BLOCKCHAIN BUSINESS CASE FORUM 27 GIGNO 2018

1. Supply@ME
Open Supply Chain Project
the AvantGarde Group Subsidiary Company

2. Business Innovator supporting Companies for their
programs of digital transformation..
The paradigm “Financial Services & Tech” is
developed by the Group in an innovative way: from
an operational point of view, AvantGarde is in fact the
first Economic Grouping with legal personality, in
which not only a framework of Strategists, Data
Scientists & UX Specialists has to be considered, but
also an orchestrating process of Companies which
successfully have been leading the market for several
years and innovative Start-ups with the aim of playing
like a booster on specific topics and technologies. A
remarkable contribution is given, in addition, by ICT
Legal Firms and the partnership with well-known Italian
Notary Offices.
The main objective is to develop and offer a new and
innovative collaboration model with Financial
Institutions and the related Customer Base (Individual &
SME): the “Business Platforms”.
According to AvantGarde, Business Platforms (which
are composed of application -, physical devices, format,
new legal forms, preventive user researches and
patterns of analysis developed by means of evolved
systems artificial intelligence) are the actual accelerators
that can be exploited by the “System” (e.g. Banks,
Insurance Companies, Individuals, Enterprises, …)
thanks to three tailored NewCOs set up by
AvantGarde:
⁄ Supply@ME: FinTech launched the program “Open
Supply Chain Project”, which is meant to be an
innovative “Platform” able to “connect” Supply Chains
with their own “ecosystem” of Stakeholders (e.g.
Banks, Insurance Companies, International Customers,
Strategic Suppliers, Institutions, …) with the aim of
allowing the Supply Chains themselves to use
innovative services in financing and, more in general,
digital collaboration field;
⁄ RegTech Open Project: a new Company,
strengthened by a significant Customer Portfolio as
well as strategic agreements with important
Management Consulting and Information Companies,
which will introduce into the market the new
paradigm of “Cognitive Internal Control”: it is a group
of services for internal controls and business
resilience able to exploit the “exponential” technology
of artificial intelligence;
⁄ Darwinsurance: an already existing start-up – which
is also entered into the register of insurance brokers –
which will launch into the market an innovative
bouquet of insurance products in the field of “living
services”.
Thanks to the innovative “portfolio” of NewCOs,
AvantGarde can offer to the market a series of
innovative solutions as well as support its own
Customers for projects of high-strategy content,
related to the definition and the implementation of
digital strategies or new service models.
35+ (CLIENTS), 3,2 M (CAPEX 2014-2017),
20+ (SCRUM FACTORY FTE)
the AvantGarde Group
RegTech Open
Project
2AvantGarde at a Glance
Supply@ME Darwinsurance

3. AVANTGARDE
DEVO LAB,
SDA BOCCONI
OBSERVATORIES HELD AT SCHOOL
OF MANAGEMENT IN POLITECNICO
MILANO
THE
ITALIAN BLOCKCHAIN ASSOCIATION
RESEARCH &
DESIGN FIRST
⁄ S T U D Y
FINANCIAL SERVICES
«HIGH IMPACT
TECHNOLOGY RADAR»
The two most relevant technologies:
⁄ Digital Biometrics which can satisfy both
internal needs (security) and external
stakeholders (customer experience)
⁄ Big Data technology to deliver their value in
terms of useful insights that improve the
capability to place the right service mix to the
right target of customers
⁄ O B S E R V A T O R I E S
INTERNET OF THINGS
Born in 2011, it aims to meet the companies’
growing interest towards potentialities offered by
the new paradigm Internet of Things (IoT).
SUPPLY CHAIN FINANCE
Born in 2013, it aims to meet the companies’
growing interest towards opportunities of
working-capital optimization and access to
credit, which are offered by Supply Chain Finance
solutions.
3AvantGarde at a Glance

