Crypto Line of Credit Risk Statement

Shakepay Credit Inc.

This Risk Statement describes the principal risks and important considerations involved when you borrow Canadian dollars (“CAD”) or U.S. dollars (“USD”) from Shakepay Credit Inc. (“Shakepay Credit”, “we”, “us”, “our”) using eligible crypto assets as collateral (the “Collateral”). It is intended to help you understand the nature of the loan arrangement and the particular characteristics of pledging crypto assets as security. It does not, and cannot, describe every possible risk. In order to borrow from Shakepay Credit, you will be required to enter into a Line of Credit Agreement. The Line of Credit Agreement sets out the terms and conditions under which you may borrow CAD or USD against crypto collateral. Before you open a crypto line of credit you should carefully review this Risk Statement together with your Line of Credit Agreement and any other documents that we provide to you in connection with the loan. You should proceed only if you are able to bear the financial and operational risks described here and if you have the ability to meet all of your obligations under the Line of Credit Agreement even in periods of extreme market volatility.

1. Nature of the Product and Collateral Arrangements

When you open a crypto line of credit with Shakepay Credit, you may be approved for a credit limit that allows you to borrow CAD or USD from time to time, subject to the terms of your Line of Credit Agreement, applicable LTV requirements, collateral requirements, and any other conditions we establish. Any availability under your line of credit may change over time, including as a result of changes in the market value of your Collateral, amounts you draw or repay, accrued interest, fees, changes to your credit limit, or other risk-management measures described in your Line of Credit Agreement. We may decline, suspend, restrict, or reduce further advances if the conditions for borrowing are not met or if required to protect our security interest.

To secure your obligations under the line of credit, you transfer supported crypto assets, such as bitcoin or ether, into a wallet or address that we designate solely for the purpose of holding those assets as Collateral. The transfer does not represent a sale of your crypto assets to us. Instead, you grant Shakepay Credit a first-ranking security interest in the pledged assets so that we can enforce our rights if you fail to meet the terms of your Line of Credit Agreement. While any amount remains outstanding or any obligations remain secured by the Collateral, you will not have access to the pledged Collateral and you may not withdraw, trade, pledge, transfer, or otherwise deal with it unless and until you have repaid all amounts owing and satisfied all applicable obligations under the Line of Credit Agreement.

We hold the Collateral either directly or through qualified third-party custodians and hot-wallet providers. Although we segregate pledged assets from our own property, your Collateral remains exposed to the risks described below, including the operational and legal risks associated with our custodians, the technical risks of the underlying blockchains, and the possibility that market conditions will reduce the value of your Collateral before you are able to take protective action.

The Line of Credit Agreement governs your relationship with Shakepay Credit regarding your line of credit. It contains important information regarding your rights and obligations, including how advances may be requested, when interest and fees accrue, how repayments are applied, how your LTV is calculated, and when Shakepay Credit may restrict access to further advances or enforce against Collateral. It is important that you read it carefully and understand it. You may want to get professional legal and/or tax advice prior to entering into the Line of Credit Agreement. No securities regulatory authority or regulator in Canada has assessed or endorsed the Line of Credit Agreement.

Advances under the line of credit are made in CAD or USD and will be available in your Shakepay Inc. account, where they can then be sent to your external bank account. Because this is an “open-loop” arrangement, fiat funds may leave the Shakepay environment and travel through normal banking or payments channels. The regulatory framework for crypto-secured lines of credit is still evolving.

Shakepay Credit is registered with FINTRAC as a money services business but neither it, nor any related SPV, is registered as an investment dealer in any jurisdiction in Canada, and the line of credit product is not covered by any Canadian investor-protection scheme. Crypto assets pledged as Collateral are not insured by the Canadian Investor Protection Fund (CIPF) or the Canada Deposit Insurance Corporation (CDIC).

