net amount is presented in the statement of financial position if there is a legally enforceable right to set off
the recognized amounts and there is an intention either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The right of set-off must be legally enforceable not only during the ordinary course of business of the parties to the contract but also
in the event of bankruptcy or insolvency of one of the parties.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_65" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_64"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_34" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_33"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">6.</td><td style="text-align: justify">Compound financial instruments:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2cm">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_66" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_65"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_35" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">Convertible debt which contains both
an equity component and a liability component are separated into two components. This separation is performed by first determining the
liability component based on the fair value of an equivalent non-convertible liability. The value of the conversion component is determined
to be the residual amount. Directly attributable transaction costs are apportioned between the equity component and the liability component
based on the allocation of proceeds to the equity and liability components.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_67" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_66"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_36" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_35"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">7.</td><td style="text-align: justify">Simple Agreement for Future Equity (&#8220;SAFE&#8221;):</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_68" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_67"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_37" id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">INX has entered into equity funding
agreements (SAFEs) pursuant to which funds received by INX from investors have been automatically converted into the same class of share
capital of INX that were issued in a qualifying financing, as defined in the SAFEs. The conversion price for SAFEs issued before June
2020 was equal to the lower of, <ix:nonNumeric contextRef="c0" name="ifrs-full:DescriptionOfEstimateOfRangeOfOutcomesFromContingentConsiderationArrangementsAndIndemnificationAssets">(i) 25% discount on the base (undiscounted) price per share of the qualifying financing, or (ii) a fixed
price, as set forth in the SAFEs. For SAFEs issued in June 2020, the conversion price was equal to the lower of, (i) 25% discount on
the base (undiscounted) price per share of the qualifying financing, or (ii) a fixed INX valuation divided by the number of INX&#8217;s shares
outstanding on a fully-diluted basis (as defined in the SAFEs).</ix:nonNumeric></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_69" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_68"><ix:continuation id="_DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory-c0_cont_37"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">INX is not obligated to complete
a qualifying financing or to approve the issuance of shares or dilutive securities&#160;within the term specified in the SAFE that would
result in the issuance of a variable number of the INX&#8217;s equity instruments. Accordingly, as the SAFEs are a non-derivative for
which the conversion price into the Company&#8217;s equity instruments is fixed at the end of its term, the consideration received from
investors pursuant to the SAFEs is classified as equity. As of December 31, 2022, all INX SAFE&#8217;s have been converted into ordinary
shares.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_70" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_69"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">g.</td><td style="text-align: justify">Fair value measurement:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_71" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_70"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Fair value measurement is based on the assumption that the transaction will take place in the asset&#8217;s or the liability&#8217;s
principal market, or in the absence of a principal market, in the most advantageous market.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 151 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_72" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_71"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_73" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_72"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Fair value measurement of a non-financial
asset takes into account a market participant&#8217;s ability to generate economic benefits by using the asset in its highest and best
use or by selling it to another market participant that would use the asset in its highest and best use.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_74" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_73"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company uses valuation techniques
that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_75" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_74"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_6" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">All assets and liabilities measured
at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level
input that is significant to the entire fair value measurement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_76" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_75"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_7" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company classifies the bases used
to measure certain assets and liabilities at their fair value. Assets and liabilities carried or measured at fair value have been classified
into three levels based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_77" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_76"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_8" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 18pt">The levels are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 18pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_78" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_77"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_9" id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.25in; vertical-align: top; width: 15%; text-align: left">Level 1:</td>
    <td style="width: 85%; text-align: justify">Quoted prices in active markets for identical assets or liabilities that the entity can
    access at the measurement date;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.25in; vertical-align: top; text-align: left">&#160;</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.25in; vertical-align: top; text-align: left">Level 2:</td>
    <td style="text-align: justify">Significant inputs other than within Level 1 that are observable for the asset or liability, either
    directly (i.e.: as prices) or indirectly (i.e.: derived from prices);</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.25in; vertical-align: top; text-align: left">&#160;</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.25in; vertical-align: top; text-align: left">Level 3:</td>
    <td style="text-align: justify">Inputs for the assets or liabilities that are not based on observable market data and require management
    assumptions or inputs from unobservable markets.</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_79" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_78"><ix:continuation id="_DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">For details of the fair value of the
INX Token liability - See Note 11. For the fair values of INX Token warrant liability, see Note 12. The fair values of current financial
assets and financial liabilities, other than the INX Token the INX Token warrant liability and investments measured at fair value, approximate
their carrying amounts due to the short-term maturity of these instruments.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_80" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_79"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_1" escape="true" name="ck0001725882:DescriptionOfDigitalAssets"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">h.</td><td style="text-align: justify">Digital assets:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_81" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_80"><ix:continuation continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_2" id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Digital assets are measured on initial
recognition at cost.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_82" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_81"><ix:continuation continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_3" id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Digital assets characterized as inventory
(current assets):</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_83" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_82"><ix:continuation continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_4" id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company has assessed that it acts
in a capacity as a commodity broker trader as defined in IAS 2, Inventories, in characterizing certain of its holdings as inventory,
or more specifically, certain holdings of digital assets. Such digital assets held by the Company are principally acquired for the purpose
of selling in the near future and generating a profit from fluctuations in price or broker-traders&#8217; margin, therefore, they should
be accounted for as inventory, and changes in fair value (less cost to sell) should be recognized in profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_84" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_83"><ix:continuation continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_5" id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Digital assets characterized as intangible
assets (non-current assets):</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_85" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_84"><ix:continuation continuedAt="ck0001725882_DescriptionOfDigitalAssets-c0_cont_6" id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Digital assets not characterized as
inventory are classified as indefinite life intangible assets, and are tested for impairment annually or whenever there is an indication
that the intangible asset may be impaired. An impairment loss is recognized if the carrying amount exceeds its fair value less cost of
sale. The Company recorded impairment of digital assets in the amount of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ImpairmentOfDigitalAssets" scale="3" unitRef="usd">72</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ImpairmentOfDigitalAssets" scale="3" unitRef="usd">80</ix:nonFraction>, for the year ended December 31, 2022 and 2021,
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_86" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_85"><ix:continuation id="ck0001725882_DescriptionOfDigitalAssets-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The fair value of digital assets is
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 152 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_87" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_86"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_88" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_87"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_2" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 18pt">The Company determines revenue
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_89" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_88"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_3" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Identification
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_90" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_89"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_4" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Identification
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_91" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_90"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_5" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Determination
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_92" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_91"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_6" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Allocation
                                            of the transaction price to the performance obligations in the contract; and</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_93" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_92"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_7" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_6"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Recognition
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_94" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_93"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_8" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In determining the amount of revenue
from contracts with customers, the Company evaluates whether it is a principal or an agent in the arrangement. The Company is a principal
when the Company controls the promised goods or services before transferring them to the customer. In these circumstances, the Company
recognizes revenue for the gross amount of the consideration. When the Company is an agent, it recognizes revenue for the net amount
of the consideration, after deducting the amount due to the principal.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_95" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_94"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_9" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Brokerage fees revenue is recorded
according to the date the service was provided, or the operation was carried out.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_96" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_95"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_10" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Trading fees revenue includes revenue
from transaction and trading fees charged to customers utilizing the Company&#8217;s trading platform and are presented on net basis.
The Company&#8217;s service is comprised of a single performance obligation to provide a matching service when customers buy, sell, or
convert digital assets. The Company does not control the digital asset being provided before it is transferred to the buyer, does not
have inventory risk related to the digital asset, and is not responsible for the settlement of the digital asset. The Company also does
not set the price for the digital asset as the price is a market rate established by users of the platform. As a result, the Company
acts as an agent in facilitating the ability for a customer to purchase digital assets from another customer.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_97" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_96"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_11" id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Trading fees charged on the INX.One
trading platform are recognized as revenue&#160;when the Company&#8217;s obligation is satisfied, the promised services are transferred
to the customer and the customer obtains control. Contracts with customers are usually open-ended and can be terminated by either party
without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already
provided. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding
amounts collected on behalf of third parties (such as taxes).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_98" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_97"><ix:continuation id="_DescriptionOfAccountingPolicyForRecognitionOfRevenue-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company also recognizes revenue
from buying and selling digital assets it owns. Such revenue is recognized in the gross amount of consideration received on sales less
the cost of digital assets sold.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_99" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_98"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_100" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_99"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Intangible assets acquired in a business
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_101" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_100"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Intangible assets with a finite useful
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asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year-end.
As of December 31, 2022, the Company recorded $<ix:nonFraction contextRef="c55" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ImpairmentLoss" scale="3" unitRef="usd">361</ix:nonFraction> of loss on impairment related to certain legacy components of the INXS middle office
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_102" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_101"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Intangible assets with indefinite
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asset may be impaired. The useful life of these assets is reviewed annually to determine whether their indefinite life assessment continues
to be supportable. If the events and circumstances do not continue to support the assessment, the change in the useful life assessment
from indefinite to finite is accounted for prospectively as a change in accounting estimate and on that date the asset is tested for
impairment. Commencing from that date, the asset is amortized systematically over its useful life.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 153 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

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</div><div>

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    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center"><ix:nonNumeric contextRef="c60" name="ck0001725882:AmortizationMethod">Straight-line</ix:nonNumeric></td><td>&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_105" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_104"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">k.</td><td style="text-align: justify">Business combinations and goodwill</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_106" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_105"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Business combinations are accounted
for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on
the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company chooses
whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate
share in the fair value of the acquiree&#8217;s net identifiable assets. Direct acquisition costs are recorded in the statement of comprehensive
income as incurred. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset
or liability in accordance with IAS 39. Subsequent changes in the fair value of the contingent consideration are recognized in profit
or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_107" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_106"><ix:continuation id="_DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Goodwill is initially measured at
cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable
assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition
date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_108" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_107"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">l.</td><td style="text-align: justify">Impairment of non-financial assets:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_109" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_108"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company evaluates the need to
record an impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable.
If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount.
The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future
cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset
that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses
are recognized in profit or loss<b>.</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_110" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_109"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">An impairment loss of an asset, other
than goodwill, is reversed only if there have been changes in the estimates used to determine the asset&#8217;s recoverable amount since
the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying
amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in
prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_111" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_110"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The following criteria are applied
in assessing impairment of these specific assets:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_112" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_111"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">1.</td><td style="text-align: justify">Goodwill in respect of subsidiaries:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_113" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_112"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_6" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company reviews goodwill for impairment
once a year, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 154 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_114" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_113"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_7" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Goodwill is tested for impairment
by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill has been allocated.
An impairment loss is recognized if the recoverable amount of the cash-generating unit (or group of cash-generating units) to which goodwill
has been allocated is less than the carrying amount of the cash-generating unit (or group of cash-generating units). Any impairment loss
is allocated first to goodwill. Impairment losses recognized for goodwill cannot be reversed in subsequent periods.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_115" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_114"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_8" id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">2.</td><td style="text-align: justify">Intangible assets with an indefinite useful
                                            life that have not yet been systematically amortized:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.3pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_116" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_115"><ix:continuation id="_DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.3pt">The impairment
test is performed annually, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment
(see Note 10d).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_117" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_116"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DescriptionOfCustomerFundsAndFundsDueToCustomers-c0_cont_1" escape="true" name="ck0001725882:DescriptionOfCustomerFundsAndFundsDueToCustomers"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">m.</td><td style="text-align: justify">Customer funds and funds due to customers:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_118" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_117"><ix:continuation id="ck0001725882_DescriptionOfCustomerFundsAndFundsDueToCustomers-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">As of December 31, 2022 and 2021,
customer funds include cash balances of $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashOnHand" scale="3" unitRef="usd">448</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CashOnHand" scale="3" unitRef="usd">1,315</ix:nonFraction> and digital asset balances of <ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:DigitalAssetBalances" scale="3" unitRef="usd">2,161</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:DigitalAssetBalances" scale="3" unitRef="usd">2,955</ix:nonFraction>, respectively, that are held for
the exclusive benefit of customers. The Company safeguards these assets and is subject to security risks for loss, theft or misuse. Therefore,
the Company has concluded it has control over these assets and records them and the corresponding liability in the consolidated financial
statements at fair value upon initial recognition and subsequently at each reporting period. The Company restricts the use of the assets
underlying the customer funds to meet regulatory requirements and classifies the assets as current based on their purpose and availability
to fulfill its direct obligation to customers.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_119" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_118"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">n.</td><td style="text-align: justify">Leases:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_120" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_119"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company accounts for a contract
as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_121" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_120"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company as a lessee:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_122" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_121"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">For leases in which the Company is
the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases
whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected
to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_123" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_122"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">In measuring the lease liability,
the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease
components (such as management and maintenance services, etc.) included in a single contract.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_124" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_123"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_6" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On the commencement date, the lease
liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined,
or otherwise using the Company&#8217;s incremental borrowing rate. After the commencement date, the Company measures the lease liability
using the effective interest rate method.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_125" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_124"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_7" id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">On the commencement date, the right-of-use
asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and
initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful
life and the lease term (<ix:nonNumeric contextRef="c56" format="ixt-sec:duryear" name="ck0001725882:LeaseTerm">3</ix:nonNumeric> years and <ix:nonNumeric contextRef="c57" format="ixt-sec:duryear" name="ck0001725882:LeaseTerm">9</ix:nonNumeric> years).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_126" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_125"><ix:continuation id="_DescriptionOfAccountingPolicyForLeasesExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The Company tests for impairment of
the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 155 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_127" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_126"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">o.</td><td style="text-align: justify">Share based payment transactions:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_128" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_127"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Certain of the Company&#8217;s employees
and other service providers are entitled to compensation in the form of equity settled share-based payment transactions. The cost of
the transactions is measured at the fair value of the equity instruments granted at grant date, using an appropriate valuation model,
further details of which are provided in Note 18. The cost of the transactions is recognized in profit or loss together with a corresponding
increase in equity or for share-based grants during the period which the performance and/or service conditions are to be satisfied ending
on the date on which the relevant employees/service provider become entitled to the award (the &#8220;vesting period&#8221;). The cumulative
expense recognized at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired
and the Company&#8217;s best estimate of the number of instruments that will ultimately vest.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_129" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_128"><ix:continuation id="_DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Until December 31, 2021, the Company
granted options exercisable into its Ordinary shares. Commencing in 2022, subsequent to the completion of the Transaction (see Note 1),
options are granted to the Company&#8217;s employees and other service providers by the Parent Company and are exercisable into the Common
shares of the Parent Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_130" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_129"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">p.</td><td style="text-align: justify">Research and development expenses:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_131" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_130"><ix:continuation id="_DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Research expenses are recognized in
profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project
is recognized if the Company can demonstrate all of the following: the technical feasibility of completing the intangible asset so that
it will be available for use or sale; the Company&#8217;s intention to complete the intangible asset and use or sell it; the Company&#8217;s
ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate
technical, financial and other resources to complete the intangible asset; and the Company&#8217;s ability to measure reliably the expenditure
attributable to the intangible asset during its development. Through December 31, 2022, the Company has not met all the aforementioned
criteria and therefore all development costs have been recognized in profit or loss.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_132" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_131"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">q.</td><td style="text-align: justify">Income taxes:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_133" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_132"><ix:continuation id="_DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The consolidated financial statements
include estimates and assumptions for determining the future tax rates applicable to subsidiaries and identifying temporary differences
that relate to each subsidiary. Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities using the tax rates used enacted or substantively enacted at the reporting date. Deferred tax is provided
using a liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax assets are recognized for deductible temporary differences and the carryforward
of any unused tax losses. Deferred tax assets are recognized to the extent it is probable that taxable profit will be available against
the deductible temporary differences and that the carryforward of unused tax losses can be utilized. The carrying amount of deferred
tax assets is reviewed at each reporting date and adjusted accordingly.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_134" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_133"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">r.</td><td style="text-align: justify">Property, plant and equipment:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 18pt">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_135" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_134"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Property, plant and equipment are
measured at cost, including directly attributable costs, less accumulated depreciation and accumulated impairment losses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_136" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_135"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Depreciation is calculated on a straight-line
basis over the useful life of the assets at annual rates as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_137" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_136"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfStraightlineBasisOverTheUsefulLifeOfTheAssetsTableTextBlock"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center"><b>Percentage</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 89%; text-align: justify">Communication &amp; equipment</td><td style="width: 1%">&#160;</td>
    <td style="width: 9%; text-align: center"><ix:nonNumeric contextRef="c62" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">15</ix:nonNumeric></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Office furniture and equipment</td><td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt"><ix:nonNumeric contextRef="c63" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">7</ix:nonNumeric>-<ix:nonNumeric contextRef="c64" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">10</ix:nonNumeric></span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Computers and software</td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c65" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">33</ix:nonNumeric></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Leasehold improvements</td><td>&#160;</td>
    <td style="text-align: center"><span style="font-size: 10pt"><ix:nonNumeric contextRef="c66" name="ifrs-full:DescriptionOfUsefulLifePropertyPlantAndEquipment">see below</ix:nonNumeric></span></td><td style="text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 156 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_138" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_137"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Leasehold improvements are depreciated
on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised)
and the useful life of the improvement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_139" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_138"><ix:continuation id="_DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The useful life and depreciation method
of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_140" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_139"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 18pt; text-align: left">s.</td><td style="text-align: justify">Net income (loss) per share:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_141" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_140"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Basic income (loss) per share is computed
by dividing the income (net) loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding
during the period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_142" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_141"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Diluted income (loss) per share is
computed by dividing the net income (loss), as above, after adjustment for interest on the convertible loans by the weighted average
number of ordinary shares outstanding, as above, plus the weighted average number of ordinary shares that would be issued on conversion
of stock options.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_143" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_142"><ix:continuation id="_DescriptionOfAccountingPolicyForEarningsPerShareExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Potential ordinary shares are included
in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Potential
ordinary shares that are converted during the period are included in diluted earnings per share only until the conversion date and from
that date in basic earnings per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -1cm">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_144" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_143"><ix:nonNumeric contextRef="c0" continuedAt="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 18pt">u.</td><td style="text-align: justify">Employee benefit liabilities:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_145" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_144"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_2" id="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">The Company has several employee benefit plans:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 45pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_146" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_145"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_3" id="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">1.</td><td>Short-term employee benefits:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 45pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_147" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_146"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_4" id="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Short-term employee benefits are benefits
that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render
the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions
and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized
when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and
a reliable estimate of the amount can be made.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 45pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_148" id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_147"><ix:continuation continuedAt="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_5" id="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">2.</td><td>Post-employment benefits:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 45pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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plans pursuant to section 14 to the Severance Pay Law under which the Company pays fixed contributions and will have no legal or constructive
obligation to pay further contributions if the fund does not hold sufficient amounts to pay all employee benefits relating to employee
service in the current and prior periods.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory-c0_cont_150"><ix:continuation id="_DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Contributions to the defined contribution
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services.</p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&#160;</p><div>


</div><!-- Field: Page; Sequence: 157 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3cm; text-indent: -3cm"><b>NOTE 3: NEW ACCOUNTING POLICIES AND RECENT
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_2" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no new accounting pronouncements adopted
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_3" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Accounting standards and amendments to existing standards that
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_4" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2021, the IASB issued amendments to
IAS 1 Presentation of Financial Statements, amendments to IFRS Practice Statement 2 Making Materiality Judgements and amendments to IAS
8 Definition of Accounting Estimate. The amendments require companies to disclose material accounting policies rather than their significant
accounting policies and to help distinguish between changes in accounting estimates versus accounting policies. These amendments are effective
for annual periods starting on or after January 1, 2023. The Company is assessing the impact of these amendments.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3cm; text-indent: -3cm"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_5" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In January 2020, which was further amended in
2022, the IASB issued amendment to IAS 1, Presentation of Financial Statements to clarify the requirements for classifying liabilities
as current or non-current. The new guidance will be effective for annual periods starting on or after January 1, 2024. The Company is
assessing the impact of this amendment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_6" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2021, the IASB issued an amendment to IAS
12, &#8220;Income Taxes&#8221; (&#8220;IAS 12&#8221;), which narrows the scope of the initial recognition exception under IAS 12.15 and IAS
12.24 (&#8220;the Amendment&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_7" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the recognition guidelines of deferred
tax assets and liabilities, IAS 12 excludes recognition of deferred tax assets and liabilities in respect of certain temporary differences
arising from the initial recognition of certain transactions. This exception is referred to as the &#8220;initial recognition exception&#8221;.
The Amendment narrows the scope of the initial recognition exception and clarifies that it does not apply to the recognition of deferred
tax assets and liabilities arising from transactions that are not a business combination and that give rise to equal taxable and deductible
temporary differences, even if they meet the other criteria of the initial recognition exception.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_8" id="_DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Amendment applies for annual reporting periods
beginning on or after January 1, 2023, with earlier application permitted. In relation to leases and decommissioning obligations, the
Amendment is to be applied commencing from the earliest reporting period presented in the financial statements in which the Amendment
is initially applied. The cumulative effect of the initial application of the Amendment should be recognized as an adjustment to the opening
balance of retained earnings (or another component of equity, as appropriate) at that date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfBusinessCombinationsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4: BUSINESS COMBINATIONS </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_2" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><b>a.</b></td><td style="text-align: justify"><b>I.L.S Brokers Ltd.</b></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_3" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 9, 2021, INX entered into a share purchase
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for the purchase of all of the issued outstanding shares of ILSB (the &#8220;ILSB Acquisition&#8221;). The consideration paid by INX as
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 158 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4: BUSINESS COMBINATIONS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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and received only an amount equal to the tax payments due by him and by his affiliated entity in connection with the ILSB Acquisition.
As a result of such waiver, the consideration paid by INX
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_5" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following are the estimated fair values of
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_6" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_5"><ix:nonNumeric contextRef="c77" continuedAt="_DisclosureOfFairValueMeasurementOfAssetsExplanatory-c77_cont_1" escape="true" name="ifrs-full:DisclosureOfFairValueMeasurementOfAssetsExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_7" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-indent: 0.5in">Cost of Acquisition:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_8" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_7"><ix:continuation continuedAt="_DisclosureOfFairValueMeasurementOfAssetsExplanatory-c77_cont_2" id="_DisclosureOfFairValueMeasurementOfAssetsExplanatory-c77_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_9" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-indent: 0.5in">Cash outflow on Acquisition:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_10" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_9"><ix:continuation id="_DisclosureOfFairValueMeasurementOfAssetsExplanatory-c77_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_11" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets include Customer Relationships, Trade Name and License.
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_12" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company estimated the fair values allocated
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_13" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From the acquisition date to December 31, 2021,
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</div><div>


</div><!-- Field: Page; Sequence: 159 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4: BUSINESS COMBINATIONS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_15" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Acquisition costs that are directly attributable
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_16" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_15"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><b>b.</b></td><td style="text-align: justify"><b>INX Securities LLC (formerly Openfinance Securities LLC)</b></td>
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_17" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 12, 2021, INX entered into an asset
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Holdings, Inc. (collectively, &#8220;OFN&#8221;). The consideration paid by INX as part of the OFN Acquisition to the shareholders was
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States as a broker-dealer, is a member of FINRA and operates and is recognized as an Alternative Trading System (&#8220;ATS&#8221;) by
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_18" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Following the completion of the Asset Purchase
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_19" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following are the estimated fair values of
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_21" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-indent: 0.5in">Cost of Acquisition:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2cm">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_23" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.25in; text-indent: 0.5in">Cash outflow on Acquisition:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_24" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_23"><ix:continuation id="_DisclosureOfFairValueMeasurementOfAssetsExplanatory-c80_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_25" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets comprise License, Core Technology and Customer Relationships
&#8211; see Note 10.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 160 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4: BUSINESS COMBINATIONS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_26" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company estimated the fair values allocated
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_27" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2021, OFN has
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_28" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the business combination had taken place at
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_29" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Acquisition costs that are directly attributable
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_30" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Contingent consideration:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 54pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_31" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As part of the purchase agreement with the previous
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_32" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_31"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_33" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_32"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_34" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_33"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:DisclosureOfLiabilityInContingentConsideration"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_35" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2021, the first installment
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_36" id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0in; text-indent: 0.25in"><span>Token
warrant grant:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfBusinessCombinationsExplanatory-c0_cont_36"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As part of the consideration for the acquisition,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 5: RESERVE FUND</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_2" id="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the INX Token Offering, INX
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to be available to cover customer and INX&#8217;s losses, if any, that result from cybersecurity breaches or theft, errors in execution of the
trading platform or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to
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</div><div>


</div><!-- Field: Page; Sequence: 161 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 5: RESERVE FUND (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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approved the Investment Policy of the Reserve Fund. Per the approved Policy, as amended on August 11, 2022, the Reserve Fund, post the
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_4" id="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, and 2021, INX has segregated
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_5" id="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_4"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_ScheduleOfReserveFundsTableTextBlock-c0_cont_1" escape="true" name="ck0001725882:ScheduleOfReserveFundsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation id="_DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory-c0_cont_5"><ix:continuation id="ck0001725882_ScheduleOfReserveFundsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify"><ix:footnote id="ix_3_footnote" xml:lang="en-US">Classified as level 1 inputs in the fair value hierarchy.</ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>


</div><!-- Field: Page; Sequence: 162 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 6: INVESTMENTS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_2" id="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 31, 2022 and 2021, the Company holds
the following investments:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>


</div><ix:continuation continuedAt="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_3" id="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfInvestmentsTableTextBlock-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfInvestmentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td></tr>
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_5" id="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Investments are accounted for as financial assets
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generally are not traded in public markets and include Company&#8217;s holdings in private companies under a share purchase agreement
and a simple agreement for future equity (SAFE), which entitle the Company to receive common stock of the issuing companies at a future
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</div><div>

</div><ix:continuation id="_DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When observable market data is not available and
insufficient recent information is available to measure fair value, the Company, in accordance with IFRS 9, uses cost as an appropriate
estimate of fair value. In such circumstances, management uses judgement to assess if there are any indicators that cost might not be
representative of fair value. The Company did not identify any such indicators at December 31, 2022<b>.</b></p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfDigitalAssetsExplanatorytextBlock-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfDigitalAssetsExplanatorytextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 7: DIGITAL ASSETS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfDigitalAssetsExplanatorytextBlock-c0_cont_2" id="ck0001725882_DisclosureOfDigitalAssetsExplanatorytextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company held the following digital assets as of December 31, 2022
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</div><div>

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    <td>&#160;</td></tr>
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    <td>&#160;</td></tr>
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    <td>&#160;</td></tr>
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</div><div>

</div><ix:continuation id="ck0001725882_DisclosureOfDigitalAssetsExplanatorytextBlock-c0_cont_3"><ix:continuation id="ck0001725882_DisclosureOfDigitalAssetInventoryAndNoncurrentIntangibleAssetsExplanatory-c4_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify"><ix:footnote id="ix_6_footnote" xml:lang="en-US">All digital assets are classified as Level 2 in the fair
value hierarchy.</ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 163 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfOtherNoncurrentAssetsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 8: DERIVATIVE ASSETS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="_DisclosureOfOtherNoncurrentAssetsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 31, 2022, the Company held $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AssetsSoldOrRepledgedAsCollateralAtFairValue" scale="3" unitRef="usd">905</ix:nonFraction> in
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The derivative assets are used for hedging of digital assets held by the Company. Net gain (loss) recognized from the hedging activity
during the year ended on December 31, 2022 was not significant.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfPrepaidExpensesAndOtherReceivablestextBlock-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfPrepaidExpensesAndOtherReceivablestextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 9: PREPAID EXPENSES AND OTHER RECEIVABLES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfPrepaidExpensesAndOtherReceivablestextBlock-c0_cont_2" id="ck0001725882_DisclosureOfPrepaidExpensesAndOtherReceivablestextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, and 2021, the Company&#8217;s
prepaid expenses and other receivables include the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="ck0001725882_DisclosureOfPrepaidExpensesAndOtherReceivablestextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:DisclosureOfPrepaidExpensesAndOtherReceivablestable"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_2" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt">a.</td><td>The following table presents activity in goodwill and intangible assets during the year ended on December 31, 2022.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_3" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_ScheduleOfCompositionAndMovementTableTextBlock-c0_cont_1" escape="true" name="ck0001725882:ScheduleOfCompositionAndMovementTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Adjustments arising from translating financial statements from functional currency to presentation currency</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; padding-bottom: 1.5pt">Balance as of December&#160;31, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Additions from business combination</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-228">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><div>


</div><!-- Field: Page; Sequence: 164 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt">&#160;</p><div>

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    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_5" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">b.</td><td style="text-align: justify">Acquisitions during the year:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-indent: -22.5pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_6" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No acquisitions were made during the year ended
December 31, 2022. Licenses don&#8217;t have a fixed term and do not require renewal. Consequently, Licenses have an indefinite useful
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_7" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_6"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">c.</td><td style="text-align: justify">Amortization expenses:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_8" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amortization expense of intangible assets of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AmortisationIntangibleAssetsOtherThanGoodwill" scale="3" unitRef="usd">220</ix:nonFraction>,
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_9" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">d.</td><td style="text-align: justify">Impairment of goodwill and other intangible assets:</td>
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_10" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended on December 31, 2022 and
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_11" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, the carrying amount of
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_12" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_11"><ix:nonNumeric contextRef="c0" escape="true" name="ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_13" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The recoverable amount of ILSB was determined
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 165 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_15" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The value in use for all cash-generating units
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_16" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_15"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_17" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_16"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_18" id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Discount rate - the discount rate reflects management&#8217;s
assumptions regarding each unit&#8217;s specific risk. In determining the appropriate discount rate for each unit, the Company relied on the
ten-year return on Government bonds.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sensitivity analysis of changes in assumptions:
With respect to the assumptions used in determining the value in use as described above, management believes that there are no potential
changes in the key assumptions detailed above, which might lead to a significant change in the carrying amounts of ILSB and OFN over their
recoverable amounts.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">N<b>OTE 11: INX TOKEN LIABILITY</b> &#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 50pt">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_2" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The number of INX Tokens that the Company has issued as of December
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_3" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfTheCompanyObligationToIssueTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_4" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 20, 2020, INX&#8217;s Form F-1 in connection
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_5" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 22, 2021, the INX Token Public Offering
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_6" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX paid $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:IssuanceCost" scale="3" unitRef="usd">5,782</ix:nonFraction> as issuance costs related to the
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 166 --><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 11: INX TOKEN LIABILITY (Cont.) &#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_7" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2021, it came to the attention of INX
that during the INX Token Offering as it related to Canada, INX did not take certain steps that may be required under applicable Canadian
securities laws. As a result, during July 2021 INX cancelled <ix:nonFraction contextRef="c153" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:INXTokensCancelled" scale="0" unitRef="shares">1,948,483</ix:nonFraction> INX Tokens that were sold
to Canadian purchasers and refunded the $<ix:nonFraction contextRef="c153" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:IncomeTaxesPaidRefund" scale="3" unitRef="usd">1,754</ix:nonFraction> to such purchasers, representing the full purchase price of the INX Tokens.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_8" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended on December 31, 2022, the
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exercised.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_9" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 14, 2021, INX&#8217;s Board of Directors
authorized our management to repurchase INX Tokens (the &#8220;Repurchased Tokens&#8221;) from their holders as the management deems required
or desirable for the benefit of INX, provided that the aggregate purchase amount of Repurchased Tokens until December 31, 2022 will not
exceed $<ix:nonFraction contextRef="c154" decimals="-6" format="ixt:num-dot-decimal" name="ck0001725882:AggregatePurchaseAmount" scale="6" unitRef="usd">5,000</ix:nonFraction>. Such repurchase shall be subject to the provisions of any applicable law and regulation and to the advice of our legal
advisors.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_10" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair values of INX Tokens free of, or subject
to lock-up agreements and the discount rates applied as of December 31, 2022, are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_11" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_10"><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_ScheduleOfSubjectToLockupAgreementsAndTheDiscountRatesTableTextBlock-c0_cont_1" escape="true" name="ck0001725882:ScheduleOfSubjectToLockupAgreementsAndTheDiscountRatesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Subject to lock-up through June 2023</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_12" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The fair value of INX Tokens free of, or subject to lock-up agreements
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_13" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_12"><ix:continuation id="ck0001725882_ScheduleOfSubjectToLockupAgreementsAndTheDiscountRatesTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt">Total</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 50pt">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_14" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 28, 2021, the INX Token commenced trading
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_15" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For INX tokens which are subject to lock-up agreement,
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significant inputs and assumptions are volatility and the period under the lock up, as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_16" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:DisclosureOfInputsAndAssumptionsAreVolatilityAndThePeriodUnderTheLockUptable"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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 2021</b></span></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 167 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->33<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 11: INX TOKEN LIABILITY (Cont.) &#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_17" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The level in the fair value hierarchy applied
for such tokens is level 2.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_18" id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the years ended December 31, 2022, and 2021,
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</div><div>

</div><ix:continuation id="ck0001725882_DisclosureOfInxTokenWarrantLiabilityCompositionExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The changes in the fair value of the INX Token
liability attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded derivative, are
immaterial for all reported periods and therefore no amounts have been included in other comprehensive income in respect of credit risk.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_1" escape="true" name="ck0001725882:DisclosureOfWarrantLiabilityTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 12: INX TOKEN WARRANT LIABILITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_2" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, directors, employees
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_3" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfWarrantLiabilityCompositionTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_4" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The liability related to INX Token warrants is
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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>

</div><p style="margin: 0; text-indent: 0.25in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 12: INX TOKEN WARRANT LIABILITY (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_7" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents changes in the number
of INX Token warrants during the years ended December 31, 2022, and 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p></ix:continuation><div>

</div><div>

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    <td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokensINXTokenWarrantsForfeited" scale="0" sign="-" unitRef="shares">491,833</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokensINXTokenWarrantsExpired" scale="0" sign="-" unitRef="shares">50,261</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.25in; padding-left: 0.25in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.25in; padding-left: 0.25in">INX Token warrants outstanding at the end of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokenINXTokensWarrantsOutstandingAtBeginningOfYear" scale="0" unitRef="shares">6,972,192</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:WeightedAverageExercisePriceINXTokensWarrantsOutstandingPerShare" scale="0" unitRef="usdPershares">0.46</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokenINXTokensWarrantsOutstandingAtBeginningOfYear" scale="0" unitRef="shares">5,660,861</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:WeightedAverageExercisePriceINXTokensWarrantsOutstandingPerShare" scale="0" unitRef="usdPershares">0.52</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.25in; padding-left: 0.25in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.25in; padding-left: 0.25in">INX Token warrants exercisable at the end of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokensINXTokenWarrantsExercisableAtTheEndOfYear" scale="0" unitRef="shares">3,718,955</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="INF" format="ixt:num-dot-decimal" name="ck0001725882:NumberOfTokensINXTokenWarrantsExercisableAtTheEndOfYear" scale="0" unitRef="shares">3,947,861</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:WeightedAverageExercisePricesINXTokenWarrantExercisablePerShare" scale="0" unitRef="usdPershares">0.13</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_9" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_8"><ix:continuation id="_DisclosureOfNumberAndWeightedAverageExercisePricesOfShareOptionsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify"><ix:footnote id="ix_7_footnote" xml:lang="en-US">During the year ended December 31, 2022, the Company issued
an option to modify certain token warrants originally issued to employees of the Company in 2021 and 2022. As result, during 2022, terms
for <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:WarrantsNewExercisePriceShares" scale="0" unitRef="shares">1,801,500</ix:nonFraction> INX token warrants were modified to include a new exercise price and a new vesting schedule, which resulted in the increase
in the fair value of the INX Token warrants of $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:WarrantReserve" scale="3" unitRef="usd">8</ix:nonFraction>.</ix:footnote></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_10" id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Token-based compensation for the years ended December
31, 2022, 2021 and 2020 is included within the following expenses:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="ck0001725882_DisclosureOfWarrantLiabilityTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31,</td><td style="font-weight: bold">&#160;</td></tr>
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    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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    <td style="padding-left: 0.25in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Total token-based compensation</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfRelatedPartyExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 13: RELATED PARTIES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_2" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">a.</td><td style="text-align: justify">The Company&#8217;s related parties include, the Parent Company, Company&#8217;s subsidiaries, associates
and service providers over which the Company exercises significant influence, and key management personnel. Key management personnel are
those persons having the authority and responsibility, directing and controlling the activities of the Company, directly and indirectly.
Key management personnel include officers, directors and companies controlled by officers and directors.</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 169 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 13: RELATED PARTIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_3" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">b.</td><td>The following balances are balances held with or by related parties as of December 31, 2022 and 2021:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 50.25pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_4" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:DisclosureOfInformationAboutBalanceOfAssetsandLiabilitiesExplanatoryTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
    <td><span style="text-decoration:underline">Assets:</span></td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Receivable from Parent Company</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-decoration: underline">Liabilities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">INX Token liability</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_5" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">The receivable balance from Parent Company includes general
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_6" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">c.</td><td style="text-align: justify">Compensation to directors and key management personnel:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_7" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">Each Director is entitled to receive
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_8" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">Compensation provided to directors and
key management personnel for the years ended December 31, 2022, 2021 and 2020 was as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_9" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_8"><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfAmountsIncurredByEntityForProvisionOfKeyManagementPersonnelServicesProvidedBySeparateManagementEntitiesExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfAmountsIncurredByEntityForProvisionOfKeyManagementPersonnelServicesProvidedBySeparateManagementEntitiesExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_10" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_9"><ix:continuation id="_DisclosureOfAmountsIncurredByEntityForProvisionOfKeyManagementPersonnelServicesProvidedBySeparateManagementEntitiesExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(*)</td><td style="text-align: justify"><ix:footnote id="ix_8_footnote" xml:lang="en-US">See Note 18 for description of options granted by Parent
Company to employees of the Company that are exercisable into Common shares of the Parent Company.</ix:footnote></td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 170 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->36<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 13: RELATED PARTIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_11" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">d.</td><td>Agreement with A-Labs Finance and Advisory Ltd. (&#8220;A-Labs&#8221;):</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_12" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">Under a service agreement dated September
26, 2017, as amended in December 2017 and January 31, 2018, A-Labs, a shareholder of the Company, provided services to the Company which
included, among others, development, planning, management, execution, branding and marketing outside of the US with relation to the Offering
of the INX Tokens on behalf of the Company (the &#8220;A-Labs Agreement&#8221;). In consideration for these services, during 2021, the
Company paid A-Labs $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:GeneralAndAdministrativeExpenses" scale="3" unitRef="usd">4,140</ix:nonFraction>, which is recorded in general and administrative expenses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_13" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">A-Labs also received a grant of <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:INXTokensReceived" scale="0" unitRef="shares">4,550,000</ix:nonFraction>
INX Tokens at a fair value of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FairValueOfShares" scale="3" unitRef="usd">6</ix:nonFraction>. In addition, pursuant to an agreement signed contemporaneously with the A-Labs Agreement, the Company
issued <ix:nonFraction contextRef="c191" decimals="0" format="ixt:num-dot-decimal" name="ifrs-full:NumberOfSharesIssued" scale="0" unitRef="shares">1,120,000</ix:nonFraction> Ordinary shares to A-Labs. The fair value of the shares issued of $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:FairValueOfShares" scale="3" unitRef="usd">136</ix:nonFraction> ($<ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AmountsPayableRelatedPartyTransactions" scale="3" unitRef="usd">175</ix:nonFraction> less the payment of $<ix:nonFraction contextRef="c192" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AmountsPayableRelatedPartyTransactions" scale="3" unitRef="usd">39</ix:nonFraction> required for those
shares), is deemed as additional consideration for the services to be provided by A-Labs and was recorded during the year ended December
31, 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify; text-indent: -0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_14" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">In addition, on July 29, 2021, the Company
made a payment to A-Labs of $<ix:nonFraction contextRef="c193" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:AmountsPayableRelatedPartyTransactions" scale="3" unitRef="usd">1,001</ix:nonFraction> and granted A-Labs with an option to purchase <ix:nonFraction contextRef="c194" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:PurchaseOfINXTokens" scale="0" unitRef="shares">1,527,084</ix:nonFraction> Tokens. These options were exercised during
2022 and vest on July 12, 2024. During the year ended December 31, 2021, the Company recognized an expense related to token options of
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfRelatedPartyExplanatory-c0_cont_15" id="_DisclosureOfRelatedPartyExplanatory-c0_cont_14"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">e.</td><td>Loans to Related Parties:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 382.95pt 0pt 27pt; text-align: center; text-indent: -27pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfRelatedPartyExplanatory-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">On December 31, 2021, INX entered into
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order to enable the officers to exercise INX Token warrants granted to them in connection with their services to the Company and to cover
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 14: CONVERTIBLE LOANS&#160;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_2" id="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into convertible loan agreements
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for an aggregate amount of $<ix:nonFraction contextRef="c209" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertibleAggregateAmount" scale="3" unitRef="usd">144</ix:nonFraction>. The loans are convertible at any time and at each Lender&#8217;s sole discretion, into an aggregate total
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_3" id="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Until 2018, the Company received $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertibleLoansReceived" scale="3" unitRef="usd">144</ix:nonFraction>, in consideration
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_4" id="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2021, interest
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</div><div>

</div><ix:continuation id="_DisclosureOfLoansAndAdvancesToCustomersExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 25, 2021, holders of Convertible loans
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agreements into an aggregate of <ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOfOrdinaryShare" scale="0" unitRef="shares">956,333</ix:nonFraction> ordinary shares of the Company.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&#160;</p><div>


</div><!-- Field: Page; Sequence: 171 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfPropertyPlantAndEquipmentExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 15: PROPERTY AND EQUIPMENT</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfPropertyPlantAndEquipmentExplanatory-c0_cont_2" id="_DisclosureOfPropertyPlantAndEquipmentExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents activity of the Company&#8217;s
property and equipment during the year ended December 31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfPropertyPlantAndEquipmentExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ifrs-full:DisclosureOfDetailedInformationAboutPropertyPlantAndEquipmentExplanatory"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 172 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 16: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_2" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">a.</td><td>Activity with respect to right-of-use assets:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_3" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">The Company has entered into office space lease agreements, which are
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_4" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:DisclosureOfRightofuseAssetsAndLeaseLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Balance as of December 31, 2022</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><div>


</div><!-- Field: Page; Sequence: 173 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 16: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_5" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">b.</td><td>Activity with respect to lease liability:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_6" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_5"><ix:nonNumeric contextRef="c238" escape="true" name="ck0001725882:DisclosureOfRespectOfLeaseLiabilityTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LeasePayments" scale="3" sign="-" unitRef="usd">68</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LeaseLiabilityBalance" scale="3" unitRef="usd">1,140</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Non-current lease liability, December 31, 2021</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:NoncurrentLeaseLiabilities" scale="3" unitRef="usd">821</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td>Balance as of January 1, 2022</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LeaseLiabilityBalance" scale="3" unitRef="usd">1,140</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Additions during the year:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">New leases</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:NewLeasesAsset" scale="3" unitRef="usd">827</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Lease payments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LeasePayments" scale="3" sign="-" unitRef="usd">578</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:CPIAndRevaluationDifferences" scale="3" sign="-" unitRef="usd">85</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt">Balance as of December 31, 2022</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LeaseLiabilityBalance" scale="3" unitRef="usd">1,387</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>Current lease liability, December 31, 2022</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt">&#160;</p></ix:nonNumeric></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_7" id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_6"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 27pt">c.</td><td style="text-align: justify">Maturity analysis of undiscounted lease payments receivable for operating leases:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="ifrs-full:MaturityAnalysisForDerivativeFinancialLiabilities"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">December&#160;31,</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: left">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left; text-indent: -8.5pt; padding-left: 8.5pt">2023</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths1" scale="3" unitRef="usd">393</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt">2024</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LesseeOperatingLeaseLiabilityPaymentsDueYearTwo1" scale="3" unitRef="usd">289</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt">2025</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LesseeOperatingLeaseLiabilityPaymentsDueYearThree1" scale="3" unitRef="usd">84</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt">2026</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LesseeOperatingLeaseLiabilityPaymentsDueYearFour4" scale="3" unitRef="usd">87</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -8.5pt; padding-left: 8.5pt">2027 and thereafter</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -8.5pt; padding-left: 8.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:LesseeOperatingLeaseLiabilityPaymentsDue1" scale="3" unitRef="usd">868</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 174 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3cm; text-indent: -3cm"><b>NOTE 17: EQUITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_2" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Composition of share capital:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_3" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfCompositionOfShareCapitalTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&#160;</td>
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    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
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    <td style="padding-bottom: 1.5pt; width: 1%; text-align: left">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_4" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">a)</td><td>Conversions of Simple Agreements for Future Equity</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_5" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">In April 2019, the Board of Directors
of the Company approved a capital raise in the form of Simple Agreements for Future Equity (&#8220;SAFE&#8221;). Pursuant to the SAFE,
upon consummation of an investment round in shares of capital stock of the Company in the amount of not less than $ <ix:nonFraction contextRef="c239" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CapitalReserve" scale="3" unitRef="usd">2,000</ix:nonFraction> (in addition
to the funds raised under the SAFEs) (the &#8220;Qualifying Financing&#8221;), the funds raised under the SAFEs will automatically be
converted into the same class of shares of capital stock as those issued in the Qualifying Financing at a price per share equal to the
lower of: (i) a <ix:nonFraction contextRef="c240" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:DiscountRatePercentage" scale="-2" unitRef="pure">25</ix:nonFraction>% discount on the base (undiscounted) price per share of the Qualifying Financing; and (ii) $<ix:nonFraction contextRef="c239" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:DefaultsPricePerShare" scale="0" unitRef="usdPershares">1.367</ix:nonFraction> per share(the &#8220;Default
Price&#8221;). If a Qualified Financing is not consummated within 12 months as of the Effective Date (as such term is defined in the SAFEs),
the funds raised under the SAFEs will automatically be converted at a price per share equal to the Default Price pursuant to the terms
set forth in the SAFEs. Following the approval of the Board of Directors, during April 2019, the Company entered into SAFEs with certain
investors pursuant to which an amount of $<ix:nonFraction contextRef="c240" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">428</ix:nonFraction> was raised by the Company, including $<ix:nonFraction contextRef="c241" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">150</ix:nonFraction> and $<ix:nonFraction contextRef="c242" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">100</ix:nonFraction> from Triple V and A-Labs respectively.
A Qualified Financing was not consummated before April 25, 2020, and thus the funds raised under the SAFE were automatically converted
into <ix:nonFraction contextRef="c243" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:ConversionOfOrdinaryShares" scale="0" unitRef="shares">312,849</ix:nonFraction> Ordinary Shares at a price per share equal to the Default Price.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_6" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">On August 13, 2019, the Board of Directors
of the Company approved an additional capital raise of up to $<ix:nonFraction contextRef="c244" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AdditionalCapitalRaise" scale="3" unitRef="usd">1,000</ix:nonFraction> in the form of SAFE, which the Board of Directors of the Company then
increased to $<ix:nonFraction contextRef="c245" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AdditionalRaiseUpCapital" scale="3" unitRef="usd">1,500</ix:nonFraction> on October 28, 2019 (the &#8220;Second SAFE&#8221;). The Second SAFE will also be automatically converted into the
same class of shares of capital stock as those issued in the Qualifying Financing at a price per share equal to the lower of: (i) <ix:nonFraction contextRef="c246" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:DiscountPriceBasePercentage" scale="-2" unitRef="pure">25</ix:nonFraction>%
discount on the base (undiscounted) price per share of the Qualifying Financing, and (ii) $<ix:nonFraction contextRef="c246" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:DefaultsPricePerShare" scale="0" unitRef="usdPershares">1.367</ix:nonFraction> per share. If a Qualified Financing is
not consummated within 12 months commencing as of the Effective Date (as such term is defined in the Second SAFE), the funds will automatically
be converted at a price per share of $<ix:nonFraction contextRef="c246" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertiblePricePerShare" scale="0" unitRef="usdPershares">1.367</ix:nonFraction>. In addition to the shares issued to the investors upon conversion of the Second SAFE, the
Second SAFE investors shall be entitled to an option to purchase an equal number of additional shares issued to them upon conversion of
their investment under the Second SAFE, from the same class of such converted shares, for an exercise price of $<ix:nonFraction contextRef="c244" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ExercisesPrice" scale="0" unitRef="usdPershares">1.953</ix:nonFraction> per share. This
option shall be valid for a period of 36 months. In connection with the Second SAFE, the Company raised an amount of $<ix:nonFraction contextRef="c244" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">978</ix:nonFraction>, including $<ix:nonFraction contextRef="c247" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">250</ix:nonFraction>
from Triple V. In the absence of a qualified financing during the 12 months&#8217; period following the effective date of such Second
SAFE in 2020, the Company converted the investment provided to it under the Second SAFE into an aggregate of <ix:nonFraction contextRef="c244" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">716,136</ix:nonFraction> Ordinary Shares of
the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_7" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Upon the closing of such Qualified Financing
on September 13, 2020, the Company converted the investment provided to it under the Fourth SAFE into <ix:nonFraction contextRef="c248" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:ConversionOfOrdinaryShares" scale="0" unitRef="shares">165,654</ix:nonFraction> Ordinary Shares of the Company.
Such conversion reflected a price of $<ix:nonFraction contextRef="c249" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertiblePricePerShare" scale="0" unitRef="usdPershares">1.811</ix:nonFraction> per share. Pursuant to the terms of the Fourth SAFE, upon the Fourth SAFE conversion, the
investor under the Fourth SAFE received an option to purchase an additional identical number of Ordinary Shares of the Company at a price
of $<ix:nonFraction contextRef="c248" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:PricePerShares" scale="0" unitRef="usdPershares">2.743</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 175 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->41<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 17: EQUITY (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_8" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">On February 21, 2020, the Board of Directors
of the Company approved an additional capital raise of up to $<ix:nonFraction contextRef="c250" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:RaisedAmount" scale="3" unitRef="usd">1,500</ix:nonFraction> in the form of SAFE (the &#8220;Third SAFE&#8221;). The Third SAFE
will be automatically converted into the same class of shares of capital stock as those issued in a Qualifying Financing at a price per
share equal to the lower of, (i) <ix:nonFraction contextRef="c251" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:DiscountRatePercentage" scale="-2" unitRef="pure">25</ix:nonFraction>% discount on the base (undiscounted) price per share of the Qualifying Financing, and (ii) $<ix:nonFraction contextRef="c252" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:DefaultsPricePerShare" scale="0" unitRef="usdPershares">1.526</ix:nonFraction>
per share. If a Qualified Financing is not consummated within 12 months commencing as of the Effective Date (as such term is defined in
the Third SAFE), the funds will automatically be converted at a price per share of $<ix:nonFraction contextRef="c252" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertiblePricePerShare" scale="0" unitRef="usdPershares">1.526</ix:nonFraction>. In addition to the shares issued to the investors
upon conversion of the Third SAFE, the Third SAFE investors shall be entitled to an option to purchase additional identical number of
shares, from the same class of the shares issued to them upon conversion of their investment under the Third SAFE, for an exercise price
of $<ix:nonFraction contextRef="c251" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ExercisesPrice" scale="0" unitRef="usdPershares">1.696</ix:nonFraction> per share. This option shall be valid for a period of 36 months commencing as of the Effective Date of the agreement. An aggregate
amount of $<ix:nonFraction contextRef="c251" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AmountReceived" scale="3" unitRef="usd">579</ix:nonFraction> has been received by the Company pursuant to the Third SAFE in 2020, including $<ix:nonFraction contextRef="c253" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AmountReceived" scale="3" unitRef="usd">100</ix:nonFraction> and $<ix:nonFraction contextRef="c254" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:AmountReceived" scale="3" unitRef="usd">30</ix:nonFraction> from Triple V and A-Labs, respectively.
In March 2021, in the absence of qualified financing during the 12 months following the effective date of such Third SAFE, the Company
converted the investment provided to it under the Third SAFE dated March 2020 into an aggregate of <ix:nonFraction contextRef="c251" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">379,593</ix:nonFraction> Ordinary Shares of the Company
at a price per share of $<ix:nonFraction contextRef="c252" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:ConvertiblePricePerShare" scale="0" unitRef="usdPershares">1.526</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_9" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">b)</td><td style="text-align: justify">Issuance of Ordinary Shares and Exercises of Options</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_10" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Pursuant to the terms of the Second SAFE,
upon the Second SAFE conversion, the investors under the Second SAFEs received an option to purchase an additional identical number of
Ordinary Shares of the Company at a price of $<ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:PricePerShares" scale="0" unitRef="usdPershares">1.953</ix:nonFraction> per share. On September 13, 2020, Triple-V exercised the option that was granted to
it under the Second SAFE dated August 30, 2019 between Triple-V and the Company, and the option that was granted to Mr. Shy Datika under
the Second SAFE dated August 30, 2019 between Mr. Datika and the Company that was assigned to Triple by Mr. Datika, were exercised to
an aggregate of <ix:nonFraction contextRef="c255" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">146,306</ix:nonFraction> Ordinary Shares at a price of $<ix:nonFraction contextRef="c255" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:PricePerShares" scale="0" unitRef="usdPershares">1.953</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_11" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">On September 30, 2020, the Company entered
into an investment agreement with Awake Limited (the &#8220;Awake Agreement&#8221; and &#8220;Awake&#8221;, respectively). Pursuant to
the Awake Agreement, awake invested in the Company $<ix:nonFraction contextRef="c256" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ConsiderationPaidReceived" scale="3" unitRef="usd">2,000</ix:nonFraction> in consideration for <ix:nonFraction contextRef="c256" decimals="0" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInNumberOfOrdinarySharesIssued" scale="0" unitRef="shares">264,201</ix:nonFraction> Ordinary Shares of the Company and <ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInNumberOfOrdinarySharesIssued" scale="0" unitRef="shares">1,481,481</ix:nonFraction> INX
Tokens. The INX Tokens under the Awake Agreement are subject to Lock-Up Agreement for a period of 12 months. The Awake Agreement&#8217;s
consideration was attributed to Ordinary shares and to INX Token liability, according to their fair value as of the date of the transaction,
which amounted to $<ix:nonFraction contextRef="c258" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ConsiderationOfAttributedToShares" scale="3" unitRef="usd">829</ix:nonFraction> and $<ix:nonFraction contextRef="c259" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:ConsiderationOfAttributedToShares" scale="3" unitRef="usd">1,171</ix:nonFraction>, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_12" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">During 2021, several investors exercised
the options that was granted to them under the Third SAFE dated August 30, 2019, to an aggregate of <ix:nonFraction contextRef="c260" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">115,661</ix:nonFraction> Ordinary Shares at a price
of $<ix:nonFraction contextRef="c260" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:PricePerShares" scale="0" unitRef="usdPershares">1.696</ix:nonFraction> per share. <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:OptionsOutstanding" scale="0" unitRef="shares">311,060</ix:nonFraction> options are outstanding and can be exercised until March 31, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_13" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">During 2021, several investors exercised
the option that were granted to them under the Second SAFE dated August 30,2019, into an aggregate amount of <ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">268,179</ix:nonFraction> Ordinary Shares at
a price of <ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:PricePerShares" scale="0" unitRef="usdPershares">1.953</ix:nonFraction>$ per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_14" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">On September 13, 2020, the Company entered
into a subscription agreement with a new investor pursuant to which the investor invested in the Company $<ix:nonFraction contextRef="c261" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ConsiderationPaidReceived" scale="3" unitRef="usd">1,500</ix:nonFraction> in consideration for <ix:nonFraction contextRef="c261" decimals="0" format="ixt:num-dot-decimal" name="ifrs-full:IncreaseDecreaseInNumberOfOrdinarySharesIssued" scale="0" unitRef="shares">621,375</ix:nonFraction>
Ordinary Shares. The new investor is also entitled to receive, for no additional consideration a warrant to purchase <ix:nonFraction contextRef="c261" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:WarrantToPurchaseOfCommonShares" scale="0" unitRef="shares">596,659</ix:nonFraction> Ordinary
Shares of the Company, at a price of $<ix:nonFraction contextRef="c261" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:OrdinarySharesPerSharePrice" scale="0" unitRef="usdPershares">2.514</ix:nonFraction> per share, until the warrant&#8217;s first-year anniversary. On December 31, 2021 the new
investor exercised the options that was granted to them, to an aggregate of <ix:nonFraction contextRef="c262" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AggregateOrdinaryShares" scale="0" unitRef="shares">596,659</ix:nonFraction> Ordinary Shares at a price of $<ix:nonFraction contextRef="c262" decimals="3" format="ixt:num-dot-decimal" name="ck0001725882:OrdinarySharesPerSharePrice" scale="0" unitRef="usdPershares">2.514</ix:nonFraction> per share. An
amount of $<ix:nonFraction contextRef="c263" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AmountReceived" scale="0" unitRef="usd">1,500</ix:nonFraction> received on January 4, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_15" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_14"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">c)</td><td>Private Placement</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_16" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">As part of the Transaction (see Note
1), on January 10, 2022, the Company completed a private placement of <ix:nonFraction contextRef="c264" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:PrivatePlacementUnits" scale="0" unitRef="shares">31,680,000</ix:nonFraction> INX subscription receipts (units) for gross proceeds
of $<ix:nonFraction contextRef="c264" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:GrossProceeds" scale="0" unitRef="usd">31,283</ix:nonFraction>. <ix:nonNumeric contextRef="c264" name="ck0001725882:DescriptionOfWarrantExercisable">Each unit consists of one Ordinary share and one-half of one Ordinary share purchase warrant exercisable for two years at
an exercise price of CAD1.88 ($1.49) per share.</ix:nonNumeric> As the exercise price of the warrants is denominated in CAD while the functional currency
of the Company is the U.S. dollar, the warrants are accounted for as a derivative liability.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 176 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->42<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><b>NOTE 17: EQUITY (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_17" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">The warrants were valued at $<ix:nonFraction contextRef="c265" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:Warrant" scale="3" unitRef="usd">4,255</ix:nonFraction> as
of the date of the private placement. The balance of gross proceeds from the private placement in the amount of $<ix:nonFraction contextRef="c265" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:GrossProceeds" scale="3" unitRef="usd">27,028</ix:nonFraction> was allocated
to Ordinary shares with the net addition to equity of $<ix:nonFraction contextRef="c265" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:NetAdditionToEquity" scale="3" unitRef="usd">25,336</ix:nonFraction> after the deduction of the issuance cost of $<ix:nonFraction contextRef="c265" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ShareIssueRelatedCost" scale="3" unitRef="usd">1,692</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_18" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Agents of the private placement collectively
received cash commissions of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:FeeAndCommissionIncome" scale="3" unitRef="usd">1,951</ix:nonFraction>, of which $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:Warrant" scale="3" unitRef="usd">259</ix:nonFraction> was allocated to the warrants and remaining amount recorded as transaction fees in
profit or loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_19" id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">The placement agents also received <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:AgentCompensationOption" scale="0" unitRef="shares">1,810,740</ix:nonFraction>
Agent compensation options exercisable into one common share of the Parent Company at an exercise price of CAD<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:ExercisesPrice" scale="0" unitRef="cadPershares">1.25</ix:nonFraction> ($<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:ExercisesPrice" scale="0" sign="-" unitRef="usdPershares">0.99</ix:nonFraction>). The options
were valued at $<ix:nonFraction contextRef="c2" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:ReserveOfChangeInValueOfTimeValueOfOptions" scale="3" unitRef="usd">515</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfReservesAndOtherEquityInterestExplanatory-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">As a result of the Transaction (see Note
1), effective on January 10, 2022, options granted and warrants issued by INX prior to such date were surrendered and cancelled, and new
options and warrants of the Parent Company were issued to holders with equivalent terms, adjusted for the Exchange Ratio. Upon the cancellation
of the private placement warrants, the warrant liability in the amount of $<ix:nonFraction contextRef="c265" decimals="-3" format="ixt:num-dot-decimal" name="ck0001725882:WarrantLiabilityExpenses" scale="3" unitRef="usd">4,255</ix:nonFraction> was derecognized and recorded as a contribution to equity.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 18: SHARE-BASED PAYMENT </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_2" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">a.</td><td>Shares reserved for Employees Stock Option Plan:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_3" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">On December 29, 2017, the INX&#8217;s
Board approved the initial resolution to reserve <ix:nonFraction contextRef="c266" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:OrdinarySharesOfESOP" scale="0" unitRef="shares">417,000</ix:nonFraction> Ordinary Shares of the Company for the purpose of an Employees Stock Option Plan
(&#8220;ESOP&#8221;) and future grants to employees and consultants as the Board may approve from time to time.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_4" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">INX&#8217;s board of directors adopted
the INX Limited Share Ownership and Award Plan (2021) on February 22, 2021, as amended from time to time (the &#8220;Share Ownership and
Award Plan&#8221; or the &#8220;Plan&#8221;), and INX shareholders approved the Plan on March 18, 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_5" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">The Plan provides for the grant
of options to purchase Ordinary Shares and restricted shares of INX to such employees, directors and consultants engaged by INX or
any of its affiliates. The Plan further provides for the grant of options and restricted shares to service providers and includes
U.S. and Israeli appendices that further specify the terms and conditions of grants of options and restricted shares to such
grantees.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_6" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">As a result of the Transaction (see Note
1), effective on January 10, 2022, options granted by INX prior to such date were surrendered and options of the Parent Company were issued
to holders with equivalent terms and adjusted for the Exchange Ratio and are currently governed by the Omnibus Equity Incentive Compensation
Plan of the Parent Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_7" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_6"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">b.</td><td style="text-align: justify">Share options granted by the Parent Company to employees and service providers of the Company that are
exercisable into Common shares of the Parent Company and outstanding as of December 31, 2022:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_8" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">1.</td><td style="text-align: justify">On March 15, 2022, two officers received <ix:nonFraction contextRef="c267" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:IssuanceOfRestrictedShares" scale="0" unitRef="shares">5,036,132</ix:nonFraction> restricted
shares of the Parent Company at cashless basis with vesting period of three to five years. As of December 31, 2022, <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:IssuanceOfRestrictedShares" scale="0" unitRef="shares">2,072,517</ix:nonFraction> of these
shares have vested.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_9" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_8"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">2.</td><td style="text-align: justify">On March 15, 2022, the Parent Company granted certain employees
and a service provider options to purchase <ix:nonFraction contextRef="c267" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:EmployeesReceivedOptionsExercisable" scale="0" unitRef="shares">5,129,334</ix:nonFraction> Common Shares at a price per share equal to the fair value per share at the date
of the commitment at a price of CAD <ix:nonFraction contextRef="c267" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="cadPershares">0.64</ix:nonFraction> ($<ix:nonFraction contextRef="c267" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="usdPershares">0.50</ix:nonFraction>), with the vesting period of over <ix:nonNumeric contextRef="c267" format="ixt-sec:duryear" name="ck0001725882:VestingPeriodOver">4</ix:nonNumeric> years.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_10" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">3.</td><td style="text-align: justify">On March 24, 2022, the Parent Company granted one employee
options to purchase <ix:nonFraction contextRef="c268" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:PurchaseOrdinaryShares" scale="0" unitRef="shares">509,617</ix:nonFraction> Common Shares at CAD <ix:nonFraction contextRef="c268" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="cadPershares">0.76</ix:nonFraction> ($<ix:nonFraction contextRef="c268" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="usdPershares">0.60</ix:nonFraction>), a price per share equal to the fair value per share at the date of the
commitment to grant the options with vesting period of over <ix:nonNumeric contextRef="c268" format="ixt-sec:duryear" name="ck0001725882:VestingPeriodOver">4</ix:nonNumeric> years.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_11" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">4.</td><td style="text-align: justify">On June 30, 2022, the Parent Company granted one employee
options to purchase <ix:nonFraction contextRef="c269" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:PurchaseOrdinaryShares" scale="0" unitRef="shares">786,535</ix:nonFraction> Common Shares at CAD <ix:nonFraction contextRef="c269" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="cadPershares">0.31</ix:nonFraction> ($<ix:nonFraction contextRef="c269" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="usdPershares">0.25</ix:nonFraction>), a price per share equal to the fair value per share at the date of the
commitment to grant the options. Options are fully vested at the time of the grant.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 177 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->43<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><b>NOTE 18: SHARE-BASED PAYMENT </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_12" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">5.</td><td style="text-align: justify">On June 30, 2022, the Parent Company granted one employee
options to purchase <ix:nonFraction contextRef="c270" decimals="0" format="ixt:num-dot-decimal" name="ck0001725882:PurchaseOrdinaryShares" scale="0" unitRef="shares">1,334,322</ix:nonFraction> Common Shares at CAD <ix:nonFraction contextRef="c270" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="cadPershares">0.31</ix:nonFraction> ($<ix:nonFraction contextRef="c270" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:DividendsPaidOtherSharesPerShare" scale="0" unitRef="usdPershares">0.25</ix:nonFraction>), a price per share equal to the fair value per share at the date of the
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options fully vested on May 2, 2026.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_13" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_12"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">6.</td><td style="text-align: justify">On September 21, 2022, the Parent Company granted one employee
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt; text-align: justify; text-indent: -36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_14" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_13"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">7.</td><td style="text-align: justify">On October 18, 2022, the Parent Company granted one employee
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_15" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2021, activity
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_16" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfRelatedToStockOptionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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 average<br/>
 exercise<br/>
 price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt; text-indent: -18pt; padding-left: 18pt">Exercised</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-261">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.3pt 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_17" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.3pt 0pt 0; text-align: justify">The weighted average fair value of the
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_18" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_17"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">c.</td><td style="text-align: justify">For the year ended December 31,2022 and 2021 and 2020, the Company recorded share-based compensation expenses
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_19" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">d.</td><td style="text-align: justify">The table below summarizes the assumptions that were used to estimate the fair value of the above options
granted to employees using the Black- Scholes option pricing model:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_20" id="_DisclosureOfSharebasedPaymentArrangementsExplanatory-c0_cont_19"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfEstimatedFairValueOptionsGrantedToEmployeesUsingTheBlackScholesOptionTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td colspan="2" style="white-space: nowrap">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="white-space: nowrap; text-align: right">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Estimated exercise price</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Risk-free interest rate</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Dividend yield</td><td>&#160;</td>
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    <td style="white-space: nowrap; text-align: left">&#160;</td><td style="white-space: nowrap; text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>


</div><!-- Field: Page; Sequence: 178 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->44<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 18: SHARE-BASED PAYMENT (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -36pt">&#160;</p><div>

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</div><div>

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</div><div>

</div><ix:continuation id="_DisclosureOfEarningsPerShareExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfWeightedAverageNumberOfOrdinarySharesTableTextBock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_2" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Financial risk management objectives
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_3" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Activities of the Company may expose it to variety
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and regulatory oversight risk, among others. The Company seeks to mitigate potential adverse effects of these risks on performance and
the Company&#8217;s financial position by employing experienced personnel, monitoring of market events, maintaining sufficient liquidity,
implementing appropriate policies and procedures addressing significant financial risks and diversifying the Company&#8217;s business
strategy within the constraints of the Company&#8217;s objectives.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_4" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Credit risk </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_5" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Credit risk is the risk that a counterparty to
a financial instrument will fail to discharge an obligation or commitment that it has entered into, causing the other party to incur a
financial loss. The Company&#8217;s cash and cash equivalents, investments and digital assets are exposed to credit risk. The Company
limits its credit risk by placing its assets with high credit quality banks, financial institutions and digital assets custodians that
are believed to have sufficient capital to meet their obligations. While the Company intends to only transact with counterparties that
it believes to be creditworthy there can be no assurance that a counterparty will not default and that the Company will not sustain a
material loss as a result. It is the Company&#8217;s policy to monitor the creditworthiness of its counterparties and to minimize the
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_6" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Market risk </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_7" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Market risk is the risk that the value of financial
instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or foreign currency
risk), whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments traded in a market
or market segment. All investments present a risk of loss of capital. The maximum risk resulting from financial instruments is equivalent
to their fair value. The Company&#8217;s investments are susceptible to also market risk arising from uncertainties about future prices
of the instruments. The Company moderates this risk through the various investment strategies within the parameters of the Company&#8217;s
investment guidelines.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 179 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 20: FINANCIAL RISKS AND RISK MANAGEMENT (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_8" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, management&#8217;s estimate
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_9" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Liquidity risk </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_10" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Liquidity risk is the risk that the Company will
not be able to meet its financial obligations as they come due, as well as the risk of not being able to liquidate invested assets at
reasonable prices. The Company manages liquidity risk by maintaining sufficient cash balances and investing capital reserves in highly
rated, marketable financial instruments that allow meeting liquidity obligations in the ordinary course of business as well as under increased
liquidity demands.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_11" id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Foreign currency risk</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify; text-indent: -27pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfFinancialRiskManagementExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Foreign currency risk is the risk that the fair
value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign currency exchange rates. The Company&#8217;s
exposure to foreign currency risk relates primarily to the Company&#8217;s continuing operation (when revenue or expense is recognized
in a different currency from the Company&#8217;s presentation currency). As of December 31, 2022 and 2021, management&#8217;s estimate
of the Company&#8217;s exposure related to the price fluctuation in foreign currency is not material.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 21: COMMITMENTS AND CONTINGENCIES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="_DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 15, 2022, INX entered into a shareholders&#8217;
and joint venture agreement with SICPA SA, a company organized under the laws of Switzerland, Mr. Yosef Meir Cohen and Mr. Hagai Itkin
(&#8220;SICPA Agreement&#8221;), whereby parties to the agreement have agreed to joint their expertise and collaborate to develop central
bank digital currency solutions with the utilization of blockchain technology. Subsequently, for the purpose of executing joint objectives
under the SICPA Agreement, the parties agreed to form SICPA INX SA (&#8220;SICPA INX&#8221;), an entity organized under the laws of Switzerland.
All parties to the agreement are to become shareholders of SICPA INX, with INX&#8217;s share of the issued and outstanding share capital
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of the issued and outstanding share capital of SICPA INX, which shall be reduced from INX&#8217;s initial allocation of shares. In relation
to the SICPA Agreement, INX also intends to enter into a service agreement with SICPA INX to license its technology and provide technology
support and management services for a period of one year in return for compensation.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><!-- Field: Page; Sequence: 180 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->46<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 22: OPERATING SEGMENTS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_2" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0%"></td><td style="width: 0.25in">a.</td><td>General:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -36pt"><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_3" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Reportable segments represent the two
lines of business for which the Company expects to earn income, incur costs and allocate resources. Operating segments are identified
based on information that is reviewed by the chief operating decision maker (&#8220;CODM&#8221;) and senior management to make decisions
about resources to be allocated and assess operational and financial performance. Accordingly, for management purposes, the Company is
organized into operating segments as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_4" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">1.</td><td style="text-align: justify">Brokerage segment -&#8211; facilitates financial transactions
between banks and offers a full range of brokerage services to banks worldwide.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: 4.5pt">&#160;</p></ix:continuation><div>

</div><div>

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<td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">2.</td><td style="text-align: justify">Digital assets segment -&#8211; development and operation
of an integrated, regulated solution for trading blockchain assets such as digital assets and security tokens, and providing services
and products related to the trading of blockchain assets.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

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<td style="width: 0%"></td><td style="width: 0.25in">b.</td><td>Reporting operating segments:&#160;</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2cm">&#160;</p></ix:continuation><div>

</div><div>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td>&#160;</td><td>&#160;</td>
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</div><div>


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    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->47<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 22: OPERATING SEGMENTS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_8" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_7"><ix:continuation id="ck0001725882_ScheduleOfReportingOperatingSegmentsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_9" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Unallocated corporate expenses for the
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_11" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_10"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfAdditionalInformationTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_12" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_13" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Revenue from major customers which account for <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:PercentageOfEntitysRevenue" scale="-2" unitRef="pure">10</ix:nonFraction>% or more
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_14" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfRevenuesFromMajorCustomersTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td>&#160;</td><td>&#160;</td>
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</div><div>


</div><!-- Field: Page; Sequence: 182 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 22: OPERATING SEGMENTS (Cont.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_16" id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">Revenue reported in the financial statements are attributed
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</div><div>

</div><ix:continuation id="_DisclosureOfEntitysReportableSegmentsExplanatory-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="ck0001725882:ScheduleOfCountriesBasedOnTheLocationOfTheCustomersTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEmployeeBenefitsExplanatory-c0_cont_2" id="_DisclosureOfEmployeeBenefitsExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Share-based and token-based compensation, and short-term employee benefits
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfEmployeeBenefitsExplanatory-c0_cont_3" id="_DisclosureOfEmployeeBenefitsExplanatory-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="ifrs-full:AdditionalInformationAboutSharebasedPaymentArrangements"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="padding-left: 0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation id="_DisclosureOfEmployeeBenefitsExplanatory-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the years ended December 31, 2022, 2021
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72pt">&#160;</p><div>