4. The archetype «Supply Chain» can refer to more
Companies, which are linked by «upstream» business
relationships (Supplier to Head Supply Chain) or
«downstream» ones (Franchising/ Affiliation Contracts),
of different dimensions (SME’s compared to «large
corporate» Heads of Supply Chain) and with various
needs. The «Supply Chain» can be considered as a single
entity (in some cases, like a real «economic grouping»);
on the other hand, it is necessary to analyze the needs of
its different nodes with the aim of personalizing the
offered services. In any case, the «Supply Chain» must be
considered as a single «aggregate», in relation to the
opportunity of providing innovative financial, insurance
and non- services (e.g. Process certifications, compliance
programs, …) which can actually add value a new set of
data and information able to represent, in the right way,
economic, financial and operational dynamics of Supply
Chain.
It is well established that the «System» (financial,
insurance related, …) does not analyze information
specificities of the various Supply Chains (in order to
understand specific needs and provide personalized
services) and seeks, because of regulatory constraints
(e.g. Basel rating systems - 3 compliants) or ICT
(impossibility of developing «custom» services), to
standardize the proposition trying to offer its own
«traditional» products/ services (factoring, invoice
discount facilities, unsecured loans provided only
according to a «cash based» and non «asset based»
logic, …). On the other hand, in relation to non-financial
services, Supply Chains themselves are supported by
professionals, who are often unable to create synergies
due to a limited production capacity, by virtue of data
and information collected on the whole Supply Chain.
Supply@ME
EXECUTIVE SUMMARY
Supply chains (from a
Company as well as
sector-based point of
view) represent a real
potential market because
of the proposition of
new digital services.
Supply@ME ∙ Executive Summary 4

5. The Platform (Supply@ME) employs exponential
technologies (blockchain, artificial intelligence, …)
supporting data certification and enabling
«collaborative» processes among the different
«stakeholders» belonging to a Supply Chain. In addition,
besides to the provision of a «sandbox» area for enabling
a continued development of new Supply Chain services
by interested Operators (Investment Funds, Banks,
Insurance Companies, external Developers of Companies
dealing with other types of services, …), the Platform can
directly perform specific services, among which the ones
related to the provision of alternative finance (in order to
allow Commercial Banks to finance anyhow – in an
innovative manner – Supply Chains without impacts on
the credit function) and more.
Therefore, it is evident that the Business Model Canvas
has its basis on the data valorization (creating an
innovative information data base of which the «system»
does not disposes) able to guarantee the planning of new
value-added digital services.
Consequently, Supply@ME business plan is based on the
following «pillars»:
⁄ collecting funds for completing the platform
technological investment (Blockchain), with the aim of
increasing the customer base (onboarding of new
Supply Chains) and performing some innovative
services (in particular – Supply Chain Finance and other
digital services having as subject the Supply Chains’
reputation and compliance)
⁄ the arrangement of a business plan with an average
expected profitability equal to 33%/ year (thanks to the
mix of financial and non-financial, which typically
provide an even higher profitability than the lending
operations performed by Supply Chains)
Value added
returned
(average
5-years)
33%per year
@This context gives rise to the
opportunity of launching an
initiative promoting the
adoption of an «open»
Platform to the various
Supply Chains. This Platform
requires - as a «deal» - to
share data and information
of single Supply Chains with
a Suppliers’ «Ecosystem»
(financial, insurance -,
compliance involved, …), as a
result of the provision of
innovative digital services
able to satisfy the needs of
single Companies belonging
to the Supply Chain as well
as its Anchor Company.
Supply@ME ∙ Executive Summary 5

6. BACKGROUND
/ TOP 10 OF RISKS IN ITALY / WHICH GOALS MUST BE ACHIEVED BY
YOUR COMPANY BY VIRTUE OF DIGITAL
TRANSFORMATION?
Reduction in
operating costs
Reduction in
timing of process
Improvement of
working internal
quality
42%
42%
40%
36%
30%
Interruption of
activity (incl. to the
Supply Chain)
Changes in the market
(volatility, increase of
competition,
stagnating market)
/ TRADE CREDIT IN ITALY
The Investment
digital as value leverage
The Risks
Business continuity and
competitiveness on top of concerns
Finance
a potential market of around € 400 Billions
Supply@ME ∙ Background 6