2. Market Volatility, LTV Mechanics and the Two-Threshold Notice Model

The market price of crypto assets can be highly volatile, and sudden price movements can sharply increase the ratio of your outstanding balance to the market value of your Collateral, commonly referred to as the loan-to-value ratio or LTV. Your LTV may also increase if you make additional advances under your line of credit, if interest accrues, if fees or costs are added to your outstanding balance, if an applicable interest rate increases, or if a promotional rate expires or no longer applies. Shakepay Credit monitors the LTV of each line of credit in real time and has established two distinct levels at which notices are provided:

• Margin Notice Threshold. When the LTV reaches the first level, called the Margin Notice Threshold, we will notify you through the channels specified in your Line of Credit Agreement, for example, email or in-app notification. You are then required to take prompt action, within the cure period set out in the Line of Credit Agreement, to restore the LTV to a healthy level. This can be done by transferring additional Collateral to the designated pledge address or by making a partial repayment of the outstanding balance. Acting early is critical: network congestion on the relevant blockchain, delays in banking rails, or unexpected operational issues can all slow the posting of additional Collateral or repayments. If those delays occur while the market price of your Collateral continues to fall, or while interest, fees, or costs continue to accrue, your LTV can continue to rise even after you have initiated a top-up or repayment.

• Liquidation Notice Threshold. If your LTV continues to deteriorate and reaches the second level, called the Liquidation Notice Threshold, we will send a further notice indicating that we intend to liquidate some or all of your Collateral unless you immediately cure the LTV as described in the Line of Credit Agreement. Market movements can be abrupt; in fast conditions the price of your Collateral may fall below the Liquidation Notice Threshold before you can act, and liquidation may proceed without additional warning. When a liquidation occurs, we sell the pledged crypto assets on one or more trading venues or through multiple liquidity providers and apply the net proceeds to the repayment of your outstanding balance, accrued interest, and any applicable fees and costs. Execution prices in a stressed market can differ materially from prices observed on public exchanges, and the final proceeds of liquidation may be substantially less than the market value you expected.

If the proceeds of liquidation are insufficient to repay your outstanding balance and all related amounts, you remain fully responsible for any deficiency. Conversely, if there is a surplus after repayment of all amounts owing and applicable fees and costs, the balance will be returned to you in accordance with the Line of Credit Agreement. These LTV mechanics and the timing of notices are fundamental to the product: your ability to maintain the LTV below the Margin Notice Threshold is the primary safeguard against involuntary liquidation.

3. Liquidity, Pricing and Valuation Methodology

Because the pledged crypto assets serve as security for your line of credit, their valuation directly determines your LTV and may affect the amount of credit available to you. Shakepay Credit relies on pricing sources and valuation methods described in the Line of Credit Agreement, for example a composite of multiple trading venues or a time-weighted average price. These valuation techniques are designed to be robust but may differ from the prices you observe on a particular exchange or blockchain explorer. In times of market stress, liquidity can thin out and spreads can widen dramatically. Outages or unusual trading activity on a major venue can cause sudden gaps between indicative and executable prices. These effects can make it difficult to assess the true market value of your Collateral, may reduce or eliminate availability under your line of credit, and can accelerate a move toward the Liquidation Notice Threshold even when overall market sentiment appears stable.

4. Operational, Technological and Network Risks

You must also consider the operational risks of both blockchain networks and internet-based credit platforms. Public blockchains such as Bitcoin and Ethereum are open-source technologies that can experience bugs, unexpected chain reorganizations, protocol upgrades or forks. Developers or miners may adopt changes without universal consensus, resulting in splits of the blockchain or the creation of new digital assets. Shakepay Credit may be unable or unwilling to allocate to you any new tokens or “airdrops” that arise while the pledged Collateral is in custody; unless expressly provided in your Line of Credit Agreement, you should not expect to receive such distributions.