</div><!-- Field: Page; Sequence: 183 --><div>
    </div><div style="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>INX LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>NOTES TO </b></span><b>CONSOLIDATED
<span style="font-variant: small-caps">FINANCIAL STATEMENTS</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>FOR THE YEARS ENDED DECEMBER
2022 AND 2021</b></span></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>U.S. dollars in thousands (except share, token, per share and per
token data)</b></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_1" escape="true" name="ifrs-full:DisclosureOfIncomeTaxExplanatory"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 24: TAXES ON INCOME</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3cm; text-align: justify; text-indent: -1cm">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_2" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is an Israeli company for tax purposes
and as such, subject to Israeli taxes. Subsidiary entities are generally subject to taxes in the jurisdictions where they are located
or have the majority of operations and management control, therefore federal income taxes are calculated as if the Company filed separate
federal income tax returns. The following tax rates were applicable to the individual entities based on the country of their organization:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_3" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Israel corporate income tax rate &#8211; <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:OtherTaxRateEffectsForReconciliationBetweenAccountingProfitAndTaxExpenseIncome" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:OtherTaxRateEffectsForReconciliationBetweenAccountingProfitAndTaxExpenseIncome" scale="-2" unitRef="pure"><ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:OtherTaxRateEffectsForReconciliationBetweenAccountingProfitAndTaxExpenseIncome" scale="-2" unitRef="pure">23</ix:nonFraction></ix:nonFraction></ix:nonFraction> percent in 2022, 2021 and 2020</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_4" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">United States weighted tax rate &#8211; 21percent (<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="ck0001725882:WeightedTaxRate" scale="-2" unitRef="pure">28</ix:nonFraction> percent state weighted tax rate)</td></tr></table><p style="margin-top: 0; margin-bottom: 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_5" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt" width="100%"><tr style="vertical-align: top">
<td style="width: 18pt"></td><td style="width: 18pt"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify">Gibraltar tax rate - <ix:nonFraction contextRef="c186" decimals="3" format="ixt:num-dot-decimal" name="ifrs-full:TaxRateEffectOfForeignTaxRates" scale="-2" unitRef="pure">12.5</ix:nonFraction> percent and <ix:nonFraction contextRef="c185" decimals="2" format="ixt:num-dot-decimal" name="ifrs-full:TaxRateEffectOfForeignTaxRates" scale="-2" unitRef="pure">10</ix:nonFraction> percent before August 1, 2021.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_6" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_5"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">a.</td><td style="text-align: justify">Tax assessments:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_7" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INX, ILSB and Midgard are subject to the tax assessment
evaluation by the Israeli Tax Authority. After the receipt of such tax assessment the entity is no longer subject to the tax examination
by the tax authority. The Company&#8217;s subsidiary, ILSB received the final tax assessment through 2020 tax year, whereas, Midgard and
INX, has not received the final tax assessment since its incorporation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_8" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">b.</td><td style="text-align: justify">Carryforward losses for tax purposes and other temporary
differences:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3cm; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_9" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Carryforward operating tax losses of the Group
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were not recognized because their utilization in the foreseeable future is not probable.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_10" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">c.</td><td style="text-align: justify">Theoretical tax:</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfIncomeTaxExplanatory-c0_cont_11" id="_DisclosureOfIncomeTaxExplanatory-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, the difference
between tax expense, assuming that all income and expenses, gains and losses in the statement of income were taxed at the statutory tax
rate, and taxes on income recorded in profit or loss is mainly due to the nontaxable income related to the revaluation of the INX token
liability. As the Company and its subsidiaries incurred net losses during the years ended December 31, 2021 and 2020 for which deferred
income taxes were not recorded, as mentioned in Note 24b, the reconciliation between the tax expense, assuming that all income and expenses,
gains and losses in the statement of income were taxed at the statutory tax rate, and the taxes on income recorded in profit or loss,
does not provide significant information and therefore is not presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfIncomeTaxExplanatory-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the years ended December 31, 2022, 2021
and 2020, the Company recognized income tax expense of $<ix:nonFraction contextRef="c0" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentTaxExpenseIncome" scale="3" unitRef="usd">119</ix:nonFraction>, $<ix:nonFraction contextRef="c4" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentTaxExpenseIncome" scale="3" unitRef="usd">157</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="-3" format="ixt:num-dot-decimal" name="ifrs-full:CurrentTaxExpenseIncome" scale="3" unitRef="usd">0</ix:nonFraction>, respectively.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>&#160;</b></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="m_074"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 19. <span style="font-variant: small-caps">EXHIBITS.</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: top; width: 9%"><span style="font-size: 10pt"><b>Exhibit<br/>
    Number</b></span></td>
    <td style="padding-bottom: 1.5pt; vertical-align: bottom; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: justify; vertical-align: bottom; width: 90%"><span style="font-size: 10pt"><b>Exhibit Description</b></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">1.1</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex3-1_inxlimited.htm">Memorandum of Association of the Company (previously filed as Exhibit 3.1 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">1.2</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390021023343/f20f2020ex1-2_inxlimited.htm">Amended Third Amended and Restated Articles of Association of the Company, as currently in effect (Previously filed as Exhibit 1.2 to the Company&#8217;s Form 20-F, filed on April 29, 2021 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">2.1</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390020021590/ea125411ex4-1_inxlimited.htm"><span style="font-size: 10pt">Form of INX Token Purchase Agreement (previously filed as Exhibit 4.1 to Amendment No. 10 to the Company&#8217;s Form F-1, filed on August 12, 2020 and herein incorporated by reference)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">2.2</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex4-2_inxlimited.htm">Form of Waiver and Subordination Undertaking (previously filed as Exhibit 4.2 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">2.3</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390019026616/ff12019a5ex4-3_inxlimited.htm"><span style="font-size: 10pt">Smart Contract (previously filed as Exhibit 4.3 to Amendment No. 5 to the Company&#8217;s Form F-1, filed on December 20, 2019 and herein incorporated by reference)</span></a></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">2.4</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390019026616/ff12019a5ex4-4_inxlimited.htm"><span style="font-size: 10pt">INX Smart Contract Description V.3.0, dated December 12, 2019 (previously filed as Exhibit 4.4 to Amendment No. 5 to the Company&#8217;s Form F-1, filed on December 20, 2019 and herein incorporated by reference)</span></a></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.1#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-4_inxlimited.htm">Amended and Restated Consultancy Agreement dated June 25, 2018 between Triple-V (1999) Ltd. and INX Limited (previously filed as Exhibit 10.4 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.2</span>#</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-5_inxlimited.htm">Financial Services Agreement dated December 26, 2017 between Insight Finance Ltd. and INX Limited (previously filed as Exhibit 10.5 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.3</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-6_inxlimited.htm">Second Amended and Restated Engagement Agreement dated December 31, 2017 between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.6 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.4</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-7_inxlimited.htm">Amendment to the Second Amended and Restated Engagement Agreement dated January 31, 2018, between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.7 to the Company&#8217;s Form F-1,  filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.5</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-13_inxlimited.htm">Amended and Restated Consultancy Agreement dated June 25, 2018 between Mr. Jonathan Azeroual and INX Limited (previously filed as Exhibit 10.13 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.6#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390021018494/ea138533ex10-42_inxlimited.htm"><span style="font-size: 10pt">Executive
    Employment Agreement dated January 1, 2021 between Alan Silbert and INX Digital, Inc. (previously filed as Exhibit 10.42 to
    Post-Effective Amendment No. 2 to the Company&#8217;s Form F-1, filed on March 30, 2021 and herein incorporated by
    reference)</span></a></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.7</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-15_inxlimited.htm">Services Agreement dated March 8, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.15 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.8#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-16_inxlimited.htm">Amendment to Services Agreement dated September 6, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.16 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.9#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-17_inxlimited.htm">Second Amendment to Services Agreement dated November 30, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.17 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.10#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-18_inxlimited.htm">Amended and Restated letter of invitation, dated June 25, 2018, between Mr. David Weild and INX Limited (previously filed as Exhibit 10.18 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-size: 10pt">4.11#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-22_inxlimited.htm">Letter of Invitation, dated July 10, 2018, between Mr. Nicholas Thadaney and INX Limited (previously filed as Exhibit 10.22 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-size: 10pt">4.12#</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-24_inxlimited.htm">Letter of Invitation, dated September 21, 2018, between Mr. Thomas Lewis and INX Limited (previously filed as Exhibit 10.24 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;<span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->129<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 9%"><span style="font-size: 10pt">4.13</span></td>
    <td style="vertical-align: bottom; width: 1%">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom; width: 90%"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-25_inxlimited.htm">Form of Custodial Services Agreement between INX Digital Inc. and BitGo Trust Company (previously filed as Exhibit 10.25 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.14#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-27_inxlimited.htm">Simple Agreement for Future Equity, dated April 25, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.27 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.15#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019016285/ff12019ex10-28_inxlimited.htm">Simple Agreement for Future Equity, dated April 25, 2019, between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.28 to the Company&#8217;s Form F-1, filed on August 19, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.16#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019018961/ff12019a1ex10-29_inxlimit.htm">Simple Agreement for Future Equity, dated August 30, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.29 to Amendment No. 1 to the Company&#8217;s Form F-1, filed on September 26, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.17#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019018961/ff12019a1ex10-30_inxlimit.htm">Simple Agreement for Future Equity, dated August 30, 2019, between Triple-V (1999) Ltd. and INX Limited (previously filed as Exhibit 10.30 to Amendment No. 1 to the Company&#8217;s Form F-1, filed on September 26, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.19#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390019026616/ff12019a5ex10-33_inxlimited.htm">Simple Agreement for Future Equity, dated November 29, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.33 to Amendment No. 5 to the Company&#8217;s Form F-1, filed on December 20, 2019 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.20#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390020009969/ea120439ex10-35_inxlimited.htm">Simple Agreement for Future Equity, dated January 31, 2020, between Shy Datika and INX Limited (previously filed as Exhibit 10.35 to Amendment No. 8 to the Company&#8217;s Form F-1, filed on April 23, 2020 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.21#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390020009969/ea120439ex10-36_inxlimited.htm">Simple Agreement for Future Equity, dated March 7, 2020, between A-Labs Finance and Advisory, Ltd. and INX Limited (previously filed as Exhibit 10.36 to Amendment No. 8 to the Company&#8217;s Form F-1, filed on April 23, 2020 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.22#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390020009969/ea120439ex10-37_inxlimited.htm">Simple Agreement for Future Equity, dated March 31, 2020, between Shy Datika and INX Limited (previously filed as Exhibit 10.37 to Amendment No. 8 to the Company&#8217;s Form F-1, filed on April 23, 2020 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.23#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390020019938/ea124642ex10-38_inxlimited.htm">Amended and Restated Services Agreement dated July 6, 2020 between Mr. Paz Diamant and INX Limited (previously filed as Exhibit 10.38 to Amendment No. 9 to the Company&#8217;s Form F-1, filed on August 3, 2020 and herein incorporated by reference)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.24</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1725882/000121390020019938/ea124642ex10-40_inxlimited.htm">Transfer Agency and Service Agreement (previously filed as Exhibit 10.40 to Amendment No. 9 to the Company&#8217;s Form F-1, filed on August 3, 2020 and herein incorporated by reference)</a></span></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.25#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390021018494/ea138533ex10-44_inxlimited.htm"><span style="font-size: 10pt">Services Agreement, dated December 24, 2020, between Itai Avneri and INX Limited (previously filed as Exhibit 10.44 to Post-Effective Amendment No. 2 to the Company&#8217;s Form F-1, filed on March 30, 2021 and herein incorporated by reference)</span></a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.26</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390021056870/ea149978ex99-2_inxlimited.htm"><span style="font-size: 10pt">Amended and Restated Securities Exchange Agreement dated, November 3, 2021, among Valdy Investments Ltd, the Company, the INX securityholders listed therein, PI Financial Corp. and Eight Capital (previously filed as Exhibit 99.2 to the Company&#8217;s Form 6-K, filed on November 4, 2021 and herein incorporated by reference)</span></a></td></tr>
  <tr>
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.27#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390022023077/f20f2021ex4-27_inxlimited.htm"><span style="font-size: 10pt">Letter of Invitation, dated December 13, 2021, between Hilary Kramer and INX Limited (previously filed as Exhibit 4.27 to the Company&#8217;s Form 20-F, filed on May 2, 2022 and herein incorporated by reference).</span></a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-size: 10pt">4.28#</span></td>
    <td style="text-align: justify; vertical-align: bottom">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="http://www.sec.gov/Archives/edgar/data/1725882/000121390022023077/f20f2021ex4-28_inxlimited.htm"><span style="font-size: 10pt">Letter of Invitation, dated February 3, 2022, between Demetra Kalogerou and INX Limited (previously filed as Exhibit 4.28 to the Company&#8217;s Form 20-F, filed on May 2, 2022 and herein incorporated by reference).</span></a></td></tr>
  <tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-size: 10pt">#</span></td><td style="text-align: justify"><span style="font-size: 10pt">Management contract or compensatory
plan</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-variant: small-caps"><b>&#160;</b></span></p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SIGNATURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The registrant hereby certifies that it meets all
of the requirements for filing on Form&#160;20-F and that it has duly caused and authorized the undersigned to sign this report filed
on its behalf.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2"><span style="font-size: 10pt"><b>INX LIMITED</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="width: 60%">&#160;</td>
    <td style="width: 4%">&#160;</td>
    <td style="width: 36%">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-size: 10pt">Date:  May 1, 2023</span></td>
    <td><span style="font-size: 10pt"><b>By:</b></span></td>
    <td style="border-bottom: Black 1.5pt solid"><span style="font-size: 10pt">/s/ Shy Datika </span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">Shy Datika</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">President and CEO</span></td></tr>
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</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></p><div>

