Exhibit 99.126

DEFI TECHNOLOGIES INC.

ANNUAL INFORMATION FORM

FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2024

Dated: March 30, 2025

TABLE OF CONTENTS

EXPLANATORY NOTES AND CAUTIONARY STATEMENTS

Explanatory Notes

In this Annual Information Form (the “AIF”), the term “Company” or “DeFi Technologies” refers to DeFi Technologies Inc. and its subsidiaries as a whole, unless otherwise specified or the context otherwise requires.

Information contained in this AIF is given as of December 31, 2024, the financial year end of the Company, unless otherwise specifically stated.

Unless otherwise indicated, all currency amounts in this AIF and references to “$” are stated in Canadian dollars.

Market and industry data used throughout this AIF was obtained from various publicly available sources. Although the Company believes that these independent sources are generally reliable, the accuracy and completeness of such information are not guaranteed and have not been verified due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and the limitations and uncertainty inherent in any statistical survey of market size, conditions and prospects.

This AIF should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis for the financial year ended December 31, 2024. The financial statements and management’s discussion and analysis are available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR+”) website at www.sedarplus.ca. The Company’s financial statements are prepared in accordance with International Financial Reporting Standards.

Caution Regarding Forward-Looking Information

This AIF contains “forward-looking information” within the meaning of that term under Canadian securities laws. This information relates to future events or future performance and reflects the Company’s expectations and assumptions regarding such future events and performance. Forward-looking information can be identified by the use of words such as, but not limited to, “plans”, “expects”, “project”, “predict”, “potential”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

In particular, all statements, other than statements of historical facts, included in this AIF that address activities, events or developments that management of the Company expects or anticipates will or may occur in the future contain forward-looking information, including but not limited to, statements with respect to:

Forward-looking information involves various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Important factors that could cause actual results to differ materially from the Company’s expectations are described in the Company’s documents filed from time to time with the applicable regulatory authorities and such factors include, but are not limited to, risks related to the staking and lending of cryptocurrencies, DeFi protocol tokens, or other digital assets; risks relating to momentum prising and volatility of cryptocurrencies, DeFi protocol tokens, and other digital assets; cybersecurity threats, security breaches and hacks; the relative novelty of cryptocurrency exchanges and other trading venues; regulatory risks; hedging risk; the U.S. classification of crypto assets and the Investment Company Act of 1940; the issuance of crypto ETPs in the EU and non-EU countries; risk related the Company’s Ventures portfolio exposure; risks associated with banks cutting off services to businesses that provide cryptocurrency related services; the impact of geopolitical events; the further development and acceptance of digital and DeFi networks; risks and uncertainties associated with custodians of digital assets; risk of loss, theft or destruction of cryptocurrencies; risks associated with the irrevocability of transactions; risks associated with the potential failure to maintain the cryptocurrency networks; risks associated with the potential manipulation of blockchain; risks that miners may cease operations; risks related to insurance; risks related to the concentration of investments; risks related to competition; risk related to investments in private issuers and illiquid securities; risks related to cash flow, revenue and liquidity; risks related to the Company’s dependence on management personnel; risks related to macro-economic conditions; risks related to the availability or opportunities and competition for investments; risks related the share prices of investments; risks related to additional financing requirements; risks related to the return on investments; risks related to the management of the Company’s growth; social , political, environmental, and economic risks in the countries in which the Company’s investment interests are located; risks related to the due diligence process undertaken by the Company in connection with investment opportunities; risks related to exchange-rate fluctuations; risks related to non-controlling interests; risks related to changes in legislation and regulations; risks associated with the Company’s limited operating history and no history of operating revenue and cash flow; risks associated with the Company having limited cash flow and funds in reserve which may not be sufficient to fund its ongoing activities at all times; risks associated with conflicts of interest; risks associated with the volatility of the Common Shares market price; risks associated the future dilution of shareholders interest in the Company; and risks associated with the Company’s history of never paying dividends; and other risks described herein including under the heading “Risk Factors – Risks Relating to the Business and Industry of the Company”.

When relying on forward-looking information to make decisions, readers should ensure that the preceding information, the risks and uncertainties described in “Risk Factors” and the other contents of this AIF are all carefully considered. The forward-looking information contained herein is current as of the date of this AIF, and, except as may be required by applicable law, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking information contained herein to reflect any change in expectations, estimates and projections with regard thereto or any changes in events, conditions or circumstances on which any information is based. Readers should not place undue importance on such forward-looking information and should not rely upon this information as of any other date. In addition to the disclosure contained herein, for more information concerning the Company’s various risks and uncertainties, please refer to the Company’s public filings available under its profile on SEDAR+ at www.sedarplus.ca and at www.cboe.ca.

With regard to all information included herein relating to companies in the Company’s Venture portfolio, the Company has relied on information provided by the investee companies and on publicly available information disclosed by the respective companies.

CORPORATE STRUCTURE

Name, Address and Incorporation

The Company was incorporated in British Columbia pursuant to the Company Act (British Columbia) (the “BCCA”) under the name “Western Premium Resource Corp.” on April 14, 1986. On August 29, 1997, the Company filed a certificate of change of name under the BCCA and changed its name to “Zodiac Exploration Corp.” On December 18, 1998, the Company filed a certificate of change of name under the BCCA and changed its name to “Donnybrook Resources Inc.” On August 13, 2003, the Company filed a certificate of change of name under the BCCA and changed its name to “Rodinia Minerals Inc.” On November 3, 2009, the Company was continued under the Business Corporations Act (Ontario) (the “OBCA”), and on June 15, 2010, the Company filed articles of amendment under the OBCA and changed its name to “Rodinia Lithium Inc.” On August 16, 2016 the Company filed articles of amendment under the OBCA and changed its name to “Routemaster Capital Inc.” The common shares of the Company (the “Common Shares”) began trading on the TSX Venture Exchange (the “TSXV”) on June 30, 2010. The Company sold its sole subsidiary on December 29, 2015 and completed a change of business (“COB”) to a tier 2 investment issuer under the rules of the TSXV on September 16, 2016. On January 19, 2021, the Common Shares were uplisted to trade on the Cboe Canada Exchange (formerly NEO Exchange Inc.) (“Cboe Canada”), and on February 26, 2021, the Company filed articles of amendment under the OBCA and changed its name to “DeFi Technologies Inc.” On April 19, 2022, the Common Shares were listed for trading on the OTCQB Venture Market. On June 1, 2022, the Company filed articles of amendment under the OBCA and changed its name to “Valour Inc.” On July 10, 2023, the Company filed articles of amendment under the OBCA and changed its name to “DeFi Technologies Inc.” The Company’s head office and registered office is located at Suite 2400, 333 Bay Street, Toronto, Ontario, M5H 2T6.

As of the date of this AIF, the Company holds 100% of DeFi Holdings (Bermuda) Ltd., 100% of Reflexivity Research, LLC (“Reflexivity Research”), 100% of Valour Inc. (“Valour Cayman”), 100% of Stillman Digital Inc. (“SDI”), 100% of Stillman Digital Bermuda Ltd. (“SDB” and together with SDI “Stillman Digital”) and 52.47% of Neuronomics AG. The following is an organizational chart illustrating the inter-corporate relationships between the Company and its subsidiaries and the jurisdiction of organization of each such entity, as at the date hereof:

Note: Valour Digital Securities Limited (“VDSL”), is owned by the charitable trust VLR Charitable Trust in Jersey. VDSL and Valour Cayman are together referred to as “Valour”. Defi Capital Inc. and Electrum Streaming Inc., wholly-owned subsidiaries of the Company, are in the process of being dissolved.

GENERAL DEVELOPMENT OF THE BUSINESS

The Company is a publicly listed company on Cboe Canada trading under the symbol “DEFI”. The Company operates five lines of business: Asset Management, Ventures, DeFi Alpha, Reflexivity Research and Stillman Digital, each of which is explained further below under their respective headings in “Description of Business”.

Three Year History

The following is a summary of the general development of the Company’s business over the three most recently completed financial years.

Subsequent to Fiscal 2024

On March 3, 2025, the Company announced that Valour launched four new ETPs on the Frankfurt Exchange: Valour Dogecoin (DOGE) EUR, Valour Aptos (APT) EUR, Valour Sui (SUI) EUR, and Valour Render (RENDER) EUR.

On March 3, 2025, the Company announced that it had appointed Chase Ergen to the board of directors of the Company (the “Board”). Mr. Ergen is a visionary entrepreneur and a leading figure in the decentralized finance space. As the son of Charlie Ergen, founder of Dish Network, a subsidiary of Echostar (NASDAQ: SATS), Chase has leveraged his firsthand experience, entrepreneurial roots, and forward-thinking mindset to drive innovation across satellite technology, information and communications technology (ICT), and cross-sector enterprises. Mr. Egegn’s appointment follows the resignation of Krisztian Toth from the Board who will transition into an advisory role.

Fiscal 2024

Asset Management

In the year ending December 31, 2024 (“Fiscal 2024”) Valour announced the launch of the following ETPs:

On November 22, 2024, the Company announced that Valour had entered into a memorandum of understanding with Asia Digital Exchange Ptd. Ltd. (“AsiaNext”) and SovFi inc. (“SovFi”) (the “Asia Next MOU”). AsiaNext, a global digital asset exchange regulated by the Monetary Authority of Singapore, bridges Asia and Europe by providing institutional investors with secure access to digital assets. It is backed by Japan’s SBI Digital Asset Holdings and SIX Group in Switzerland. The Asia Next MOU with Valour will evaluate and facilitate the listing and trading of Valour’s ETPs on AsiaNext’s securities exchange, enhancing AsiaNext’s position as a leading marketplace for institutional investors.

On August 6, 2024, the Company announced that Valour had entered into a memorandum of understanding with the Nairobi Securities Exchange (“NSE”) and SovFi (the “NSE MOU”). The key objectives of the NSE MOU include facilitating the creation, issuance, and trading of digital asset ETPs on the NSE by leveraging Valour’s extensive expertise in digital assets and ETPs. The NSE MOU aims to deploy financial products developed by Valour and SovFi, develop market infrastructure and enhance market access to global capital through tokenized finance primitives and real-world assets.

On June 11, 2024, the Company announced that it has deployed a Core Chain validator node to act as an independent validator for the network. The Company also staked 1,498 BTC on the Core Chain.

On April 8, 2024, the Company announced that Valour has launched a trading desk in the United Arab Emirates.

