Risk Disclosures

1. General Investment Risks

All investments carry risk, and there is no guarantee that you will receive a return on your investment. The value of investments can go down as well as up, and you may lose all or a substantial portion of your invested capital. Before investing, you should carefully consider whether such investments are suitable for you in light of your circumstances, knowledge, and financial resources.

2. Risk of Loss of Principal

You may lose all or a substantial portion of your investment.There is no guarantee that you will recover your initial investment or receive any return on your investment. The value of tokenized securities can fluctuate significantly and may become worthless.

Unlike bank deposits or government-guaranteed investments, investments in tokenized securities are not insured or guaranteed by any government agency, including the FDIC, SIPC, or any other regulatory body. Your investment is subject to market risk and the financial performance of the underlying assets or businesses.

3. Illiquidity and Transfer Restrictions

Tokenized securities are generally illiquid investments. You may not be able to sell, transfer, or otherwise dispose of your tokens when you want, or at all. Factors that contribute to illiquidity include:

• Transfer Restrictions: Securities laws and offering terms may restrict your ability to transfer tokens, including minimum holding periods, limitations on the number of transfers, and requirements for transferee accreditation
• Limited Secondary Market: There may be no established secondary market for your tokens, making it difficult or impossible to sell your investment
• Platform Limitations: Our Platform may not support or facilitate secondary trading of tokens
• Regulatory Restrictions: Applicable securities laws may limit or prohibit the resale of tokens
• Valuation Challenges: Without an active market, determining the fair value of your tokens may be difficult or subjective

You should assume that you will need to hold your investment for an extended period, possibly until a liquidity event occurs or the investment matures. You should only invest funds that you can afford to lose and that you do not need for immediate expenses or emergencies.

4. Lack of Diversification

Investing in a single deal or a small number of deals exposes you to concentration risk. If a single investment performs poorly or fails, your entire investment portfolio may be significantly impacted. Diversification across multiple investments can help reduce risk, but it does not eliminate the risk of loss.

You should carefully consider your overall investment portfolio and avoid over-concentration in any single asset or asset class, including tokenized securities.

5. Business and Operating Risks

The success of your investment depends on the financial performance and business operations of the underlying assets, businesses, or revenue streams. These may be subject to various risks, including:

• Business Failure: The underlying business may fail, become insolvent, or cease operations
• Revenue Volatility: Revenue streams may fluctuate or decline due to market conditions, competition, changes in consumer preferences, or other factors
• Management Risk: Poor management decisions, fraud, or mismanagement may adversely affect the performance of the investment
• Competition: Increased competition may reduce profitability or market share
• Market Conditions: Economic downturns, recessions, or industry-specific challenges may negatively impact performance
• Operational Issues: Operational problems, supply chain disruptions, or other operational challenges may affect revenue generation
• Regulatory Changes: Changes in laws or regulations affecting the underlying business or industry may adversely impact operations

6. Technology and Blockchain Risks

Tokenized securities utilize blockchain technology and smart contracts, which involve inherent risks:

6.1 Smart Contract Risks

• Code Vulnerabilities: Smart contracts may contain bugs, vulnerabilities, or coding errors that could result in loss of funds or tokens
• Immutable Code: Once deployed, smart contracts may be difficult or impossible to modify, even if flaws are discovered
• Upgrade Risks: Smart contract upgrades or migrations may introduce new risks or fail
• Third-Party Dependencies: Smart contracts may depend on external services, oracles, or other contracts that could fail or be compromised

6.2 Blockchain Network Risks

• Network Congestion: Blockchain networks may experience congestion, delays, or high transaction fees, affecting your ability to interact with tokens
• Network Forks: Blockchain networks may fork, creating uncertainty about which chain is valid or which tokens are legitimate
• Consensus Failures: Failures in blockchain consensus mechanisms could result in transaction reversals or network instability
• 51% Attacks: Malicious actors may gain control of a majority of network computing power, potentially allowing double-spending or other attacks

6.3 Wallet and Key Management Risks

• Loss of Private Keys: If you lose access to your private keys or wallet, you may permanently lose access to your tokens with no recourse
• Unauthorized Access: Your wallet or private keys may be stolen, hacked, or otherwise compromised, resulting in loss of tokens
• Platform Security: Security breaches or vulnerabilities in our Platform or third-party services could result in loss of tokens or personal information
• User Error: Mistakes in transactions, such as sending tokens to the wrong address, may be irreversible

6.4 Technological Obsolescence

Blockchain technology is rapidly evolving. The technology underlying your tokens may become obsolete, replaced, or superseded by newer technologies, potentially affecting the value or functionality of your investment.