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{"company-data": {"conformed-name": "INX Ltd", "cik": "0001725882", "assigned-sic": "6199", "irs-number": "000000000", "state-of-incorporation": "J1", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "000-56429", "film-number": "23874218"}, "business-address": {"street1": "1.23 WORLD TRADE CENTER, BAYSIDE ROAD", "city": "GIBRALTAR", "state": "J1", "zip": "GX111AA", "phone": "35020044201"}, "mail-address": {"street1": "1.23 WORLD TRADE CENTER, BAYSIDE ROAD", "city": "GIBRALTAR", "state": "J1", "zip": "GX111AA"}}
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from
to
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File No.:
333-233363
INX
LIMITED
(Exact name of registrant as specified in its charter)
Not
Applicable
(
Translation
of Registrant's name into English
)
Gibraltar
(
Jurisdiction
of incorporation or organization
)
57/63
Line Wall Road
Gibraltar
,
GX11 1AA
(
Address
of principal executive offices
)
Shy
Datika
57/63
Line Wall Road
Gibraltar
,
GX11 1AA
(
Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person
)
Securities
registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities
registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act: INX Tokens
Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of December 31, 2022:
47,635,875
ordinary shares of GBP 0.001 par value
Indicate
by check mark whether Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes    ☐
No
☒
If
this report is an annual or transition report, indicate by check mark if Registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes    ☐
No
☒
Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒  No    ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes   ☐
No
☐
Indicate
by check mark whether Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.
See definition of "accelerated filer", "large accelerated filer", and "emerging growth company" in
Rule 12b-2 of the Exchange Act.
Large accelerated Filer ☐
Accelerated Filer ☐
Non-accelerated Filer
☒
Emerging growth company
☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the International Accounting Standards Board
☒
Other ☐
If
"Other" has been check in response to the previous question, by check mark which financial statement item Registrant has
elected to follow. Item 17 ☐    Item 18 ☐
If
this is an annual report, indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes   ☐   No
☒
TABLE
OF CONTENTS
PART I
1
ITEM
    1.
IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.
1
ITEM
    2.
OFFER
    STATISTICS AND EXPECTED TIMETABLE.
1
ITEM
    3.
KEY
    INFORMATION.
1
A.
[RESERVED].
1
B.
Capitalization
    and Indebtedness.
1
C.
Reasons
    for the Offer and Use of Proceeds.
1
D.
Risk
    Factors.
1
ITEM
    4.
INFORMATION
    ON THE COMPANY.
46
A.
History
    and Development of the Company.
46
B.
Business
    Overview.
49
C.
Organizational
    Structure.
72
D.
Property,
    Plants and Equipment.
73
ITEM
    5.
OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS.
74
A.
Operating
    Results.
74
B.
Liquidity
    and Capital Resources.
83
C.
Research
    and Development.
85
D.
Trend
    Information.
85
E.
Critical
    Accounting Estimates.
85
ITEM
    6.
DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES.
88
A.
Directors
    and Senior Management.
88
B.
Compensation.
92
C.
Board
    Practices.
97
D.
Employees.
106
E.
Share
    Ownership.
107
F.
Disclosure
    of a Registrant's Action to Recover Erroneously Awarded Compensation
109
ITEM
    7.
MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
109
A.
Major
    Shareholders.
109
B.
Related
    Party Transactions.
110
C.
Interests
    of Experts and Counsel.
119
ITEM
    8.
FINANCIAL
    INFORMATION.
119
A.
Consolidated
    Statements and Other Financial Information.
119
B.
Significant
    Changes.
119
ITEM
    9.
THE
    OFFER AND LISTING.
120
A.
Offer
    and Listing Details.
120
B.
Plan
    of Distribution.
120
C.
Markets.
120
D.
Selling
    Shareholders.
120
E.
Dilution.
120
F.
Expenses
    of the Issue.
120
ITEM
    10.
ADDITIONAL
    INFORMATION.
120
A.
Share
    Capital.
120
B.
Memorandum
    and Articles of Association.
120
C.
Material
    Contracts.
120
D.
Exchange
    Controls.
121
E.
Taxation.
121
F.
Dividends
    and Paying Agents.
123
G.
Statement
    by Experts.
123
H.
Documents
    on Display.
123
I.
Subsidiary
    Information.
124
J.
Annual
    Report to Security Holders.
124
i
ITEM
    11.
QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
124
ITEM
    12.
DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES.
124
A.
Debt
    Securities.
124
B.
Warrants
    and Rights.
124
C.
Other
    Securities.
124
D.
American
    Depositary Shares.
124
PART II
125
ITEM
    13.
DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES.
125
ITEM
    14.
MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.
125
ITEM
    15.
CONTROLS
    AND PROCEDURES.
125
ITEM
16.
[RESERVED]
126
ITEM
    16.
A.
AUDIT
    COMMITTEE FINANCIAL EXPERT.
126
ITEM
    16.
B.
CODE
    OF ETHICS.
126
ITEM
    16.
C.
PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.
126
ITEM
    16.
D.
EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
127
ITEM
    16.
E.
PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
127
ITEM
    16.
F.
CHANGE
    IN REGISTRANT'S CERTIFYING ACCOUNTANT.
127
ITEM
    16.
G.
CORPORATE
    GOVERNANCE.
127
ITEM
    16.
H.
MINE
    SAFETY DISCLOSURE.
127
ITEM
    16.
I
DISCLOSURE
    REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
127
PART III
128
ITEM
    17.
FINANCIAL
    STATEMENTS.
128
ITEM
    18.
FINANCIAL
    STATEMENTS.
128
ITEM
    19.
EXHIBITS.
129
ii
GENERAL
INFORMATION
Unless
indicated otherwise by the context, all references in this report to
"INX Limited",
the
"Company",
"our Company", "we", "us", "our"
or the "
Registrant
" are to INX
Limited and its subsidiaries.
EMERGING
GROWTH COMPANY
As
a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company"
as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified
reduced reporting and other burdens that are otherwise applicable to public companies that are not emerging growth companies. For example,
we have elected to rely on the following exemptions:
●
an
    exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board, or the PCAOB,
    regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the
    audit and the financial statements (auditor discussion and analysis); and
●
an
    exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to
    Section 404 of the Sarbanes-Oxley Act of 2002;
We
may take advantage of the exemptions available for emerging growth companies for up to five years or such earlier time that we are no
longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue,
have more than $700 million in market value of the ordinary shares held by non-affiliates, or issue more than $1.0 billion of non-convertible
debt over a three-year period. We may choose to take advantage of some, but not all of these reduced burdens.
It
should be noted that the JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply
with new or revised accounting standards applicable to public companies. We are choosing to "opt out" of this provision and,
as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the
extended transition period is irrevocable.
PRESENTATION
OF FINANCIAL INFORMATION
We
have included in this report our audited consolidated financial statements as of December 31, 2022. Our consolidated financial statements
appearing in this report are prepared in U.S. Dollars and in accordance with International Financial Reporting Standards, or IFRS, as
issued by the International Accounting Standards Board, or IASB, and are audited in accordance with the standards of the PCAOB.
MARKET,
INDUSTRY AND OTHER DATA
This
report includes market and industry data and forecasts that were obtained from third-party sources, industry publications and publicly
available information as well as industry data prepared by management on the basis of its knowledge of the industry in which INX operates
(including management's estimates and assumptions relating to the industry based on that knowledge). Management's knowledge
of the blockchain industry has been developed through its experience and participation in the industry. Management believes that its
industry data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or
completeness of this data. Third-party sources generally state that the information contained therein has been obtained from sources
believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. Although management believes
it to be reliable, INX has neither independently verified any of the data from management or third-party sources referred to in this
report, nor analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying
economic assumptions relied upon by such sources. In addition, assumptions and estimates of our and our industry's future performance
are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Item 3.D "Risk
Factors" below.
Statements
made in this report concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements
or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this report,
you may read the document itself for a complete description of its terms, and the summary included herein is qualified by reference to
the full text of the document which is incorporated by reference into this report.
iii
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some
of the statements contained in this annual report with respect to our business, financial condition and results of operations are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995, as amended,
and other federal securities laws. All statements other than statements of historical fact are forward-looking statements. The use of
the words "anticipate", "believe", "continue", "could", "estimate", "expect",
"intends", "may", "might", "plan", "possible", "potential", "predict",
"project", "should", "would", and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not a forward-looking statement. These statements involve known and unknown
risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied
in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking
statements included in this annual report should not be unduly relied upon. Any forward-looking statements are qualified in their entirety
by reference to the risk factors discussed throughout this annual report. Some of the risks, uncertainties and assumptions that could
cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not
limited to:
●
our
    ability to continue to develop our trading platforms as contemplated;
●
the
    slowing or stopping of the development or acceptance of blockchain assets;
●
the
    limitations of blockchain technology, which remains largely novel and untested;
●
the
    legal framework of regulations applicable to blockchain technologies, cryptocurrencies, security tokens and token offerings;
●
changes
    in how we are taxed;
●
the
    lack of any existing marketplace for blockchain assets;
●
our
    lack of a long operating history;
●
the
    impact of competition and new technologies;
●
our
    ability to obtain government regulations and approvals;
●
industry
    developments affecting our business, financial condition and results of operations;
●
our
    ability to cooperate with third party collaborators, including contractors for the design, development and implementation of our
    trading platform infrastructure;
●
our
    operating performance and cash flow, or lack thereof;
●
global
    market, political, and economic conditions; and
●
those
    factors referred to in "Risk Factors," "Business," and "Management's Discussion and Analysis
    of Financial Condition and Results of Operations," as well as in this report generally.
These
statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our
or our industry's actual results, levels of activity, performance, or achievements to be materially different from those anticipated
by the forward-looking statements. We discuss many of these risks in this report in greater detail under the heading "Risk Factors"
and elsewhere in this report. You should not rely upon forward-looking statements as predictions of future events.
Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels
of activity, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking
statements, whether as a result of new information, future events or otherwise, after the date of this report.
The
foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking
statements. You should read this annual report and the documents that we reference herein and have filed as exhibits to the annual report
completely and with the understanding that our actual future results may be materially different from what we expect. You should assume
that the information appearing in this annual report is accurate as of the date hereof. Because the risk factors referred to in Item
3.D. "Risk Factors" of this annual report, could cause actual results or outcomes to differ materially from those expressed
in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements.
Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this annual
report, and particularly our forward-looking statements, by these cautionary statements.
iv
PART
I
ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not
applicable.
ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not
applicable.
ITEM
3. KEY INFORMATION
A.
[RESERVED].
B.
Capitalization and Indebtedness.
Not
applicable.
C.
Reasons for the Offer and Use of Proceeds.
Not
applicable.
D.
Risk Factors.
You
should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 20-F. The
risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant
to an investment in our securities. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also
harm us. If any of these risks materialize our business, results of operations or financial condition could suffer, and the price of
our ordinary shares could decline substantially.
Investing
in INX Tokens or indirectly in the Company by way of purchasing shares of our sole shareholder, The INX Digital Company Inc. (the "Parent
Shares" and the "Parent" or "TIDCI", respectively) involves a high degree of risk. Our businesses face
significant risks and uncertainties. You should carefully consider the risks we describe below, along with all of the other information
set forth in this annual report, including the section entitled "Cautionary Note Regarding Forward-Looking Statements" and
our financial statements and the related notes beginning on page F-1, before deciding to purchase INX Tokens or Parent Shares. The risks
and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant
to initiating or maintaining an investment in any INXS or the Parent Shares. If any of these risks materialize, our business, results
of operations or financial condition could suffer, the price of INXS or Parent Shares could decline substantially and you could lose
part or all of your investment. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also
harm us and adversely affect your investment in INXS or the Parent Shares.
You
may lose all monies that you spend initiating or maintaining an investment in INXS or indirectly investing in the Company, by purchasing
the Parent Shares. If you are uncertain as to our business and operations or you are not prepared to lose all monies that you spend purchasing
INX Tokens or investing in the Company, we strongly urge you not to purchase any INX Tokens nor invest in the Company. We recommend you
consult legal, financial, tax and other professional advisors or experts for further guidance before participating in the offering of
our INX Token as further detailed in this report. Further, we recommend you consult independent legal advice in respect of the legality
of your participation in the INX Token sale.
We
do not recommend that you purchase INX Tokens unless you have prior experience with cryptographic tokens, blockchain-based software and
distributed ledger technology and unless you have received independent professional advice.
1
Summary
Risk Factors
Our
business is subject to numerous risks, as more fully described in the section titled "Risk Factors" immediately following
this summary. You should read and carefully consider these risks and all of the other information in this report, including the financial
statements and the related notes included elsewhere in this report, before deciding whether to invest in INX Tokens. In particular, such
risks include, but are not limited to, the following:
●
We
                                            face the risk of operating as an unregistered exchange, unregistered broker-dealer or unregistered
                                            clearing agency in the U.S.
●
The
                                            crypto market was negatively impacted by the growth in crypto-related frauds, layoffs, and
                                            the ongoing liquidity crisis that led to bankruptcies by leading crypto companies.
●
We
                                            may not be able to continue development of the INX Digital, Inc. ("INXD") and
                                            INXS trading platforms as contemplated or at all, or continue to receive the regulatory approvals
                                            necessary to operate our business as currently contemplated.
●
Blockchain
                                            networks represent a new and rapidly changing industry and there remains relatively limited
                                            use of blockchain networks and assets.
●
The
                                            prospect of INX Token holders receiving any distributions of our cumulative Adjusted Operating
                                            Cash Flow is highly uncertain.
●
Blockchain
                                            technology is an emerging technology that is novel and untested.
●
The
                                            legal framework of regulations applicable to blockchain technologies, cryptocurrencies, security
                                            tokens and token offerings is uncertain and evolving quickly.
●
Tax
                                            authorities may disagree with our tax positions with regard to the Company, its business
                                            and the INX Token and may ask us to revise these positions in a manner that could adversely
                                            affect you.
●
The
                                            prices of blockchain assets are extremely volatile and fluctuations in the price of blockchain
                                            assets could materially affect our profits.
●
The
                                            price of INX Tokens is subject to substantial volatility.
●
The
                                            market for trading blockchain assets is still in the early stages of development and we expect
                                            to face intense competition from both regulated and unregulated blockchain asset trading
                                            platforms.
●
We
                                            may not be able to prevent illegal activity from occurring over our platform, which could
                                            subject us to disciplinary action, including fines.
●
Our
                                            securities business and related clearing operations expose us to material default and liquidity
                                            risk.
●
Systems
                                            failures or capacity constraints could materially harm our ability to conduct our operations
                                            and execute our business strategy.
●
Blockchain
                                            assets and blockchain trading platforms remain susceptible to security breaches and cybercrime
                                            and the INX Token, the Company or our trading platforms may be a target of cyber security
                                            breaches or theft.
●
Company
                                            private keys that allow the unilateral transfer or "freezing" of INX Tokens may
                                            be compromised.
●
The
                                            tax characterization of INX Tokens is uncertain and you must seek your own tax advice in
                                            connection with purchasing INX Tokens.
2
Risks
Related to Our Financial Position and Need for Additional Capital
We
have incurred significant losses and negative cash flows from operations since inception
We
have incurred operating losses since our inception and have an accumulated a net deficit of $36.6 million. In addition to the accumulated
deficit, we have entered into contractual arrangements committing us to future expenses. Our proposed operations are subject to all business
risks associated with a new enterprise. The likelihood of our continuation of a viable business must be considered in light of the problems,
expenses, difficulties, complications, and delays frequently encountered in connection with the inception of a business operating in
a relatively new, highly competitive, and developing industry. There can be no assurance that we will ever generate operating profits
or develop and operate the business as planned. If we are unsuccessful at executing on our business plan, our business, prospects, and
results of operations may be materially adversely affected and investors may lose all or a substantial portion of their investment.
We
may need additional funding, which may not be available to us on acceptable terms or at all. If we are unable to raise capital when needed,
it may impair our growth or adversely impact our operations.
We
may need to raise additional capital to continue to expand our operations, pursue our growth strategies, fund needed capital expenditures,
and to respond to competitive pressures. We may not be able to obtain additional debt or equity financing on favorable terms, if at all,
which could impair our growth and adversely affect our operations. We may be required to accept terms that restrict our ability to incur
additional indebtedness or require us to maintain specified liquidity or other financial ratios or other terms that may not be in the
best interests of our stockholders. The failure to obtain additional debt or equity financing on satisfactory terms could materially
and adversely affect our financial condition, results of operations and business plans.
Risk
of increased losses or impairments in our investments could have an adverse effect on our financial condition.
We
hold significant investments in marketable debt securities such as corporate and municipal bonds and notes. The fair value of these financial
instruments may be negatively affected by multiple factors including a downgrade of the credit rating or negative publicity of the issuer,
market conditions, fiscal policy, geopolitical restrictions and sanctions, among others. Decrease in the fair value of these investments
or distressed sale prior to the maturity at a price significantly below par value may negatively impact our shareholders' equity
and the Company's financial position.
3
Risks
Related to Regulation, Information Systems and Privacy Matters
We
face the risk of operating as an unregistered exchange, unregistered broker-dealer or unregistered clearing agency in the U.S.
Any
platform that brings together purchasers and sellers of digital assets that are characterized as securities in the U.S. is generally subject
to registration as a national securities exchange, or must qualify for an exemption, such as by being operated by a registered broker-dealer
as an alternative trading system (or ATS).
The
INX Securities trading platform is a registered broker-dealer and FINRA member that operates an SEC-recognized alternative trading system,
and the INX Digital trading platform is licensed, or otherwise qualified, to operate as a money transmitter in 43 U.S. states, plus Washington
D.C. and Puerto Rico. In the future, we may seek to obtain money transmitter licenses or otherwise become qualified to operate in additional
U.S. states. In addition, if in the future we determine to proceed with the establishment of a platform for the trading of cryptocurrency-based
derivatives, we would be required to seek registrations with other regulatory bodies, such as the CFTC. However, there can be no assurance
that our platform will qualify for additional registrations that we may seek in the future, with the SEC, FINRA, U.S. state regulators
and various other regulatory bodies, both in the U.S. and in other countries.
While
we take precautionary actions to prevent unauthorized access to our platform in the U.S. states in which we are not licensed to operate
as a money transmitter, such as the use of geofencing in our system (which disallows sign in if an individual is located in a state in
which we are not registered) and a review by our customer support team to verify the location of the user, in the event that an individual
in a jurisdiction in which we are not licensed to operate is able to access the INX Digital trading platform, we could be deemed to have
facilitated a transaction in a jurisdiction which we are not licensed to operate. If such an event occurs, we could be subject to significant
monetary penalties, censure or other actions, which could have a material and adverse effect on us.
In addition, while we do not believe that the INX Digital trading platform
is a securities exchange or ATS or is part of an unregistered exchange mechanism, regulators may determine that this is the case, and
we would then be required to register as a securities exchange or qualify and register as an ATS. Any determination that we operate or
have operated an unregistered exchange, unregistered broker-dealer or unregulated clearing agency could have a material adverse effect
on us.
We
obtain and process sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm our
reputation, as well as have an adverse effect on our business.
Various
local, state, federal laws and regulations apply to our collection, use, retention, protection, disclosure, transfer, and processing
of personal data. These data protection and privacy laws and regulations are subject to uncertainty and continue to evolve in ways that
could adversely impact our business.
In
the United States, state and federal lawmakers and regulatory authorities have increased their attention on the collection and use of
user data. In the United States, non-sensitive user data generally may be used under current rules and regulations, subject to certain
restrictions, so long as the person does not affirmatively "opt-out" of the collection or use of such data. If an "opt-in"
model or additional required "opt-outs" were to be adopted in the United States, less data may be available, and the cost
of data likely would increase.
As
supervisory authorities continue to issue further guidance on personal data, we could suffer additional costs, complaints, regulatory
investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we
operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems
and operations and could adversely affect our financial results.
We
obtain and process sensitive data, including personal data related to our customers and their transactions, such as their names, addresses,
social security numbers, visa information, copies of government-issued identification, facial recognition data (from scanning of photographs
for identity verification), trading data, tax identification, and bank account information. We face risks, including to our reputation,
in the handling and protection of this data, and these risks will increase as our business continues to expand, including through our
acquisition of, and investment in, other companies and technologies. Federal, state, and international laws and regulations governing
privacy, data protection, and e-commerce transactions require us to safeguard our customers', employees', and service providers'
personal data. All data that is collected is stored and retained in conjunction with applicable state laws and SEC recordkeeping requirements
under SEC Rule 17a-4.
4
We
have administrative, technical, and physical security measures and controls in place and maintain a robust information security program.
However, our security measures, or the security measures of companies we acquire, may be inadequate or breached as a result of third-party
action, employee or service provider error, malfeasance, malware, phishing, hacking attacks, system error, trickery, advances in computer
capabilities, new discoveries in the field of cryptography, inadequate facility security or otherwise, and, as a result, someone may
be able to obtain unauthorized access to sensitive information, including personal data, on our systems. We could be the target of a
cybersecurity incident, which could result in harm to our reputation and financial losses. Additionally, our customers have been and
could be targeted in cybersecurity incidents like an account takeover, which could result in harm to our reputation and financial losses.
Additionally, privacy and data protection laws are evolving, and these laws may be interpreted and applied in a manner that is inconsistent
with our data handling safeguards and practices that could result in fines, lawsuits, and other penalties, and significant changes to
our or our third-party partners' business practices and products and service offerings. Our future success depends on the reliability
and security of our platform. To the extent that the measures we, any companies we acquire, or our third-party business partners have
taken prove to be insufficient or inadequate, or to the extent we discover a security breach suffered by a company we acquire following
the closing of such acquisition, we may become subject to litigation, breach notification obligations, or regulatory or administrative
sanctions, which could result in significant fines, penalties, damages, harm to our reputation, or loss of customers. If our own confidential
business information or sensitive customer information were improperly disclosed, our business could be adversely affected. Additionally,
a party who circumvents our security measures could, among other effects, appropriate customer information or other proprietary data,
cause interruptions in our operations, or expose customers to hacks, viruses, and other disruptions.
Depending
on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may
also have obligations to notify customers and regulators about the incident, and we may need to provide some form of remedy, such as
a subscription to credit monitoring services, pay significant fines to one or more regulators, or pay compensation in connection with
a class-action settlement. Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another.
Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident
that compromises customer data. Additionally, the financial exposure from the events referenced above could either not be insured against
or not be fully covered through any insurance that we may maintain, and there can be no assurance that the limitations of liability in
any of our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events
referenced above. Any of the foregoing could have an adverse effect on our business, reputation, operating results, and financial condition.
Furthermore,
we may be required to disclose personal data pursuant to demands from individuals, regulators, government agencies, and law enforcement
agencies in various jurisdictions with conflicting privacy and security laws, which could result in a breach of privacy and data protection
policies, notices, laws, rules, court orders, and regulations. Additionally, changes in the laws and regulations that govern our collection,
use, and disclosure of customer data could impose additional requirements with respect to the retention and security of customer data,
could limit our marketing activities, and have an adverse effect on our business, operating results, and financial condition.
The Company's
policies or procedures for conducting due diligence for anti-money laundering, know your customer, and/or compliance with the Office of
Foreign Assets Control related requirements
The Company conducts KYC and
anti-money laundering ("AML") for every user it onboards onto its platform, regardless of whether that customer wishes to
trade cryptocurrencies or security tokens. As part of that onboarding process, the Company uses a third-party provider to check the user
against numerous lists, including the OFAC sanctions list. User due diligence is performed at the time of onboarding before the account
is opened and before funds or assets are deposited into the user's account on the trading platform. When a potential customer wants
to open an account with the Company, he or she completes the online investor application and submits this information for review. Upon
submission, the customer's data is entered into our third-party service provider for verification against various sanctions lists
like OFAC sanctions list and software-defined networking ("SDN") for AML purposes. In addition, there is also a physical review
of all the information by a customer specialist to confirm compliance with KYC checks and verifications. Upon successfully passing the
AML/KYC process, and acknowledging applicable agreements, the account would be deemed approved and eligible for trading.
To the extent reasonable and
practicable, we ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based
procedures to verify and document the accuracy of the information we receive about our customers. Using manual and/or automated tools, our
team analyzes the information obtained to determine whether the information is sufficient to form a reasonable belief that we
know the true identity of the customer.
As stated above, the Company
verifies user identity through proof of identification and proof of address documentation, with the intention
of forming a reasonable belief that we know the identity of the customer and that they are who they say they are. The Company
uses a third-party provider, Onfido, to process identity checks and verify their validity. The Onfido identity document check
consists of a visual image scan, which analyzes identification documents to verify that they are valid. Onfido also identifies
whether the identification document has been recorded as lost, stolen or compromised (i.e., through tampering, forgery and fraud). The
Company may ask for further documentation from users through an enhanced due diligence process if it deems this necessary in order to
comply with its regulatory requirements.
5
The Company collects information
about each individual such that we can reasonably determine who the customer is and the nature of their business with the Company.
Such information is collected during the onboarding process where the applicant is requested to complete the "Personal Profile"
section, which includes questions in relation to their:
●
Employment: for example applicants are required to declare, amongst others, if they are a politically exposed person;
●
Financials: for example applicants are required to declare, amongst others, their net income and net worth; and
●
Investment experience: for example applicants are required to declare, amongst others, their risk tolerance and investment goals.
Additionally, all users are
subject to screening as part of the onboarding process. Screening is currently done via Onfido. Onfido uses the customer's proof
of identification to perform screening, including OFAC screening, by gathering data from diverse government sources, international
regulators and law enforcement agencies and watchlists, which will scan for known or suspected entities and individuals who are associated
with money laundering, terrorism, financial fraud, arms proliferation, drug trafficking or are politically exposed persons. Depending
on the Onfido screening findings, if any, the INX team will perform the necessary reviews and escalate as per our defined processes.
A person who tries to initiate
the onboarding process from a restricted jurisdiction, due to unauthorized location, sanctioned country or otherwise identified through
geofencing, will not be allowed to continue the onboarding process and will get a notification explaining that the person applied cannot
invest with the Company and cannot open an account on the platform.
Although we have implemented
controls and are working to implement additional controls and screening tools designed to prevent sanctions violations, there is no guarantee
that we will not inadvertently provide access to our products and services to unauthorized or sanctioned parties or jurisdictions in the
future.
Risks Related to Blockchain Assets
Blockchain
is a nascent and rapidly changing technology and there remains relatively small use of blockchain networks and blockchain assets in the
retail and commercial marketplace. The slowing or stopping of the development or acceptance of blockchain networks may adversely affect
an investment in INX Tokens or in our Company.
The
development of blockchain networks is a new and rapidly evolving industry that is subject to a high degree of uncertainty. Factors affecting
the further development of the blockchain industry include:
●
continued
    worldwide growth in the adoption and use of blockchain networks and assets;
●
the
    maintenance and development of the open-source software protocol of blockchain networks;
●
changes
    in consumer demographics and public tastes and preferences;
●
the
    popularity or acceptance of the Bitcoin or Ethereum networks;
●
the
    availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat
    currencies;
●
government
    and quasi-government regulation of blockchain networks and assets, including any restrictions on access, operation and use of blockchain
    networks and assets; and
●
the
    general economic environment and conditions relating to blockchain networks and assets.
Our
business model is dependent on continued investment in and development of the blockchain industry and related technologies. If investments
in the blockchain industry become less attractive to investors or innovators and developers, or if blockchain networks and assets do
not gain public acceptance or are not adopted and used by a substantial number of individuals, companies and other entities, it could
have a material adverse impact on our prospects and our operations.
6
The
application of distributed ledger technology is novel and untested and may contain inherent flaws or limitations.
Blockchain
is an emerging technology that offers new capabilities which are not fully proven in use. There are limited examples of the application
of distributed ledger technology. In most cases, software used by blockchain asset issuing entities will be in an early development stage
and still unproven. As with other novel software products, the computer code underpinning the INX Tokens and Ethereum blockchain may
contain errors, or function in unexpected ways. Insufficient testing of smart contract code, as well as the use of external code libraries,
may cause the software to break or function incorrectly. Any error or unexpected functionality may cause a decline in value of the INX
Token and result in substantial losses to purchasers of INX Tokens.
If
we discover errors or unexpected functionalities in the INX Token smart contract, we may make a determination that the INX Token smart
contract is defective and that its use should be discontinued. Although we intend to replace the INX Token and the INX Token smart contract
with a new token using a new smart contract in that situation, we may be required to take certain measures, such as freezing digital
wallet addresses so that such wallets cannot transfer INX Tokens, which may disrupt trading in the INX Tokens. Such a determination and
our subsequent deployment of a new smart contract and replacement token could have a material effect on the value of any investment in
the INX Token or our business.
The
creation and operation of digital platforms for the public trading of blockchain assets will be subject to potential technical, legal
and regulatory constraints. There is no warranty that the process for receiving, use and ownership of blockchain assets will be uninterrupted
or error-free and there is an inherent risk that the software, network, blockchain assets and related technologies and theories could
contain undiscovered technical flaws or weaknesses, the cryptographic security measures that authenticate transactions and the distributed
ledger could be compromised, and breakdowns and trading halts could cause the partial or complete inability to use or loss of blockchain
assets.
Risks
associated with the distributed ledger technology could affect our business directly or the market for blockchain assets generally. In
either case, the occurrence of these events could have a materially adverse effect on an investment in INX Tokens or the Company.
The
open-source structure of blockchain software means that blockchain networks may be susceptible to malicious cyber-attacks or may contain
exploitable flaws, which may result in security breaches and the loss or theft of blockchain assets.
Most
blockchain networks operate based on some form of open-source software. An open source project is not represented, maintained or monitored
by an official organization or authority. Because of the nature of open-source software projects, it may be easier for third parties
not affiliated with the issuer to introduce weaknesses or bugs into the core infrastructure elements of the blockchain network. This
could result in the corruption of the open-source code which may result in the loss or theft of blockchain assets.
Blockchain
networks may be the target of malicious attacks seeking to identify and exploit weaknesses in the software. Such events may result in
a loss of trust in the security and operation of blockchain networks and a decline in user activity which could have a negative impact
on the Company.
7
Each
blockchain network, including the Ethereum network, is dependent upon its users and contributors, and actions taken, or not taken, by
the users or contributors of a blockchain network could damage its reputation and the reputation of blockchain networks generally.
Developers
and other contributors to blockchain network protocols generally maintain or develop those blockchain networks, including the verification
of transactions on such networks. Because the networks are decentralized, these contributors are generally not directly compensated for
their actions. Therefore, most blockchain networks provide that such contributors receive awards and transfer fees for recording transactions
and otherwise maintaining the blockchain network. Such fees are generally paid in the blockchain asset of that network.
The
security and integrity of blockchain assets, including the value ascribed to blockchain assets, relies on the integrity of the underlying
blockchain networks. We are issuing the INX Token, an ERC20 blockchain asset that is programmed using a smart contract that is compatible
with the Ethereum blockchain.
If
the awards and fees paid for maintenance of a network are not sufficiently high to incentivize miners, miners may respond in a way that
reduces confidence in the blockchain network. To the extent that any miners cease to record transactions in solved blocks, transactions
that do not include the payment of a transfer fee will not be recorded on the blockchain until a block is solved by a miner who does
not require the payment of transfer fees. Any widespread delays in the recording of transactions could result in a loss of confidence
in the blockchain network and its assets. To the extent that this occurs with regard to blockchain networks that underlie the blockchain
assets traded on our platforms, including the Ethereum network, it could have a materially adverse effect on an investment in the Company.
To the extent that this occurs with regard to the Ethereum network, it could have a materially adverse effect on an investment in the
INX Token.
The
prices of blockchain assets are extremely volatile. Fluctuations in the price of Bitcoin, Ether and/or other blockchain assets could
materially and adversely affect the Company.
The
prices of blockchain assets such as Bitcoin and Ether have historically been subject to dramatic fluctuations and are highly volatile.
As relatively new products and technologies, blockchain assets have only recently become accepted as a means of payment for goods and
services, and such acceptance and use remains limited. Conversely, a significant portion of demand for blockchain assets is generated
by speculators and investors seeking to profit from the short- or long-term holding of blockchain assets.
In
addition, some blockchain industry participants have reported that a significant percentage of blockchain asset trading activity is artificial
or non-economic in nature and may represent attempts to manipulate the price of certain blockchain assets. For example, in a report published
by Bitwise Asset Management, Bitwise claimed that 95% of bitcoin trading activity appearing on 81 blockchain asset trading platforms
is fake. Bitwise's report further stated that trading platforms and blockchain asset developers are incentivized to artificially
inflate trading volumes so that their platform or asset rises in league tables and gains prominence in the industry. As a result, trading
platforms or blockchain assets may seek to inflate demand for specific blockchain assets, or blockchain assets generally, which could
increase the volatility of that asset or blockchain asset trading prices generally.
The
market price of these blockchain assets, as well as other blockchain assets that may be developed in the future, may continue to be highly
volatile. A lack of expansion, or a contraction of adoption and use of blockchain assets, may result in increased volatility or a reduction
in the price of blockchain assets.
8
Several
additional factors may influence the market price of blockchain assets, including, but not limited to:
●
Global
    blockchain asset supply;
●
Global
    blockchain asset demand, which can be influenced by the growth of retail merchants' and commercial businesses' acceptance
    of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain asset trading platforms
    and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets is safe and secure,
    and the regulatory restrictions on their use;
●
Changes
    in the software, software requirements or hardware requirements underlying the blockchain networks;
●
Changes
    in the rights, obligations, incentives, or rewards for the various participants in blockchain networks;
●
The
    cost of trading and transaction in blockchain assets, and whether such costs may become fixed or standardized;
●
Investors'
    expectations with respect to the rate of inflation;
●
Interest
    rates;
●
Currency
    exchange rates, including the rates at which blockchain assets may be exchanged for fiat currencies;
●
Fiat
    currency withdrawal and deposit policies of blockchain asset trading platforms and liquidity on such platforms;
●
Interruptions
    in service or other failures of major blockchain asset trading platforms;
●
Investment
    and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in blockchain
    networks or blockchain assets;
●
Monetary
    policies of governments, trade restrictions, currency devaluations and revaluations;
●
Regulatory
    measures, if any, that affect the use of blockchain assets;
●
The
    maintenance and development of the open-source software utilized in blockchain networks;
●
Global
    or regional political, economic or financial events and situations; and
●
Expectations
    among blockchain network participants that the value of such blockchain assets will soon change.
A
decrease in the price of a single blockchain asset may cause volatility in the entire blockchain industry and may affect other blockchain
assets. For example, a security breach that affects investor or user confidence in Ether or Bitcoin may affect the industry as a whole
and may also cause the price of other blockchain assets to fluctuate.
The
value of blockchain assets and fluctuations in the price of blockchain assets could materially and adversely affect our business and
investment in INX Tokens or the Company.
9
The
U.S. regulatory regimes governing blockchain technologies, blockchain assets and the purchase and sale of blockchain assets are uncertain,
and new regulations or policies may materially adversely affect the development of blockchain networks and the use of blockchain assets.
INX
Securities, LLC ("INXS") is registered with FINRA and the Securities and Exchange Commission ("SEC") as a broker-dealer
authorized to operate as an ATS that is allowed to facilitate the trading of security tokens in compliance with the SEC's "Three-Step
Process." Additionally, INXS is registered in all 50 U.S. states, the District of Columbia, and Puerto Rico, and is also permitted
to act as the broker-dealer of record in primary offerings for traditional and digital securities. As such, the Company has implemented
policies, processes, rules and procedures that govern the issuance and trading of security tokens on the INXS ATS.
However,
there is still significant uncertainty regarding the application of federal and state laws to the issuance and trading of crypto assets,
including regulations governing the conduct of market intermediaries to the trading of crypto assets that are securities.
In
addition, various legislative and executive bodies in the United States and in other countries have shown that they intend to adopt legislation
to regulate the sale and use of blockchain assets. Such legislation may vary significantly among jurisdictions, which may subject participants
in the blockchain trading marketplace to different and perhaps contradictory requirements.
Also,
as firms in the financial services industry have experienced increased scrutiny in recent years, such regulatory or other actions may
lead to penalties, fines, disbarment and other sanctions which could place restrictions or limitations on our operations and otherwise
have a material adverse effect on our businesses. We could be exposed to substantial liability under federal and state laws and court
decisions, as well as rules and regulations promulgated and/or direct actions brought by the SEC, state securities regulators and other
U.S. regulatory agencies.
If
we fail to qualify with any of these authorities, we may be unable to execute on, or be forced to cease operations contemplated under,
our business plan as a provider of financial services. This would have a broad impact on us and could have a material adverse effect
on our businesses, financial condition, results of operations and prospects and, as a result, investors could lose all or most of their
investment. In addition, any such action could also cause us significant reputational harm, which, in turn, could seriously harm the
Company.
New
or changing laws and regulations or interpretations of existing laws and regulations, in the United States and elsewhere, may materially
and adversely impact the development and growth of blockchain networks and the adoption and use of blockchain assets. This is even more
so due to market conditions and recent growth in crypto-related frauds, layoffs, and the ongoing liquidity crisis that led to bankruptcies
by leading crypto companies. The imposition of restrictions on all blockchain assets, or certain blockchain assets, could affect the
value, liquidity and market price of blockchain assets subject to heighten regulation, by limiting access to marketplaces or exchanges
on which to trade such blockchain assets, or imposing restrictions on the structure, rights and transferability of such blockchain assets.
Some governments may seek to ban transactions in blockchain assets altogether. See "Item 1.B Business Overview — Regulatory
Oversight of Blockchain Assets."
The
Company may be prevented from entering, or it may be required to cease operations in, a jurisdiction that makes it illegal or commercially
unviable or undesirable to operate in such jurisdiction. Enforcement, or the threat of enforcement, may also drive a critical mass of
participants and trading activity away from regulated markets, such as those provided by INX Trading Solutions, ("INX Trading Solutions"
means the business conducted by the Company in the United States, which includes the INX Digital, Inc. ("INXD") trading platform,
the INXS trading platform, and other related business activities), and toward unregulated exchanges. Although it is impossible to predict
the positions that will be taken by certain governments, any regulatory changes affecting blockchain assets could be substantial and
materially adverse to the development and growth of our business and investment in INX Tokens and the Company.
We
may be deemed an underwriter under the Securities Act with regard to our role and involvement with respect to any initial offerings of
securities on the INXS ATS, and our failure to comply with applicable federal securities laws may expose us to legal liability. We may
be subject to disputes regarding the quality of trade execution, the settlement of trades or other matters relating to our services.
We may become subject to these claims as a result of any failures or malfunctions of our systems and services we provide.
We
could incur significant legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit
or claim against us could have a material adverse effect on our business and reputation. To the extent we are found to have failed to
fulfill our regulatory obligations, we could lose our authorizations or licenses or become subject to conditions that could make future
operations more costly and impair our profitability.
10
We
are subject to an extensive and highly-evolving regulatory landscape world-wide and any adverse changes to, or our failure to comply
with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.
The markets for digital securities
and cryptocurrencies are still new and rapidly emerging. As such, the Company is subject to an extensive and highly evolving regulatory
landscape. The Company's business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives,
treaties, and legal and regulatory interpretations and guidance in the markets in which it operates, including those governing financial
services and banking, federal government contractors, trust companies, securities, derivative transactions and markets, broker-dealers
and alternative trading systems ("ATS"), crypto asset custody, exchange, and transfer, cross-border and domestic money and
crypto asset transmission, foreign currency exchange, privacy, data governance, data protection, cybersecurity, fraud detection, payment
services (including payment processing and settlement services), retail protection, competition, bankruptcy, tax, anti-bribery, economic
and trade sanctions, anti-money laundering, counter-terrorist financing and others.
Many of these legal and regulatory
regimes were adopted prior to currently available advanced technologies. As a result, some applicable laws and regulations world-wide
do not contemplate or address unique issues associated with the digital securities and cryptocurrencies, and are subject to significant
uncertainty, and vary widely across U.S. federal, state, and international jurisdictions. These legal and regulatory regimes, including
the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner
from one jurisdiction to another, and may conflict with one another.
This complexity and evolving
nature of the Company's business and the significant uncertainty surrounding the regulation of the digital securities and cryptocurrencies
requires us to exercise our best judgment as to whether certain laws, rules, and regulations apply to the Company's business, and
it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have misinterpreted any such
laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services,
reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect the Company's
business, operating results, and financial condition.
In addition to existing laws
and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in
other countries, may adopt new laws and regulations not yet in existence. For example, European Union legislation imposing additional
regulatory requirements in relation to crypto-related activities is expected in the intermediate term which, among other things, may
impose new or additional regulatory requirements on both crypto service providers and issuers of certain crypto assets, which may impact
our operations in the European Union.
Furthermore, new interpretations
of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the digital
securities and cryptocurrencies economy as a whole and our legal and regulatory status in particular by changing how we operate our business,
how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our
compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain crypto asset transactions,
as has occurred in certain jurisdictions in the past. Those new laws, regulations, or interpretations may result in litigation, regulatory
investigations, and enforcement or other actions, including preventing or delaying the Company from offering certain products or services
offered by its competitors or could impact how the Company offers such products and services. Adverse changes to, or our failure to comply
with, any laws and regulations may have an adverse effect on our reputation and brand and our business, operating results, and financial
condition.
In addition to existing laws
and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the United States and in other
countries, may adopt new laws and regulations not yet in existence. For example, European Union legislation imposing additional regulatory
requirements in relation to crypto-related activities is expected in the intermediate term which, among other things, may impose new or
additional regulatory requirements on both crypto service providers and issuers of certain crypto assets, which may impact our operations
in the European Union. Furthermore, new interpretations of existing laws and regulations may be issued by such bodies or the judiciary,
which may adversely impact the development of the digital securities and cryptocurrencies economy as a whole and our legal and regulatory
status in particular by changing how we operate our business, how our products and services are regulated, and what products or services
we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements,
or imposing a total ban on certain crypto asset transactions, as has occurred in certain jurisdictions in the past. Those new laws, regulations,
or interpretations may result in litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying
the Company from offering certain products or services offered by its competitors or could impact how the Company offers such products
and services. Adverse changes to, or our failure to comply with, any laws and regulations may have an adverse effect on our reputation
and brand and our business, operating results, and financial condition.
11
Blockchain assets also face
an uncertain regulatory landscape in many foreign jurisdictions. On September 4, 2017, the People's Bank of China labeled blockchain
asset sales as "illegal and disruptive to economic and financial stability." Previously, China had issued a notice that classified
bitcoin as legal and "virtual commodities;" however, the same notice restricted the banking and payment industries from using
bitcoin, creating uncertainty and limiting the ability of Bitcoin Exchanges to operate in the then-second largest bitcoin market. South
Korea's Financial Services Commission likewise prohibited all forms of tokens on September 29, 2017. Japan has enacted a law regulating
virtual currencies which has brought Bitcoin exchanges under know-your-customer and anti-money laundering rules and resulted in the categorization
of Bitcoin as a kind of prepaid payment instrument. The law puts in place capital requirements for exchanges as well as cybersecurity
and operational stipulations. In addition, those exchanges are also required to conduct employee training programs and submit to annual
audits. To date, the Japanese Financial Services Agency (FSA) has granted licenses to 15 different cryptocurrencies or tokens trading
platforms. In November 2017, the Monetary Authority of Singapore ("MAS") issued a statement that tokens sold through the blockchain
funding model may be considered securities under certain circumstances under Singapore law and provided case studies as examples of tokens
that do and do not constitute securities. Previously, the MAS had stated that other laws may apply to token sales, such as money laundering
and terrorism financing laws.
Other jurisdictions are still
researching the subject. In September 2017, the Swiss Financial Market Supervisory Authority ("FINMA") issued guidance that
it was investigating ICOs and that whenever FINMA is notified about ICO procedures that breach regulatory law or which seek to circumvent
financial market law it initiates enforcement proceedings. On February 16, 2018, FINMA publicly announced ICO guidelines. In December
2018, the Swiss Federal Council adopted a report on the legal framework for blockchain and distributed ledger technology in the financial
sector. In March 2019, the Federal Council initiated consultation with regard to specific amendments to federal law for the purpose of
adapting federal law to developments in distributed ledger technology. For additional information see "Item 1.B Business Overview
— Regulatory Oversight of Blockchain Assets."
Moreover, we offer and may
in the future offer products and services whose functionality or value depends in part on our management of token transaction smart contracts,
asset tracking, or other applications that provide novel forms of customer engagement and interaction delivered via blockchain protocols.
We may also offer products and services whose functionality or value depends on our ability to develop, integrate, or otherwise interact
with such applications within the bounds of our legal and compliance obligations. The legal and regulatory landscape for such products,
including the law governing the rights and obligations between and among smart contract developers and users and the extent to which such
relationships entail regulated activity is uncertain and rapidly evolving. Our interaction with those applications, and the interaction
of other blockchain users with any smart contracts or assets we may generate or control, could present legal, operational, reputational,
and regulatory risks for our business.
Because we have offered and
will continue to offer a variety of innovative products and services to our customers, many of our offerings are subject to significant
regulatory uncertainty that we try to mitigate by adopting measures that do not necessarily apply to the Company's current business
operation (see for example segregation of assets). There are substantial uncertainties on how these requirements would apply in practice,
and we may face substantial compliance costs to operationalize and comply with these rules. Certain products and services offered by us
that we believe are not subject to regulatory oversight or are only subject to certain regulatory regimes.
It may be illegal now, or
in the future, to acquire, own, hold, sell or use INX Tokens in one or more countries, and ownership of, holding or trading in our Company's
securities may also be considered illegal and subject to sanction. The regulation of blockchain assets remains uncertain or undefined
in many jurisdictions. Although we anticipate treating the INX Tokens as securities under the laws of all foreign jurisdictions and adhering
to such laws with regard to the offering and sale of INX Tokens abroad, one or more foreign governmental authorities, such as those in
China or Russia, may take regulatory action in the future that severely restricts the right to acquire, own, hold, sell or use blockchain
assets or to exchange blockchain assets for fiat currency. Such an action may result in the restriction of ownership, holding or trading
in the INX Token and other securities. Such restrictions may adversely affect the business or operations of the Company.
While we have implemented
policies and procedures designed to help monitor for and ensure compliance with existing and new laws and regulations, there can be no
assurance that we and our employees, contractors, and agents will not violate or otherwise fail to comply with such laws and regulations.
To the extent that we or our employees, contractors, or agents are deemed or alleged to have violated or failed to comply with any laws
or regulations, including related interpretations, orders, determinations, directives, or guidance, we or they could be subject to a litany
of civil, criminal, and administrative fines, penalties, orders and actions, including being required to suspend or terminate the offering
of certain products and services.
Adverse changes to, or our
failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation and brand and
our business, operating results, and financial condition.
We
cannot assure that our policies and procedures in place to comply with applicable complex and evolving laws, regulations, and rules will
always be effective, which could have a negative impact on our business operations.
Our
ability to comply with applicable complex and evolving laws, regulations, and rules is largely dependent on the establishment, maintenance,
and scaling of our compliance, audit, and reporting systems to continuously keep pace with our customer activity and transaction volume,
as well as our ability to attract and retain qualified compliance and other risk management personnel. While we have devoted significant
resources to develop policies and procedures to identify, monitor, and manage our risks, and expect to continue to do so in the future,
we cannot assure you that our policies and procedures are and will always be effective or that we have been and will always be successful
in monitoring or evaluating the risks to which we are or may be exposed in all market environments or against all types of risks, including
unidentified or unanticipated risks. Our risk management policies and procedures rely on a combination of technical and human controls
and supervision that are subject to error and failure. Some of our methods for managing risk are discretionary by nature and are based
on internally developed controls and observed historical market behavior, and also involve reliance on standard industry practices. These
methods may not adequately prevent losses, particularly as they relate to extreme market movements, which may be significantly greater
than historical fluctuations in the market. Our risk management policies and procedures also may not adequately prevent losses due to
technical errors if our testing and quality control practices are not effective in preventing failures. In addition, we may elect to
adjust our risk management policies and procedures to allow for an increase in risk tolerance, which could expose us to the risk of greater
losses.
12
Certain
crypto assets in which we may in the future facilitate trading may be subject to regulatory authority by the CFTC. Any fraudulent or
manipulative activity in a crypto asset occurring on our platform could subject us to increased regulatory scrutiny, regulatory enforcement,
and litigation.
The
CFTC has stated and judicial decisions involving CFTC enforcement actions have confirmed that certain crypto assets may fall within the
definition of a "commodity" under the Commodity Exchange Act ("CEA"). As a result, the CFTC would have general
enforcement authority to police against manipulation and fraud in at least some crypto asset markets. From time to time, manipulation,
fraud, and other forms of improper trading by market participants have resulted in, and may in the future result in, CFTC investigations,
inquiries, enforcement action, and similar actions by other regulators, government agencies, and civil litigation. Such investigations,
inquiries, enforcement actions, and litigation may cause us to incur substantial costs and could result in negative publicity.
Certain
transactions in crypto assets may constitute "retail commodity transactions" subject to regulation by the CFTC as futures
contracts. If crypto asset transactions we facilitate are deemed to be such retail commodity transactions, we would be subject to additional
regulatory requirements, licenses and approvals, and potentially face regulatory enforcement, civil liability, and significant increased
compliance and operational costs.
Any
transaction in a commodity, including a crypto asset, entered into with or offered to retail investors using leverage, margin, or other
financing arrangements (a "retail commodity transaction") is subject to CFTC regulation as a futures contract unless such
transaction results in actual delivery within 28 days. The meaning of "actual delivery" has been the subject of commentary
and litigation, and in 2020, the CFTC adopted interpretive guidance addressing the "actual delivery" of a crypto asset. To
the extent that crypto asset transactions that we facilitate or facilitated are deemed retail commodity transactions, including pursuant
to current or subsequent rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight, and
we could be subject to judicial or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations.
The CFTC has previously brought enforcement actions against entities engaged in retail commodity transactions without appropriate registrations.
Particular
crypto assets or transactions therein could be deemed "commodity interests" (e.g., futures, options, swaps) or security-based
swaps subject to regulation by the CFTC or SEC, respectively. If a crypto asset that we facilitate trading in is deemed a commodity interest
or a security-based swap, we would be subject to additional regulatory requirements, registrations and approvals, and potentially face
regulatory enforcement, civil liability, and significant increased compliance and operational costs.
Commodity
interests, as such term is defined by the CEA and CFTC rules and regulations, are subject to more extensive supervisory oversight by
the CFTC, including registrations of entities engaged in, and platforms offering commodity interest transactions. This CFTC authority
extends to crypto asset futures contracts and swaps, including transactions that are based on current and future prices of crypto assets
and indices of crypto assets. To the extent that a crypto asset in which we facilitate or facilitated trading or transactions in a crypto
asset which we facilitate or facilitated are deemed to fall within the definition of a commodity interest, including pursuant to subsequent
rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight and could be subject to judicial
or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations as an exchange (for example,
as a designated contract market for trading futures or options on futures, or as a swaps execution facility for trading swaps) or as
a registered intermediary (for example, as a futures commission merchant or introducing broker). Such actions could result in injunctions,
cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm. The CFTC has previously
brought enforcement actions against entities engaged in crypto asset activities for failure to obtain appropriate exchange, execution
facility and intermediary registrations.
13
Furthermore, the CFTC and
the SEC have jointly adopted regulations defining "security-based swaps," which include swaps based on single securities and
narrow-based indices of securities. If a crypto asset is deemed to be a security, certain transactions referencing that crypto asset could
constitute a security-based swap. A crypto asset or transaction therein that is based on or references a security or index of securities,
whether or not such securities are themselves crypto assets, could also constitute a security-based swap. To the extent that a crypto
asset in which we facilitate or have facilitated trading or transactions in a crypto asset which we facilitate or have facilitated are
deemed to fall within the definition of a security-based swap, including pursuant to subsequent rulemaking or guidance by the CFTC or
SEC, we may be subject to additional regulatory requirements and oversight by the SEC and could be subject to judicial or administrative
sanctions if we do not or did not a relevant time possess appropriate registrations as an exchange (for example, as a security-based swaps
execution facility) or as a registered intermediary (for example, as a security-based swap dealer or broker-dealer). This could result
in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm.
If the Company fails
to properly characterize a digital asset listed for trading under applicable securities laws, it may be subject to regulatory scrutiny,
inquiries, investigations, fines, and other penalties, which may adversely affect the business, operating results, and its financial
condition.
The SEC and its staff have
taken the position that many digital assets fall within the definition of a "security" under the U.S. federal securities laws.
The SEC has stated that the characterization of a digital asset as a security or non-security should be made by application of the Howey test,
which provides a multi-factor analysis for determining whether a digital asset is a security, as well as other case law and reports, orders
and statements issued by the SEC which provide guidance on when a digital asset should be treated as a security for purposes of US federal
securities laws.
Several foreign jurisdictions
have taken a broad-based approach to classifying crypto assets as "securities," while other foreign jurisdictions, such as
Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain crypto assets may be deemed to be a "security"
under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations,
or directives that affect the characterization of crypto assets as "securities."
The classification of a crypto
asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale,
trading, and clearing of such assets. For example, a crypto asset that is a security in the United States may generally only be offered
or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption
from registration.
The Company has developed
specific criteria and follows its policies and procedures to analyze  whether a digital asset could be deemed a "security"
under applicable laws prior to listing such asset on the INXD trading platform. The Company's policies and procedures do not constitute
a legal standard, but rather represent the Company-developed model, which it uses to make a risk-based assessment regarding the likelihood
that a particular crypto asset could be deemed a "security" under applicable laws. Regardless of the conclusions, the Company
could be subject to legal or regulatory action in the event the SEC, a state or foreign regulatory authority, or a court were to determine
that a supported crypto asset currently traded on our INXD platform is a "security" under applicable laws.
The policy reviews a variety
of factors for each listing, including applying such review as it relates to the Howey test. The policy considers, among other things,
the use, purpose, and specific features of each crypto asset being considered. Once all of these assessments are completed and internally
approved by the relevant members of Company management, the assessment is reviewed and approved by the INXD Board of Directors.
The Company will only approve
a listing that it reasonably determines is not used to circumvent laws and regulations or that may facilitate the obfuscation or concealment
of a customer's or counterparty's identity. Additionally, the Company will only approve cryptocurrencies that it reasonably
determines, using the above-described procedures, are not crypto assets that fall under the jurisdiction of securities regulations in
the U.S. and may seek the guidance of outside legal counsel in this determination. The Company will only permit the trading of a crypto
asset consistent with relevant consumer protection standards and that do not jeopardize INXD's safety and soundness as a going concern.
The Company believes that
its process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent application of available
legal guidance. However, it recognizes that the application of securities laws to the specific facts and circumstances of crypto assets
may be complex, and that a listing determination does not guarantee any conclusion under the U.S. federal securities laws.
14
There can be no assurances
that we will properly characterize any given crypto asset as a security or non-security for purposes of determining whether our platform
will support trading of the crypto asset, or that the SEC, foreign regulatory authority, or a court, if the question was presented to
it, would agree with our assessment. If an applicable regulatory authority or a court, having final determinative authority on the subject,
were to determine that a supported crypto asset currently offered, sold, or traded on our INXD platform is a security, we could be subject
to judicial or administrative sanctions for failing to offer or sell the crypto asset in compliance with the registration or exemption
requirements. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement,
criminal liability, and reputational harm. Customers that traded such supported crypto assets on our platform and suffered trading losses
could also seek to rescind a transaction that we facilitated on the basis that it was conducted in violation of applicable law, which
could subject us to significant liability. We may also be required to cease facilitating transactions in the supported crypto asset other
than via our licensed subsidiaries, which could negatively impact our business, operating results, and financial condition. Furthermore,
if we remove any crypto assets from trading on our platform for any reason, our decision may be unpopular with users and may reduce our
ability to attract and retain customers, especially if such assets remain traded on unregulated exchanges, which includes many of our
competitors.
Further, if Bitcoin, Ethereum,
or any other supported crypto asset is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding
in a court of law or otherwise, it may have adverse consequences for such supported crypto asset. For instance, all transactions in such
supported crypto assets would have to be registered with the SEC or other foreign authority, or conducted in accordance with an exemption
from registration, which could severely limit its liquidity, usability and transactability. Moreover, the networks on which such supported
crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could
effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the
general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto assets to be traded, cleared, and held
in custody as compared to other crypto assets that are not considered to be securities.
Adding crypto assets to,
or removing from our platform
The Company has a policy and
process in place for adding new crypto asset securities and cryptocurrencies for listing or trading on its platform. The Company's
legal and compliance teams, in cooperation with the Chief Compliance Officer, evaluate the legal, compliance, technology, cybersecurity,
and operational risks with respect to listing a cryptocurrency. The evaluation is done in the form of a due diligence checklist, upon
which the above parties have to signify approval, and once this is done, the checklist is then sent to the Board of Directors of INXD,
for a final review and approval.
More specifically, the relevant
risk areas that INXD takes into consideration regarding each cryptocurrency include the overview and history, roadmap, business purpose,
usage, distribution and concentration, regulation, compliance obligations, Howey Test triggers, risk assessment, token type, white paper,
blockchain type, engineering, security and code, prototype, consensus process, network, operating costs, supply, rewards and penalties,
development team, and operations.
Adding the Millennium Sapphire,
Compound and Aave Tokens to our platform
Regarding the listing of the
Millennium Sapphire Security Token ("MSTO") to our ATS for trading, MSTO first signed a listing agreement with INX and provided
due diligence items requested by the Company, pursuant to INXS' listing policy. Following review of all relevant documents submitted,
INXS verified that the primary offering was done in compliance with the exemptions for registration under Regulation D and Regulation
S of the Securities Act of 1933 which are specifically noted in the INXS Membership Agreement as valid primary exemptions for which INXS
can provide secondary market trading services. INXS reviews and signs off on all due diligence and listing agreements, including those
of MSTO. As part of additional due diligence, and since neither INXS, nor any of its affiliated entities, minted the security tokens,
INXS integrated the ATS settlement flow with MSTO's ownership record holder (the "Digital Registrar"). A Digital Registrar
maintains books and records for security token issuers similar to the functions of a transfer agent in the United States. Once this integration
was tested and implemented, the security token was made available for trading on the ATS.
Regarding the addition of
the Compound and Aave tokens to our crypto asset trading platform, the Company respectfully advises the Staff that it followed the same
procedures described in the response to comment 3 above in determining to add these tokens to our trading platform.
15
As we continue to expand
our business and customer base outside the United States, we may be vulnerable to risks related to unauthorized or impermissible customer
access outside of the jurisdictions in which we operate, which may result in significant legal and financial exposure, damage to our
reputation, and a loss of confidence in the services we provide
As we expand and localize
our international activities, we have become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations
of both the jurisdictions in which we operate and those into which we offer services on a cross-border basis. For instance, financial
regulators outside the United States have increased scrutiny of crypto asset exchanges over time, such as by requiring crypto asset exchanges
operating in their local jurisdictions to be regulated and licensed under local laws.
Regulators worldwide frequently
study each other's approaches to the regulation of the crypto economy. Consequently, developments in one jurisdiction may influence
other jurisdictions and any such development may be extended to additional services and other jurisdictions. As a result, risks created
by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting our business in
another jurisdiction or involving another service. Conversely, if regulations diverge worldwide, we may face difficulty and increased
expenses adjusting our products, services, and other aspects of our business with the same effect. These risks are heightened as we face
increased competitive pressure from other similarly situated businesses engaging in regulatory arbitrage to avoid the compliance costs
associated with regulatory changes.
Although the Company monitors
closely the above mentioned risks and takes proactive steps to mitigate them, any breach or unauthorized customer access to products and
services outside jurisdictions in which we operate could result in significant legal and financial exposure, damage to our reputation,
and a loss of confidence in the services we provide that could potentially have an adverse effect on our business, while resulting in
regulatory penalties or the imposition of burdensome obligations by regulators.
Use
of digital engagement practices ("DEP") designed to engage with retail investors and provide educational tools
Our success depends on our
ability to retain existing customers and attract new customers, including ecosystem partners, to increase engagement with our products,
services, and platform. To do so, we must continue to offer leading technologies and ensure that our products and services are secure,
reliable, and engaging. We must also expand our products and services, and offer competitive prices in an increasingly crowded and price-sensitive
market. There is no assurance that we will be able to continue to do so, that we will be able to retain our current customers or attract
new customers, or keep our customers engaged.
Used responsibly, DEPs provide
significant benefits to retail investors, including enhanced access to customized products and services, lower costs, access to a broader
range of products, better customer service, and improved compliance efforts leading to safer markets. Certain DEPs also raise potential
risks, highlighting the need to ensure investor protection in connection with their use. The existing regulatory regime, however, addresses
firms' use of DEPs, preserving their well-documented benefits, while appropriately managing potential risks and conflicts.
Specifically, the primary
intersection between DEPs and our current regulatory regime are in two discrete areas:
●
communications to retail investors (educational, informational, advertising, and marketing); and
●
potential recommendations (i.e., personalized investment advice) to retail investors.
16
FINRA's communications
(and related) rules and guidance cover the former, and the SEC's Regulation Best Interest ("Reg BI") covers the latter.
The Company believes that the existing federal securities laws and regulations, and FINRA rules, are sufficient to fulfill the SEC's
investor protection and market integrity missions with respect to DEPs.
The genesis and growth of
DEPs in the securities industry today reflect the manner in which retail investors increasingly engage in every aspect of their lives,
that is, digitally, online, and interactively, using the latest technologies and platforms. It is also driven, in part, by the manner
in which many retail investors now choose to transact and invest, that is, on a self-directed basis (distinct from the model of receiving
recommendations from a dedicated financial advisor). Many retail investors want to make their own investment decisions and manage their
own investment risks, including market risks, product complexity, leverage, margin, and trading frequency. Regardless, for all retail
investors, DEPs provide the latest technologies, tools, information, data, and education to facilitate and enhance their investment experience.
DEPs can also offer retail investors a simplified, easily understandable path to effective financial planning and financial literacy at
their digital fingertips. Firms' use of DEPs helps meet the demand of retail investors to engage and transact in the manner of their
choosing. In meeting that demand, DEPs not only strengthen existing client relationships, but also have been appropriately credited with
improving investor access and opportunity on the latest investment platforms, resulting in a significant, well-documented increase in
retail investor participation in the capital markets.
In fact, DEPs are providing
new useful channels for delivering investor education tools and resources to retail investors. Retail investors are better educating themselves
about the risks and features of prospective products and services, and ultimately, transacting in a manner that is consistent with their
investment goals and risk tolerance. Relevant studies support the view that effective DEP communications can help retail investors make
more responsible decisions and ultimately improve their financial outcomes.
Investor protection is paramount
to our retail customers. Accordingly, the Company is cognizant of the potential risks associated with certain DEPs and the need to ensure
investor protection in connection with their use. While DEPs have the potential to encourage beneficial investor behavior, certain DEPs
may have the potential to encourage retail investors to transact in a manner that may be inconsistent with their investment goals or risk
tolerance. As the Commission notes, some have also expressed concerns that certain DEPs may encourage frequent trading, options trading,
trading on margin, and trading in complex securities products. The Company is not involved with any of the foregoing practices.
To date, the Company does
not have any sophisticated digital engagement processes to engage retail customers. The Company allows pop-ups on its website, utilizes
user contests such as a recent World Cup contest amongst platform users, email marketing, and social media posts to bring attention to
potential users on the Company platform. The Company provides FAQs with videos and tutorials to develop and provides investment education
tools.
INX acknowledges the need
to address these potential conflicts. DEPs should never mislead clients and should always present information in a manner that is fair
and balanced. It is important to note, however, that these potential conflicts are not new to the industry. In fact, they are the same
potential conflicts that arises in connection with any medium or form of firm communication or engagement with a client. DEPs are merely
a different medium or form. And, as discussed further below, DEPs are already subject to the same compliance and regulatory obligations
that the firm owes with respect to every other communication or engagement with a client, including full disclosure of all relevant risks.
Preserving individual retail investors' interest in autonomy, preference, choice, and access to new investment opportunities, which
DEPs may facilitate, is essential to ensuring that these investors have the means to effectively manage their short- and long-term financial
objectives, and their wealth generally.
As discussed further below,
assuming firms are meeting their compliance and regulatory obligations with respect to DEP use under the current regulatory regime, there
is no new or different regulatory interest in preventing or limiting firms from using DEPs to facilitate the trading activities and investment
experiences in which these retail investors have chosen to engage.
17
For broker-dealers, these
provisions include, without limitation:
●
The anti-fraud provisions of the federal securities laws and FINRA rules;
●
Account opening, KYC, and other due diligence approval obligations;
●
Standard of conduct;
●
Disclosure obligations;
●
Reporting and other financial responsibility requirements;
●
Communications with the public rules;
●
Supervision obligations and insider trading procedures;
●
Recordkeeping obligations;
●
Customer complaints; and
●
Privacy and cybersecurity.
The foregoing overview of
select rules and regulations, as well as additional regulatory obligations, demonstrate the comprehensive nature of broker-dealer regulation
generally, as well as the specific regulations relevant to the use of DEPs and related tools and methods today.
With respect to educational
and informational communications to retail investors, as noted above, INX provides FAQs with videos and tutorials to develop and provide
investment education tools. Recently, the Company published "
The INX Way
," which provides insight to retail investors
regarding security tokens and the basic concepts and foundations of this new innovative financial product.
As discussed above, retail
investors derive significant benefits from tools that deliver education and information about financial services and products. All educational
and informational communications, like all communications generally, must be fair, balanced, and not misleading under our existing regulatory
regime. Retail investors are already well protected by these laws and rules.
With respect to advertising
and marketing communications to retail investors, such communications are likewise already addressed by the existing ruleset. FINRA's
communications rules already apply to all forms of electronic, hard copy, and other means of advertising and marketing communication,
and readily cover DEPs. DEP-related advertising and marketing communications should continue to be subject to, and regulated by these
well-established, existing regulatory standards.
Our use of DEPs may
be impacted by current and potential future regulations, which may adversely affect our business, operating results and financial condition.
Our success depends on our
ability to retain existing customers and attract new customers, including ecosystem partners, to increase engagement with our products,
services, and platform, which is done in part by the use of DEPs. While DEPs have the potential to encourage beneficial investor behavior,
certain DEPs may have the potential to encourage retail investors to transact in a manner that may be inconsistent with their investment
goals or risk tolerance.
The genesis and growth of
DEPs in the securities industry today has led to increased SEC scrutiny in the way companies utilize DEPs, including the risk that certain
DEPs may encourage frequent trading, options trading, trading on margin, and trading in complex securities products. Current and future
regulations regarding the use of DEPs may
subject us to audits, inquiries, whistleblower complaints,
adverse media coverage, investigations, severe criminal, or civil sanctions, damage our reputation, or result in fines or proceedings
by governmental agencies and private claims and litigation, any of which could adversely affect our business, operating results, and financial
condition.
There
is a risk that, as we expand, we may assume liabilities for breaches experienced by any companies we acquire. Additionally, there are
potentially inconsistent world-wide government regulations pertaining to data protection and privacy. Despite our efforts to comply with
applicable laws, regulations and other obligations relating to privacy, data protection, and information security, it is possible that
our practices, offerings, or platform could fail, or be alleged to fail, to meet applicable requirements. For instance, the overall regulatory
framework governing the application of privacy laws to blockchain technology is still highly undeveloped and likely to evolve. Our failure,
or the failure by our third-party providers or partners, to comply with applicable laws or regulations and to prevent unauthorized access
to, or use or release of personal data, or the perception that any of the foregoing types of failure has occurred, even if unfounded,
could subject us to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, severe criminal, or civil sanctions,
damage our reputation, or result in fines or proceedings by governmental agencies and private claims and litigation, any of which could
adversely affect our business, operating results, and financial condition.
18
Risks Related to Blockchain Assets
Our ability to continue
to develop our trading platforms faces operational, technological and regulatory challenges and we may not be able to continue to develop
this business as contemplated.
We may not be able to continue
to develop the platforms as contemplated by our business model. In addition, a number of factors could materially adversely affect our
ability to commercialize and generate any profits from our business.
The structuring and maintenance
and further development of our trading platforms could lead to unanticipated and substantial costs, delays or other operational or financial
difficulties. Our platforms are complex and their maintenance and further development requires the integration of multiple technologies
and the development of software.
There can be no assurance
that our platforms will gain the acceptance of customers or other market participants. Because blockchain asset trading is still in its
early stages, it is difficult to predict the preferences and requirements of blockchain asset traders and our platform design and technology
may be incompatible with new or emerging forms of blockchain assets or related technologies. Failure to achieve acceptance would impede
our ability to develop and sustain a commercial business.
While the trading platform
of INXS is a registered broker-dealer and FINRA member that operates an SEC- recognized alternative trading system and that the INXD trading
platform is licensed as a money transmitter in certain states, there can be no assurance our platform will qualify for additional registrations
that we are seeking or we plan to seek with the SEC, FINRA, U.S. state regulators and various other regulatory bodies both in the U.S.
and in other countries, including Israel. We are licensed or otherwise qualified to operate as a money transmitter in 43 U.S. states plus
Washington D.C. and Puerto Rico. We intend to obtain money transmitter licenses or otherwise become qualified to operate in more U.S.
states by the end of 2023. In addition, if in the future we determine to proceed with the establishment of a platform for the trading
of cryptocurrency-based derivatives, we would be required to seek registrations with other regulatory bodies, such as the CFTC.
We may fail to qualify for
registrations under any of these authorities or we may be required to alter our business model as currently contemplated in order to meet
the requirements of these regulatory authorities. Either of these results would have a broad impact on us and could have a material adverse
effect on our businesses, financial condition, results of operations and prospects and, as a result, investors could lose all or most
of their investment.
Because distributions to the
INX Token holders are dependent on our cash flow, our failure to continue to develop the Company platforms, failure of the platforms to
gain regulatory approvals or failure of the platforms to gain acceptance may prevent us from paying a distribution to the INX Token holders.
Such adverse effects would impact the utility, liquidity, and the trading price of INX Tokens and potentially render INX Tokens worthless.
Firms in the financial services
industry have experienced increased scrutiny in recent years. Such regulatory or other actions may lead to penalties, fines, disbarment
and other sanctions which could place restrictions or limitations on our operations and otherwise have a material adverse effect on our
businesses.
We expect to face intense
competition from other companies and, if we are not able to successfully compete, our business, financial condition and operating results
will be materially harmed.
The digital assets industry
is highly innovative and rapidly evolving, with frequent introductions of new products and services, and subject to uncertain and evolving
industry and regulatory requirements. Although we strongly believe that our key competitive advantage is the ability to offer digital
assets and security tokens on a single trading platform and within a regulated and fully transparent environment as a public company,
we expect competition to further intensify in the future as existing and new competitors introduce new products or enhance existing service
offerings. We compete against a number of companies that focus on traditional financial services and those that focus on blockchain-based
services.
19
We expect to encounter competition
in all aspects of our business, including from entities having substantially greater capital and resources, offering a wide range of products
and services and in some cases operating under a different and possibly less stringent regulatory regime.
We will face competition from
other securities, futures and securities option exchanges; over-the-counter markets (OTC); clearing organizations; large industry participants;
swap execution facilities; alternative trade execution facilities; technology firms, including electronic trading system developers, and
others. New entrants may enter the market with alternative methods of providing trade execution and related services, and existing competitors
may launch new initiatives.
Our main competitors fall
into the following categories:
●
traditional financial technology
and brokerage firms that have entered the crypto asset market in recent years and offer overlapping features targeted at our customers;
and
●
companies focused on the crypto
asset market, some of whom adhere to local regulations and directly compete with our platform, and many who choose to operate outside
of local rules and regulations or in jurisdictions with less stringent local rules and regulations and are potentially able to more quickly
adapt to trends, support a greater number of crypto assets, and develop new crypto-based products and services due to a different standard
of regulatory scrutiny.
Many of these competitors
have greater financial, marketing, technological and personnel resources than we do. In addition, many of our competitors may offer a
wider range of bundled services, have broader name recognition, and have larger customer bases than we do.
Due to our regulated status
in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and
services, including products and services that our unregulated or less regulated competitors are able to offer to a group that includes
many of our customers, which may adversely impact our business, financial condition, and results of operations.
In recent years, our commitment
to compliance and the attendant customer-facing requirements, including customer due diligence requirements, have resulted in our customers
transferring significant funds and crypto assets to unregulated or less regulated competitors. We also have expended significant managerial,
operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions
in which we operate, and expect to continue to incur significant costs to comply with these requirements, which unregulated or less regulated
competitors have not had to incur.
Many innovative start-up companies
and larger traditional financial services companies have made, and continue to make, significant investments in research and development,
and we expect these companies to continue to develop similar or superior products and technologies that compete with our products. Further,
more traditional financial and non-financial services businesses may choose to offer blockchain-based services in the future as the industry
gains adoption.
Our existing competitors have,
and our potential competitors are expected to have, various competitive advantages over us, such as:
●
the ability to trade crypto
assets and offer products and services that we do not support or offer on our platform (due to constraints from regulatory authorities,
our banking partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws;
●
greater name recognition, longer
operating histories, larger customer bases, and larger market shares;
●
larger sales and marketing budgets
and organizations;
●
greater resources to make acquisitions;
20
●
larger and more mature intellectual
property portfolios;
●
established core business models
outside of the trading of crypto assets, allowing them to operate on lesser margins or at a loss;
●
operations in certain jurisdictions
with lower compliance costs and greater flexibility to explore new product offerings; and
●
substantially greater financial,
technical, and other resources.
Our ability to develop competitive
advantages will require continued enhancements to our products, investment in the development of our services, additional marketing activities
and enhanced customer support services. There can be no assurance that we will have resources to make sufficient investments in the development
of our services, that our competitors will not devote significantly more resources to competing services or that we will otherwise be
successful in developing market share. If competitors offer superior services, our market share could be affected and this would adversely
impact our business and results of operations.
Failure to keep up
with rapid changes in industry-leading technology, products and services could negatively impact our results of operations.
The financial services industry
is subject to rapid technological change and evolving industry standards. User demands become greater and more sophisticated as the dissemination
of products and information to customers increases. If we are unable to anticipate and respond to the demand for new services, products
and technologies, innovate in a timely and cost-effective manner and adapt to technological advancements and changing standards, we may
be unable to compete effectively, which could have a material adverse effect on our business. Many of our competitors have significantly
greater resources than we do to fund research and development initiatives. Moreover, the development of technology-based services is a
complex and time-consuming process. New products and enhancements to existing products can require long development and testing periods.
Significant delays in new product releases, failure to meet key deadlines, or significant problems in creating new products could negatively
impact our revenues and profits.
The extent to which
blockchain assets are used to fund criminal or terrorist enterprises or launder the proceeds of illegal activities could materially impact
our business.
The potential, or perceived
potential, for anonymity in transfers of bitcoin and similar blockchain assets, as well as the decentralized nature of blockchain networks,
has led some terrorist groups and other criminals to solicit bitcoins and other blockchain assets for capital raising purposes. As blockchain
assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies have been examining
the operations of blockchain assets, their users and exchanges, concerning the use of blockchain assets for the purpose of laundering
the proceeds of illegal activities or funding criminal or terrorist enterprises.
In addition to the current
market, new blockchain networks or similar technologies may be developed to provide more anonymity and less traceability. There is also
the potential that other blockchain asset trading platforms may court such illicit activity by not adhering to know-your-customer and
anti-money laundering practices.
We may not be able to prevent
illegal activity from occurring over our platforms. We may be unable to detect the unauthorized use of a KYC/AML vetted account on one
of our platforms. Further, we may be unable to verify whether private keys for wallets containing INX Tokens have been transferred to
third parties who have not completed our KYC/AML process. Although we have implemented procedures that will ensure that we remain in compliance
with our KYC/AML obligations, we may not be successful in deterring or identifying illegal activity.
The use of blockchain assets
for illegal purposes, or the perception of such use, over our platforms or on other trading platforms could result in significant legal
and financial exposure, damage to our reputation, damage to the reputation of blockchain assets and a loss of confidence in the services
provided by our platforms and the blockchain asset community as a whole. Our failure to meet our KYC/AML requirements could result in
regulatory penalties which could have a materially adverse effect on our business.
21
We may not have sufficient
cash flow from operating activities, cash on hand and the ability to obtain borrowing capacity to finance required capital expenditures,
fund strategic initiatives and meet our other cash needs. These obligations require a significant amount of cash, and we may need additional
funds, which may not be readily available.
The viability of our business
is dependent on the availability of adequate capital to develop and maintain our business and meet our regulatory capital requirements.
We will need to continue to invest in our operations for the foreseeable future to carry out our business plan. If our business does not
attract clients and does not achieve the expected operating results, we will need to seek additional financing or revise our business
plan. Our ability to borrow additional funds may be impacted by financial lending institutions' ability or willingness to lend to
us on commercially acceptable terms.
Low levels of operating cash
flow together with limited access to capital or credit in the future could have an impact on our ability to meet our regulatory capital
requirements, invest in our software and infrastructure, engage in strategic initiatives, make acquisitions or strategic investments in
other companies, react to changing economic and business conditions, repay our outstanding debt, or make dividend payments. Such outcomes