In Fiscal 2024, Valour invested US$61,741,683 in three tranches of a private investment fund designed to acquire Solana and Avalanche tokens from a bankrupt company (“Fund A”). The Company’s investment represents the acquisition of 491,249 Solana at US$105 per Solana and 931,446 Avalanche at US$11 per Avalanche.

The Solana acquired by the Company is locked and staked, earning staking rewards during the lock period. Staking rewards will accrue while Solana is locked and will become distributable on the same unlocking schedule as the Solana. The Solana will be released in monthly increments from January 2025 through January 2028.

The Avalanche acquired by the Company is locked and staked, earning staking rewards during the lock period. Staking rewards will accrue while Avalanche is locked and will become distributable on the same unlocking schedule as the Avalanche. The Avalanche will be released in weekly increments July 10, 2025 and continuing through July 1, 2027.

The investment in the investment fund was valued based on the latest available net asset value, as determined by the investment fund’s administrator less DLOM. The fair values of the investments were remeasured based on monthly valuation reports provided to the Company by the investment fund administrator.

In Fiscal 2024, Valour invested $153,516,846 (US$112,072,453) in two tranches of a private investment fund designed to acquire Solana tokens from a bankrupt company (“Fund B” and together with Fund A the “Equity Investments in Digital Assets”).

The Company’s investment represents the acquisition of 1,123,360 Solana at US$100 per Solana. The Solana acquired by the Company is locked and staked, earning staking rewards during the lock period and thereafter until such Solana is sold by the fund manager or an in-kind distribution in the limited partners of the fund. Staking rewards will accrue while Solana is locked and will become distributable on the same unlocking schedule as the Solana. Approximately 25 % of the Solana will be released in March 2025, while the remaining 75% of the Solana will be released linearly monthly until January 2028. The investment in the investment fund was valued based on the latest available net asset value, as determined by the investment fund’s administrator less DLOM. The fair values of the investments were remeasured based on monthly valuation reports provided to the Company by the investment fund administrator.

DeFi Alpha

On July 16, 2024, the Company announced that DeFi Alpha generated an additional approximately C$4.0 million (US$2.9 million) in USDT and C$15.3 million (US$11.2 million) in digital asset inventory through low-risk arbitrage trades in Q3 2024.

On June 3, 2024, the Company announced that its new business line, DeFi Alpha generated an additional C$59.2 million (US$43.4 million) from low-risk arbitrage trades. In its first few months since formation, DeFi Alpha generated approximately C$113.8 million (US$83.4 million). Of the US$83.4 million generated, US$19.5 million was used to pay down debt.

Reflexivity Research

On September 13, 2024, the Company announced that Reflexivity Research was holding its inaugural Crypto Investor Day in New York City on October 25, 2025.

On June 24, 2024, the Company announced that Reflexivity Research has partnered with CoinMarketCap, the world’s largest crypto pricing and data aggregator, to educate users on various digital assets with in-depth fundamental research. Through this partnership, CoinMarketCap users will now have access to Reflexivity Research’s high-quality, actionable research on individual digital assets, including fundamental analysis, market structure updates, and technical breakdowns.

On March 7, 2024, the Company announced that Reflexivity Research was holding its inaugural Bitcoin Investor Day on March 22, 2024 in New York City. The Bitcoin Investor Day, orchestrated by Reflexivity Research, aims to assemble hundreds of institutional investors, capital allocators, and forward-thinking entrepreneurs.

On January 9, 2024, the Company announced that it had entered into a binding letter of intent to acquire Reflexivity Research (the “Reflexivity Acquisition”). Reflexivity Research, co-founded by Anthony Pompliano and Will Clemente, offers high-quality crypto-native research designed for traditional finance investors. The firm is known for unique bitcoin analysis, along with counting some of the most well-known cryptocurrency organisations as clients, including eToro, Solana, Avalanche, NEAR, Fantom, Sei Network, and many more. Reflexivity Research’s research is distributed via their homepage, a premium membership portal, and an email list of over 55,000 investors. On February 7, 2024, the Company announced that it had completed the Reflexivity Acquisition.

Partnerships and Acquisitions

On December 10, 2024, the Company announced that it has signed a letter of intent to increase its holdings of Neuronomics AG (“Neuronomics”), a Swiss asset management firm specializing in quantitative trading strategies powered by artificial intelligence, computational neuroscience, and quantitative finance, to 10%. On March 7, 2025, the Company announced that it had further increased its stake in Neuronomics to 52.5%.

On November 14, 2024, the Company announced the launch of CoreFi Strategy Corp (“CoreFi Strategy”). Modeled after MicroStrategy and MetaPlanet’s successful approaches, CoreFi Strategy offers a regulated, leveraged pathway to Bitcoin yield and CORE—the native asset of the Core blockchain, designed to unlock sustainable Bitcoin yield and other key functions. On February 4, 2025, DeFi entered a binding letter agreement with CoreFi Strategy and Orinswift Ventures (the “CoreFi LOI”) to facilitate a reverse takeover (the “RTO”). The RTO will be completed through a definitive agreement that is to be negotiated by the parties, which will contain customary representations and warranties for similar transactions, and is expected to be structured as a three-corned amalgamation whereby a newly incorporated subsidiary of Orinswift will amalgamate with CoreFi, resulting in Orinswift acquiring all securities of CoreFi, and CoreFi securityholders becoming securityholders of Orinswift, as the resulting issuer following closing of the Transaction (the “Resulting Issuer”). The final structure for the Transaction is subject to satisfactory tax, corporate and securities law advice for each of Orinswift, CoreFi, and DeFi. Pursuant to the LOI the Core Foundation will contribute US$20 million in CORE Tokens to strengthen CoreFi’s treasury in exchange for 30% of the Resulting Issuer. Additionally, CoreFi plans to raise US$20 million in concurrent financing to accelerate its growth in Bitcoin Finance (BTCfi) technologies. DeFi will provide advisory services, intellectual property development and intellectual property licenses in exchange for 30% of the Resulting Isser.

On November 12, 2024, the Company announced the launch of SolFi Technologies, new pure-play investment vehicle dedicated to providing traditional investors with specific access to the expanding Solana (“SOL”) ecosystem. SolFi Technologies aims to generate consistent cash flow at higher yields than third-party staking providers, with these yields reinvested or distributed to its shareholders as dividends, enhancing returns and compounding growth. As a cornerstone shareholder and partner, the Company will benefit from increased exposure to Solana’s performance, unlocking new growth potential and revenue streams that complement its existing portfolio. SolFi Technologies is designed to act as a “MicroStrategy for Solana,” providing leveraged access to Solana’s high-yield staking and capital appreciation potential. Through innovative capital structures unavailable to ETFs, SolFi offers investors both token upside and cash flow opportunities, capitalizing on Solana’s rapid adoption and enabling investors to potentially outperform the underlying asset.

On July 30, 2024, the Company announced that it has entered into a strategic partnership with Zero Computing, a pioneer in verifiable computation on Ethereum and Solana. This partnership aims to build critical infrastructure to enhance the arbitrage discovery and execution capabilities of DeFi Alpha, and advance capabilities for capturing zero-knowledge enabled Maximal Extractable Value.

On July 9, 2024, the Company announced that it has signed a letter of intent to acquire Stillman Digital (the “Stillman Acquisition”). Stillman is a leading global liquidity provider offering industry-leading trade execution, settlement, and technology services. On October 7, 2024, the Company announced that it had completed the Stillman Acquisition.

Financial Statements and Auditor Matters

On September 6, 2024, the Company announced that it has refiled its 2023 annual consolidated financial statements (the “Refiled 2023 FS”) to include an amended auditor’s report delivered by HDCPA Professional Corporation (the “Auditors”). The date of the 2023 FS remains unchanged and the Refiled 2023 FS have not been restated in any respect. In connection with a continuous disclosure review by the Ontario Securities Commission, the Company determined to refile the Auditors’ report on the Company’s previously filed 2023 annual consolidated financial statements (the “Original 2023 FS”) to correctly identify the period over which the Auditors are providing assurance. The Refiled 2023 FS include an amended Auditors report which (a) identifies that the Auditors did not audit or express an opinion on the Company’s 2022 financial statements, (b) corrects a typographical error in the “Other Matters” section to refer to “December 31, 2023”, and (c) adds certain note references under “Description of the Key Audit Matter”.

On April 1, 2024, the Company announced that it has filed its financial statements of the Company for fiscal-year 2023 with restated comparative information for fiscal 2022 and the corresponding management’s discussion and analysis. The Company became aware of an enforcement report issued by the Canadian Public Accountability Board (“CPAB”) on December 7, 2023 against BF Borgers CPA PC (“Former Auditor”) (the “Enforcement Report”) resulting from an engagement findings report dated October 12, 2023 (the “CPAB Report”). As a result of the Enforcement Report, the Auditor provided a consultation with respect to the CPAB Report, remediation plan requested by CPAB and the impact on the scope of the audit for fiscal 2023 (the “Consultation”), As a result of the Consultation, the Company reassessed the application of IFRS on the accounting the valuation of the Company’s holdings in 3iQ and AMINA Bank AG (formerly SEBA Bank AG) as well as the valuation of Valour’s Genesis loan and collateral posted to secure such loan. Compared with the previously filed fiscal 2022 financial statement of the Company, the Amended and Restated Financial Statements reflected a (i) reduction in digital assets by $2,433,348 to $104,148,728 as at December 31, 2022; and (ii) reduction in private investments, at fair value through profit and loss, by $13,489,824 to $30,015,445 as at December 31, 2022, with an opening retained earnings impact at January 1, 2023 of $15,923,172.

On January 8, 2024, the Company announced that it has changed its auditor from Former Auditor to the Auditor effective December 20, 2023. On December 7, 2023, CPAB issued an enforcement report (the “Enforcement Report”) against the Former Auditor resulting from the CPAB Report with respect to the audit of the Company’s financial statements for the fiscal year ended December 31, 2022 (“2022 Statements”).

The Enforcement Report identified multiple significant inspection findings, each of which constitute a separate Violation Event (as defined in the Rules of CPAB) with respect to the Former Auditor. As a result of the CPAB Report, a remediation plan is required for the audit of the 2022 Statements. The Company has received information requests from the Former Auditor on its remediation plan, including third party confirmations from all of the Company’s digital asset custodians to confirm existence of the digital assets and fair market value, confirmations for all the private investments confirming the existence of the Company’s holdings and their latest financing details, management forecast files and schedules including all assumptions used in the goodwill impairment analysis, confirmation of exchange traded products, working papers on the calculation of staking and lending revenue, management fees and node revenue.