7. Regulatory and Legal Risks

Tokenized securities and blockchain technology are subject to evolving regulatory frameworks:

• Regulatory Changes: Laws and regulations governing securities, blockchain technology, and digital assets are evolving and may change in ways that adversely affect your investment
• Classification Risk: Regulatory authorities may reclassify tokenized securities or change how they are regulated, potentially affecting their value, transferability, or legality
• Enforcement Actions: Regulatory enforcement actions against issuers, platforms, or other participants could adversely affect your investment
• Jurisdictional Issues: Different jurisdictions may apply different laws or regulations, creating uncertainty about applicable legal frameworks
• Tax Implications: Tax treatment of tokenized securities is uncertain and may change, potentially resulting in unexpected tax liability
• Securities Law Compliance: Failure to comply with securities laws could result in the invalidation of offerings, loss of exemptions, or other adverse consequences

8. Platform and Operational Risks

Our Platform and services are subject to operational and technical risks:

• Service Interruptions: The Platform may experience downtime, outages, or service interruptions that prevent you from accessing your account or making transactions
• Technical Failures: Software bugs, system failures, or technical problems may affect Platform functionality or result in errors
• Cybersecurity Risks: Despite security measures, our systems may be vulnerable to cyberattacks, data breaches, or other security incidents
• Third-Party Services: Dependence on third-party service providers (e.g., cloud hosting, payment processors) exposes us to risks beyond our control
• Operational Errors: Human error, process failures, or operational mistakes could result in incorrect transactions or other errors
• Business Continuity: We may cease operations, be acquired, or otherwise change our business, potentially affecting access to or value of your investments

9. Limited Information and Due Diligence

Investment opportunities may provide limited information compared to publicly traded securities. You may not have access to:

• Regular financial reporting or disclosures
• Real-time pricing or valuation information
• Independent analysis or research
• Historical performance data
• Comparable market transactions

You should conduct your own thorough due diligence and seek independent professional advice before making any investment decision. You should not rely solely on information provided by the issuer or our Platform.

10. Conflicts of Interest

We and our affiliates may have interests that conflict with yours:

• We may receive fees, commissions, or other compensation from issuers or transactions
• We may invest in or have business relationships with issuers whose securities are offered on our Platform
• We may provide services to multiple parties with potentially conflicting interests
• Our employees, officers, or directors may have personal investments in offerings

While we strive to disclose material conflicts of interest, you should be aware that conflicts may exist and consider how they may affect your investment.

11. Tax Risks and Considerations

Investing in tokenized securities may have significant tax implications:

• Uncertain Tax Treatment: Tax authorities may not have issued clear guidance on the tax treatment of tokenized securities, creating uncertainty
• Tax Liability: You may be subject to income, capital gains, or other taxes on your investment, even if you do not receive cash distributions
• Withholding Taxes: Income or distributions may be subject to withholding taxes
• Reporting Requirements: You may be required to report investments and transactions to tax authorities, and failure to do so may result in penalties
• Tax Law Changes: Changes in tax laws could adversely affect the tax treatment of your investment
• Complexity: Tax rules applicable to tokenized securities may be complex and require professional tax advice

We do not provide tax advice. You should consult with a qualified tax advisor to understand the tax implications of your investment.

12. Dilution and Ownership Risks

Your ownership percentage or economic interest may be diluted:

• Issuers may issue additional tokens or securities, reducing your proportional ownership
• Future financings may be structured in ways that disadvantage existing token holders
• Conversion rights or other features may allow other investors to obtain a larger stake

13. No Guarantees or Assurances

No party guarantees or assures:

• Any return on your investment or payment of principal
• The accuracy, completeness, or timeliness of information provided
• The success or profitability of underlying businesses or assets
• The liquidity or marketability of tokens
• The performance of blockchain networks or smart contracts
• Regulatory compliance or approval

14. Risks Specific to Accredited Investors

Many offerings are available only to accredited investors because they are high-risk investments that may not be suitable for all investors. Accredited investor status does not guarantee that an investment is suitable for you or that you will not lose money. You should carefully assess whether an investment aligns with your investment objectives, risk tolerance, and financial situation.

15. Forward-Looking Statements

Information provided about investment opportunities may contain forward-looking statements about future performance, projections, or expectations. These statements are based on assumptions and estimates that may prove to be incorrect. Actual results may differ materially from forward-looking statements due to various factors, many of which are beyond the control of issuers or our Platform.

16. Conclusion

Investing in tokenized securities involves substantial risk, including the risk of losing your entire investment. These risk disclosures are not exhaustive, and additional risks may exist that are not described herein. You should carefully consider all risks and consult with qualified advisors before making any investment decision.

By investing through our Platform, you acknowledge that you have read and understood these risk disclosures, that you are aware of the risks involved, and that you are prepared to accept those risks, including the possible loss of your entire investment.