could have an adverse effect on our business, financial condition and operating results.
Our securities business
exposes us to capital requirements and regulatory risk.
Broker-dealers are also subject
to regulatory capital requirements promulgated by the applicable regulatory and exchange authorities of the countries in which they operate.
The failure to maintain required regulatory capital may lead to suspension or revocation of a broker-dealer registration and suspension
or expulsion by a regulatory body. If existing cash together with cash from operations are not sufficient, we may need to reject orders
from clients and we may ultimately breach regulatory capital requirements.
Furthermore, if our broker-dealer
subsidiaries are subject to new or modified regulatory capital rules or requirements, or fines, penalties or sanctions due to increased
or more stringent enforcement, it could materially limit or reduce the liquidity we may need to expand or even maintain our then-present
levels of business, which could have a material adverse effect on our business, results of operations and financial condition.
We may be unable to
maintain minimum net capital that meets regulatory requirements. Further, our commitment to maintain the Cash Fund or other regulatory
reserves may limit our ability to invest in our future growth.
As a broker-dealer, we must
maintain minimum net capital that satisfies the requirements under Rule 15c3-1 under the Exchange Act. Depending upon our future business
activities, we may become subject to additional capital requirements in the United States or other foreign jurisdictions in which we may
conduct business in the future.
In the U.S., we have
obtained licenses to operate as money transmitters (or the equivalent in the states where such licenses or equivalent are required to
conduct our business), as well as in the District of Columbia and Puerto Rico. As a licensed money transmitter, we are subject to, among
other things, capital requirements including the net worth of our subsidiary, INXD.
Current and future regulations
may require us to accumulate capital reserves in our subsidiaries which could limit our ability to carry on or expand our operations or
may result in higher than anticipated costs for financing our operations.
In addition, we have established
a Cash Fund, as defined below, by reserving 75% of the gross proceeds less payments to underwriters from our initial public offering in
excess of $25 million to be available to cover customer and Company losses, if any, that result from cybersecurity breaches or theft,
errors in execution of the trading platform or its technology, and counterparty defaults, including instances where counterparties lack
sufficient collateral to cover losses. We refer to this amount as our "Cash Fund" or "Reserve Fund." The Cash
Fund is intended to provide additional protection to our customers and maintain the financial stability of the Company.
22
In addition, we invest a significant
level of resources in the continued development and operation of our trading platform and the development of our service offering. We
cannot guarantee that we will have or will maintain sufficient funding to continue investing in our business and successfully execute
our business plan.
If our reserves are insufficient
to cover our future liabilities, we may be required to raise additional capital. Any one or all of these outcomes may have a material
effect on our business.
There can be no assurance
that we will have sufficient assets or that we will be able to obtain and maintain liability insurance on acceptable terms or with adequate
coverage to cover our liabilities.
If our platform or the INX
Token is alleged to have a flaw or is hacked such that our customers suffer significant losses, we may be subject to significant liability
claims or regulatory action. To mitigate this risk, we have established a Cash Fund by reserving 75% of the gross proceeds less payments
to underwriters from our initial public offering in excess of $25 million to be available to cover customer and Company losses, if any,
that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty defaults,
including instances where counterparties lack sufficient collateral to cover losses. The Company utilizes the Cash Fund only in response
to these events. However, the Cash Fund may be insufficient to cover all losses associated with significant liability claims. Further,
the Company does not plan to replenish the Cash Fund after our initial public offering and after it has been used for these purposes.
Further, insurance coverage
against such losses is expensive and may not be available in the future on acceptable terms, or at all. Available insurance coverage may
be subject to unfavorable terms and conditions and require payments of significant deductibles, or it may not be sufficient to cover all
losses in the case of a claim. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against
potential liability claims could result in us becoming subject to significant liabilities that are uninsured.
Risks to customers'
assets in the event of insolvency or bankruptcy of any INX entity
Customer custodial assets
represent restricted funds maintained in segregated accounts that are held in accounts for the exclusive benefit of customers. The
Company
holds liquid assets, as defined by applicable regulatory requirements equal to at least 100% of the aggregate amount of all customers
custodial liabilities.
All customer funds are held in their original currency one-to-one at the firm's digital assets custodian
as well as at a specifically designated U.S. bank account. The firm does not hypothecate, invest or use customer funds for any other purpose.
The Company places great importance
on safeguarding customers' crypto assets. The Company is in the process of implementing a segregation of customer funds following
the CFTC segregation model under the CEA Rule 1.20,
Futures customer funds to be segregated and separately accounted for,
to the
extent feasible and available. We intend to achieve this protection by amending contractual agreements with our custodian and banks holding
customer funds. Such amendments, among other related provisions, will include the addition of a written segregation acknowledgement letter
issued by our custodian and banks acknowledging certain accounts to be specifically designated as holding customer funds and prohibit
the right of offset between customer and house assets deposited by INX and held by such custodians and banks. The key objective of the
contractual revisions is to separate assets held in specifically designated customer accounts from the Company's general estate,
thus making them bankruptcy remote and not subject to claims of general creditors, a required practice under CFTC rules, and a framework
that we believe can be similarly applied by digital assets intermediaries. The Company expected to implement the segregation requirement
during the first half of 2023, subject to custodian and banks' cooperation, however, due to recent developments in the banking industry
and failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank in March 2023, this implementation will be delayed.
Pursuant to this segregation
mechanism, the Company is in the process of modifying its services agreements with the custodian holding digital assets in specifically
designated, and titled as such, custodial accounts on a segregated basis for the sole benefit of the Company's customers. Under
such agreements, assets held in segregated accounts are intended to be recognized as customer property and in the event that the Company
becomes subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, under the segregation acknowledgement
terms between the Company and the bank or the custodian, the Company believes that the bank or the custodian would have no obligation
to release customer funds and digital assets held in the custodial accounts, except upon instructions of the trustee in bankruptcy or
pursuant to a bankruptcy court order. Moreover, the segregation requirement prohibits the right of offset between customer and proprietary
assets held by the bank or the custodian.
23
However, because custodially
held crypto assets may be considered to be the property of a bankruptcy estate, the crypto assets held in custody by BitGo Trust Company,
Inc. ("BitGo Trust"), on behalf of our customers could be treated as property of a bankruptcy estate in the event of the insolvency
or bankruptcy of an INX entity and consequently our customers could be treated as general unsecured creditors in bankruptcy proceedings.
Accordingly, the Company believes
that a court would not treat customers' crypto assets as part of the Company's general estate; however, due to the novelty
of crypto assets, there can be no assurance that a bankruptcy court would not determine to include these customer assets as part of our
bankruptcy estate in the event of our insolvency or bankruptcy.
Our failure to safeguard
and manage our customers' fiat currencies and crypto assets could adversely impact our business, operating results, and financial
condition.
As of December 31, 2022, our
customer funds in fiat were held with our partnering banks, Metropolitan Commercial Bank and Evolve Bank and Trust, which
are not affiliated with INX.  As of the date hereof, all such customer assets held at the Metropolitan Commercial Bank have been
transferred to the Byline Bank, which is currently the bank where all customer assets for clients trading digital assets are held under
a specifically designated custodial account. Byline Bank is not affiliated with INX. Customer funds for clients trading security tokens
continue to be held at Evolve Bank and Trust under individual accounts for each client.
Supported crypto assets are
not insured or guaranteed by any government or government agency. The ability to manage and accurately safeguard customer assets requires
a high level of internal controls. As our business continues to grow and we expand our product and service offerings, we must continue
to strengthen our associated internal controls and ensure that our partners do the same. Our success and the success of our offerings
requires significant public confidence in our and our partners' ability to properly manage customers' balances and handle
large and growing transaction volumes and amounts of customer funds. In addition, we are dependent on our partners' operations,
liquidity, and financial condition for the proper maintenance, use, and safekeeping of these customer assets. Any failure by us or our
partners to maintain the necessary controls or to manage customer crypto assets and funds appropriately and in compliance with applicable
regulatory requirements could result in reputational harm, litigation, regulatory enforcement actions, significant financial losses, lead
customers to discontinue or reduce their use of our services, and result in significant penalties and fines and additional restrictions,
which could adversely impact our business, operating results, and financial condition.
Moreover, because custodially
held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold
in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured
creditors. This may result in customers finding our custodial services more risky and less attractive and any failure to increase our
customer base, discontinuation or reduction in use of our platform and products by existing customers as a result could adversely impact
our business, operating results, and financial condition.
Our
security technology is designed to prevent, detect, and mitigate inappropriate access to our systems, by internal or external threats.
We believe we have developed and maintained administrative, technical, and physical safeguards designed to comply with applicable legal
requirements and industry standards. However, it is nevertheless possible that hackers, employees or service providers acting contrary
to our policies, or others could circumvent these safeguards to improperly access our systems or documents, or the systems or documents
of our business partners, agents, or service providers, and improperly access, obtain, misuse customer crypto assets and funds. The methods
used to obtain unauthorized access, disable, or degrade service or sabotage systems are also constantly changing and evolving and may
be difficult to anticipate or detect for long periods of time.
Any
loss of customer cash or crypto assets could result in a substantial business disruption, adverse reputational impact, inability to compete
with our competitors, and regulatory investigations, inquiries, or actions. Also, any security incident resulting in a compromise of
customer assets could result in substantial costs to us and require us to notify impacted individuals, and in some cases regulators,
of a possible or actual incident, expose us to regulatory enforcement actions, including substantial fines, limit our ability to provide
services, subject us to litigation, significant financial losses, damage our reputation, and adversely affect our business, operating
results, financial condition, and cash flows.
24
We may experience systems
failures or capacity constraints that could materially harm our ability to conduct our operations and execute our business strategy.
We are heavily dependent on
the capacity, reliability and security of the computer and communications systems and software supporting our operations. We receive and/or
process a large portion of our trade orders through electronic means, such as through public and private communications networks. Our
systems, or those of our third party providers, may fail or be shut down or, due to capacity constraints, may operate slowly, causing
one or more of the following to occur:
●
unanticipated disruptions in
service to our customers;
●
slower response times and delays
in our customers' trade execution and processing;
●
failed settlement of trades;
●
incomplete or inaccurate accounting,
recording or processing of trades;
●
financial losses;
●
security breaches;
●
litigation or other customer
claims;
●
loss of customers; and
●
regulatory sanctions.
If any of our systems do not
operate properly, are compromised or are disabled, including as a result of system failure, employee or customer error or misuse of our
systems, we could suffer financial loss, liability to customers, regulatory intervention or reputational damage that could affect demand
by current and potential users of our market.
We will need to continue to
upgrade, expand and increase the capacity of our systems as our business grows and as we execute our business strategy. Although many
of our systems are designed to accommodate additional volume and products and services without redesign or replacement, we will need to
continue to make significant investments in additional hardware and software to accommodate the increases in volume of transactions and
order transaction traffic and to provide processing services to third parties. If we cannot increase the capacity and capabilities of
our systems to accommodate an increasing volume of transactions and to execute our business strategy, our ability to maintain or expand
our businesses would be adversely affected.
We may face cyber-attack
and other cyber security risks.
We regard the secure transmission
of confidential information and the ability to continuously transact and clear on our electronic trading platforms as critical elements
of our operations. Our technology, our people and those of our third party service providers and our customers may be vulnerable to targeted
attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, firewall or encryption failures and other
security problems. Attackers may seek to steal information about our technology, financial data or user information or take other actions
that would be damaging to the Company and/or holders of INX Tokens.
25
In addition, as the regulatory
environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly
changing requirements applicable to our business, compliance with those requirements could also result in additional costs.
The INX Token Distributed
Ledger is publicly available. The misuse or theft of this information may give rise to breaches of privacy laws, fines and sanctions.
For many blockchain assets,
distributed ledgers are used to record transfers of ownership of the asset. Information regarding ownership is most commonly represented
by ledger balances and an owner's public wallet address. Such information includes the complete transfer history from the inception
of the respective blockchain asset and such information regarding ownership of the assets, including the public wallet address, is generally
available to the public. For many blockchain assets, personal identifying information that is used to associate a public wallet address
with its owner is typically maintained in a separate database that is not exposed to the public.
There are a number of data
protection, security, privacy and other government- and industry-specific requirements that are implicated by utilizing a distributed
ledger. If blockchain networks are unable to satisfy data protection, security, privacy, and other government-and industry-specific requirements,
their growth could be harmed.
Security attacks against
the Company could result in a loss of the Company's blockchain assets, including the INX Tokens, theft of personal information
of our customers or damage to our reputation and our brand, each of which could adversely affect an investment in INX Tokens or the Company.
We could be required to incur significant expense to protect our systems and/or investigate any alleged attack.
Security breaches, computer
malware and computer hacking attacks have been a prevalent concern since the launch of blockchain networks. In 2022, $3.8 billion in cryptocurrency
was reported stolen from cryptocurrency exchanges and investors. One notable theft during 2022 was more than $600 million worth of blockchain
assets stolen from a video game network. Our security system and operational infrastructure may be breached due to the actions of outside
parties, error or malfeasance of an employee of ours, or otherwise. Techniques used to obtain unauthorized access, disable or degrade
service, or sabotage systems change frequently and may be designed to remain dormant until a predetermined event. Outside parties may
also attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure.
Furthermore, we believe that, as our assets grow, the Company may become a more appealing target for security threats such as hackers
and malware.
In addition, the Company holds
private keys that allow it or its transfer agent, as applicable, the ability to "freeze" or automatically reject any digital
wallet address from participating in transfers of INX Tokens, or unilaterally transfer INX Tokens out of a third-party digital wallet.
If such private keys are compromised, all owners of INX Tokens are at risk of losing the ability to transfer their INX Token out of their
digital wallet or they may have their INX Token transferred out of their digital wallet without their permission.
Our security measures may
prove insufficient depending upon the attack or threat posed. We may be unable to anticipate these techniques or implement adequate preventative
measures. As a result, an unauthorized party may obtain access to our private keys, company and customer data or blockchain assets.
Any such breach or unauthorized
access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the services we
provide that could potentially have an adverse effect on our business, while resulting in regulatory penalties or the imposition of burdensome
obligations by regulators. In the event of a security breach, we may be forced to cease operations, or suffer a reduction in assets, the
occurrence of each of which could adversely affect an investment in the Company.
We are subject to risks
in using third-party service providers, including custodians and other agents.
We depend on the services
of custodians and other agents and third-party service providers to carry out certain transactions and other business functions (including
without limitation, Bitgo Trust, our custodian). Errors and mistakes made by these third parties may be attributed to us and subject us
to reputational damage, penalties or losses. We may be unsuccessful in seeking reimbursement or indemnification from these third-party
service providers.
26
Furthermore, in the event
of the insolvency of a custodian, we may be unable to recover equivalent assets in full as we may rank among the custodian's unsecured
creditors in relation to its assets. In addition, a custodian may not segregate our cash (including funds of our customers) from its own
cash, and therefore we may rank as unsecured creditors in relation to that cash. The inability to recover assets from the custodian could
have a material adverse effect on our results of operations, financial condition and cash flow.
The counterparty to one or
more of our contractual arrangements could default on its obligations under the contract. Default risk may arise from events or circumstances
that are difficult to detect, foresee or evaluate. In addition, the default by large market participants that the market experienced led
to significant liquidity problems for other market participants, which could in turn expose us to significant losses. If a counterparty
defaults, we may be unable to take action to cover the exposure and could incur material losses and legal and reputational damages. We
may not accurately anticipate the impact of market stress or counterparty financial condition and, as a result, we could take insufficient
action to reduce these risks effectively, which, if left unmitigated, could have a material adverse effect on our results of operations,
financial condition and cash flow.
We are not restricted from
dealing with any particular counterparty or from concentrating any or all of our transactions with one counterparty. The consolidation
and elimination of counterparties may increase our concentration of counterparty risk.
The loss of key personnel
could have a material adverse effect on us.
Our success depends solely
on the continued services of key personnel, particularly senior management and officers of the company, who have extensive market knowledge
and long-standing industry relationships. In particular, our reputation among and our relationships with key blockchain industry leaders
are the direct result of a significant investment of time and effort by our senior management to build credibility in a highly specialized
industry. The loss of services of any member of senior management could diminish our business and growth opportunities and our relationships
with key leaders in the blockchain industry and could have a material adverse effect on us.
Our business will be
adversely affected if we are unable to attract and retain talented employees, including sales, technology, operations and development
professionals.
Our business operations will
require highly specialized knowledge of the financial industry and of technological innovation as it applies to the financial industry.
If we are unable to hire or retain the services of talented employees, including executive officers, other key management and sales, technology,
operations and development professionals, we would be at a competitive disadvantage. In addition, recruitment and retention of qualified
staff could result in substantial additional costs. The loss of the services of one or more of our executive officers or other key professionals
or our inability to attract, retain and motivate qualified personnel, could have a material adverse effect on our ability to operate our
business.
We have not identified
all the persons that we will need to hire to provide services and functions critical to the development of the business and no assurance
can be given that we will be able to hire the necessary persons on acceptable terms, if at all.
Our business has not identified
all the persons that we will need to hire to provide services and functions critical to the continued development of the business. If
we are unable to hire persons with the necessary expertise on terms acceptable to us then we will not be able to continue to develop our
business as contemplated. Further, even if we are able to hire such service providers, they might be unable to meet our specifications
and requirements, which could have a material adverse effect on our ability to develop and evolve our business plan.
The size, nature and
complexity of the Company's business could make it susceptible legal proceedings which may have an adverse effect on our reputation
and brand and our business, operating results, and financial condition
The size, nature and complexity
of the Company's business could make it susceptible to various claims, both in litigation and binding arbitration proceedings, legal
proceedings, and government investigations, due to the heightened regulatory scrutiny following the recent disruptions in the crypto asset
markets. The Company believes that since the digital asset industry generally is a relatively new business sector, it is more likely subject
to government investigation and regulatory determination, particularly following the recent cryptocurrency market participant bankruptcies.
Any claims, regulatory proceedings or litigation that could arise in the course of the Company's business could have a material
adverse effect on the Company, its business or operations, or the industry as a whole.
27
The scope, determination,
and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are
subject cannot be predicted with certainty, and may result in:
●
substantial payments to satisfy judgments, fines, or penalties;
●
substantial outside counsel, advisor, and consultant fees
and costs;
●
substantial administrative costs, including arbitration fees;
●
additional compliance and licensure requirements;
●
loss or non-renewal of existing licenses or authorizations,
or prohibition from or delays in obtaining additional licenses or authorizations, required for our business;
●
loss of productivity and high demands on employee time;
●
criminal sanctions or consent decrees;
●
termination of certain employees, including members of our
executive team;
●
barring of certain employees from participating in our business
in whole or in part;
●
orders that restrict our business or prevent us from offering
certain products or services;
●
changes to our business model and practices;
●
delays to planned transactions, product launches or improvements;
and
●
damage to our brand and reputation.
Further, we believe increasingly
strict legal and regulatory requirements and additional regulatory investigations and enforcement, any of which could occur or intensify,
may result in changes to our business, as well as increased costs, and supervision and examination for ourselves, our affiliates, and
service providers. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations,
and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors
or could impact how we offer such products and services. Adverse changes to, or our failure to comply with, any laws and regulations have
had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.
As of this date, the Company
is not aware of any legal proceedings or government investigations, pending or known to be threatened, in the United States or in other
jurisdictions against the Company or its affiliates. However, the Company may be subject to regulatory oversight by numerous state, federal,
and foreign regulators and we may become subject to various legal proceedings, inquiries, investigations, and demand letters that arise
in the course of our business.
28
As a financial services
provider, we might be subjected to significant litigation risk and potential commodity and securities law liability.
Many aspects of our business
involve substantial litigation risks. We could be exposed to substantial liability under federal and state laws and court decisions, as
well as rules and regulations promulgated and/or direct actions brought by the SEC, state securities regulators and other U.S. regulatory
agencies.
These
risks include, among others, potential liability from disputes over terms of a trade, the claim that a system failure or delay caused
monetary losses to a customer, that we entered into an unauthorized transaction, that we provided materially false or misleading statements
in connection with a transaction or that we failed to effectively fulfill our regulatory oversight responsibilities. We may be deemed
an underwriter under the Securities Act with regard to our role and involvement with respect to any initial offerings of securities on
the INXS trading platform, and our failure to comply with applicable federal securities laws may expose us to legal liability. We may
be subject to disputes regarding the quality of trade execution, the settlement of trades or other matters relating to our services. We
may become subject to these claims as a result of failures or malfunctions of our systems and services we provide.
We could incur significant
legal expenses defending claims, even those without merit. In addition, an adverse resolution of any future lawsuit or claim against us
could have a material adverse effect on our business and our reputation. To the extent we are found to have failed to fulfill our regulatory
obligations, we could lose our authorizations or licenses or become subject to conditions that could make future operations more costly
and impairing our profitability.
Our compliance and risk management programs
might not be effective and may result in outcomes that could adversely affect our reputation, financial condition and operating results.
Our ability to comply with
applicable laws and rules is largely dependent on our establishment and maintenance of compliance, review and reporting systems, as well
as our ability to attract and retain qualified compliance and other risk management personnel. We face the risk of significant intervention
by regulatory authorities, including extensive examination and surveillance activity.
While we have devoted significant
resources to develop our compliance policies and procedures and expect to continue to do so in the future, we cannot assure you that our
compliance policies and procedures will always be effective or that we will always be successful in monitoring or evaluating our risks.
In the case of alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative
proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages, which could be significant.
Any of these outcomes may adversely affect our reputation, financial condition and operating results.
Operational risks,
such as misconduct and errors of our employees or entities with which we do business, are difficult to detect and deter and could cause
us reputational and financial harm.
Our employees and agents could
engage in misconduct which may include conducting and concealing unauthorized activities, improper use or unauthorized disclosure of confidential
information. We are at risk that our employees may engage in insider trading of the digital assets listed on one of our platforms which
may lead to corporate actions, such as a suspension of trading, and legal actions that could have an adverse effect on the Company.
Further, our employees could
make errors in recording or executing transactions for customers which would cause us to enter into transactions that customers may disavow
and refuse to settle.
It is not always possible
to deter misconduct by our employees, and the precautions we take to prevent and detect this activity may not be effective in all cases.
Our ability to detect and prevent errors or misconduct by entities with which we do business may be even more limited. Such misconduct
could subject us to financial losses or regulatory sanctions and materially harm our reputation, financial condition and operating results.
29
Our operations of businesses
outside of the United States and our acceptance of currencies other than the U.S. Dollar will subject us to currency fluctuation risk.
We intend to expand globally
and portions of our revenues and expenses will be denominated in currencies other than the U.S. dollar. Because our financial statements
are presented in U.S. dollars, we must translate non-U.S. dollar denominated revenues, income and expenses, as well as assets and liabilities,
into U.S. dollars at exchange rates in effect during or at the end of each reporting period. These fluctuations may materially impact
the translation of our non-U.S. results of operations and financial condition.
Increases or decreases in
the value of the U.S. dollar against these other currencies may affect our operating results and the value of assets and liabilities denominated
in foreign currencies.
We accept certain cryptocurrencies
as fees for services. Our holding of these cryptocurrencies will subject us to risks due to fluctuations in the value of these cryptocurrencies.
We accept certain cryptocurrencies
as payment fees for services. These cryptocurrencies will be held until sold. Proceeds from the sale of such cryptocurrencies will be dependent on the U.S. dollar trading
value for the respective cryptocurrency based on the relevant market or markets for that cryptocurrency. Decreases in the trading value
of a cryptocurrency while it is held by us will result in a decrease in the operating results of the Company.
Crypto assets as payment
fees for crypto and security token services.
With regards to trading of
digital assets, a transaction fee is charged and deducted from the customer account at the time of the order execution. The transaction
fee is set as a percentage of the transaction value based on the fee schedule published on the Company's website (https://www.inx.co/fee-schedules/)
and is charged in the currency of the consideration paid by the customer. For example, if a customer buys BTC with USD, the transaction
fee would be charged in USD. The same process is followed with regards to transactions where one digital asset is purchased for another,
for example, BTC is purchased with ETH. In this example, the transaction fee would be charged in ETH.
These cryptocurrencies will
be held until sold. Proceeds from the sale of such cryptocurrencies will be dependent on the U.S. dollar trading value for the respective
cryptocurrency based on the relevant market or markets for that cryptocurrency. Decreases in the fair value of a cryptocurrency while
it is held by us will result in a decrease in the operating results of the Company.
To minimize market risk, the
Company follows its policy on converting digital assets earned as transaction fees into U.S. dollars if such amounts exceed internally
established limits.
We may not be able
to successfully execute our business strategy if we are deemed to be an investment company under the Investment Company Act of 1940.
In general, under the Investment
Company Act, a U.S. company that does not qualify to use one of the "private investment company" (or other specialized) exemptions
from investment company status, that has made (or proposes to make) a public offering of its securities and that is, or hold itself out
as being, engaged primarily in the business of investing, reinvesting or trading in securities must register, and is subject to regulation,
as an investment company under that Act. In addition, in general, investment company status may apply (again, unless a specialized exemption
is available) because a company owns "investment securities" (essentially, non-controlling interests in other companies'
securities or controlling interests in companies that have the characteristics of an investment company) constituting more than 40% of
the value of the investing company's unconsolidated assets (disregarding U.S. government securities and "cash items").
We intend that our future activities will not cause us to be considered an investment company.
Further, our subsidiaries,
INXD and INXS, are engaged in the trading of cryptocurrencies and security tokens, respectively. INXS engages in trading security tokens
that constitute securities. We believe that INXS qualifies to utilize an exemption from investment company status under Section 3(c)(2)
of the Investment Company Act that applies to entities "primarily engaged in the business of underwriting and distributing securities
issued by other persons, selling securities to customers, acting as broker, and acting as market intermediary, or any one or more of such
activities, whose gross income normally is derived principally from such business and related activities."
30
Accordingly, we believe that
the cryptocurrencies that we or our subsidiaries will own and trade in will not be securities. In the case of trading in security tokens
by a subsidiary that qualifies to use the Section 3(c)(2) exemption from investment company status, our ownership interest in that subsidiary
will not constitute an "investment security" (as a result of the availability of the exemption). As a result, we believe we
will not be primarily engaged in the business of investing, reinvesting or trading in securities and that investment securities will not
constitute more than 40% of the unconsolidated value of our total assets after eliminating holdings in U.S. government securities and
cash items.
While we believe that our
business activities do not cause us to be an investment company, if we were deemed to be, and were required to register as, an investment
company, we would be forced to comply with substantive requirements under the Investment Company Act, including limitations on our ability
to borrow, limitations on our capital structure, limitations on our ability to issue additional common stock, restrictions on acquisitions
of interests in associated companies, prohibitions on transactions with affiliates, restrictions on specific investments, and compliance
with governance, reporting, record keeping, voting, proxy disclosure and other statutory requirements and related rules and regulations.
If we were forced to comply with those requirements, we would be required to change our structure and future operations from our current
plans, could be prevented from successfully executing our business strategy and could be required to cease business.
We need to implement
strict finance and accounting systems, procedures and controls to operate our business.
We are required to comply
with a variety of reporting, accounting and other rules and regulations. Compliance with these requirements is expensive. We need to implement
strict finance and accounting systems, procedures and controls to satisfy our reporting requirements and these requirements may increase
our costs and require additional management time and resources. However, as an "emerging growth company" as defined in the
JOBS Act we may not be required to, among other things, provide an auditor's attestation report on our system of internal controls
over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act or comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit
and the financial statements (auditor discussion and analysis). We have not completed an assessment, nor have our auditors tested, our
systems of internal controls. For as long as we are an "emerging growth company" under the JOBS Act, our independent registered
public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant
to Section 404. If our internal controls have undetected weaknesses or our internal control over financial reporting is determined to
be ineffective, such failure could cause investors to lose confidence in our reported financial information, negatively affect the market
price of the INX Token and adversely impact our business and financial condition.
Negative publicity
could damage our business.
Developing and maintaining
our reputation is critical to attracting and retaining customers and investors and for maintaining our relationships with our regulators.
Our success depends on our ability to complete development of, successfully implement, and maintain the electronic trading systems that
have the functionality, performance, reliability and speed required by our customers.
Crypto asset platforms are
still relatively new. Many of our competitors are unlicensed, unregulated, operate without supervision by any governmental authorities,
and do not provide the public with significant information regarding their ownership structure, management team, corporate practices,
cybersecurity, and regulatory compliance. As a result, customers and the general public may lose confidence in crypto asset platforms,
including regulated platforms like ours.
Since the inception of the
crypto economy, numerous crypto asset platforms have been sued, investigated, or shut down due to fraud, manipulative practices, business
failure, and security breaches. In many of these instances, customers of these platforms were not compensated or made whole for their
losses. Larger platforms like us are more appealing targets for hackers and malware, and may also be more likely to be targets of regulatory
enforcement actions.
In addition, there have been
reports that a significant amount of crypto asset trading volume on crypto asset platforms is fabricated and false in nature, with a specific
focus on unregulated platforms located outside the United States. Such reports may indicate that the market for crypto asset platform
activities is significantly smaller than otherwise understood.
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Negative perception, a lack
of stability and standardized regulation in the crypto economy, and the closure or temporary shutdown of crypto asset platforms due to
fraud, business failure, hackers or malware, or government mandated regulation, and associated losses suffered by customers may reduce
confidence in the crypto economy and result in greater volatility of the prices of assets, including significant depreciation in value.
Any of these events could have an adverse impact on our business.
Additionally, although we
are not directly connected to the recent crypto asset market events, we may still suffer reputational harm due to our association with
the crypto asset industry in light of the recent disruption in the crypto asset markets. Ongoing and future regulation and regulatory
actions could significantly restrict or eliminate the market for or uses of certain crypto assets and/or may adversely affect the Company's
business, reputation, financial condition and results of operations.
Negative publicity regarding
our Company, INX Tokens, our key personnel or blockchain assets generally, whether based upon fact, allegation or perception and whether
justified or not, could give rise to reputational risk which could significantly harm our business prospects.
Some of those risks include:
●
any significant disruption in our products and services, in
our information technology systems, or in any of the blockchain networks we support, could result in a loss of customers or funds and
adversely impact our brand and reputation and our business, operating results, and financial condition;
●
cyberattacks and security breaches of our platform, or those
impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating results, and financial
condition;
●
we are subject to an extensive and highly-evolving regulatory
landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation,
business, operating results, and financial condition;
●
security issues, bugs, and software errors have been identified
with many crypto assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also
inherent security weaknesses in some crypto assets, such as when creators of certain crypto networks use procedures that could allow
hackers to counterfeit tokens. Any weaknesses identified with a crypto asset could adversely affect its price, security, liquidity, and
adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating
the actions of the computers) obtains a majority of the compute or staking power on a crypto network, as has happened in the past, it
may be able to manipulate transactions, which could cause financial losses to holders, damage the network's reputation and security,
and adversely affect its value.
Our brand and reputation are
key assets and a competitive advantage. Maintaining, protecting, and enhancing our brand depends largely on the success of our marketing
efforts, ability to provide consistent, high-quality, and secure products, services, features, and support, and our ability to successfully
secure, maintain, and defend our rights to use the "INX" trademark and other trademarks important to our brand. We believe
that the importance of our brand will increase as competition further intensifies. Our brand and reputation could be harmed if we fail
to achieve these objectives or if our public image were to be tarnished by negative publicity, unexpected events, or actions by third
parties. Unfavorable publicity about us, including our products, services, technology, customer service, personnel, and crypto asset or
crypto asset platforms generally could diminish confidence in, and the use of, our products and services. Moreover, to the extent that
we acquire a company and maintain that acquired company's separate brand, we could experience brand dilution or fail to retain positive
impressions of our own brand to the extent such impressions are instead attributed to the acquired company's brand.
We, as well as many of
our potential customers, engage with third party suppliers and service providers for certain important services. An interruption or cessation
of an important supply or service by any third party could have a material adverse effect on our business, including revenues derived
from our customers' trading activity.
We are engaged with a number
of suppliers, such as banking, clearing and settlement organizations, on-line service providers, data processors, and software and hardware
vendors, for elements of our trading, clearing and other systems, as well as communications and networking equipment, computer hardware
and software and related support and maintenance. We also engage with third parties to provide Internet, telecommunication and fiber optic
network connectivity to our data centers. Many of our customers rely on third parties, such as independent software vendors, to provide
them with front-end systems to access our platform and other back office systems for their trade processing and risk management needs.
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We cannot guarantee that these
service providers will make the necessary monetary and time investments to provide services for our INX Trading Solutions model and changes
to our interfaces and functionality that occur as we develop our business. To the extent any of our service providers or the organizations
that provide services to our customers in connection with their trading activities cease to provide these services in an efficient, cost-effective
manner or fail to adequately expand their services to meet our needs and the needs of our customers, we could experience decreased trading
volume, lower revenues and higher costs which could adversely affect an investment in the Company.
The price of crypto
assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant volatility.
The
price of crypto assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant
volatility. For instance, in 2021, the value of certain crypto assets, including Bitcoin, experienced steep increases in value. The increases
in value of certain crypto assets, including Bitcoin, from 2016 to 2017, and then again in 2021, were followed by a steep decline in 2018
and again in 2022.
In
December 2020, CryptoCompare and the University of Sussex Business School launched The Bitcoin Volatility Index (BVIN). The index measures
the implied volatility of bitcoin — the view on volatility over the next 30 days held by bitcoin option traders. Other VIX indices
are used for settlement prices of volatility futures contracts in traditional markets. The index represents a valuable tool for institutional
investors to price bitcoin volatility risk, and hedge and trade on bitcoin volatility. Between January 1, 2021 and April 28, 2023, the
index varied between 50.57% and 174.29%.
The price and trading volume
of any crypto asset is subject to significant uncertainty and volatility, depending on a number of factors, including:
●
market conditions of, and overall sentiment towards, crypto
assets;
●
changes in liquidity, market-making volume, and trading activities;
●
trading activities on other crypto platforms worldwide, many
of which may be unregulated, and may include manipulative activities;
●
investment and trading activities of highly active retail
and institutional users, speculators, miners, and investors;
●
the speed and rate at which crypto is able to gain adoption
as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at
all;
●
decreased user and investor confidence in crypto assets and
crypto platforms;
●
negative publicity and events relating to the crypto economy;
●
unpredictable social media coverage or "trending"
of, or other rumors and market speculation regarding crypto assets;
●
the ability for crypto assets to meet user and investor demands;
●
the functionality and utility of crypto assets and their associated
ecosystems and networks, including crypto assets designed for use in various applications;
●
retail user preferences and perceived value of crypto assets
and crypto asset markets;
●
increased competition from other payment services or other
crypto assets that exhibit better speed, security, scalability, or other characteristics;
●
regulatory or legislative changes and updates affecting the
crypto economy;
●
the characterization of crypto assets under the laws of various
jurisdictions around the world;
●
the adoption of unfavorable taxation policies on crypto asset
investments by governmental entities;
●
the maintenance, troubleshooting, and development of the blockchain
networks underlying crypto assets, including by miners, validators, and developers worldwide;
●
the ability for crypto networks to attract and retain miners
or validators to secure and confirm transactions accurately and efficiently;
33
●
legal and regulatory changes affecting the operations of miners
and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory
requirements as a result of growing environmental concerns around the use of energy in bitcoin and other proof-of-work mining activities;
●
ongoing technological viability and security of crypto assets
and their associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability;
●
fees and speed associated with processing crypto asset transactions,
including on the underlying blockchain networks and on crypto platforms;
●
financial strength of market participants;
●
the availability and cost of funding and capital;
●
the liquidity of crypto platforms;
●
interruptions in service from or failures of major crypto
platforms;
●
availability of an active derivatives market for various crypto
assets;
●
availability of banking and payment services to support crypto-related
projects;
●
level of interest rates and inflation;
●
monetary policies of governments, trade restrictions, and
fiat currency devaluations; and
●
national and international economic and political conditions.
There is no assurance that
any supported crypto asset will maintain its value or that there will be meaningful levels of trading activities. In the event that the
price of crypto assets or the demand for trading crypto assets decline, our business, operating results, and financial condition would
be adversely affected.
New or changing laws and regulations
or interpretations of existing laws and regulations, in the United States and elsewhere, may materially and adversely impact the development
and growth of blockchain networks and the adoption and use of blockchain assets. The imposition of restrictions on all blockchain assets,
or certain blockchain assets, could affect the value, liquidity and market price of blockchain assets subject to heighten regulation,
by limiting access to marketplaces or exchanges on which to trade such blockchain assets, or imposing restrictions on the structure, rights
and transferability of such blockchain assets. Some governments may seek to ban transactions in blockchain assets altogether.
The crypto asset market has
been characterized by significant volatility and unexpected price movements. Certain crypto assets may become more volatile and less liquid
in a very short period of time, resulting in market prices being subject to erratic and abrupt market movement, which could harm our business.
For instance, abrupt changes in volatility or market movement can lead to extreme pressures on our platform and infrastructure that can
lead to inadvertent suspension of services across parts of the platform or the entire platform.
Our revenues and profits
will be substantially dependent on the trading volume in our markets. Our revenues and profits would be adversely affected if we are unable
to develop and continually increase our trading volume on either of our trading platforms.
The success of our business
depends, in part, on our ability to continually increase our trading volume; further develop and expand our product offerings or execution
facilities; and attract and retain new customers. Our success also depends on our ability to offer competitive prices and services in
an increasingly price-sensitive business.
We cannot provide assurances
that we will be able to develop and expand product lines, that we will be able to attract and retain customers or that we will be able
to modify our pricing structure to compete effectively.
34
Trading volumes on blockchain
asset trading platforms have historically been volatile. Such volatility may be the result of various factors, including fluctuations
in the price of blockchain assets or periods of rapid expansion and contraction of adoption and use of blockchain assets. Trading volume
will also be directly affected by domestic and international factors that are beyond our control, including:
●
economic, political and geopolitical
market conditions;
●
legislative and regulatory changes,
including any direct or indirect restrictions on or increased costs associated with trading in our markets;
●
broad trends in the industry
and financial markets;
●
shifts in global or regional
demand or supply in commodities underlying our products;
●
competition;
●
changes in government monetary
policies, especially the regulation of tokens and the number of registered token offerings;
●
availability of capital to our
market participants and their appetite for risk-taking;
●
levels of assets under management;
●
pandemics affecting our customer
base or our ability to operate our markets; and
●
consolidation in our customer
base and within our industry.
Any one or more of these factors
may contribute to reduced activity in our markets.
Declines in trading volume
may negatively impact market liquidity, which could lead to further loss of trading volume. Material decreases in trading volume would
have a material adverse effect on our financial condition and operating results.
A
significant amount of the trading volume on our platform is derived from a relatively small number of customers, and the loss of these
customers, or a reduction in their trading volume, could have an adverse effect on our business, operating results, and financial condition.
A
relatively small number of institutional market makers and high-transaction volume retail customers account for a significant portion
of the trading volume on our platform and the related net transactional revenue. For the year ended December 31, 2022, our top ten institutional
market makers and high-transaction volume retail customers accounted for, in the aggregate, approximately 88% of our trading volume, and
our top two customers accounted for approximately 65% of our trading volume.
We
expect significant trading volume and net revenue attributable to these customers to continue for the foreseeable future. As a result,
a loss of these customers, or a reduction in their trading volume, and our inability to replace these customers, could have an adverse
effect on our business, operating results, and financial condition.
If
we fail to retain existing customers or add new customers, or if our customers decrease their level of engagement with our products, services
and platform, our business, operating results, and financial condition may be significantly harmed.
Any number of factors
can negatively affect customer retention, growth, and engagement, including if:
●
customers increasingly engage
with competing products and services, including products and services that we are unable to offer due to regulatory reasons;
●
we fail to introduce new and
improved products and services, or if we introduce new products or services that are not favorably received;
●
we fail to support new and in-demand
crypto assets or if we elect to support crypto assets with negative reputations;
35
●
there are changes in sentiment about the quality or usefulness of our products
and services or concerns related to privacy, security, or other factors;
●
there are adverse changes in our products and services that are mandated by legislation, regulatory authorities,
or litigation;
●
customers perceive the crypto assets on our platform to be bad investments,
or experience significant losses in investments made on our platform;
●
technical or other problems prevent us from delivering our products and
services with the speed, functionality, security, and reliability that our customers expect;
●
cybersecurity incidents, employee or service provider misconduct, or other
unforeseen activities cause losses to us or our customers, including losses to assets held by us on behalf of our customers;
●
modifications to our pricing model or modifications by competitors to their
pricing;
●
we fail to provide adequate customer service;
●
regulatory and governmental bodies in countries that we target for expansion
express negative views towards crypto asset trading platforms and, more broadly, the digital asset economy; or
●
we or other companies in our industry are the subject of adverse media reports
or other negative publicity.
From
time to time, certain of these factors have negatively affected customer retention, growth, and engagement to varying degrees. If we are
unable to maintain or increase our customer base and customer engagement, our revenue and financial results may be adversely affected.
Any decrease in user retention, growth, or engagement could render our products and services less attractive to customers, which may have
an adverse impact on our revenue, business, operating results, and financial condition. If our customer growth rate slows or declines,
we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive
growth of revenue.
The revaluation of the
INX Token liability to fair value for each reporting period may have a negative effect on our equity and our comprehensive income.
As more fully described in
the notes to our financial statements, the INX Token is presented as a liability on our consolidated balance sheet, which is remeasured
at each reporting period to fair value with changes in fair value recorded in profit or loss.
The fair market value of the
INX Tokens, based on the quoted market price, is subject to fluctuations due to a number of factors, including fluctuations in the Company's
results of operations and macro-economic factors. Accordingly, the financial liability measured at fair market value also fluctuates.
The remeasurement of the INX
Token liability to fair value in each reporting period may have a negative effect on our equity and our comprehensive income.
We have an evolving business
model.
As blockchain assets and blockchain
technologies become more widely available, we expect the services and products associated with them to evolve. As a result, to stay current
with the industry, our business model may need to evolve as well. From time to time we may modify aspects of our business model relating
to our product mix and service offerings. We cannot offer any assurance that these or any other modifications will be successful or will
not result in harm to the business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth
and negatively affect our operating results.
We may have difficulty
executing our growth strategy and maintaining our growth effectively.
Our growth requires additional
investment in personnel, facilities, information technology infrastructure and financial and management systems and controls and may place
a significant strain on our management and resources. Our growth strategy also may subject us to increased legal, compliance and regulatory
obligations.
36
There is no guarantee that
our efforts will be successful. We may not be able to implement important strategic initiatives in accordance with our expectations, including
that the strategic initiatives could result in additional unanticipated costs, which may result in an adverse impact on our business and
financial results. Unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated
with our growth, our future profitability could be adversely affected.
We intend to explore acquisitions,
other investments and strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses.
Any such transaction may not produce the results we anticipate, which could adversely affect our business and the price of INX Tokens.
We intend to explore and pursue
acquisitions, strategic partnerships, joint ventures and other alliances to strengthen our business and grow our company.
The market for acquisitions
and strategic opportunities is highly competitive, especially in light of recent merger and acquisition activity in our industry. In addition,
these transactions entail numerous operational and financial risks, including but not limited to difficulties in valuing acquired businesses,
combining personnel and firm cultures, integrating acquired products, services and operations, achieving anticipated synergies that were
inherent in our valuation assumptions, exposure to unknown material liabilities, the potential loss of key vendors, clients or employees
of acquired companies, incurrence of substantial debt or dilutive issuance of equity securities to pay for acquisitions, higher-than expected
acquisition or integration costs, write-downs of assets or impairment charges, increased amortization expenses and decreased earnings,
revenue or cash flow from dispositions.
We may be unable to identify
strategic opportunities or we may be unable to negotiate or finance future transactions on terms favorable to us. To the extent we enter
into joint ventures and alliances, we may experience difficulties in the development and expansion of the business of any newly formed
ventures, in the exercise of influence over the activities of any ventures in which we do not have a controlling interest, as well as
encounter potential conflicts with our joint venture or alliance partners.
We may not realize the anticipated
growth and other benefits from our growth initiatives and investments, which may have an adverse impact on our financial condition and
operating results.
The Company is dependent
in part on the data center facilities of third parties.
The Company's infrastructure
network may be established in whole or in part through servers which it owns and/or houses at the location facilities of third parties,
and/or servers that it rents at data center facilities of third parties. If the Company is unable to secure or renew its data facility
leases on commercially reasonable terms or at all, the Company may be required to transfer its servers to a new data center facility,
and may incur significant costs and possible service interruption in connection with the relocation. These facilities are also vulnerable
to damage or interruption from, among others, natural disasters, arson, terrorist attacks, power losses, and telecommunication failures.
Additionally, the third party providers of such facilities may suffer a breach of security as a result of third party action, employee
error, malfeasance or otherwise, and a third party may obtain unauthorized access to the data in such servers. The Company and the providers
of such facilities may be unable to anticipate these techniques or to implement adequate preventive measures.
Our business may be adversely
affected by the impact of coronavirus, other epidemics or pandemics, acts of God, wars, insurrections, riots, infrastructure failures,
and other force majeure events.
Public health epidemics or
outbreaks could adversely impact our business. In early 2020, an outbreak of the novel strain of a coronavirus, which causes a disease
named COVID-19, spread worldwide, including to Israel and the United States. As a result of the coronavirus pandemic, governments and
industries have instituted drastic actions to contain the coronavirus or treat its impact. Such actions, including bans on international
and domestic travel, quarantines, and prohibitions on accessing work sites, have caused significant disruptions to global and local economies
and have led to dramatic volatility in the capital markets.
37
The extent to which the coronavirus
pandemic, other epidemics or pandemics, acts of God, wars, insurrections, riots, infrastructure failures, and other force majeure events,
impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Factors
that may result in material delays and complications with respect to our business, financial condition and results of operation include
the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. In particular,
the continued spread of the coronavirus globally could adversely impact our operations, including the development of our platforms within
our expected timeframes, our workforce, including the health and safety of our employees and our ability to complete recruitment for open
positions on our team, and our ability to raise capital. In addition, the coronavirus pandemic could affect the operations of key governmental
agencies, such as the SEC and CFTC, which may delay the development and regulatory approval necessary to operate our platforms. Each of
these factors could have an adverse impact on our business, financial condition and results of operation.
General global market and
economic conditions may have an adverse impact on the Company's operating performance, results of operations and/or cash flow.
Weakness in the economy could
have a negative effect on the Company's business, operations and financial condition, including decreases in revenue and operating
cash flow, and inability to attract future equity and/or debt financing on commercially reasonable terms. Additionally, in a down-cycle
economic environment, the Company may experience the negative effects of a slowdown in trading and usage of the Company's business
platform and may delay or cancel the development, structuring, licensing and/or launch of any Token functionality. Suppliers with which
the Company engages for servers, bandwidth, location and other services could also be negatively impacted by economic conditions that,
in turn, could have a negative impact on the Company's operations or expenses. There can be no assurance, therefore, that current
economic conditions or worsening economic conditions or a prolonged or recurring recession will not have a significant, adverse impact
on the Company's business, financial condition and results of operations, and hence, the Company's business platform and/or
the ability to develop, structure, license and/or launch any Token functionality. Any such circumstances may then correspondingly negatively
impact the functionality, liquidity, and/or trading price of INX Tokens.
Several recent company
failures and bankruptcies have adversely affected our industry.
In 2022, several companies
in the broader digital asset space failed or filed for bankruptcy protection. These companies include, but are not limited to FTX, Blockfi,
Celsius, and Voyager. It is uncertain if failures of companies in the industry will continue at an inordinate rate. The Company's
business does not have a direct exposure to, and the Company is not a creditor of, any of the cryptocurrency market participants that
recently filed for bankruptcy protection. At the time of filing this 20-F report, we have no assets, material or otherwise, that may not
be recovered due to these bankruptcies, and we have no direct exposure to any other counterparties, customers, custodians or other crypto
asset market participants known to have (i) experienced excessive redemptions or suspended redemptions or withdrawal of crypto assets,
(ii) their crypto assets of their customers unaccounted for, or (iii) experienced material corporate compliance failures. Our business,
financial condition and results of operations may not be immune to unfavorable investor sentiment resulting from these recent developments
in the broader cryptocurrency industry. Also, as circumstances develop, additional companies might find themselves in a similar unfavorable
position that might have a direct effect on the Company.
Moreover, while the Company
has not been directly affected by recent crypto market events, our business, financial condition and results of operations may still be
adversely affected by recent industry-wide adverse developments beyond our control. The bankruptcy filings of crypto companies over the
last several months and other developments in the broader cryptocurrency space will likely attract heightened regulatory scrutiny from
U.S. regulatory agencies and others. Increasing regulation and regulatory scrutiny may result in new costs for the Company and Company's
management having to devote increased time and attention to regulatory matters, and potentially change aspects of the Company's
business. In addition, regulatory developments and/or the Company's business activities may require the Company to comply with certain
regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result
in changes to our business, as well as increased costs, and supervision and examination for ourselves and our service providers. Moreover,
new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions.
Adverse changes to, or our failure to comply with, any laws and regulations, may have an adverse effect on our reputation and brand and
our business, operating results, and financial condition.
Additionally, although we
are not directly connected to the recent cryptocurrency market events, we may still suffer reputational harm due to our association with
the cryptocurrency industry in light of the recent disruption in the crypto asset markets.
38
Recent bank failures in
the U.S. may adversely affect our business and the industry we operate in.
During March 2023, the banking
industry in the U.S. experienced disruptions, characterized by the failure of Silvergate Bank, Silicon Valley Bank, and Signature Bank.
All three banks serviced the digital asset industry and provided services that facilitated the transmission of money across the industry
and between industry participants. While the Company was not directly affected by the failure of these three banks and did not hold any
Company or customer funds at these banks, our business, financial condition and results of operations may still be adversely affected
by these developments. First, the operation and business activity of companies within the cryptocurrency space might be damaged or encumbered.
Secondly, other banks may also encounter similar problems in the near future, that will result in their failure. For these reasons and
others, the Company might be directly or indirectly affected.
Moreover, these bank failures
will likely attract heightened regulatory scrutiny from U.S. regulatory agencies and others. Increasing regulation and regulatory scrutiny
may result in new costs for the Company and Company's management having to devote increased time and attention to regulatory matters,
and potentially change aspects of the Company's business. In addition, regulatory developments and/or the Company's business
activities may require the Company to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and
any regulatory investigations and enforcement may result in changes to our business, as well as increased costs, and supervision and examination
for ourselves and our service providers. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory
investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations, may have
an adverse effect on our reputation and brand and our business, operating results, and financial condition. Further, these bank failures
may hinder our ability to acquire bank accounts or payment services in the future. It is also unknown if additional bank failures will
occur in the future.
RISKS RELATED TO AN INVESTMENT IN OUR TOKENS
We have limited operating
history and therefore valuation of the INX Token is difficult.
The value of the INX Token
is influenced by the supply of the INX Token, the market's perception of the INX Token's value and the liquidity for Tokens
on a secondary market. The original purchase price of the INX Token in our initial public offering -has not been indicative of the market
price of INX Tokens in the secondary market.
If our INX Token does not
gain public acceptance or is not traded by a substantial number of individuals, companies and other entities, it could have a material
adverse impact on the value of the INX Token.
The prospect of any holder
of INX Tokens to receive any cash distributions from us is uncertain.
Under the INX Token Purchase
Agreement, holders of INX Tokens as of March 31 of a year following a year end for which there was positive cumulative Adjusted Operating
Cash Flow are entitled to receive a pro rata cash distribution equal to 40% of our cumulative Adjusted Operating Cash Flow. The pro rata
distribution of our cumulative Adjusted Operating Cash Flow is not self-executing and requires that our board of directors approve the
Company's financial statements and calculate such distribution in good faith. Although such annual calculation is based on the cash
flow from operating activities reflected in the consolidated statement of cash flow of our Company that is included in the audited consolidated
financial statements of our Company and its subsidiaries, neither the calculation of the cumulative Adjusted Operating Cash Flow nor any
pro rata distributions thereof to holders of INX Tokens will be audited at the time of any distribution. Further, the general public will
not be able to independently verify the number of INX Tokens outstanding that are entitled to share in the distribution.
Further, as of December 31,
2022, cumulative Adjusted Operating Cash Flow was approximately negative $56.4 million. Because each INX Token holder's right to
a pro rata distribution is based on our cumulative Adjusted Operating Cash Flow, no distribution will be made to INX Token holders, if
at all, until the Company generates positive Adjusted Operating Cash Flows that exceeds this deficit. Therefore, the token holders may
not receive a pro rata distribution even in years in which we are profitable due to our historical losses.
39
In addition, we may elect
to operate our business and pursue business strategies, such as acquisitions and the development of our products and services, which could
adversely affect our ability to generate positive net operating cash flow. Our cumulative Adjusted Operating Cash Flow will increase or
decrease based on the difference between our cash inflows and outflows. Although we may generate cash inflow from daily operations through
trading fees and other services, such amount will be reduced by cash outflows from our operations, including cash payments to our service
providers, our employees, taxes, fees, and other operating expenses. To the extent that we engage in acquisitions, we may expend significant
cash in order to integrate such businesses, products, technologies or personnel. As a result of our expenditures, we may never generate
a positive cumulative Adjusted Operating Cash Flow and may never pay any cash distributions, which could adversely affect the value of
INX Tokens. As a result, the prospect of any holder of INX Tokens to receive any cash distributions from us is uncertain.
Further, each INX Token holder's
right to the pro rata portion of the distribution for any given year is subject to charges related to banking fees, transaction fees and/or
Ethereum gas fees required to be paid with respect to the transfer of funds or Ether to such holder. Thus, with respect to any year during
which the amount to be distributed to an individual INX Token holder is less than the amount of fees relating to such transfer, no distribution
will be made to that individual INX Token holder.
The trading price of our
INX Tokens is volatile.
The trading price of our INX
Tokens is volatile. The INX Token is not issued by any central bank nor is it backed by any hard assets or other credit. Consequently,
investors may not be able to liquidate their investment at a price that reflects the value of the business.
The trading volume of INX
Tokens could affect their price volatility.
Although our Board of Directors
approved repurchase of INX Tokens by the Company (up to a certain yearly amount) we do not have a token repurchase policy. Accordingly,
nothing obligates us to repurchase any specific number of INX Tokens.
Further, the trading price
of INX Tokens could be significantly affected by any number of factors including volatility in the broader market for blockchain assets,
changes in analyst earnings estimates, fluctuations in our results of operations, shifting investor perceptions, dilution (in both monetary
and percentage amounts) from future sales or issuances of INX Tokens by the Company, large purchases or sales by a significant INX Token
holder or by the Company, the announcement of new products or the occurrence of any of the events described within this "Risk Factors"
section.
Any of these factors could
adversely affect the trading price of INX Tokens. Market volatility of the INX Token may affect the value of investment by token holders
and could subject us to litigation. Securities litigation against us could result in substantial costs and divert our management's
attention from achieving business objectives, which could harm our business. We are currently not subject to any token holder litigation
and continue to aggressively pursue our business objectives toward gaining profitability, which ultimately leads to fulfilling the purpose
of the INX Token, which is to share in profitability of the Company by token holders.
Our decision to introduce
or suspend promotional incentives for the use of INX Tokens to pay transaction fees on the INX.One trading platform or for holding INX
Tokens could impact the trading price of INX Tokens.
This offer may entitle owners
to, at a minimum, a ten percent (10%) discount as compared to fees paid using other currencies. From time to time, the Company or INXS
may offer additional discounts for the use of INX Tokens as payment for INXS transaction fees such that the aggregate discount exceeds
ten percent (10%). In addition, although the INX Tokens may not be used as payment for transaction fees on the INXD trading platform,
we intend from time to time to offer promotional discounts on transaction fees on the INXD trading platform to record holders of INX Tokens.
Such discounts, as well as discounts on the INXS Trading Platform in excess of 10%, are promotional incentives that are governed by the
terms and conditions for use of the trading platform and are not rights granted to the holders of INX Tokens through the INX Token Purchase
Agreement or otherwise. The value and percentage of any such discount is subject to change at the sole discretion of INX with reasonable
notice to INX Token holders and participants on the INX.One trading Platform.
40
Decisions to set or change
the transaction fees for trades executed on our trading platforms or to change the discount applied to transaction fees on our trading
platform may impact the trading price of INX Tokens or may result in increased volatility in the price of INX Tokens, especially during
periods surrounding the announcement to institute or terminate any fee discount. The decision to reverse or suspend any discounts could
negatively impact the trading price of INX Tokens and, as a result, the trading price of INX Tokens may not accurately reflect the value
of the public's perception and acceptance of other rights and characteristics of the INX Tokens. Registered exchanges may decline
to list INX Tokens if this feature violates applicable listing standards or ATSs may decide not to make INX Tokens available for trading.
Prior to making decisions
to set the rate for the transaction fees on our trading platform and the level of additional discounts, if any, offered to holders of
INX Tokens, the Company will consider various factors such as the profitability of our trading platform, the effect of such changes on
current holders of INX Tokens, and whether such changes will discourage investors from purchasing INX Tokens in the future.
Under the INX Token Purchase
Agreement, holders of INX Tokens are entitled to receive a pro rata cash distribution equal to 40% of our cumulative Adjusted Operating
Cash Flow. This means that the portion of any cash distribution allocated to each INX Token is in part determined by the number of outstanding
INX Tokens that are not owned by the Company or any subsidiary of the Company.
We anticipate that users of
the INX.One platform will be incentivized to hold INX Tokens to be entitled to transaction fees discounts on the platform.
Large swings in the use of
INX Tokens as payment for transaction fees or future issuances of INX Tokens equity or convertible debt securities could cause INX Token
holders to suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior
to those of our then-existing capital stock. Any debt financing secured by us in the future could involve restrictive covenants relating
to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional
capital and to pursue business opportunities. If we cannot raise additional funds when we need them, our business and prospects could
fail or be materially and adversely affected.
INX Token holders may not
have full or any recourse in the event that the Company enters into insolvency, liquidation, dissolution, reorganization or bankruptcy
and the Company may incur debt that ranks equally with, or senior to, the rights of the INX Token holders.
Pursuant to the INX Token
Purchase Agreement, if (i) the Company permanently discontinued all the activities of INX Trading Solutions and there is no successor
conducting a substantially similar business that assumes the obligations of the Company with regard to the INX Tokens and (ii) an "Insolvency
Event" (as defined in the INX Token Purchase Agreement) occurs, then the Company shall be deemed to be in default of its obligations
under the INX Token Purchase Agreement, which breach shall create a claim in favor of INX Token holders that may be asserted by INX Token
holders against the Company in any proceeding arising from such Insolvency Event. The claim amount will be determined by the liquidator,
a court of competent jurisdiction overseeing the liquidation, or some other authority pursuant to applicable insolvency law.
The Company intends that the
INX Token holders will be unsecured creditors of the Company and would therefore rank
pari passu
with all the other unsecured creditors
of the Company and senior to the claims of holders of the Company's shares. Further, the Company has caused its sole shareholder,
TIDCI, and shall cause its future shareholders, to enter an agreement, pursuant to which such shareholders (a) irrevocably subordinate
their rights to receive any distributions and payments from the Company prior to the payment in full by the Company of all distributions
owed to INX Token holders, and (b) irrevocably waive and subordinate their rights, in the event of an Insolvency Event, to any cash held
in the Cash Fund. However, the Cash Fund will not be held in an escrow or trust account, but rather, will be held in a separate bank account
controlled by the Company. In the case of an Insolvency Event, a liquidator, court or other applicable authority may determine that INX
Token holders are not entitled to any payment from the Company's assets or that the INX Token holders' claims are not senior
in right to claims or interests of the Company's shareholders, in particular the shareholders who have not agreed to subordinate
their rights to the claims of INX Token holders. In addition, the Company may incur debt (including secured debt) that ranks equally with,
or senior to, the rights of INX Token holders, as well as holders of other preferential claims under relevant insolvency laws. In the
case of an Insolvency Event, holders of debt instruments ranking senior to INX Tokens may be entitled to receive payment in full before
INX Token holders receive any distribution, including distributions of Adjusted Operating Cash Flow and distributions from the Cash Fund.
41
INX Token holders do not
have a perfected security interest in either the Cash Fund, or their Pro Rata Portion of the Distributable Amount of the cumulative Adjusted
Operating Cash Flow. There is no guarantee that an INX Token holder will receive any funds following an Insolvency Event.
After repaying such senior
creditors, the Company may not have sufficient assets, if any, remaining for payment of any obligations that it owes to INX Token holders.
Further, if it is determined that the Company's obligations to INX Token holders rank equally with other debt, INX Token holders
may share on an equal basis with other creditors. However, the Company may not have sufficient assets, if any, remaining for payment of
obligations owed to INX Token holders.
The tax characterization
of INX Tokens is uncertain. You must seek your own tax advice in connection with purchasing INX Tokens, which may result in adverse tax
consequences to you, including withholding taxes, income taxes and tax reporting requirements.
The treatment of INX Tokens
for U.S. federal income tax purposes is uncertain. Due to the new and evolving nature of digital currencies, tokens and blockchain assets,
and a general absence of clearly controlling authority with respect to these assets, many significant aspects of the U.S. federal income
tax treatment of digital currencies are uncertain. It is unclear what guidance on the treatment of tokens and blockchain for U.S. federal
income tax purposes may be issued in the future. Future developments regarding the treatment of tokens or blockchain assets for U.S. federal
income tax purposes could adversely affect an investment in INX Tokens.
The Company does not intend
to request a ruling from the Internal Revenue Service ("IRS") on these issues. The IRS has ruled on the tax treatment of bitcoin
and other cryptocurrencies. In Notice 2014-21 (the "Notice") the Service held that digital "currencies" are treated
like property and that each transaction using these currencies is a separate taxable event. The IRS stated in the Notice that, for U.S.
federal income tax purposes, (i) digital currency is "property" that is not currency and (ii) digital currency may be held
as a capital asset. There can be no assurance that the IRS will not alter its position with respect to digital currency in the future
or that a court would uphold the treatment set forth in the Notice.
The Notice does not address
other significant aspects of the U.S. federal income tax treatment of tokens or blockchain assets, including: the tax characterization
of tokens which possess other non-currency-like rights or powers (so called "utility" tokens) or tokens which provide a share
of profits to holders. Moreover, there is no authority on the circumstances in which profit-sharing tokens such as INX Tokens may be treated
as equity or stock in the Company for U.S. federal income tax (or other tax) purposes. If INX Tokens were characterized as equity interests
in the Company for U.S. federal income purposes, U.S. holders of INX Tokens would be subject additional tax consequences and related reporting
considerations applicable to holders of stock in a foreign company, including the possible application of rules relating to passive foreign
investment companies (or "PFICs") and controlled foreign corporations ("CFCs").
The tax characterization of
INX Tokens is uncertain. Token holders must seek their own tax advice in connection with purchasing Tokens, which may result in adverse
tax consequences, including withholding taxes, income taxes and tax reporting requirements. Prospective investors are urged to consult
their tax advisers regarding the uncertainty regarding tax consequences of an investment in INX Tokens and in blockchain assets in general.
42
INX Token holders will
not be afforded an opportunity to vote in the election of directors and significant corporate transactions, such as a merger or other
sale of our company or its assets, and may not realize any benefit from such transactions.
Although the INX Token is
an equity security, as such term is defined in Section 3(a)(11) of the Exchange Act, the rights that attach to an INX Token are materially
different from the rights that are typically associated with equity securities such as common shares. As holders of a non-voting security,
INX Token holders have no influence over our corporate governance policies and affairs, and INX Token holders will not be afforded an
opportunity to vote on any matters affecting the Company, including the election of directors, related party transactions or significant
corporate transactions such as a merger, or sale of the Company or its assets. INX Token holders are not afforded the same protections
generally as shareholders of other publicly traded companies. Further, INX Token holders may not benefit from a sale of the Company or
its assets in the same way that our shareholders will benefit, if at all. Your only opportunity to affect an investment decision regarding
the Company, if at all, may be limited to selling your INX Tokens.
The interests of our shareholders
may conflict with the interests of INX Token holders.
Our directors are nominated
and elected by a majority of our shareholders and their interests in our business may differ from the interests of INX Token holders.
Our directors will have no fiduciary obligations to act in the interests of INX Token holders. Mr. Shy Datika, one of our founders, our
President, Chief Executive Officer ("CEO") and a member of our Board of Directors, controls approximately 20% of the voting
power of the share capital of our sole shareholder, TIDCI, and as such, Mr. Datika and the other shareholders of our sole shareholder
have significant influence over management and affairs and all other matters of the Company, including significant corporate transactions,
such as a merger or other sale of our Company or its assets.
The INX Tokens are not
currently registered under the Exchange Act.
The INX Token is an equity
security as such term is defined in Section 3(a)(11) of the Exchange Act; however, The INX Tokens are not currently registered under the
Exchange Act, however, the Company is currently required to file annual and other periodic reports pursuant to Section 15(d) of the Exchange
Act, as required by a foreign private issuer.
The Company intends to register
the INX Tokens in accordance with Section 12(g) of the Exchange Act at the same time or immediately after filing this report. However,
if the Company does not continue to be subject to, or voluntarily comply with, the periodic reporting and other obligations of the Exchange
Act, you may not be able to access regular publicly available reports about us and you will not be entitled to the same type of disclosure
in relation to critical corporate events as if we were subject to the Exchange Act.
The INX Token Purchase
Agreement includes exclusive venue and jurisdiction provisions. By purchasing INX Tokens, an investor is irrevocably consenting to these
provisions regarding claims, suits, actions or proceedings, and submitting to the exclusive jurisdiction of Delaware courts. The INX Token
Purchase Agreement also provides that the Company will not be responsible for any losses except those arising from the Company's
gross negligence, fraud or willful misconduct.
The INX Token Purchase Agreement
is governed by Delaware law and includes exclusive venue and jurisdiction provisions designating Delaware courts as the exclusive venue
for most claims, suits, actions and proceedings involving us or our officers, directors and employees.
By purchasing an INX Token,
an investor is irrevocably consenting to these limitations and provisions regarding claims, suits, actions or proceedings and submitting
to the exclusive jurisdiction of Delaware courts. If a dispute were to arise between an investor and us or our officers, directors or
employees, the investor may be required to travel to Delaware in order to pursue its legal remedies and participate in any proceeding
in Delaware courts which may be an inconvenient or distant location and which is considered to be a more corporate friendly environment.
In addition, the choice of forum provision may limit an investor's ability to bring a claim in a judicial forum that it finds favorable
for disputes with us. These provisions may have the effect of discouraging lawsuits and limiting an investors' ability to obtain
a favorable judicial forum for disputes against us and our directors and officers.
43
This provision does not, nor
is intended to, apply to claims under the federal securities laws. By agreeing to this limitation of liability, investors will not be
deemed to have waived the Company's compliance with federal securities laws and the rules and regulations thereunder.
The INX Token Purchase Agreement
also includes a provision limiting our liability, to the maximum extent permitted by applicable law, for any losses the investor may incur,
except for such losses that arise from our gross negligence, fraud or willful misconduct. By purchasing an INX Token, an investor is agreeing
to this limitation of liability which could reduce its ability to recover damages from us if we act in a manner that causes investors
to incur losses.
It may be illegal now,
or in the future, to acquire, own, hold, sell or use INX Tokens in one or more countries, and ownership of, holding or trading in our
Company's securities may also be considered illegal and subject to sanction.
The regulation of blockchain
assets remains uncertain or undefined in many jurisdictions. Although we anticipate treating the INX Tokens as securities under the laws
of all foreign jurisdictions and adhering to such laws with regard to the offering and sale of INX Tokens abroad, one or more foreign
governmental authorities, such as those in China, may take regulatory action in the future that severely restricts the right to acquire,
own, hold, sell or use blockchain assets or to exchange blockchain assets for fiat currency. Such an action may result in the restriction
of ownership, holding or trading in the INX Token and other securities. Such restrictions may adversely affect an investment in the Company.
RISKS RELATING TO INTELLECTUAL PROPERTY RIGHTS
AND DISPUTES
We may be unable to protect
our proprietary technology and to obtain trademark protection for our marks.
Our success depends to a significant
degree upon the protection of our software and other proprietary intellectual property rights. We may be unable to bring enforcement actions
under the laws of the US or other countries to protect our intellectual property rights, which could have a material adverse effect on
our business. Further, we may not be able to secure protection for our service marks or trademarks in the United States or elsewhere as
we expand internationally. Our competitors might adopt service marks or trademarks similar to our marks or might try to prevent us from
using our marks. Any claim by another party against us or customer confusion related to our trademarks, or our failure to obtain trademark
registration, could have a material adverse effect on our business.
We may not be able to enforce
protection of our intellectual property rights under the laws of other countries.
We do business internationally
and consequently we are subject to risks of doing business internationally, including uncertainty regarding liability for the listings
and other content provided by our users, and differing intellectual property laws, which may provide insufficient protection for our intellectual
property. Any such difficulties could have a material adverse effect on our business.
RISKS RELATED TO INCORPORATION IN GIBRALTAR
We are a "foreign
private issuer" and we cannot be certain if the reduced reporting requirements applicable to foreign private issuers will make owning
INX Tokens less attractive to investors.
As a foreign private issuer,
we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Securities Exchange Act
of 1934, or the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent
than those of U.S. domestic reporting companies. For example, we will not be required to issue proxy statements that comply with the requirements
applicable to U.S. domestic reporting companies. We will also have four months after the end of each fiscal year to file our annual reports
with the SEC and will not be required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore,
our officers, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities
and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. These exemptions and leniencies,
along with other corporate governance exemptions resulting from our ability to rely on home country rules, will reduce the frequency and
scope of information and protections to which you may otherwise have been eligible in relation to a U.S. domestic reporting company.
44
We would lose our foreign
private issuer status if more than fifty percent of our outstanding voting securities are directly or indirectly owned of record by residents
of the United States and any of the following three circumstances applies: (i) the majority of our executive officers or directors are
U.S. citizens or residents; (ii) more than 50% of our assets are located in the U.S.; or (iii) our business is administered principally
in the U.S. Since our Parent Shares are listed on the NEO Exchange in Canada and given the level of our intended business contacts with
the United States, we may lose our status as a foreign private issuer should more than fifty percent of our voting securities be held
of record by residents of the United States. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign
private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a
U.S. domestic reporting company may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic
reports and registration statements on U.S. domestic reporting company forms with the SEC, which are more detailed and extensive than
the forms available to a foreign private issuer. We may also be required to modify certain of our policies to comply with accepted governance
practices associated with U.S. domestic reporting companies. Such conversion and modifications will involve additional costs. In addition,
we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available
to foreign private issuers.
It may be difficult to
enforce a U.S. judgment against us, our officers and directors, and the experts named in this report, or to assert U.S. securities laws
claims or serve process on our officers and directors and these experts.
We were incorporated in Gibraltar,
and a significant part of our operations are currently located in the State of Israel. Therefore, it may be difficult to enforce a U.S.
court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S.
or Gibraltar court, or to affect service of process upon these persons in the United States.
Additionally, it may be difficult
for an investor, or any other person or entity, to assert U.S. securities law claims in original actions instituted in Gibraltar. This
is for two principal reasons: 1) because the Gibraltar courts may regard the U.S. law in question to be a penal, revenue or public law
and therefore, under Gibraltar law, not capable of direct or indirect enforcement in the Gibraltar courts, or 2) because the Gibraltar
court may stay the claim on the grounds that Gibraltar is not an appropriate forum ("forum non conveniens"). If U.S. law is
found to be applicable to a claim which the Gibraltar court can and is prepared to hear, the content of applicable U.S. law must be proved
as a fact by expert witnesses, which can be a time-consuming and costly process. If proceedings were to be brought in Gibraltar, all procedural
matters would be governed by Gibraltar law. There is little case law addressing the matters described above that would be binding case
law in a Gibraltar court.
RISKS RELATED TO DOING BUSINESS IN ISRAEL
Potential political, economic,
and military instability in the State of Israel, where some of our senior management and our research and development facilities are located,
may adversely impact our results of operations.
Our offices and operations
are currently located in the State of Israel and in the United States. In addition, certain of our employees, officers, and directors
are residents of Israel. Accordingly, political, economic, and military conditions in Israel directly affect our business. Since the State
of Israel was established in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries. Any hostilities
involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn
in the economic or financial condition of Israel, could adversely impact our operations.
45
Israeli Government initiative
to amend Israeli Legislation concerning Government, Judiciary and Administration Procedures may adversely impact our results of operations
The Israeli government is
advancing significant changes in Israeli legislation concerning judicial nomination and oversight. If such proposals are enacted by the
Israeli Knesset, they will change the current balance between the three branches of government in Israel in a manner that is expected
to add significant power to the executive and the legislative branches.
Such changes may have actual
or perceived effects regarding the risks associated with conducting business or investing in Israel.
Since the proposals have not
yet been enacted as law, the uncertainty of their effect on the Company and its business may not be estimated at this time. However, since
certain of our offices and operations are currently located in the State of Israel and since certain of our employees, officers, and directors
are residents of Israel, such initiative may adversely impact our results of operations.
Our operations may be disrupted
by the obligations of personnel to perform military service.
Certain of our employees,
officers and directors are based in Israel. Some of our employees and consultants may be called upon to perform up to 36 days (and in
some cases more) of annual military reserve duty until they reach the age of 40 (and in some cases, up to 45 or older) and, in emergency
circumstances, could be called to immediate and unlimited active duty. In the event of severe unrest or other conflict, individuals could
be required to serve in the military for extended periods of time. Our operations could be disrupted by the absence of a significant number
of our employees related to military service or the absence for extended periods of one or more of our key employees for military service.
Such disruption could materially adversely affect our business and results of operations.
ITEM 4.
INFORMATION ON THE
COMPANY
A. History and Development of the Company.
We are a Gibraltar private
company limited by shares, incorporated on November 27, 2017 under the Gibraltar Companies Act. We were originally incorporated under
the name "INX Holdings Ltd." On December 17, 2017, we changed our name to our current name, INX Limited.
On February 16, 2021, we were
registered as a foreign company in Israel with the Israeli Registrar of Companies.
On January 10, 2022, Valdy
Investments Ltd. ("Valdy"), a company incorporated under the provincial Business Corporations Act (British Columbia), entered
into a definitive securities exchange agreement with INX, whereby INX became a wholly owned subsidiary of Valdy (the "Parent Company").
The Transaction resulted in a reverse takeover transaction whereby current shareholders of INX (pre-transaction) became majority shareholders
of the Parent Company. The combined entities (the "Resulting Issuer") continues the business. Also, as a result of the transaction,
Valdy changed its name to The INX Digital Company Inc.
The Company is engaged in
the operation and development of a digital asset and a security token trading platform and other services and products related to the
fully integrated and regulated solutions for trading of blockchain assets. In 2021, the Company completed a SEC registered initial public
offering of the INX Token. The offering of the INX Token was registered under the United States Securities Act of 1933 and, in such registration,
the INX Token is deemed to be an "equity security" under relevant SEC rules and regulations.
46
Subsidiaries
The Company operates through the following wholly-owned subsidiaries:
●
INX Digital, Inc. ("INXD"), a Delaware corporation, is
licensed or otherwise cleared to operate in 43 U.S. states plus Washington D.C. and Puerto Rico as a money transmitter to operate a trading
platform for cryptocurrencies. INXD launched a cryptocurrency trading platform on April 29, 2021, which was developed by INX Limited and is
operated by INXD. Select digital assets are supported for trading on the INX Digital platform such as (identified by symbol): AAVE, AVAXC,
BTC, CRV, ETH, FTM, LINK, LTC, MATIC, UNI, USDC, AND ZEC.
●
INX Services, Inc., a Delaware corporation, which currently is a dormant entity.
●
INX Solutions Limited is incorporated in
Gibraltar as a private company limited by shares. INX Solutions Limited was a dormant company until the end of March 2022. INX Solutions
Limited provides liquidity and risk management services. It commenced operations during the second quarter of 2022.
●
Midgard Technologies Ltd.
    ("Midgard") is a company incorporated under the laws of the State of Israel. Midgard serves as the research and
    development arm of INX Limited and was acquired on April 1, 2021. Midgard provides software development services for the group and
    holds the related intellectual property.
●
INX Securities, LLC ("INXS") (formerly known as: Openfinance Securities, LLC), is a Pennsylvania limited liability company. INXS is recognized in the U.S. as a SEC registered Broker Dealer and is an SEC registered Alternative Trading System ("ATS").  INXS was purchased by INX on May 10, 2021 as part of the Asset Purchase Agreement with Openfinance Holdings, Inc. and certain subsidiaries of Openfinance Holdings, Inc., dated January 12, 2021. After closing on the acquisition, the company's name was changed from Openfinance Securities, LLC to INX Securities, LLC.
●
I.L.S. Brokers Ltd. ("ILSB"), a company incorporated under the laws of the State of Israel, was purchased by INX, pursuant to the share purchase agreement between INX and the shareholders of ILSB, dated June 9, 2021, for the purchase of all of the issued outstanding shares of ILSB. ILSB is a multinational brokerage house, established in 2001, that facilitates financial transactions between banks and offers a full range of brokerage services to several leading banks worldwide. ILSB's main field of operation is foreign exchange and interest rate derivatives services. ILSB's activities are regulated by the Israeli Capital Market Authority, Insurance and Savings and are registered with the U.S. National Futures Association ("NFA") (authorized by the U.S. Commodity Futures Trading Commission ("CFTC")). ILSB holds the following license: Provider of Financial Services in Israel and an introducing broker (IB) license from NFA (CFTC) in the US.
●
INX Digital Assets UK Limited (formerly known as:  ILSB UK Limited) ("INX UK"), a company incorporated under the laws of England and Wales INX acquired and issued and outstanding shares of INX UK on July 13, 2021, from Mr. James Crossley, former board member of INX, in consideration for an inconsequential amount of cash. INX UK is currently a dormant entity.
●
INX Transfer Agent LLC (f/k/a Tokensoft Transfer Agent LLC) ("INX Transfer"), a Delaware limited liability company. INX Transfer is a transfer agent registered with the SEC, acquired by the Company pursuant to a purchase agreement dated December 28, 2021.
●
INX EU Ltd. ("INX EU"), a company incorporated under the laws of Cyprus. INX EU is currently a dormant entity.
47
Securities Exchange
Agreement
On January 10, 2022, Valdy
Investments Ltd. ("Valdy"), a Capital Pool Company (CPC) incorporated under the laws of British Columbia, Canada, acquired
all of the issued and outstanding securities of the Company (including all outstanding options and warrants) from the holders thereof