Director Appointments, NCIB, US Listing and Treasury Management

On October 29, 2024, the Company announced that Valour has successfully eliminated its outstanding debt following a final C$5.5 million (US$4 million) repayment completed on October 16, 2024.

On September 16, 2024, the Company announced that it filed a Form 40-F Registration Statement (“Form 40-F”) with the United States Securities and Exchange Commission (the “SEC”), in connection with its application to list the Common Shares on The Nasdaq Stock Market LLC (the “Nasdaq”). The listing of the Company’s common shares on the Nasdaq remains subject to the approval of the Nasdaq and the satisfaction of all applicable listing and regulatory requirements, including the Form 40-F being declared effective by the SEC.

On July 31, 2024, the Company announced the appointment of Andrew Forson to its board of directors. Andrew Forson is an experienced financial and risk engineer, software architect, and trust and estate practitioner. He serves as the Head of Ventures and Investments for the Hashgraph Group, the commercialization and enablement arm of Hedera, where he has been instrumental in driving strategic investments and fostering innovation in the digital asset sector.

On July 18, 2024, the Company announced that as part of its digital asset treasury strategy, it purchased an additional 94.34 BTC, bringing its total BTC holdings to 204.34 BTC. Additionally, the Company has acquired 12,775 SOL tokens and 1,484,148 CORE tokens, with plans to actively participate in CORE DAO’s staking facility.

On June 10, 2024, the Company announced that it has adopted Bitcoin as its primary treasury reserve asset and has purchased 110 Bitcoins to initiate this strategy.

On June 6, 2024, the Company announced a Normal Course Issuer Bid (“NCIB”) to buy back Common Shares through the facilities of Cboe Canada.

On May 7, 2024, the Company announced that it had fully repaid balances of US$6 million and US$13.5 million, which were secured by BTC and ETH collateral, respectively.

Fiscal 2023

Asset Management

On August 29, 2023, the Company announced that Valour launched three new products on the Nordic Growth Market Exchange (“NGM”). Valour Ethereum Zero EUR precisely tracks the price of ETH without charging management fees, making an investment in the world’s second largest digital asset easy, secure and cost-effective. Valour Solana EUR precisely tracks the price of SOL, the native cryptocurrency fuelling the Solana network. Marketed as one the fastest blockchains, Solana has more than 400 live projects spanning its DeFi, NFT, and Web3 ecosystem. Valour’s Solana ETP makes an investment in this leading decentralised platform cost-effective, simple and secure. Valour Digital Asset Basket 10 (VDAB10) tracks the performance of the top 10 largest digital assets based on market capitalisation with a maximum cap of 30% for any constituent. Valour’s VDAB10 ETP provides investors with a diversified and dynamic exposure to the ever-evolving crypto landscape in a trusted and secure manner.

On August 22, 2023, the Company announced that VDSL launched 1Valour Ethereum Physical Staking ETP. The 1Valour Ethereum Physical Staking ETP simplifies network participation for investors. With a fixed yield, undefined expiry and a 1.49% management fee, investors have the potential to earn passive returns, sidestepping the technical challenges involved with staking, and actively contributing towards the evolving decentralized finance landscape. Enhanced security measures including slashing insurance and full collateralization mean investors benefit from additional transparency and security measures.

On July 12, 2023, the Company announced that Valour launched its digital asset basket ETP - Valour Digital Asset Basket 10 (VDAB10) SEK. The Valour Digital Asset Basket 10 (VDAB10) ETP provides retail and institutional investors with trusted, secure, and diversified exposure to 10 of the largest cryptocurrencies by market capitalization. With a quarterly rebalancing, the multi-digital asset ETP enables investors to gain access to certain of the largest disruptive digital assets, offering an expanded entry into the rapidly developing digital asset ecosystem, without the need to set up a dedicated trading account.

On June 15, 2023, the Company announced that VDSL launched its first physically backed digital asset product, the 1Valour Bitcoin Physical Carbon Neutral ETP. The 1Valour Bitcoin Physical Carbon Neutral ETP provides investors with sustainable and climate-friendly exposure to Bitcoin with the low management fee of 1.49%. The ETP presents a trusted investment method that benefits the environment and aligns with environmental, social and governance (“ESG”) goals by funding certified carbon removal and offset initiatives in order to neutralise the associated Bitcoin carbon footprint.

On April 12, 2023, the Company announced the launch of VDSL, a Jersey-based securities issuer of ETPs for physically stored digital assets. VDSL obtained all regulatory approvals by the Swedish and Jersey regulators for an EU-wide offering to investors domiciled in Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Malta, Poland, Portugal, Romania, Slovakia and Spain, and its products will be listed on regulated stock exchanges such as Deutsche Börse/Xetra in Frankfurt, Euronext in Paris and Amsterdam and SIX Swiss Exchange in Switzerland.

On March 21, 2023, the Company announced the listing of certain ETPs on Euronext Paris, providing availability to French investors.

On January 23, 2023, the Company announced that on January 19, 2023, Genesis Global Capital LLC (“Genesis”) and its group companies filed for bankruptcy protection in the US and listed Valour as a creditor. Valour clarified that Valour Cayman, its wholly-owned subsidiary, is a borrower of funds under a master loan agreement with Genesis dated January 22, 2022. The loan amount borrowed by Valour Cayman under the loan agreement is US$6 million which is collateralised.

On January 10, 2023, the Company announced the approval of its renewed EU-base prospectus covering digital assets ETP-products by the Swedish Financial Supervisory Authority (“SFSA”).

Partnerships and Acquisitions

On December 18, 2023, the Company announced that it has entered into a definitive purchase agreement (the “Solana IP Agreement”) to acquire intellectual property (“Solana IP”) from prominent Solana developer Stefan Jørgensen (the “Solana IP Acquisition”). Pursuant to the Solana IP Agreement, the Company issued a total of 7,297,090 Common Shares at a deemed price of $0.55 per Common Share to Mr. Jørgensen in exchange for all of the Solana IP. The Payment Shares will be issued in five tranches over a period of two years, and be subject to the continued involvement of Mr. Jørgensen with the Company and its subsidiaries at the time of issuance. The Solana IP acquired by the Company encompasses a suite of sophisticated features including advanced liquidity provisioning, innovative trading strategies and technologies, along with the distribution, management, and analytics of decentralized financial data. These elements are tailored to support the Solana-focused trading desk operated by both the Company and Valour. The Solana IP Acquisition positions the Company to significantly elevate its capabilities, offering cutting-edge trading solutions and unique strategies specifically designed for Solana, a blockchain platform rapidly gaining recognition for its outstanding performance capabilities. The Solana IP Acquisition closed on February 9, 2024.

On October 24, 2023, the Company announced that it has entered into a joint venture agreement with Neuronomics AG (“Neuronomics”) to collaborate on the development of AI based exchange traded products, actively managed certificates, and asset backed tokens for global distribution. To further align the interests of the Company and Neuronomics, the Company entered into share exchange agreements with Olivier Roussy Newton, Chief Executive Officer of the Company and Johan Wattenstrom, Director of Valour, pursuant to which DeFi acquired from each of Mr. Newton and Mr. Wattenstrom 362 shares of Neuronomics with nominal value of CHF 1.- for a total of 724 shares of Neuronomics.

Management, Board, Auditor Changes and Name Change

On January 8, 2024, the Company announced the change of its auditors from BF Borgers CPA PC to HDCPA Professional Corporation effective December 20, 2023.

On July 7, 2023, the Company announced that it had changed its name from “Valour Inc.” to “DeFi Technologies Inc.”

On February 13, 2023, the Company announced that Russell Starr has elected to step down from his role as Executive Chairman but will remain as Head of Capital Markets. Olivier Francois Roussy Newton, CEO of Valour, assumed the role of Executive Chairman replacing Russell Starr.

On February 3, 2023, the Company announced the change of its auditors from RSM Canada LLP to BF Borgers CPA PC.

Financings

On November 13, 2023, the Company announced a non-brokered private placement financing of up to 6,250,000 units (a “Unit”) at a price of $0.16 per Unit (the “Unit Price”) for gross proceeds of up to $1,000,000 (the “Nov 2023 Offering”). Each Unit consisted of one common share of the Company (a “Unit Share”) and one common share purchase warrant (a “Warrant”), entitling the holder to acquire one additional common share of the Company (a “Warrant Share”) at an exercise price of $0.23 for a period of 24 months from issuance. The Nov 2023 Offering closed on an oversubscribed basis for 11,812,500 Units, representing aggregate gross proceeds of $1,890,000.

On November 1, 2023, the Company announced that Valour completed a non-brokered private placement financing of unsecured convertible notes (the “Notes”) for gross proceeds of C$3,000,000 (the “Convertible Offering”). The Notes issued in connection with the Convertible Offering accrue interest at a rate of 8% per annum and will mature on October 31, 2025 (“Maturity Date”). Upon the occurrence of certain trigger events, the principal amount of Notes and all accrued interest may be convertible (a “Conversion”), at the option of the holder, into (a) Common Shares (“Conversion Shares”) at a price of C$0.10 (“Conversion Price”) per Conversion Share and (b) an equal number of common share purchase warrants of the Company (“Conversion Warrants”) entitling the holder to acquire Common Shares at a price of C$0.20 for a period of five years from the date of issuance. Upon the Conversion, the Company will subscribe for such additional equity of Valour equal to the principal amount of Notes and accrued interest converted pursuant to the Conversion. As of the date hereof, all of the Notes were converted into Conversion Shares and Conversion Warrants.

On August 23, 2023, the Company announced that it has entered into shares for debt settlement agreements with a lender, an officer and consultants of the Company to settle an aggregate amount of approximately C$604,543.34 of accrued debt obligations and accrued fees owing to such lender, officer and consultants of the Company by issuing Common Shares at a price of C$0.105 per Common Share for a total of 5,757,827 Common Shares.

On June 30, 2023, the Company announced that it filed a preliminary short form base shelf prospectus (the “Preliminary Base Shelf Prospectus”) with the securities regulators in each province and territory of Canada. The filing of the Preliminary Base Shelf Prospectus was subsequently withdrawn.

On June 12, 2023, the Company announced that it entered into shares for debt settlement agreements with various officers and consultants of the Company to settle an aggregate amount of approximately C$674,837.78 of accrued fees owing to such officers and consultants of the Company by issuing Common Shares at a price of C$0.085 per Common Share for a total of 7,939,268 Common Shares.

Fiscal 2022

Management, Board and Advisory Board Changes

On November 14, 2022, the Company announced the resignation of Bernard Wilson as director of the Company.