7. SOURCES OF INSPIRATION
OBP has the mission of supporting Banks, Developers (and also
other stakeholders like final customers, Society in general, …) for
design & build new digital financial services enviroment. In
particular, for Banks (actually the principal Client of OBP like
Supply Chain for AVG OSCP), OBP:
⁄ Offers a wider range of web and mobile apps to your
customers
⁄ Reduces integration and maintenance costs for new
applications
⁄ Achieves better data control and security for the end-users
⁄ Leverages a growing community of developers and deploy
new apps instantly
Open
Supply Chain
Project
OSCP has the mission to connect Supply Chain
(both anchor Company and SME) with Trusted
Third Parties Ecosystem targeting:
⁄ The development of Supply Chains
Communities
⁄ The design & building of new innovative digital
services (financial e NON financial)
OSCP is also aimed at developing a new Supply
Chain data certification process for Third Parties
data consumption using Blockchain technologies
and Artificial intelligence models.
@
BANK
Supply@ME ∙ Sources of Inspiration 7

8. VALUE PROPOSITION & SOLUTIONS
8

9. Platform
Business Services
VALUE PROPOSITION
Goals Supply Chain
Collaboration Goals
A new way to support Supply Chains
⁄ Supply Chain «bankability» enhancement
program (unlock the untapped market)
⁄ New Supply chain Collaboration
mechanisms
⁄ SME «Reputation enabler» services
⁄ «Industrial Internet of Things» enabler
Blockchain permissioned infrastructure
ERP connections & SC Data Hub
SME & Supply Chain APP + Simulators
API consumption model for «Third Party»
Inventory «tokenization» for a new way
of working capital optimization
New Digital Services w/ AI & Blockchain
(Reputation, Compliance, Bankability, ..)
Early Payment process (to be)
Supply Chain Financial analysis (Anchor
Company & SME) (to be)
SME «Fondo di Garanzia» simulator – new
rating system (facilitated loans) (to be)
1
2
3
4
5
⁄ Enhancing «trust» between Supply Chain
Financial & Insurance Services Industry
⁄ Getting more finance with new formulas
⁄ Launching new «supply chain finance business
line» without ICT impact
⁄ Cross selling opportunities between business
unit (Large Corporate, Middle Market, …)
Employment of the Platform’s Sandbox Area for:
⁄ Generating new incomes thanks to the
development and the offer of new value-added
digital services (in the case of Fintech)
⁄ Digitalizing processes of Supply Chain (in the
case of «internal» ICT developers)
Supply@ME ∙ Value Proposition & Solutions 9

10. SOLUTIONS: INVENTORY TOKENIZATION OVERVIEW
Supply@ME ∙ Value Proposition & Solutions 10
⁄ Pricing of the transactions are at Fair value (no
additional costs)
⁄ Supply@ME:
▪ is exposed price and counterparty risk relating to
the commodity purchase
▪ has the ability to sell or pledge the commodity
inventories
▪ bears the risk of damage or loss (or insures these
risks)
▪ bears the commodity storage other risks
⁄ Duration = ~12 months
⁄ Preferred Supply Chain: Commodity,
Made in Italy, …
⁄ The costs or value of the assets
transferred can be measured reliably.
There is a purchase price at which the
inventories are sold to Supply@ME

11. SOLUTIONS: INVENTORY TOKENIZATION PROCESS
Supply@ME ∙ Value Proposition & Solutions 11
⁄ B2B meetings with Supply Chain target –
introduced by Partners (Commerical Banks)
⁄ NdT Community & Unionfiliere Network
⁄ Supply Chain environment (NO single SME)
1 Supply Chain deal
set up
2
Deal management
Funding Execution
⁄ Understanding Supply Chain needs (working capital
optimization, derecognition, …)
⁄ Annual recurring Asset under management proxy
⁄ Quick Onboarding KIT: “Patrimonio destinato”
approval (ex Italy Civil Code 2447-bis; the
“Patrimonio destinato” is a special reserve of the
Company - focused on single Supply Chain),
“Patrimonio destinato» funding strategy (see next
slides) and Blockchain permissioned set up
2-A 2-B

12. INVENTORY TOKENIZATION PROCESS
1. Supply Chain deal set up
Supply@ME ∙ Value Proposition & Solutions 12
Supply Chains served Types of business services
⁄ «Closed» Supply Chains with internal integrated
process (i.e. Supply Chain with SME that are
subsidiaries of Anchor Company «Parent»)
⁄ Supply Chains with «derecognition needs»
⁄ Supply Chains with SME not served by
Commercial Banks (i.e. SME unrated)
⁄ Both traditional Supply Chains (with SME
suppliers) and “Franchising” Supply Chains
⁄ Repurchasing Agreements with 12 months maximum duration
⁄ Derecognition NOT applicable
⁄ Opportunity: Producer/ Manufacturer has the availability of
the goods (Inventory “on the premises”)
Inventory REPO
⁄ Purchase of the inventory with the possibility of leaving “on
the premises" to the Producer the goods object of Inventory
with also the refinement of mandate to sell between
Supply@ME and the Producer
⁄ Supply@ME freely places purchased Inventories
⁄ Derecognition applicable
Inventory Purchase Overdraft