by way of a securities exchange, in accordance with the terms and conditions of the Amended and Restated Security Exchange Agreement dated
November 3, 2021, as amended (the "Security Exchange Agreement"), whereby, at the closing, then current holders of shares
and options to purchase shares of the Company were issued an aggregate of 175,000,000 common shares of the combined entity and the Company
became a wholly owned subsidiary of Valdy (the "Valdy Transaction"). The shareholders of Valdy received 5,124,740 common shares
of the combined entity. Additional securities of the combined entity were issued to consultants of the Company and to principals of Valdy
as set forth in the Security Exchange Agreement. Following the closing of the Valdy Transaction, Valdy changed its name to "The
INX Digital Company, Inc." For more information on the Security Exchange Agreement, see "Item 7, Part A – Major Shareholders
and Related Party Transactions – Major Shareholders – Changes in Percentage Ownership by Major Shareholders – Security
Exchange Agreement."
Consolidation
Immediately prior to the completion
of the Valdy Transaction, on January 10, 2022, Valdy completed a consolidation (the "
Consolidation
") of the (pre-Valdy
Transaction) issued and outstanding Valdy Shares, on the basis of one (1) post-Consolidation Valdy Share for each 2.7266667 pre-Consolidation
Valdy Shares, such that the number of Valdy common shares outstanding immediately prior to the completion of the Valdy Transaction was
3,844,740 on a fully-diluted basis
.
Concurrent Financing
In parallel with the Valdy
Transaction, on April 1, 2021, the Company completed a private placement of 31,680,000 subscription receipts, at a price of CAD$ 1.25
per receipt (the "
Concurrent Financing
"). Each receipt entitled its holder to receive a unit ("INX Unit")
comprised of one ordinary share of the Company ("
Ordinary Share
") and one half of one warrant to purchase one Ordinary
Share (at a price of CAD$ 1.88 per share) ("each, an "INX Financing Warrant"). The Ordinary Shares and warrants issued
pursuant to the subscription receipts were exchanged for comparable securities of Valdy on closing of the Valdy Transaction. The Company
raised an aggregate amount of $31.3 million pursuant to the Concurrent Financing. In consideration for their services to the Company,
the Company's financial advisors received cash compensation and options to purchase ordinary shares of Valdy.
Token Offering
As further detailed in this
report, the Company is the world's first company to debut and successfully complete an SEC-registered IPO of a blockchain security
token (the "INX Token").  On August 20, 2020, the public offering of the INX Token (the "Token Offering")
was registered under the United States Securities Act of 1933 and, in such registration, the INX Token is deemed to be an "equity
security" under relevant SEC rules and regulations. On April 22, 2021, the Token Offering was completed.
Under the Token Offering,
the Company raised $84.0 million, pursuant to the sale of 93,409,410 INX Tokens (excluding the sale of INX Tokens described below). Additionally,
the Company raised $7,621,778, pursuant to the sale of 10,386,148 INX Tokens through private placements, which were subject to a 12-month
lockup.
Under the Token Offering,
INX Tokens were bought by more than 7,200 retail and institutional investors in 75 countries, with more than 61,000 investors expressing
interest but unable to invest in the Token Offering, in part due to the U.S. blue sky restrictions.   In June 2021, it came
to the attention of the Company that during the course of the Token Offering as it related to Canada, the Company did not take all steps
that may be required under Canadian securities laws. As a result, the Company elected to unwind the transactions forthwith by canceling
the 1,948,483 INX Tokens that were sold to such purchasers and refunding US$1,753,635 representing the full purchase price of the INX
Tokens sold.
48
General
The ordinary shares of the
Company (the "INX Shares") have never been listed for public trading.
INX Limited's registered
office is located at 57/63 Line Wall Road, Gibraltar, GX11 1AA. INX Limited has an office located in Israel, where a majority of its senior
officers are currently based.
The SEC maintains an internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC at http://www.sec.gov. Our website is https://www.inx.co/. The reference to our website is an inactive textual reference only and
information contained in, or that can be accessed through, our website is not part of this report.
B. Business Overview.
Background & Current Market
Blockchain Technology and Blockchain Assets
Blockchain technology is a
digital record or ledger of transaction data that is permanently recorded in files called "blocks." Each blockchain is founded
upon software source code that establishes and governs its cryptographic system for verifying transactions.
In traditional blockchain
networks, copies of the blockchain ledger are stored in a decentralized manner on computers across a peer-to-peer network. Users of the
blockchain network maintain a copy of the ledger with all copies of the ledger synchronized through a consensus algorithm. Protocols included
in the source code govern the rules, operations, and communications of the underlying blockchain network, including the validation of
new blocks that contain an updated ledger reflecting new transactions.
This lack of a single point
of data collection is believed to enhance the security of traditional blockchain networks and blockchain assets. Nonetheless, blockchain
assets and blockchain trading platforms remain susceptible to security breaches and cybercrime. In 2022, $3.8 billion in cryptocurrency
was reported stolen from cryptocurrency exchanges and investors. One notable theft during 2022 was more than $600 million worth of blockchain
assets stolen from a video game network. Variations on traditional blockchain networks include "permissioned" blockchains,
in which a limited number of pre-selected users monitor and validate transactions (or add "blocks" to the chain). In a fully
centralized blockchain, one organization monitors and validates transactions. Such blockchain ledgers may be viewable by the public or
viewing ledger information may be restricted.
Blockchain assets are assets
that utilize blockchain ledgers to record their creation, ownership, and transfer of ownership. Blockchain assets have generally been
created and used in two broad contexts: within blockchain protocol layers and within application layers. Blockchain assets used at the
protocol layer are generally intended to create financial incentives that drive the underlying blockchain network to verify and authorize
the creation of a new block to update the ledger of ownership. Network participants may receive a fee, generally paid in the protocol's
native blockchain asset, for validating the authenticity of a new block. A blockchain asset used at the application layer is not designed
to incentivize validation of new blocks on the blockchain. However, the ledger of ownership of an application blockchain asset, including
the record of transfers of such blockchain assets, is recorded on blocks added to the underlying blockchain. For example, Bitcoin and
Ether are protocol blockchain assets used on the Bitcoin and Ethereum blockchains, respectively. The INX Token is an application blockchain
asset that is recorded on the Ethereum blockchain.
Ownership of a blockchain
asset is established by recording on the blockchain ledger the owner's unique identifier address, or "public address,"
and the amount of the asset held by such address. When a blockchain asset is transferred, the ledger records the sender's public
address, the recipient's public address and the amount of digital assets transferred. Authorization of the transfer requires the
sender's digital signature and a transfer fee.
Digital signatures are generated
by use of the private key associated with the relevant public address. The public address is publicly known so that it may be used to
direct transfers of the blockchain asset. Private keys are used to sign transactions that initiate the transfer of blockchain assets from
a sender's public address to a recipient's public address. Only the private key associated with a particular public address
can digitally sign a transaction proposing a transfer of the blockchain asset from one public address to another. Similar to a digital
password, if an unauthorized third person learns of a user's private key, that third person could forge the user's digital
signature and transfer blockchain assets from the user's public address to another public address, thereby transferring ownership
of the user's blockchain assets.
49
Blockchain Asset Classes
Blockchain assets exist as
a digital representation of value or rights, including rights to an underlying asset. Some blockchain assets may be viewed as having intrinsic
value. In addition, the blockchain asset may be tethered to the value of another asset or may be a representation of contractual rights.
Almost any asset can be "tokenized," meaning that title to the asset, including any rights associated with such title, can
be recorded on a blockchain ledger. To this point, blockchain assets may be used to pay for goods and services, may entitle the owner
to certain rights, or may represent assets that have traditionally existed off the blockchain.
We have identified and targeted
our business operations around two emerging blockchain asset classes: cryptocurrencies and security tokens.
A "cryptocurrency,"
also known as a digital currency or virtual currency, is a digital representation of value that functions as a medium of exchange, a unit
of account, or a store of value. Cryptocurrencies are generally used as a substitute for fiat currencies as a means of paying for goods
or services or transferring value. While there remains considerable regulatory uncertainty as to which specific blockchain assets qualify
as "cryptocurrencies" and which are "digital securities" (and therefore subject to securities laws), a "cryptocurrency,"
as the term is used in this report, is not a "security" as that term is defined under U.S. federal Securities Laws. Bitcoin
and Ether are examples of well-known cryptocurrencies.
A "digital security"
is a blockchain asset that falls within the definition of a security under federal securities laws. On April 3, 2019, the Strategic Hub
for Innovation and Financial Technology (FinHub) of the SEC published informal guidance, titled "Framework for 'Investment
Contract' Analysis of Digital Assets" (the "Framework"), which provides analytical tools for determining whether
a blockchain asset is a security under federal securities laws. In the Framework, the SEC uses the term "digital asset" to
refer to an asset that is issued and transferred using distributed ledger or blockchain technology. In this report, we use the term "blockchain
asset" to distinguish between assets that are recorded and stored using blockchain technology and assets that may be stored in digital
form, but which do not utilize blockchain technology. In addition, the SEC has not used the term "digital security." The Framework
provides a list of factors to consider when determining whether a digital asset offered for sale is a security. The factors included in
the Framework are based on an analysis of whether the blockchain asset is an "investment contract" as that term was first
used by the Supreme Court in SEC v. Howey, 328 U.S. 293 (1946), and which has been further clarified through subsequent case law.
The SEC staff has acknowledged
that determining whether a blockchain asset is a security can require a careful analysis of the nature of the blockchain asset and how
it is offered and sold. Further, the SEC staff acknowledged that a blockchain asset that is initially sold as a security may, at a later
point, no longer meet the characteristics of a security. The Framework represents the views of the SEC staff, and it is not a rule, regulation,
or statement of the SEC and it is not binding on the SEC.
To determine the character
of a blockchain asset and whether it should be traded on the INXD trading platform or the INXS Trading Platform, we have sought the guidance
of nationally recognized outside legal counsel. In certain instances, we may seek a declaratory judgment or no action relief from the
relevant regulatory agency prior to deciding whether to permit the trading of an asset on one of our platforms.
Markets for Blockchain Assets
The market for blockchain
assets has grown dramatically including through dramatic volatility since blockchain assets were first introduced in 2009 with the launch
of Bitcoin. According to CoinMarketCap.com, as of March 17, 2023, blockchain assets had a total market capitalization of approximately
$1.12 trillion.
50
Some blockchain industry participants
have reported that a significant percentage of blockchain asset trading activity is artificial or non-economic in nature and may represent
attempts to manipulate the price of certain blockchain assets. For example, according to a report published by Bitwise Asset Management,
95% of bitcoin trading activity appearing on 81 blockchain asset trading platforms is fake. Bitwise's report further stated that
trading platforms and blockchain asset developers are incentivized to artificially inflate trading volumes so that their platform or asset
rises in league tables and gains prominence in the industry. As a result, trading platforms or blockchain assets may seek to inflate demand
for specific blockchain assets, or blockchain assets generally, which could increase the volatility of that asset or blockchain asset
trading prices generally.
On the digital securities
side, we believe that this nascent market is beginning to blossom. As of August 2021, the total digital securities market capitalization
crossed the US$1 billion threshold, up over 20% from the prior month. Over 90% of all trading was done on the INXS trading platform ($567
million) and INXS' closest competitor, tZero ($405 million). Trading volumes for digital securities grew by over 27% on a month-over-month
basis in August 2021; INXS and tZero accounted for approximately 88% of that volume.
Blockchain Asset Exchanges
We believe that there is a
growing institutional interest in operating regulated blockchain asset exchanges and trading platforms and utilizing blockchain assets
in bank financing practices.
According to CoinMarketCap.com,
over 200 blockchain asset trading platforms provide basic buy and sell services for one or more blockchain assets. On March 17, 2023,
over 45 of those trading platforms had average daily trading volumes over US$400 million, approximately 20 of which had daily trading
volumes over US$1 billion. Top blockchain asset trading platforms, based on USD daily trading volume, include Binance, OKEx, Coinbase,
and Gate.
On November 16, 2018, the
SEC's Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets issued the Statement
on Digital Asset Securities Issuance and Trading addressing the SEC's enforcement actions involving and relating to digital asset
securities. The Statement confirmed the applicability of the U.S. federal securities law framework to new and emerging technologies, such
as blockchain, and provided a summary of the circumstances under which the SEC has taken enforcement action against participants in the
marketplace for digital asset securities, including actions against initial offerings and sales of securities and actors and institutions
that develop and facilitate the secondary market for securities.
Finally, the CFTC has stated
that virtual currencies, like Bitcoin, may be commodities that are within the purview of the CFTC. However, beyond its anti-fraud and
anti- manipulation authorities, the CFTC generally does not oversee "spot" or cash market exchanges and transactions
involving cryptocurrencies that do not utilize margin, leverage, or financing.
According to CoinMarketCap.com,
as of March 17, 2023, around 30 cryptocurrency derivatives exchanges were operating, with 24-hour trade volumes of over $300 million.
Top derivatives exchanges (by volume) include Binance, OKEx, and Bybit.
Because of the uncertainty
built into a "facts and circumstances" analysis, as well as general regulatory uncertainty worldwide, companies have begun
to structure their blockchain assets as securities and conduct sales of their blockchain assets as securities offerings. As blockchain
assets take on the attributes of securities and market makers expand the breadth of blockchain asset trading products into spot, futures
and derivative trading instruments, the need and demand for a regulated blockchain asset trading solution continues to grow.
51
Opportunities in the Current Market
As blockchain assets are sorted
into cryptocurrencies and digital securities, the need and demand for regulated trading solutions for each asset class continues to grow.  
However, current platforms or exchange markets that permit the trading of blockchain assets have the following shortcomings:
●
Lack of Trading History.
Some blockchain asset trading platforms do not or cannot present the entire history of trades to exchange participants in a manner that would be requested by a regulator. This lack of trading history does not allow regulatory agencies to effectively monitor transactions.
●
Lack of Regulatory Compliance
. Many blockchain asset trading platforms are not prepared to comply (or are not willing to comply) with regulatory requirements imposed by federal and state securities law. Blockchain asset trading platforms assume less responsibility for what takes place on their platforms as compared to regulated exchanges. For example, blockchain asset trading platforms are generally unable to verify the legitimate origin of funds in a trade and therefore cannot confirm that the trades are not in violation of anti-money laundering laws. In addition, current blockchain asset trading platforms do not provide traditional trading protections, such as liquidity reserves, making professional traders unable or reluctant to conduct trading on these exchanges. The lack of compliant exchanges for the trading of blockchain assets leads to low customer and public confidence in both the exchanges and the blockchain assets traded.
●
Lack of Technological Capability
. Blockchain asset trading platforms generally do not have the technological capability to handle the large trading volumes or capture trades for multiple simultaneous trading requests without disruption or significant errors. The technology of many blockchain asset trading platforms was not developed to handle the dramatic growth in demand to engage in blockchain trades and the market has witnessed exchange outages, sometimes for many hours, pricing errors, lack of user access to their funds, and other service-related complaints.
●
Lack of Fee Transparency
. There is currently no clear market standard for fees for trading blockchain assets. This is particularly true in the retail market, where many trading platforms do not separately state the transaction fee but instead include any fees as part of the price of the blockchain asset. In this way, many unregulated exchanges do not disclose their fees, creating uncertainty regarding the cost of trading.
●
Poor Price Discovery
. Blockchain asset trading platforms experience inefficiencies in the form of significant arbitrage due to recurrent operational issues including temporary service outages and other temporary restrictions on access to the trading platform, the ability to withdraw or deposit fiat currencies and cryptocurrencies, or otherwise perform a trade on the platform. This creates significant exposure to arbitrage trading between exchanges. Further, the operator of a blockchain asset trading platform may trade on its own behalf on the trading platform. Doing so provides liquidity to platform participants. However, it also presents potential conflicts of interest, such as front-running customer order flow and engaging in price manipulation. By acting as a trading participant on one's own platform, trading platforms may artificially inflate or deflate prices, which impairs market pricing discovery.
These weaknesses in current
blockchain asset trading platforms reveal a significant opportunity in the blockchain asset industry for market development through operations
and services that provide functionality, transparency and trading platforms backed by cash reserves similar to those of regulated trading
marketplaces.
52
INX Trading Solutions, also known as INX.One, a Single Regulated
Ecosystem for Trading Blockchain Assets
We believe that we have a
comprehensive solution to the issues that we have identified.
Since our inception, we have
sought to become a regulated digital hub, aiming to offer all digital services, whether with cryptocurrencies, digital securities or derivatives,
under a regulated umbrella.
The first stage involved cementing
our place in the United States as we began by obtaining money transmitter licenses, a broker/dealer and an ATS (registered under the SEC
and FINRA) for digital assets. We are qualified to operate as a money transmitter in forty-three (43) U.S. states plus Washington D.C.
and Puerto Rico. We intend to obtain money transmitter licenses or otherwise become qualified to operate in more US states by the end
of the 2023 calendar year. We started our international expansion with the purchase of an institutional FX trading operation in Israel,
seeking to bridge the gap between the mostly retail world and the largest financial institutions. This interdealer broker has relationships
with over 50 tier-1 and tier-2 global banks (including: Citibank, HSBC, Goldman Sachs, Morgan Stanley, JP Morgan and others) focusing
on OTC trading of FX, interest rates and other derivative products. This broker is an NFA member registered under the CFTC as an introducing
broker and swap firm and holds other licenses in Israel.
On September 14, 2022, we
launched INX.One. a single point of entry with one onboarding process and a unified graphic user interface for both:
●
The digital asset platform operated through our subsidiary INX Digital Inc., which offers trading on digital
assets that do not constitute securities (e.g. Bitcoin and Ethereum), and
●
The digital security platform operated through our subsidiary INXS, which offers trading and investing
in digital assets that do constitute securities under applicable securities laws (such as the INX Token and tokens of other issuers who
chose to issue a digital security).
We offer professional traders
and retail and institutional investors trading platforms with established practices common in other regulated financial services markets,
such as customary trading and settlement procedures, regulatory compliance, capital and liquidity reserves and operational transparency.
We also created the INX Token,
an ERC-1404 blockchain asset that is programmed using a smart contract that is compatible with the Ethereum blockchain (the "
INX
Token
"), which was offered to the public from August 20,2020 and closed on April 22, 2021. For more information see below "The
INX Token" and Item 4, Part A – "Information on the Company - History and Development of the Company – The Token
Offering."
We designed our platforms
to provide the following solutions to the problems identified above, which we believe makes the INXD trading platform, the INXS trading
platform and our related business activities (collectively, the "INX Trading Solutions") an attractive choice for the trading
of blockchain assets:
●
Robust Pre-Trade and Post-Trade Services
. We have developed trading features to permit clients to continually monitor and manage blotter, position, and other technical analysis. We also offer investment tools during the pre-trading period and provide trade confirmations, reporting and access to pricing data during the post-trading period. We intend to continue with the development of additional features and improvements to our pre-trade and post-trade services.
●
Historical Trading Record
. Beginning with the first recorded transaction on the INX Trading Solutions trading platforms, we apply anti-money laundering ("
AML
") and "Know Your Client" ("
KYC
") procedures for all account holders and provide transparency so that clients have the ability to review all activities taken by them. We believe that this accessibility will supplement the transparency of blockchain assets.
53
●
Regulation and Safeguards
. We believe
    that regulatory oversight will instill greater confidence in our trading platforms compared to unregulated blockchain asset trading platforms.
    As the ownership of blockchain assets becomes more commonplace and professional traders continue to analyze and enter the blockchain asset
    marketplace, we believe that clients will expect regulatory safeguards for blockchain asset trading, comparable to the current fiat
    and securities exchanges. All customers of INX Trading Solutions, whether trading cryptocurrencies or security tokens, are required to
    complete KYC/AML checks in compliance with applicable laws and regulations. Blockchain assets traded on the INXD trading platform are
    transferred to a digital wallet held by one of our custodians.
Blockchain assets traded on the INXD trading platform
    are transferred to a digital wallet held by one of our custodians, which transfer is recorded on the blockchain ledger that underlies
    such blockchain asset. Once a blockchain asset is deposited with our custodian, none of the trading transactions performed on the INXD
    trading platform are recorded on a blockchain ledger. Trades on our trading platforms are recorded only on our internal centralized servers,
    and they are then reflected in each customer's respective account. A transfer of a blockchain asset is recorded on its underlying
    blockchain ledger when the owner of the blockchain asset wishes to withdraw the blockchain asset from their account. In this event, the
    blockchain asset is transferred from our respective custodian's digital wallet to the customer's private digital wallet. Digital
    securities traded on the INXS ATS are reflected via bids and offers in the order book visible to approved users on INXS. Each user
    self-custodies the digital security in their own digital wallet. Trades are executed based on user instructions using API connections
    to third party custodians and blockchain distributed ledger technology.
We have a cyber security function that ensures
    that transfers in and out of our respective custodian's digital wallet will be done after full verification of the person that requested
    the withdrawal. The procedure includes user credential verification plus a one-time password that is replaced every 30 seconds. The customer
    gets a dedicated unique cryptographic application that generates unique passwords every 30 seconds while we have a second unique key that
    enables the verification of the one-time password. The used technology implements the PPK algorithm which is considered to highly strengthen
    the security of the customer's account. Alex Weinert, Group Program Manager for Identity Security and Protection at Microsoft said,
    "Based on our studies, your account is more than 99.9% less likely to be compromised if you use MFA (Multi- Factor Authentication)."
8
Our system, after verifying the client's one-time password, sends a verification email with a short expiration to get additional
    client verification for the withdrawal request. A withdrawal request will be approved only after a completion of all the above steps.
    In addition to robust policies and procedures that govern the onboarding of customers to INXD trading platform, including both AML and
    KYC screening and controls, fiat withdrawal requests are screened by operations staff to match the account credentials and identifying
    information to the receiving bank account information provided for the withdrawals (i.e. first-party wires only). Discrepancies in information
    are investigated by operations staff and escalated to compliance staff for further review, if necessary, in-line with the suspicious activity
    escalation procedures in the policies referenced above. Similarly, regarding crypto withdrawal requests, our industry-leading vendor Elliptic
    analyzes the blockchain and risk scores the recipient wallets (barring a de minimis or market maker transfer), allowing our operations
    staff to timely screen withdrawal and approve, deny, or escalate to our compliance staff for further review, if necessary.
●
Reserve Fund
. We provide additional comfort to our customers with respect to the financial stability of the Company by allocating a reserve fund of $36.0 million (the "Reserve Fund"), out of the funds raised in the Token Offering, which fund is available to cover customer and Company losses, if any, that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses.
54
●
Our Robust Technology
.  We
    are developing technology to support rapid trading activity. Our platforms are custom-built to support the growing blockchain asset market,
    and to scale along with the continued growth of the market.
The architecture for the INX Trading Solutions
    matching engine is such that all orders are matched based on a "first in, first out" ("
FIFO
") asset-management
    and valuation method in which assets produced or acquired first are sold, used, or disposed of first. Orders in different markets/pairs
    are processed in parallel to provide the fastest possible execution. To facilitate liquidity and support a vibrant trading market on our
    trading platforms, we offer incentives to attract high volume traders and establish strategic partnerships with market makers. INX Trading
    Solutions enables trading via web portal and application programming interface solutions ("
API
"). The INXS ATS
    allows users to place bids and offers in digital securities such as the INX Token. All orders are placed in the order book which
    are visible to all approved users of the ATS. The ATS only accepts limit orders placed by each user. The system will automatically execute
    the best bids or offers in the order book.  The ATS enables this peer-to-peer trading for approved users that have passed the KYC/AML
    requirements of INXS.
●
Transaction Fee Transparency
. We have established transaction fees as a percentage of the trade price of each trade executed on our trading platform INX.One. Transaction fees must be paid, (a) for transactions in digital assets in the currency or cryptocurrency that is received by the customer for the purchase or sale associated with the transaction fee, and (b) for transactions in security tokens in US Dollars. The transaction fees are published and updated from to time on our website available at https://www.inx.co/fee-schedules/
For example, if a customer buys BTC with USD, the transaction fee would be charged from that customer in BTC. The same process is followed with regards to transactions where one digital asset is purchased for another. For example, if BTC is purchased with ETH, the transaction fee would be charged from the buyer in BTC.
With regards to trading of security tokens, the transaction fee is charged and deducted from both customers' bank accounts (the buyer and the seller) in USD at the time of the order execution. The transaction fee is similarly set as a percentage of the transaction value based on the fee schedule referred to above. In addition, there is an ethereum settlement fee paid by both the buyer and seller per order, which covers the blockchain costs associated with the order's execution.
As of the date of this Annual
Report on Form 20-F, we offer services in the following crypto assets and security tokens you offer services in on INX Trading Solutions,
also known as INX.One:
INX Digital
INX Securities
BTC
INX
ETH
MSTO
ZEC
BCAP
LTC
Spice
USDC
PRTS
AVAXC
SCI2
LINK
TXC
MATIC
TRZX
FTM
ATX
UNI
TRUCPAL
CRV
XMNA
AAVE
55
On the INX Digital platform,
the digital assets are offered in the following 43 U.S. jurisdictions, plus Washington D.C. and Puerto Rico, as well as in foreign
jurisdictions that we believe we have the right to operate in: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut,
Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma,
Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and
Wyoming.  For these assets, the Company offers listing and trading services.
On the INX Securities platform, the
security tokens are listed for trading in all 50 U.S. states, as well as in foreign jurisdictions that we believe we have the right to
operate in. For these security tokens, in addition to listing and trading services, the Company also offers placement agent
services.
We believe that our use of
the Ethereum blockchain to create the INX Token has the following benefits, which we believe makes the INX Token an attractive choice:
●
Decentralization
. Record-keeping of transfers is performed in real time using a distributed ledger, with no need for third party or intermediary validation.
●
Traceability
. Full historical data of all transfers of INX Tokens is recorded on the Ethereum blockchain.
●
Immutability
. Data is written into the blockchain to
    allow it to be shared publicly while ensuring its immutability. There are no known methods for changing a blockchain once it has
    been written.
●
High Availability
. Because the Ethereum blockchain is based on thousands of nodes in a peer-to-peer network, and data is replicated and updated on each and every node, the distributed ledger becomes highly available.
●
Privacy
. Personal information of INX Token holders is stored in an encrypted form and only available to the Company and will be provided to regulatory and governmental authorities as required by law.
In the future, we intend to
establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment
of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly,
there is no assurance that such a trading platform will ever be developed.
Technology and Product Development
We designed our trading platforms
to provide clients with a multi-currency non-biased execution trading solution and to eventually function as broker, execution, and clearing
agent. We provide trading of different types of digital blockchain assets, including cryptocurrencies and security tokens.
Our goal in the development
of INX Trading Solutions is to offer professionals in the financial services community a comprehensive, interactive platform that allows
for seamless integrated trading, real-time risk management and reporting and administration tools. The INX Trading Solutions will help
our customers automate and coordinate front-office trading functions, middle-office risk management and reporting functions, and back-office
accounting functions.
The INX Trading Solutions
website serves as a single entry point for our customers. Once logged in, customers are able to access the INX Digital tab for the trading
of cryptocurrencies, and the INXS tab for the trading of digital securities, in each case subject to the satisfaction of applicable regulatory
requirements. The INX Digital and the INXS tabs are separate and distinct trading platforms under one similar user interface with a single
point of entry and onboarding process. As we further develop and update our trading platforms, we intend to add functionalities across
the entire transaction lifecycle, as well as other information and features. Our platforms do not support cross-asset (i.e., digital securities
for cryptocurrency) trading, nor will we permit the settlement of securities transactions in cryptocurrency, at least until such time
as the regulatory uncertainty regarding such transactions is resolved.
56
We developed and operate each
of our trading platforms through certain of our subsidiaries and these functions are separated by entity as follows:
●
INXD is responsible for recording cryptocurrency trades in accordance with state money transmitter regulations; and
●
INXS is responsible for recording digital security trades in accordance with applicable SEC and FINRA regulations.
We utilize key criteria in
the selection of our leadership team and team members. This includes relevant experience in platform development (designing, building,
and operating trading platforms), trading, financial markets, digital assets, regulations, legal or compliance skills, foreign exchange,
and money transmission. Multiple team members are involved in hiring potential candidates and screening for relevant experience. Multiple
interviews and reference checks are conducted for each role, and where appropriate, background checks and/or police report screening is
mandatory. Licensed individuals are registered with relevant regulatory authorities. Potential team members are also evaluated based on
their experience operating within regulated businesses, especially of a financial nature.
The trading platforms to be
operated by each entity will support "straight through processing" of orders received from customers. As such, orders and
resulting trades will be recorded on internal databases and will be reflected in customer accounts without any intervention. Both INX
Digital, Inc. and INXS, LLC employ staff to monitor trading activity and support customers. Each entity also employs supervising managers
to oversee the trading and settlement process.
Our proprietary order management
software, which is utilized by both INXD and INXS has a rules engine that ensures sufficient funds or fully paid assets are available
to cover orders, prior to their submission.
INX Digital Trading Platform
We developed the INXD trading
platform and tested its trading capabilities from a functional and load perspective. We have completed the minimum viable product of the
platform that includes the architecture design, trading functionalities and the user interface and experience. To be able to handle large
amounts of traffic and transactions, we are currently working on scaling the capabilities of the system from an architecture and application
level. We are putting in place fail safe and recovery processes in case of system failure that are designed to inherently respond in a
way that will cause no or minimal harm to core trading data.
Customers of the INXD trading
platform will be entitled to discounts on trading fees charged by the Company, providing that they hold INX Tokens. Discounts will be
granted according to different tiers, allowing for larger discounts given to customers who hold a larger number of INX Tokens.
We have
registered INX Digital with FinCEN as a federal money service business.  In addition, as of April 30, 2023, we have been issued a
license by the following U.S. states, territories, and districts: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, District
of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Nebraska,
New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Vermont, Washington, and West Virginia, and have submitted notifications or are otherwise qualified to operate (based on being
exempted from any licensing requirement or notice requirement) in the following States: California, Colorado, Indiana, Massachusetts,
Michigan, Missouri, Montana, Pennsylvania, Utah, Wisconsin, and Wyoming. INX Digital is now eligible to operate as proposed in those jurisdictions.
The INXD trading platform
incorporates a secure trading and matching engine, which has high frequency transaction capabilities and supports a range of standard
order types. We also developed an API interface for broker-dealers, traders and market makers.
57
The architecture for the INXD
trading platform allows all orders to be matched based on a FIFO logic. Orders in different markets/pairs are processed in parallel to
provide the fastest possible execution.
We have designed trading features
to permit clients to continually monitor and manage blotter, position, and other technical analysis. We also offer investment tools during
the pre-trading period and provide trade confirmations, reporting and access to pricing data during the post-trading period.
Custody of Client Assets on the INXD trading
platform
INXD receives custodian services
for cryptocurrencies held on behalf of the clients of our INXD trading platform from BitGo Trust Company ("BitGo Trust"),
a trust company under §51-A of the South Dakota Banking Law and is licensed to act as custodian of its client's digital assets
on its client's behalf. BitGo Trust describes itself as a "qualified custodian" as defined in Rule 206(4)-2 promulgated
under the Investment Advisers Act of 1940.
We believe that BitGo Trust,
together with its affiliate BitGo, Inc. (together, "BitGo"), is a leading provider of custody and wallet services for cryptocurrency
trading, with a high degree of electronic and physical security, as well as transaction processing and reporting. BitGo Trust is independent
from INX.
BitGo offers two types of
services; a hot wallet solution and a cold storage solution. INXD is contracted with BitGo Trust for both services. A hot wallet is a
multi-signature storage solution, which requires two of three private keys to transfer digital assets. Pursuant to our agreement with
BitGo, INX is holding two of the keys, and BitGo, Inc. is holding the other key. Two keys are created whenever INX establishes a BitGo
hot wallet, a primary key (used to authorize transactions) and a backup key (used to recover the wallet, if the wallet password is lost
or if BitGo Inc. ceases operations).
The third key is used by BitGo
Inc. to co-sign transactions; this key is created by BitGo's servers and is known only to BitGo, Inc., to mitigate the risk of an
unauthorized transfer of assets. All multi-signature wallets require that INXD and BitGo Inc. must act together to transfer assets. INXD
is maintaining an omnibus wallet at BitGo Inc. for each type of asset to be traded on our platform, which will be designated for the exclusive
benefit of customers. We currently store the cryptocurrency assets held by us with BitGo Inc. using properly constructed policies in conjunction
with multiple admins on the wallets which are a key element in keeping funds safe.
BitGo Trust's cold storage
solution outsources key management and security to BitGo Trust. Cold storage is offline storage; it is the most secure way to store digital
assets, as it is never connected to a network. INXD will transfer cryptocurrency assets from its hot wallet to cold storage at BitGo Trust;
BitGo Trust, as custodian, will safeguard cryptocurrency assets for our customers. To initiate a transfer from cold storage to a Company
hot wallet, we will specify the amount to transfer and submit the request to BitGo Trust. BitGo Trust will contact us, to conduct an out-of-band
video verification to confirm the transfer is legitimate and that a Company authorized signatory approves it. BitGo Trust will then generate
the transaction and sign it securely offline with the user key that BitGo Trust holds in custody. Once half-signed, BitGo Trust will bring
the transaction back online, and upload it to the platform. After key policies are evaluated and satisfied, BitGo Inc. will then sign
the transaction with the BitGo Inc. key. Once completely signed, BitGo Inc. will broadcast the transaction to the blockchain, and the
cryptocurrency assets will be transferred from cold storage to the appropriate Company hot wallet. This separation of functions makes
our operations more secure because, among other reasons, we only need to keep a hot wallet sufficiently funded to service withdrawals.
We plan to use cold storage to store the majority of the cryptocurrency assets held by us when they become material, because cold storage
provides greater asset protection through policies and physical security.
Company assets that are held
using BitGo Inc. multi-signature solution and properly constructed policies used in conjunction with multiple admins on a wallet, which
are a key element in keeping funds safe.
BitGo Trust's custodial
services are provided pursuant to a custodial services agreement dated August 21, 2020 (as amended on January 8, 2021 and March 1, 2021,
the "Custodial Services Agreement") between INXD and BitGo Trust. For its custodial services, BitGo Trust receives an onboarding
fee and receives a monthly custody fee equal to an annualized percentage of the market value of the assets under custody (subject to
a minimum monthly charge). BitGo Trust also receives various transaction-based fees.
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The Custodial Services Agreement
is for an initial term of one year and has been automatically extended for one-year periods, unless terminated by either party by delivery
of a written notice at least 60-days prior to the expiration of the then-current term. INXD may also terminate the Custodial Services
Agreement for any reason upon 30 days' prior written notice.
The foregoing description
of the Custodial Services Agreement summarizes the material terms of the Custodial Services Agreement but is not a complete description. For
more details about the Custodial Services Agreement, please refer to the full text of the Custodial Services Agreement, which is attached
as Exhibit 4.13 to the Company's Annual Report on Form 20-F.
In addition to the Custodial
Services Agreement, on August 17, 2020 the parties thereto entered into an Electronic Trading Agreement (the "Electronic Trading
Agreement") in connection with BitGo Trust's services to INXD and the access granted to INXD by BitGo Trust to BitGo Trust's
proprietary electronic trading system (the "BitGo System"). The Electronic Trading Agreement includes, without limitation,
terms of use of the BitGo System by INXD, disclaimers by BitGo Trust and limitations to its responsibly and liability in connection with
the BitGo System, undertakings by INXD to indemnify BitGo under certain circumstances, and the right of BitGo Trust to terminate the Electronic
Trading Agreement at its discretion and without cause upon a 30 days' notice. INXD's access and use of the BitGo Trust's
proprietary electronic trading system is further subject to execution of, and to the terms that were determined by, the Custodial Services
Agreement and a clearing and settlement addendum with BitGo Trust. BitGo Trust and its affiliates retain all rights, title and interest
in and to the BitGo System, including all source code, object code, data, information, copyrights, trademarks, patents, inventions and
trade secrets embodied therein, and all other rights not expressly granted to INXD pursuant to the Electronic Trading Agreement. The Electronic
Trading Agreement is governed by the laws of California, USA and includes a binding arbitration clause pursuant to the Commercial Arbitration
Rules of the American Arbitration Authority.
As stated in INXD's
Custodian Services Agreement with BitGo, BitGo obtains and maintains insurance coverage in such types and amounts as are commercially
reasonable for the custodial services provided. Any insurance related to theft of coins will apply to custodial services only (where keys
are held by Trust Company, i.e., "cost storage") and not to non-custodial accounts (where keys are held by client, i.e., "hot-wallets").
Currently, there is about
$2.2M USD of customers' funds held by BitGo.
INX committed to reserve 75%
of the gross proceeds less payments to underwriters from its initial public offering in excess of $25,000 to be available to cover
customer and INX's losses, if any, that result from cybersecurity breaches or theft, errors in execution of the trading platform
or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses. INX
refers to this amount as the "Reserve Fund". As of December 31, 2022, INX has segregated $36,023,000, which is restricted
as the Reserve Fund. The Reserve Fund is comprised of cash and cash equivalents, U.S. Treasury securities and corporate bonds held at
banks and brokerage firms.
On July 13, 2021, the INX's
Board of Directors approved the investment policy of the Reserve Fund (the "Investment Policy").  Per the Investment
Policy, as amended on August 11, 2022, the Reserve Fund, post the amendment, shall be invested as follows: minimum 15% in cash and bank
deposits, up to 70% in U.S Treasury securities, up to 20% shall be invested in exchange traded funds and up to 50% in corporate bonds
and other instruments with lowest investment grade rating of BBB.
INXS Trading Platform
Company owns INXS, a Pennsylvania
limited liability company, that is registered in the United States as a broker-dealer, a FINRA member, and that operates and is registered
as an Alternative Trading System by the SEC. We count INXS's broker-dealer/ATS - including its digital security listings and client
base - among our wholly owned subsidiaries.
INXS was developed as a platform
for investors that trade (buy and sell) securities and would like to enrich their portfolios with a new type of securities, also known
as "digital securities."
The INXS Trading Platform
opens access to a new stream of market liquidity that comes from the alternative asset markets. The INXS Trading Platform manages to complete
transactions without the need to custody the clients' tokens nor funds and still provides full confidence to the seller and the
buyer that the trade will be completed based on their firm orders.
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We are continuing the maintenance
and development of the INXS Trading Platform in order to create additional ways of trading digital securities. We listed the INX Token
on the INXS Trading Platform in July 2021. Customers of INXS will be entitled to discounts on trading fees charged by the company, providing
that they hold INX Tokens. Discounts will be granted according to different tiers, allowing for larger discounts given to customers who
hold a larger number of INX Tokens.
The INX Token
We developed the INX Token,
an ERC-1404 blockchain asset that is programmed using a smart contract that is compatible with the Ethereum blockchain, which was offered
to the public from August 20, 2020 to April 22, 2021. For more information regarding the initial offering of the INX Tokens with the SEC,
see "Item 4, Part A – Information on the Company - History and Development of the Company – The Token Offering."
In July 2021, we listed the
INX Token on the INXS Trading Platform. We developed our token smart contract based on the "ERC-1404: Simple Restricted Token Standard."
ERC-1404 is designed for security tokens, tokenized securities and other tokens that carry complex compliance requirements. ERC-1404 is
a token standard developed with corporate governance, banking, and securities laws in mind. It is fully open source, which is paramount
to ensuring its security, quality and interoperability. ERC-1404 carries all of the same benefits of an ERC-20 token, it is simple, easy
to deploy and interoperable with the entire Ethereum universe, with a few key improvements that allow issuers to enforce regulatory transfer
restrictions and maintain compliance with KYC/AML rules as well as the ability to recover tokens in case of wallet loss. The INX Token/smart
contract passed an external audit test by Quantstamp.
We engaged Quantstamp, a blockchain
security firm, a leader in blockchain security, having performed over 200 audits and secured over US$100 billion in value, to perform
an audit of the INX Token smart contract code, which was completed on December 12, 2019 (the "INX Contract Audit"). Quantstamp's
team has decades of combined experience in formal verification, static analysis, and software verification. Through their services, Quantstamp
has assisted blockchain projects globally with its white glove security auditing services, and has secured billions of dollars in transaction
value for blockchain applications. Quantstamp is also dedicated to research and development in the form of collaborations with leading
academic institutions such as National University of Singapore and MIT (Massachusetts Institute of Technology). Quantstamp has experience
with auditing various blockchain platforms including Ethereum, Binance Chain, Hyperledger, EOS, and Corda, and languages including Solidity
and Vyper.
The INX Contract Audit is
intended to evaluate security-related issues, code quality, adherence to specification and best practices and it includes a manual review
of code and a comparison to specifications of the code. Quantstamp reviewed the INX Token smart contract for vulnerabilities related to
transaction-ordering dependence, timestamp dependence, mishandled exceptions and call stack limits, reentrancy and cross-function vulnerabilities,
logical oversights, access control, code clones, functionality duplication, gas usage and arbitrary token minting. The INX Contract Audit
is not an endorsement of the reliability or effectiveness of the INX Token smart contract, but rather it is limited to an assessment of
its logic and implementation.
During the INX Contract Audit,
Quantstamp identified two specific risks: (i) the ability of a hacker to delay the release of INX Tokens by other holders as a means to
get a trading advantage, and (ii) the risk to users if the Company's private keys are compromised. Quantstamp advised that the Company
take caution in using particular functions when transaction ordering. Quantstamp also advised that the Company disclose the risk associated
with theft or loss of its private keys having the ability to revoke INX Tokens from a third-party account or time-lock INX Tokens of such
accounts. The Company has acknowledged each of these risks and has taken security precautions with regards to each.
The INX Tokens are accessible
only from secure Ethereum wallets and have a recovery mechanism that allows the Company under certain circumstances to protect the INX
Token holder even in the case of loss of wallet credentials.
Prospective investors who
were duly identified through KYC/AML procedures were able to purchase the INX Token under the INX Token Purchase Agreement, which all
initial purchasers of INX Tokens in the offering of the INX Token with the SEC are a party to, and which sets forth the rights of each
INX Token holder with regard to the INX Tokens held by such holder.
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Holders of INX Tokens are
entitled to receive an annual pro rata distribution of 40% of the Company's cumulative net cash flow from operating activities (since
the Company's inception (September 1, 2017)), excluding any cash proceeds from an initial sale by the Company of an INX Token ("Adjusted
Operating Cash Flow"). INX's profit share model makes these INX Token holders beneficiaries of the growth and success of INX's
business.
The distribution is calculated
on an annual basis and paid on or before April 30 to parties (other than the Company or its subsidiaries) that hold INX Tokens on the
preceding March 31. Each annual distribution is based on INX's cumulative Adjusted Operating Cash Flow (net of cash flows which
have already formed the basis for a prior distribution), calculated as of December 31 of the year prior to the distribution. However,
because each INX Token holder's right to a pro rata distribution is based on our cumulative Adjusted Operating Cash Flow, no distribution
will be made to INX Token holders, if at all, until the Company generates positive cumulative Adjusted Operating Cash Flows. As of December
31, 2022, cumulative Adjusted Operating Cash Flow was negative $56.4 million. The distribution to INX Token holders is a contractual obligation
of the Company and a right of each INX Token holder of record as of March 31 of a year following a year end for which there was positive
cumulative Adjusted Operating Cash Flow. However, the pro-rata distribution of the Company's cumulative Adjusted Operating Cash
Flow is not self- executing and requires the approval of the Company's financial statements and calculation of such distributions
in good faith by the Company's Board of Directors. For purposes of the calculation of the Adjusted Operating Cash Flow, cash flow
from the sale and purchase of blockchain assets, including cash flow from the sale and purchase of the INX Token (excluding cash proceeds
from an Initial Sale) and cash flow for interest paid and interest received, will be included in the calculation of Adjusted Operating
Cash Flow regardless of their classification in the consolidated statement of cash flow of the Company. An "Initial Sale"
refers to the first sale and transfer of the respective INX Token by the Company to an initial purchaser. Distributions will be paid either
in U.S. Dollars to an INX Token holder's bank account or in Ether which will be transferred to the INX Token holders' wallet
that is recorded on the INX Token Distributed Ledger (as defined in the Token Offering).
In addition, holders of INX
Tokens will be entitled to, at a minimum, a 10% discount on the payment of transaction fees on the INX trading platform, INX.One. Customers
of INX will be entitled to discounts on trading fees charged by the Company, provided that they hold INX Tokens. Discounts will be granted
according to different tiers, allowing for larger discounts given to customers who hold a larger number of INX Tokens. The Company does
not currently accept INX Tokens as payment for its services.
Holders of INX Tokens have
contractual rights determined by the INX Token Purchase Agreement. Pursuant to the terms of the INX Token Purchase Agreement, ownership
of the INX Tokens and all rights under the INX Token Purchase Agreement are contingent upon holders of INX Tokens satisfying the Company's
KYC/AML procedures, including any requirements to periodically or otherwise update information provided to the Company. Transfer of INX
Tokens would include similar rights and obligations toward the new holder of the INX Tokens.
●
Rights of INX Token Holders Upon a Failure or a Change of Control. Each INX Token held by parties other than the Company shall entitle its holder to receive a pro rata portion (based upon the number of INX Tokens then outstanding) of the Cash Fund, if any of the following occur:
-
The Company fails to operate a bona fide trading platform that permits the spot trading of Bitcoin and Ethereum by December 31, 2021, (a milestone which has, as of the date hereof, been achieved); or
-
(a) a sale of all or substantially all of the assets of the Company; (b) any person or entity becoming the beneficial owner, directly or indirectly, of more than 50% of the outstanding voting interests of the Company; or (c) the closing of a merger, consolidation, recapitalization or reorganization of the Company with or into any person or entity pursuant to which the shareholders of the Company immediately prior to such transaction own less than 50% of the outstanding voting interests of the resulting entity or its parent company.
●
Rights of INX Token Holders Upon an Insolvency Event. If (i) the Company permanently discontinues all the activities of INX Trading Solutions and there is no successor conducting a substantially similar business that assumes the obligations of the Company with regard to the INX Tokens and (ii) an "Insolvency Event" (as defined in the INX Token Purchase Agreement) occurs, then INX shall be deemed to be in breach of its obligations under the INX Token Purchase Agreement, which breach shall create a claim in favor of INX Token holders that may be asserted by INX Token holders against the Company in any proceeding arising from such Insolvency Event. The claim amount will be determined by the liquidator, a court of competent jurisdiction overseeing the liquidation, or some other authority pursuant to applicable insolvency law, and accordingly, there can be no assurance as to the payment amount, if any, that may be received by an INX Token Holder in settlement of such claim.
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The Company intends that the
INX Token holders will be unsecured creditors of the Company and would therefore rank pari passu with all the other unsecured creditors
of the Company and senior to the claims of holders of the Company's shares. On closing of the transactions contemplated by the Security
Exchange Agreement, TIDCI entered an agreement with the Company (the "Waiver and Subordination Undertaking"), pursuant to
which TIDCI will (a) irrevocably subordinate its rights to receive any distributions and payments from the Company prior to the payment
in full by the Company of all distributions owed to INX Token holders, and (b) irrevocably waive and subordinate its rights, in the event
of an Insolvency Event, to any cash held in the Cash Fund.
The Cash Fund is not held
in an escrow or trust account, but rather, is held in a separate bank account or accounts controlled by the Company. The Cash Fund can
be used only for very specific designated purposes, under certain pre-identified circumstances, such as for covering losses of the Company
and its clients that result from cybersecurity breaches or theft, errors in the execution of the trading platform or its technology, and
counterparty defaults, including instances where counterparties lack sufficient collateral to cover losses, or for the purpose of payment
to holders of INX Tokens (other than to the Company itself) in the event of a change of control in the Company. In addition, payment of
funds held in the Cash Fund is subject to the approval of the Board of Directors of the Company which always consists of a majority of
independent board members. In the case of an Insolvency Event, a liquidator, court or other applicable authority may determine that INX
Token holders are not entitled to any payment from the Company's assets or that the INX Token holders' claims are not senior
in right to claims or interests of the Company's shareholders, in particular the shareholders who have not agreed to subordinate
their rights to the claims of INX Token holders. In addition, the Company may incur debt (including secured debt) that ranks equally with,
or senior to, the rights of INX Token holders. In the case of an Insolvency Event, holders of debt instruments ranking senior to INX Tokens,
as well as holders of other preferential claims under relevant insolvency laws, may be entitled to receive payment in full before INX
Token holders receive any distribution, including distributions of Adjusted Operating Cash Flow and distributions from the Cash Fund.
INX Token holders do not have a perfected security interest in either the Cash Fund, or their Pro Rata Portion (as such term is defined
in the Token Offering) of the Distributable Amount (as such term is defined in the Token Offering) of the cumulative Adjusted Operating
Cash Flow. There is no guarantee that an INX Token holder will receive any funds following an Insolvency Event (as such term is defined
in the Token Offering).
Future Development
We plan to further develop
our products and business, and in particular, to conduct the following development activities:
●
Develop full solution to support onboarding and trading of institutions - front and back office.
●
Enhance risk trading management tools.
●
Create the infrastructure to develop and launch new digital assets and/or integration with third party providers for specific solutions. INX intends to establish a platform for the trading of cryptocurrency-based futures, options and swaps. INX has taken no steps towards the establishment of such a platform, which will require both the development of technological solutions as well as applicable regulatory approvals, and accordingly, there is no assurance that such a trading platform will ever be developed.
●
Execute the full vision of one regulated hub for digital assets – all under the same platform and share common processes (such as: registration, onboarding, trading, support).
●
Develop automated know-your-client (KYC) and anti-money laundering (AML) procedures.
●
Develop and launch a mobile application for digital securities trading.
●
Add additional payment methods for INX Trading Solutions.
●
Develop multi-blockchain support for the INXS platform.
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Our Growth Strategies
We believe that as INX Trading
Solutions completes each phase of development, which we expect will increase the number of high-volume blockchain assets included on our
platforms, our business operations will grow and enable us to launch several growth strategies, including the following:
●
Active expansion of institutional blockchain asset trading and large-scale block transactions
. We promote our trading platforms and related services with institutional and other accredited investors such as family offices, hedge funds and others who require access to platforms for trading cryptocurrencies or security tokens, including trades in large-scale block transactions.
●
Fully monetize market data and connectivity
. We aim to serve as a hub for blockchain asset traders, institutional investors, commercial banks and individuals trading blockchain assets. As we attract more clients, we expect that we will accumulate non-proprietary big-data relating to trading behavior and related market statistics. We plan to use this data for internal use and as a product to be sold to institutional investors and trade analysts.
●
Strategic opportunities
. Upon completion of development phases, we plan to pursue strategic alliances with commercial banks and other licensed and regulated blockchain asset trading platforms for the expansion of our business.
●
The INX Token
.
Use of the INX Token is intended to create a "virtuous cycle," where users will get benefits to buy INX Tokens. For example, INX Token holders may be entitled to a minimum of 10% discount on the trading fees on the INXS Trading Platform. This, in turn, may increase the value of the INX Token as the number of users on the INXS Trading Platform grows. In addition, holders of INX Tokens will be entitled to a distribution based on our net cash flow from operating activities, excluding any cash proceeds from an initial sale by the Company of an INX Token. Our profit share model makes these INX Token holders beneficiaries of the growth and success of the Company's operations. The Company has not allocated for issuance and has no current intention to issue 35 million of the 200 million INX Tokens that have been created. In addition, the Company may reserve an additional 20% of INX Tokens received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed 35 million plus 50% of the number of INX Tokens sold by the Company to the public pursuant to our initial public offering and subsequent offerings of INX Tokens (excluding re-issuances of reacquired INX Tokens), up to a maximum of 100 million INX Tokens. The Company does not intend to issue these reserved INX Tokens for general fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations of the Company if the Board of Directors determines that the Company has net cash balances sufficient to fund less than six months of the Company's operations. We intend to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to limit the dilution to INX Token holders.
●
Single integrated solution
. We believe that developing INX Trading Solutions with the capability to provide customers with a single integrated solution to access an array of services and features will be preferred by participants in the financial services community and will attract high volume traders who need a multifunctional trading solution. We intend to bolster our competitive position by developing platforms for a wide breadth of asset classes, each platform with a suite of workflow functionalities across the entire transaction lifecycle, including pre-trade, trade and post-trade services. In the future, the Company intends to establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly, there is no assurance that such a trading platform will ever be developed.
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Competition
We face intense competition
in the blockchain asset trading market on a global level. As of April 30, 2023, top blockchain asset trading platforms, based on USD daily
trading volume, include Binance, Coinbase Exchange, Kraken, Bitstamp, KuCoin and bybit.
An ever-growing number of
previously unregulated trading platforms have announced intentions to operate as a regulated broker-dealers, or as otherwise regulated
entities either under the federal securities laws, U.S. state or local laws or, as applicable, the laws of other jurisdictions (outside
the U.S.) such as the EU. The market for trading blockchain assets has generated considerable interest and is continually evolving with
new entrants to the market. In addition, established financial institutions have expressed interest in operating regulated blockchain
asset exchanges or trading platforms and utilizing blockchain assets in bank financing practices.
For example, in January
2019, t0.com, Inc. announced that its security token trading platform was operational and began trading tZERO token, in compliance
with SEC and FINRA regulations. Coinbase and Uphold, two blockchain asset trading platforms, have each announced plans seek to SEC
approval to operate trading platforms for trading blockchain assets that are securities, and on April 14, 2021, Coinbase listed its
shares on the Nasdaq stock exchange. In September 2021, Securitize Markets launched secondary trading for digital
securities.
The market for trading blockchain
assets is developing and we anticipate new entrants to the market and competition to intensify in the future. Our future competitors may
have greater resources than us and there can be no assurance that we will have the financial and operational resources necessary to carry
out our business plan and successfully compete with our competitors.
Regulation of our Trading Solution
We have registered
INX Digital with FinCEN as a federal money service business.  In addition, as of April 30, 2023, we have been issued a license by
the following U.S. states, territories, and districts: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, District of Columbia,
Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Nebraska, New Hampshire,
New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Vermont,
Washington, and West Virginia, and have submitted notifications or are otherwise qualified to operate (based on being exempted from any
licensing requirement or notice requirement) in the following States: California, Colorado, Indiana, Massachusetts, Michigan, Missouri,
Montana, Pennsylvania, Utah, Wisconsin, and Wyoming. INX Digital is now eligible to operate as proposed in those jurisdictions.
INXS was accredited by FINRA
as a registered broker-dealer and by the SEC as a recognized alternative trading system based on the licenses of Openfinance.
In the future, we intend to
establish a platform for the trading of cryptocurrency-based futures, options and swaps. We have taken no steps towards the establishment
of such a platform, which will require the development of technological solutions as well as federal and state regulatory approvals; accordingly,
there is no assurance that such a trading platform will ever be developed.
Regulation of Our Trading Platforms and
Our Subsidiaries
The financial services industry
is subject to extensive regulation under both federal and state laws. Regulators that oversee our business activities are charged with
ensuring the integrity of the financial markets and the protection of customers and other third parties who engage in the financial markets.
Registration as a money transmitter, broker-dealer, and alternative trading system subject our subsidiaries to laws and regulations covering
all aspects of financial services, including sales methods, trade practices, use and safekeeping of clients' funds and other assets,
minimum capital requirements, record keeping, financing of securities purchases and conduct of directors, officers and employees.
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Regulation of Money Transmitters
The vast majority of States
maintain "money transmitter", "money service business" or "check casher" licensing and regulatory
regimes, which generally govern entities that are in the business of taking possession of, providing non-bank storage services for and
transferring funds. These state licensing regimes vary from jurisdiction to jurisdiction and, while certain states have issued guidance
indicating that its licensing requirements do not apply to virtual currency, the majority of states have either affirmatively stated that
certain virtual currency activities are covered by their licensing regime or have been silent on the issue. Many jurisdictions maintain
exemptions and/or exceptions to their respective licensing regimes.
At a federal level, the activity
regulated by state licenses also may make the relevant actor a "money transmitter" or "provider of prepaid access,"
each of which is considered a "money service business" ("MSB") that must be registered with FinCEN unless otherwise
exempt. MSBs are subject to regulatory oversight and enforcement by FinCEN. MSBs are subject to the Bank Secrecy Act, as amended by the
USA PATRIOT Act of 2001 ("BSA"). MSBs must register with FinCEN and implement a compliance program appropriately tailored
to the MSBs' money laundering and financial crime risks. An MSB's compliance program must incorporate relevant reporting,
recordkeeping and anti-money laundering controls and processes, including, to the extent applicable to the MSB's business know-your-customer
controls, transaction monitoring, filing of suspicious activity reports ("SARs"), and sharing information with other financial
institutions under Section 314(b) of the USA PATRIOT Act, the "Funds Transfer Rule," or the "Funds Travel Rule."
On March 18, 2013 and May 9, 2019, FinCEN issued guidance concerning virtual currency and MSB licensing requirements in which FinCEN identified
"administrators" or "exchangers" of virtual currencies as MSBs, unless an exemption applies. There are various
exemptions to the MSB registration requirements. For example, entities that are "registered with, and functionally regulated or
examined by, the SEC or the CFTC" are exempt from federal MSB registration and reporting obligations.
Larger money transmitters
may also be subject to direct supervision by the Consumer Financial Protection Bureau (the "CFPB") and are required to provide
additional consumer information and disclosures, adopt error resolution standards and adjust refund procedures for international transactions
originating in the United States in a manner consistent with the Remittance Transfer Rule (a rule issued by the CFPB pursuant to the Dodd-Frank
Act). In addition, the CFPB may adopt other regulations governing consumer financial services, including regulations defining unfair,
deceptive, or abusive acts or practices, and new model disclosures. In addition, money transmitters may be subject to periodic examination
by the CFPB.
We have registered INX Digital
with FinCEN as a federal MSB and we have notified or intend to notify and/or register with state regulators in compliance with state money
transmitter requirements. We do not currently intend to rely on any state or federal exemptions to registering as an MSB, including any
exemptions relating to registration with and regulation by the SEC or CFTC, and we intend to monitor all legislative and regulatory developments
with respect to the BSA, including the publication of further rulings or guidance by FinCEN, and to make revisions to INX Digital's
compliance program when appropriate.
Broker-Dealer Regulation
In the United States, the
SEC is the federal agency responsible for the administration of the federal securities laws, with certain standard setting and monitoring
responsibilities delegated to self-regulatory organizations ("SROs"). Of these SROs, the regulation of broker-dealers is principally
the function of FINRA and every firm and broker that sells securities to the public in the United States must be licensed and registered
by FINRA. National securities exchanges, such as the New York Stock Exchange, also regulate and monitor broker-dealer activity. In addition
to federal and SRO oversight, securities firms are also subject to regulation by state securities administrators in those states in which
they conduct business.
Broker-dealers, like other
securities market participants, must comply with the general "antifraud" provisions of the federal securities laws. The "antifraud"
provisions prohibit misstatements or misleading omissions of material facts, and fraudulent or manipulative acts and practices, in connection
with the purchase or sale of securities, and broker-dealers must conduct their activities to avoid these kinds of practices.
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Broker-dealers must also comply
with many requirements that are designed to maintain high industry standards. Broker-dealers owe their customers a duty: a) of fair dealing,
b) to recommend only those specific investments or overall investment strategies that are suitable, c) to seek to obtain the most favorable
terms available under the circumstances for its orders (best execution), d) to provide at or before the completion of transaction certain
information (including the identifying the securities involved in the transaction and compensation related to the transaction), and e)
to provide notice about purchasing securities on credit, among other disclosure requirements.
Broker-dealers are also subject
to broad obligations under the Bank Secrecy Act to guard against money laundering and terrorist financing which include requirements to
file reports or retain records relating to suspicious transactions, customer identity, large cash transactions, cross-border currency
movement, foreign bank accounts and wire transfers, among other things.
Every U.S.-registered broker-dealer
is also subject to the Uniform Net Capital Requirements. The Uniform Net Capital Requirements are designed to ensure financial soundness
and liquidity by prohibiting a broker or dealer from engaging in business at a time when it does not satisfy minimum net capital requirements.
In the United States, net
capital is essentially defined as net worth (assets minus liabilities), plus qualifying subordinated borrowings and less certain mandatory
deductions that result from excluding assets that are not readily convertible into cash and from conservatively valuing certain other
assets, such as a firm's positions in securities. Among these deductions are adjustments, which are referred to as "haircuts,"
in the market value of securities positions to reflect the market risk of such positions prior to their liquidation or disposition. The
Uniform Net Capital Requirements also impose a minimum ratio of equity to subordinated debt which may be included in net capital.
Regulations have been adopted
by the SEC that prohibit the withdrawal of equity capital of a broker-dealer, restrict the ability of a broker-dealer to distribute or
engage in any transaction with a parent company or an affiliate that results in a reduction of equity capital or to provide an unsecured
loan or advance against equity capital for the direct or indirect benefit of certain persons related to the broker-dealer (including partners
and affiliates) if the broker-dealer's net capital is, or would be as a result of such withdrawal, distribution, loan or advance,
below specified thresholds of excess net capital. In addition, the SEC's regulations require certain notifications to be provided
in advance of such withdrawals, distributions, reductions, loans and advances that exceed in the aggregate 30% of excess net capital within
any 30 day period, and the SEC has the authority to restrict, for up to 20 business days, such withdrawal, distribution or reduction of
capital if the SEC concludes that it may be detrimental to the financial integrity of the broker-dealer or may expose its customers or
creditors to loss. Notice is required following any such withdrawal, distribution, reduction, loan or advance that exceeds in the aggregate
20% of excess net capital within any 30 day period. The SEC's regulations limiting withdrawals of excess net capital do not preclude
the payment to employees of "reasonable compensation."
Compliance with the Uniform
Net Capital Requirements may limit the extent and nature of our operations requiring the use of our registered broker-dealer subsidiaries'
capital and could also restrict or preclude our ability to withdraw capital from our broker-dealer subsidiaries.
Regulation ATS
Regulation ATS permits a U.S.
ATS to match orders submitted by buyers and sellers without having to register as a national securities exchange. An ATS, although functionally
an exchange, is regulated as a broker-dealer. In order to acquire the status of an ATS, a firm must first be registered as a broker-dealer,
and then file an initial operation report with respect to the trading system on Form ATS. The Form ATS must provide detailed information
regarding the types of subscribers it expects to admit to the system, the securities it expects to trade, the manner in which the system
operates, including how orders are entered and transactions executed, reported, cleared and settled, as well as all relevant infrastructure
and procedures concerning system access, capacity, supervision, security, contingency planning and subscriber compliance.
The initial operation report
must be accurate and kept current. The Commission does not issue approval orders for Form ATS filings; however, the Form ATS is not considered
filed unless it complies with all applicable requirements under Regulation ATS. Regulation ATS contains provisions concerning the system's
operations, including: fair access to the trading system; fees charged; the display of orders and the ability to execute orders; system
capacity, integrity and security; record keeping and reporting; and procedures to ensure the confidential treatment of trading information.
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An ATS must also comply with
any applicable SRO rules and with state laws relating to alternative trading systems and relating to the offer or sale of securities or
the registration or regulation of persons or entities affecting securities transactions.
Futures Exchanges, Clearing Houses, and Swaps
The CFTC is the federal agency
primarily responsible for the administration of federal commodities laws, including the adoption of rules applicable to Futures Commissions
Merchants, Designated Contract Markets and Swap Execution Facilities. The operations of U.S. futures exchanges, clearing houses, swap
data repository and swap execution facilities are subject to extensive regulation by the CFTC. The CFTC carries out the regulation of
the futures and swaps markets and clearing houses in accordance with the provisions of the CEA as amended by, among others, the Commodity
Futures Modernization Act and Dodd-Frank.
Regulatory Oversight of Blockchain Assets
The following is a summary
of recent demonstrations of regulatory action taken with regard to blockchain assets. We believe that these actions will impact the Company;
however, regulation of the blockchain industry is evolving rapidly. The regulatory landscape may differ from country to country, but we
expect for the foreseeable future that regulators will maintain an increased focus on blockchain assets. In addition, the SEC, FINRA,
and courts have continued, and likely will continue, to promulgate statements, enforcement actions and rulings, as applicable, interpreting
the characterization of blockchain assets, the issuance of blockchain assets and regulating behavior in the market.
Regulation of blockchain assets
by U.S. federal and state governments, foreign governments and self-regulatory organizations remains in its early stages. As blockchain
assets have grown in popularity and in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies such as the SEC,
the CFTC, FinCEN and the Federal Bureau of Investigation, have begun to examine the nature of blockchain assets and the markets on which
they are traded.
The SEC has taken various
actions against persons or entities misusing blockchain assets, including virtual currencies, in connection with fraudulent schemes, inaccurate
and inadequate publicly disseminated information, and the offering of unregistered securities. In addition, on July 25, 2017, the SEC
issued Release No. 81207 ("the DAO Report"), in which it analyzed a certain issuance of tokens, and indicated that "whether
or not a particular transaction involves the offer and sale of a security – regardless of the terminology used – will depend
on the facts and circumstances, including the economic realities of the transaction." The SEC clarified that the registration requirements"
apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a
decentralized autonomous organization, regardless whether those securities are …distributed in certificated form or through distributed
ledger technology…" On December 4, 2017 and December 11, 2017, the SEC announced enforcement actions relating to the PlexCoin
and Munchee token launches, respectively. Also on December 11, 2017, SEC Chairman Jay Clayton published a public statement entitled "Cryptocurrencies
and Initial Coin Offerings." The SEC has made a concerted effort to monitor the ICO market and address—through the DAO Report
and the more recent SEC guidance—transactions and behaviors it believes are both inconsistent with and in violation of U.S. securities
laws. In early 2018, media reports indicated that the SEC has subpoenaed around 80 cryptocurrency firms as part of a targeted probe. On
March 7, 2018, the Divisions of Enforcement and Trading and Markets issued a public statement stating that many digital assets are likely
to be securities under the federal securities laws and urged investors to use platforms for trading such assets that are registered with
the SEC, such as a national securities exchange, ATS, or broker-dealer. Since March 2018, the SEC has continued to bring enforcement actions
and make public statements which further supports its view that blockchain assets should be treated as securities in almost all cases.
In December 2020 the SEC
filed
an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they illegally
sold a cryptocurrency, XPR and raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.
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The
SEC also sued blockchain-based publishing company LBRY Inc,. alleging LBRY offered and sold "LBRY Credits" or "LBC"
without registering them as securities in violation of the US federal securities laws. A US District Court judge in New Hampshire ruled
that no reasonable jury could reject the SEC's claim that LBRY offered LBC as an investment in its content distribution network and therefore,
securities. LBC did not sell the tokens through an initial coin offering (ICO), but instead sold LBC directly through the LBRY application.
LBRY attempted to argue that LBC had utility and were able to be used as currency on the platform early on to compensate creators and
incentivize users. LBRY CEO noted the judge's decision in this case "threatens the entire US cryptocurrency industry" by setting
a standard that would deem "almost every cryptocurrency" a security. As this case was heard in the US First District, it does
not necessarily impact any decision in the Ripple case held in the Second District. Meanwhile, Chairman Gensler has stated he believes
that the vast majority of cryptocurrency tokens he has seen are securities.
More
recently, in December of last year, the SEC filed a complaint against Thor Technologies for the sale of its Thor tokens as unregistered
securities from its 2018 ICO. The SEC highlighted in its complaint that the Thor tokens were marketed as an investment, and Thor did not
give proper disclosures to investors regarding its financial condition and ability to generate profits.
The
SEC charged the FTX Trading Ltd. CEO and co-founder with defrauding investors through its crypto asset trading platform, FTX, with investigations
of other securities law violations ongoing. The CEO of FTX and various alleged celebrity endorsers were also sued in a potential class
action lawsuit for engaging in the unlawful sale of unregistered securities, deceptive and unfair business practices and participation
in a civil conspiracy akin to a "Ponzi scheme." However, this is only one of many during 2022, and we will highlight a few notable
ones below.
In
July of last year, the SEC filed a complaint against a Coinbase Global, Inc., employee and two others alleging insider trading in violation
of the federal securities laws. In its complaint, the SEC points to nine different crypto assets and alleges that these are all "crypto
asset securities."
The
SEC continues to focus on the cryptocurrency industry and we expect digital asset regulation to remain a priority in the near future.
The SEC's Division of Enforcement nearly doubled the size of its Crypto Assets and Cyber Unit last year, allocating more resources to
enforcement in the crypto markets.
On April 3, 2019, the Strategic
Hub for Innovation and Financial Technology (FinHub) of the SEC published informal guidance, titled "Framework for 'Investment
Contract' Analysis of Digital Assets" (the Framework), which provides analytical tools for determining whether a blockchain
asset is a security under the U.S. federal securities laws. In the Framework, the SEC uses the term "digital asset" to refer
to an asset that is issued and transferred using distributed ledger or blockchain technology. In this report, we use the term "blockchain
asset" to distinguish between assets that are recorded and stored using blockchain technology and assets that may be stored in digital
form but which do not utilize blockchain technology. In addition, the SEC has not used the term "security token." The Framework
provides a list of factors to consider when determining whether a digital asset offered for sale is a security. The factors included in
the Framework are based on an analysis of whether the blockchain asset is an "investment contract" as that term was first
used by the Supreme Court in
SEC v. Howey
, 328 U.S. 293 (1946), and which has been further clarified through subsequent case law.
The CFTC has asserted the
belief that bitcoin and other virtual currencies meet the definition of a commodity and that the CFTC has regulatory authority over futures
and other derivatives based on virtual currencies, subject to facts and circumstances. The CFTC defined "virtual currencies"
as "a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value, but does
not have legal tender status in any jurisdiction. Bitcoin and other virtual currencies are distinct from 'real' currencies,
which are the coin and paper money of the United States or another country that are designated as legal tender, circulate, and are customarily
used and accepted as a medium of exchange in the country of issuance." Although the CFTC maintains regulatory oversight of the commodities
markets, beyond its anti-fraud and anti- manipulation authorities, the CFTC generally does not oversee "spot" or cash market
exchanges and transactions involving virtual currencies that do not utilize margin, leverage, or financing. In late 2022,
CFTC
Chair Rostin Behnam has requested "clear authority to impose [the CFTC's] traditional regulatory regime over the digital asset
commodity market." Earlier this year, bipartisan legislators in the U.S. Congress introduced competing bills that would each establish
a crypto market intermediary registration regime overseen by the CFTC. These bills are likely to be reintroduced in 2023. After recent
crypto market events, a comprehensive crypto bill that expands the CFTC's jurisdiction may see broad support and if passed, would
impact the Company.
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In addition to relevant state
money transmitter and securities laws, local state regulators may also regulate or seek to regulate blockchain assets. In July 2014, the
New York State Department of Financial Services (the "NYSDFS") proposed the first state regulatory framework for licensing
participants in "virtual currency business activity." The regulations, known as the "BitLicense," are intended
to focus on consumer protection and, after the closure of an initial comment period that yielded 3,746 formal public comments and a re-proposal,
the NYSDFS issued its final BitLicense regulatory framework in June 2015. The BitLicense regulates the conduct of businesses that are
involved in "virtual currencies" in New York or with New York customers and prohibits any person or entity involved in such
activity to conduct activities without a license. Not all regulations of blockchain assets are restrictive. For example, on June 28, 2014,
California repealed a provision of its Corporations Code that prohibited corporations from using alternative forms of currency or value.
The bill indirectly authorizes the use of bitcoin as an alternative form of money in the state.
The IRS has released guidance
treating bitcoin as property that is not currency for U.S. federal income tax purposes. Taxing authorities of a number of U.S. states
have also issued their own guidance regarding the tax treatment of bitcoin for state income or sales tax purposes. The treatment of blockchain
assets may be the subject of contemplated tax reform.
On November 13, 2017, the
European Securities and Markets Authority ("ESMA") issued two statements, the first statement was intended to warn investors
of the inherent risks of ICOs, and the second statement sought to alert companies involved in ICOS to the need to meet relevant EU and
member state regulatory requirements. On February 12 2018, ESMA issued another EU-wide warning to consumers about the risks of buying
virtual currencies. In July 2018, The EU Fifth Anti Money Laundering Directive (EU) 2018/843 came into force and extended the scope of
KYC/AML regulations pertaining to virtual currency exchange platforms and wallet providers.  On January 9 2019, both ESMA as well
as the European Banking Authority published reports on crypto-assets and assessed the suitability of the existing regulatory framework
relating to these instruments. In October 2021, the FATF updated its 2019 Guidance for a risk-based approach to virtual assets and virtual
asset service providers ("VASPs"). The update focused mainly on helping countries and VASPs understand their anti-money laundering
and counter-terrorist financial obligations, whilst also providing guidance on how to effectively implement the FATF's requirements
as they apply to this sector. On 30 June 2022, the new EU Market in Crypto-assets Regulation (MiCA) was agreed on between the European
Commission, the European Parliament, and the Council of the European Union. MiCA intends to regulate crypto assets and their service providers
through a single licensing regime across all Member States by 2024.
Blockchain assets also face
an uncertain regulatory landscape in many foreign jurisdictions. On September 4, 2017, the People's Bank of China labeled blockchain
asset sales as "illegal and disruptive to economic and financial stability." Previously, China had issued a notice that classified
bitcoin as legal and "virtual commodities;" however, the same notice restricted the banking and payment industries from using
bitcoin, creating uncertainty and limiting the ability of Bitcoin Exchanges to operate in the then-second largest bitcoin market. South
Korea's Financial Services Commission likewise prohibited all forms of tokens on September 29, 2017. Japan has enacted a law regulating
virtual currencies which has brought Bitcoin exchanges under know-your-customer and anti-money laundering rules and resulted in the categorization
of Bitcoin as a kind of prepaid payment instrument. The law puts in place capital requirements for exchanges as well as cybersecurity
and operational stipulations. In addition, those exchanges are also required to conduct employee training programs and submit to annual
audits. To date, the Japanese Financial Services Agency (FSA) has granted licenses to 15 different cryptocurrencies or tokens trading
platforms. In November 2017, the Monetary Authority of Singapore ("MAS") issued a statement that tokens sold through the blockchain
funding model may be considered securities under certain circumstances under Singapore law and provided case studies as examples of tokens
that do and do not constitute securities. Previously, the MAS had stated that other laws may apply to token sales, such as money laundering
and terrorism financing laws.
Other jurisdictions are still researching the subject. In September
2017, FINMA issued guidance that it was investigating ICOs and that whenever FINMA is notified about ICO procedures that breach regulatory
law or which seek to circumvent financial market law it initiates enforcement proceedings. On February 16, 2018, FINMA publicly announced
ICO guidelines. In December 2018, the Swiss Federal Council adopted a report on the legal framework for blockchain and distributed ledger
technology in the financial sector. In March 2019, the Federal Council initiated consultation with regard to specific amendments to federal
law for the purpose of adapting federal law to developments in distributed ledger technology.
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In December 2017, the UK Financial
Conduct Authority ("FCA") issued a statement on distributed ledger technology which said, in part, that the FCA will gather
further evidence and conduct a deeper examination of the ICO market and that its findings will help to determine whether or not there
is need for further regulatory action. In June 2018, an amendment to the Tel Aviv Stock Exchange Ltd. ("TASE") regulations
entered into effect, under which shares of companies operating in the field of cryptographic currencies will be excluded and / or not
included in the TASE indices, if such a company is engaged in the holding, investing or mining of distributed cryptographic currencies,
and the TASE Indices Committee decides that this activity is material or expected to be material to the company's business. The
Israel Securities Authority (ISA) has previously indicated that to date, there is uncertainty as to the format and extent of the regulation
that will apply to the various activities in cryptographic currencies - especially those of decentralized currencies without any centralized
entity, such as Bitcoin, in terms of taxation, prevention of money laundering and terrorism, cyber security and investor protection. In
addition, the ISA has appointed a special committee authorized to examine the regulation of issuances of cryptographic currencies to the
public.
In its final report, published
in March 2019, the special committee recommended, among other things, focusing on the following: establishing a dedicated disclosure regime
to adjust to the unique characteristics of such activities; formation by a number of Israeli regulatory authorities (among others, the
Bank of Israel, Israeli Tax Authority, Anti-Money-Laundering Authority, Ministry of Finance, Justice Department, Israeli National Cyber
Directorate and ISA) of a 'regulatory sandbox' with the aim of creating a harmonious government policy and the removal of
barriers to domestic industry in the field of cryptographic assets; and examining a better suitable regulatory framework for the trading
activity of cryptographic assets that are deemed securities. In addition, the special committee final report further provided the following
initial regulatory guidelines to this field:
(1) the question of whether
a cryptocurrency will be considered a security will be decided according to the totality of the circumstances and characteristics of each
case on its merits against the background of the purposes of the Israeli law;
(2) cryptographic currencies
that grant rights similar to those of traditional securities such as shares, bonds or participation units will be considered securities.
This category includes, for example, tokens who grant rights to participate in revenue or profits generated from an enterprise; tokens
granting rights to receive payments, fixed or variable, whether by way of the allocation of additional currencies or by way of redemption
of currencies; or tokens granting ownership rights or membership in an enterprise whose purpose is to generate an economic yield;
(3) blockchain assets intended
to be used as a method of payment, clearing or exchange only, other than in a specific enterprise, which do not confer additional rights
and are not controlled by a central entity, shall not typically be considered a security;
(4) blockchain assets that
embody a right to a product or service and are purchased for consumption and use only shall not typically be considered securities; and
(5) a public offering of a
cryptographic currency falling within the definition of a security is subject to the requirement to publish a prospectus.
In Canada, the Canadian
Securities Administrators (the "CSA"), the umbrella group for the provincial and territorial securities
regulators, have generally taken the position that securities laws apply to cryptocurrencies. The CSA, beginning in 2017,
has published a series of Staff Notices outlining their position and explaining how securities laws apply to various aspects
of the cryptocurrency industry. The majority of those Staff Notices have dealt with the question of when
a cryptocurrency constitutes a security for securities law purposes, as well as providing specific regulatory guidance for cryptocurrency
trading platforms that have Canadian resident customers and other businesses that hold cryptocurrencies on behalf of Canadian clients.
As the Company does not have Canadian clients, or other Canadian operations, such regulatory guidance does not apply to the Company.
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The Government of Gibraltar
enacted the Financial Services (Distributed Ledger Technology Providers) Regulations (the "DLT Regulations") which came into
effect on January 1, 2018. The primary purpose of the DLT Regulations is to create a safe environment for DLT-related businesses to operate
and innovate, while simultaneously protecting consumers and safeguarding Gibraltar's reputation as a trusted and stable global business
hub. In April 2022, Gibraltar introduced the 10
th
core principle of their DLT Regulations, Market Integrity. This principle
focuses on combating market and price manipulation, as well as any other activity that may negatively affect the reputation of Gibraltar's
digital asset market. The integrity of these markets is a key focus and Gibraltar intends to remain at the forefront of standard setting
in the industry. Companies which use blockchain technology to store or transmit value belonging to others by way of business are caught
by the DLT Regulations and require a license in Gibraltar. The activity of undertaking a token sale does not automatically fall within
the scope of the DLT Regulations, however, this will depend on the manner in which the sale of tokens is structured and the characteristics
of the token.
European Regulation
The recent extension of anti-money
laundering requirements to certain crypto-related activities by the European Union's Fifth Money Laundering Directive has increased
the regulatory compliance burden for our business in Europe and, as a result of the fragmented approach to the implementation of its provisions,
resulted in distinct and divergent national licensing and registration regimes for us in different E.U. member states. Further E.U.-level
legislation imposing additional regulatory requirements in relation to crypto-related activities is also expected in the near term, such
as with the enactment of the Markets in Crypto-Assets Regulation ("MiCA"). Among other provisions, MiCA is expected to introduce
a comprehensive authorization and compliance regime for crypto asset service providers and a disclosure regime for the issuers of certain
crypto assets, which is expected to impact our operations in the European Union. For example, the requirements of privacy and data protection
laws in the European Union, United States, and elsewhere are typically founded on the premise of centralized, data-controller-based data
processing, and require fulfilling, among other things, individual rights to access or delete one's data. This creates unique compliance
challenges given the nature of blockchain's peer-to-peer network architecture, lack of centralized control, immutability, and perpetual
data storage.
The European Commission has
published and moved to implement the following EU legislation, relevant to crypto-assets: a directive introducing targeted amendments
to the existing extensive body of EU financial services legislative and regulatory instruments. These are to accommodate the Markets in
Crypto-Assets (MiCA) regime and the Pilot DLT Market Infrastructure Regulation (PDMIR). EU regulation on digital operational resilience
for the financial sector (DORA), which received final agreement in November 2022 and is awaiting signature and official publication. In
addition, updates are expected on the harmonisation of the EU AML framework, including the introduction of a single pan-EU AML Authority.
The Markets in Crypto-Assets
(MiCA) Regulation is expected to enter into force in 2023. After formal approval by the Council of the EU, MiCA will be published in the
EU's Official Journal and enter into force 20 days later. MiCA will generally start applying after a transitional period of 18 months,
meaning that MiCA will likely take effect no earlier than Q3 2024. MiCA is intended to close gaps in existing EU financial services legislation
by establishing a harmonized set of rules for crypto-assets and related activities and services at EU level. MiCA intends to providing
legal certainty for crypto-assets not covered by existing EU legislation. The legislation would regulate issuance and trading of crypto-assets
as well as the management of the underlying assets, where applicable, with additional regulatory rules.
MiCA is part of a broader
digital finance package, which, inter alia, also includes the Digital Operational Resilience Act (DORA) which received final agreement
in November 2022 and is awaiting signature and official publication; and the DLT Pilot Regime Regulation which creating a sandbox regime
for private sector participants developing infrastructure for the trading and settlement of crypto-assets.
United Kingdom
In October 2022, the House
of Commons voted to give HM Treasury (HMT) the power to make cryptoassets a regulated financial instrument. The vote clarifies that 'Digital
Settlement Assets' can be brought within the scope of the existing provisions of the Financial Services and Markets Act 2000. If
they are brought within scope, cryptoassets will be treated like other forms of financial assets. The new legislation is included in the
Financial Services and Markets Bill 2022 (FSMB). Tokens currently unregulated, but could be captured under the FSMB, subject to regulatory
outcomes, including utility tokens, which can be redeemed for access to a specific product or service and unbacked exchange tokens or
cryptocurrencies, which are usually decentralized and designed to be used primarily as a medium of exchange.
In June 2022, HMT confirmed
it would extend information sharing requirements for wire transfers (known as the Travel Rule) to include cryptoassets. From September
2023, firms will be required to collect beneficiary and originator information for transactions with an 'elevated risk of illicit
finance', as defined in the legislation.
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Additionally, there are other
rules expected this year such as final rules on managing the failure of systemic stablecoin firms by HMT, expected in 2023; Consultations
on proposed regulatory framework for systemic stablecoins, systemic wallets as well as proposed authorization and supervision regime by
the Bank of England, expected in 2023.
Japan
The Japanese government has
announced plans to introduce new rules to mitigate money laundering through crypto. Expected to take effect in 2023, the regulations will
provide Japanese authorities with additional monitoring capabilities to track virtual currency transfers.
Japan's Act on Prevention
of Transfer of Criminal Proceeds will be amended to implement these changes. If approved, cryptoassets will be brought under the travel
rule as recommended by the Financial Action Task Force (FATF) in its targeted update on the implementation of FATF standards on virtual
assets (VAs) and virtual asset service providers (VASPs).
The new rules focus on remittances
and sharing know your customer Know-Your-Client-related information. Under the regulations, exchange operators must share customer information,
including the customer's name and address, when tokens are moved between platforms. VASPs that violate the rules will be subject
to administrative guidance and criminal penalties.
To date, we have treated,
and we anticipate continuing to treat, the INX Tokens as securities under the laws of all foreign jurisdictions.