On October 6, 2022, the Company announced the appointment of Olivier Roussy Newton as Chief Executive Officer of the Company following the resignation of Russell Starr. In addition, the Company announced Russell Starr will re-assume the role of Head of Capital Markets and maintain his role as Executive Chairman of the Company.

On July 5, 2022, the Company announced Diana Biggs stepped down from her role as Chief Strategy Officer of the Company.

Financings

On November 29, 2022, the Company announced the closing of the second tranche of the October 2022 Unit (as defined below) offering for gross proceeds of $132,400 through the sale of 662,000 October 2022 Units. No finders fees were paid in connection with the closing of the second tranche. The securities underlying the second tranche closing were subject to a statutory hold period of four months and one day following the closing date, which expired on March 30, 2023.

On November 14, 2022, the Company announced the closing of the first tranche of the October 2022 Unit offering, for gross proceeds of $1,414,973 through the sale of 7,074,865 October 2022 Units. A director of the Company purchased 2,500,000 October 2022 Units under the first tranche closing. In connection with the November 14, 2022 first tranche closing of the October 2022 Unit offering, the Company paid aggregate finder’s fees of C$ 7,499.73 in cash to certain finders and 187,493 broker warrants, each broker warrant entitling the holder to acquire one Share at a price of $0.30 for a period of two years from issuance. The securities underlying the first tranche closing were subject to a statutory hold period of four months and one day following the closing date, which expired on March 15, 2023.

On October 11, 2022, the Company announced its non-brokered private placement financing of 25,000,000 units (the “October 2022 Units”), at an offering price of $0.20 per October 2022 Unit, for aggregate gross proceeds of $5,000,000. Each October 2022 Unit was comprised of one Common Share and one-half Common Share purchase warrant, entitling the holder of a whole warrant to acquire one Common Share, at an exercise price of $0.30, for a period of 24 months from issuance.

SEBA Bank Partnership and Investment

On January 25, 2022, the Company announced that it closed its investment of CHF 25 million in SEBA, acting as the co-lead in the oversubscribed CHF 110 million Series C funding round of SEBA. SEBA is a fully integrated, Swiss Financial Market Supervisory Authority (“FINMA”) licensed, digital assets banking platform providing a seamless, secure, and easy-to-use bridge between digital and traditional assets.

On January 5, 2022, the Company announced that it has entered into a commercial agreement (the “Preferred Partnership Agreement”) to establish a preferred partnership relationship with SEBA. The Preferred Partnership Agreement outlines a framework for the Company to become a preferred provider of staking services, client referrals, market making and liquidity to SEBA, and SEBA to become a preferred provider of custody services to the Company. The Preferred Partnership Agreement also outlines further cooperation between SEBA and the Company with respect to asset and investment management, mining services, tokenization, digital capital markets and institutional research.

Additions to Indices

On January 26, 2022, the Company announced that it will be added to the CoinShares Blockchain Global Equity Index, administered by Solactive AG, on February 8, 2022. The index aims to offer exposure to listed companies that participate or have the potential to participate in the blockchain or cryptocurrency ecosystem. It also aims to capture the potential investment upside generated by earnings related to the adoption of blockchain technologies or cryptocurrencies.

On January 24, 2022, the Company announced that it has been added to the Melanion Bitcoin Exposure Index. This unique index, sponsored by Melanion Capital and administered by Bita GmbH, marks the first milestone in the development of an innovative Digital Asset business for Melanion Capital.

ESG Initiatives

On January 18, 2022, the Company announced that it joined the Crypto Climate Accord, an industry initiative whose objective is to decarbonise the global crypto industry by prioritizing climate stewardship and supporting the entire crypto industry’s transition to net zero greenhouse gas emissions by 2040, as a supporter.

Asset Management

On December 23, 2022, the Company announced its products were listed on the independent comparison platform MoneyMoon, a major European ETP comparison platform.

On December 1, 2022, the Company announced its partnership with Autostock, a Swedish trading platform, to launch an automated trading strategy designed to capture weekly effects of Bitcoin.

On October 28, 2022, the Company announced it had filed a new EU-base prospectus covering digital assets ETP-products with the SFSA.

On October 18, 2022, the Company announced the consolidation of its full pro-rated ETHW allocation received as a result of the Ethereum proof-of-work to proof-of-stake forking event. Net proceeds from the consolidation were reinvested into the underlying asset of the Company’s Ethereum Zero certificate products. The change was reflected through an adjustment to the net asset value of both Valour Cayman Ethereum Zero certificates (SEK and EUR denominated).

On October 12, 2022, the Company announced its partnership with Swedish index provider Vinter to launch the Company’s first multi-asset crypto ETP, the Valour Digital Asset Basket 10 ETP (VDAB10). The Valour Digital Asset Basket 10 ETP tracks the 10 largest digital assets weighted by their market capitalisation, with a maximum portfolio allocation of 30% per asset.

On September 23, 2022, the Company announced the debut and trading of its Carbon Neutral Bitcoin ETP on the Boerse Frankfurt Zertifikate AG (the “Frankfurt Exchange”).

On August 24, 2022, the Company announced the debut and trading of its new Binance Coin Exchange traded product, Valour (BNB) EUR ETP, on the Frankfurt Exchange. The Valour (BNB) EUR ETP tracks the price of BNB, the native token behind the BNB Chain, a decentralized open-source, multi-chain platform being used to build parallel virtual ecosystem infrastructure.

On August 18, 2022, the Company announced an agreement with German banks, Comdirect and Onvista, that will enable banking clients to integrate Valour Cayman ETPs into their investment portfolios.

On August 16, 2022, the Company announced its partnership with German online brokerage firm justTrade, whereby the Company was retained to provide physically-backed crypto ETPs to justTrade’s savings plan program (Sparplan) by the end of the year.

On July 26, 2022, the Company announced trading of its ETP products on the Lang and Schwarz Exchange, based in Germany. Trading of Bitcoin Zero, Etherium Zero, Valour Uniswap ETP, Valour Polkadot ETP, Valour Cardano ETP, Valour Solana ETP, Valour Avalanche ETP, and Valour Cosmos ETP began July 25, 2022.

On May 26, 2022, the Company announced Valour Cayman received approval to begin trading of the Valour Enjin (ENJ) EUR ETP and Valour Cosmos (ATOM) EUR ETP on the Frankfurt Exchange. Trading began on May 26, 2022.

On May 2, 2022, the Company announced that Valour Cayman received approval from the SFSA to extend its distribution from the Top 75 single digital assets by market capitalization to the Top 125.

On April 6, 2022, the Company announced that Valour Cayman began trading of its Polkadot (DOT) EUR ETP, Cardano (ADA) EUR ETP, and Solana (SOL) EUR ETP on the Euronet Exchange in Paris and Amsterdam. Trading began on April 6, 2022.

On February 17, 2022, the Company announced a strategic partnership with RockX, a Singapore-based institutional gateway to crypto finance and blockchains, to enhance the staking components of the Company’s current respective ETP infrastructures, co-develop ETP products, provide institutional staking services, custodian services and real time data yield oracle.

On February 16, 2022, the Company announced that Valour Cayman received approval to begin trading of its Terra (LUNA) SEK ETP and Avalanche (AVAX) SEK ETP on the Nordic Growth Market Exchange (“NGM”). Trading on the NGM began on February 28, 2022 and trading on the Frankfurt Exchange began on March 25, 2022.

On February 14, 2022, the Company announced that Valour Cayman received approval to begin trading of the Polkadot (DOT) EUR ETP and Cardano (ADA) EUR ETP on Frankfurt Stock Exchange. Trading began on February 21, 2022.

On February 2, 2022, the Company announced that Valour Cayman applied for a Swiss Verein zur Qualitätssicherung von Finanzdienstleistungen (“VQF”) membership through its Swiss subsidiary Valour Europe AG (formerly known as DeFI Europe AG). The VQF membership is awarded by the Verein zur Qualitätssicherung von Finanzdienstleistungen (Financial Services Standards Association), a self-regulatory association for the financial industry in Switzerland. Approval for the VQF membership was granted on April 11, 2022.

On February 1, 2022, the Company announced that Valour Cayman received approval to begin trading its Solana ETP on the Frankfurt Exchange, with trading to begin February 2, 2022.

Ventures

On April 5, 2022, the Company announced it had participated in the $45 million Series A raise for Boba Network, a blockchain Layer-2 scaling solution and Hybrid Compute platform that integrates smart contracts with Web2 API.

On January 19, 2022, the Company announced that it has made a block purchase of $WILD tokens, the native token of Wilder World, an immersive 5D Metaverse built on Ethereum, Unreal Engine 5 and open protocol ZERO.

Normal Course Issuer Bid

On April 8, 2022, the Company announced the extension of its Normal Course Issuer Bid (“NCIB”), previously launched on April 13, 2021, to buy back Common Shares through the facilities NEO Exchange and/or other Canadian alternative trading platforms. The actual number of Common Shares that may be purchased under the NCIB and the exact timing of such purchases will be determined by the Company. Under the terms of the NCIB, the Company may, if considered advisable, purchase its Common Shares in open market transactions through the facilities of the NEO Exchange and/or other Canadian alternative trading platforms not to exceed up to 10% of the public float for the Common Shares as of April 8, 2022, or 20,359,513 Common Shares, purchased in aggregate. The price that the Company will pay for the Common Shares shall be the prevailing market price at the time of purchase and all purchased Common Shares will be cancelled by the Company. In accordance with NEO Exchange rules, daily purchases (other than pursuant to a block purchase exception) on the NEO Exchange under the NCIB cannot exceed 25% of the average daily trading volume on the NEO Exchange as measured from November 8, 2021 to April 8, 2022.

DESCRIPTION OF THE BUSINESS

General

The Company is a publicly listed issuer on Cboe Canada trading under the symbol “DEFI”. The Company is a technology company bridging the gap between traditional capital markets and decentralized finance through five primary business lines:

“Decentralized finance” or “DeFi” refers to a financial system that seeks to operate as an alternative to the traditional financial system. DeFi seeks to allow people and companies to effect transactions on a “peer to peer” basis, typically employing blockchain or other distributed ledger technology to allow participants to interact with one another directly between each other. Because transactions are effected peer to peer, DeFi does not rely on traditional intermediaries such as banks, brokerages, and stock exchange, so transactions can be completed on a more timely basis and without the fees typically charged by intermediaries.