13. INVENTORY TOKENIZATION PROCESS
2-A. Deal management: funding
Supply@ME ∙ Value Proposition & Solutions 13
SC 1
SC 2
SC …
⁄ RAIF share subscription
(«Patrimonio destinato» of
Supply@ME is a sub-fund of RAIF
and issues a financial instrument
underwrited by RAIF)
⁄ Lending to «Patrimonio
destinato» by Commercial Banks
(Partner of Supply@ME)
⁄ Securitisation of the performing
loans of which Supply@ME is
entitled by virtue of the REPO
Approval of
«Patrimonio
destinato» ex cc
2447-bis for each
Supply Chain
Investor strategy
(several opportunities)
⁄ Blockchain permissioned
infrastructure for each Supply Chain
served
⁄ Consensus process that involves
several Supply Chain peers/ nodes
(SME, Anchor, Data Consumer, …) for
conflicts of interest mitigation
⁄ Investors (in order to enhancing data
trust) could be a blockchain node
Trusted data
workplace

14. ROADMAP
December 2017
January 2018
March 2018
November 2017
@
Supply@ME ∙ Roadmap 14

15. OPERATIONS
By virtue of the AvantGarde Group’s «networking», +20 FTEs have
been allocated in the NewCO Supply@ME for development activities
concerning the Platform (Designers, Data Scientists, Developers,
Architects, Security, Marketing & Sales).
TEAM
Alessandro Zamboni
Leader
Manager specialized in Industry of Financial
Services and related strategic and digital
models. After a professional experience in
L’Oréal in the Strategic Marketing sector, he
played the role of Managing Partner in a
Consulting Firm specialized in Internal
Controls Systems for Financial Institutions
until 2014. Among a huge amount of
responsibilities and activities, he took part to
the publication “Internal Governance”, for
which he was responsible for relating about
strategic directives of banking system. In
2014, he founded the Economic Grouping
The AvantGarde Group (“AvantGarde”),
becoming its current
Chairman and Managing Partner.
He is AssoFinTech Executive member.
Mr. Camerinelli has extensive experience
within his areas of coverage as well as in
providing research and consulting services to
clients. Most recently, he served as a senior
analyst with Celent, focusing on the financial
supply chain and Single Euro Payments Area
(SEPA). Prior to that, he was the European
director and chief analyst at the Supply Chain
Council, a non-profit serving the logistics and
supply-chain industry. In that capacity, Mr.
Camerinelli provided independent research
and advisory services as well as business
development and budget control for the
organization. Before that, he was a vice
president and research leader at META
Group’s Electronic Business Strategies service,
tracking trends in supply chain management,
product life-cycle management, e-
procurement, and sourcing.
.
Luca Bolognini
President of the Italian Institute of Privacy, lawyer and founding
partner of the office-international boutique ICT Legal Consulting.
Author of several volumes published in Italy and abroad, he wrote his
first Italian commentary to the EU Reform concerning Data Protection
(“Il Regolamento Privacy Europeo” – «The European Privacy
Regulation» - Giuffrè, 2016) and teaches also IoT and Big Data in
LUISS, University of Geneva, UniCassino, UniTeramo, Unitelma, Roma
Tor Vergata.
Giovanni Cucchiarato
Partner of Jenny.Avvocati, legal boutique in the field of corporate and
M&A with important international customers. It mainly deals with
extraordinary operations, apart from equity and lending crowdfunding
and other themes related to fintech. He studied at University of
Bologna and Heidelberg and worked in the major Italian and German
offices. Author of several publications, he regularly takes part as
speaker to conferences on legal themes linked to innovation.
LEGAL TEAM
Enrico Camerinelli
Advisor & Mentor
@
Supply@ME ∙ Team 15

16. info@theavantgardegroup.it