C. Organizational Structure.
Parent
TIDCI was incorporated under
the Business Corporations Act (British Columbia) ("BCBCA") on August 22, 2018, as evidenced by a Certificate of Incorporation
issued pursuant to the provisions of the BCBCA under the name "Valdy Investments Ltd."
On May 27, 2019, Valdy completed
its initial public offering of common shares as a CPC, pursuant to which it issued 2,500,000 common shares ("Valdy Shares")
at a price of CAD$0.10 per Valdy Share for gross proceeds of CAD$250,000. The Valdy Shares were listed on the TSXV on May 29, 2019, under
the symbol "VLDY.P" until November 16, 2021, when they were voluntarily delisted from the TSXV.
TIDCI consolidated its issued
and outstanding common shares (the "Consolidation") on the basis of one (1) post-Consolidation Share for every 2.7266667 pre-Consolidation
Shares outstanding on a fully-diluted basis such that immediately prior to the Closing, there were 5,124,740 Shares outstanding on a fully-diluted
basis ("post consolidated shares").
TIDCI issued to the shareholders
of INX (excluding holders of INX Financing Shares) consideration of an aggregate of 167,331,410 post-Consolidation common shares. The
common shares issued to holders of INX Financing Shares were issued on a 1:1 basis, and all other common shares will be issued on the
basis of 10.4871348 common shares for each INX Share (the "Conversion Ratio").
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On January 10, 2022, the Valdy
Transaction was completed, pursuant to which Valdy acquired all of the issued and outstanding securities of the Company (including all
outstanding options and warrants) from the INX Securityholders by way of a securities exchange, in accordance with the terms and conditions
of the Security Exchange Agreement dated November 3, 2021, whereby its name was changed from "Valdy Investments Ltd." to "The
INX Digital Company, Inc." For more information on the Security Exchange Agreement, see "Item 7, Part A – Major Shareholders
and Related Party Transactions – Major Shareholders – Changes in Percentage Ownership by Major Shareholders - Security Exchange
Agreement."
TIDCI has obtained a final
approval from the NEO Exchange to list the Valdy Shares on the NEO Exchange under the symbol "INXD" upon fulfilling all listing
requirements of the NEO Exchange and as of January 24, 2022 the shares of TIDCI are traded on the NEO Exchange under such symbol.
List of Subsidiaries
The following table sets forth
the legal name, location and country of incorporation and percentage ownership of each of our current principal operating subsidiaries:
Subsidiary Name
Country of Incorporation
Ownership
Percentage
INX Digital, Inc.
United States (Delaware)
100%
INX Services, Inc.
United States (Delaware)
100%
INX Solutions Limited
Gibraltar
100%
Midgard Technologies Ltd.
Israel
100%
INX Securities, LLC
United States (Pennsylvania)
100%
I.L.S. Brokers Ltd.
Israel
100%
INX Digital Assets UK Limited
UK
100%
INX Transfer Agent LLC
United States (Delaware)
100%
INX EU Ltd.
Cyprus
100%
The contractual relationship
between the Company and the following Company Subsidiaries: INX Digital, INX Services, INXS and Midgard, and between ILSB and INX UK are
administered by a series of intercompany agreements that include services agreements, license agreements, loan agreements and expense
sharing agreements.
For more information on our
subsidiaries, see "Item 4, Part A – "Information on the Company - History and Development of the Company."
D. Property, Plant and Equipment.
Other than computer equipment
used in operations, the Company currently does not own or hold any tangible fixed assets, including real property, plant or equipment,
whether by leasehold or otherwise.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
A. Operating Results
.
You should read the following
discussion and analysis of our financial condition and results of operations together with the section titled "Selected Financial
Data" and our financial statements and related notes included elsewhere in this report. This discussion and other parts of this
report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations,
and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those discussed in the section titled "Risk Factors."
Nature of Operations
The Company was incorporated
on November 27, 2017 and, through its subsidiaries, is engaged in the operation and ongoing development of an integrated and regulated
solution for trading of blockchain assets on a digital asset and security token trading platform called INX.One. The Company also provides
other services and products related to the trading of blockchain assets. INX.One is designed to offer both security tokens and digital
assets under a single platform and to help customers automate and coordinate front-office trading functions, middle-office risk management
and reporting functions, as well as operations and accounting functions.
INX Token
As part of its blockchain ecosystem, the Company
created the INX Token (the "INX Token"), and on August 20, 2020, the SEC acknowledged the effectiveness of the F-1 Registration
Statement that was filed by INX with the SEC and declared effectiveness of the INX Token Offering ("the Offering"). In such
Offering, INX offered up to 130 million INX Tokens at a price of $0.90 per INX Token.
The INX Token was offered to the public on August
24, 2020, and closed on April 22, 2021, when the Offering was completed.
The Company is the world's first company to debut
and successfully complete an SEC-registered IPO of a blockchain security token (the INX Token). The public offering of the INX Token was
registered under the United States Securities Act of 1933 and, in such registration, the INX Token is deemed to be an "equity security"
under relevant SEC rules and regulations.
In July
2021, INX listed the INX Token for trading on the INXS Trading Platform, rebranded since then to INX.One.
INX has not allocated for issuance and does not
intend to issue 35 million of the 200 million INX Tokens that have been created. The Company may reserve an additional 20% of INX Tokens
received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed 35 million plus 50% of the
number of INX Tokens sold by the Company to the public pursuant to the Offering and subsequent offerings of INX Tokens (excluding re-issuances
of reacquired INX Tokens), up to a maximum of 100 million INX Tokens. The Company does not intend to issue these reserved INX Tokens for
general fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations
of the Company if the Board of Directors of it determines that the Company has net cash balances sufficient to fund less than nine months
of its operations. The Company intends to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to
limit dilution to INX Token holders. As of December 31, 2022, the Company held approximately 67.5 million INX Tokens in reserve.
74
Following an amendment to the INX Token rights
which was approved by the Board of Directors of the Company on May 17, 2019 (the "Token Rights Amendment"), the holders of
INX Tokens (other than INX) are entitled to receive a pro rata distribution of 40% of the Company's net cash flow from operating
activities, excluding any cash proceeds from an initial sale by the Company of an INX Token (the "Adjusted Operating Cash Flow").
The distribution is based on the Company's cumulative Adjusted Operating Cash Flow, net of cash flows which have already formed
a basis for a prior distribution, calculated as of December 31 of each year. The distribution is to be paid to parties (other than the
Company) holding INX Tokens as of March 31 of the following year on April 30th, commencing with the first distribution to be paid, if
at all. As of December 31, 2022, the cumulative adjusted operating cash flow activity was negative, and therefore no distribution is expected
to be paid on April 30, 2023.
We plan to offer holders of INX Tokens an entitlement
to, at a minimum, a 10% discount on the payment of transaction fees on the INX.One Trading Platform.
Results of Operations for the year ended December 31, 2022
Revenues
The Company's
operations consist of two segments which represent the two lines of business for which the Company expects to earn income, incur
costs and allocate resources: digital assets and brokerage. The Company generated $4,273,000 in net revenue for the year ended
December 31, 2022, consisting of $3,621,000 revenue from brokerage fees related to our FX business and $874,000 from transaction,
trading and listing fees as well as net loss on digital assets utilized in operations of $222,000 related to our security token and
digital assets business.
Net loss on digital assets utilized in operations of $222,000 included
gross sales of $8,724,000, less cost of digital assets of $8,758,000, less change in revaluation loss of $188,000, which mainly relates
to liquidity providing and risk management trading activity initiated during 2022 by one of the subsidiaries.
Digital assets segment:
Trading and transaction
fees
Trading fee revenue consists
of transaction revenue generated from trading and transaction fees from trades in security tokens and digital assets that occur on our
INX.One platform. Trading fees earned are based on the price and quantity of the digital asset that is bought, sold, or converted and
are published on our website (https://www.inx.co/fee-schedules/). Transaction fees may be either set as a fixed fee per transaction or
as a percentage of the amount traded. Transaction revenue is recognized at the time the transaction is processed and is directly correlated
with trading and transaction volume.
Listing fees
In 2022, we launched primary
offerings of security tokens issued by our issuer clients on our trading platform INX.One. This service is offered by our SEC broker-dealer
subsidiary INXS. Similar to the INX Token, security tokens listed by us are registered with the SEC and are deemed to be an "equity
security" under relevant SEC rules and regulations. After the primary offerings are completed, tokens are expected to trade on INX.One
is the secondary market. Listing fees are generated on each primary raise and are directly correlated to the total capital raised by the
issuer.
Brokergage segment:
Brokerage fees
Brokerage fees revenue consists
of brokerage fees generated from trading in foreign exchange markets with global forex dealers and banks by one of our subsidiaries ILSB.
Transactions denominated in foreign currency are recorded at the representative rate of exchange on the date of the transaction. Revenues
from brokerage services are recorded on the date the service is provided or the operation is carried out, and are based on notional amounts
traded.
Key Business Metrics
Security Token and Digital
Asset Business
For our security token and digital assets business,
we use the following key business metrics to evaluate our business, measure performance and make strategic decisions:
Years ended December 31,
2022
2021
2020
Number of Verified Accounts
30,584
23,856
2,833
Trading Volume
$
66,744,966
$
58,663,116
$
-
Customer Assets on Platform
$
2,608,749
$
4,270,194
$
-
75
We define "Verified
Accounts" as all retail institutional customers that have registered and successfully onboarded onto our platform and have established
an account as of the date of measurement. Verified Users are an indication of our growth. These customers have demonstrated an interest
in our platform or direct intent to invest and transact in security tokens and digital assets. Number of Verified Accounts represents
our customer acquisition pace. Verified Accounts may overstate the number of unique customers who have established an account on our platform
as one customer may register for, and use, multiple accounts.
We define "Trading Volume"
as the total U.S. dollar equivalent value of spot matched trades transacted between a buyer and seller through our platform during the
period of measurement. Trading Volume represents the product of the quantity of asset transacted and the trade price at the time the transaction
was executed. As trading activity directly impacts transaction revenue, we believe this measure is a reflection of liquidity on our order
books, trading health, and the underlying growth of the digital asset economy. Generally, Trading Volume on our platform is primarily
influenced by the price of security tokens and digital assets, price volatility and macroeconomic conditions.
We define "Customer
Assets on Platform" as the aggregate of customer digital asset liabilities and customer custodial fiat liabilities, set forth on
our consolidated balance sheet under Customer Funds, plus customer fiat balances and security token balances held in self-custody by customers
of INXS.
The value of Assets on Platform
is driven by three factors – the price, quantity, and type of digital asset or security token held by customers on our platform.
Changes in the price and quantity or type of digital asset or security token held on our platform, can result in the increase or decrease
in Assets on Platform in a particular period.
FX Business
For our FX business, we use
total notional amount traded to evaluate this business, measure performance and make strategic decisions. During the years ended December
31, 2022 and 2021, our subsidiary ILSB traded total notional amounts of approximately $88.7 billion and $86.7 billion, respectively.
Total Operating Expenses
Operating expenses for the
year ended December 31, 2022, were $19.0 million, and they consist of research and development, sales and marketing and general and administrative
expenses, net of the gain from the fair value adjustment of INX Token warrants.
−
Research and development expenses, of $5.3 million, primarily consisted of costs of our research and development personnel and other
development-related expenses.
−
Sales and marketing expenses of $6.5 million primarily comprised
of personnel cost, promotional campaigns and other marketing costs incurred mainly related to the digital assets business segment.
−
General and administrative expenses of $15.5 million, mainly
include the cost of personnel, compliance and legal costs, software and technology infrastructure, audit services and insurance.
−
Operating expenses include a positive fair value adjustment
of the INX Token warrant liability for warrants granted to employees and service providers of $8.3 million.
Net income
Our net income for the year
ended December 31, 2022, was approximately $211.3 million.
Adjusted Operating Cash
Flow (Negative)
Our Adjusted Operating Cash
Flow for the year ended December 31, 2022, was approximately negative $22.3 million. The cumulative Adjusted Operating Cash Flow as of
December 31, 2022, was approximately negative $56.7 million.
76
The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2022:
Cumulative Adjusted Operating Cash Flow as of December 31, 2021
(34,374,000
)
Less: Net cash used in operating activities in the year ended December 31, 2022
(22,305,000
)
Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2021 that formed the basis of distribution paid to INX Token holders on April 30, 2022 (there was no distribution)
-
Plus: Proceeds from INX Tokens in the year ended December 31, 2022
-
Less: Proceeds from initial sale of INX Tokens in the year ended December 31, 2022
-
Cumulative Adjusted Operating Cash Flow as of December 31, 2022
(56,679,000
)
Results of Operations for the year ended December 31, 2021
Revenues
The Company generated $2.5
million in revenue for the year ended December 31, 2021, consisting of $2.3 million in revenue from brokerage fees related to our FX business
and $0.3 million from transaction and trading fees related to our digital asset and security token business.
Total Operating Expenses
Operating expenses for the
year ended December 31, 2021 were $56 million and they mainly consist of research and development, sales and marketing, and general and
administrative expenses.
−
Research and development expenses, of $3.9 million, primarily includes costs of our research and
                                                                                                                                                      development personnel and other development-related expenses.
−
Sales and marketing expenses of $6.4 million, is primarily comprised
of personnel costs and marketing costs incurred in connection with our initial public offering.
−
General and administrative expenses, of $33.1 million, include
costs of personnel, costs associated with the registration of our platform, as well as legal and other services related to our initial
public offering.
−
Operating expenses include a negative fair value adjustment of the
INX Token warrant liability for warrants granted to employees and service providers of $12.6 million.
Net Loss
Our net loss for the year
ended December 31, 2021 was approximately $215.2 million.
Adjusted Operating Cash
Flow (Negative)
Our Adjusted Operating Cash
Flow for the year ended December 31, 2021 was approximately negative $22.0 million. The cumulative Adjusted Operating Cash Flow as of
December 31, 2021 was approximately negative $34.4 million.
The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2021:
Cumulative Adjusted Operating Cash Flow as of December 31, 2020
(12,419,000
)
Less: Net cash used in operating activities in the year ended December 31, 2021
(21,955,000
)
Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2020 that formed the basis of distribution paid to INX Token holders on April 30, 2021 (there was no distribution)
-
Plus: Proceeds from INX Tokens in the year ended December 31, 2021
81,340,000
Less: Proceeds from initial sale of INX Tokens in the year ended December 31, 2021
(81,340,000
)
Cumulative Adjusted Operating Cash Flow as of December 31, 2021
(34,374,000
)
77
Results of Operations for the year ended December 31, 2020
Total Operating Expenses
Operating expenses for the
year ended December 31, 2020 were $11.8 million, and they consist of research and development, sales and marketing and general and administrative
expenses. Research and development expenses, which amounted to $1.6 million, include the cost of development of our trading platform and
are primarily comprised of costs of our research and development personnel and other development-related expenses. Sales and marketing
expenses amounted to $2.2 million, primarily comprised of costs of personnel and other marketing costs incurred in connection with our
initial public offering. General and administrative expenses, which amounted to $8.1 million, include costs of personnel, costs associated
with the registration of our platform, as well as legal and other services related to our initial public offering.
Net Loss
Our net loss for the year
ended December 31, 2020 was approximately $24.3 million.
Adjusted Operating Cash
Flow (Negative)
Our Adjusted Operating Cash
Flow for the year ended December 31, 2020 was approximately negative $6.1 million. The cumulative Adjusted Operating Cash Flow as of December
31, 2020 was approximately negative $12.4 million.
The following table provides
the calculation of our cumulative Adjusted Operating Cash Flow (in U.S. Dollars) as of December 31, 2020:
Cumulative Adjusted Operating Cash Flow as of December 31, 2019
(6,364,000
)
Less: Net cash used in operating activities in the year ended December 31, 2020
(6,055,000
)
Less: $0 in cumulative Adjusted Operating Cash Flow as of December 31, 2019 that formed the basis of distribution paid to INX Token holders on April 30, 2020 (there was no distribution)
-
Plus: Proceeds from INX Tokens in the year ended December 31, 2020
10,403,000
Less: Proceeds from initial sale of INX Tokens in the year ended December 31, 2020
(10,403,000
)
Cumulative Adjusted Operating Cash Flow as of December 31, 2020
(12,419,000
)
78
Comparison
of operating results for the year ended December 31, 2022 and 2021
The following
table presents an overview of our results of operations for year ended December 31, 2022 and 2021:
(U.S. Dollars
in thousands, except share and per share data)
Year ended December 31,
2022
2021
Revenue:
Trading and brokerage fees
$
4,495
$
2,544
Sales of digital assets
8,724
-
Cost of digital assets
(8,758
)
-
Change in revaluation gain (loss) on digital assets, net
(188
)
-
Net gain (loss) on digital assets
(222
)
-
Revenue, net
4,273
2,544
Operating income (expenses):
Research and development
(5,306
)
(3,849
)
Sales and marketing
(6,512
)
(6,411
)
General and administrative
(15,450
)
(33,136
)
Fair value adjustment of INX Token warrant liability to employees and service providers
8,294
(12,626
)
Loss from operations
$
(14,701
)
$
(53,478
)
Unrealized gain (loss) on INX Tokens issued, net
226,044
(161,173
)
Finance income
787
-
Finance expense
(677
)
(427
)
Income (loss) before tax
211,453
(215,078
)
Tax expenses
(119
)
(157
)
Net income (loss)
$
211,334
$
(215,235
)
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met:
Realized (gain) loss on securities at fair value through other comprehensive income (loss) reclassification adjustment into net income (loss)
424
-
Unrealized loss on securities at fair value through other comprehensive income (loss)
(1,353
)
-
Adjustments arising from translating financial statements from functional currency to presentation currency
(513
)
188
Total other comprehensive income (loss)
(1,442
)
188
Total comprehensive income (loss)
$
209,892
$
(215,047
)
Earnings (loss) per share, basic and diluted
$
4.52
$
(14.30
)
Weighted average number of shares outstanding, basic and diluted
46,767,930
15,048,576
79
Research
and Development Expenses
We
incurred $5.3 million in research and development expenses for the year ended December 31, 2022, compared to $3.9 million for the year
ended December 31, 2021. Research and Development expenses increased by $1.4 million for the year ended December 31, 2022 compared to
the year ended December 31, 2021. This increase was primarily driven by an increase of $2.7 million in personnel cost and cost and services
related to the development of our trading platform, which is offset by the decrease in share-based compensation expense of $1.1 million,
respectively.
Sales
and Marketing Expenses
We
incurred $6.5 million in sales and marketing expenses during the year ended December 31, 2022, compared to $6.4 million for the year ended
December 31, 2021. Sales and marketing expenses increased by $0.1 million for the year ended December 31, 2022 compared to the year ended
December 31, 2021. This net increase was primarily driven by decreases in share-based compensation expenses of $1.1 million,which is offset
by increases in token-based compensation of $0.3 million, personnel costs of $0.5 million, other marketing costs of $0.3 million and customer
support expenses of $0.1 million.
General
and Administrative expenses
We
incurred $15.5 million in general and administrative expenses during the year ended December 31, 2022, compared to $33.1 million for the
year ended December 31, 2021, a decrease of $17.6 million, primarily driven by decreases in share-based and token-based compensation expense
of $7.6 million and $6.0 million, respectively, a decrease in IPO related costs of $5.2 million, and $1.5 million decrease related to
compliance and registration fees. The decrease offsets the increase in personnel costs of $0.8 million, an increase in amortization expense
of $0.6 million, an increase in right-of-asset depreciation of $0.4 million, an increase in software and technology of $0.3 million, and
an increase in other operation costs of $0.6 million.
Change
in fair value of INX Token and INX Token warrants
Our
balance sheet as of December 31, 2022 includes the INX Token liability of $56.9 million compared to $282.6 million as of December 31,
2021. Based on the terms of the INX Token, the INX Token is a hybrid financial instrument and under the applicable accounting standards
it is presented as a financial liability on our consolidated balance sheet due to the right of the INX Token holders to use the INX Token
to pay transaction fees on the INX.One Trading Platform.
On December
31, 2022 and 2021, we measured the INX Token at fair value based on the closing market price of the INX Token (see further details in
Note
11
in the audited consolidated financial statements).
Also,
as of December 31, 2022 and December 31, 2021 the total amount of outstanding INX Token warrants the Company has granted to
directors, employees and service providers is 6,972,192 and 5,660,861, respectively. The INX Token warrant liability of $1.6 million and $9.8 million at December 31, 2022
and 2021, respectively, is presented at fair value based on Black-Scholes pricing model. (see further details in Note
12
in
the financial statements).
Changes
in fair value of the liabilities noted above are recorded through profit or loss in our consolidated statements of comprehensive income
(loss). During the year ended December 31, 2022, the fair value of INX Tokens and INX Token warrant liabilities decreased by $226 million
and $8.2 million, respectively, which is recorded as a gain in the statement of comprehensive income (loss).
80
INX Token Valuation
The fair value of each INX Token as of December
31, 2022, and December 31, 2021, was $0.43 and $2.20, respectively.
Net income
(loss)
Net
income for the year ended December 31, 2022, was $211.3 million compared to net loss of $215.2 million, for the year ended December
31, 2021, an increase of $426.5 million. A substantial portion of this increase, specifically $387.2 and $20.1 million, is
attributable to the change in the fair value of the liabilities related to INX Tokens and INX Token warrants, respectively, from
December 31, 2021 to December 31, 2022.
Total
comprehensive income (loss)
Total
comprehensive income for the year ended December 31, 2022, was $209.9 million compared to total comprehensive loss of $215.1 million,
for year ended December 31, 2021, an increase of $425.0 million.
Adjusted
Operating Cash Flow
Adjusted
Operating Cash Flow for the year ended December 31, 2022, was negative $22.3, compared to an Adjusted Operating Cash Flow of negative
$22.0 for the year ended December 31, 2021, an increase in negative cash-flows from operations of $0.3 million that resulted from an increase
in our loss from operations between the compared periods.
Comparison of year ended December
31, 2021 and 202
0
The following
table presents an overview of our results of operations for year ended December 31, 2021 and 2020:
(U.S. Dollars in thousands, except share and per
share data)
Year ended December 31,
2021
2020
Revenue:
Trading and brokerage fees
$
2,544
$
-
Sales of digital assets
-
-
Cost of digital assets
-
-
Change in revaluation gain (loss) on digital assets, net
-
-
Net gain (loss) on digital assets
-
-
Revenue, net
2,544
-
Operating income (expenses):
Research and development
(3,849
)
(1,581
)
Sales and marketing
(6,411
)
(2,153
)
General and administrative
(33,136
)
(8,056
)
Fair value adjustment of INX Token warrant liability to employees and service providers
(12,626
)
-
Loss from operations
(53,478
)
(11,790
)
Unrealized gain (loss) on INX Tokens issued, net
(161,173
)
(12,518
)
Finance income
-
-
Finance expense
(427
)
(23
)
Income (loss) before tax
(215,078
)
(24,331
)
Tax expenses
(157
)
-
Net income (loss)
(215,235
)
(24,331
)
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met:
Realized (gain) loss on securities at fair value through other comprehensive income (loss) reclassification adjustment into net income (loss)
-
-
Unrealized loss on securities at fair value through other comprehensive income (loss)
-
-
Adjustments arising from translating financial statements from functional currency to presentation currency
188
-
Total other comprehensive income (loss)
188
-
Total comprehensive income (loss)
(215,047
)
(24,331
)
Earnings (loss) per share, basic and diluted
$
(14.30
)
$
(2.00
)
Weighted average number of shares outstanding, basic and diluted
15,048,576
12,152,006
81
Research and Development Expenses
We incurred $3.9 million in
research and development expenses for the year ended December 31, 2021, compared to $1.6 million for the year ended December 31, 2020.
Research and development expenses increased by $2.3 million for the year ended December 31, 2021 compared to the year ended December 31,
2020. This increase was primarily driven by increases in share-based compensation expense of $0.8 million, and an increase in personnel
cost of $1.5 million and other cost and services related to the development of our trading platform.
Sales and Marketing Expenses
We incurred $6.4 million in
sales and marketing expenses for the year ended December 31, 2021, compared to $2.2 million for the year ended December 31, 2020. Sales
and marketing expenses increased by $4.2 million during the year ended December 31, 2021 compared to the year ended December 31, 2020.
This increase was primarily driven by increases in share-based compensation expense of $1.9 million, an increase in personnel costs of
$1.8 million and an increase in other marketing costs in connection with our initial public offering of $0.8 million.
General and Administrative expenses
We incurred $33.1 million
in general and administrative expenses for the year ended December 31, 2021, compared to $8.1 million for the year ended December 31,
2020, an increase of $25.0 million, primarily driven by increases in share-based compensation expense of $7.6 million, an increase in
personnel costs of $4.3 million, an increase in legal and offering related services of $4.9 million, an increase in compliance and registration
fees of $1.9 million and an increase in other operation costs of $3.0 million.
Change in fair value of INX Token and INX Token
warrants
Our consolidated balance sheet
as of December 31, 2021 includes INX Token liability of $282.6 million compared to $24.1 million as of December 31, 2020. Based on the
terms of the INX Token, the INX Token is a hybrid financial instrument and under the applicable accounting standards it is presented as
a financial liability on our consolidated balance sheet due to the right of the INX Token holders to use the INX token to pay transaction
fees on the INX Trading Platform. At December 31, 2021, we measured the INX Token at fair value based on the closing market price of the
INX Token as of December 31, 2021. At December 31, 2020, we measured the INX Token at fair value based on the closing marketing price
and the offering price.
Also, as of December 31, 2021
and December 31, 2020 the total amount of outstanding INX Token warrants the Company has granted to directors, employees and service providers
is
5,660,861 and 5,926,083, respectively. The related liability in the amount of $9.8 million and $4.3 million as of December 31, 2021 and 2020, respectively is presented
at fair value based on Black-Scholes pricing model.
Changes in fair value of the
liabilities noted above are recorded through profit or loss in our consolidated statements of comprehensive income (loss). During the
year ended December 31, 2021, the fair value of INX Token liability increased by $258.6 million and the liability for INX Token grant
commitments increased by $5.6 million, which is recorded as a net loss in the statement of comprehensive income(loss).
82
Loss and total comprehensive loss
Loss and total comprehensive
loss for the year ended December 31, 2021, was $215.3 million compared to net loss of $24.3 million, for year ended December 31, 2020,
an increase of $190.9 million.
Adjusted Operating Cash Flow
Adjusted Operating Cash Flow
for the year ended December 31, 2021, was negative $22.0 million, compared to an Adjusted Operating Cash Flow of negative $6.1 million
for the year ended December 31, 2020, an increase in negative cash-flows from operations of $15.9 million that resulted from an increase
in our loss from operations between the compared periods and decrease in fair value of our digital assets.
B. Liquidity and Capital Resources.
Capital resources
As of December 31, 2022, our
operating capital of $29.5 million is held in cash and cash equivalents, U.S. Treasury securities, and marketable corporate bonds as follows:
(U.S. Dollars in thousands)
December 31, 2022
December 31, 2021
Cash and cash equivalents
19,781
24,581
Short-term investments (*)
U.S. Treasury securities
3,444
-
Corporate bonds – marketable investments
1,589
-
Total short-term investments
5,033
-
Long-term investments (*)
Corporate bonds – marketable investments
4,254
-
Other investments
400
-
Total long-term investments
4,654
400
29,468
24,981
Reserve Fund (otherwise referred to as Cash
Fund)
In addition, as of December
31, 2022 and 2021, INX has segregated $36,023, which is restricted as the Reserve Fund set aside to cover customer and INX's losses, if
any, that result from cybersecurity breaches or theft, errors in execution of the trading platform or its technology, and counterparty
defaults, including instances where counterparties lack sufficient collateral to cover losses. The Reserve Fund is comprised of cash and
cash equivalents, U.S. Treasury securities and corporate bonds held at banks and brokerage firms as follows:
(U.S. Dollars in thousands)
December 31, 2022
December 31, 2021
Cash and cash equivalents
5,824
21,987
Short-term investments
U.S. Treasury securities
6,141
-
Corporate bonds – marketable investments
12,332
-
Total short-term investments
18,473
-
Long-term investments
U.S. Treasury securities
474
-
Corporate bonds – marketable investments
11,252
14,036
Total long-term investments
11,726
14,036
36,023
36,023
83
Digital assets
As of December 31, 2022 and
2021, we held $2.6 million and $1 million, respectively, of digital assets for operating purposes.
Coin Symbol
December 31,
2022
December 31,
2021
USDT
$
684
$
25
BTC
546
233
ETH
503
177
USDC
463
543
LTC
109
14
ZEC
51
8
UNI
44
-
AAVE
31
-
COMP
31
-
CRV
29
-
MATIC
28
-
Other
78
-
$
2,597
(*)
$
1,000
(*)
(*)
All digital assets are classified as Level 2 in the fair
value hierarchy.
Material cash commitments and contractual obligations
As of December 31, 2022 and 2021, we have the
following short and long-term cash commitments and contractual obligations:
(U.S. Dollars in thousands)
December 31,
2022
December 31,
2021
Current liabilities
Accounts payable and accrued expenses
2,298
3,170
Funds due to customers
2,609
4,270
Lease liability
519
319
Total current liabilities
5,426
7,759
Non current liabilities
Lease liability
868
821
Total non-current liabilities
868
821
Total
6,294
8,580
We are required to hold corporate
liquid assets or net worth at our subsidiaries to meet capital requirements established by our regulators based on statutory net capital
requirements. We are in compliance with these capital requirements.
84
Operating capital
To date, although we have
generated brokerage fee revenue through ILSB as well as trading and transaction fees, and listing fees earned on our security token and
digital assets business offered by INXS and INX Digital, we have mainly financed our operations through equity investments made by our
shareholders and the INX Token Offering in the US and the Valdy Transaction in Canada.
Our future expenditures and
capital requirements will depend on numerous factors, including our growth, our ability to acquire and retain new clients utilizing our
services and attract issuers to issue security tokens and list them on INX.One for trading, as well as the continuing market acceptance
of our products and services and digital assets and blockchain technology and overall economic conditions.
We believe that our existing
operating capital is sufficient in both the short and long term to meet our operating requirements, including meeting our working capital
and capital expenditure requirements.
C. Research and development, patents and licenses,
etc.
For information concerning
our research and development policies and a description of the amount spent during each of the last four fiscal years on company-sponsored
research and development activities, see "Item 5. Operating and Financial Review and Prospects—Results of Operations."
D. Trend Information
See "Item 4, Item 5.A"
and "Item 5.B."
E. Critical Accounting Estimates
Critical Accounting Policies and Estimates
The consolidated financial
statements have been prepared in accordance with International Accounting Standards ("IFRS") as issued by the International
Accounting Standards Board ("IASB") and interpretations of the International Reporting Interpretations Committee ("IFRIC").
In accordance with IFRS, in
preparing our financial statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of net revenues and
expenses during the reported period. We develop and periodically change these estimates and assumptions based on historical experience
and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates.
Many aspects of the digital
currency and blockchain industry have not yet been addressed by current IFRS guidance. The Company is required to make significant assumptions
and judgments as to its accounting policies and the application thereof, which is disclosed in the notes to the consolidated financial
statements. If specific guidance is enacted by the IASB in the future, the impact may result in changes to the Company's profit
or loss and financial position as currently presented.
85
The critical accounting policies
requiring estimates, assumptions and judgments that we believe have the most significant impact on our financial statements are described
below.
Financial liabilities at fair value through
profit or loss - INX Token liability:
Based on the terms of the
INX Token, the INX Token is a hybrid financial instrument. The host instrument is a financial liability due to the right of the INX Token
holder to use the INX Token to pay transaction fees on the INX One Trading Platform. The INX Token is considered a puttable instrument
which is a financial liability in accordance with IAS 32, Financial Instruments: Presentation.
The Company's obligation
to distribute annually to the INX Token holders 40% of the Company's Adjusted Operating Cash Flow is an embedded derivative. The
Company views the Company's operating cash flows as a financial variable, and therefore, the embedded derivative requires bifurcation
pursuant to IFRS 9. The Company elected in accordance with IAS 9 to designate the entire financial liability (including the embedded derivative)
at fair value through profit and loss.
Accordingly, the INX Token
liability is remeasured to fair value at the end of each reporting period through profit or loss. The change in the fair value of the
INX Token liability that is attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded
derivative, to the extent there are any, would be presented in other comprehensive income. The remaining amount of the change in the fair
value of the INX Token liability would be presented in profit or loss. At December 31, 2022, all change in fair value of the INX
Token liability is included in profit or loss.
When the INX Token is used
to pay for services provided by the Company, the respective portion of the INX Token liability is derecognized and revenue is recognized.
The fair value of INX Tokens issued in consideration for services to be provided to the Company (through its subsidiaries) is recognized
as compensation expense when services are provided.
Impairment of goodwill
The Company reviews goodwill
for impairment at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing
use of the cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable
discount rate for those cash flows.
Discount rate for a lease liability
When the Company is unable
to readily determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing
rate. That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security,
the funds necessary to obtain an asset of similar economic environment. When there are no financing transactions that can serve as a basis,
the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving from
the lease contract's conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert in determining
the incremental borrowing rate.
86
Revenue recognition:
The Company determines revenue recognition from
contracts with customers through the following steps:
●
Identification of the contract with the customer;
●
Identification of performance obligations in the contract;
●
Determination of transaction price;
●
Allocation of the transaction price to the performance obligations
in the contract; and
●
Recognition of the revenue when, or as, the Company satisfies
a performance obligation.
In determining the amount of revenue from contracts
with customers, the Company evaluates whether it is a principal or an agent in the arrangement. The Company is a principal when the Company
controls the promised goods or services before transferring them to the customer. In these circumstances, the Company recognizes revenue
for the gross amount of the consideration. When the Company is an agent, it recognizes revenue for the net amount of the consideration,
after deducting the amount due to the principal.
Brokerage fees revenue is recorded according to
the date the service was provided, or the operation was carried out.
Trading fees revenue includes revenue from transaction
and trading fees charged to customers utilizing the Company's trading platform and are presented on a net basis. The Company's
service consists of a single performance obligation to provide a matching service when customers buy, sell, or convert digital assets.
The Company does not control the digital asset being provided before it is transferred to the buyer, does not have inventory risk related
to the digital asset, and is not responsible for the settlement of the digital asset. The Company also does not set the price for the
digital asset as the price is a market rate established by users of the platform. As a result, the Company acts as an agent in facilitating
the ability for a customer to purchase digital assets from another customer.
Trading fees charged on the INX.One trading platform
are recognized as revenue when the Company's obligation is satisfied, the promised services are transferred to the customer and
the customer obtains control. Contracts with customers are usually open-ended and can be terminated by either party without a termination
penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. The transaction
price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf
of third parties (such as taxes).
The Company also recognizes revenue from buying
and selling digital assets it owns. Such revenue is recognized in the gross amount of consideration received on sales less the cost of
digital assets sold.
87
ITEM 6.
DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management.
The following table sets forth certain information
relating to our  executive officers and board members, including their ages, as of April 30, 2023. Unless otherwise stated, the address
for our senior management is at the Company's registered office currently located at 57/63 Line Wall Road, Gibraltar, GX11 1AA.
Name
Age
Position
Shy Datika
54
Director, President & CEO
Itai Avneri
49
Deputy CEO & Chief Operating Officer
Maia Naor
39
Chief Product Officer
Jonathan Azeroual
36
Chief Blockchain Officer
Alan Silbert
50
Director; Chief Executive Officer of North America
Keren Avidar
46
Global General Counsel
Paz Diamant
54
Chief Technology Officer
Renata Szkoda
46
Chief Financial Officer
Vlad Uchenik
53
Chief Compliance Officer; Chief Executive Officer of INXS
David Weild (1)
66
Independent Director
Nicholas Thadaney (1) (2)(3)
54
Independent Director
Thomas Lewis (1) (2)(3)
70
Independent Director
Hilary Kramer (2)(3)
59
Independent Director
Demetra Kalogerou
54
Independent Director
*
Under Gibraltar law, directors
are appointed indefinitely unless their appointment specifies a defined period. Our directors were not appointed with a specified defined
period of term.
(1)
Member of the Compensation Committee
(2)
Member of the Audit Committee
(3)
Member of the Nominating and Governance Committee
Mr. Shy Datika
is one
of our founders and has served as our President since 2017 and CEO since 2022. Mr. Datika has also been a member of the board of directors
since December 2021. Mr. Datika has more than 25 years of experience in the banking and finance industry. As founder and former Chief
Executive Officer of ILS Brokers, a multinational brokerage house based in Tel-Aviv, Israel, Mr. Datika has a significant role in the
adoption of electronic trading in the global OTC foreign exchange (OTC Forex) market as well as in the brokerage activity and online trading business.
During the last 20 years, Mr. Datika has been extensively involved in financial technology ("fin-tech") as an investor, director
or manager of several companies, including as CEO of ForexManage Ltd., a software company providing professional technology platform solutions
for institutional risk management and trading activities in the forex and interest rate derivatives markets for the banking industry,
any option, Ouroboros Ltd (CySec licenced CIF) and as an independent (external) director and the Chairman of the Investment Committee
and member of the Audit Committee of Altshuler Shaham provident funds and Pension Ltd. Prior to that, he was a senior dealer in Bank Hapoalim
heading the G7 spot desk. Mr. Datika possesses broad knowledge in the areas of fin-tech and trading and has an extensive track record
in building sustainable businesses in the financial market. Mr. Datika serves as a director on the board of numerous private companies.
Mr. Itai Avneri
has served as our Deputy CEO since March 2022 and our Chief Operating Officer since January 2021. Mr. Avneri brings over 20 years of executive
management experience into this role. His commercial work spans a variety of technology companies, including from June 2015 to June 2017,
COO of anyoption, and former Playtech Group-CMO and CEO of the Israel office. Since 2018 Mr. Avneri has served on the advisory boards
of various enterprises including Reality Races, Layer11, Groupiez and BeexOS. Mr. Avneri has led the launch of multiple financial services
and products in Europe and South Africa among other regulated jurisdictions. He designed and built advanced information systems with specializations
in trading, BI & CRM solutions, marketing and KYC automation as well as payments and integration hubs. His in-depth knowledge and
hands-on experience on all aspects of online business (B2B & B2C), marketing, technology and finance will play a key role at INX Limited.
88
Ms. Maia Naor
has served
as our Chief Product Officer and has been with the Company since its founding. Ms. Naor has ten years of fin-tech experience working for
companies across Europe and Israel. From 2010 until July 2017, Ms. Naor served as Vice President – Product in Anyoption Ltd., a
leading European regulated trading group where she oversaw the planning, implementation and launch of several financial services and computer-internet-based
and cellular-based trading applications. Ms. Naor also gained experience in building and training teams of data scientists that supported
the growth and optimization of the trading products. Ms. Naor is a graduate of the Tel Aviv University School of Economics and the Tel
Aviv University School of Mathematical Sciences, with honors.
Mr. Jonathan Azeroual
has served as our Chief Blockchain Officer our incorporation. Mr. Azeroual has over 10 years of broad financial experience working for
banks, hedge funds, brokerage firms in various analytical, operational or executive positions in Paris', New York's, and London's
financial markets. He is the co-founder and, from July 2015 until December 2017, served as Chief Executive Officer of Bsave Ltd., a UK
company which operates a Bitcoin savings platform. He also currently works for Redwood Digital Fund as a member of their Trading &
Investment Services team. He currently serves on the board of directors of Redwood Digital Offshore Fund I, Ltd. From June 2016 to February
2017, he was a member of the Trading & Investment Services group at Hadas Capital. Between October 2014 and October 2015 he was an
algorithmic trader for Colley Cooper Capital. Prior to that, starting in 2012 until October 2014, he served as an institutional sales
trader for Sunrise Brokers. He graduated with honors and holds a postgraduate degree in Financial and Statistical Engineering from Paris-Dauphine
University and holds ESCP Europe Advanced Master in Finance.
Mr. Alan Silbert
has
served as our Secretary and our Chief Executive Officer of North America since April 2021. Mr. Silbert has been our director since March
2018. He joined the Company in March 2018 as Executive Managing Director. Mr. Silbert is responsible for Company operations in North America,
and his responsibilities include facilitating the build-out of the director and advisor team, raising capital, growing operations and
infrastructure for North American operations and leading regulatory and licensing processes. From December 2015 until March 2018, he was
Senior Vice President at Capital One Commercial Banking, serving on the Asset Based Lending and Life Science Finance/Venture Debt teams.
Prior to that, he was Senior Vice President at GE Capital and Vice President at Merrill Lynch Capital. From February 2013 until October
2017, he served as founder and Chief Executive Officer of BitPremier LLC, a bitcoin luxury marketplace. Mr. Silbert received his BS in
Business Administration with a concentration in Finance from Towson University.
Mr. Paz Diamant
has
served as our Chief Technology Officer since July 2020. Mr. Diamant has more than 25 years of experience in the banking and financial
technology industry. From November 2013 to January 2020, Mr. Diamant held several roles at eToro, a worldwide leading social investment
network, where he was most recently Managing Director of R&D and Product. In that role he directed the design, development, and deployment
of the company's cloud-based exchange system, and was responsible for the development of eToro's complicated hedging algorithms.
While at eToro, Mr. Diamant managed R&D teams for several years while implementing cutting-edge, cloud-based technologies successfully.
From October 2002 to January 2011, Mr. Diamant was the founder and Chief Executive Officer of ForexManage Ltd., a leading provider of
advanced, real-time, risk management and foreign exchange online trading technologies for the banking industry. Through his role at ForexManage,
Mr. Diamant had a significant role in the adoption of advanced risk management models in major European banks and brokerage houses. Mr.
Diamant holds a BS in Physics from the Technion - Israel Institute of Technology, where he graduated cum laude, and an MBA, Finance from
Bar-Ilan University.
Mrs. Renata Szkoda
is our Chief Financial Officer. Ms. Szkoda brings with her over 20 years of experience and financial leadership in regulated capital markets
and financial services industry. Ms. Szkoda has deep expertise in financial regulation and a strong record of building financial and operational
infrastructure to enable business expansion within regulated environments. She was previously the Director of Finance at Galaxy Digital,
a financial services and investment management firm focused on digital assets. Prior to that, Ms. Szkoda was the Chief Financial Officer
at Blue Fire Capital, proprietary trading firm based in Chicago, Chief Financial Officer of KCG Futures, the division of KCG Americas
(KCG), a self-clearing futures commission merchant (FCM) and the Senior Vice President, Accounting and Finance at Rosenthal Collins Group
(RCG), a FCM based in Chicago where she oversaw the finance and treasury operations. Prior to her employment at RCG, Ms. Szkoda was a
senior audit manager in the Financial Services Practice Group of RSM McGladrey, providing audit and consulting services to a variety of
financial services firms, including securities broker-dealers, futures commission merchants, hedge funds, investment advisors, market
specialists and commodity pools. Ms. Szkoda is a CPA and holds a Bachelors of Science in Accounting from University of Illinois at Chicago.
89
Ms. Keren
Avidar
is Global General Counsel. Ms. Avidar brings with her over 20 years of legal experience in the fintech industry.  Ms. Avidar has an extensive knowledge of worldwide financial markets, for both regulated and unregulated markets, best practice standards
in the industry and regulatory requirements. Ms. Avidar has a strong record of building legal and regulatory infrastructure to enable
business operation and expansion within the financial environment. Ms. Avidar managed her own practice while advising her clients on all
aspects of their daily operations and business concerns, she was previously the General Legal Counsel at Final Group, a leader in algorithmic
trading worldwide, she was an associate at S. Horowitz & Co., one of Israel's largest law firms, an associate at Fried, Frank,
Harris, Shriver and Jacobson LLP, an international law firm headquartered in New York City. Ms. Avidar was admitted to practice law in
Israel in 2001 and in New York in 2005. She holds a LLB from Middlesex University, London and LLM from Tel Aviv University.
Mr. Vlad Uchenik
is
Chief Compliance Officer for the INX Trading Solutions group of companies and the Chief Executive Officer of INXS. Mr. Uchenik has over
26 years of experience in the financial services industry. Vlad is currently CEO and CCO for INXS (formerly Openfinance Securities, LLC,
Sageworks Capital, LLC and Raiseworks), and has been in the role since 2013. Mr. Uchenik was responsible for getting regulatory approval
for the first ATS that traded digital securities in the secondary market, with the first trade occurring in November 2018. Mr. Uchenik
also previously worked as CCO for Eagliew Securities, LLC, as CCO for iTB Securities LLC, a fixed income ATS trading platform BD, and
as COO and CCO for InterMerchant Securities, LLC in New York. Prior to that, Mr. Uchenik was the Chief Operating, Compliance and Financial
Officer of Jesup & Lamont Securities Corp supervising over 150 registered reps. Mr. Uchenik was also the COO/CCO of Safdie Investment
Services Corp., a boutique BD and Investment Advisor, and served as the VP of Regulatory Risk and Control for US Trust's Operations
Division where his responsibilities included overseeing the risk and compliance measures in operations for the BD, 4 SEC IAs, a National
Bank, '40 Act mutual funds and a Trust company. Mr. Uchenik also held a CCO role with BBVA Securities Corp in New York and was CCO/COO
for Security Financial Network in Phoenixville, PA. Mr. Uchenik has the FINRA Series 4, 7, 24, 28, 53, 63 and 65 licenses. Mr. Uchenik
has an undergraduate degree in Business Management from Rutgers University in New Brunswick, NJ and a master's degree in Finance
from Temple University in Philadelphia, PA.
Mr. David Weild
has
been an independent director of the Company since April 2018. Mr. Weild is founder, chairman and CEO of Weild & Co., Inc., parent
company of the investment banking firm Weild Capital, LLC. Prior to Weild & Co., Mr. Weild was vice chairman of NASDAQ, president
of PrudentialFinancial.com and head of corporate finance and equity capital markets at Prudential Securities, Inc. Mr. Weild holds an
M.B.A. from the Stern School of Business and a B.A. from Wesleyan University, and also studied at the Sorbonne, Ecoles des Hautes Etudes
Commerciales (HEC Paris) and the Stockholm School of Economics. Mr. Weild is currently on the boards of BioSig Technologies, Inc. and
Scopus Biopharma, Inc., and previously served on the board of
PAVmed Inc. From September
2010 to June 2011, Mr. Weild served on the board of Helium.com, until it was acquired by R.R. Donnelly & Sons Co. Since 2003, Mr.
Weild was a director and then chairman of the board of the 9-11 charity Tuesday's Children. He became chairman emeritus in October
2016. Mr. Weild brings extensive financial, economic, stock exchange, capital markets, and small company expertise to the Company gained
throughout his career on Wall Street. He is a recognized expert in capital markets and has spoken at the White House, Congress, the SEC,
OECD and the G-20 on how market structure can be better to improve capital formation and economic growth.
Mr.
Weild co-authored a number of definitive white papers that were the key catalysts for new legislation and regulatory reforms, including
the JOBS Act.
Mr. Nicholas (Nick) Thadaney
has been an independent director of the Company since July 2018. He most recently founded Partners Capital Corp. in 2019, a firm
focused on advising, co-investing and partnering with entrepreneurs and their management teams to accelerate the growth of their businesses
through innovative capital and strategic solutions. Mr. Thadaney was previously President and Chief Executive Officer, Global Equity Capital
Markets, and a member of the senior management team of TMX Group until February 2018. In his roles with TMX Group, Mr. Thadaney was responsible
for all equity listing and trading activity across the company's equities markets and alternative trading systems, including heading
the Toronto Stock Exchange, TSX Venture Exchange, Alpha, TMX Select, and TSX Private Markets.  He also oversaw TSX Trust - TMX Group's
transfer agency and corporate trust services provider. Prior to joining TMX Group in 2015, Mr. Thadaney was Chief Executive Officer of
ITG Canada Corp. (now Virtu Financial) since 2005, with responsibility for managing all aspects of the business, as well as a Member of
ITG's Global Executive Committee. He joined ITG Canada as Director of Sales and Trading in 2000. Before his tenure at ITG, Mr. Thadaney
was Vice-President, Business Development (Equities) at C.T. Securities Inc.(Canada Trust), which was later acquired by T.D. Securities
Inc.(TD Bank) in 1999. Mr. Thadaney has been a board & committee member of a number of prominent businesses, industry associations,
and registered charities, including: Bermuda Stock Exchange; CanDeal; Investment Industry Regulatory Organization of Canada (IIROC); Investment
Industry Association of Canada; JA (Junior Achievement) Canada; Mount Sinai Hospital Asset Management Industry Hold'em for Life
Charity (Co-Chair); Toronto Financial Services Alliance (now Toronto Finance International); Young Presidents Organization (Ontario Chapter);
and the World Federation of Exchanges SME Advisory Board. Mr. Thadaney also currently serves as a senior advisor to a number of firms
and a director on the boards of Coinsquare Inc., Tetra Trust Company and Agrinam Acquisition Corporation.
90
Mr. Thomas K. Lewis, Jr
.
has been an independent director of the Company since October 2018. Mr. Lewis was the Founder of Noble 4 Advisors, LLC, a company he founded
in September 2012 that develops and provides methodologies, technologies and guidance that assist boards, CEOs, investors and senior executives
in defining and implementing plans to improve operating performance. Mr. Lewis retired from Noble 4 Advisors in January 2020. Mr. Lewis
has served as CEO of four companies, including The Green Exchange, a federally regulated futures and options exchange in New York and
London, from September 2009 to July 2012; Automated Power Exchange Inc. (APX), a venture-backed wholesale power markets and renewable
energy services provider, from August 2003 to October 2007; Ameritrade, an online retail broker, from February 1999 to August 2000; and
Campus Pipeline, an educational software company. Prior to that, Mr. Lewis served in technology leadership positions with American Express,
Credit Suisse First Boston, USF&G Insurance and Marriott Corporation. Mr. Lewis has served on the boards of The New York Ledger Exchange,
aka LedgerX (from 2014 to 2017), Green Exchange Holdings, LLC (2009 to 2012), Evolution Markets, Inc. (2007 to 2009), Automated Power
Exchange Inc. (2003 to 2007) and Neovest Holdings, Inc. (2001 to 2004). Mr. Lewis has served on the advisory board of Xpansiv Limited,
a global marketplace for ESG commodities, including carbon, RECs, digital fuels, and water rights, since 2021. Mr. Lewis holds an honorary
doctorate, a master's degree in computer and information science, and a bachelor's degree, magna cum laude, in business administration
from the University of New Haven in Connecticut, where he was honored as a distinguished alumnus. He served as chairman of the Board of
Trustees of the Henry Lee Institute of Forensic Science, and served for twelve years as a member of the Board of Trustees of the University
of New Haven. He has also served as a member of the Advisory Board of the Johns Hopkins Carey Business School at Johns Hopkins University.
Mr. Lewis served as Executive in Residence and Assistant Professor at Johns Hopkins University, Carey Business School. Mr. Lewis also
served as the head of technology for the Executive Office of the President of the United States during the Ronald Reagan Administration.
Ms. Hilary Kramer
has
been an independent director of the Company since January 2022. Ms. Hilary Kramer is a former analyst and investment banker at Morgan
Stanley and Lehman Brothers, founded and ran a long-short hedge fund, GreenTech Research LLC, and has been chief investment officer overseeing
more than $5 billion of debt and equity portfolios. Ms. Kramer served as the co-head and board member of a $1.0 billion private equity
fund jointly owned by Hicks, Muse that developed and invested in new programming content as well as serving on the advisory board of numerous
companies including DirecTV International, Spalding and Evenflo. Ms. Kramer has served as a director to four publicly-traded companies
and consults in family offices and institutions, such as Montgomery Asset Management, Freddie Mac, and families on the Forbes list of
global billionaires ranging from Latin America to the Middle East. Ms. Kramer authors seven subscription-based investment newsletters
and has a nationally syndicated investment radio show, Kramer's Millionaire Maker, on the Salem Network in 140 markets. In 2020,
Ms. Kramer was awarded the Gracie Award for best syndicated national radio show. She is the author of Ahead of the Curve (Simon &
Schuster 2007) and The Little Book of Big Profits from Small Stocks (Wiley 2012). Her latest book, Game Changing Investing (Regnery 2020)
is on the best- selling lists at "The Wall Street Journal", "USA TODAY" and on Amazon.com. Ms. Kramer was a founding
member of the Wall Street Journal Women in Business. In 2011, Ms. Kramer received the Certified Fraud Examiner (CFE) designation
and has been an investigator and expert witness on compliance, board governance, executive compensation, portfolio structure and investment
suitability cases. Ms. Kramer holds an MBA from the Wharton School of the University of Pennsylvania and a BA with honors from Wellesley
College.
Ms. Demetra Kalogerou
has been an independent director of the Company since February 2022. Mrs. Demetra also currently serves as a non-executive independent
board member of the listed company Swissquote Group Holding Ltd., and of the private company ecombx Ltd. Ms. Kalogerou (BSc, MSc,
MPhil) from September 2011 to September 2021 was the Chairwoman of CYSEC, the independent public supervisory Authority responsible for
the supervision of the Capital Markets, the investment services market, all the transactions in transferable securities and other financial
instruments carried in and out of the Republic of Cyprus and the collective investment and asset management sector. It also supervises
firms offering administrative services as well as Crypto Exchanges only in terms of AML issues and financial terrorism. From 2011 to 2021,
she participated in the board of supervisors of the European Securities and Markets Authority (ESMA). Also, from November 2012 until February
2021, she was a member of the Cyprus Public Audit Oversight Board, which has been established for the oversight of auditors and audit
firms. Furthermore, from November 2019 until June 2021 Mrs. Kalogerou chaired the ad-hoc tripartite committee and she was also a member
of the four-party committee concerning the investigation of  the naturalization of all persons done through the CIP. Additionally
from September 2013 until June 2014, Mrs. Kalogerou has been a member of the Resolution Authority, with the Minister of Finance and the
Governor of Central Bank of Cyprus, which supervised the implementation of the resolution of financial institutions in Cyprus.
91
Arrangements Concerning Election of Directors; Family Relationships
There are no family relationships between any of
the directors or members of senior management named above.
We are not aware of any arrangements or understandings
with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or
member of senior management.
B. Compensation.
Compensation of Senior Management and Directors
Each Director is entitled
to receive an option to purchase 3,500 INX Tokens each month at an exercise price equal to the fair market value of the INX Token at the
date of the grant.
Compensation provided to key
management personnel and directors for the years ended December 31, 2022, and 2021 and 2020 was as follows:
(U.S. Dollars in thousands)
Year ended December 31,
2022
2021
2020
Research and Development:
Compensation and benefits
$
738
$
598
$
380
Share-based compensation (*)
93
391
45
INX Token based compensation
9
448
91
Sales and marketing:
Compensation and benefits
369
4,406
816
Share-based compensation (*)
176
2,783
171
INX Token based compensation
298
3,878
421
General and administrative:
Compensation and benefits
1,575
1,577
2,045
Share-based compensation (*)
520
6,883
124
INX Token based compensation
275
2,249
391
2,367
23,213
4,484
Fair value adjustment of INX Token and derivative liabilities
$
(20,133
)
$
24,673
$
3,852
(*)
See Note 18 to the consolidated audited financial statements as of December 31, 2022 for description
                                                    of options granted by Parent to employees of the Company that are exercisable into Common shares of Parent.
For additional information, see "Item 7.B
Related Party Transactions
–
Relationships and Transactions with Directors and Executive Officers."
Equity Compensation Plan Information
On February 22, 2021, the
Company's board of directors adopted the INX Limited Share Ownership and Award Plan (2021) (the "Plan") and, on March
18, 2021, the Company's shareholders approved the Plan. The Plan provided for the grant of options to purchase Ordinary Shares and
restricted shares to such employees, directors and consultants engaged by the Company or any of its affiliates.
The Plan provides for the
grant of options to purchase Ordinary Shares and restricted shares of INX to such employees, directors and consultants engaged by INX
or any of its affiliates. The Plan further provides for the grant of options and restricted shares to service providers, and includes
U.S. and Israeli appendices that further specify the terms and conditions of grants of options and restricted shares to such grantees.
92
Upon completion of the Valdy
Transaction, all outstanding INX Options were exchanged for Valdy Consideration Options, which are governed by the Omnibus Equity Incentive
Compensation Plan of TIDCI (the "TIDCI Equity Incentive Plan").
Commencing as of the completion
of the Valdy Transaction, following which, all our outstanding share capital is held by TIDCI, we do not intend to grant to employees,
directors and consultants engaged by the Company or any of its affiliates any share awards pursuant to the Plan. Commencing as of such
date, share award compensation are granted to employees, directors and consultants engaged by the Company or any of its affiliates pursuant
to the TIDCI Equity Incentive Plan. The Plan is used solely for grant of Token awards as described below.
Grant of Token
Awards under the Plan
:
Token Plan Awards
.
On March 31, 2022, our Board of Directors and the Board of Directors of our Parent (acting as our general meeting) approved certain changes
to our Plan (including to the Plans' US and Israeli Appendices) in connection with grant of INX Tokens, restricted INX Tokens and
options to purchase INX Tokens (collectively, "Token Awards") pursuant to the provisions of the Plan. The Plan provides
for the grant of Token Awards to employees, directors and consultants who are Gibraltar citizens and others who are not Gibraltar citizens,
and includes U.S. and Israeli appendices that further specify the terms and conditions of grants of Token Awards to such non-Gibraltar
grantees.
Authorized Tokens for Grant
under the Plan
. Subject to certain capitalization adjustments, the aggregate number of INX Tokens that may be issued pursuant to Token
Awards under the Plan may not exceed 17,373,438 INX Tokens.  Tokens subject to Token Awards granted under the Plan that expire,
become un-exercisable or are canceled, forfeited to or repurchased by the Company due to the failure to vest, or otherwise terminated
without having been exercised or settled in full, in accordance with the Plan, shall revert to and again become available for issuance
under the Plan (unless the Plan has terminated). This includes INX Tokens that are reacquired pursuant to any forfeiture provision, right
of repurchase or redemption or INX Tokens that are used to satisfy the exercise or purchase price for the award or any tax withholding
obligations related to an award.
Plan Administration
.
The Company's board of directors administers and interprets the provisions of the Plan. Under the Plan, the Company's board
of directors has the authority to, among other things, determine award grantees, the numbers and types of Token Awards to be granted,
the applicable fair market value and the provisions of each Token Award, including the period of their exercisability and the vesting
schedule applicable to a Token Award, construe and interpret the Plan and awards granted thereunder, prescribe, amend and rescind rules
and regulations for the administration of the Plan, and accelerate the vesting of awards.
Options for INX Tokens
.
Options to purchase INX Tokens are granted under option agreements adopted by the Company's board of directors. The Company's
board of directors determines the exercise price for Tokens, within the terms and conditions of the Plan. Options granted under the Plan
vest at the rate specified in the option agreements and option rules as determined by the Company's board of directors.
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The Company's board
of directors determines the term of options for Tokens granted under the Plan, up to a maximum of 15 years, or 10 years for its US grantees.
If a grantee's service relationship with the Company or any of its affiliates ceases for any reason other than disability or death
or Cause (as such term is defined below), the grantee may generally exercise any vested awards for a period of up to 90 days following
the cessation of service, or such other period of time set forth in the option agreement. If a grantee's service relationship with
the Company or any of its affiliates ceases by reason of death or disability (as determined by the Company's board of directors
in its absolute discretion), the award shall remain exercisable for a period of one year following such termination (but only to the extent
exercisable at termination of engagement or appointment, as the case may be, and not beyond the scheduled expiration date). If a grantee's
service relationship with the Company or any of its affiliates ceases by reason of retirement, pursuant to applicable law with the approval
of the Company's board of directors, the award shall remain exercisable for a period of one hundred and eighty (180) days following
such termination (but only to the extent exercisable at termination of engagement or appointment, as the case may be, and not beyond the
scheduled expiration date). If a grantee's service relationship with the Company or any of its affiliates ceases for Cause, as shall
be determined by the Company's board of directors, all awards held by or on behalf of such grantee shall immediately expire upon
the earlier of such termination or notice of termination. In no event may an option be exercised beyond the expiration of its term.
For purposes of the Plan,
the term "Cause" means any of (i) a material breach by the grantee of the grantee's obligations under any agreement
with the Company or any related company; (ii) the commission by the grantee of an act of fraud or embezzlement against the Company or
any related company or the willful taking of action injurious to the business or prospects of the Company or any related company; (iii)
the conviction of the grantee of a felony; and (iv) the grantee's involvement in an act or omission which constitutes breach of
trust between the grantee and the Company or any related company.
The exercise price for INX
Tokens issued under the Plan is generally payable in cash or cash equivalents or other forms of consideration determined by the Company's
board of directors, including but not limited to a cashless exercise.
Unless the Company's
board of directors provides otherwise, options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution.
Restricted Tokens
.
Restricted Tokens may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by the Company's board of directors. The Company's board of directors determines the terms and conditions of
restricted Tokens, including vesting and forfeiture terms. If a participant's service relationship with the Company ends for any
reason, the Company may receive any or all of the INX Tokens held by the participant that have not vested as of the date the participant
terminates service with the Company through a forfeiture condition or a repurchase right.
Significant Event
.
In the event of (a) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation, other
than a transaction in which the holders of INX Shares (on an as converted basis) immediately prior thereto have the same, or substantially
similar, proportionate ownership of shares (on an as converted basis) of the surviving corporation immediately after the transaction and
a transaction in which the holders of INX Shares (on an as converted basis) immediately prior thereto own a majority of the voting power
of the surviving corporation; or (b) any sale, exchange or other transfer (in one transaction or a series of related transactions) of
all or substantially all the assets or all or substantially all of the outstanding and issued shares of the Company; each outstanding
award will be treated as the Company's board of directors determines, unless in each case the applicable award agreement provides
otherwise. The Board may, but shall not be obligated to, determine that a certain portion of the outstanding awards held by or for the
benefit of any grantee and which have not yet vested shall be accelerated and become immediately vested and exercisable.  The
Board is not obligated to treat all awards similarly.
Plan Amendment or Termination
.
The Company's board of directors may at any time amend, alter, suspend or terminate the Plan. Certain amendments, alterations, or
the suspension or discontinuance of the Plan may require the written consent of holders of outstanding awards. Certain material amendments
also require the approval of the Company's shareholders. Unless sooner terminated, the Plan terminates in February 2036.
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Grant of TIDCI Share
Awards under the TIDCI Equity Incentive Plan
:
Commencing as of the completion
of the Valdy Transaction, certain employees, directors and consultants engaged by the Company or any of its affiliates are being compensated
by grant of share awards of TIDCI pursuant to the TIDCI Equity Incentive Plan.
The TIDCI Equity Incentive
Plan provides for the grant of shares of TIDCI, options to purchase shares of TIDCI, restricted shares of TIDCI and restricted share units
of TIDCI and it includes US and Israeli appendices that further specify the terms and conditions of grants of share awards to US and Israeli
grantees.
Authorized Shares
.
Subject to certain capitalization adjustments, the aggregate number of TIDCI shares that may be issued pursuant to share awards under
the TIDCI Equity Incentive Plan may not exceed 25,352,832 shares. Should any award for any reason expire or be canceled prior to its exercise
or relinquishment in full, the share underlying to such award may again, according to the TIDCI Board's sole and absolute discretion,
be subject to an award under the TIDCI Equity Incentive Plan, provided, however, that shares that have actually been issued under the
TIDCI Equity Incentive Plan shall not be returned to the TIDCI Equity Incentive Plan and shall not become available for future distribution
under the TIDCI Equity Incentive Plan. The aggregate number of shares to be delivered upon the exercise of all awards granted under the
TIDCI Equity Incentive Plan shall not exceed the maximum number of shares permitted under the rule of any stock exchange on which shares
are then listed or other regulatory body having jurisdiction.
Plan Administration
.
The TIDCI Board administers and interprets the provisions of the TIDCI Equity Incentive Plan. Under the TIDCI Equity Incentive Plan, the
TIDCI Board has the authority to, among other things, determine award grantees, the numbers and types of share awards to be granted, applicable
market value and the provisions of each share award, including the period of their exercisability and the vesting schedule applicable
to a share award, construe and interpret the TIDCI Equity Incentive Plan and awards granted thereunder, prescribe, amend and rescind rules
and regulations for the administration of the TIDCI Equity Incentive Plan, and accelerate the vesting of awards.
Share Options
. Options
to purchase TIDCI shares are granted under option agreements adopted by the TIDCI's Board. TIDCI's Board determines the exercise
price for share options, within the terms and conditions of the TIDCI Equity Incentive Plan. Options granted under the TIDCI Equity Incentive
Plan vest at the rate specified in the share option agreements and option rules as determined by the TIDCI Board.
The TIDCI's Board determines
the term of share options granted under the TIDCI Equity Incentive Plan, up to a maximum of 10 years. If a grantee's service relationship
with TIDCI or any of its affiliates ceases for any reason other than disability or death or Cause (as such term is defined below), the
grantee may generally exercise any vested awards for a period of up to 90 days following the cessation of service, or such other period
of time set forth in the option agreement. If a grantee's service relationship with TIDCI or any of its affiliates ceases by reason
of death or disability (as determined by the TIDCI's Board in its absolute discretion), the award shall remain exercisable for a
period of one year following such termination (but only to the extent exercisable at termination of engagement or appointment, as the
case may be, and not beyond the scheduled expiration date). If a grantee's service relationship with the TIDCI or any of its affiliates
ceases by reason of retirement, pursuant to applicable law with the approval of the TIDCI's Board, the award shall remain exercisable
for a period of one hundred and eighty (180) days following such termination (but only to the extent exercisable at termination of engagement
or appointment, as the case may be, and not beyond the scheduled expiration date). If a grantee's service relationship with the
Company or any of its affiliates ceases for Cause, as shall be determined by TIDCI's Board, all awards held by or on behalf of such
grantee shall immediately expire upon the earlier of such termination or notice of termination. In no event may an option be exercised
beyond the expiration of its term.
For purposes of the TIDCI
Equity Incentive Plan, the term "Cause" means any of (i) a material breach by the grantee of the grantee's obligations
under any agreement with the TIDCI or any subsidiary; (ii) the commission by the grantee of an act of fraud or embezzlement against TIDCI
or any subsidiary or the willful taking of action injurious to the business or prospects of TIDCI or any subsidiary; (iii) the conviction
of the grantee of a felony; and (iv) the grantee's involvement in an act or omission which constitutes breach of trust between the
grantee and the TIDCI or any subsidiary.
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The exercise price for shares
issued under the TIDCI Equity Incentive Plan are generally payable in cash or cash equivalents or other forms of consideration determined
by TIDCI's Board, including but not limited to a cashless exercise.
Unless TIDCI's Board
provides otherwise, options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution.
TIDCI's Board may award
options to purchase shares of the TIDCI to any eligible grantee. Each option granted under the TIDCI Equity Incentive Plan shall be evidenced
by a written agreement between TIDCI and the grantee, in such form as TIDCI's Board shall from time to time approve. The options
shall be subject to all applicable terms of the TIDCI Equity Incentive Plan. The provisions of the various option agreements entered into
under the TIDCI Equity Incentive Plan need not be identical.
Limitations on Grants.
The TIDCI Equity Incentive
Plan provides that-
◌
Awards granted to any one individual in any 12-month period cannot exceed more than 5% of the issued TIDCI shares, unless TIDCI has obtained disinterested shareholder approval.
◌
Awards granted to any one consultant, in aggregate, in any 12-month period cannot exceed more than 2% of the issued TIDCI shares.
◌
Stock options granted to all persons, in aggregate, conducting investor relations activities in any 12-month period cannot exceed more than 2% of the issued TIDCI shares.
Restricted Shares
.
Restricted shares may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by TIDCI's Board. TIDCI's Board determines the terms and conditions of restricted shares, including vesting
and forfeiture terms. If a participant's service relationship with TIDCI ends for any reason, TIDCI may receive any or all of the
shares held by the participant that have not vested as of the date the participant terminates service with TIDCI through a forfeiture
condition or a repurchase right.
Restricted Share Units
.
Restricted share units may be awarded in consideration for cash or cash equivalents or another form of consideration, including past services,
as determined by TIDCI's Board. TIDCI's Board determines the terms and conditions of restricted share units, including vesting
and forfeiture terms. If a participant's service relationship with TIDCI ends for any reason, TIDCI may receive any or all of the
shares held by the participant that have not vested as of the date the participant terminates service with TIDCI through a forfeiture
condition or a repurchase right.
Changes to Capital Structure
.
In the event of any dividend or other distribution, recapitalization, share split, reverse share split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or other change in TIDCI's corporate structure affecting its shares,
TIDCI Board may make any adjustments it deems appropriate, including in the aggregate number and class of shares available under the TIDCI
Equity Incentive Plan, and TIDCI Board's determination in this regard shall be conclusive.
Significant Event
.
In the event of the consummation of a Significant Event (as defined below) or the adoption of any plan or proposal for the liquidation
or dissolution of TIDCI, then, notwithstanding any contrary vesting periods in any agreement or in the TIDCI Equity Incentive Plan, and
unless in each case the applicable agreement provides otherwise, TIDCI Board may, but shall not be obligated to, determine that a certain
portion of the outstanding awards held by or for the benefit of any grantee and which have not yet vested shall be accelerated and become
immediately vested and exercisable.
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For purposes of the TIDCI
Equity Incentive Plan, the term "Significant Event" means each of the following: (a) a takeover bid (as defined in the Act),
which is successful in acquiring shares, (b) a change of control of the TIDCI Board resulting from the election by the members of TIDCI
of less than a majority of the persons nominated for election by management of TIDCI, (c) any consolidation, plan of arrangement or amalgamation
of TIDCI, other than a transaction in which the holders of shares immediately prior thereto have the same, or substantially similar, proportionate
ownership of shares of the surviving or resulting entity immediately after the transaction and a transaction in which the holders of shares
immediately prior thereto own a majority of the voting power of the surviving or resulting entity; (c) any sale, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all the assets or all or substantially all of the outstanding
and issued Shares of TIDCI; or (d) the dissolution of TIDCI business or the liquidation of its assets.
C. Board Practices
Election of Directors; Independent Board Members
Under the Companies Act, a
Gibraltar private company must have at least one director. Appointments of directors are performed by means of a vote at the general meeting
of shareholders, or by a resolution of the board if permitted by the memorandum or if the articles so provide. Our Articles of Association
provide that, any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director (a)
by ordinary resolution of the shareholders (members) (within the meaning given in section 200 of the Companies Act), or (b) by a decision
of our Board of Directors.
Our
Articles of Association also provide that, upon the effectiveness of the registration statement submitted as part of the Token Offering,
the Company shall maintain a Board consisting of a majority of independent directors, as defined by the NASAA Statements of Policy and
the UK Corporate Governance Code. We currently have seven (7) directors, five of whom are independent as such term is defined by the North
American Securities Administrators Association (NASAA) Statement of Policy Regarding Corporate Securities Definitions and the UK Corporate
Governance Code. There is no definition under Gibraltar law to the term "Independent Director."
Further, our Articles of Association
state that, in addition to any obligation, duty or consideration imposed on them by law, independent directors shall be required to consider
the interests of token holders in determining whether to approve or disapprove of the following events:
(1) a transaction with an
Affiliate (as such term is defined in the Articles);
(2) a Deemed Liquidation (as
such term is defined in the Articles); and
(3) an Insolvency (as such
term is defined in the Articles).
In connection with all future
material affiliated transactions and loans, we will (i) make and enter into such transactions and loans on terms no less favorable to
us than those that can be obtained from unaffiliated third parties; (ii) obtain approval from a majority of our independent directors
of all future material transactions and loans, including any forgiveness of loans; and (iii) to the extent required by law, obtain shareholder
approval for any such transaction. Our officers and directors have considered their due diligence and assure that there is a reasonable
basis for these representations. Further, we have considered and decided to embody certain of these representations in our Articles of
Association. Our Articles of Association include a provision that any material transaction between the Company and an affiliate of the
Company must be approved by a majority (and at least two) of our independent directors who do not have an interest in the transaction.
Our Articles of Association
provide that if the numbers of director votes for and against a proposal are equal, the chairman of the meeting has a casting vote.
Qualification of Directors
The shareholding qualification
for directors may be fixed by the Company in general meeting, and unless and until so fixed no qualification shall be required.
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Authority Granted to Directors
Subject to the Articles, the
directors are responsible for the management of the company's business, for which purpose they may exercise all the powers of the
Company. Subject to the Articles, the directors may delegate any of the powers which are conferred on them under the Articles: (i) to
such person or committee; (ii) by such means (including by power of attorney) to such an extent; (iii) in relation to such matters or
territories; and (iv) on such terms and conditions; as they think fit. Committees to which the directors delegate any of their powers
must follow procedures which are based (as far as they are applicable) on those provisions of the articles which govern the taking of
decisions by directors. The directors may make rules of procedure for all or any committees, which prevail over rules derived from the
articles if they are not consistent with them.
Directors' Remuneration
Directors may undertake any
services for the Company as determined by the Board of Directors. Directors are entitled to such remuneration as determined by the Board
of Directors: (a) for their services to the Company as directors, and (b) for any other services undertaken for the Company. Subject to
the Company's articles of association, a director's remuneration may take any form, and include any arrangements in connection
with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.
Unless otherwise determined by the Board of Directors, their remuneration accrues from day to day and directors are not accountable to
the Company for any remuneration that they receive as directors or as officers or employees of the Company's subsidiaries or of
any other body corporate in which the Company is interested. The Company may pay any reasonable expenses which the directors properly
incur in connection with their attendance at: (a) meetings of directors or committees of directors, (b) general meetings, or (c) separate
meetings of the holders of any class of shares or of debentures of the company, or otherwise in connection with the exercise of their
powers and the discharge of their responsibilities in relation to the Company.
Corporate Governance
Under Gibraltar law, the Company
is governed in accordance with its memorandum and articles of association, the provisions of the Companies Act and other Gibraltar statutory
and common law principles. The Board is committed to the principles of corporate governance which it considers to be central to the effective
management of the business and to maintaining the confidence of investors.
Differences between the Gibraltar Companies
Act and laws impacting Delaware companies
The Sarbanes-Oxley Act, as
well as related rules subsequently implemented by the SEC, requires foreign private issuers, such as us, to comply with various corporate
governance practices. Under those rules, we may elect to follow certain corporate governance practices permitted under the Companies Act,
in lieu of compliance with corresponding corporate governance requirements otherwise imposed by the SEC regulations for U.S. domestic
issuers.
The Companies Act and the
laws of Gibraltar affecting Gibraltar companies like us and our shareholders differ from laws applicable to U.S. corporations and their
shareholders. Set forth below is a summary of the significant differences between the provisions of the laws of Gibraltar applicable to
us and, for illustrative purposes only, the Delaware General Corporation Law (the "DGCL"), which governs companies incorporated
in the state of Delaware. The summary is not intended to be a complete discussion nor a comprehensive all included description of the
respective rights and it is qualified in its entirety by reference to Delaware law and the Companies Act, and as may be relevant, to our
Memorandum and our Articles of Association.
Number of Directors
Under
the Companies Act, every Gibraltar private limited company shall have at least one director and the number shall be fixed in the company's
memorandum and articles of association.
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Removal of Directors.
Under
the Gibraltar law, directors may be removed from office, with or without cause, in accordance with the provisions of their memorandum
and articles of association. Gibraltar law allows shareholders with sufficient majority to exercise a vote to remove directors. In addition,
under our Articles of Association, a person ceases to be a director as soon as: (a) that person ceases to be a director by virtue of any
provision of the Companies Act or the Gibraltar Insolvency Act 2011 or is prohibited from being a director by law; (b) a bankruptcy order
is made against that person; (c) a composition is made with that person's creditors generally in satisfaction of that person's
debts; (d) a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person
has become physically or mentally incapable of acting as a director and may remain so for more than three months; (e) notification is
received by the company from the director that the director is resigning from office, and such resignation has taken effect in accordance
with its terms. Under Delaware law, unless otherwise provided in the certificate of incorporation, directors may be removed from office,
with or without cause, by a majority stockholder vote, though in the case of a corporation whose board is classified, stockholders may
affect such removal only for cause.
Vacancies
on the Board of Directors
. Under the Companies Act, appointments of directors (other than nomination of directors via the general
meeting of shareholders) may also be made by a resolution of the board if allowed by the articles of association of the Gibraltar company.
Our Articles of Association provide that, any person who is willing to act as a director, and is permitted by law to do so, may be appointed
to be a director (a) by ordinary resolution of the shareholders (members) of the Gibraltar company (within the meaning given in section
200 of the Companies Act), or (b) by a decision of our Board of Directors. Under Delaware law, vacancies on a corporation's board
of directors, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors.
Shareholder/Stockholder
Meetings
. Under the Companies Act, annual general meetings of shareholders and extraordinary general meetings of shareholders (within
the meaning given in sections 193 and 195 of the Companies Act) shall be held at such place, on such date and at such time as may be designated
from time to time by the board of directors or as provided in the articles of association of the Gibraltar company, and extraordinary
general meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized under the
Companies Act or by the articles of association. With respect to notices of general meetings, subject to the provisions of the Companies
Act relating to
special resolutions
, seven days' notice at the least (exclusive of the day on which the notice is served
or deemed to be served, but inclusive of the day for which notice is given) specifying the place, the day and the hour of meeting and,
in case of special business, the general nature of that business shall be given in manner hereinafter mentioned, or in such other manner
(if any) as may be prescribed by the company in general meeting, to such persons as are, under the articles of association of the company,
entitled to receive such notices from the company; but with the consent of all the members entitled to receive notice of some particular
meeting, that meeting may be convened by such shorter notice and in such manner as those members may think fit. Meetings to resolve matters
requiring a special resolution necessitate a 21 day notice period.
A
Gibraltar company can decide its own way of communicating with its shareholders, including publication of notice of meetings on a website
of a company (in accordance with the provision of the Companies Act).
Ordinary resolutions
(within the meaning given in section
200 of the Companies Act) at the general meetings are passed by a simple majority.
Extraordinary and special
resolutions (within
the meaning given in section 201 of the Companies Act) are passed by seventy-five percent (75%) majority. Under Delaware law, (i) the
annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the
board of directors or as provided in the certificate of incorporation or by the bylaw, and (ii) special meetings of the stockholders may
be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
Shareholder
action by written consent
. Under the Companies Act, it is not necessary in the case of a Gibraltar private company to hold a general
meeting in order to pass an ordinary, an extraordinary, or a special resolution. Subject to provisions in the articles of the company,
such resolutions may be passed in writing by unanimous approval. Our Memorandum and Articles of Association currently provide such provisions.
Under the DGCL, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation.
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Preemptive
Rights
. Under Gibraltar law, rights of pre-emption can be worked into the articles of association of the company. However, in the
absence of such explicit rights, shareholders are not automatically entitled to benefit from preemptive rights. Under Delaware law, unless
otherwise provided in a corporation's certificate of incorporation, a stockholder does not, by operation of law, possess preemptive
rights to subscribe to additional issuances of the corporation's stock.
Liability
of Directors and Officers
.
Pursuant
to s. 224 of the Companies Act, in a limited company the liability of the directors or managers, or of the managing director, if so provided
by the memorandum, may be unlimited, while s.225 of the Companies Act states that a limited company, if so authorized by its articles,
may by special resolution, alter its memorandum so as to render unlimited the liability of its directors or managers, or of any managing
director. Upon the passing of any such special resolution the provisions of the special resolution shall be as valid as if they had been
original contained in the memorandum. However, s. 231 (1) states that subject to its provisions, any provision, whether contained in the
articles of a company or in any contract with a company or otherwise, for exempting any director, manager or officer of the company from,
or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence,
default, breach of duty or breach of trust of which he may be guilty in relation to the company, shall be void. S. 231 (2) further states
that nothing shall preclude:
●
Any person, not being the company, indemnifying any director, manager or officer of the company against any such liability as referred to in subsection (1);
●
A company from purchasing and maintaining for any director manager or officer of the company, or any person (whether an officer of the company or not) employed by the company as auditor, insurance against any such liability referred to in subsection (1);
A
company from indemnifying any director, manager or officer of the company against any such liability incurred by him in defending any
proceedings, whether civil or criminal, in which judgment is given in his favor or in which he is acquitted or in connection with any
application under s. 477 in which relief is granted to him by the court.
Under
Delaware law, a corporation's certificate of incorporation may include a provision eliminating or limiting the personal liability
of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision
can limit the liability of a director for:
●
any breach of the director's duty of loyalty to the corporation or its stockholders;
●
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
●
intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or
●
any transaction from which the director derives an improper personal benefit.
Standard
of Conduct for Directors
. Under Gibraltar law, directors are subject to various common law duties. Director's duties are not
codified in Gibraltar and are not set in statute but derive from common law principles and case law. These significant duties and responsibilities
include the following:
●
to act in good faith and in the best interest of the company;
●
to not allow their interests to conflict with those of the company; and
●
to act with due care and skill.
100
Delaware
law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors
is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed
basis and in a manner they reasonably believe to be in the best interest of the stockholders.
Voting
Rights
. Under Gibraltar law, the basic presumption is that each shareholder is entitled to one vote for each share held. However,
the rights and entitlements attaching to shares of a Gibraltar company are set out in a company's memorandum and articles of association
which can be modified to denote the rights and entitlements attaching to each type of share in the company. Certain shares may be granted
additional voting rights while others may only be entitled to financial remuneration and not voting rights. Delaware law provides that,
unless otherwise provided in the certificate of incorporation, each stockholder of capital stock is entitled to one vote for each share
of capital stock held by such stockholder, and blockchain assets are not considered capital stock unless expressly identified in the certificate
of incorporation of the company.
Distribution
of periodic reports to shareholders; proxy solicitation
. Under the Companies Act, each company decides its own way of communicating
with its shareholders, however shareholders have a right to request certain information from the company.
Quorum
. Under the Companies
Act, a company is entitled to determine in its memorandum of association and in its articles of association, the number of shareholders
and percentage of holdings required for a quorum at a shareholders meeting. Our Articles and our memorandum of association, or the Memorandum,
provides that two members present in person or by proxy shall constitute a quorum unless there shall at any time be one member in which
event such member alone shall have the authority to transact the business of a general meeting.  An ordinary resolution of the members
(or of a class of members) can be passed by members representing a simple majority (i.e. more than 50%) of the total voting rights of
the members or, as the case may be, of the class of members. An extraordinary or special resolution of the members requires a majority
of not less than 75% of those members at a general meeting of which notice specifying the terms of the resolution and the intention to
propose the resolution as such a resolution has been given.
Nomination of our directors
.
Our directors are elected by an annual meeting of our shareholders to hold office until the next annual meeting following one year from
his or her election. The nominations of directors, which are presented to our shareholders by our Board, are generally made by the Board
itself, in accordance with the provisions of our Articles of Association and the Companies Act. Nominations need not be made by a nominating
committee of our Board consisting solely of independent directors.
Compensation of officers
.
Under the Companies Act and our Memorandum and Articles of Association, compensation of our officers requires approval by, our Board and,
at times, our shareholders. The Board will seek recommendations and approval from the Audit Committee.
Independent directors
.
A majority of the directors serving on our Board are to be "independent", and in any case, we will at all times maintain a
Board with at least two directors who are independent. We define independence using both the North American Securities Administrators
Association (NASAA) Statement of Policy Regarding Corporate Securities Definitions and the UK Corporate Governance Code.
Gibraltar law does not require,
nor do our independent directors conduct, regularly scheduled meetings at which only they are present.
Shareholder approval
.
We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Act. The Companies
Act sets our various matters requiring shareholder approval. Notable examples of this include any amendments to the company's Memorandum
and Articles of Association, any increase or reclassification of share capital and the issuance of dividends.
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In particular, shareholder
approval shall be generally required for: (i) an acquisition of shares/assets of another company that involves the issuance of 20% or
more of the acquirer's shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the
target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment
of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible
into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5% shareholders)
if such equity is issued (or sold) at below the greater of the book or market value of shares.
Generally, under Delaware
law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation,
sale, lease or exchange of all or substantially all of a corporation's assets or dissolution requires:
●
the approval of the board of directors; and
●
approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.
Mergers and similar arrangements
.
Under the Gibraltar law, there are various mechanisms to give effect to a merger or takeover. However, the most common way is pursuant
to the provisions of the Companies Act by way of scheme of arrangement. The procedure for a scheme of arrangement is set out at Part VIII
of the Companies Act.
In very general terms, a scheme
of arrangement is a compromise or arrangement between a company and its members. Under a scheme to effect a merger, the shares in one
Gibraltar company (target) would be exchanged by its shareholders for consideration shares and/or cash by another Gibraltar company.
A brief overview of the process
is as follows:
●
Court order for holding meeting
: an application may be made by a company or any member (or creditors) of such company to summon a meeting of members;
●
Statement to be circulated
: Where a meeting is summoned, the notice of such meeting which is sent to members must include a statement explaining the proposed arrangement and disclosing any material interests of the directors of the company, whether as directors or as members or as creditors of the company or otherwise;
●
Approval of members of merging companies
: The scheme is conditional on, amongst other things, the approval by shareholders; the statutory majority required to approve the scheme at the meeting is a 75% majority of those shareholders who are present and vote in person or who vote by proxy or at any adjournment thereof;
●
Petition to the Court
: Upon approval of a majority of shareholders, an application must then be made to Court by way of petition seeking the Court's sanction of the scheme. As part of this application, the Court will need to be satisfied that the requisite approval of the shareholders has been duly sought and obtained in accordance with the necessary legal processes. If the Court is satisfied in this regard, it may then, either by order sanctioning the arrangement or by imposing certain conditions for the implementation of the scheme or by any subsequent order, make provision for the amalgamation of the relevant companies.
●
Delivery of the Order to the Registrar
: When issued by the Court, the order sanctioning the scheme will need to be delivered to with the Register of Companies for registration and, it is upon such delivery and registration that the scheme will become effective; a copy of such order must be delivered to the Registrar within 7 days after its making. The entire process can take between 4 and 8 months.
Under Delaware law each corporation's
board of directors must approve a merger agreement. The merger agreement must state, among other terms, the terms of the merger and method
of carrying out the merger. This agreement must then be approved by the majority vote of the outstanding stock entitled to vote at an
annual or special meeting of each corporation, and no class vote is required unless provided in the certificate of incorporation. Delaware
permits an agreement of merger to contain a provision allowing the agreement to be terminated by the board of directors of either corporation,
notwithstanding approval of the agreement by the stockholders of all or any of the corporations (1) at any time prior to the filing of
the agreement with the Secretary of State or (2) after filing if the agreement contains a post-filing effective time and an appropriate
filing is made with the Secretary of State to terminate the agreement before the effective time. In lieu of filing an agreement of merger,
the surviving corporation may file a certificate of merger, executed in accordance with Section 103 of the DGCL. The surviving corporation
is also permitted to amend and restate its certification of incorporation in its entirety. The agreement of merger may also provide that
it may be amended by the board of directors of either corporation prior to the time that the agreement filed with the Secretary of State