Asset Management

Valour ETPs

The Company’s wholly owned subsidiary Valour Cayman develops and lists ETPs on regulated stock exchanges and multilateral trading facilities in Europe that synthetically track the value of digital assets, or an index or basket thereof. ETPs simplify the ability for retail and institutional investors to gain exposure to cryptocurrencies and decentralized finance as they remove the need to manage wallets, various logins, custody and other intricacies that are linked to managing a digital asset portfolio. Rather, retail and institutional investors can simply purchase the associated ETP with the digital asset they wish to gain exposure to through a bank or brokerage account with access to the relevant stock exchanges and multilateral trading facilities.

As of the date hereof, Valour Cayman has listed 55 ETPs. Valour Cayman currently lists its ETPs, on the following European stock exchanges: Spotlight Exchange, Deutsche Börse Xetra, Gettex, Frankfurt Exchange, Euronext Amsterdam, Euronext Paris and Lang and Schwarz Exchange. The listing of ETPs are subject to exchange approval by the relevant exchange. A full list of ETPs listed by Valour Cayman can be found here: https://valour.com/en/products.

Products and Services

Valour Cayman ETPs are issued under a base prospectus dated March 16, 2021 (as amended and updated to the date hereof, the “Base Prospectus”), as supplemented by supplements or final terms from time to time (“Final Terms”), which together govern the ETP program (the “Program”). The Base Prospectus has been approved by the SFSA, the Swedish financial authority, and is passport eligible in Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Norway and Spain and/or, subject to completion of relevant notification measures, any other member state within the European Economic Area (“EEA”). For further details on the terms and conditions of the ETPs, a copy of the Base Prospectus may be obtained at https://www.fi.se/en/our-registers/prospektregistret/details/?id=24-34625.

Valour Cayman’s current ETP range are all open-ended certificates that provide exposure to a single digital asset, or an index or a basket thereof, as specified in the relevant Final Terms. The Final Terms and for each of Valour Cayman’s ETPs are available on the company website on the respective ETP pages: https://valour.com/products. Valour Cayman is the issuer of the ETPs offered under the Program and also acts as calculation agent.

Valour Cayman’s policy is always to hedge substantially 100% of the market risk in the underlying asset. Hedging is primarily done continuously through an in-housed developed auto-hedger and in direct correspondence to the issuance of ETPs to investors, but Valour Cayman may elect to utilize other hedging methods it deems appropriate. In order to hedge its exposure to each digital asset, Valour Cayman relies on cryptocurrency exchanges and counterparties to be able to buy and sell the digital assets, or interests in funds that hold digital assets, which the ETPs track.

For its Bitcoin Zero and Ethereum Zero products, Valour Cayman charges zero management fees and for all other products, a management fee of 1.9% to 2.5% applies.

Valour Digital Securities Limited ETPs

VDSL is a special purpose vehicle incorporated as a public limited liability company under the laws of Jersey. VDSL is owned by the charitable trust VLR Charitable Trust in Jersey. In April 2023, VDSL obtained all regulatory approvals by the Swedish and Jersey regulators for an EU-wide offering of physically backed ETPs to investors domiciled in Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Malta, Poland, Portugal, Romania, Slovakia and Spain. Valour Cayman acts as arranger for all ETPs issued by VDSL.

As of the date hereof, Valour Cayman has listed 6 ETPs. VDSL ETPs are currently listed on the Deutsche Börse Xetra and Euronext Amsterdam. The listing of ETPs are subject to exchange approval by the relevant exchange.

Products and Services

VDSL ETPs are issued under a base prospectus dated April 24, 2024 (the “VDSL Base Prospectus”), as supplemented by supplements or final terms from time to time (“VDSL Final Terms”), which together govern the VDSL ETP program (the “VDSL Program”). The VDSL Base Prospectus has been approved by the SFSA, the Swedish financial authority, and is passport eligible in Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Malta, Poland, Portugal, Romania, Slovakia and Spain. VDSL may also request the SFSA to publicize the approval of the VDSL Base Prospectus to other EEA states in accordance with Regulation (EU) 2017/1129. In addition, VDSL may decide to register this VDSL Base Prospectus in Switzerland with the reviewing body SIX Exchange Regulation AG or another FINMA approved reviewing body, as a foreign prospectus that is also deemed to be approved in Switzerland pursuant to Article 54 paragraph 2 FinSA, for the purposes of making a public offer of VDSL ETPs in Switzerland or admission to trading of all or a series of VDSL ETPs on a regulated stock exchange in Switzerland. For further details on the terms and conditions of the ETPs, a copy of the VDSL Base Prospectus may be obtained at https://www.fi.se/en/our-registers/prospektregistret/details/?id=24-5713.

The VDSL Program permits VDSL to issue VDSL ETPs related to any one of 124 underlying digital currencies (“Digital Currencies”) (or more subject to supplements to the VDSL Base Prospectus), to a “basket” comprising two or more of such Digital Currencies or to an index linked to Digital Currencies, as specified in the relevant VDSL Final Terms. The VDSL Final Terms and for each of VDSL’s ETPs are available on the company website on the respective ETP pages: https://valour.com/products. The VDSL ETPs are designed to offer investors a means of investing in Digital Currencies without having to acquire digital assets themselves and to enable investors to buy and sell that interest through the trading of a security on a stock exchange.

Each VDSL ETP is an undated secured limited recourse debt obligation of VDSL, which ranks equally with all other VDSL ETPs of the same class. VDSL ETP holders only have recourse to the assets of the class of VDSL ETP of which they are a holder. If the net proceeds are insufficient for VDSL to make all payments due, neither the trustee nor any person acting on behalf of the trustee will be entitled to take any further steps against the VDSL, and no debt shall be owed by the VDSL in respect of such further sum.

The underlying assets for the VDSL ETP of each class, by which they are backed and on which they are secured, comprise private keys evidencing ownership of Digital Currencies. These private keys are held in the name of VDSL in secure vaults at the premises of the relevant custodian of VDSL (“VDSL Custodian”) and are not fungible with other digital assets held by the relevant VDSL Custodian.

The VDSL ETPs are constituted under the trust instrument dated April 5, 2023 between VDSL and The Law Debenture Trust Corporation p.l.c. as trustee (the “Trustee”) for the holders of VDSL ETPs (“VDSL ETP Holders”) (the “Trust Instrument”). The Trustee holds all rights and entitlements under the Trust Instrument on trust for VDSL ETP Holders. In addition, VDSL and the Trustee have entered into a single security deed (the “Security Deed”) in respect of all pools of VDSP ETPs (“Pools”). The rights and entitlements held by the Trustee under the Security Deed, to the extent attributable to a Pool, are held by the Trustee on trust for the VDSL ETP Holders of that particular class of VDSL ETP. Under the terms of the Security Deed, VDSL has charged to the Trustee for the benefit of the Trustee and the relevant VDSL ETP Holders by way of first fixed charge the Digital Currencies held in custody attributable to the relevant class of VDSL ETP and all rights of VDSP in respect of the respective custody accounts to the extent attributable to the relevant Pool. VDSL has also, under the terms of the Security Deed, assigned to the Trustee by way of security the contractual rights of the issuer relating to such class under the custody agreements entered into by VDSL and has granted a first-ranking floating charge in favour of the Trustee over all of VDSL’s rights in relation to the secured property attributable to the applicable Pool, including but not limited to its rights under the custody agreements and the custody accounts attributable to that Pool.

VDSL charges management fees ranging from 1.9% to 2.5% on the VDSL ETPs.

Staking of Cryptocurrency and Defi Protocol Tokens

As part of Valour’s policy to hedge substantially 100% of the market risk, Valour purchases and sells the digital assets, and investments exposed to digital assets, which its ETPs track. Valour may trade, lend or stake such digital assets on its balance sheet to generate revenue in accordance with the policies in the Base Prospectus of Valour Cayman and as Staking Agent for VDSL in accordance to VDSL’s base prospectus. Lending or staking transactions are only conducted with institutional-grade counterparties and only up to a certain percentage for risk management purposes in accordance with Valour’s Lending and Staking Policy.

Pursuant to the Lending and Staking Policy, lending and staking activities are overseen by the Head of Asset Management and Trading (“CIO”), Head of Finance (“CFO”) and the director of Valour. Prior to entering into any lending or staking transaction, due diligence will be conducted on all potential counterparties, and in particular counterparties in the following situations:

In order to evaluate a counterparty the following information is collected and documented in the counterparty scorecard:

Contact information

The name, the website and contact person at the exchange/counterparty, as well as the responsible onboarding owner on Valour side.

Current status

The current status of the relationship, the connection type, as well as the services, products and currency pairs used on the respective exchange/counterparty have to be documented and kept up to date.

Country of registration and regulation

The country in which the exchange/counterparty is registered must be documented. In addition all countries in which the exchange/counterparty holds a regulatory licence have to be assessed and documented by stating the licence number (if applicable).

Country risk

The country of registration as well as the country/-ies of regulation are evaluated by using the country risk matrix. The country risk matrix considers the FATF (and equivalent) country evaluation, the Transparency.org Corruption Perception Index (CPI) as well as the VQF SRO country risk recommendations.

Adverse media search

An adverse media search is being conducted. For example, information about an exchange having been hacked in the past or any news about a negative reputation, regulatory breaches etc are documented.

Public exchange scores

Publicly available information and risk scores from data sources such as Coinmarketcap and Coingecko are being collected and documented.

Information security certification

The exchange/counterparty information security certification status is assessed. Information about the possession of certifications such as AICPA SOC 1, SOC 2 Type I and SOC 2 Type II as well as ISO 27001 are documented.

Insurance coverage

Information about insurance protection and regulatory status in terms of investor protection are assessed and documented.

Proof of reserves

It is being checked if the exchange/counterparty has made the public wallet addresses of its cold and hot storage publicly available or if any other cryptographic means of verification of the reserves held in custody are either publicly available or have been audited.

Risk evaluation

The risk score is evaluated on a scale of 1 to 5, with 1 being the lowest risk and 5 being the highest risk. Based on the information collected in the scorecard, with a focus on regulatory licences, a risk score is calculated and documented for each exchange or counterparty.

Business justification and restrictions

In cases where an exchange or counterparty presents increased risks, a business justification must be provided. Any decision to establish a business relationship with an exchange or counterparty with increased risks must be approved by the board.

Recurring review schedule

The review date and review frequency of all exchanges/counterparties are documented and tracked in the scorecard. A review once a year is set as the default standard, however, an ad-hoc review has to be considered in case of any event that may result in any of the assessment criteria being changed.