Deposits of additional Collateral or fiat repayments intended to reduce LTV may be delayed by network congestion, wallet maintenance, node desynchronization, or failures in banking or payment networks. Even if you act promptly after receiving a Margin Notice, these delays can prevent your Collateral or repayment from being credited before the LTV rises to the Liquidation Notice Threshold. These delays may also affect your ability to access additional advances under your line of credit. Internet-based platforms face risks of hacking, credential theft, phishing, denial-of-service attacks, and other cybersecurity incidents. Despite the security controls and contingency plans maintained by Shakepay Credit and its third-party service providers, service disruptions and losses can occur, including at critical moments when you are attempting to add Collateral, make a repayment, request an advance, or otherwise manage your line of credit.

5. Custody and Insurance Limitations

Shakepay Credit holds pledged Collateral either directly or through qualified custodians and hot-wallet technology providers. We segregate client assets from our own and employ a combination of cold storage and multi-signature (“multi-sig”) hot wallets to facilitate operations.

This approach is designed to provide both protection and operational efficiency: cold storage and segregation from Shakepay Credit’s own assets help shield your Collateral from hacking and from commingling with corporate property, while multi-sig hot wallets permit timely processing of line of credit advances, repayments, withdrawals of eligible Collateral, and enforcement actions without exposing the full balance to online risk. These controls mean that, under ordinary circumstances, the Collateral remains readily identifiable and available to support your obligations under the Line of Credit Agreement.

The structure, however, also carries risk. Collateral may be subject to the insolvency and property laws of the jurisdiction where the custodian or any special purpose vehicle (“SPV”) operates. If Shakepay Credit, an SPV, or an acceptable third-party custodian becomes insolvent, the legal treatment of crypto assets remains unsettled and recovery of your Collateral could be delayed, may require you to assert ownership or other rights in court, and in extreme cases may be incomplete. Under the Line of Credit Agreement, Shakepay Credit holds a perfected security interest over your Collateral and retains the technical ability, through multi-sig controls or comparable mechanisms, to access, transfer, or liquidate the Collateral if required. This access protects the lender’s security interest and allows rapid action to preserve value in the event of default, LTV deterioration, or severe market moves, which in turn supports the ongoing stability of the line of credit program. But it also means that, in a default, liquidation, or forced-sale scenario, Collateral may need to be sold quickly in stressed market conditions, potentially at prices materially below prevailing market levels, and technological, operational, or governance failures could result in unauthorized or erroneous movements of assets.

Although Shakepay Credit and its service providers maintain insurance or other protective arrangements, such coverage is subject to limits, exclusions, and claims processes and may not fully compensate you in the event of loss or theft of crypto assets. No public investor-protection program, such as the Canadian Investor Protection Fund (CIPF) or the Canada Deposit Insurance Corporation (CDIC), covers crypto assets pledged as Collateral.

6. Regulatory and Banking Uncertainty

The legal and regulatory environment for crypto assets and crypto-secured credit continues to evolve in Canada and internationally. Future legislative or regulatory changes, new guidance from Canadian or foreign authorities, or changes in the policies of banks and other financial institutions could limit the ability of Shakepay Credit to operate its line of credit program or could restrict the transfer, custody, or liquidation of crypto assets. Such developments may occur with little notice and may delay or prevent you from adding Collateral, making repayments, requesting or receiving advances, withdrawing fiat funds, or accessing your available credit. They could also lead to the suspension, restriction, early termination, or forced repayment of outstanding amounts under your line of credit. Banks or custodians may also tighten their internal risk policies, restrict services to crypto-asset businesses, or require modifications to the line of credit program. In the event of a sudden change, Shakepay Credit may have to suspend operations, restrict further advances, or liquidate Collateral to protect its security interests, which could negatively impact the value you ultimately receive.

7. Concentration and Network-Level Risks

Large holders of a particular crypto asset may significantly influence its price. A decision by one or more large market participants to sell a substantial position could produce sudden and dramatic price declines. In addition, a successful “51% attack” or other compromise of the consensus mechanism of a blockchain network could undermine confidence in that network and cause the value of the affected crypto asset to drop sharply. Either scenario can raise your LTV to the Liquidation Notice Threshold in a matter of minutes, reduce or eliminate availability under your line of credit, or prevent you from obtaining additional advances.