becomes effective, even after approval by stockholders, so long as any amendment made after such approval does not adversely affect the
rights of the stockholders of either corporation and does not change any term in the certificate of incorporation of the surviving corporation.
If the agreement is amended after filing but before becoming effective, an appropriate amendment must be filed with the Secretary of State.
If the surviving corporation is not a Delaware corporation, it must consent to service of process for enforcement of any obligation of
the corporation arising as a result of the merger; such obligations include any suit by a stockholder of the disappearing Delaware corporation
to enforce appraisal rights under Delaware law.
102
If a proposed merger or consolidation
for which appraisal rights are provided is to be submitted for approval at a shareholder meeting, the subject company must give notice
of the availability of appraisal rights to its shareholders at least 20 days prior to the meeting.
A dissenting shareholder who
desires to exercise appraisal rights must (a) not vote in favor of the merger or consolidation; and (b) continuously hold the shares of
record from the date of making the demand through the effective date of the applicable merger or consolidation. Further, the dissenting
shareholder must deliver a written demand for appraisal to the company before the vote is taken. The Delaware Court of Chancery will determine
the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, together
with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the court will take
into account "all relevant factors." Unless the Delaware Court of Chancery in its discretion determines otherwise, interest
from the effective date of the merger through the date of payment of the judgment will be compounded annually and accrue at 5% over the
Federal Reserve discount rate.
Approval of Related Party
Transactions
. All related party transactions must be disclosed to the Company for approval.
Transactions with interested
shareholders
. Delaware law contains a business combination statute applicable to Delaware public corporations whereby, unless the
corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited
from engaging in certain business combinations with an "interested shareholder" for three years following the date that such
person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more
of the target's outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential
acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,
among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either
the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential
acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target's board of directors.
The Companies Act has no direct
comparison, but it is worth noting that certain common law provisions relating, for example, to conflicts of interest and similar considerations,
may, depending on the facts, apply under Gibraltar law.
Committees of the Board of Directors
Gibraltar companies are not
required to establish any sub committees of the Board. Nevertheless, they have the power to create such subcommittees and delegate responsibilities
and oversight accordingly. Committees to which the directors delegate any of their powers must follow procedures which are based as far
as they are applicable on those provisions of the articles which govern the taking of decisions by directors. The directors may make rules
of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them.
Our Board has established
two committees: (1) an audit committee, and (2) a compensation committee. The members of the audit committee and the members of the compensation
committee were appointed by the Board.
103
Audit Committee
Our
Board has adopted terms of reference for an audit committee, as customary for public companies, and established the committee upon the
closing of the Token Offering. The audit committee is currently and will be comprised of three members of the Board. The audit committee
has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company
is properly measured and reported on. It will receive and review reports from our management and auditors relating to the interim and
annual accounts and the accounting and internal control systems in use throughout the Company. The audit committee will meet not less
than once in each financial year and at such other times as circumstances require.
Our
Board of Directors has adopted an audit committee charter, which sets forth the responsibilities of the audit committee consistent with
SEC rules and regulations governing audit committee members, including the following:
●
considering and making recommendations to our Board on our financial statements, reviewing and discussing the financial statements and presenting its recommendations with respect to the financial statements to the Board prior to the approval of the financial statements by our Board;
●
oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the Board in accordance with Gibraltar law;
●
recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting;
●
recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our Board; and
●
reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities' findings, receiving reports regarding irregularities and legal compliance, acting according to "whistleblower policy" and recommending to our Board if so required, and overseeing our policies and procedures regarding compliance to applicable financial and accounting related standards, rules and regulations.
Although
not required under Gibraltar law, the members of our audit committee will each be independent in accordance with the independence standard
that is applied to non-investment company issuers under Rule 10A-3 of the Exchange Act. All members of our audit committee will be financially
literate.
Remuneration (Compensation) Committee
Although
not required under Gibraltar law, our Board has also adopted terms of reference for a compensation committee and SEC rules and regulations,
and established the committee upon the closing of the Token Offering. The compensation committee is currently comprised of three members
of the Board. The members of our compensation committee will each be independent in accordance with the independence standard under Rule
10C-1 of the Exchange Act. The compensation committee will review the performance of management and make recommendations to our Board
on matters relating to their remuneration and terms of employment.
Nominating and Corporate Governance Committee
Although
not required under Gibraltar law, our Board has also adopted terms of reference for a Nominating and Corporate Governance Committee and
SEC rules and regulations, and established the committee on December 14th, 2021. The Nominating and Corporate Governance committee is
currently comprised of three members of the Board. The members of our Nominating and Corporate Governance committee will each be independent
in accordance with the independence standard under Rule 10C-1 of the Exchange Act. The Nominating and Corporate Governance committee will
exercise general oversight with respect to the governance of the Board of Directors.
104
Role of Board of Directors in Risk Oversight
Process
Risk assessment and oversight
are an integral part of our governance and management processes and business strategy. Our Board encourages management to promote a culture
that incorporates risk management into our corporate strategy and day-to-day business operations, to discusses strategic and operational
risks at regular management meetings, and to conduct specific strategic planning and review sessions during the year that include a focused
discussion and analysis of the risks facing us. Throughout the year, senior management will review these risks with the Board at regular
board meetings as part of management presentations that focus on particular business functions, operations or strategies, and present
the steps taken by management to mitigate or eliminate such risks.
Appointment of Secretary
Subject
to the provisions of the Companies Act, the secretary shall be appointed by the directors for such term, at such remuneration and upon
such conditions as they may think fit; and any secretary so appointed may be removed by them.
Family Relationships
There are no family relationships
between any members of our executive management and our directors.
Approval of Related Party Transactions
General
Under
Gibraltar law, related party transactions need to be disclosed to the board as such before the transaction. Details on the transaction
will appear as related party transactions in the notes of the accounts of the Company.
Under
the Companies Act, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described
above, if:
●
the office holder acts in good faith and the act or its approval does not cause harm to the company; and
●
the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company's approval of such matter.
Duty to Disclose Personal
Interests
As
set out above, under Gibraltar law directors of the company have various common law and fiduciary duties to the company. These duties
are not codified in the Companies Act but are wide ranging and include a duty to not to allow their interests to conflict with those of
the company. They are therefore required to promptly disclose any direct or indirect personal interest that they may have and all related
material information known to them relating to any existing or proposed transaction by the company.
All arrangements as to compensation
and indemnification or insurance of office holders require approval of the compensation committee and Board of Directors, and compensation
of office holders who are directors must be also approved, subject to certain exceptions, by the shareholders, in that order. If shareholders
of a company do not approve the compensation terms of office holders, other than directors, the compensation committee and Board of Directors
may override the shareholders' decision, subject to certain conditions.
105
Exculpation and Indemnification of Directors
and Officers Indemnities
The
general common law position that a company can indemnify its directors has been circumscribed in Gibraltar by statutory enactment. Section
231 of the Companies Act imposes certain limits on the extent and scope of indemnification relieving directors of indemnification under
Gibraltar law. Section 231(1) prohibits indemnification for liability arising from their own negligence, default, breach of duty or breach
of trust. A provision in the articles of a company or a specific contract seeking to provide such indemnification is void. However, it
follows that apart from such restrictions, directors can in certain circumstances be indemnified (i.e. for matters not expressly prohibited).
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
Insurance
Under
our Articles, the directors may decide to purchase and maintain insurance, at the expense of the company, for the benefit of any relevant
director in respect of any relevant loss. In this paragraph: (a) a "relevant director" means any director or former director
of the company or an associated company, (b) a "relevant loss" means any loss or liability which has been or may be incurred
by a relevant director in connection with that director's duties or powers in relation to the company, any associated company or
any pension fund or employees' share scheme of the company or associated company, and (c) companies are associated if one is a subsidiary
of the other or both are subsidiaries of the same body corporate.
D. Employees.
Each individual who provides services to us does
so through an employment, services, consulting or similar agreement.
Company
(1)
Location
Management
Financial
Technology
Administration and Other Positions
Total
INX Limited (Gibraltar)
Gibraltar, Cyprus Israel
3
(2)
-
2
11
16
INX Digital, Inc. (US)
United States
2
-
-
4
6
Midgard Technologies Ltd. (Israel)
Israel
2
5
24
6
37
I.L.S. Brokers Ltd. (Israel)
Israel
2
1
1
11
15
INX Securities , LLC
United States
1
-
-
-
1
Total
10
6
27
32
75
(1)
As a single employee/service provider
may be engaged in more than one activity, each employee/service provider is represented only once under the activity representing their
primary responsibility.
(2)
These employees/service providers are located in Israel.
(3)
Employees/service providers of INX Digital also provide services to INXS.
106
E. Share Ownership.
As of April 28, 2023, 47,635,875 of our ordinary shares are outstanding.
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities
to persons who possess sole or shared voting or investment power with respect to those securities, and include shares subject to options
and warrants that are exercisable within 60 days from the date of this report. Such shares are also deemed outstanding for purposes
of computing the percentage ownership of the person holding the option, but not the percentage ownership of any other person. As of April
28, 2023, none of the outstanding ordinary shares are held by U.S. Persons.
Unless otherwise indicated
below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares, except to
the extent that authority is shared by spouses under community property laws. None of our shareholders has informed us that he, she, or
it is affiliated with a registered broker-dealer or is in the business of underwriting securities. None of our shareholders has different
voting rights from other shareholders.
Ordinary
Shares
Beneficially
Owned
Percentage
of Ordinary
Shares
Beneficially
Owned
5% Shareholders
The INX Digital Company Inc.
*
47,635,875
100
%
Senior Management and Directors
(1)
Shy Datika
-
-
Renata Szkoda
-
-
Itai Avneri
-
-
Maia Naor
-
-
Jonathan Azeroual
-
-
Alan Silbert
-
-
Paz Diamant
-
-
David Weild
-
-
Nicholas Thadaney
-
-
Thomas Lewis
-
-
Hilary Kramer
-
-
Demetra Kalogerou
-
-
Vlad Uchenik
-
-
All of the senior management and directors as a group (13 persons)
-
-
*
Some of the Senior Management
and Directors of the Company hold common shares of TIDCI and options to purchase common shares of TIDCI.
(1)
The address of Senior Management
and Directors is INX Limited's registered office at 57/63 Line Wall Road, Gibraltar, GX11 1AA.
107
In addition, the following table sets forth information
with respect to the outstanding beneficial ownership of INX Tokens as of April 28 2023, by:
●
each of our executive officers
and directors;
●
each person or entity known
by us to beneficially own more than 5% of our outstanding shares; and
●
all of our senior management
and directors as a group.
INX
Tokens
Beneficially
Owned
Percentage of INX
Tokens
Beneficially
Owned
5% Shareholders
The INX Digital Company Inc.
-
-
Senior Management and Directors
Shy Datika
(1)
9,435,939
4.71
%
Renata Szkoda
(2)
150,000
*
Itai Avneri
(3)
460,000
*
Maia Naor
(4)
1,062,499
*
Jonathan Azeroual
(5)
875,000
*
Alan Silbert
(6)
1,004,911
*
Douglas Borthwick
(7)
1,195,158
*
Paz Diamant
(8)
302,500
*
David Weild
(9)
438,667
*
Nicholas Thadaney
(10)
438,667
*
Thomas Lewis
(11)
438,667
*
Hilary Kramer
(12)
52,500
*
Demetra Kalogerou
(13)
49,000
*
Vlad Uchenik
(14)
150,000
*
Keren Avidar
(15)
150,000
*
All of the senior management and directors as a group (15 persons)
*
Less than 1%
(1)
Mr. Datika, one of our founders
and directors and our CEO and President, holds 9,435,939 INX Tokens through Triple V (1999) Ltd., a private company incorporated under
the laws of Israel, of which Mr. Datika is the sole shareholder.
(2)
Mrs. Renata Szkoda, our Chief Financial Officer, holds 150,000
tokens held pursuant to an Restricted Token Award ("RTA").
(3)
Mr. Avneri, our Chief Operating Officer, holds an option to purchase
360,000 INX Tokens at a price of $0.09 per Token and additional 100,000 at a price of $0.43 per Token, of which options to purchase 180,000
INX Tokens have vested or will vest within 60 days of April 28, 2023.
(4)
Ms. Maia Naor, our Chief Product Officer, holds 937,499 INX Tokens,
and an option to purchase 125,000 INX Tokens at a price of $0.43 per INX Token, a, none of which have vested or will vest within 60 days
of April 28, 2023.
(5)
Mr. Jonathan Azeroual, our Chief Blockchain Officer, holds 750,000 INX Tokens, and has an option to purchase 125,000 INX Tokens at a price of US$0.43 per INX Token, , none of which have vested or will vest within 60 days of April 28, 2023.
(6)
Mr. Silbert, a director of the Company and Chief Executive Officer of North America, holds 1,004,911 INX Tokens.
(7)
Mr. Borthwick holds 1,195,158 INX Tokens. Mr. Borthwick resigned from his position as Chief Business Officer (CBO) of the Company effective December 31, 2022, and entered into
a written agreement with the Company to serve on its advisory board, effective January 1, 2023.
(8)
Mr. Diamant, our Chief Technology Officer, holds 50,000 INX Tokens, and options to purchase 200,000 INX Tokens, at the price of $0.08 per Token and additional 52,500 at an exercise price of $0.43 per INX Token, of which options to purchase 75,000 INX Tokens have vested or will vest within 60 days of April 28, 2023.
(9)
Mr. Weild, our director,  holds options to purchase an aggregate amount of 438,667 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant .
(10)
Mr. Thadaney, our director, holds (i) 361,667 INX Tokens, (ii) options to purchase 77,000 INX
    Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.
108
(11)
Mr. Lewis, our director, (i) holds 365,167 INX Tokens, and (ii) options to purchase 73,500 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.
(12)
Ms. Hilary Kramer, our director, holds options to purchase 52,500 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.
(13)
Ms. Demetra Kalogerou, our director, holds  options to purchase 49,000 INX Tokens at an exercise price equal to the fair market value of the INX Token at the date of each grant.
(14)
Mr. Vlad Uchenik, Chief Compliance Officer of the Company and Chief Executive Officer of INXS, holds 150,000 INX Tokens held pursuant to an RTA.
(15)
Ms. Keren Avidar, General Global Counsel, is entitled to receive an option to purchase 150,000 INX Tokens at an exercise price equal to
the fair market value of the Tokens as of the date of grant of the Tokens by INX Limited.
Share Ownership and Award Plan
See "Item 6, B. Compensation
- Equity Compensation Plan Information" for a description of the Company's Share Ownership and Award Plan.
On March 31, 2022, our Board
of Directors and the Board of Directors of our Parent (acting as our general meeting) approved certain changes to our Plan (including
to the Plans' US and Israeli Appendixes) in connection with grant of INX Tokens, restricted INX Tokens and options to purchase INX
Tokens pursuant to the provisions of the Plan.
F. Disclosure of a Registrant's Action to Recover Erroneously
Awarded Compensation.
None.
ITEM 7.
MAJOR SHAREHOLDERS
AND RELATED PARTY TRANSACTIONS
A. Major Shareholders.
Except as set forth in "Item 6. Directors, Senior Management
and Employees—E. Share Ownership," to the best of our knowledge, no other person who we know beneficially owns 5% or more
of our ordinary shares outstanding as of April 28, 2023. None of our shareholders has different voting rights from other shareholders.
Other than as described herein, to the best of our knowledge, we are not owned or controlled, directly or indirectly, by another corporation,
by any foreign government or by any natural person or legal persons, severally or jointly, and we are not aware of any arrangement that
may, at a subsequent date, result in a change of control of our company.
Changes in Percentage Ownership by Major
Shareholders
Security Exchange Agreement
On March 31, 2021, the Company,
Valdy, certain Company securityholders, PI Financial Corp. and Eight Capital Inc. entered into the Security Exchange Agreement, for the
consummation of a securities exchange.
Pursuant to the terms of the
Security Exchange Agreement, on January 10, 2022, Valdy acquired all the issued and outstanding securities of the Company from the Company
Securityholders by way of a securities exchange, as follows:
(a)
Valdy acquired an aggregate
of 15,955,875 INX Shares (excluding the INX Shares issued pursuant to the Concurrent Financing (the "INX Financing Shares"))
from the holders thereof, and issued to such holders consideration of an aggregate of 167,331,410 post-Consolidation Valdy Shares, being
the product of the number of INX Shares acquired by the ratio of 10.4871348 Valdy Shares for each INX Share (the "Exchange Ratio");
(b)
Valdy acquired an aggregate
of 31,680,000 INX Financing Shares from the holders thereof and issued to such holders consideration of an aggregate of 31,680,000 post-Consolidation
Valdy Shares;
(c)
the holders of INX Options surrendered
for cancellation each INX Option held by them, and for each INX Option so surrendered, Valdy issued to such holder options to acquire
post-Consolidation Valdy Shares (the "Valdy Consideration Options") having terms equivalent to the surrendered INX Option
with respect to exercise price, vesting conditions, and expiry date, but adjusted such that: (i) the number of post- Consolidation Valdy
Shares issuable pursuant to the Valdy Consideration Option shall be the product of the number of INX Shares issuable pursuant to the
INX Option and the Exchange Ratio; and (ii) the exercise price for each post-Consolidation Valdy Share issuable upon conversion of the
Valdy Consideration Option shall be equal to the exercise price of the INX Option divided by the Exchange Ratio;
109
(d)
the holders of common share
purchase warrants which entitle the holder thereof to acquire one INX Share (the "INX Legacy Warrants") surrendered for cancellation
each INX Legacy Warrant held by them, and for each INX Legacy Warrant so surrendered, Valdy issued to such holder warrants to purchase
post-Consolidation Valdy Shares (the "Valdy Consideration Warrants") having terms equivalent to the surrendered INX Legacy
Warrant with respect to exercise price, the number of post-Consolidation Valdy Shares issuable pursuant thereto, and expiry date, but
adjusted such that: (i) the number of post-Consolidation Valdy Shares issuable pursuant to the Valdy Consideration Warrant shall be the
product of the number of INX Shares issuable pursuant to the INX Legacy Warrant and the Exchange Ratio; and (ii) the exercise price for
each post-Consolidation Valdy Share issuable upon conversion of the Valdy Consideration Warrant shall be equal to the exercise price
of the INX Legacy Warrant divided by the Exchange Ratio; and
(e)
each warrant to purchase INX
Shares issued pursuant to the Concurrent Financing ("INX Financing Warrant"), in accordance with its terms, became exercisable
to purchase an equivalent number of post-Consolidation Valdy Shares at the same exercise price as the INX Shares to which such warrant
was previously exercisable for, and such INX Financing Warrant otherwise continued to be governed in accordance with its terms.
Record Holders
As of April 28, 2023, there was one holder of record of our shares that is
not incorporated in the United States.
B. Related Party Transactions.
The following is a description
of the material terms of those transactions with related parties to which we are party to date.
Relationships and Transactions with Directors
and Executive Officers
For a description of the Valdy
Transaction and the Security Exchange Agreement, see "Item 4, Part A - History and Development of the Company" and "Item
7, Part A – Major Shareholders and Related Party Transactions – Major Shareholders – Changes in Percentage Ownership
by Major Shareholders – Security Exchange Agreement."
Mr. James Crossley
Transactions Involving
the Company's Securities
Under a Services Agreement,
dated March 8, 2018, between Bentley Limited and the Company (as amended on August 1, 2018, January 7, 2019, October 1, 2020 and April
1, 2021) the "Bentley Services Agreement"), Bentley Limited received the option to purchase 10,000 INX Tokens per month at
the price of $0.01 per Token, subject to a maximum of 100,000 INX Tokens. Options to purchase INX Tokens granted pursuant to the Bentley
Services Agreement were exercised for the maximum amount. On January 7, 2019, the Bentley Services Agreement was amended to include the
grant of options to Bentley Limited to purchase an additional 7,500 INX Tokens per month at the price of $0.01 per INX Token. On October
1, 2020, the Bentley Services Agreement was further amended such that Bentley Limited's entitlement for INX Tokens ended on October
1, 2020. In the aggregate, 265,000 INX Tokens were issued pursuant to the Bentley Option Rights. As of the date hereof, Bentley Limited
has exercised all options to purchase INX Tokens under the Bentley Option Rights.
Management, Services or
Consulting Agreement
Pursuant to the Bentley Services
Agreement, Bentley Limited provides services to the Company, including by way of Mr. James Crossley serving as a member of the Board of
Directors. On December 14, 2021, Mr. Crossley resigned from his position as a member of the Company's Board and is now serving as
the Company's Director of Business Development.
Mr. David Weild
Transactions Involving
the Company's Securities
Under the Weild Engagement
Letter, Mr. Weild will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an option
to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing as of
June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the fair
market value of the INX tokens on the date of the grant and that such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.
Management, Services or
Consulting Agreement
Mr. Weild has entered into
a written services agreement with our Company, pursuant to which Mr. Weild provides services to the Company as a member of the Board of
Directors (the "Weild Engagement Letter"). Mr. Weild currently serves as the Chairman of our Board of Directors.
Agreement with Weild Capital,
LLC ("Weild Capital")
On January 2, 2023, TIDCI entered into and advisory services agreement
with Weild Capital LLC (dba Weild & Co.) ("Weild Agreement"), a wholly-owned subsidiary of Weild & Co., Inc., of which
Mr. David Weild is Chairman & CEO. Mr. Weild serves as the Chairman of the board of TIDCI. Under the advisory agreement, TIDCI agreed
to pay Weild Capital a nonrefundable advisory fee of $90 plus a transaction fee of three and a half percent (3.5%) of the aggregate transaction
value up to $60,000, and four and a half percent (4.5%) of the aggregate transaction value in excess of $60,000, subject to a minimum
transaction fee of $1,400, to be paid upon closing. In addition, under the terms of the agreement, in the event that an investment transaction
is consummated within 12 months after the termination of the Weild Agreement, TIDCI is obligated to pay a financing placement fee equal
to five and half percent (5.5%) of gross proceeds received, excluding any proceeds provided by existing shareholders of TIDCI. Further,
Weild Capital shall receive warrants to purchase the equivalent securities on comparable terms subject to such investment transaction
in an amount equal to three percent (3%) of the gross proceeds received by TIDCI under the investment transaction.
110
Mr. Nicholas Thadaney
Transactions Involving the
Company's Securities
Under the Thadaney Engagement
Letter, Mr. Thadaney will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an
option to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing
as of June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the
fair market value of the INX Tokens on the date of the grant and that such options shall be granted following the end of each calendar
quarter, with respect to the months of services in such calendar quarter.
Management, Services or
Consulting Agreement
Mr. Thadaney has entered into
a written services agreement with our Company, pursuant to which Mr. Thadaney provides services to the Company as a member of the Board
of Directors (the "Thadaney Engagement Letter").
Mr. Thomas Lewis
Transactions Involving the
Company's Securities
Under the Lewis Engagement
Letter, Mr. Lewis will receive a monthly issuance of 3,500 INX Tokens per month in consideration for $0.01 per Token, as well as an option
to purchase 350,000 INX Tokens at a price of $0.01 per Token. On June 9, 2021, our Board of Directors resolved that, commencing as of
June 1, 2021, the grant of options to purchase INX Tokens by our directors shall be made based on an exercise price equal to the fair
market value of the INX Tokens on the date of the grant and that such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.
Management, Services or
Consulting Agreement
Mr. Lewis has entered into
a written services agreement with our Company, pursuant to which Mr. Lewis provides services to the Company as a member of the Board of
Directors (the "Lewis Engagement Letter").
Ms. Hilary Kramer
Transactions Involving the
Company's Securities
Under the Kramer Engagement
Letter, Ms. Kramer will receive options to purchase 3,500 Tokens per each month of services to the Company at an exercise price equal
to the fair market value of the Tokens on the date of the grant. Such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.
Management, Services or
Consulting Agreement
Ms. Kramer has entered into
a written services agreement with our Company, pursuant to which Ms. Kramer provides services to the Company as a member of the Board
of Directors.
Ms. Demetra Kalogerou
Transactions Involving the
Company's Securities
Under the Kalogerou Engagement
Letter, Ms. Kalogerou will receive options to purchase 3,500 Tokens per each month of services to the Company at an exercise price equal
to the fair market value of the Tokens on the date of the grant. Such options shall be granted following the end of each calendar quarter,
with respect to the months of services in such calendar quarter.
Management, Services or
Consulting Agreement
Ms. Kalogerou has entered into
a written services agreement with our Company, pursuant to which Ms. Kalogerou provides services to the Company as a member of the Board
of Directors.
Mr. Alan Silbert
On June 25, 2018, Mr. Silbert
and INX Services entered into an Amended and Restated Executive Employment Agreement (effective March 1, 2018) as amended effective as
of November 1, 2019 (the "Silbert Previous Employment Agreement"), pursuant to which Mr. Silbert provided services to INX
Services and the Company, including Mr. Silbert's service as a member of the Company's Board of Directors and Executive Managing
Director of U.S. Operations of INX Services. On January 1, 2021, the Silbert Previous Employment Agreement was terminated, and INX Digital
and Mr. Silbert entered into an executive employment agreement, as amended on March 25, 2001 (effective April 1, 2021) (the "Silbert
Employment Agreement"), pursuant to which Mr. Silbert provides services to INX Digital and the Company, including Mr. Silbert's
service as a member of the Company's Board of Directors and Executive Managing Director of U.S. Operations of INX Digital. On April
1, 2021, Mr. Silbert's title changed to CEO, North America.
111
Transactions Involving the
Company's Securities
Under the Silbert Employment
Agreement, on February 20, 2021, Mr. Silbert was granted an option to purchase 500,000 INX Tokens at a price of $0.01 per Token.
Following the adoption of a
Share Ownership and Award Plan by the Company, Mr. Silbert was granted an option to purchase 287,290 Ordinary Shares of the Company constituting
3% of the share capital of the Company on a fully diluted basis at the date of the Original Silbert Employment Agreement, at a price per
share equal to its fair value as of the effective date of the Original Silbert Employment Agreement or $0.391904. 25% of the option shares
vest upon each anniversary of the Original Silbert Employment Agreement, such that the options would be fully vested and exercisable upon
the 4
th
anniversary of the Original Silbert Employment Agreement. Unvested options were subject to accelerated vesting upon
change of control of the Company.
On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Silbert pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).
On March 25, 2021, the Silbert
Employment Agreement was amended such that, effective as of April 1, 2021, Mr. Silbert was granted an additional option to purchase 200,000
INX Tokens at a price of $0.90 per Token, and an option to purchase 197,710 Ordinary Shares of the Company at a price per share equal
to $11.126. One thirty-sixth (1/36) of the Ordinary shares and INX Tokens underlying each option shall vest following lapse of each month
of Mr. Silbert's continuous engagement by the Company, such that all such Ordinary shares and INX Tokens would become fully vested
by April 1, 2024.
On December 30, 2021, the Company's
Board of Directors approved that (i) all unvested options to purchase INX Tokens that were granted to Mr. Silbert ("Silbert's
Tokens") shall accelerate and be fully vested commencing as of the date of such resolution and (ii) the entering into a customary
reverse vesting agreement with Mr. Silbert in connection with such accelerated options of Mr. Silbert pursuant to which the Company would
have the right to repurchase for cancellation Silbert's Tokens in the event that the Silbert Employment Agreement is terminated
without cause or good reason as such terms are defined in the Silbert Employment Agreement. The Company's repurchase right shall
lapse in equal parts on a monthly basis over the course of two (2) years and three (3) months commencing as of January 1, 2022, such that
the repurchase right will have fully lapsed on April 1, 2024.
On December 30, 2021, the Company's
Board of Directors also approved the grant of an unsecured, non-recourse loan in the amount of US$404,129 bearing interest at a rate of
1.26% annually to Mr. Silbert ("Silbert Loan") by INX Digital in connection with the exercise of a portion of his options
to purchase Silbert's Tokens (the "Silbert Promissory Note"). On February 8, 2022, the Board of Directors of TIDCI approved
a grant of 100,000 INX Tokens to Mr. Silbert. Such INX Tokens were granted to Mr. Silbert on April 12, 2022 following the approval of
the changes to our Plan on March 31, 2022. On March 24, 2022, the Board of Directors of TIDCI approved an increase of the Silbert Loan
from US$ 404,129 to US$ 504,300. The Silbert Promissory Note was amended accordingly.
Effective June 30, 2022, the
Company purchased 632,474 INX Tokens from Mr. Silbert, at a per token purchase price of US$0.80, and on the same date Mr. Silbert used
the aggregate proceeds from such purchase to repay the full balance of the Silbert Loan, in the amount of US$506,150, including accrued
interest On the same date, the Company's Board of Directors also approved a grant of 837,385 INX Tokens subject to a Restricted
Token Agreement, subject to continuous engagement of Mr. Silbert with the Company or its affiliates, such that the tokens would be fully
vested on March 30, 2024. Upon separation or termination of employment with the Company, 731,830 of these tokens would be fully vested
on the date of termination of employment.
Management, Services or
Consulting Agreement
Mr. Silbert has entered into
a written employment agreement with INX Digital, pursuant to which he provides services, including as a member of the Board of Directors
of the Company, formerly as the Executive Managing Director of U.S. Operations of INX Digital, and commencing as of April 1, 2021 as the
Chief Executive Officer of North America.
Mr. Shy Datika
Transactions Involving
the Company's Securities
Under a Share Purchase Agreement,
dated September 26, 2017, between the Company and Triple-V (1999) Ltd. (Triple-V"), a company wholly owned by Mr. Shy Datika, one
of our founders, a member of our Board of Directors, President and CEO, the Company issued to Triple-V (1999) Ltd. 3,356,666 ordinary
shares of the Company, par value of GBP 0.001 (each an "Ordinary Share"), in consideration of $446,875.
Under the Share Purchase Agreement,
the Company also issued to Triple-V 9,435,939 INX Tokens at a price of $0.01 per INX Token.
On April 25, 2019, Mr. Datika
invested an additional $150,000 in the Company pursuant to a Simple Agreement for Future Equity (the "SAFE"). Pursuant to
the terms of the SAFE, upon consummation of an investment round (in shares of capital stock of the Company) in the amount of not less
than $2 million (in addition to the funds raised under the SAFEs) (a "Qualifying Financing"), the funds raised under the SAFE
would have automatically been converted into the same class of shares of capital stock as those issued in the Qualifying Financing at
a price per share equal to the lower of: (i) a 25% discount on the base (undiscounted) price per share of the Qualifying Financing; and
(ii) US$ 1.367 (the "Default Price"). A Qualifying Financing was not consummated before April 25, 2020, and thus the funds
raised under the SAFE were automatically converted into Ordinary Shares at a price per share equal to the Default Price. Hence, under
the terms of the SAFE, on April 25, 2020, Mr. Datika received 109,729 Ordinary Shares.
112
The foregoing description
of the SAFE executed between Mr. Datika and the Company summarizes the material terms of the SAFE, but is not a complete description.
For more details, you should reference the full text of the SAFE executed between Mr. Datika and the Company, which is attached as Exhibit
4.14 hereto, and is incorporated herein by reference.
On August 30, 2019 and November
29, 2019, Mr. Datika invested in the aggregate an additional $250,000 in the Company pursuant to Simple Agreements for Future Equity (the
"Second SAFE"). The Second SAFE would also be automatically converted into the same class of shares of capital stock as those
issued in a Qualifying Financing at a price per share equal to the lower of 25% discount on the base (undiscounted) price per share of
the Qualifying Financing, and $1.367 per share. If a Qualifying Financing was not consummated within 12 months commencing as of the Effective
Date (as such term is defined in the Second SAFE), the funds would automatically be converted at a price per share of $1.367. Hence, the
SAFE would have an anti-dilutive impact on the Qualifying Financing as the number of shares issued pursuant to the SAFE increased relative
to a decrease in the price per share of such Qualifying Financing. Notwithstanding an increased valuation, and thus increased price per
share, of a Qualifying Financing, Mr. Datika was entitled to a minimum of 182,882 Ordinary Shares.
In addition to the shares
issued to the investors upon conversion of the Second SAFE, upon such conversion the Second SAFE investors would be entitled to an option
to purchase additional shares, in the same amount and from the same class of the shares issued to them upon conversion of their investment
under the Second SAFE, for an exercise price of $1.953 per share. This option shall be valid for a period of 36 months commencing as of
the Effective Date.
A Qualifying Financing was
not consummated before August 30, 2020, and thus the funds raised under the Second SAFE were automatically converted into Ordinary Shares
at a price per share equal to $1.367. Hence, under the terms of one of the Second SAFEs, on August 30, 2020, Mr. Datika received 146,305
Ordinary Shares and Mr. Datika was entitled to an option to purchase 146,305 Ordinary Shares for an exercise price of $1.953 per share.
All of the options were exercised on September 13, 2020.
The foregoing description
of the Second SAFEs summarizes the material terms of the Second SAFE, but is not a complete description. For more details, you should
reference to the full text of the Second SAFE executed between Mr. Datika and the Company and Triple-V (1999) Ltd. and the Company, which
are attached as Exhibits 4.16 and 4.17 hereto, and is incorporated herein by reference.
On January 31, 2020 and March
31, 2020, Mr. Datika invested in the aggregate an additional $100,000 in the Company pursuant to Simple Agreements for Future Equity (the
"Third SAFE"). The Third SAFE would also be automatically converted into the same class of shares of capital stock as those
issued in the Qualifying Financing at a price per share equal to the lower of, 25% discount on the base (undiscounted) price per share
of the Qualifying Financing, and $1.526 per share. If a Qualifying Financing was not consummated within 12 months commencing as of the
Effective Date (as such term is defined in the Third SAFE), the funds would automatically be converted at a price per share of $1.526.
Hence, the Third SAFE would have an anti-dilutive impact on the Qualifying Financing as the number of shares issued pursuant to the Third
SAFE increased relative to a decrease in the price per share of such Qualifying Financing. Notwithstanding an increased valuation, and
thus increased price per share, of a Qualifying Financing, Mr. Datika was entitled to a minimum of 65,530 Ordinary Shares.
In addition to the shares
issued to the investors upon conversion of the Third SAFE, the Third SAFE investors would be entitled to an option to purchase additional
identical number of shares, from the same class of the shares issued to them upon conversion of their investment under the Third SAFE,
for an exercise price of $1.696 per share. This option shall be valid for a period of 36 months commencing as of the Effective Date.
A Qualifying Financing was
not consummated before January 31, 2021, and thus the funds raised under the one of the Third SAFEs were automatically converted into
Ordinary Shares at a price per share equal to $1.526. Hence, under the terms of Third SAFE, on January 31, 2021 Mr. Datika received an
aggregate of 49,147 Ordinary Shares and Mr. Datika was be entitled to an option to purchase 49,147 Ordinary Shares for an exercise price
of $1.696 per share.
The foregoing description
of the Third SAFE summarizes the material terms of the Third SAFE, but is not a complete description. For more details, you should reference
to the full text of the Third SAFEs executed between Mr. Datika and the Company, which are attached as Exhibits 19 and 4.20 hereto, and
is incorporated herein by reference.
On March 22, 2021, Mr. Datika
entered into the March 2021 Subscription Agreement with the Company, pursuant to which Mr. Datika provided to the Company CAD$ 75,000
in consideration for subscription receipts of the Company that were replaced at the closing of the Valdy Transaction by 60,000 Ordinary
Shares of Valdy and to an option to purchase 30,000 Ordinary Shares of Valdy at an exercise price of CAD$ 1.88 per share.
In January 2023, Triple V (1999) Ltd. converted part of its Fees into
options to acquire 593,678 shares in the Company.
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Management, Services or
Consulting Agreement
Triple-V (1999) Ltd. has entered
into a written services agreement with our Company, pursuant to which Triple-V, though the personal services of Mr. Datika, provides services
to the Company as shall be determined by our Board of Directors.
On April 28, 2021, our Board
of Directors appointed Mr. Datika as the CEO of the Company, upon and subject to closing of the Valdy Transaction.
On December 14, 2021, Mr.
Datika was appointed as a member of the Company's Board of Directors.
Ms. Maia Naor
Transactions Involving
the Company's Securities
Under a Loan Agreement, dated
November 27, 2017, between the Company and Ms. Naor, our Chief Product Officer, the Company borrowed $40,635 from Ms. Naor. The term of
the loan is five years, and the outstanding balance shall become due and payable on the five-year anniversary of the Naor Loan Agreement
or upon the sooner of an IPO or a Deemed Liquidation Event (as such terms are defined in the Company's Articles of Association).
The interest rate on the principal of the loan is an annual rate of 2% compounded annually (subject to adjustment from time to time by
the applicable Income Tax Ordinance).
Pursuant to the Loan Agreement,
Ms. Naor was entitled, at any time and at her sole discretion, to convert outstanding principal and interest amounts of the loan agreement
into 333,333 Ordinary Shares.
The Board of Directors of TIDCI approved two grants of an aggregate
total amount of 786,535 Ordinary Shares of TIDCI to Ms. Naor pursuant to the terms of the Omnibus Equity Incentive Compensation Plan of
TIDCI , subject to the standard vesting provisions set forth in such plan. The exercise price of the shares underlying such grant shall
be equal to their fair market value on the date of each grant.
Under the terms of the Loan
Agreement, Ms. Naor purchased 937,499 INX Tokens issued by the Company at a price of $0.01 per INX Token.
On February 25, 2021, Ms.
Naor exercised her right to convert the outstanding principal and interest amounts of the loan agreement into 333,333 Ordinary Shares
of the Company.
Mrs. Naor has an option to purchase 125,000 INX Tokens at a price of
$0.43 per INX Token.
Management, Services or
Consulting Agreement
The Company has entered into
a services agreement with Midgard, an Israeli private company, pursuant to which Ms. Naor provided services to the Company as VP Product.
Ms. Naor's services to the Company are rendered solely through Midgard. Prior to that, Ms. Naor provided services to the Company
pursuant to a services agreement directly with Ms. Naor and to an agreement between the Company and Shiran Communications Ltd. On April
1, 2021, Midgard was purchased by the Company. On June 1, 2021, Ms. Naor's position changed to that of Chief Product Officer.
Mr. Jonathan Azeroual
Transactions Involving
the Company's Securities
Under a Share Purchase Agreement,
dated September 27, 2017, between the Company and Mr. Jonathan Azeroual, our Chief Blockchain Officer, the Company issued to Mr. Azeroual
377,500 Ordinary Shares in consideration of GBP 377.50. On January 7, 2019, the Board of Directors of the Company approved the issuance
to Mr. Azeroual of 33,391 Ordinary Shares in consideration of $34,860.
114
On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 393,268 Ordinary Shares of TIDCI to Mr. Azeroual pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI , subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).
See "Item 7.A Major
Shareholders."
Under the Share Purchase Agreement
the Company also issued 750,000 INX Tokens to Mr. Azeroual at a price of $0.01 per Token.
Mr. Azeroual has an option
to purchase 125,000 INX Tokens at a price of $0.43 per INX Token.
Management, Services or
Consulting Agreement
Mr. Azeroual has entered into
a written services agreement with our Company, pursuant to which he provides services to the Company as its Vice President, Blockchain
Asset Strategy.
Mr. Douglas Borthwick
Transactions Involving
the Company's Securities
Under the Borthwick Employment
Agreement, Mr. Borthwick was granted an option to purchase 103,929 INX Tokens at an exercise price of $0.065 per INX Token. On February
20, 2021, Mr. Borthwick received a one-time bonus in the amount of $200,000 and an option to purchase additional 259,821 INX Tokens at
an exercise price of $0.065 per INX Token.
Following the adoption of
a Share Ownership and Award Plan by the Company, Mr. Borthwick was granted with an option to purchase 194,937 Ordinary Shares of the Company,
at a price per share equal to its fair value as of September 1, 2019. 50% of the option shares vested on September 1, 2019. Thereafter,
on each anniversary of September 1, 2019, one-third (1/3) of the remaining unvested portion of the options shall vest, such that, subject
to the continuous engagement of Mr. Borthwick with the Company at such time, the options will be fully vested and exercisable upon September
1, 2022.
On October 1, 2020, Mr. Borthwick's
Employment Agreement was amended such that, Mr. Borthwick's monthly salary was increased to $15,000. Mr. Borthwick was also granted
an option to purchase 50,000 Tokens at an exercise price of $0.09 per INX Token, which option vested on February 20, 2021. Mr. Borthwick
was also granted an option to purchase 200,000 Tokens at an exercise price of $0.90 per INX Token, which option vests in accordance with
the following vesting schedule
:
25% vested on October 1, 2020 and, subject to Mr. Borthwick's continuous engagement by the
Company, an additional 25% vest on the yearly anniversary of such date during each consecutive year thereafter, such that all such 200,000
INX Tokens shall become fully vested on October 1, 2023.
On March 25, 2021 Mr. Borthwick's
Employment Agreement was amended such that, commencing as of April 1, 2021, Mr. Borthwick's title changed to Company's Chief
Business Officer (CBO) and Mr. Borthwick's base salary increased to $23,000 per month. In addition, Mr. Borthwick was granted, effective
as of April 1, 2021, an additional option to purchase 200,000 INX Tokens at a price of $0.90 per Token, and with an option to purchase
206,000 Ordinary Shares of the Company at a price per share equal to $11.126. One thirty-sixth (1/36) of the Ordinary shares and INX Tokens
underlying each option shall vest following lapse of each month of Mr. Borthwick's continuous engagement by the Company, such that
all such Ordinary shares and INX Tokens shall become fully vested on April 1, 2024.
115
On December 30, 2021, the
Company's Board of Directors approved that (i) all unvested options to purchase INX Tokens that were granted to Mr. Borthwick ("Borthwick's
Tokens") shall accelerate and be fully vested commencing as of the date of such resolution and (ii) the entering into a customary
reverse vesting agreement with Mr. Borthwick in connection with such accelerated options of Mr. Borthwick pursuant to which the Company
would have the right to repurchase for cancellation Borthwick's Tokens in the event that the Borthwick Employment Agreement is terminated
without cause or good reason as such terms are defined in the Borthwick Employment Agreement; The Company's repurchase shall lapse
(A) with respect to 100,000 tokens ("Borthwick's First Portion") - on equal parts on a yearly basis over the
course of two (2) years commencing as of October 1, 2021, such that the repurchase right with respect to Borthwick's First Portion
shall have fully lapsed on October 1, 2023; and (B) with respect to the remaining 150,000 tokens ("Borthwick's Second Portion")
– on equal parts on a monthly basis over the course of two (2) years and three (3) months commencing as of January 1, 2022, such
that the repurchase right with respect to Borthwick's Second Portion shall have fully lapsed on April 1, 2024.
On December 30, 2021, the
Company's Board of Directors also approved the grant of an unsecured, non-recourse loan in the amount of $610,777 bearing interest
at a rate of 1.26% annually to Mr. Borthwick ("Borthwick Loan") by INX Digital in connection with the exercise of his options
to purchase Borthwick's Tokens (the "Borthwick Promissory Note"). On February 8, 2022, the Board of Directors of TIDCI
approved a grant of 100,000 INX Tokens to Mr. Borthwick. Such INX Tokens were granted to Mr. Borthwick on April 12, 2022 following the
approval of the changes to our Plan on March 31, 2022. The Board of Directors of TIDCI also approved a grant of 509,617 Ordinary Shares
of TIDCI to Mr. Borthwick pursuant to the terms of the Omnibus Equity Incentive Compensation Plan of The TIDCI, subject to the standard
vesting provisions set forth in such plan. The exercise price of the shares underlying such grant shall be equal to their fair market
value on March 15, 2022 (the date of the grant). On March 24, 2022, the Board of Directors of TIDCI approved an increase of the Borthwick
Loan from $610,777 to $729,777. The Borthwick Promissory Note was amended accordingly.
Effective June 30, 2022, the
Company purchased 913,750 INX Tokens from Mr. Borthwick, at a per token purchase price of $0.80, and on the same date Mr. Borthwick used
the aggregate proceeds from such purchase to repay the full balance of the Borthwick Loan, in the amount of $732,529, including accrued
interest. On the same date, the Company's Board of Directors also approved a grant of 1,195,158 INX Tokens subject to a Restricted
Token Agreement, with a monthly vesting schedule, subject to continuous engagement of Mr. Borthwick with the Company or its affiliates,
such that the tokens would be fully vested on June 30, 2025. Upon separation or termination of engagement with the Company as an employee
or advisor, 983,603 of these tokens would be fully vested on the date of termination of employment.
Management, Services or
Consulting Agreement
Mr. Borthwick resigned from
his position as Chief Business Officer (CBO) of the Company effective December 31, 2022, and entered into a written agreement with the
Company to serve on its advisory board, effective January 1, 2023.
Mr. Paz Diamant
Transactions Involving
the Company's Securities
Pursuant to Mr. Diamant's
Services Agreement, Mr. Diamant was granted options to purchase 50,000 Tokens, at the price of $0.08 per Token, which equals 10,000 Tokens
per month during the three months between the effective date of Mr. Diamant's Services Agreement and October 2020, plus 20,000 INX
Tokens. Upon entering into an Employment Agreement, Mr. Diamant was granted an option to purchase an additional 200,000 INX Tokens at
an exercise price of $0.08 per INX Token. The options granted under the Employment Agreement shall vest, subject to Mr. Diamant's
continued employment with the Company, over four years in equal amounts on each of the first four anniversaries of the effective date
of the Employment Agreement.
In addition, the Company undertook
that upon and subject to the adoption of a Share Ownership and Award Plan by the Company and approval of the Company's board of
directors, Mr. Diamant shall receive an option to purchase 67,158 Ordinary Shares of the Company. 20% of the option shares will vest on
the first anniversary of the grant date. Thereafter, 5% of the options shares vest at the end of each quarter during the four (4) years
after the first anniversary of the grant date, such that the options will be fully vested and exercisable upon the 5
th
anniversary
of the grant date. The option to purchase Ordinary Shares is subject to the continued employment of Mr. Diamant with the Company.
116
On February 8, 2022, the Board of Directors of TIDCI replaced such
commitment to issue options to purchase shares of the Company with a grant of 607,698 Restricted Shares of TIDCI (net number of Restricted
Shares, issued on a "cashless basis").
Mr. Diamant holds 50,000 INX
Tokens, and options to purchase 200,000 INX Tokens, at the price of $0.08 per Token and additional 52,500 INX Tokens at an exercise price
of $0.43 per INX Token
Management, Services or
Consulting Agreement
Mr. Diamant has entered into
a written services agreement with the Company, pursuant to which he provides services as its Chief Technology Officer.
Mr. Itai Avneri
Transactions Involving
the Company's Securities
Pursuant to Mr. Avneri's
Services Agreement, Mr. Avneri was granted an option to purchase 180,000 INX Tokens at a price of $0.09 per Token, and an option to purchase
additional 180,000 INX Tokens upon the earlier of June 30, 2020 or the execution of the Avneri Employment Agreement with the Company.
In addition, upon and subject to the adoption of a Share Ownership and Award Plan by the Company, the Company undertook that Mr. Avneri
shall receive an option to purchase 269,640 Ordinary Shares of the Company and additional 269,640 Ordinary Shares upon the execution of
the Avneri Employment Agreement with the Company. 25% of the option shares will vest on the first anniversary of the grant date. Thereafter,
subject to Mr. Avneri's continuous engagement with the Company, one-twelfth (1/12) of the remaining unvested options vest at the
end of each quarter during the three (3) years after the first anniversary of the grant date, such that the options will be fully vested
and exercisable upon the fourth anniversary of the grant date.
On February 8, 2022, the Board
of Directors of TIDCI replaced such commitment to issue options to purchase shares of the Company with a grant of 4,428,434 Restricted
Shares of TIDCI (net number of Restricted Shares, issued on a "cashless basis"). In addition, on the same date, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Avneri pursuant to the terms of the Omnibus Equity Incentive
Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares underlying
such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant)
Mr. Avneri holds an option
to purchase 360,000 INX Tokens at a price of $0.09 per Token and additional 100,000 INX Tokens at a price of $0.43 per Token.
In January 2023, Mr. Avneri
converted part of his salary into options to acquire 319,043 shares in the TIDCI.
Management, Services or
Consulting Agreement
Mr. Avneri has entered into
a written services agreement with the Company, pursuant to which he provides services as its Chief Operating Officer.
Mr. Vladislav Uchenik
Management, Services or
Consulting Agreement
Mr. Uchenik serves as the
Chief Executive Officer and Chief Compliance Officer for INXS, pursuant to an offer letter with the INX Digital.
Transactions Involving
the Company's Securities
On February 8, 2022, the Board
of Directors of TIDCI approved a grant of 509,617 Ordinary Shares of TIDCI to Mr. Uchenik pursuant to the terms of the Omnibus Equity
Incentive Compensation Plan of TIDCI, subject to the standard vesting provisions set forth in such plan. The exercise price of the shares
underlying such grant shall be equal to their fair market value on March 15, 2022 (the date of the grant).
Mr. Uchenik holds 150,000
INX Tokens pursuant to an RTA.
117
Ms. Keren Avidar
Management, Services or
Consulting Agreement
Ms. Avidar serves as the Global
General Counsel, pursuant to an Employment Agreement entered into with Midgard Technologies Ltd. in September 2022.
Transactions Involving
the Company's Securities
Under the Employment Agreement,
Ms. Avidar was granted an equity compensation award of Common Shares of INXD under the Omnibus Equity Incentive Compensation of INXD as
follows: An option to purchase 1,325,946 Common Shares, constituting 0.5% of the share capital of INXD on a fully diluted basis as of
the Grant Date, at a price per share at the Market Value (as such term is defined under the INXD Plan) per each Option Share on the Grant
Date. The Option will vest and become exercisable as follows: 1/3 of the Option shall vest upon each anniversary of the Grant Date such
that subject to the continuous engagement of the Employee with the Company at such time, the entire Option shall be vested and exercisable
upon the 3
rd
anniversary of the Grant Date.
Under the Employment Agreement,
Ms. Avidar was also granted an option to purchase 150,000 INX Tokens. The exercise price of the Tokens shall be the equal to the fair
market value of the Tokens as of the date of grant of the Tokens by INX Limited. The Tokens shall vest over a period of three (3) years
during Employee's engagement with the Company, such that 1/3 of the Tokens shall vest upon each anniversary of the Effective Date,
such that the Tokens will be fully vested and exercisable upon the 3
rd
anniversary of the Effective Date, subject to continuous
engagement of the Employee with the Company or any of its affiliates at such time.
Ms. Renata Szkoda
On May 2, 2022, Ms. Szkoda
entered into an Executive Employment Agreement with INX Digital, Inc. and INX Limited to serve as the Chief Financial Officer of the INX
group.
Transactions Involving
the Company's Securities
Under the Executive Employment
Agreement, Ms. Szkoda was granted an option to purchase 150,000 INX Tokens.
Ms. Szkoda was also granted
an option to purchase a number of Option Shares constituting 0.50% of the share capital of TINXDCO on a fully diluted basis as of the
Grant Date at a price per share at the Fair Market Value ("FMV") per each Option Share on the Grant Date. The Option will
vest and become exercisable as follows: 1/4 of the Option shall vest upon each anniversary of the Effective Date subject to the continuous
engagement of the Executive with the Company at such time, such that, subject to the continuous engagement of the Executive with the Company
at such time, the entire Option shall be vested and exercisable upon the 4th anniversary of the Agreement's Effective Date.
Agreements with Other Interested Parties
A-Labs
The Company and A-Labs Finance
and Advisory Ltd. ("A-Labs"), a limited liability company registered under the laws of the state of Israel, entered into the
A-Labs Engagement Agreement dated September 26, 2017, as amended in December 2017 and January 31, 2018. A-Labs, a shareholder of the Company,
provided services to the Company which included, among others, development, planning, management, execution, branding and marketing outside
of the US with relation to the Offering of the INX Tokens on behalf of the Company (the "A-Labs Agreement").
On January 7, 2019, the Board
of Directors of the Company approved the issuance to A-Labs of 47,893 Ordinary Shares in consideration of $50,000.
On April 25, 2019, A-Labs
invested an additional $100,000 in the Company pursuant to a SAFE dated as of such date. On April 25, 2020, under the terms of the SAFE,
A-Labs received 73,152 Ordinary Shares. See
"
Item 7.B Related Party Transactions
–
Relationships and Transactions
with Directors and Executive Officers – Mr. Shy Datika – Transactions Involving the Company's Securities
"
for
a summary of the material terms of the SAFE.
On March 7, 2020, A-Labs invested
an additional $30,000 in the Company pursuant to a Third SAFE dated as of such date. Under the terms of the Third SAFE, A-Labs is entitled
to a minimum of 19,659 Ordinary Shares. See "Item 7.B Related Party Transactions – Relationships and Transactions with Directors
and Executive Officers – Mr. Shy Datika – Transactions Involving the Company's Securities" for a summary of the
material terms of the SAFE and Third SAFE.
A Qualifying Financing was
not consummated before March 7, 2021, and thus the funds raised under the Third SAFEs were automatically converted into Ordinary Shares
at a price per share equal to $1.526. Hence, under the terms of Third SAFE, on March 7, 2021 A-Labs received 19,659 Ordinary Shares and
A-Labs will be entitled to an option to purchase 19,659 Ordinary Shares for an exercise price of $1.696 per share.
118
The foregoing descriptions
of the SAFE and Third SAFE executed between A-Labs and the Company summarizes the material terms of the SAFE and Third SAFE but are not
complete descriptions. For more details, you should reference to the full text of the SAFE and Third SAFE executed between A-Labs and
the Company, which are attached as Exhibits 4.15 and 4.21 hereto, and incorporated herein by reference.
On March 22, 2021, A-Labs
(for itself and/or on behalf of any affiliate or fund or other investment vehicle managed by A-Labs or an affiliate thereof) entered into
the March 2021 Subscription Agreement with the Company, pursuant to which A-Labs provided to the Company CAD$ 2,487,500 in consideration
for subscription receipts of the Company that was replaced at the closing of the Valdy Transaction by 1,990,000 Ordinary Shares of Valdy
and an option to purchase 995,000 Ordinary Shares of Valdy at an exercise price of CAD$ 1.88 per share.
In consideration for the advisory
services, during 2021, the Company paid A-Labs $4.1 million.
A-Labs also received a grant
of 4,550,000 INX Tokens at a fair value of $6. In addition, pursuant to an agreement signed contemporaneously with the A-Labs Agreement,
the Company issued 1,120,000 Ordinary shares to A-Labs. The fair value of the shares issued of $136,000, was deemed as additional consideration
for the services to be provided by A-Labs and was recorded during the year ended December 31, 2021.
In addition, on July 29, 2021,
the Company made a payment to A-Labs of $1.0 million and granted A-Labs with an option to purchase 1,527,084 Tokens. These options were
exercised during 2022 and vest on July 12, 2024.
C. Interests of Experts and Counsel.
None.
ITEM 8.
FINANCIAL
INFORMATION.
A. Consolidated Statements and Other Financial
Information.
See "Item 18. Financial
Statements."
Legal Proceedings
From time to time we may be
subject to legal proceedings and claims in the ordinary course of business. We are not involved in any material legal proceedings.
Dividends
We have never declared or
paid cash dividends to our shareholders. Currently we do not intend to pay cash dividends. We currently intend to reinvest any future
earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion
of our Board of Directors and will depend on a number of factors, including future earnings, our financial condition, operating results,
contractual restrictions, capital requirements, business prospects, applicable law and other factors our Board of Directors may deem relevant.
B. Significant Changes.
None.
119
ITEM 9.
THE OFFER AND LISTING
A. Offer and Listing Details.
Our Parent has listed its common shares on the
NEO Exchange in Canada and on the OTCQB exchange in the United States (operated by OTC Markets). No trading market currently exists for
our Ordinary Shares in the United States or elsewhere.
B. Plan of Distribution.
Not applicable.
C. Markets.
Our Parent has listed its common shares on the
NEO Exchange in Canada and on the OTCQB exchange in the United States (operated by OTC Markets). No trading market currently exists for
our Ordinary Shares in the United States or elsewhere.
D. Selling Shareholders.
Not applicable.
E. Dilution.
Not applicable.
F. Expenses of the Issue.
Not applicable.
ITEM 10.
ADDITIONAL INFORMATION
A. Share Capital.
Not
applicable.
B. Memorandum and Articles of Association.
On March 18, 2021, the shareholders
of the Company approved the amendment of the Third Amended and Restated Articles of Association of the Company. Pursuant to such amendment,
Article 80.D(f) shall be amended such that the Bring Along and Forced Sale provisions of the Articles shall not be terminated upon the
completion of the Token Offering.
C. Material Contracts.
We have not entered into any
material contract within the two years prior to the date of this annual report on Form 20F, other than contracts entered into in the ordinary
course of business, or as otherwise described herein in "Item 4.A. History and Development of the Company" above, "Item 4.B.
Business Overview" above, "Item 7A. Major Shareholders" above, or "Item 8B. Significant Changes."
On December 15, 2022, INX
entered into a shareholders' and joint venture agreement with SICPA SA, a company organized under the laws of Switzerland, Mr. Yosef
Meir Cohen and Mr. Hagai Itkin ("SICPA Agreement"), whereby parties to the agreement have agreed to joint their expertise
and collaborate to develop central bank digital currency solutions with the utilization of blockchain technology. Subsequently, for the
purpose of executing joint objectives under the SICPA Agreement, the parties agreed to form SICPA INX SA ("SICPA INX"), an
entity organized under the laws of Switzerland. All parties to the agreement are to become shareholders of SICPA INX, with INX's
share of the issued and outstanding share capital to be 33 percent. Also, under the SICPA Agreement, INX is entitled to introduce a new
partner within the first year from the date of the agreement, which, if approved by the majority shareholder, would be entitled to receive
a maximum number of shares constituting 16.5 percent of the issued and outstanding share capital of SICPA INX, which shall be reduced
from INX's initial allocation of shares. In relation to the SICPA Agreement, INX also intends to enter into a service agreement
with SICPA INX to license its technology and provide technology support and management services for a period of one year in return for
compensation.
120
D. Exchange Controls.
Dividends paid or deemed to
be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax under Part XIII of the Tax Act. The default
rate of withholding tax is 25% of the gross dividend paid to a non-resident of Canada.
Under the Treaty, the rate
of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend. In the case of a U.S. Holder
that is a corporation owning at least 10% of the Company's voting shares, the applicable withholding rate is 5% of the gross
dividend, provided the U.S. Holder can establish entitlement to the benefits of the Treaty.
Except as provided in the
Investment Canada Act, or the Act, there are no limitations under the laws of Canada, the Province of British Columbia or in the charter
or any other constituent documents of the Company on the right of foreigners to hold or vote the ordinary shares of the Company.
The following discussion summarizes
the principal features of the Investment Canada Act for a non-resident who proposes to acquire the ordinary shares.
The Investment Canada Act
generally prohibits an "entity" that is not Canadian-controlled from effecting an acquisition of control of a Canadian business
that exceeds the applicable financial threshold for review, unless after review, the Director of Investments appointed by the Minister
responsible for the Investment Canada Act is satisfied that the investment is likely to be of net benefit to Canada. The financial thresholds
for review vary according to whether the direct acquisition of control is made by (i) an investor that is controlled by nationals of a
specified free trade party; (ii) a national of a World Trade Organization (WTO) member state; or (iii) a state-owned enterprise. Any investment,
regardless of the applicable financial threshold for review, may be reviewed on national security grounds. An acquisition of control is
presumed to occur under the Investment Canada Act if a non-Canadian acquires a majority of the ordinary shares. An acquisition resulting
in the non-Canadian purchaser holding one third or more, but less than a majority, of the ordinary shares would be presumed to be an acquisition
of control of the Company unless it could be established that, on the acquisition, the Company was not controlled in fact by the acquirer
through the ownership of the ordinary shares. Certain transactions relating to the ordinary shares would be exempt from the Investment
Canada Act, including: (a) an acquisition of the ordinary shares by a person in the ordinary course of that person's business as
a trader or dealer in securities; (b) an acquisition of control of the Company in connection with the realization of security granted
for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and (c) an acquisition
of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate
direct or indirect control in fact of the Company, through the ownership of the ordinary shares, remained unchanged
E. Taxation.
U.S. Federal Income Tax
Considerations
Set forth below is a discussion,
in summary form, of certain United States federal income tax consequences relating to the acquisition, ownership and disposition of Tokens.
This summary does not attempt to present all aspects of the United States federal income tax laws or any state, local or foreign laws
that may affect an interest in Tokens. Financial institutions, insurance companies, tax-exempt entities, purchasers subject to the alternative
minimum tax and other purchasers of special status must consult with their own professional tax advisors regarding a prospective or current
investment in INX Tokens. This summary is by nature general in nature and should not be construed as tax advice to any prospective purchaser
or current INX Token holder. No ruling has been or will be requested from the IRS and no assurance can be given that the IRS will agree
with the tax consequences described in this summary. The following discussion assumes that each purchaser will acquire Tokens as a capital
asset (generally, property held for investment). This description is based on the U.S. Internal Revenue Code of 1986, as amended, (the
"Code"), existing, proposed and temporary U.S. Treasury Regulations and judicial and administrative interpretations thereof,
in each case as available on the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could
affect the tax consequences described below. The following discussion is limited to prospective purchasers and current INX Token holders
who are "United States Persons" within the meaning of the Code. Each prospective purchaser and current INX Token holder should
consult with its own tax adviser in order to fully understand the United States federal, state, local and foreign income tax consequences
of purchasing or holding an interest in Tokens. No formal or legal tax advice is hereby given to any prospective purchaser or current
INX Token holder, and no prospective purchaser and or INX Token holder may rely on the Company's statements regarding the anticipated
tax consequences of purchasing, holding and disposing of Tokens.
Transactions involving Tokens
are relatively new and it is more than likely that the IRS will issue guidance, possibly with retroactive effect, impacting the taxation
of participating in the purchase, ownership and disposition of Tokens. Such future tax guidance from the IRS (or guidance resulting from
future judicial decisions) could negatively impact purchasers of Tokens.
121
Character of Tokens
There are no regulations,
published rulings or judicial decisions involving the characterization for US federal income tax purposes of instruments with substantially
the same terms as the INX Tokens.  It is also unclear what guidance on the characterization and treatment of tokens for U.S. federal
income tax purposes may be issued in the future.  Thus, the characterization and treatment of INX Tokens for U.S. federal income
tax purposes is uncertain.
The IRS has ruled on the tax
treatment of virtual currencies. In Notice 2014-21, the IRS held that digital currencies (i) are "property" that is not currency
for US federal income tax purposes and (ii) may be held as a capital asset.   The Notice does not address other aspects of the
U.S. federal income tax treatment of tokens, including the tax characterization of tokens which possess non-currency rights or powers
(so called "utility" tokens) or tokens which provide a share of profits to holders.
Moreover, there is no authority
on the circumstances in which profit-sharing tokens such as INX Tokens may be treated as equity in the Company for U.S. federal income
tax purposes.   It should be expected, however, that the IRS or a court would determine the characterization of tokens based
on a consideration and weighing of the characteristics of these instruments.  Based on the characteristics of the INX Tokens, the
Company intends to treat the INX Tokens as property that is not an equity interest in the Company for US federal income tax purposes. 
This treatment is supported by the following characteristics:(i) distribution rights on the INX Tokens are (a) based on annual net cash
flow from operating activities rather than earnings and profits of the Company and (b) entitlements pursuant to the terms of the INX Tokens
without any action to declare a payment (distribution) required by Company's board of directors, (ii) no participation rights in
residual property of the Company on liquidation along with common equity and no specified liquidation preference typical with preferred
equity and (iii) no voting rights.
Other characterizations of
the INX Tokens are possible, including the possible characterization as equity of the Company. If INX Tokens were characterized as equity
interests in the Company for U.S. federal income purposes, U.S. holders of INX Tokens would be subject additional tax consequences and
related reporting considerations applicable to holders of stock in a foreign company, including the possible application of rules relating
to PFICs and CFCs.  The summary below assumes that INX Tokens will not constitute an equity interest in the Company for U.S. federal
income tax purposes.
Potential purchasers and current
INX Token holders are strongly advised to consult their own tax advisors as to the US federal income tax characterization of the INX Tokens
and the consequences to them of the various alternative characterizations.
Treatment of Token Sales.
The issuance of Tokens to a purchaser will be treated as a taxable sale of property by the Company to the purchaser. A purchaser should
not be taxed upon the acquisition of Tokens. A purchaser should generally have a tax basis for U.S. federal income tax purposes in INX
Tokens it acquires from the Company equal to the value of the purchase price paid by such purchaser for INX Tokens. The purchaser's
holding period in INX Tokens should begin on the day INX Tokens are issued to the purchaser.
Disposition of Tokens. A Token
holder who sells, exchanges, or otherwise disposes of Tokens for cash or other property (including pursuant to an exchange of such Tokens
for other convertible virtual currency) should, pursuant to Internal Revenue Service Notice 2014-21, recognize capital gain or loss in
an amount equal to the difference between the fair market value of the property received in exchange for such Tokens and the purchaser's
adjusted tax basis in INX Tokens. This capital gain may be long term if the purchaser has held his Tokens for more than one year prior
to disposition. Preferential tax rates for long term capital gain will generally apply to non-corporate U.S. Holders. Any gain or loss
realized by a U.S. Holder on the sale, exchange, or other disposition of Tokens should generally be treated as from sources within the
United States for U.S. foreign tax credit purposes. The deductibility of capital losses for U.S. federal income tax purposes is subject
to limitations.
122
Treatment of Profit-Share
Distributions. U.S. holders of Tokens are required to include in gross income the amount of any distribution paid with respect to their
Tokens. The source of distributions paid in respect of INX Tokens for U.S. foreign tax credit purposes is not clear.
EACH PURCHASER SHOULD SEEK,
AND MUST DEPEND UPON, THE ADVICE OF HIS OR HER TAX ADVISOR WITH RESPECT TO THEIR PURCHASE OWNERSHIP AND DISPOSITION OF TOKENS, AND EACH
PURCHASER IS RESPONSIBLE FOR THE FEES OF SUCH ADVISOR. NOTHING IN THIS ANNUAL REPORT ON FORM 20-F IS OR SHOULD BE CONSTRUED AS LEGAL OR
TAX ADVICE TO A PURCHASER. PURCHASERS SHOULD BE AWARE THAT THE INTERNAL REVENUE SERVICE MAY NOT AGREE WITH ALL TAX POSITIONS TAKEN BY
THE COMPANY AND THAT CHANGES TO THE INTERNAL REVENUE CODE OR THE REGULATIONS OR RULINGS THEREUNDER OR COURT DECISIONS AFTER THE DATE OF
THIS REPORT MAY CHANGE THE ANTICIPATED TAX TREATMENT TO A PURCHASER. THE COMPANY WILL NOT OBTAIN ANY RULING FROM THE INTERNAL REVENUE
SERVICE WITH REGARD TO THE TAX CONSEQUENCES OF PURCHASES OF TOKENS.
THE TAX TREATMENT OF INX TOKENS
IS UNCERTAIN AND THERE MAY BE ADVERSE TAX CONSEQUENCES FOR PURCHASERS UPON CERTAIN FUTURE EVENTS. A PURCHASE OF TOKENS MAY RESULT IN ADVERSE
TAX CONSEQUENCES TO PURCHASERS, INCLUDING WITHHOLDING TAXES, INCOME TAXES AND TAX REPORTING REQUIREMENTS. EACH PURCHASER SHOULD CONSULT
WITH AND MUST RELY UPON THE ADVICE OF ITS OWN PROFESSIONAL TAX ADVISORS WITH RESPECT TO THE UNITED STATES TAX TREATMENT OF TOKENS.
F. Dividends and Paying Agents.
Not applicable.
G. Statement by Experts.
Not applicable.
H. Documents on Display.
We are subject to certain
information reporting requirements of the Exchange Act, applicable to foreign private issuers and under those requirements will file reports
with the SEC. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. Our filings with the SEC will also be available to the public through
the SEC's website at www.sec.gov.
As a foreign private issuer,
we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors
and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the
Exchange Act. In addition, we will not be required under the Exchange Act to file annual, quarterly and current reports and financial
statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act.
However, we will file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC,
an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and may submit
to the SEC, on a Form 6-K, unaudited quarterly financial information.
We maintain a corporate website
https://www.INX.co. Information contained on, or that can be accessed through, our website and the other websites referenced above do
not constitute a part of this annual report. We have included these website addresses in this report solely as inactive textual references.
123
I. Subsidiary Information.
Not applicable.
J. Annual Report to Security Holders.
Not applicable.
ITEM 11.
QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Exchange Risk
We have not been exposed to
material risks due to changes in foreign exchange rates, and we have not used any derivative financial instruments to manage our foreign
exchange risk exposure.
Interest Rate Risk
We have not been exposed to
material risks due to changes in market interest rates, and we have not used any derivative financial instruments to manage our interest
risk exposure.
We have invested a portion
of our operating funds and a portion of the Reserve Fund in interest-earning instruments. Investments in both fixed rate and floating
rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely
impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.
Credit Risk
Credit risk is the risk that a counterparty to
a financial instrument will fail to discharge an obligation or commitment that it has entered into, causing the other party to incur a
financial loss. The Company's cash and cash equivalents, investments and digital assets are exposed to credit risk. The Company
limits its credit risk by placing its assets with high credit quality banks, financial institutions and digital assets custodians that
are believed to have sufficient capital to meet their obligations. While the Company intends to only transact with counterparties that
it believes to be creditworthy there can be no assurance that a counterparty will not default and that the Company will not sustain a
material loss as a result. It is the Company's policy to monitor the creditworthiness of its counterparties and to minimize the
concentration of credit risk to mitigate significant loss caused by potential counterparty's failure.
Market Risk
Market risk is the risk that
the value of financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate
risk or foreign currency risk), whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments
traded in a market or market segment. All investments present a risk of loss of capital. The maximum risk resulting from financial instruments
is equivalent to their fair value. The Company's investments are susceptible to market risk arising from uncertainties about future
prices of the instruments. The Company manages this risk through the various investment strategies within the parameters of the Company's
investment guidelines.
ITEM 12.
DESCRIPTION OF SECURITIES
OTHER THAN EQUITY SECURITIES
A. Debt Securities.
Not applicable.
B. Warrants and Rights.
Not applicable.
C. Other Securities.
Not applicable.
D. American Depositary Shares.
Not applicable.
124
PART II
ITEM 13.
DEFAULTS, DIVIDEND
ARREARAGES AND DELINQUENCIES
Not applicable.
ITEM 14.
MATERIAL MODIFICATIONS
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15.
CONTROLS AND PROCEDURES
(a) Disclosure Controls
and Procedures
Our management, with the participation
of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) as of December 31, 2022 (the "Evaluation Date"). Based on such evaluation, those officers
have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective in recording, processing, summarizing
and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information
is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.
(b) Management's
annual report on internal control over financial reporting
Our management is responsible
for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the company's board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
●
pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect our transactions and asset dispositions;
●
provide reasonable assurance that transactions are recorded
as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles;
●
provide reasonable assurance that receipts and expenditures
are made only in accordance with authorizations of our management and board of directors (as appropriate); and
●
provide reasonable assurance regarding the prevention or timely
detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Due to its inherent limitations,
internal controls over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Under the supervision and
with the participation of our management, including our CEO, and our CFO, we assessed the effectiveness of our internal control over financial
reporting as of December 31, 2022 based on the framework for Internal Control-Integrated Framework set forth by The Committee of Sponsoring
Organizations of the Treadway Commission (COSO) (2013).
Based on our assessment and
this framework, our management concluded that our internal controls over financial reporting were effective as of December 31, 2022.
125
(c) Attestation Report of the Registered Public
Accounting Firm
This
Annual Report on Form 20-F does not include an attestation report of our independent registered public accounting firm regarding internal
control over financial reporting due to an exemption for emerging growth companies provided in the JOBS Act.
(d) Changes in Internal Control over Financial Reporting
During
the year ended December 31, 2022, there were no changes in our internal control over financial reporting that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM
16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Currently no independent Audit
Committee member is an" audit committee financial expert", as that term is defined by the SEC in its final rules
implementing Section 407 of the Sarbanes-Oxley Act of 2002, because, after self-evaluation, our Audit Committee members did not
consider themselves, individually, as an "audit committee financial expert". However, our Audit Committee members
and our Board of Directors believe that our Audit Committee members are nonetheless qualified to carry out their duties on the Audit Committee
given their experience and other qualifications in financial matters.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of
Business Ethics applicable to all of our directors and employees, including our chief executive officer, chief financial officer, controller
or principal accounting officer, and other persons performing similar functions, which is a "code of ethics" as defined in
Item 16B of Form 20-F promulgated by the SEC. The full text of the Code of Business Ethics is posted on our website at INX.co. Information
contained on, or that can be accessed through, our website does not constitute a part of this report and is not incorporated by reference
herein.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth
the aggregate fees billed for professional services rendered by our principal auditors for the years ended December 31, 2022 and 2021,
for various types of services and a brief description of the nature of such services. Kost Forer Gabbay & Kasierer, a member of Ernst
& Young Global and an independent registered public accounting firm, was our principal auditors for the year ended December 31, 2022
and 2021. We currently expect Kost Forer Gabbay & Kasierer to serve as our principal auditors for the year ended December 31, 2023.
(U.S. dollars in thousands)
Year Ended December 31,
2022
2021
Services Rendered
(U.S. dollars in thousands)
Audit services (1)
490
345
Total
490
345
(1)
These include professional
services rendered by the principal accountant for the audit of the registrant's annual financial statements, including audited
financial statements that were included in registration statements filed as part of our initial public offering.
126
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING
ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Not applicable.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
127
PART III
ITEM 17.
FINANCIAL
STATEMENTS
We have elected to provide
consolidated financial statements and related information pursuant to Item 18.
ITEM 18.
FINANCIAL
STATEMENTS
The consolidated audited financial
statements and the related notes required by this Item are included in this annual report on Form 20-F beginning on page F-1.
128
INX LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022
U.S. DOLLARS IN THOUSANDS
INDEX
Page
Report of Independent Registered Public Accounting Firm
(PCAOB ID:
1281
)
F-2
Consolidated Balance Sheets
F-3 – F-4
Consolidated Statements of Comprehensivee Income (Loss)
F-5
Consolidated Statements of Changes in Equity
F-6 – F-7
Consolidated Statements of Cash Flows
F-8 - F-9
Notes to Consolidated Financial Statements
F-10 - F-50
- - - - - - - - - - -
F-
1
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Shareholders and Board of Directors of
INX LIMITED
Opinion on the Financial Statements
We
have audited the accompanying consolidated balance sheets of INX Limited (the "Company") and its subsidiaries as of December
31, 2022 and 2021, the related consolidated statements of comprehensive income (loss), changes in equity and cash flows for each of the
three years in the period ended December 31, 2022 (collectively referred to as the "financial statements"), and the related
notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2022, in conformity with International Financial Reporting Standards, as issued by the International Accounting Standard Board.
Basis for Opinion
These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
/s/
KOST FORER GABBAY &
KASIERER
A Member of Ernst & Young Global
We have served as the Company's auditor
since its incorporation in 2017.
Tel-Aviv, Israel
May 1, 2023
F-
2
INX LIMITED
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
December 31,
Note
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
19,781
$
24,581
Cash and cash equivalents held in Reserve Fund
5
5,824
21,987
Short-term investments held in Reserve Fund
5
18,473
-
Short-term investments
6
5,033
-
Digital assets
7
2,597
-
Trade receivable
506
834
Derivative assets
8
1,072
-
Customer funds
2,609
4,270
Receivable from related party
13
1,205
Prepaid expenses and other receivables
9
1,403
2,383
Total current assets
58,503
54,055
Non-current assets:
Property, plant and equipment, net
15
395
160
Digital assets
7
-
1,000
Long-term investments held in Reserve Fund
5
11,726
14,036
Long-term investments
6
4,654
400
Intangible assets, net
10
3,528
4,394
Goodwill
10
2,290
2,455
Loan receivable from related parties
13
-
1,015
Rights-of-use-assets, net
16
1,309
987
Total non-current assets
23,902
24,447
Total Assets
$
82,405
$
78,502
The accompanying notes are an integral part of the consolidated financial
statements.
F-
3
INX LIMITED
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
December 31,
Note
2022
2021
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses
$
2,298
$
3,170
Funds due to customers
2,609
4,270
Lease liability
16
519
319
INX Token liability
11
56,847
282,642
INX Token warrant liability
12
1,580
9,814
Contingent consideration liability
4
-
400
Total current liabilities
63,853
300,615
Non-current liabilities:
Lease liability
16
868
821
Total non-current liabilities
868
821
Equity:
17
Ordinary shares of GBP
0.001
par value Authorized:
100,000,000
shares at December 31, 2022 and 2021; Issued and Outstanding:
47,635,875
and
15,955,875
at December 31, 2022 and 2021, respectively
60
21
Share premium
49,474
24,177
Contribution to equity by controlling shareholder
5,972
582
Other comprehensive income (loss)
(
1,254
)
188
Accumulated deficit
(
36,568
)
(
247,902
)
Total equity
17,684
(
222,934
)
Total Liabilities and Equity
$
82,405
$
78,502
The accompanying notes are an integral part of the consolidated financial
statements.
F-
4
INX LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS)
U.S. dollars in thousands (except share and per share data)
Year ended December 31,
Note
2022
2021
2020
Revenue:
Trading and brokerage fees
22
$
4,495
$
2,544
$
-
Sales of digital assets
22
8,724
-
-
Cost of digital assets
(
8,758
)
-
-
Change in revaluation gain (loss) on digital assets, net
(
188
)
-
-
Net gain (loss) on digital assets
(
222
)
-
-
Revenue, net
4,273
2,544
-
Operating income (expenses):
Research and development
(
5,306
)
(
3,849
)
(
1,581
)
Sales and marketing
(
6,512
)
(
6,411
)
(
2,153
)
General and administrative
(
15,450
)
(
33,136
)
(
8,056
)
Fair value adjustment of INX Token
    warrant liability to employees and service providers
8,294
(
12,626
)
-
Loss from operations
$
(
14,701
)
$
(
53,478
)
$
(
11,790
)
Unrealized gain (loss) on INX Tokens issued, net
11
226,044
(
161,173
)
(
12,518
)
Finance income
787
-
-
Finance expense
(
677
)
(
427
)
(
23
)
Income (loss) before tax
211,453
(
215,078
)
(
24,331
)
Tax expenses
24
(
119
)
(
157
)
-
Net income (loss)
$
211,334
$
(
215,235
)
$
(
24,331
)
Amounts that will be or that have
    been reclassified to profit or loss when specific conditions are met:
Realized (gain) loss on securities at fair value through
    other comprehensive income (loss) reclassification adjustment into net income (loss)
424
-
-
Unrealized loss on securities at fair value through other
    comprehensive income (loss)
(
1,353
)
-
-
Adjustments arising from translating
    financial statements from functional currency to presentation currency
(
513
)
188
-
Total other comprehensive income (loss)
(
1,442
)
188
-
Total comprehensive income (loss)
$
209,892
$
(
215,047
)
$
(
24,331
)
Earnings (loss) per share, basic and diluted
19
$
4.52
$
(
14.30
)
$
(
2.00
)
Weighted average number of shares outstanding, basic and diluted
46,767,930
15,048,576
12,152,006
The accompanying notes are an integral part of the consolidated financial
statements.
F-
5
INX LIMITED
CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY
U.S. dollars in thousands (except share and per share data)
Ordinary
Shares
Par
Value
Share
Premium
Receivable
on account
of shares
Conversion
option of
convertible
loans
Contribution
to equity by
controlling
shareholder
Accumulated
other
comprehensive
income
Accumulated
deficit
Total
equity
Balance as of January 1, 2020
11,412,930
15
6,805
$
(
76
)
$
6
$
-
$
-
$
(
8,336
)
$
(
1,546
)
Net loss
-
-
-
-
-
-
-
(
24,331
)
(
24,331
)
Issuance of SAFE and warrants
-
-
879
-
-
-
-
-
879
Issuance of ordinary shares and warrants
885,576
1
2,328
-
-
-
-
-
2,329
Consideration for shares issued in 2017
-
-
-
75
-
-
-
-
75
Conversion of SAFE
1,194,639
2
(
2
)
-
-
-
-
-
-
Exercise of warrants
146,306
(*)
-
286
(
8
)
-
-
-
-
278
Share-based compensation
-
-
570
-
-
-
-
570
Balance as of December 31, 2020
13,639,451
18
10,866
(
9
)
46
-
-
(
32,667
)
(
21,746
)
Net loss
-
-
-
-
-
-
-
(
215,235
)
(
215,235
)
Foreign currency translation
-
-
-
-
-
-
188
-
188
Contribution to equity by a controlling shareholder (Note
    4a)
-
-
-
-
-
582
-
-
582
Collection of a receivable
-
-
9
-
-
-
-
9
Conversion of SAFE
379,539
1
1
-
-
-
-
-
1
Conversion of convertible loan
956,333
1
193
-
(
46
)
-
-
-
148
Share-based compensation
-
-
10,899
-
-
-
-
-
10,899
Exercise of options under SAFE
    agreements
980,498
1
2,220
-
-
-
-
-
2,220
Balance as of December 31, 2021
15,955,875
$
21
$
24,177
$
-
$
-
$
582
$
188
$
(
247,902
)
$
(
222,934
)
(*)
Less than $1
The accompanying notes are an integral part of the consolidated financial
statements.
F-
6
INX LIMITED
CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY
U.S. dollars in thousands (except share and per share data)
Ordinary
Shares
Par Value
Share
Premium
Contribution
to equity by
controlling
shareholder
Accumulated
other
comprehensive
income (loss) (**)
Accumulated
deficit
Total
equity
Balance as of December 31, 2021
15,955,875
$
21
$
24,177
$
582
$
188
$
(
247,902
)
$
(
222,934
)
Net income
-
-
-
-
-
211,334
211,334
Realized loss on available-for sale securities reclassification
    adjustment into net income (loss)
-
-
-
-
424
-
424
Unrealized loss on available-for-sale securities, net
    of realized gain (loss) reclassification
-
-
-
-
(
1,353
)
-
(
1,353
)
Foreign currency translation
-
-
-
-
(
513
)
-
(
513
)
Proceeds from private placement, net of issuance costs
    (*)
31,680,000
39
25,297
-
-
-
25,336
Surrender and cancellation of private placement warrants
    (*)
-
-
-
4,255
-
-
4,255
Share-based compensation
-
-
-
1,135
-
-
1,135
Balance as of December 31, 2022
47,635,875
$
60
$
49,474
$
5,972
$
(
1,254
)
$
(
36,568
)
$
17,684
(*)
See Note 17.
(**)
As of December 31, 2022 the balance includes the net loss on foreign currency translation of $325 and the net loss on financial assets measured at fair value of $929.
The accompanying notes are an integral part of the consolidated financial
statements.
F-
7
INX LIMITED
CONSOLIDATED STATEMENTS OF CASH
FLOWS
U.S. dollars in thousands
Year ended December 31,
2022
2021
2020
Net cash flows from operating activities:
Net income (loss) for the period
$
211,334
$
(
215,235
)
$
(
24,331
)
Adjustments to reconcile net income (loss) to net cash
    used in operating activities:
Share-based compensation
1,135
10,899
570
Net loss on investments
214
97
-
Financial expenses, net
(
677
)
(
55
)
-
Taxes on income
119
157
-
Depreciation of equipment and right-of-use-assets
610
137
3
Amortization of intangible assets
581
130
-
Amortization of premium paid on investments
247
-
-
INX Token-based compensation
(
6,902
)
19,801
4,142
Unrealized net (gain) loss on INX Tokens issued
(
226,044
)
161,173
12,518
Impairment expense on digital assets
72
80
-
Revaluation of lease liability and right-of-use assets
(
148
)
-
-
Changes in operating assets and liabilities:
Decrease in trade receivables
328
215
-
Decrease in prepaid expenses, other receivables and receivable
    from related party
(
225
)
(
278
)
(
161
)
Increase in derivative assets
(
1,072
)
-
-
Increase in digital assets, net
(
1,669
)
-
-
Increase from revaluation of contingent liability
-
(
96
)
-
Increase (decrease) in accounts payable and accrued expenses
(
1,061
)
1,212
1,185
Cash paid and received during the year for:
Interest received
784
98
-
Taxes received (paid), net
69
(
290
)
-
Net cash used in operating activities
$
(
22,305
)
$
(
21,955
)
$
(
6,074
)
Net cash flows from investing activities:
Proceeds from INX Token offering
-
48,243
-
Increase in digital assets
-
(
485
)
-
Purchase of equipment
(
335
)
(
132
)
(
35
)
Purchase of investments
(
33,402
)
(
14,533
)
-
Proceeds from sales and maturities of investments
6,534
-
-
Increase in loan receivable from related parties
(
218
)
(
475
)
-
Net cash used in business combinations
-
(
5,232
)
-
Net cash provided by (used in) investing activities
$
(
27,421
)
$
27,386
$
(
35
)
F-
8
INX LIMITED
CONSOLIDATED STATEMENTS OF CASH
FLOWS
U.S. dollars in thousands
Year ended December 31,
2022
2021
2020
Net cash flows from financing
    activities:
Proceeds from issuance of Ordinary shares
-
-
2,329
Proceeds from exercise of INX token warrants
150
1,052
-
Proceeds from issuance of INX tokens, net
-
31,852
10,403
Proceeds from exercise of option under SAFE agreements
-
720
879
Proceeds from private placement
29,591
-
-
Repayment of contingent consideration liability
(
400
)
-
-
Repayment of finance lease liabilities
(
578
)
(
68
)
-
Net cash provided
    by financing activities
$
28,763
$
33,556
$
13,611
Change in cash and cash equivalents
(
20,963
)
38,987
7,502
Cash and cash equivalents at beginning
    of year
46,568
7,581
79
Cash and cash
    equivalents at end of year
$
25,605
$
46,568
$
7,581
Significant
    non-cash transactions:
Premium on exercise of shares by
    related party
$
-
$
9
$
75
Contribution to equity by controlling
    shareholder
-
582
-
Conversion of convertible loan
-
148
-
INX Token Offering proceeds received
    in digital assets
-
49,488
-
Proceeds from Exercise of SAFE
    warrant by related party
-
-
278
Proceeds from exercise of share option
-
1,500
-
Right-of-use asset recognized with
    corresponding lease liability
827
654
-
Repayment of loan receivable from
    related parties
1,233
-
-
Contribution to equity upon cancellation
    of private placement warrants
4,255
-
-
The accompanying notes are an integral part of the consolidated financial
statements.
F-
9
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 1: NATURE OF OPERATIONS
INX Limited (the "Company" or "INX"),
a company incorporated on November 17, 2017, with registered office at 57/63 Line Wall Road, Gibraltar.
The Company and its subsidiaries are engaged
in the operation and ongoing development of integrated and regulated solutions for trading of blockchain assets on a digital asset and
security token trading platform, and providing other services and products related to the trading of blockchain assets. The INX.One trading
platform is designed to help customers automate and coordinate front-office trading functions, middle-office risk management and reporting
functions, as well as operations and accounting functions. The Company charges fees at a transaction level. The transaction fee is calculated
based on volume and the value of the transaction. The transaction fee is collected from customers at the time the transaction is executed.
INX also completed a SEC registered initial public
offering of the INX Token. The offering of the INX Token was registered under the United States Securities Act of 1933 and, in such registration,
the INX Token is deemed to be an "equity security" under relevant SEC rules and regulations.
The Company operates in the following reportable
segments:
●
Digital
                                            assets segment - offers integrated, regulated solution for trading blockchain assets that
                                            includes a digital asset and security token trading platform, and other services and products
                                            related to the trading of digital assets.
●
Brokerage
                                            segment - facilitates financial transactions between financial institutions and offers a
                                            full range of brokerage services to banks worldwide.
The consolidated financial statements of the
Company as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022, were authorized for
issuance in accordance with a resolution of the board of directors on April 27, 2023.
INX Token
As part of the Company's blockchain ecosystem,
INX created the INX Token (the "INX Token"), and on August 20, 2020, the U.S Securities and Exchange Commission (the "SEC")
acknowledged the effectiveness of the F-1 Registration Statement that was filed by INX with the SEC and declared the effectiveness of
the initial public offering of INX Tokens ("The INX Token Offering" or "the Offering") pursuant to which INX
offered up to
130
million INX Tokens at a price of $
0.90
per INX Token.
The INX Token was offered to the public on August
24, 2020, and closed on April 22, 2021, when the Offering was completed.
In July 2021, INX listed the INX Token for trading
on the trading platform for "digital securities," i.e., digital assets that constitute securities under the applicable law,
operated through INX's subsidiary, INX Securities, LLC (formerly the "INX Securities Trading Platform", rebranded in
2022 as INX.One).
INX has not allocated for issuance and does not
intend to issue
35
million of the
200
million INX Tokens that have been created. In addition, INX reserves an additional
20
% of INX Tokens
received as payment of transaction fees, as long as the total amount of INX Tokens reserved does not exceed
35
million plus
50
% of the
number of INX Tokens sold by INX to the public pursuant to the Offering and subsequent offerings of INX Tokens (excluding re-issuances
of reacquired INX Tokens), up to a maximum of
100
million INX Tokens. INX does not intend to issue these reserved INX Tokens for general
fundraising purposes; these INX Tokens may be issued to fund acquisitions, address regulatory requirements or fund the operations of
INX if the Board of Directors of INX determines that INX has net cash balances sufficient to fund less than nine months of its operations.
INX intends to restrict issuances of the reserved INX Tokens to these or similar extraordinary situations to limit dilution to INX Token
holders. As of December 31, 2022, the Company held approximately
67.5
million INX Tokens in reserve.
F-
10
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 1: NATURE OF OPERATIONS (Cont.)
Following an amendment to the INX Token rights
which was approved by the Board of Directors of the Company on May 17, 2019 (the "Token Rights Amendment"), the holders of
INX Tokens (other than INX) are entitled to receive a pro rata distribution of
40
% of INX's net cash flow from operating activities,
excluding any cash proceeds from an initial sale by INX of an INX Token (the "Adjusted Operating Cash Flow"). The distribution
is based on INX's cumulative Adjusted Operating Cash Flow, net of cash flows which have already formed a basis for a prior distribution,
calculated as of December 31 of each year. The distribution is to be paid to parties (other than INX) holding INX Tokens as of March
31 of the following year on April 30th, commencing with the first distribution to be paid, if at all. As of December 31, 2022, the INX
cumulative adjusted operating cash flow activity was negative, and therefore no distribution is expected on April 30, 2023.
Holders of INX Tokens are also entitled to, at
a minimum, a
10
% discount on the payment of transaction fees on the INX.One Trading Platform.
Securities Exchange Agreement
On March 31, 2021, the Company entered into a
definitive securities exchange agreement (the "Original Securities Exchange Agreement") with The INX Digital Company, Inc.
(formerly - Valdy Investments Ltd.) ("Valdy"), a company incorporated under the provincial Business Corporations Act (British
Columbia) and the securityholders of INX (the "INX Securityholders"), whereby Valdy, subject to the completion, acquired
all issued and outstanding securities of INX (the "Transaction"). The Original Securities Exchange Agreement was amended
by Valdy, INX, PI Financial Corp. and Eight Capital entering into an Amendment to the Securities Exchange Agreement dated as of July
23, 2021 (the "Amendment"), and together with the Original Securities Exchange Agreement, (the "Amended Agreement"),
among other things, extended the deadline for completion of the Transaction to January 24, 2022, subject to possible earlier termination.
Subsequently, Valdy, INX, the INX Securityholders, PI Financial Corp. and Eight Capital entered into an Amended and Restated Securities
Exchange Agreement dated as of November 3, 2021 (the "Amended and Restated Securities Exchange Agreement") which replaced
and superseded the Amended Agreement.
On January 10, 2022, Valdy completed the Transaction
with INX, whereby INX became a wholly owned subsidiary of Valdy, (the "Parent Company"). The Transaction resulted in a reverse
takeover transaction whereby current shareholders of INX (pre-transaction) became majority shareholders of the Parent Company. The combined
entities (the "Resulting Issuer") continues the business.
On December 31, 2021, the Parent Company received
conditional approval from the Neo Exchange Inc. ("Neo Exchange") to list the combined entity (the "Resulting Issuer")
shares. Also, on January 24, 2022, the Parent Company's shares started to trade on the NEO Exchange.
Organizational Structure
The Company also operates through the following
wholly owned subsidiaries:
●
INX
                                            Digital, Inc. ("INXD"), a Delaware corporation, is registered in 43 US states
                                            plus Washington D.C. and Puerto Rico as a money transmitter to operate a trading platform
                                            for digital assets. INXD launched a digital assets trading platform on April 29, 2021, which
                                            was developed by INX and is operated by INXD. Select digital assets are supported for trading
                                            on the INXD platform, such as (identified by symbol): AAVE, AVAX, BTC, COMP, CRV, ETH, FTM,
                                            GYEN, LINK, LTC, MANA, MATIC, SAND, UNI, USDC, ZEC, ZUSD.
●
INX
                                            Securities, LLC (Previously named: Openfinance Securities, LLC) ("INXS"), a Pennsylvania
                                            limited liability company. INXS is recognized in the US as a SEC registered Broker Dealer
                                            and is an SEC registered Alternative Trading System ("ATS"). INXS was purchased
                                            by INX on May 10, 2021 as part of the Asset Purchase Agreement with Openfinance Holdings,
                                            Inc. and certain subsidiaries of Openfinance Holdings, Inc., dated January 12, 2021. After
                                            closing on the acquisition, the company's name was changed from Openfinance Securities,
                                            LLC to INX Securities, LLC.
F-
11
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 1: NATURE OF OPERATIONS (Cont.)
●
I.L.S.