Account closure

If the exchange or counterparty has been identified with an increased risk, such as a risk score of 4 or 5, Valour will determine if it is necessary to close the business relationship. This decision is based on the potential exposure and the potential impact on the business and stakeholders. If it is determined that the business relationship should be terminated, a plan for closing the relationship is developed in a controlled and orderly manner. This may include transferring outstanding transactions, closing accounts, and ensuring that all necessary documents and records are properly transferred or retained. The decision to close the business relationship is communicated to the exchange or counterparty and a timeline for the closure is provided. Once the business relationship has been successfully terminated, the counterparty scorecard is updated in order to reflect the closure.

When deciding whether to lend or stake a particular asset, the Lending and Staking Policy provides that the decision will initially be made based on the risk profile of the potential counterparties, then the highest yield available, then prioritizing staking over lending.

The Lending and Staking Policy also sets limits on how much of a particular digital asset can be lent or staked of 55% in the case of assets under management of less than US$10 million, and 80% for over US$10 million. Allocations by counterparty will be limited to 33% of Valour Cayman’s aggregate assets. Exceptions to these rules can be made with Valour Board approval.

“Staking” refers to the process of dedicating digital assets to a particular blockchain for a set period of time so as to verify transactions on that blockchain. The act of staking typically results in the staking person or company receiving newly-created digital assets of the same type as a reward verifying the transactions. In addition, having digital assets staked improves the integrity and security of the applicable blockchain ledger.

Custody of Digital Assets

The policies of Valour require the application of internal multi-signature cold-storage and external custody. External custody solutions include specialized third-party custody providers within the United States and Europe. Valour currently utilizes the following third-party custody providers to hold and safeguard Valour’s digital assets:

Note 1: As at December 31, 2024; Residual digital assets served as collateral for loans with Genesis Global Capital LLC (0.04%; subject to bankruptcy proceeding/filing as of January 19, 2023).

Note 2: The Company’s hold interest in funds that acquired Solana and Avalanche tokens from a bankrupt company. The Company has included these positions in this chart to illustrate the underlying Solana and Avalanche tokens held in such funds.

VDSL

Note 1: As at December 31, 2024;

Prior to engaging any prospective third-party to perform custody services, Valour conducts diligence and counterparty risk analysis of such third-party. Such measures include:

Valour’s current third-party custody providers do not engage sub-custodians to provide custody services. None of Valour ’s current third-party custody providers are Canadian financial institutions or related parties of the Company. Each of Valour’s third-party custody providers maintain general commercial insurance on its own behalf and would be subject to their respective jurisdiction’s bankruptcy laws in the event of such an event. The Company and Valour are not aware of any aspect of the above custody providers that would adversely affect the Company from obtaining an unqualified audit opinion on its audited financial statements. The Company and Valour are not aware of any security breaches or similar incidents with respect to its third-party custody providers.

In addition, Valour utilizes custody solutions offered by institutional quality exchanges. The exchanges typically store between 95% and 100% of the assets in multi-signature cold storage. Different exchanges store different proportions of their assets in online wallets, and the proportion of assets in cold storage is one of the factors determining their risk weight in our model for capital adequacy. Cold storage means storage facilities where the private keys of a wallet are held off-line protected physically as well as by the multi-signature features of the wallet. By comparison, hot storage means storage facilities or platforms that are connected to the internet, which provide greater accessibility to digital assets for users, but are subject to greater cybersecurity risks.

The Company does self custody some of the Company’s portfolio using meta mask and other hot wallets. The total value of the Company’s digital assets under self custody was approximately $488.4 M on December 31, 2024 (December 31, 2023 – approximately $4.5M). Some digital assets related to the Valour Cayman ETPs are self-custodied.

The controls around the meta mask and other hot wallets includes only senior management having access to the accounts, passwords, seed phases, etc. All copies of passwords and seed phases are secured with senior management. Duplicate copies of the passwords and seeds phases are held by two members of the senior management in different locations.

The following principles are applied with regards to Valour’s internal safe keeping of digital assets:

Specialized Skill and Knowledge

Valour has assembled a team of employees, officers, directors and consultants with specialized skill and knowledge of regulated exchanges in Europe, investment banking, cryptocurrencies, digital assets and decentralized finance. In particular, Valour Cayman has retained Johan Wattenstrom, Co-Founder & Director at Nortide Capital and previously the Founder of XBT Provider (now known as Coinshares), which created the world’s first ever Bitcoin ETP in 2015, and has served on the management committees of several Nordic investment banks. Olivier Roussy Newton, CEO of the Company, also serves as director of Valour.

Valour also retains external legal counsel with respect to regulatory compliance of its ETP programs. Additional information can be found in the Base Prospectus and the VDSL Base Prospectus.

Competitive Conditions

There are several other issuers that have listed similar tracker-products in various forms and markets. Valour holds a strong competitive position, particularly in the Nordics, due to its competitive and transparent pricing model. Valour’s Bitcoin and Ethereum Zero ETPs are the first and only of their kind to track the two largest digital assets by market capitalisation and charge zero management fees. For its other products, Valour charges 1.9% management fees, whereas competitor products in the same markets charge up to 2.5% management fees.

Valour innovative product range is also a competitive advantage. As of the date of this AIF, Valour is the most comprehensive provider of crypto ETPs listed in the Nordics.

Cycles

As Valour’s products are financial markets products tracking digital assets of finite supply, the demand for ETPs may experience cycles resulting from fluctuating supply and demand, and as an alternative asset class, although the correlation between traditional markets and digital assets has been seen to be increasing.

Employees

Valour’s wholly owned service company, Valour Europe AG, employs 4 full-time employees. Valour has 5 consultants in specialized roles in marketing, finance, IT Development. DeFi Middle East (DMCC) employs 4 employees.

Foreign Operations

Valour operates primarily out of the Cayman Islands and Switzerland, with a trading desk in the United Arab Emirates.

Ventures

The Company, whether by itself or through its subsidiaries, invests in various companies and leading protocols across the DeFi ecosystem to build a diversified portfolio of digital asset and venture investments, predominantly at Seed or Series A stage. As of December 31, 2024 the Company has participated in equity or token raises from the following ventures:

Each of these ventures were selected for their innovative potential, high quality teams, growing and / or potential user bases and unique position in the market or market share, cutting edge technology, and/or leading investors. The ventures respective use cases include borrowing and lending, decentralized exchanges, derivatives and asset management, amongst others.

Specialized Skill and Knowledge

The Company believes that the success of its Ventures line of business is dependent on the performance of its management team and the ability of the Company to leverage the network of its management, directors and advisory board. Management of the Company and its subsidiaries have extensive knowledge and understanding of evolving digital asset industry and have a strong track record of identifying sound investment opportunities and making prudent business decisions. In addition, the members of the advisory board have also been selected due to their wealth of experience in the digital asset industry. The Company has adequate personnel with the specialized skills required to successfully carry out its operations.

Competitive Conditions

As the DeFi industry is an emerging industry, competition in the space is constantly evolving. With respect to investment in DeFi projects, protocols and other ventures, the Company’s competitors range from established DeFi protocol trading companies to crypto and / or traditional VCs to individual angel investors. The Company may also compete with other emerging companies in the DeFi industry and established mutual funds, investment funds, hedge funds, investment companies, management companies and other investment vehicles for investment opportunities. Many of these competitors have greater financial, technical and other resources than the Company. To compete, the Company depends on the knowledge, experience and network of business contacts of the management, directors and the employees of the Company.

Reflexivity Research

Reflexivity Research is a digital asset research firm seeking to bridge traditional finance into the ever-evolving world of crypto. Reflexivity Research distributes newsletters for free to the general public, with portions of the content sponsored by corporate clients. Furthermore, Reflexivity Research produces commissioned reports and organizes thematic conferences. Furthermore, Reflexivity Research produces commissioned reports. Reflexivity Research does not produce research reports on any equity securities. Additionally, Reflexivity Research holds conferences in the cryptocurrency sector, such as Bitcoin Investor Day held in New York on March 22, 2024 and Crypto Investor Day held on October 25, 2024, bringing together institutional investors, capital allocators, and entrepreneurs.

Specialized Skill and Knowledge

Anthony Pompliano has been operating in the cryptocurrency market for numerous years, have built large digital audiences, and is sought out by mainstream media outlets for his knowledge and opinions.

Competitive Conditions

The digital asset research space is new and there are low barriers to entry. Furthermore, there are no geographic restrictions on where digital asset research firms can be located. As a result, there are numerous competitors to Reflexivity Research, some of which include Messari, Blockworks Research, Delphi Digital, and The Block PRO.

Employees

Reflexivity Research employs 2 employees and 4 consultants.

DeFi Alpha

In Q2 2024, the Company formed DeFi Alpha, a specialized arbitrage trading desk under DeFi Technologies designed to identify and capitalize on low-risk arbitrage opportunities within the cryptocurrency market. Utilizing sophisticated algorithmic strategies and comprehensive market analysis, DeFi Alpha targets inefficiencies and discrepancies in digital asset pricing. Since its inception, DeFi Alpha has generated over C$133.1 million (US$97.5 million) in cash and digital asset equivalents in 2024.

Specialized Skill and Knowledge

DeFi Alpha draws from the specialized skill and knowledge of its employees and consultants at Valour, Stillman Digital and Reflexivity Research to identify and execute low-risk arbitrage opportunities. Such individuals are at the forefront of the digital asset industry, and are often able to be one of the first to identify and capitalize on such opportunities given their day-to-day exposure to arbitrage opportunities within the digital asset space.

Competitive Conditions

The trading of digital assets is not restricted to geography, time or markets, and as such, it is a highly competitive industry. There are many firms operating in the same industry with much larger financial resources, including those that are publicly-traded. DeFi Alpha’s maintains its competitive position by primarily being the first-mover for such opportunities and by being part of the consolidated Company.

Employees

DeFi Alpha does not have any full-time employees and consultants, but rather draws from the employees and consultants at Valour, Stillman Digital, Reflexivity Research and the Company.

Stillman Digital

Stillman Digital is a non-custodial, spot digital asset OTC desk and digital asset liquidity provider. With over US$15 billion in trade volume since 2021, Stillman Digital has built a strong reputation for OTC on/off ramp tradeflow, and block trading and market-making services.

Stillman Digital’s core products and services are:

Specialized Skill and Knowledge

Stillman Digital require its employees to be knowledgeable in digital asset trade execution, regulatory compliance in their respective place of operations, trading platform software engineering and financial reporting. Stillman Digital has employed a diverse group of employees with specialization in such skills and knowledge required to operate Stillman Digital.