8. Interest, Fees and Tax Considerations

Your Line of Credit Agreement sets out the interest rate or rates applicable to your line of credit, the manner in which interest accrues, and any applicable fees, including, for example, origination charges, liquidation or execution fees, custody or network fees, and costs associated with the sale of Collateral. The interest rate applicable to your outstanding balance may be fixed, variable, promotional, or otherwise subject to change as described in your Line of Credit Agreement and any related disclosures. Different rates may apply to different advances, balances, currencies, promotional periods, or customer eligibility conditions. If an interest rate increases, or if a promotional rate expires or no longer applies, interest may accrue more quickly, your outstanding balance may increase, and your LTV may rise, which may increase the risk of a Margin Notice or liquidation. All accrued interest, fees, costs, and other amounts owing are payable in addition to the principal amount you borrow and may be deducted from the proceeds of any liquidation. Borrowing against crypto assets and any subsequent liquidation of Collateral may have tax consequences. Shakepay Credit does not provide tax advice, and you are responsible for obtaining independent advice regarding the tax treatment of all aspects of your line of credit.

We may offer promotional interest rates from time to time. A promotional rate may apply only for a limited period and only to certain advances, balances, currencies, customers, collateral types, or other eligibility conditions. When a promotional period ends, or if you no longer satisfy the conditions for the promotional rate, the standard rate or another applicable rate described in your Line of Credit Agreement will apply. The end of a promotional rate may materially increase the interest accruing on your outstanding balance and may increase your LTV.

9. Borrower Responsibilities and Potential Events of Default

Under the Line of Credit Agreement, you are responsible for monitoring the LTV of your line of credit at all times and for acting promptly on both the Margin Notice and the Liquidation Notice. You are also responsible for monitoring your outstanding balance, available credit, applicable interest rate or rates, promotional-rate periods, payment obligations, and any other requirements under the Line of Credit Agreement. You must maintain current and accurate contact information and protect the security of your Shakepay Credit account, email, phone, and any two-factor authentication devices. Unauthorized access to these channels could result in missed notices or unauthorized instructions, including unauthorized requests for advances, repayments, collateral transfers, or other account activity. In addition to the LTV-based triggers, the Line of Credit Agreement may define other events of default, such as failure to pay interest or other amounts when due, breach of covenants, insolvency, legal restraint orders, unauthorized or prohibited use of the line of credit, or failure to satisfy collateral requirements, any of which can allow Shakepay Credit to suspend or terminate further advances, accelerate all outstanding amounts, and liquidate Collateral even if LTV thresholds have not been reached.

10. Force Majeure and Business Continuity

Events beyond our control, such as natural disasters, widespread power or telecommunications outages, pandemics, cyber incidents, or acts of terrorism, may disrupt Shakepay Credit’s operations or those of its service providers. Although we maintain business-continuity and disaster-recovery plans, these events could delay notices, prevent timely processing of collateral top-ups, advances, or repayments, impair your ability to access or manage your line of credit, or impair our ability to safeguard pledged assets.

This Risk Statement is intended to provide a detailed, plain-language explanation of the significant risks of borrowing CAD or USD from Shakepay Credit using crypto assets as collateral. It should be read together with your Line of Credit Agreement and any related documents before you decide to proceed with a crypto line of credit. You should not rely on this statement as legal, tax, investment, or financial advice and should seek professional advice on those matters as needed.

11. Statutory Protections

The statutory rights in sections 217 and 221 of the Securities Act, RLRQ, c. V-1.1 (Québec) and section 130.1 of the Securities Act, R.S.O. 1990, c. S.5 (Ontario) and (if applicable to you) similar statutory rights under securities legislation of other Canadian jurisdictions, do not apply in respect of this Risk Statement to the extent a security is distributed pursuant to the loan, the Line of Credit Agreement, and other applicable documents.

This Risk Statement was last updated on August 6, 2026.