                                            Brokers Ltd. ("ILSB"), a company incorporated under the laws of the State of
                                            Israel, was purchased by INX, pursuant to the share purchase agreement between INX and the
                                            shareholders of ILSB, dated June 9, 2021, for the purchase of all of the issued outstanding
                                            shares of ILSB. ILSB is a multinational brokerage house, established in 2001, that facilitates
                                            financial transactions between banks and offers a full range of brokerage services to several
                                            leading banks worldwide. ILSB's main field of operation is foreign exchange and interest
                                            rate derivatives services. ILSB's activities are regulated by the Israeli Capital Market
                                            Authority, Insurance and Savings and are registered with the U.S. National Futures Association
                                            ("NFA") (authorized by the U.S. Commodity Futures Trading Commission ("CFTC")).
                                            ILSB holds the following license: Provider of Financial Services in Israel and an introducing
                                            broker (IB) license from NFA (CFTC) in the US.
●
Midgard
                                            Technologies Ltd. ("Midgard") is a company incorporated under the laws of the
                                            State of Israel. Midgard had served as the research and development arm of INX since November
                                            1, 2020 and was acquired on April 1, 2021. Midgard provides software development services
                                            for the group and holds the related intellectual property.
●
INX
                                            Transfer Agent LLC (previously named TokenSoft LLC) ("INX Transfer Agent"), a
                                            Delaware limited liability company. INX Transfer Agent is a transfer agent registered with
                                            the SEC and was acquired by INX pursuant to a purchase agreement dated December 28, 2021
                                            for a nominal consideration.
●
INX
                                            Solutions Limited, incorporated by INX in Gibraltar as a private company limited by shares.
                                            INX Solutions Limited provides liquidity and risk management services, it commenced operations
                                            during the second quarter of 2022.
The following subsidiaries are currently dormant:
●
INX
                                            Digital Assets UK Limited (Previously named: ILSB UK Limited) ("INX UK"), a company
                                            incorporated under the laws of England and Wales. INX acquired all issued and outstanding
                                            shares of INX UK on July 13, 2021, from Mr. James Crossley, former board member of INX, in
                                            consideration for an inconsequential amount of cash.
●
INX
                                            EU Ltd. ("INX EU"), a company incorporated under the laws of Cyprus.
●
INX
                                            Services, Inc., a Delaware corporation.
Assessment of going concern
These consolidated financial statements
have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future
and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. As of December 31,
2022, the Company had an accumulated deficit of $
36,568
. During the year ended December 31, 2022, the Company incurred an operating loss
of $
14,701
and negative cash flow from operating activities of $
22,305
. Based on the Company's existing cash funds and the working
capital in the amount of $
27,200
as of December 31, 2022 (excluding assets held in the Reserve Fund and the INX Token liability), and
management's projections of the operating results for the next twelve months, management concluded that the Company has sufficient
funds to continue its operations and meet its obligations for a period of at least twelve months from the date the financial statements
were authorized for issuance.
F-
12
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied
consistently in these consolidated financial statements for the periods presented, unless otherwise stated.
a.
Basis of presentation of the financial statements:
These consolidated financial statements
have been prepared in accordance with International Accounting Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") and interpretations of the International Reporting Interpretations Committee ("IFRIC").
The consolidated financial statements
have been prepared on a historical cost basis, except certain financial instruments which are measured at fair value and digital assets
which are measured at fair value less cost to sell through profit or loss.
b.
Consolidated financial statements:
The consolidated financial statements
comprise the financial statements of the Company and companies that are controlled by the Company (subsidiaries). Control is achieved
when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control.
The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.
The financial statements of the Company
and of the subsidiaries are prepared as of the same dates and periods. The consolidated financial statements are prepared using uniform
accounting policies by all companies in the Group. Significant intra group balances and transactions and gains or losses resulting from
intragroup transactions are eliminated in full in the consolidated financial statements.
c.
Functional and presentation currencies:
1.
Functional currency
                                            and presentation currency:
The consolidated financial statements
are presented in U.S. dollars.
The Company determines the functional
currency of each entity through an analysis of the consideration factors identified in International Accounting Standard ("IAS")
21.
Assets, including fair value adjustments
upon acquisition, and liabilities of an investee which is a foreign operation, are translated at the closing rate at each reporting date.
Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized
in other comprehensive income (loss).
Upon the full or partial disposal
of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which
had been recognized in
other comprehensive income is carried
to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the
relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests.
2.
Transactions, assets and liabilities in foreign
                                            currency:
Transactions denominated in foreign
currency are recorded upon initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary
assets and liabilities denominated in foreign currency are translated at each reporting date into the functional currency at the exchange
rate at that date. Exchange rate differences, other than those capitalized to qualifying assets or accounted for as hedging transactions
in equity, are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost
are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency
and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value
was determined.
F-
13
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
3.
Index-linked monetary items:
Monetary assets and liabilities linked
to the changes in the Israeli Consumer Price Index ("Israeli CPI") are adjusted at the relevant index at each reporting date
according to the terms of the agreement.
d.
Use of estimates and judgements:
The preparation of the consolidated
financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from those
estimates.
Key assumptions made in the consolidated
financial statements concerning uncertainties at the reporting date that may result in a material adjustment to the carrying amount of
the INX Token liability and INX Token warrant liability within the next financial year are discussed in Note 11 and Note 12.
Many aspects of the digital currency
and blockchain industry have not yet been addressed by current IFRS guidance. The Company is required to make significant assumptions
and judgments as to its accounting policies and the application thereof, which is disclosed in the notes to the consolidated financial
statements. If specific guidance is enacted by the IASB in the future, the impact may result in changes to the Company's profit
or loss and financial position as currently presented.
Discount rate for a lease liability
When the Company is unable to readily
determine the discount rate implicit in a lease in order to measure the lease liability, the Company uses an incremental borrowing rate.
That rate represents the rate of interest that the Company would have to pay to borrow over a similar term and with similar security,
the funds necessary to obtain an asset of similar economic environment. When there are no financing transactions that can serve as a
basis, the Company determines the incremental borrowing rate based on its credit risk, the lease term and other economic variables deriving
from the lease contract's conditions and restrictions. In certain situations, the Company is assisted by an external valuation expert
in determining the incremental borrowing rate.
Impairment of goodwill
The Group reviews goodwill for impairment
at least once a year. This requires management to make an estimate of the projected future cash flows from the continuing use of the
cash-generating unit (or a group of cash-generating units) to which the goodwill is allocated and also to choose a suitable discount
rate for those cash flows.
F-
14
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Deferred tax assets
Deferred tax assets are recognized
for unused carryforward tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be
available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax
assets that can be recognized, based upon the timing and level of future taxable profits, its source and the tax planning strategy.
e.
Cash and cash equivalents:
Cash and cash equivalents may include
demand deposits and short-term, highly liquid investments that are readily convertible to cash with an original maturity of three months
or less from the date of investment and are redeemable on demand without penalty.
f.
Financial instruments:
1.
Financial assets, including short-term and
                                            certain long-term investments, INX Tokens, digital assets, derivative assets are initially
                                            recognized at fair value plus directly attributable transaction costs, except for financial
                                            assets measured at fair value through profit or loss in respect of which transaction costs
                                            are recorded in profit or loss.
The Company classifies and measures
debt instruments in the financial statements based on the following criteria:
-
The Company's business model for managing financial
assets; and
-
The contractual cash flow terms of the financial asset.
a)
Debt instruments are
                                            measured at fair value through other comprehensive income when:
The Company's business model is to
hold the financial assets in order to both collect their contractual cash flows and to sell the financial assets, and the contractual
terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
After initial recognition, the instruments
in this category are measured at fair value. Gains or losses from fair value adjustments, excluding interest and exchange rate differences,
are recognized in other comprehensive income.
b)
Debt instruments are
                                            measured at fair value through profit or loss when:
A financial asset which is a debt
instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial
recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or
loss.
c)
Derivative instruments
As part of its risk management activities,
the Company enters into derivatives such as digital currency forwards. A digital currency forward is an exchange traded contract which
represents a legal agreement to either buy or sell a referenced digital asset at a predetermined price at some time in the future. Digital
assets forwards held by the Company are settled in a stable coin. The derivatives are carried at fair value and any realized and unrealized
gains (losses) on derivatives are recognized through profit and loss.
F-
15
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
2.
Loans and receivables are held to collect
                                            contractual cash flows and give rise to cash flows representing solely payments of principal
                                            and interest. These are measured subsequent to initial recognition at amortized cost.
Impairment of financial assets:
At the end of each reporting period,
the Company evaluates the loss allowance for financial debt instruments which are not measured at fair value through profit or loss.
The Company has short-term financial
assets such as trade receivables in respect of which the Company applies the simplified approach in IFRS 9 and measures the loss allowance
in an amount equal to the lifetime expected credit losses.
The Company grants its customers
interest-free credit for periods of 30-90 days. As of December 31, 2022 and 2021, there were no material past-due accounts. Accordingly,
the allowance for doubtful accounts is immaterial.
3.
Derecognition of financial assets
A financial asset is derecognized
only when:
a.
The contractual rights to the cash flows
                                            from the financial asset has expired; or
b.
The Company has transferred substantially
                                            all the risks and rewards deriving from the contractual rights to receive cash flows from
                                            the financial asset or has neither transferred nor retained substantially all the risks and
                                            rewards of the asset, but has transferred control of the asset; or
c.
The Company has retained its contractual
                                            rights to receive cash flows from the financial asset but has assumed a contractual obligation
                                            to pay the cash flows in full without material delay to a third party.
4.
Financial liabilities:
Financial liabilities are initially
recognized at fair value. After initial recognition, the accounting treatment of financial liabilities is based on their classification
as follows:
a)
Financial liabilities at amortized cost:
After initial recognition, loans
and other liabilities are measured based on their terms at amortized cost less directly attributable transaction costs using the effective
interest method.
b)
Financial liabilities at fair value through
                                            profit or loss:
These liabilities include financial
liabilities held for trading (including the INX Token warrant liability), contingent consideration liability recognized in a business
combination and financial liabilities designated upon initial recognition as at fair value through profit or loss. Changes in the fair
value of liabilities held for trading and contingent consideration are recognized in profit or loss in finance expenses. Based on the
terms of the INX Token, as described in Note 1, the INX Token is a hybrid financial instrument. The host instrument is a financial liability
due to the right of the INX Token holder to use the INX Token to pay transactions fees on the INX.One Trading Platform. The INX Token
is considered a puttable instrument which is a financial liability in accordance with IAS 32, Financial Instruments: Presentation.
INX's obligation to make a
pro rata distribution annually to the INX Token holders from INX's Adjusted Operating Cash Flow is an embedded derivative. The
Company views INX's operating cash flows as a financial variable, and therefore, the embedded derivative requires bifurcation pursuant
to IFRS 9. The Company elected, in accordance with IFRS 9, to designate the entire financial liability (including the embedded derivative)
at fair value through profit and loss. Accordingly, the INX Token liability and the INX Token warrant liability are remeasured to fair
value at the end of each reporting period.
F-
16
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The change in the fair value of the
INX Token liability that is attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded
derivative, to the extent there are any, would be presented in other comprehensive income. The remaining amount of the change in the
fair value of the INX Token liability would be presented in profit or loss. At December 31, 2022, all change in fair value of the INX
Token liability is included in profit or loss.
When the INX Token is used to pay
for services provided by INX, the respective portion of the INX Token liability is derecognized and revenue is recognized. The fair value
of INX Tokens issued in consideration for services to be provided to the Company (through its subsidiaries) is recognized as compensation
expense when services are provided.
5.
Offsetting financial instruments:
Financial assets and financial liabilities
are offset, and the net amount is presented in the statement of financial position if there is a legally enforceable right to set off
the recognized amounts and there is an intention either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The right of set-off must be legally enforceable not only during the ordinary course of business of the parties to the contract but also
in the event of bankruptcy or insolvency of one of the parties.
6.
Compound financial instruments:
Convertible debt which contains both
an equity component and a liability component are separated into two components. This separation is performed by first determining the
liability component based on the fair value of an equivalent non-convertible liability. The value of the conversion component is determined
to be the residual amount. Directly attributable transaction costs are apportioned between the equity component and the liability component
based on the allocation of proceeds to the equity and liability components.
7.
Simple Agreement for Future Equity ("SAFE"):
INX has entered into equity funding
agreements (SAFEs) pursuant to which funds received by INX from investors have been automatically converted into the same class of share
capital of INX that were issued in a qualifying financing, as defined in the SAFEs. The conversion price for SAFEs issued before June
2020 was equal to the lower of,
(i) 25% discount on the base (undiscounted) price per share of the qualifying financing, or (ii) a fixed
price, as set forth in the SAFEs. For SAFEs issued in June 2020, the conversion price was equal to the lower of, (i) 25% discount on
the base (undiscounted) price per share of the qualifying financing, or (ii) a fixed INX valuation divided by the number of INX's shares
outstanding on a fully-diluted basis (as defined in the SAFEs).
INX is not obligated to complete
a qualifying financing or to approve the issuance of shares or dilutive securities within the term specified in the SAFE that would
result in the issuance of a variable number of the INX's equity instruments. Accordingly, as the SAFEs are a non-derivative for
which the conversion price into the Company's equity instruments is fixed at the end of its term, the consideration received from
investors pursuant to the SAFEs is classified as equity. As of December 31, 2022, all INX SAFE's have been converted into ordinary
shares.
g.
Fair value measurement:
Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Fair value measurement is based on the assumption that the transaction will take place in the asset's or the liability's
principal market, or in the absence of a principal market, in the most advantageous market.
F-
17
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.
Fair value measurement of a non-financial
asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best
use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques
that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured
at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level
input that is significant to the entire fair value measurement.
The Company classifies the bases used
to measure certain assets and liabilities at their fair value. Assets and liabilities carried or measured at fair value have been classified
into three levels based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements.
The levels are as follows:
Level 1:
Quoted prices in active markets for identical assets or liabilities that the entity can
    access at the measurement date;
Level 2:
Significant inputs other than within Level 1 that are observable for the asset or liability, either
    directly (i.e.: as prices) or indirectly (i.e.: derived from prices);
Level 3:
Inputs for the assets or liabilities that are not based on observable market data and require management
    assumptions or inputs from unobservable markets.
For details of the fair value of the
INX Token liability - See Note 11. For the fair values of INX Token warrant liability, see Note 12. The fair values of current financial
assets and financial liabilities, other than the INX Token the INX Token warrant liability and investments measured at fair value, approximate
their carrying amounts due to the short-term maturity of these instruments.
h.
Digital assets:
Digital assets are measured on initial
recognition at cost.
Digital assets characterized as inventory
(current assets):
The Company has assessed that it acts
in a capacity as a commodity broker trader as defined in IAS 2, Inventories, in characterizing certain of its holdings as inventory,
or more specifically, certain holdings of digital assets. Such digital assets held by the Company are principally acquired for the purpose
of selling in the near future and generating a profit from fluctuations in price or broker-traders' margin, therefore, they should
be accounted for as inventory, and changes in fair value (less cost to sell) should be recognized in profit or loss.
Digital assets characterized as intangible
assets (non-current assets):
Digital assets not characterized as
inventory are classified as indefinite life intangible assets, and are tested for impairment annually or whenever there is an indication
that the intangible asset may be impaired. An impairment loss is recognized if the carrying amount exceeds its fair value less cost of
sale. The Company recorded impairment of digital assets in the amount of $
72
and $
80
, for the year ended December 31, 2022 and 2021,
respectively. As of December 31, 2022, the Company did not hold any digital assets characterized as intangible assets.
The fair value of digital assets is
determined by quoted prices at the active markets as of 12:00 AM UTC.
F-
18
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
i.
Revenue recognition:
The Company determines revenue
recognition from contracts with customers through the following steps:
●
Identification
                                            of the contract with the customer;
●
Identification
                                            of performance obligations in the contract;
●
Determination
                                            of transaction price;
●
Allocation
                                            of the transaction price to the performance obligations in the contract; and
●
Recognition
                                            of the revenue when, or as, the Company satisfies a performance obligation.
In determining the amount of revenue
from contracts with customers, the Company evaluates whether it is a principal or an agent in the arrangement. The Company is a principal
when the Company controls the promised goods or services before transferring them to the customer. In these circumstances, the Company
recognizes revenue for the gross amount of the consideration. When the Company is an agent, it recognizes revenue for the net amount
of the consideration, after deducting the amount due to the principal.
Brokerage fees revenue is recorded
according to the date the service was provided, or the operation was carried out.
Trading fees revenue includes revenue
from transaction and trading fees charged to customers utilizing the Company's trading platform and are presented on net basis.
The Company's service is comprised of a single performance obligation to provide a matching service when customers buy, sell, or
convert digital assets. The Company does not control the digital asset being provided before it is transferred to the buyer, does not
have inventory risk related to the digital asset, and is not responsible for the settlement of the digital asset. The Company also does
not set the price for the digital asset as the price is a market rate established by users of the platform. As a result, the Company
acts as an agent in facilitating the ability for a customer to purchase digital assets from another customer.
Trading fees charged on the INX.One
trading platform are recognized as revenue when the Company's obligation is satisfied, the promised services are transferred
to the customer and the customer obtains control. Contracts with customers are usually open-ended and can be terminated by either party
without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already
provided. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding
amounts collected on behalf of third parties (such as taxes).
The Company also recognizes revenue
from buying and selling digital assets it owns. Such revenue is recognized in the gross amount of consideration received on sales less
the cost of digital assets sold.
j.
Intangible assets
Intangible assets acquired in a business
combination are measured at fair value at the acquisition date.
Intangible assets with a finite useful
life are amortized on a straight-line basis over their useful life and reviewed for impairment whenever there is an indication that the
asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year-end.
As of December 31, 2022, the Company recorded $
361
of loss on impairment related to certain legacy components of the INXS middle office
system that became obsolete and were replaced by a newly developed software (see Note 10d).
Intangible assets with indefinite
useful lives are not systematically amortized and are tested for impairment annually or whenever there is an indication that the intangible
asset may be impaired. The useful life of these assets is reviewed annually to determine whether their indefinite life assessment continues
to be supportable. If the events and circumstances do not continue to support the assessment, the change in the useful life assessment
from indefinite to finite is accounted for prospectively as a change in accounting estimate and on that date the asset is tested for
impairment. Commencing from that date, the asset is amortized systematically over its useful life.
F-
19
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The useful life of intangible assets
is as follows:
Licenses
Customer relationships
Trade name
Technology
Useful life
Indefinite
Definite 10.58 years
Definite 10.58 years
Definite 8.67 years
Amortization method
Not amortized
Straight-line
Straight-line
Straight-line
k.
Business combinations and goodwill
Business combinations are accounted
for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on
the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company chooses
whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate
share in the fair value of the acquiree's net identifiable assets. Direct acquisition costs are recorded in the statement of comprehensive
income as incurred. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset
or liability in accordance with IAS 39. Subsequent changes in the fair value of the contingent consideration are recognized in profit
or loss.
Goodwill is initially measured at
cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable
assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition
date.
l.
Impairment of non-financial assets:
The Company evaluates the need to
record an impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable.
If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount.
The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future
cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset
that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses
are recognized in profit or loss
.
An impairment loss of an asset, other
than goodwill, is reversed only if there have been changes in the estimates used to determine the asset's recoverable amount since
the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying
amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in
prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss.
The following criteria are applied
in assessing impairment of these specific assets:
1.
Goodwill in respect of subsidiaries:
The Company reviews goodwill for impairment
once a year, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment.
F-
20
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Goodwill is tested for impairment
by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill has been allocated.
An impairment loss is recognized if the recoverable amount of the cash-generating unit (or group of cash-generating units) to which goodwill
has been allocated is less than the carrying amount of the cash-generating unit (or group of cash-generating units). Any impairment loss
is allocated first to goodwill. Impairment losses recognized for goodwill cannot be reversed in subsequent periods.
2.
Intangible assets with an indefinite useful
                                            life that have not yet been systematically amortized:
The impairment
test is performed annually, on December 31, or more frequently if events or changes in circumstances indicate that there is an impairment
(see Note 10d).
m.
Customer funds and funds due to customers:
As of December 31, 2022 and 2021,
customer funds include cash balances of $
448
and $
1,315
and digital asset balances of
2,161
and $
2,955
, respectively, that are held for
the exclusive benefit of customers. The Company safeguards these assets and is subject to security risks for loss, theft or misuse. Therefore,
the Company has concluded it has control over these assets and records them and the corresponding liability in the consolidated financial
statements at fair value upon initial recognition and subsequently at each reporting period. The Company restricts the use of the assets
underlying the customer funds to meet regulatory requirements and classifies the assets as current based on their purpose and availability
to fulfill its direct obligation to customers.
n.
Leases:
The Company accounts for a contract
as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company as a lessee:
For leases in which the Company is
the lessee, the Company recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases
whose term is up to 12 months and leases for which the underlying asset is of low value. For these excluded leases, the Company has elected
to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term.
In measuring the lease liability,
the Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease
components (such as management and maintenance services, etc.) included in a single contract.
On the commencement date, the lease
liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined,
or otherwise using the Company's incremental borrowing rate. After the commencement date, the Company measures the lease liability
using the effective interest rate method.
On the commencement date, the right-of-use
asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and
initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful
life and the lease term (
3
years and
9
years).
The Company tests for impairment of
the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.
F-
21
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
o.
Share based payment transactions:
Certain of the Company's employees
and other service providers are entitled to compensation in the form of equity settled share-based payment transactions. The cost of
the transactions is measured at the fair value of the equity instruments granted at grant date, using an appropriate valuation model,
further details of which are provided in Note 18. The cost of the transactions is recognized in profit or loss together with a corresponding
increase in equity or for share-based grants during the period which the performance and/or service conditions are to be satisfied ending
on the date on which the relevant employees/service provider become entitled to the award (the "vesting period"). The cumulative
expense recognized at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired
and the Company's best estimate of the number of instruments that will ultimately vest.
Until December 31, 2021, the Company
granted options exercisable into its Ordinary shares. Commencing in 2022, subsequent to the completion of the Transaction (see Note 1),
options are granted to the Company's employees and other service providers by the Parent Company and are exercisable into the Common
shares of the Parent Company.
p.
Research and development expenses:
Research expenses are recognized in
profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project
is recognized if the Company can demonstrate all of the following: the technical feasibility of completing the intangible asset so that
it will be available for use or sale; the Company's intention to complete the intangible asset and use or sell it; the Company's
ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate
technical, financial and other resources to complete the intangible asset; and the Company's ability to measure reliably the expenditure
attributable to the intangible asset during its development. Through December 31, 2022, the Company has not met all the aforementioned
criteria and therefore all development costs have been recognized in profit or loss.
q.
Income taxes:
The consolidated financial statements
include estimates and assumptions for determining the future tax rates applicable to subsidiaries and identifying temporary differences
that relate to each subsidiary. Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities using the tax rates used enacted or substantively enacted at the reporting date. Deferred tax is provided
using a liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax assets are recognized for deductible temporary differences and the carryforward
of any unused tax losses. Deferred tax assets are recognized to the extent it is probable that taxable profit will be available against
the deductible temporary differences and that the carryforward of unused tax losses can be utilized. The carrying amount of deferred
tax assets is reviewed at each reporting date and adjusted accordingly.
r.
Property, plant and equipment:
Property, plant and equipment are
measured at cost, including directly attributable costs, less accumulated depreciation and accumulated impairment losses.
Depreciation is calculated on a straight-line
basis over the useful life of the assets at annual rates as follows:
Percentage
Communication & equipment
15
Office furniture and equipment
7
-
10
Computers and software
33
Leasehold improvements
see below
F-
22
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Leasehold improvements are depreciated
on a straight-line basis over the shorter of the lease term (including the extension option held by the Company and intended to be exercised)
and the useful life of the improvement.
The useful life and depreciation method
of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.
s.
Net income (loss) per share:
Basic income (loss) per share is computed
by dividing the income (net) loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding
during the period.
Diluted income (loss) per share is
computed by dividing the net income (loss), as above, after adjustment for interest on the convertible loans by the weighted average
number of ordinary shares outstanding, as above, plus the weighted average number of ordinary shares that would be issued on conversion
of stock options.
Potential ordinary shares are included
in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Potential
ordinary shares that are converted during the period are included in diluted earnings per share only until the conversion date and from
that date in basic earnings per share.
u.
Employee benefit liabilities:
The Company has several employee benefit plans:
1.
Short-term employee benefits:
Short-term employee benefits are benefits
that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render
the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions
and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized
when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and
a reliable estimate of the amount can be made.
2.
Post-employment benefits:
The plans are normally financed by
contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.
The Company has defined contribution
plans pursuant to section 14 to the Severance Pay Law under which the Company pays fixed contributions and will have no legal or constructive
obligation to pay further contributions if the fund does not hold sufficient amounts to pay all employee benefits relating to employee
service in the current and prior periods.
Contributions to the defined contribution
plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee's
services.
F-
23
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 3: NEW ACCOUNTING POLICIES AND RECENT
ACCOUNTING PRONOUNCEMENTS
There are no new accounting pronouncements adopted
during the year ended December 31, 2022.
Accounting standards and amendments to existing standards that
are not yet effective
In February 2021, the IASB issued amendments to
IAS 1 Presentation of Financial Statements, amendments to IFRS Practice Statement 2 Making Materiality Judgements and amendments to IAS
8 Definition of Accounting Estimate. The amendments require companies to disclose material accounting policies rather than their significant
accounting policies and to help distinguish between changes in accounting estimates versus accounting policies. These amendments are effective
for annual periods starting on or after January 1, 2023. The Company is assessing the impact of these amendments.
In January 2020, which was further amended in
2022, the IASB issued amendment to IAS 1, Presentation of Financial Statements to clarify the requirements for classifying liabilities
as current or non-current. The new guidance will be effective for annual periods starting on or after January 1, 2024. The Company is
assessing the impact of this amendment.
In May 2021, the IASB issued an amendment to IAS
12, "Income Taxes" ("IAS 12"), which narrows the scope of the initial recognition exception under IAS 12.15 and IAS
12.24 ("the Amendment").
According to the recognition guidelines of deferred
tax assets and liabilities, IAS 12 excludes recognition of deferred tax assets and liabilities in respect of certain temporary differences
arising from the initial recognition of certain transactions. This exception is referred to as the "initial recognition exception".
The Amendment narrows the scope of the initial recognition exception and clarifies that it does not apply to the recognition of deferred
tax assets and liabilities arising from transactions that are not a business combination and that give rise to equal taxable and deductible
temporary differences, even if they meet the other criteria of the initial recognition exception.
The Amendment applies for annual reporting periods
beginning on or after January 1, 2023, with earlier application permitted. In relation to leases and decommissioning obligations, the
Amendment is to be applied commencing from the earliest reporting period presented in the financial statements in which the Amendment
is initially applied. The cumulative effect of the initial application of the Amendment should be recognized as an adjustment to the opening
balance of retained earnings (or another component of equity, as appropriate) at that date.
The Company estimates that the initial application
of the Amendment is not expected to have a material impact on its financial statements.
NOTE 4: BUSINESS COMBINATIONS
a.
I.L.S Brokers Ltd.
On June 9, 2021, INX entered into a share purchase
agreement with the shareholders of I.L.S. Brokers Ltd., a Company incorporated under the laws of the State of Israel ("ILSB")
for the purchase of all of the issued outstanding shares of ILSB (the "ILSB Acquisition"). The consideration paid by INX as
part of the ILSB Acquisition to the shareholders was $
4,327
.
F-
24
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 4: BUSINESS COMBINATIONS (Cont.)
Mr. Datika was a shareholder of ILSB and sold
his shares to INX as part of the ILSB Acquisition. Immediately prior to the ILSB Acquisition, Mr. Datika held, directly and indirectly,
approximately
20
% of the outstanding share capital of ILSB. Mr. Datika waived his right to receive full consideration under the ILSB Acquisition
and received only an amount equal to the tax payments due by him and by his affiliated entity in connection with the ILSB Acquisition.
As a result of such waiver, the consideration paid by INX
as part of the ILSB Acquisition was reduced from $
4,909
to $
4,327
. Mr. Datika is one of the founding shareholders of INX (through the
wholly owned company Triple-V) and is also the CEO of INX. The waiver of the partial consideration by Mr. Datika in the amount of $
582
was recorded as a contribution to equity ILSB is a multinational brokerage house, established in 2001, that facilitates financial transactions
between banks and offers a full range of brokerage services to several leading banks worldwide.
The following are the estimated fair values of
the identifiable assets and liabilities assumed of ILSB as of the date of the acquisition:
June 9,
2021
Cash and cash equivalents
$
810
Accounts receivable
1,031
Property and equipment
37
Right-of-use-assets
416
Intangible assets
2,491
Total assets
4,785
Accounts payable and accrued expenses
(
745
)
Lease liability
(
501
)
Total liabilities
(
1,246
)
Net identifiable assets
3,539
Goodwill arising on acquisition
1,370
Total cost of acquisition
$
4,909
Cost of Acquisition:
Cash paid
$
4,327
Equity contribution by shareholder
582
Total cost of acquisition
$
4,909
Cash outflow on Acquisition:
Cash paid
$
4,327
Cash and cash equivalents acquired
810
Net cash outflow
$
3,517
Intangible assets include Customer Relationships, Trade Name and License.
See Note 10.
The Company estimated the fair values allocated
to the assets and liabilities of ILSB with the assistance of an external independent expert.
From the acquisition date to December 31, 2021,
ILSB has contributed net income of $
254
to the consolidated net loss, and $
2,278
to the consolidated revenue.
F-
25
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 4: BUSINESS COMBINATIONS (Cont.)
If the business combination had taken place at
the beginning of the calendar year 2021, the effect on consolidated net loss would have been immaterial and the consolidated revenue would
have been $
4,164
.
Acquisition costs that are directly attributable
to the transaction were immaterial.
b.
INX Securities LLC (formerly Openfinance Securities LLC)
On January 12, 2021, INX entered into an asset
purchase agreement (the "OFN Asset Purchase Agreement") with Openfinance Holdings, Inc. and certain subsidiaries of Openfinance
Holdings, Inc. (collectively, "OFN"). The consideration paid by INX as part of the OFN Acquisition to the shareholders was
$
3,253
. Pursuant to the OFN Asset Purchase Agreement, on May 9, 2021, INX acquired various assets of OFN, including the entire share capital
of Openfinance Securities, LLC ("OFN Securities"), a Pennsylvania limited liability Company, that is registered in the United
States as a broker-dealer, is a member of FINRA and operates and is recognized as an Alternative Trading System ("ATS") by
the SEC. As a result of the acquisition, INX owns and operates Openfinance broker-dealer/ATS, including its primary security token listings.
Following the completion of the Asset Purchase
Agreement on May 9, 2021, OFN Securities was renamed to INX Securities, LLC.
The following are the estimated fair values of
the identifiable assets and liabilities assumed of OFN as of May 9, 2021, the date of the acquisition:
May 9,
2021
Cash and cash equivalents
$
307
Other current assets
18
Intangible assets
1,914
Total Assets
2,239
Accounts payable
(
3
)
Total Liabilities
(
3
)
Net identifiable assets
2,236
Goodwill arising on acquisition
1,017
Total cost of acquisition
$
3,253
Cost of Acquisition:
Cash paid
$
2,022
Token warrant liability
735
Contingent consideration liability
496
Total cost of acquisition
$
3,253
Cash outflow on Acquisition:
Cash paid
$
2,022
Cash and cash equivalents acquired
307
Net cash outflow
$
1,715
Intangible assets comprise License, Core Technology and Customer Relationships
– see Note 10.
F-
26
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 4: BUSINESS COMBINATIONS (Cont.)
The Company estimated the fair values allocated
to the assets and liabilities of OFN with the assistance of an external independent expert.
During the year ended December 31, 2021, OFN has
contributed a net loss of $
133
to the consolidated net loss, and $
193
to the consolidated revenue.
If the business combination had taken place at
the beginning of the year, the effect on consolidated net loss and on consolidated revenue would have been, immaterial.
Acquisition costs that are directly attributable
to the transaction were immaterial.
Contingent consideration:
As part of the purchase agreement with the previous
owner of Open Finance securities, LLC., it was agreed that the previous owner would be entitled to an additional consideration ("the
contingent consideration") as follows:
a.
Six months after closing and contingent upon the continued operation of the platform by the Company or
its affiliates - $
400
.
b.
12 months after closing and contingent upon the continued operation of the platform by the Company or
its affiliates - $
400
.
2022
2021
Balance as of January 1
$
400
$
-
Liability arising as result of business combination
-
496
Payment
(
400
)
(
400
)
Change in fair value of contingent liability recognized in profit or loss
-
304
Balance as of December 31
$
-
$
400
As of December 31, 2021, the first installment
was paid and the fair value of the second installment of the contingent consideration was estimated at $
400
(measured at level 3 of the
fair value hierarchy), which is presented as Contingent consideration liability. The second installment was paid during the year ended
December 31, 2022.
Token
warrant grant:
As part of the consideration for the acquisition,
the Company granted the shareholders of OFN,
885,000
INX Token warrants which are exercisable at a price of $
0.07
per warrant. The fair
value of these warrants in the amount of $
735
was determined using the Black-Scholes option pricing method. These warrants were exercised
in 2021.
NOTE 5: RESERVE FUND
In connection with the INX Token Offering, INX
committed to reserve
75
% of the gross proceeds less payments to underwriters from its initial public offering in excess of $
25,000
to be available to cover customer and INX's losses, if any, that result from cybersecurity breaches or theft, errors in execution of the
trading platform or its technology, and counterparty defaults, including instances where counterparties lack sufficient collateral to
cover losses. INX refers to this amount as the "Reserve Fund".
F-
27
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 5: RESERVE FUND (Cont.)
On July 13, 2021,
the INX's Board of Directors
approved the Investment Policy of the Reserve Fund. Per the approved Policy, as amended on August 11, 2022, the Reserve Fund, post the
amendment, shall be invested as follows: minimum 15% in cash and bank deposits, up to 70% in U.S Treasury securities, up to 20% shall
be invested in exchange traded funds and up to 50% in corporate bonds and other instruments with lowest investment grade rating of BBB.
As of December 31, 2022, and 2021, INX has segregated
$
36,023
, which is restricted as the Reserve Fund. The Reserve Fund is comprised of cash and cash equivalents, U.S. Treasury securities
and corporate bonds held at banks and brokerage firms as follows:
December 31,
2022
December 31,
2021
a. Cash and cash equivalents
$
5,824
$
21,987
b. Financial assets at fair value:
Short-term investments (*)
U.S. Treasury securities
6,141
-
Corporate bonds – marketable investments
12,332
-
Total short-term investments
18,473
-
Long-term investments (*)
U.S. Treasury securities
474
-
Corporate bonds and loans (principally) – marketable investments
11,252
14,036
Total long-term investments
11,726
14,036
$
36,023
$
36,023
(*)
Classified as level 1 inputs in the fair value hierarchy.
F-
28
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 6: INVESTMENTS
On December 31, 2022 and 2021, the Company holds
the following investments:
December 31,
2022
December 31,
2021
Financial assets at fair value:
Short-term investments (*)
U.S. Treasury securities
$
3,444
$
-
Corporate bonds – marketable investments
1,589
-
Total short-term investments
5,033
-
Long-term investments
Corporate bonds – marketable investments (*)
4,254
-
Other investments (**)
400
400
Total long-term investments
4,654
400
$
9,687
$
400
(*)
Level 1 in the fair value hierarchy.
(**)
Not traded in public market and classified as level 3 in the fair value hierarchy.
Investments are accounted for as financial assets
which are initially recognized at fair value and subsequently measured at fair value through other comprehensive income. Other investments
generally are not traded in public markets and include Company's holdings in private companies under a share purchase agreement
and a simple agreement for future equity (SAFE), which entitle the Company to receive common stock of the issuing companies at a future
date.
When observable market data is not available and
insufficient recent information is available to measure fair value, the Company, in accordance with IFRS 9, uses cost as an appropriate
estimate of fair value. In such circumstances, management uses judgement to assess if there are any indicators that cost might not be
representative of fair value. The Company did not identify any such indicators at December 31, 2022
.
NOTE 7: DIGITAL ASSETS
The Company held the following digital assets as of December 31, 2022
(inventory), and 2021 (non-current intangible assets):
Coin Symbol
December 31,
2022
December 31,
2021
USDT
$
684
$
25
BTC
546
233
ETH
503
177
USDC
463
543
LTC
109
14
ZEC
51
8
UNI
44
-
AAVE
31
-
COMP
31
-
CRV
29
-
MATIC
28
-
Other
78
-
$
2,597
(*)
$
1,000
(*)
(*)
All digital assets are classified as Level 2 in the fair
value hierarchy.
F-
29
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 8: DERIVATIVE ASSETS
On December 31, 2022, the Company held $
905
in
collateral related to open digital assets forwards positions with fair value of $
1,072
, utilizing level 2 inputs in the fair value hierarchy.
The derivative assets are used for hedging of digital assets held by the Company. Net gain (loss) recognized from the hedging activity
during the year ended on December 31, 2022 was not significant.
NOTE 9: PREPAID EXPENSES AND OTHER RECEIVABLES
As of December 31, 2022, and 2021, the Company's
prepaid expenses and other receivables include the following:
December 31,
2022
2021
Prepaid expenses and advances to service providers
1,015
580
Tax credits receivable
219
231
Receivable from related parties
49
15
Other receivables
120
57
Receivable on account of shares
-
1,500
$
1,403
$
2,383
NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS
a.
The following table presents activity in goodwill and intangible assets during the year ended on December 31, 2022.
Trade Name
Customer Relationships
Licenses
Technology
Goodwill
Total
Intangible assets, at cost:
Balance as of January 1, 2021
$
-
$
-
$
-
$
-
$
-
$
-
Additions from business combination
445
1,830
1,699
430
2,387
6,791
Adjustments arising from translating financial statements from functional currency to presentation currency
22
75
23
-
68
188
Balance as of December 31, 2021
467
1,905
1,722
430
2,455
6,979
Additions from business combination
-
-
-
-
-
-
Adjustments arising from translating financial statements from functional currency to presentation currency
(
51
)
(
173
)
(
61
)
-
(
165
)
(
450
)
Balance as of December 31, 2022
$
416
$
1,732
$
1,661
$
430
$
2,290
$
6,529
F-
30
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS (Cont.)
Trade Name
Customer Relationships
Licenses
Technology
Goodwill
Total
Accumulated amortization and impairment
:
Balance as of January 1, 2021
$
-
$
-
$
-
$
-
$
-
$
-
Amortization recognized in the year
23
75
-
32
-
130
Balance as of December 31, 2021
23
75
-
32
-
130
Impairment of technology
-
-
-
361
-
361
Amortization recognized in the year
41
142
-
37
-
220
Balance as of December 31, 2022
$
64
$
217
$
-
$
430
$
-
$
711
Intangible assets at cost, net at December 31, 2021
444
1,830
1,722
398
2,455
6,849
Intangible assets at cost, net at December 31, 2022
$
352
$
1,515
$
1,661
$
-
$
2,290
$
5,818
b.
Acquisitions during the year:
No acquisitions were made during the year ended
December 31, 2022. Licenses don't have a fixed term and do not require renewal. Consequently, Licenses have an indefinite useful
life.
c.
Amortization expenses:
Amortization expense of intangible assets of $
220
,
$
130
and $
0
is recorded in profit or loss within General and administrative expenses for the years ended December 31, 2022, 2021 and 2020,
respectively.
d.
Impairment of goodwill and other intangible assets:
During the year ended on December 31, 2022 and
2021, the Company recorded impairment of intangible assets with a definite useful life related to Technology of $
361
and $
0
, respectively.
As of December 31, 2022, the carrying amount of
Goodwill and Licenses were allocated as follows (each representing a cash-generating unit):
ILSB
INXS
Total
Goodwill
$
1,273
$
1,017
$
2,290
Licenses
$
461
$
1,200
$
1,661
Trade Name
$
352
$
-
$
352
Customer Relationships
$
283
$
1,232
$
1,515
The recoverable amount of ILSB was determined
based on the value in use which is calculated at the expected estimated future cash flows from this cash-generating unit, as determined
according to the budget for the next
five years
and approved by the Company's management. The pre-tax discount rate of the cash
flows is
23.45
%. The projected cash flows for the period exceeding
five years
is estimated using a fixed growth rate of
3
%, representing
the long-term average growth rate as customary in the cash generating unit.
F-
31
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 10: GOODWILL AND OTHER INTANGIBLE ASSETS (Cont.)
The recoverable amount of OFN was determined based
on the value in use which is calculated at the expected estimated future cash flows from this cash-generating unit, as determined according
to the budget for the next
five years
and approved by the Company's management. The pre-tax discount rate of the cash flows is
27.19
%.
The projected cash flows for the period exceeding
five years
is estimated using a fixed growth rate of
3
%, representing the long-term
average growth rate as customary in the cash generating unit.
The value in use for all cash-generating units
may change if any changes occur in the following key assumptions:
●
Discount rate.
●
Growth rate for the period exceeding the
five
budget
years
.
Discount rate - the discount rate reflects management's
assumptions regarding each unit's specific risk. In determining the appropriate discount rate for each unit, the Company relied on the
ten-year return on Government bonds.
Sensitivity analysis of changes in assumptions:
With respect to the assumptions used in determining the value in use as described above, management believes that there are no potential
changes in the key assumptions detailed above, which might lead to a significant change in the carrying amounts of ILSB and OFN over their
recoverable amounts.
N
OTE 11: INX TOKEN LIABILITY
The number of INX Tokens that the Company has issued as of December
31, 2022 and December 31,2021, or has an obligation to issue is as follows:
December 31,
2022
2021
Significant shareholder – Triple-V
9,435,939
9,435,939
Private Placement
10,386,148
10,386,148
Founding Investors
9,078,622
9,078,622
Issued in the Offering
93,409,410
93,409,410
Employees and service providers
11,100,657
9,944,263
Total
133,410,776
132,254,382
INX Token liability
$
56,847
$
282,642
On August 20, 2020, INX's Form F-1 in connection
with the Offering was declared as effective by the SEC.
On April 22, 2021, the INX Token Public Offering
was completed. During the INX Token Offering, from August 2020 to April 2021, INX raised gross proceeds of $
84,068
and sold
93,409,410
INX Tokens (excluding the
1,948,483
INX Tokens that were issued to certain Canadian investors - see below). Additionally, as of December
31, 2021, INX raised $
7,622
, and sold
10,386,148
INX Tokens through private placements.
INX paid $
5,782
as issuance costs related to the
Offering. In addition, INX has granted options to purchase
6,127,015
INX Token at an exercise price of $
0.09
valued at $
4,954
, with all
options set to expire by September 2022. Of these options,
6,113,820
were exercised with total proceeds of $
550
, and
13,194
options expired.
F-
32
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 11: INX TOKEN LIABILITY (Cont.)
In June 2021, it came to the attention of INX
that during the INX Token Offering as it related to Canada, INX did not take certain steps that may be required under applicable Canadian
securities laws. As a result, during July 2021 INX cancelled
1,948,483
INX Tokens that were sold
to Canadian purchasers and refunded the $
1,754
to such purchasers, representing the full purchase price of the INX Tokens.
During the year ended on December 31, 2022, the
Company granted
168,000
INX Tokens to a service provider and recorded a corresponding expense of $
29
;
2,534,618
INX Token warrants were
exercised.
On December 14, 2021, INX's Board of Directors
authorized our management to repurchase INX Tokens (the "Repurchased Tokens") from their holders as the management deems required
or desirable for the benefit of INX, provided that the aggregate purchase amount of Repurchased Tokens until December 31, 2022 will not
exceed $
5,000
. Such repurchase shall be subject to the provisions of any applicable law and regulation and to the advice of our legal
advisors.
The fair values of INX Tokens free of, or subject
to lock-up agreements and the discount rates applied as of December 31, 2022, are as follows:
Discount rate
Number of INX
tokens
Total fair
value
Not subject to lock-up
0
%
122,716,614
$
52,768
Subject to lock-up through February-April 2023
6
%-
9.3
%
9,082,078
3,554
Subject to lock-up through May 2023
10.05
-
10.22
%
82,000
31
Subject to lock-up through June 2023
10.52
%
3,000
1
Subject to lock-up through July 2024
24.99
%
1,527,084
493
Total
133,410,776
$
56,847
The fair value of INX Tokens free of, or subject to lock-up agreements
and the discount rates applied as of December 31, 2021, are as follows:
Discount rate
Number of INX
tokens
Total fair
value
Not subject to lock-up
0
%
99,576,830
$
219,069
Subject to lock-up through April 2022
7.96
%
13,148,864
26,775
Subject to lock-up through April 2023
20.74
%
19,528,688
36,798
Total
132,254,382
$
282,642
On July 28, 2021, the INX Token commenced trading
on the INX Securities Trading Platform, which was rebranded during 2022 under INX.One. The fair value per INX Token as of December 31,2022
and December 31,2021, for tokens that are not subject to lock-up agreement was $
0.43
and $
2.2
respectively, based on the closing market
price of the INX Token. The level in the fair value hierarchy is level 1.
For INX tokens which are subject to lock-up agreement,
the Company used the Finnerty model to determine the discount rates applying for such INX tokens during their lock-up agreements. The
significant inputs and assumptions are volatility and the period under the lock up, as follows:
December 31,
2022
December 31,
2021
Expected term (years)
0.13
-
1.53
0.06
-
1.31
Expected volatility
71.56
%-
103.37
%
63.18
%-
86.90
%
F-
33
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 11: INX TOKEN LIABILITY (Cont.)
The level in the fair value hierarchy applied
for such tokens is level 2.
In the years ended December 31, 2022, and 2021,
the re-measurement to fair value of the INX Token liability with respect to INX Tokens issued by the Company resulted in unrealized gain
of $
226,044
and an unrealized loss of $
161,173
, respectively, which was recorded in profit or loss.
The changes in the fair value of the INX Token
liability attributable to changes in credit risk, excluding those changes in credit risk attributable to the embedded derivative, are
immaterial for all reported periods and therefore no amounts have been included in other comprehensive income in respect of credit risk.
NOTE 12: INX TOKEN WARRANT LIABILITY
As of December 31, 2022, directors, employees
and service providers hold
6,972,192
INX Token warrants granted by the Company as compensation. The grantees have a right to purchase
INX Tokens upon the completion of terms set forth in each warrant agreement.
Year ended December 31,
2022
2021
INX Token warrant liability:
Warrants granted to employees and service providers
$
1,580
$
9,814
$
1,580
$
9,814
The liability related to INX Token warrants is
presented at fair value based on the below inputs. The level in the fair value hierarchy is level 3.
The following table lists the inputs to the Black-Scholes
pricing model used for the fair value measurement of INX Token warrants:
December 31,
2022
December 31,
2021
Expected volatility of the token prices (%)
67.51
% -
86.39
%
63
% -
99
%
Risk-free interest rate (%)
3.88
% -
4.69
%
0.19
% -
1.52
%
Expected life of warrant (years)
0.08
-
10
0.25
-
4
Exercise price
$
0.01
– $
2.86
$
0.01
- $
2.11
F-
34
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 12: INX TOKEN WARRANT LIABILITY (Cont.)
The following table presents changes in the number
of INX Token warrants during the years ended December 31, 2022, and 2021.
2022
2021
Number of
tokens
Weighted
average
exercise
price
Number of
tokens
Weighted
average
exercise
price
INX Tokens warrants outstanding at beginning of year (*)
5,660,861
$
0.52
5,926,083
$
0.066
INX Token warrants granted
4,388,043
0.25
8,685,071
0.292
INX Token warrants forfeited
(
491,833
)
1.40
(
512,933
)
0.270
INX Token warrants expired
(
50,261
)
0.03
-
-
INX Token warrants exercised (INX Token issued)
(
2,534,618
)
0.06
(
8,437,360
)
0.129
INX Token warrants outstanding at the end of year
6,972,192
$
0.46
5,660,861
$
0.52
INX Token warrants exercisable at the end of year
3,718,955
$
0.16
3,947,861
$
0.13
(*)
During the year ended December 31, 2022, the Company issued
an option to modify certain token warrants originally issued to employees of the Company in 2021 and 2022. As result, during 2022, terms
for
1,801,500
INX token warrants were modified to include a new exercise price and a new vesting schedule, which resulted in the increase
in the fair value of the INX Token warrants of $
8
.
Token-based compensation for the years ended December
31, 2022, 2021 and 2020 is included within the following expenses:
Year ended December 31,
2022
2021
2020
Operating expenses (income):
Research and development
$
135
$
262
$
336
Sales and marketing
437
177
423
General and administrative
820
6,736
3,174
Fair value adjustment of INX Token warrant liability to employees and service providers
(
8,294
)
12,626
-
Total token-based compensation
$
(
6,902
)
$
19,801
$
3,933
NOTE 13: RELATED PARTIES
a.
The Company's related parties include, the Parent Company, Company's subsidiaries, associates
and service providers over which the Company exercises significant influence, and key management personnel. Key management personnel are
those persons having the authority and responsibility, directing and controlling the activities of the Company, directly and indirectly.
Key management personnel include officers, directors and companies controlled by officers and directors.
F-
35
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 13: RELATED PARTIES (Cont.)
b.
The following balances are balances held with or by related parties as of December 31, 2022 and 2021:
December 31,
2022
2021
Assets:
Loan receivable from related parties
$
-
$
1,015
Receivable from Parent Company
1,205
-
Prepaid expenses
49
15
Total
1,254
1,030
Liabilities:
Accounts payable and accrued expenses
308
589
INX Token liability
5,531
36,102
INX Token warrant liability
1,140
2,723
Total
$
6,979
$
39,414
The receivable balance from Parent Company includes general
and administrative expenses incurred by the Parent Company and paid by INX.
c.
Compensation to directors and key management personnel:
Each Director is entitled to receive
an option to purchase
3,500
INX Tokens each month at an exercise price equal to the fair market value of the INX Token at the date of
the grant.
Compensation provided to directors and
key management personnel for the years ended December 31, 2022, 2021 and 2020 was as follows:
Year ended December 31,
2022
2021
2020
Research and Development:
Compensation and benefits
$
738
$
598
$
380
Share-based compensation (*)
93
391
45
INX Token based compensation
9
448
91
Sales and marketing:
Compensation and benefits
369
4,406
816
Share-based compensation (*)
176
2,783
171
INX Token based compensation
298
3,878
421
General and administrative:
Compensation and benefits
1,575
1,577
2,045
Share-based compensation (*)
520
6,883
124
INX Token based compensation
275
2,249
391
2,367
23,213
4,484
Fair value adjustment of INX Token and derivative liabilities
$
(
20,133
)
$
24,673
$
3,852
(*)
See Note 18 for description of options granted by Parent
Company to employees of the Company that are exercisable into Common shares of the Parent Company.
F-
36
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 13: RELATED PARTIES (Cont.)
d.
Agreement with A-Labs Finance and Advisory Ltd. ("A-Labs"):
Under a service agreement dated September
26, 2017, as amended in December 2017 and January 31, 2018, A-Labs, a shareholder of the Company, provided services to the Company which
included, among others, development, planning, management, execution, branding and marketing outside of the US with relation to the Offering
of the INX Tokens on behalf of the Company (the "A-Labs Agreement"). In consideration for these services, during 2021, the
Company paid A-Labs $
4,140
, which is recorded in general and administrative expenses.
A-Labs also received a grant of
4,550,000
INX Tokens at a fair value of $
6
. In addition, pursuant to an agreement signed contemporaneously with the A-Labs Agreement, the Company
issued
1,120,000
Ordinary shares to A-Labs. The fair value of the shares issued of $
136
($
175
less the payment of $
39
required for those
shares), is deemed as additional consideration for the services to be provided by A-Labs and was recorded during the year ended December
31, 2021.
In addition, on July 29, 2021, the Company
made a payment to A-Labs of $
1,001
and granted A-Labs with an option to purchase
1,527,084
Tokens. These options were exercised during
2022 and vest on July 12, 2024. During the year ended December 31, 2021, the Company recognized an expense related to token options of
$
4,140
, which is recorded in general and administrative expenses.
e.
Loans to Related Parties:
On December 31, 2021, INX entered into
loan agreements with two officers of the Company in the amounts of $
611
and $
404
, respectively. On March 24, 2022, the Board of Directors
of the Company approved an increase of the total loan amount from $
1,015
to $
1,233
. The loans were non-recourse and were provided in
order to enable the officers to exercise INX Token warrants granted to them in connection with their services to the Company and to cover
the income tax liability incurred by the officers with respect to the warrants. On May 2, 2022, the Board approved a repurchase of
1,546,224
INX Tokens by INX from the officers at market price of such Tokens as of April 29, 2022 of $
0.80
, with proceeds to be used for the repayment
of the loans and accrued interest. As of December 31, 2022, the loans were repaid.
NOTE 14: CONVERTIBLE LOANS
The Company entered into convertible loan agreements
dated November 27, 2017 ("Convertible Loans") with three individuals, of which one is an officer of the Company (the "Lenders"),
for an aggregate amount of $
144
. The loans are convertible at any time and at each Lender's sole discretion, into an aggregate total
of
10,029,193
Ordinary shares of the Company or repaid at the earlier of (i) the lapse of five years; (ii) an initial public offering
of the Company's shares or (iii) upon a Deemed Liquidation Event as defined in the Company's Articles of Association. The
loans bear
2
% interest compounded annually. In addition, the Lenders were granted the right to purchase a total of
2,690,623
INX Tokens.
Until 2018, the Company received $
144
, in consideration
for the convertible loans and INX Tokens, of which $
5
were attributed to the fair value of the INX Tokens. The fair value of the loans
received until 2018, amounted to $
93
, resulting in an effective interest rate of
60
% and the balance of $
46
, was attributed to the conversion
option, which was recorded in equity.
During the year ended December 31, 2021, interest
and amortization of discount on the convertible loans amounted to $
0
.
On February 25, 2021, holders of Convertible loans
exercised their right under their loan agreements and converted the outstanding amounts provided by them to the Company under such loan
agreements into an aggregate of
956,333
ordinary shares of the Company.
F-
37
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 15: PROPERTY AND EQUIPMENT
The following table presents activity of the Company's
property and equipment during the year ended December 31, 2022:
Computers
and software
Office
equipment
& furniture
Leasehold
improvements
Communication
& equipment
Total
Cost:
Balance at January 1, 2021
$
35
$
-
$
-
$
$
35
Business combination
17
11
-
9
37
Additions
73
48
6
5
132
Balance at December 31, 2021
125
59
6
14
204
Additions
42
41
99
153
335
Adjustments arising from translating financial statements from functional currency to presentation currency
-
-
-
(
14
)
(
14
)
Balance at December 31, 2022
$
167
$
100
$
105
$
153
$
525
Accumulated depreciation:
Balance at January 1, 2021
3
-
-
-
3
Depreciation expense
30
10
1
-
41
Balance at December 31, 2021
33
10
1
-
44
Depreciation expense
51
9
9
19
88
Adjustments arising from translating financial statements from functional currency to presentation currency
-
-
-
(
2
)
(
2
)
Balance at December 31, 2022
84
19
10
17
130
Net assets at December 31, 2022
$
83
$
71
$
95
$
136
$
395
Net assets at December 31, 2021
$
92
$
49
$
5
$
14
$
160
F-
38
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 16: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
a.
Activity with respect to right-of-use assets:
The Company has entered into office space lease agreements, which are
used for the Company's operations. Leases of office space have lease terms of between
3
and
5
years.
Land and
buildings
Cost:
Balance as of January 1, 2021
$
-
Additions during the year:
New leases
654
Adjustments arising from translating financial statements from functional currency to presentation currency
13
Business combination
416
Balance as of December 31, 2021
$
1,083
Accumulated depreciation:
Balance as of January 1, 2021
$
-
Additions during the year:
Depreciation and amortization
96
Balance as of December 31, 2021
96
Right-of-use assets as of December 31, 2021, net
$
987
Cost:
Balance as of January 1, 2022
$
1,083
Additions during the year:
New leases
827
Adjustments arising from translating financial statements from functional currency to presentation currency
(
46
)
CPI and revaluation differences
63
Balance as of December 31, 2022
$
1,927
Accumulated depreciation:
Balance as of January 1, 2021
$
96
Additions during the year:
Depreciation and amortization
522
Balance as of December 31, 2022
618
Right-of-use assets as of December 31, 2022, net
$
1,309
F-
39
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 16: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (Cont.)
b.
Activity with respect to lease liability:
Land and buildings
Balance as of January 1, 2021
$
-
Additions during the year:
New leases
654
Business combination
501
Lease payments
(
68
)
Interest expense
26
CPI and revaluation differences
27
Balance as of December 31, 2021
$
1,140
Current lease liability, December 31, 2021
$
319
Non-current lease liability, December 31, 2021
$
821
Balance as of January 1, 2022
$
1,140
Additions during the year:
New leases
827
Lease payments
(
578
)
Interest expense
83
CPI and revaluation differences
(
85
)
Balance as of December 31, 2022
$
1,387
Current lease liability, December 31, 2022
$
519
Non-current lease liability, December 31, 2022
$
868
c.
Maturity analysis of undiscounted lease payments receivable for operating leases:
December 31,
2022
2023
393
2024
289
2025
84
2026
87
2027 and thereafter
15
$
868
F-
40
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 17: EQUITY
Composition of share capital:
December 31,
2022
2021
Authorized
Issued and
outstanding
Authorized
Issued and
outstanding
Number of shares
Ordinary shares with
0.001
GBP par value each
100,000,000
47,635,875
100,000,000
15,955,875
a)
Conversions of Simple Agreements for Future Equity
In April 2019, the Board of Directors
of the Company approved a capital raise in the form of Simple Agreements for Future Equity ("SAFE"). Pursuant to the SAFE,
upon consummation of an investment round in shares of capital stock of the Company in the amount of not less than $
2,000
(in addition
to the funds raised under the SAFEs) (the "Qualifying Financing"), the funds raised under the SAFEs will automatically be
converted into the same class of shares of capital stock as those issued in the Qualifying Financing at a price per share equal to the
lower of: (i) a
25
% discount on the base (undiscounted) price per share of the Qualifying Financing; and (ii) $
1.367
per share(the "Default
Price"). If a Qualified Financing is not consummated within 12 months as of the Effective Date (as such term is defined in the SAFEs),
the funds raised under the SAFEs will automatically be converted at a price per share equal to the Default Price pursuant to the terms
set forth in the SAFEs. Following the approval of the Board of Directors, during April 2019, the Company entered into SAFEs with certain
investors pursuant to which an amount of $
428
was raised by the Company, including $
150
and $
100
from Triple V and A-Labs respectively.
A Qualified Financing was not consummated before April 25, 2020, and thus the funds raised under the SAFE were automatically converted
into
312,849
Ordinary Shares at a price per share equal to the Default Price.
On August 13, 2019, the Board of Directors
of the Company approved an additional capital raise of up to $
1,000
in the form of SAFE, which the Board of Directors of the Company then
increased to $
1,500
on October 28, 2019 (the "Second SAFE"). The Second SAFE will also be automatically converted into the
same class of shares of capital stock as those issued in the Qualifying Financing at a price per share equal to the lower of: (i)
25
%
discount on the base (undiscounted) price per share of the Qualifying Financing, and (ii) $
1.367
per share. If a Qualified Financing is
not consummated within 12 months commencing as of the Effective Date (as such term is defined in the Second SAFE), the funds will automatically
be converted at a price per share of $
1.367
. In addition to the shares issued to the investors upon conversion of the Second SAFE, the
Second SAFE investors shall be entitled to an option to purchase an equal number of additional shares issued to them upon conversion of
their investment under the Second SAFE, from the same class of such converted shares, for an exercise price of $
1.953
per share. This
option shall be valid for a period of 36 months. In connection with the Second SAFE, the Company raised an amount of $
978
, including $
250
from Triple V. In the absence of a qualified financing during the 12 months' period following the effective date of such Second
SAFE in 2020, the Company converted the investment provided to it under the Second SAFE into an aggregate of
716,136
Ordinary Shares of
the Company.
Upon the closing of such Qualified Financing
on September 13, 2020, the Company converted the investment provided to it under the Fourth SAFE into
165,654
Ordinary Shares of the Company.
Such conversion reflected a price of $
1.811
per share. Pursuant to the terms of the Fourth SAFE, upon the Fourth SAFE conversion, the
investor under the Fourth SAFE received an option to purchase an additional identical number of Ordinary Shares of the Company at a price
of $
2.743
per share.
F-
41
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 17: EQUITY (Cont.)
On February 21, 2020, the Board of Directors
of the Company approved an additional capital raise of up to $
1,500
in the form of SAFE (the "Third SAFE"). The Third SAFE
will be automatically converted into the same class of shares of capital stock as those issued in a Qualifying Financing at a price per
share equal to the lower of, (i)
25
% discount on the base (undiscounted) price per share of the Qualifying Financing, and (ii) $
1.526
per share. If a Qualified Financing is not consummated within 12 months commencing as of the Effective Date (as such term is defined in
the Third SAFE), the funds will automatically be converted at a price per share of $
1.526
. In addition to the shares issued to the investors
upon conversion of the Third SAFE, the Third SAFE investors shall be entitled to an option to purchase additional identical number of
shares, from the same class of the shares issued to them upon conversion of their investment under the Third SAFE, for an exercise price
of $
1.696
per share. This option shall be valid for a period of 36 months commencing as of the Effective Date of the agreement. An aggregate
amount of $
579
has been received by the Company pursuant to the Third SAFE in 2020, including $
100
and $
30
from Triple V and A-Labs, respectively.
In March 2021, in the absence of qualified financing during the 12 months following the effective date of such Third SAFE, the Company
converted the investment provided to it under the Third SAFE dated March 2020 into an aggregate of
379,593
Ordinary Shares of the Company
at a price per share of $
1.526
.
b)
Issuance of Ordinary Shares and Exercises of Options
Pursuant to the terms of the Second SAFE,
upon the Second SAFE conversion, the investors under the Second SAFEs received an option to purchase an additional identical number of
Ordinary Shares of the Company at a price of $
1.953
per share. On September 13, 2020, Triple-V exercised the option that was granted to
it under the Second SAFE dated August 30, 2019 between Triple-V and the Company, and the option that was granted to Mr. Shy Datika under
the Second SAFE dated August 30, 2019 between Mr. Datika and the Company that was assigned to Triple by Mr. Datika, were exercised to
an aggregate of
146,306
Ordinary Shares at a price of $
1.953
per share.
On September 30, 2020, the Company entered
into an investment agreement with Awake Limited (the "Awake Agreement" and "Awake", respectively). Pursuant to
the Awake Agreement, awake invested in the Company $
2,000
in consideration for
264,201
Ordinary Shares of the Company and
1,481,481
INX
Tokens. The INX Tokens under the Awake Agreement are subject to Lock-Up Agreement for a period of 12 months. The Awake Agreement's
consideration was attributed to Ordinary shares and to INX Token liability, according to their fair value as of the date of the transaction,
which amounted to $
829
and $
1,171
, respectively.
During 2021, several investors exercised
the options that was granted to them under the Third SAFE dated August 30, 2019, to an aggregate of
115,661
Ordinary Shares at a price
of $
1.696
per share.
311,060
options are outstanding and can be exercised until March 31, 2023.
During 2021, several investors exercised
the option that were granted to them under the Second SAFE dated August 30,2019, into an aggregate amount of
268,179
Ordinary Shares at
a price of
1.953
$ per share.
On September 13, 2020, the Company entered
into a subscription agreement with a new investor pursuant to which the investor invested in the Company $
1,500
in consideration for
621,375
Ordinary Shares. The new investor is also entitled to receive, for no additional consideration a warrant to purchase
596,659
Ordinary
Shares of the Company, at a price of $
2.514
per share, until the warrant's first-year anniversary. On December 31, 2021 the new
investor exercised the options that was granted to them, to an aggregate of
596,659
Ordinary Shares at a price of $
2.514
per share. An
amount of $
1,500
received on January 4, 2022.
c)
Private Placement
As part of the Transaction (see Note
1), on January 10, 2022, the Company completed a private placement of
31,680,000
INX subscription receipts (units) for gross proceeds
of $
31,283
.
Each unit consists of one Ordinary share and one-half of one Ordinary share purchase warrant exercisable for two years at
an exercise price of CAD1.88 ($1.49) per share.
As the exercise price of the warrants is denominated in CAD while the functional currency
of the Company is the U.S. dollar, the warrants are accounted for as a derivative liability.
F-
42
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 17: EQUITY (Cont.)
The warrants were valued at $
4,255
as
of the date of the private placement. The balance of gross proceeds from the private placement in the amount of $
27,028
was allocated
to Ordinary shares with the net addition to equity of $
25,336
after the deduction of the issuance cost of $
1,692
.
Agents of the private placement collectively
received cash commissions of $
1,951
, of which $
259
was allocated to the warrants and remaining amount recorded as transaction fees in
profit or loss.
The placement agents also received
1,810,740
Agent compensation options exercisable into one common share of the Parent Company at an exercise price of CAD
1.25
($
0.99
). The options
were valued at $
515
.
As a result of the Transaction (see Note
1), effective on January 10, 2022, options granted and warrants issued by INX prior to such date were surrendered and cancelled, and new
options and warrants of the Parent Company were issued to holders with equivalent terms, adjusted for the Exchange Ratio. Upon the cancellation
of the private placement warrants, the warrant liability in the amount of $
4,255
was derecognized and recorded as a contribution to equity.
NOTE 18: SHARE-BASED PAYMENT
a.
Shares reserved for Employees Stock Option Plan:
On December 29, 2017, the INX's
Board approved the initial resolution to reserve
417,000
Ordinary Shares of the Company for the purpose of an Employees Stock Option Plan
("ESOP") and future grants to employees and consultants as the Board may approve from time to time.
INX's board of directors adopted
the INX Limited Share Ownership and Award Plan (2021) on February 22, 2021, as amended from time to time (the "Share Ownership and
Award Plan" or the "Plan"), and INX shareholders approved the Plan on March 18, 2021.
The Plan provides for the grant
of options to purchase Ordinary Shares and restricted shares of INX to such employees, directors and consultants engaged by INX or
any of its affiliates. The Plan further provides for the grant of options and restricted shares to service providers and includes
U.S. and Israeli appendices that further specify the terms and conditions of grants of options and restricted shares to such
grantees.
As a result of the Transaction (see Note
1), effective on January 10, 2022, options granted by INX prior to such date were surrendered and options of the Parent Company were issued
to holders with equivalent terms and adjusted for the Exchange Ratio and are currently governed by the Omnibus Equity Incentive Compensation
Plan of the Parent Company.
b.
Share options granted by the Parent Company to employees and service providers of the Company that are
exercisable into Common shares of the Parent Company and outstanding as of December 31, 2022:
1.
On March 15, 2022, two officers received
5,036,132
restricted
shares of the Parent Company at cashless basis with vesting period of three to five years. As of December 31, 2022,
2,072,517
of these
shares have vested.
2.
On March 15, 2022, the Parent Company granted certain employees
and a service provider options to purchase
5,129,334
Common Shares at a price per share equal to the fair value per share at the date
of the commitment at a price of CAD
0.64
($
0.50
), with the vesting period of over
4
years.
3.
On March 24, 2022, the Parent Company granted one employee
options to purchase
509,617
Common Shares at CAD
0.76
($
0.60
), a price per share equal to the fair value per share at the date of the
commitment to grant the options with vesting period of over
4
years.
4.
On June 30, 2022, the Parent Company granted one employee
options to purchase
786,535
Common Shares at CAD
0.31
($
0.25
), a price per share equal to the fair value per share at the date of the
commitment to grant the options. Options are fully vested at the time of the grant.
F-
43
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 18: SHARE-BASED PAYMENT
5.
On June 30, 2022, the Parent Company granted one employee
options to purchase
1,334,322
Common Shares at CAD
0.31
($
0.25
), a price per share equal to the fair value per share at the date of the
commitment to grant the options. Options shall vest over the period of over
4
years with the first anniversary on May 2, 2023, with all
options fully vested on May 2, 2026.
6.
On September 21, 2022, the Parent Company granted one employee
options to purchase
1,325,946
Common Shares at CAD
0.265
($
0.20
), a price per share equal to the fair value per share at the date of
the commitment to grant the options. Options shall vest over the period of over
3
years with the first anniversary on September 20, 2023,
with all options fully vested on September 20, 2025.
7.
On October 18, 2022, the Parent Company granted one employee
options to purchase
254,808
Common Shares at CAD
0.235
($
0.17
), a price per share equal to the fair value per share at the date of the
commitment to grant the options. Options shall vest over the period of over
3
years with the first anniversary on October 18, 2023, with
all options fully vested on October 18, 2025.
During the year ended December 31, 2021, activity
related to stock options under the Plan was as follows:
Number of
Stock
Options
Weighted
average
exercise
price
Balance as of January 1, 2021
-
$
-
Granted
10,381,959
0.48
Exercised
-
-
Balance as of December 31, 2021
10,381,959
0.48
INX Stock Options exercisable at the end of year
5,396,720
$
0.25
The weighted average fair value of the
options granted during the year ended December 31, 2022 and 2021, was $
0.64
and $
1.035
per option, respectively.
c.
For the year ended December 31,2022 and 2021 and 2020, the Company recorded share-based compensation expenses
of $
1,135
and $
10,899
and $
570
, respectively, related to stock options granted.
d.
The table below summarizes the assumptions that were used to estimate the fair value of the above options
granted to employees using the Black- Scholes option pricing model:
2022
2021
Expected term (years)
10
10
Expected volatility
89.78
% -
94.32
%
94
% -
94.67
%
Estimated exercise price
$
0.17
-
0.55
$
0.037
-
1.06
Risk-free interest rate
1.37
% -
3.356
%
1.37
% -
1.71
%
Dividend yield
-
-
F-
44
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 18: SHARE-BASED PAYMENT (Cont.)
e.
For certain grant commitments issued during 2021, whose exercise price had
not yet been determined, the Company recorded the share-based payment according to the fair market value at the end of each period. Once
the options were officially granted by the board of directors and the exercise price had been determined, the Company has set the share-based payment
amount based on the official grant.
NOTE 19: EARNINGS (LOSS) PER SHARE
The net income (loss) and weighted average number
of ordinary shares used in the calculation of basic and diluted income (loss) per share are as follows:
Year ended December 31
2022
2021
2020
Net income (loss) used in the calculation of earnings (loss) per share, basic and diluted
$
211,334
$
(
215,235
)
$
(
24,331
)
Weighted average number of ordinary shares for the purposes of earnings (loss) per share, basic and diluted
46,767,930
15,048,576
12,152,006
NOTE 20: FINANCIAL RISKS AND RISK MANAGEMENT
Financial risk management objectives
and policies
Activities of the Company may expose it to variety
of financial and related risks: credit risk, market risk, liquidity risk, digital asset risk, loss of access risk, irrevocability of transactions,
and regulatory oversight risk, among others. The Company seeks to mitigate potential adverse effects of these risks on performance and
the Company's financial position by employing experienced personnel, monitoring of market events, maintaining sufficient liquidity,
implementing appropriate policies and procedures addressing significant financial risks and diversifying the Company's business
strategy within the constraints of the Company's objectives.
Credit risk
Credit risk is the risk that a counterparty to
a financial instrument will fail to discharge an obligation or commitment that it has entered into, causing the other party to incur a
financial loss. The Company's cash and cash equivalents, investments and digital assets are exposed to credit risk. The Company
limits its credit risk by placing its assets with high credit quality banks, financial institutions and digital assets custodians that
are believed to have sufficient capital to meet their obligations. While the Company intends to only transact with counterparties that
it believes to be creditworthy there can be no assurance that a counterparty will not default and that the Company will not sustain a
material loss as a result. It is the Company's policy to monitor the creditworthiness of its counterparties and to minimize the
concentration of credit risk to mitigate significant loss caused by potential counterparty's failure.
Market risk
Market risk is the risk that the value of financial
instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or foreign currency
risk), whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments traded in a market
or market segment. All investments present a risk of loss of capital. The maximum risk resulting from financial instruments is equivalent
to their fair value. The Company's investments are susceptible to also market risk arising from uncertainties about future prices
of the instruments. The Company moderates this risk through the various investment strategies within the parameters of the Company's
investment guidelines.
F-
45
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 20: FINANCIAL RISKS AND RISK MANAGEMENT (Cont.)
As of December 31, 2022, management's estimate
of the effect on equity investments due to a +/-
20
% change in the market prices of the Company's investments, with all other variables
held constant, is +/- $
8
. (December 31, 2021 - $
3
).
Liquidity risk
Liquidity risk is the risk that the Company will
not be able to meet its financial obligations as they come due, as well as the risk of not being able to liquidate invested assets at
reasonable prices. The Company manages liquidity risk by maintaining sufficient cash balances and investing capital reserves in highly
rated, marketable financial instruments that allow meeting liquidity obligations in the ordinary course of business as well as under increased
liquidity demands.
Foreign currency risk
Foreign currency risk is the risk that the fair
value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign currency exchange rates. The Company's
exposure to foreign currency risk relates primarily to the Company's continuing operation (when revenue or expense is recognized
in a different currency from the Company's presentation currency). As of December 31, 2022 and 2021, management's estimate
of the Company's exposure related to the price fluctuation in foreign currency is not material.
NOTE 21: COMMITMENTS AND CONTINGENCIES
On December 15, 2022, INX entered into a shareholders'
and joint venture agreement with SICPA SA, a company organized under the laws of Switzerland, Mr. Yosef Meir Cohen and Mr. Hagai Itkin
("SICPA Agreement"), whereby parties to the agreement have agreed to joint their expertise and collaborate to develop central
bank digital currency solutions with the utilization of blockchain technology. Subsequently, for the purpose of executing joint objectives
under the SICPA Agreement, the parties agreed to form SICPA INX SA ("SICPA INX"), an entity organized under the laws of Switzerland.
All parties to the agreement are to become shareholders of SICPA INX, with INX's share of the issued and outstanding share capital
to be
33
percent. Also, under the SICPA Agreement, INX is entitled to introduce a new partner within the first year from the date of the
agreement, which, if approved by the majority shareholder, would be entitled to receive a maximum number of shares constituting
16.5
percent
of the issued and outstanding share capital of SICPA INX, which shall be reduced from INX's initial allocation of shares. In relation
to the SICPA Agreement, INX also intends to enter into a service agreement with SICPA INX to license its technology and provide technology
support and management services for a period of one year in return for compensation.
F-
46
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 22: OPERATING SEGMENTS
a.
General:
Reportable segments represent the two
lines of business for which the Company expects to earn income, incur costs and allocate resources. Operating segments are identified
based on information that is reviewed by the chief operating decision maker ("CODM") and senior management to make decisions
about resources to be allocated and assess operational and financial performance. Accordingly, for management purposes, the Company is
organized into operating segments as follows:
1.
Brokerage segment -– facilitates financial transactions
between banks and offers a full range of brokerage services to banks worldwide.
2.
Digital assets segment -– development and operation
of an integrated, regulated solution for trading blockchain assets such as digital assets and security tokens, and providing services
and products related to the trading of blockchain assets.
b.
Reporting operating segments:
Brokerage
segment
Digital
assets
segment
Total
Year ended December 31, 2020:
External customers
$
-
$
-
$
-
Total revenue
-
-
-
Segment income (loss)
-
(
11,813
)
(
11,813
)
Unallocated corporate expenses:
Other expense
(
12,518
)
Net income (loss) before taxes
$
(
24,331
)
Year ended December 31, 2021:
External customers
$
2,278
$
266
$
2,544
Total revenue
2,278
266
2,544
Segment income (loss)
383
(
54,288
)
(
53,905
)
Unallocated corporate expenses:
Other expense
(
161,173
)
Net income (loss) before taxes
$
(
215,078
)
F-
47
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 22: OPERATING SEGMENTS (Cont.)
Brokerage
segment
Digital
assets
segment
Total
Year ended December 31, 2022:
External customers
$
3,621
$
652
$
4,273
Total revenue, net
3,621
652
4,273
Segment income (loss)
(
157
)
(
14,434
)
(
14,591
)
Unallocated corporate expenses:
Other income
226,044
Net income (loss) before taxes
$
211,453
Unallocated corporate expenses for the
years ended December 31, 2022, 2021 and 2020 include the fair value adjustment on INX Tokens.
c.
Select balance sheet information:
Brokerage
segment
Digital
assets
segment
Total
As of December 31, 2021:
Segment assets
$
2,544
$
75,958
$
78,502
Segment liabilities
940
300,496
301,436
As of December 31, 2022:
Segment assets
$
2,351
$
79,838
$
82,189
Segment liabilities
1,077
63,644
64,721
d.
Revenue from major customers:
Revenue from major customers which account for
10
% or more
of total revenue as reported in the financial statements:
Year ended December 31,
2022
2021
2020
Brokerage segment:
Customer A
$
452
$
265
$
-
F-
48
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 22: OPERATING SEGMENTS (Cont.)
e.
Revenue based on geographic locations:
Revenue reported in the financial statements are attributed
to countries based on the location of the customers, as follows:
Year ended December 31,
2022
2021
2020
Brokerage segment:
State of Israel
$
1,562
$
911
$
-
Other countries
2,059
1,367
-
Digital assets segment:
State of Israel
$
90
$
-
$
-
Other countries
562
266
-
NOTE 23: EMPLOYEE BENEFITS EXPENSE
Share-based and token-based compensation, and short-term employee benefits
included in consolidated statements of comprehensive income (loss) are as follows:
Year ended December 31,
2022
2021
2020
Research and development
Compensation and benefits
$
2,159
$
1,286
$
738
Share based compensation
2
1,105
255
Token based compensation
125
262
336
Sales and Marketing
Compensation and benefits
1,160
677
267
Share based compensation
1,022
2,809
171
Token based compensation
435
177
423
General and administration
Compensation and benefits
6,493
5,072
1,600
Share based compensation
111
6,985
144
Token based compensation
817
6,175
3,174
During the years ended December 31, 2022, 2021
and 2020, the Company incurred cost of $
899
, $
608
and $
10
respectively, related to contributions to employee post-retirement benefit plans.
F-
49
INX LIMITED
NOTES TO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER
2022 AND 2021
U.S. dollars in thousands (except share, token, per share and per
token data)
NOTE 24: TAXES ON INCOME
The Company is an Israeli company for tax purposes
and as such, subject to Israeli taxes. Subsidiary entities are generally subject to taxes in the jurisdictions where they are located
or have the majority of operations and management control, therefore federal income taxes are calculated as if the Company filed separate
federal income tax returns. The following tax rates were applicable to the individual entities based on the country of their organization:
●
Israel corporate income tax rate –
23
percent in 2022, 2021 and 2020
●
United States weighted tax rate – 21percent (
28
percent state weighted tax rate)
●
Gibraltar tax rate -
12.5
percent and
10
percent before August 1, 2021.
a.
Tax assessments:
INX, ILSB and Midgard are subject to the tax assessment
evaluation by the Israeli Tax Authority. After the receipt of such tax assessment the entity is no longer subject to the tax examination
by the tax authority. The Company's subsidiary, ILSB received the final tax assessment through 2020 tax year, whereas, Midgard and
INX, has not received the final tax assessment since its incorporation.
b.
Carryforward losses for tax purposes and other temporary
differences:
Carryforward operating tax losses of the Group
total approximately $
53,000
as of December 31, 2022. Deferred tax assets relating to these losses and to other deductible temporary differences
were not recognized because their utilization in the foreseeable future is not probable.
c.
Theoretical tax:
For the year ended December 31, 2022, the difference
between tax expense, assuming that all income and expenses, gains and losses in the statement of income were taxed at the statutory tax
rate, and taxes on income recorded in profit or loss is mainly due to the nontaxable income related to the revaluation of the INX token
liability. As the Company and its subsidiaries incurred net losses during the years ended December 31, 2021 and 2020 for which deferred
income taxes were not recorded, as mentioned in Note 24b, the reconciliation between the tax expense, assuming that all income and expenses,
gains and losses in the statement of income were taxed at the statutory tax rate, and the taxes on income recorded in profit or loss,
does not provide significant information and therefore is not presented.
During the years ended December 31, 2022, 2021
and 2020, the Company recognized income tax expense of $
119
, $
157
and $
0
, respectively.
F-
50
ITEM 19.
EXHIBITS.
Exhibit
Number
Exhibit Description
1.1
Memorandum of Association of the Company (previously filed as Exhibit 3.1 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
1.2
Amended Third Amended and Restated Articles of Association of the Company, as currently in effect (Previously filed as Exhibit 1.2 to the Company's Form 20-F, filed on April 29, 2021 and herein incorporated by reference)
2.1
Form of INX Token Purchase Agreement (previously filed as Exhibit 4.1 to Amendment No. 10 to the Company's Form F-1, filed on August 12, 2020 and herein incorporated by reference)
2.2
Form of Waiver and Subordination Undertaking (previously filed as Exhibit 4.2 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
2.3
Smart Contract (previously filed as Exhibit 4.3 to Amendment No. 5 to the Company's Form F-1, filed on December 20, 2019 and herein incorporated by reference)
2.4
INX Smart Contract Description V.3.0, dated December 12, 2019 (previously filed as Exhibit 4.4 to Amendment No. 5 to the Company's Form F-1, filed on December 20, 2019 and herein incorporated by reference)
4.1#
Amended and Restated Consultancy Agreement dated June 25, 2018 between Triple-V (1999) Ltd. and INX Limited (previously filed as Exhibit 10.4 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.2
#
Financial Services Agreement dated December 26, 2017 between Insight Finance Ltd. and INX Limited (previously filed as Exhibit 10.5 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.3
Second Amended and Restated Engagement Agreement dated December 31, 2017 between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.6 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.4
Amendment to the Second Amended and Restated Engagement Agreement dated January 31, 2018, between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.7 to the Company's Form F-1,  filed on August 19, 2019 and herein incorporated by reference)
4.5
Amended and Restated Consultancy Agreement dated June 25, 2018 between Mr. Jonathan Azeroual and INX Limited (previously filed as Exhibit 10.13 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.6#
Executive
    Employment Agreement dated January 1, 2021 between Alan Silbert and INX Digital, Inc. (previously filed as Exhibit 10.42 to
    Post-Effective Amendment No. 2 to the Company's Form F-1, filed on March 30, 2021 and herein incorporated by
    reference)
4.7
Services Agreement dated March 8, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.15 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.8#
Amendment to Services Agreement dated September 6, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.16 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.9#
Second Amendment to Services Agreement dated November 30, 2018 between Bentley Limited and INX Limited (previously filed as Exhibit 10.17 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.10#
Amended and Restated letter of invitation, dated June 25, 2018, between Mr. David Weild and INX Limited (previously filed as Exhibit 10.18 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.11#
Letter of Invitation, dated July 10, 2018, between Mr. Nicholas Thadaney and INX Limited (previously filed as Exhibit 10.22 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.12#
Letter of Invitation, dated September 21, 2018, between Mr. Thomas Lewis and INX Limited (previously filed as Exhibit 10.24 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
129
4.13
Form of Custodial Services Agreement between INX Digital Inc. and BitGo Trust Company (previously filed as Exhibit 10.25 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.14#
Simple Agreement for Future Equity, dated April 25, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.27 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.15#
Simple Agreement for Future Equity, dated April 25, 2019, between A-Labs Finance and Advisory Ltd. and INX Limited (previously filed as Exhibit 10.28 to the Company's Form F-1, filed on August 19, 2019 and herein incorporated by reference)
4.16#
Simple Agreement for Future Equity, dated August 30, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.29 to Amendment No. 1 to the Company's Form F-1, filed on September 26, 2019 and herein incorporated by reference)
4.17#
Simple Agreement for Future Equity, dated August 30, 2019, between Triple-V (1999) Ltd. and INX Limited (previously filed as Exhibit 10.30 to Amendment No. 1 to the Company's Form F-1, filed on September 26, 2019 and herein incorporated by reference)
4.19#
Simple Agreement for Future Equity, dated November 29, 2019, between Shy Datika and INX Limited (previously filed as Exhibit 10.33 to Amendment No. 5 to the Company's Form F-1, filed on December 20, 2019 and herein incorporated by reference)
4.20#
Simple Agreement for Future Equity, dated January 31, 2020, between Shy Datika and INX Limited (previously filed as Exhibit 10.35 to Amendment No. 8 to the Company's Form F-1, filed on April 23, 2020 and herein incorporated by reference)
4.21#
Simple Agreement for Future Equity, dated March 7, 2020, between A-Labs Finance and Advisory, Ltd. and INX Limited (previously filed as Exhibit 10.36 to Amendment No. 8 to the Company's Form F-1, filed on April 23, 2020 and herein incorporated by reference)
4.22#
Simple Agreement for Future Equity, dated March 31, 2020, between Shy Datika and INX Limited (previously filed as Exhibit 10.37 to Amendment No. 8 to the Company's Form F-1, filed on April 23, 2020 and herein incorporated by reference)
4.23#
Amended and Restated Services Agreement dated July 6, 2020 between Mr. Paz Diamant and INX Limited (previously filed as Exhibit 10.38 to Amendment No. 9 to the Company's Form F-1, filed on August 3, 2020 and herein incorporated by reference)
4.24
Transfer Agency and Service Agreement (previously filed as Exhibit 10.40 to Amendment No. 9 to the Company's Form F-1, filed on August 3, 2020 and herein incorporated by reference)
4.25#
Services Agreement, dated December 24, 2020, between Itai Avneri and INX Limited (previously filed as Exhibit 10.44 to Post-Effective Amendment No. 2 to the Company's Form F-1, filed on March 30, 2021 and herein incorporated by reference)
4.26
Amended and Restated Securities Exchange Agreement dated, November 3, 2021, among Valdy Investments Ltd, the Company, the INX securityholders listed therein, PI Financial Corp. and Eight Capital (previously filed as Exhibit 99.2 to the Company's Form 6-K, filed on November 4, 2021 and herein incorporated by reference)
4.27#
Letter of Invitation, dated December 13, 2021, between Hilary Kramer and INX Limited (previously filed as Exhibit 4.27 to the Company's Form 20-F, filed on May 2, 2022 and herein incorporated by reference).
4.28#
Letter of Invitation, dated February 3, 2022, between Demetra Kalogerou and INX Limited (previously filed as Exhibit 4.28 to the Company's Form 20-F, filed on May 2, 2022 and herein incorporated by reference).
4.29#
INX Limited Share and Token Ownership and Award Plan, as amended on March 31, 2022 (previously filed as Exhibit 4.29 to the Company's Form 20-F, filed on May 2, 2022 and herein incorporated by reference).
4.30#
INX Limited Restricted Token Grant Notice and Restricted Token Agreement (previously filed as Exhibit 4.30 to the Company's Form 20-F, filed on May 2, 2022 and herein incorporated by reference).
11.1
List of subsidiaries of the Registrant (previously filed as Exhibit 11.1 to the Company's Form 20-F, filed on April 29, 2021 and herein incorporated by reference).
12.1*
Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*
Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
Consent of Kost Forer Gabbay & Kasierer, a member firm of Ernst & Young Global, Independent Registered Public Accounting Firm
.
101
The following financial information from INX's Annual Report on Form 20-F for the year ended December 31, 2022, formatted in Inline Extensible Business Reporting Language (XBRL): (i) Statement of Financial Position, (ii) Statements of Comprehensive Loss, (iii) Statements of Changes in Equity, (iv) Statements of Cash Flows and (iv) Notes to Financial Statements.*
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Filed herewith
#
Management contract or compensatory
plan
130
SIGNATURES
The registrant hereby certifies that it meets all
of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report filed
on its behalf.
INX LIMITED
Date:  May 1, 2023
By:
/s/ Shy Datika
Shy Datika
President and CEO
131