Competitive Conditions

The trading of digital assets is not restricted to geography, time or markets, and as such, it is a highly competitive industry. There are many firms operating in the same industry, some with much larger financial resources and operations.

Employees

Stillman Digital employs 16 employees and 9 consultants.

Foreign Operations

SDI is registered in Wyoming, United States of America and SDB is registered in Bermuda. Both hold relevant operating licenses or registrations in their respective jurisdictions and require the maintenance of such licenses or registrations to operate.

Employees

In addition to the 8 employees and 5 consultant at Valour, 2 employees and 4 consultants at Reflexivity Research, and 16 employees and 9 consultants at Stillman Digital, the Company has 11 consultants.

Risk Factors

The Company’s business, operations, financial results and prospects are subject to the normal risks of its industry and are subject to various factors which are beyond the control of the Company. Certain of these risk factors are described below. The risks described below are not the only ones facing the Company. Additional risks not currently known to the Company, or that it currently considers immaterial, may also adversely impact the Company’s business, operations, financial results or prospects, should any such other events occur.

Risks Relating to the Business and Industry of the Company

Staking and Lending of Cryptocurrencies, DeFi Protocol Tokens or other Digital Assets

The Company (or entities the Company makes Equity Investments in Digital Assets in) may stake or lend digital assets to third parties or affiliates. The digital assets that are “staked” will earn rewards in the form of additional digital assets, which will accrue to the validator address, but neither the rewards nor the principal allocation of digital assets can be withdrawn for a predetermined period of time, and as a result, the liquidity of such digital assets will be limited. On termination of the staking arrangement or loan, the counterparty is required to return the digital assets to the owner; any gains or loss in the market price during the period would inure to the owner. Such limitations on liquidity could prevent the disposal of the applicable digital asset during certain periods. Liquid digital assets that are staked are maintained outside of cold storage during the staking process, locked into a smart contract and will generally not be maintained with a qualified custodian while being staked. The owner of the staked digital asset is provided with withdrawal keys that allow retrieval of the staked liquid tokens once withdrawals have been activated by the relevant protocol, and on a defined timeline with daily limits on the number of digital assets that can be withdrawn. Withdrawal keys will be held by a qualified custodian, but the additional complexities of staking liquid digital assets can increase the risk of loss. Staked liquid tokens are also subject to higher risk of loss or theft due to malicious actions, network interruptions, or a failure by third-party validators to validate transactions. Staking creates exposure to smart contracts. Smart contracts are subject to certain risks and may result in losses stemming from errors, bugs or other failures. Staking provides no guarantee of return nor are there currently efficient ways to insure against such risks. To the extent that smart contract insurance is available, it may not cover all risks related to staking of the applicable digital asset, engaging with smart contracts, or other opportunities utilized.

In the event of the bankruptcy of the counterparty, the Company could experience delays in recovering its digital assets. In addition, to the extent that the value of the digital assets increases during the term of the loan, the value of the digital assets may exceed the value of collateral provided to the Company, exposing the Company to credit risks with respect to the counterparty and potentially exposing the Company to a loss of the difference between the value of the digital assets and the value of the collateral. If a counterparty defaults under its obligations with respect to a loan of digital assets, including by failing to deliver additional collateral when required or by failing to return the digital assets upon the termination of the loan, the Company may expend significant resources and incur significant expenses in connection with efforts to enforce the staking or loan agreement, which may ultimately be unsuccessful.

Furthermore, the Company and its affiliates may also pledge and grant security over its digital assets to secure loans. In the event that the Company or its affiliates defaults under its obligations with respect to the loan, including failure to repay the principal amount of the loan or accrued interest, lenders may realize upon its security and take possession to such pledged digital assets.

The digital assets that are staked, loaned or pledged to third parties by the Company include digital assets held by Valour for the purposes of hedging its ETPs. The Company is exposed to a potentially significant liquidity risk if, for example, the aggregate sale of ETPs exceed the quantum of uncommitted cryptocurrency available to the Company to satisfy such sale requests. A similar risk applies with respect to individual reserves of each type of cryptocurrency should the sale of ETPs, and correspondingly, the underlying cryptocurrency, exceed the Company’s available reserves.

Custody Risk

The Company uses multiple custodians (or third-party “wallet providers”) to hold digital assets for its DeFi Ventures business line, its digital assets in treasury as well as for digital assets underlying Valour ETPs. Such custodians may or may not be subject to regulation by U.S. state or federal or non-U.S. governmental agencies or other regulatory or self-regulatory organizations. The Company could have a high concentration of its digital assets in one location or with one custodian, which may be prone to losses arising out of hacking, loss of passwords, compromised access credentials, malware or cyberattacks. Custodians may not indemnify us against any losses of digital assets. Digital assets held by certain custodians may be transferred into “cold storage” or “deep storage,” in which case there could be a delay in retrieving such digital assets. The Company may also incur costs related to the third-party custody and storage of its digital assets. Any security breach, incurred cost or loss of digital assets associated with the use of a custodian could materially and adversely affect our trading execution, the value of our and the value of any investment in our common shares. Furthermore, there is, and is likely to continue to be, uncertainty as to how U.S. and non-U.S. laws will be applied with respect to custody of cryptocurrencies and other digital assets held on behalf of clients. For example, U.S.- regulated investment advisers may be required to keep client “funds and securities” with a “qualified custodian”; there remain numerous questions about how to interpret and apply this rule, and how to identify a “qualified custodian” of, digital assets, which are obviously kept in a different way from the traditional securities with respect to which such rules were written. The uncertainty and potential difficulties associated with this question and related questions could materially and adversely affect our ability to continuously develop and launch our business lines. The Company may also incur costs related to the third-party custody and storage of its digital assets. Any security breach, incurred cost or loss of digital assets associated with the use of a custodian could materially and adversely affect the execution of hedging ETPs, the value of the Company’s assets and the value of any investment in the Common Shares.

Cryptocurrencies, DeFi Protocol Tokens and Digital Assets Momentum Pricing Risk

Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for anticipated future appreciation in value. Cryptocurrency and DeFi protocol token market prices are determined primarily using data from various exchanges, over-the-counter markets, and derivative platforms. Momentum pricing may have resulted, and may continue to result, in speculation regarding future appreciation in the value of cryptocurrencies and DeFi Protocol tokens inflating and making their market prices more volatile. As a result, they may be more likely to fluctuate in value due to changing investor confidence in future appreciation (or depreciation) in their market prices, which could adversely affect the value of the Company’s cryptocurrency and DeFi protocol token inventory and thereby affect the Company’s shareholders.

The profitability of our operations will be significantly affected by changes in prices of cryptocurrencies, DeFi protocol tokens and other digital assets. Any declines in the volume of digital asset transactions, the price of digital assets, or market liquidity for digital assets generally may adversely affect our operating results. Cryptocurrencies, DeFi protocol tokens and other digital assets prices are highly volatile, can fluctuate substantially and are affected by numerous factors beyond our control, including use of such cryptocurrencies, DeFi protocol tokens and other digital assets in the DeFi industry, demand, inflation and expectations with respect to the rate of inflation, global or regional political or economic events. If cryptocurrencies, DeFi protocol tokens and other digital assets prices should decline and remain at low market levels for a sustained period, our financial condition may be adversely affected, and we could determine that it is not economically feasible to continue activities.

The price and trading volume of any digital asset is subject to significant uncertainty and volatility, depending on several factors, including, but not limited to:

Cryptocurrencies, DeFi Protocol Tokens and Digital Assets Volatility Risk

As Valour’s ETPs track the market price of digital assets, cryptocurrencies and DeFi protocol tokens, the value of the Common Shares relates partially to the value of such digital assets, cryptocurrencies and DeFi protocol tokens, and fluctuations in the price of cryptocurrencies, DeFi protocol tokens and other digital assets could materially and adversely affect an investment in the Common Shares. Several factors may affect the price of cryptocurrencies, DeFi protocol tokens and other digital assets, including: the total number of cryptocurrencies, DeFi protocol tokens and other digital assets in existence; global cryptocurrency, DeFi protocol tokens and other digital assets demand; global cryptocurrencies, DeFi protocol tokens and other digital assets supply; investors’ expectations with respect to the rate of inflation of fiat currencies; investors’ expectations with respect to the rate of deflation of cryptocurrencies, DeFi protocol tokens and other digital assets; interest rates; currency exchange rates, including the rates at which cryptocurrencies, DeFi protocol tokens and other digital assets may be exchanged for fiat currencies; fiat currency withdrawal and deposit policies of cryptocurrency exchanges and liquidity of such cryptocurrency exchanges; interruptions in service from or failures of major cryptocurrency exchanges; Cyber theft of cryptocurrencies, DeFi protocol tokens and other digital assets from online wallet providers, or other third parties holding digital assets, or news of such theft from such providers or from individuals’ wallets; investment and trading activities of large investors; monetary policies of governments, trade restrictions, currency devaluations and revaluations; regulatory measures, if any, that restrict the use of cryptocurrencies, DeFi protocol tokens and other digital assets as a form of payment or the purchase of cryptocurrencies, DeFi protocol tokens and other digital assets; the availability and popularity of businesses that provide cryptocurrencies, DeFi protocol tokens and other digital assets and blockchain-related services; the maintenance and development of the open-source software protocol of various cryptocurrency or DeFi protocol networks; increased competition from other forms of cryptocurrency or payments services; global or regional political, economic or financial events and situations; expectations among cryptocurrencies, DeFi protocol tokens and other digital assets economy participants that the value of cryptocurrencies, DeFi protocol tokens and other digital assets will soon change; and fees associated with processing a cryptocurrency, DeFi protocol token or other digital asset transaction.

Cryptocurrencies, DeFi protocol tokens and other digital assets have historically experienced significant intraday and long-term price volatility. If cryptocurrency, DeFi protocol token and other digital asset markets continue to be subject to sharp fluctuations, shareholders may experience losses if they need to sell their Common Shares at a time when the price of cryptocurrencies, DeFi protocol tokens and other digital assets is lower than it was when they purchased their Common Shares. In addition, investors should be aware that there is no assurance that cryptocurrencies, DeFi protocol tokens and other digital assets will maintain their long term value in terms of future purchasing power or that the acceptance of cryptocurrencies, DeFi protocol tokens and other digital assets payments by mainstream retail merchants and commercial businesses will continue to grow.

Cybersecurity Threats, Security Breaches and Hacks

As with any other computer code, flaws in cryptocurrency and DeFi protocol source code have been exposed by certain malicious actors. Several errors and defects have been found and corrected, including those that disabled some functionality for users and exposed users’ information. Discovery of flaws in or exploitations of the source code that allow malicious actors to take or create cryptocurrencies and / or DeFi protocol tokens can occur.

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the Bitcoin and other cryptocurrency exchange market since the launch of the Bitcoin Network. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm the Company’s business operations or result in loss of the Company’s assets. Any breach of the Company’s infrastructure could result in damage to the Company’s reputation and reduce demand for the Common Shares, resulting in a reduction in the price of the Common Shares. Furthermore, the Company believes that if its assets grow, it may become a more appealing target for security threats, such as hackers and malware.

Any security procedures implemented cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by the Company. The security procedures and operational infrastructure of the Company may be breached due to the actions of outside parties, error or malfeasance of an employee of the Company or otherwise, and, as a result, an unauthorized party may obtain access to the Company’s crytocurrency account, private keys, data or cryptocurrencies. Additionally, outside parties may attempt to fraudulently induce employees of the Company to disclose sensitive information in order to gain access to the Company’s infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event, and often are not recognized until launched against a target, the Company may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of one of the Company’s accounts occurs, the market perception of the effectiveness of the Company could be harmed.

As technological change occurs, the security threats to the Company’s cryptocurrencies, DeFi protocol tokens and other digital assets will likely adapt and previously unknown threats may emerge. The Company’s ability to adopt technology in response to changing security needs or trends may pose a challenge to the safekeeping of the Company’s cryptocurrencies, DeFi protocol tokens and other digital assets. To the extent that the Company is unable to identify and mitigate or stop new security threats, the Company’s cryptocurrencies, DeFi protocol tokens and other digital assets may be subject to theft, loss, destruction or other attack

Cryptocurrency Exchanges and other Trading Venues are Relatively New

The Company and its affiliates manages its holdings of cryptocurrency, DeFi protocol tokens and other digital assets through cryptocurrency exchanges. In particular, Valour relies on cryptocurrency exchanges to be able to buy and sell the digital assets which its ETPs track. To the extent that cryptocurrency exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, this could result in a reduction in cryptocurrency prices. Cryptocurrency market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, derivatives and other currencies. For example, in the past, a number of cryptocurrency exchanges have been closed due to fraud, business failure or security breaches. In many of these instances, the customers of these exchanges were not compensated or made whole for the partial or complete losses of their account balances in such exchanges. While smaller exchanges are less likely to have the infrastructure and capitalization that provide larger exchanges with additional stability, larger exchanges may be more likely to be appealing targets for hackers and “malware” (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information, or gain access to private computer systems) and may be more likely to be targets of regulatory enforcement action.

Regulatory Risks

As digital assets have grown in both popularity and market size, governments around the world have reacted differently to digital assets with certain governments deeming them illegal while others have allowed their use and trade. Ongoing and future regulatory actions may alter, perhaps to a materially adverse extent, the ability of the Company to continue to operate. The effect of any future regulatory change on the DeFi ecosystem or any cryptocurrency, project or protocol that the Company may hold is impossible to predict, but such change could be substantial and adverse to the space as a whole, as well as potentially to the Company.

Governments may, in the future, restrict or prohibit the acquisition, use or redemption of cryptocurrencies. Ownership of, holding or trading in cryptocurrencies may then be considered illegal and subject to sanction. Governments may also take regulatory action that may increase the cost and/or subject cryptocurrency mining companies to additional regulation.

The Company has not received any exemptive relief from regulators in Canada. The Company discusses regulatory compliance with its external legal counsel on a regular basis. Investments in the ETPs in the light of their exposure to digital assets must always be assessed by every investor based on the circumstances and legal and regulatory conditions applicable to that investor. An investor governed by such conditions may be subject to limited possibilities to invest in the ETPs and/or experience unforeseeable consequences of a holding in the ETPs. The combination of the nature of Valour’s activities, the markets to which it is exposed, the institutions with which it does business and the securities which it issues makes it particularly exposed to national, international and supranational regulatory action and taxation changes. The scope and requirements of regulation and taxation applicable to the issuer continues to change and evolve and there is a risk that as a result it may prove more difficult or impossible, or more expensive, for Valour to continue to carry on their functions in the manner currently contemplated. This may require that changes are made in the future to the agreements applicable to Valour and may result in changes to the commercial terms of the ETPs and/or the inability to apply for and redeem ETPs and/or compulsory redemption of some or all of the ETPs and/or disruption to the pricing thereof.

Valour Cayman and VDSL are companies which are regulated by various laws and regulations of the Cayman Islands and Jersey, respectively. Valour Cayman and VDSL cannot fully anticipate all changes that in the future may be made to laws and regulations to which Valour Cayman and VDSL are subject to in the future, nor the possible impact of all such changes. Valour Cayman and VDSL’s ability to conduct its business is dependent on the ability to comply with rules and regulations.

If the Company was found to be in breach of regulations applicable to Valour Cayman or VDSL, it could result in fines or adverse publicity which could have a material adverse effect on the business which in turn may lead to decreased results of operations and the company’s financial condition.

Valour Cayman or VDSL’s involvement in such proceedings or settlements as well as potential new legislation or regulations, decisions by public authorities or changes regarding the application of or interpretation of existing legislation, regulations or decisions by public authorities applicable to Valour Cayman or VDSL’s operations, the ETPs and/or the underlying assets, may adversely affect Valour Cayman or VDSL’s business or an investment in the ETPs.

The impact of any detrimental developments in the underlying digital asset’s regulation on Valour Cayman and VDSL’s ETPs becomes evident by considering an ETP’s product nature: An Exchange Traded Product is a financial instrument traded – like a share - on a stock exchange whereby typically the aim is to provide the same return as a specified benchmark or asset (before fees). Although ETPs can take a number of forms (ETFs/ETCs/ETNs), they share some common characteristics. ETPs are designed to replicate the return of an underlying benchmark or asset, with the easy access and tradability of a share or digital asset (that otherwise may only be bought via a decentralized exchange wallet-setup). Investors can benefit from the broad diversification of a benchmark, gaining exposure to hundreds or thousands of individual underlying securities – or digital assets - in a single transaction. Additionally, the wide range of asset classes covered by ETPs opens up more exotic investment areas which historically could only be accessed by institutional investors (such as individual commodities, emerging markets or digital assets). ETPs generally do all this with a lower fee than actively managed funds and therefore compete with traditional index funds on cost.

Valour Cayman’s ETPs are non-interest-bearing debt securities that are designed to track the return of an underlying digital asset. The current Valour ETP program in place does not provide that those securities are collateralised. Although their yield references an underlying benchmark or asset, the ETPs are similar to unsecured, listed bonds. As such, Valour ETPs are entirely reliant on the creditworthiness of Valour as issuing entity. Hence, generally a change in that creditworthiness might negatively impact the value of the ETP, irrespective of the performance of the underlying benchmark or digital asset.

However, the primary appeal of these types of ETPs is that they guarantee exposure to a benchmark or an asset’s return (minus fees) even when the underlying markets or sectors suffer from liquidity shortages. The return is guaranteed by the issuing entity and not reliant on the access (direct or via a directive) to the underlying assets. Unlike physical replication, a synthetic ETP does not hold the underlying assets the product is designed to track. Instead, an ETP issuer like Valour enters into hedging transactions thereby directly or indirectly trading in the underlying assets, entering swap agreements, making investment in funds dedicated to holding the underlying digital assets etc. with a range of counterparties to provide the return of the underlying assets. Consequently, a negative change of regulation (tightening/restriction/prohibition) can have a direct impact on Valour’s issuer activity or – indirectly – by affecting its contractual counterparties. Restrictive and prohibitive regulation may lead to counterparty default, known as counterparty risk. If a counterparty defaults on its obligations under the hedging transactions described above, the ETP would not provide the return of the asset it is designed to track which could also expose investors to losses.

Canada

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. Many of those Staff Notices have dealt with cryptocurrency trading platforms and other businesses that hold cryptocurrencies on behalf of clients, which the Company does not do as part of its business.

The CSA has also, however, published Staff Notices focused on the analysis of when a cryptocurrency constitutes a security for securities law purposes. On August 24, 2017 and June 11, 2018, the CSA published CSA Staff Notice 46-307 – Cryptocurrency Offerings and CSA Staff Notice 46- 308 – Securities Law Implications for Offerings of Tokens, respectively, each providing guidance on whether token offerings are subject to Canadian securities laws. While the Company does not create or sell digital assets of its own issue, through its Valour Venture and Valour Infrastructure business lines it holds a number of digital assets from a variety of issuers. In the event that any of these were determined to be securities, it could negatively impact the issuers of those digital assets by making trading subject to prospectus requirements, which could reduce the market price of such assets and therefore devalue the holdings of the Company.

While the Company does not have operations in the United States, the Company reviews development of the cryptocurrency regulatory environment in the United States on an ongoing basis due to the proximity of United States to Canada. In comparison to traditional securities or commodities markets, U.S. law and regulation remains thinly developed with respect to financial services provided to the cryptocurrency and digital asset markets. Although recent years have seen some guidance emerge with respect to the question of whether a digital asset constitutes a security for certain purposes under U.S. law, there remains little or no clear legal authority or established practice with respect to the application to digital assets of concepts like staking and lending of cryptocurrency, fungibility, settlement, trade execution and reporting, collateralization rehypothecation, custody, repo, margin, restricted securities, short sales, bankruptcy and insolvency and many others. Some or all of these concepts may be needed for crypto-related marketplaces to continue to grow, mature and attract institutional participants; there can be no assurances that rules and practices for such concepts will develop in the United States in a manner that is timely, clear, favorable to the Company or compatible with other jurisdictions’ regimes in which the Company operates. Furthermore, to the extent the Company offers any of these financial services, emerging regulation or enforcement activity may have a material impact on the Company’s ability to continue providing such service thereby affecting the Company’s revenues and profitability as well as its reputation and resources.

Governments may in the future take regulatory actions that prohibit or severely restrict the right to acquire, own, hold, sell, use or trade cryptocurrencies or to exchange cryptocurrencies for fiat currency. By extension, similar actions by other governments may result in the restriction of the acquisition, ownership, holding, selling, use or trading in the common shares of the Company’s common shares. Such a restriction could result in the Company liquidating its cryptocurrency investments at unfavorable prices and may adversely affect the Company’s shareholders.

U.S. Classification of digital Assets and Investment Company Act of 1940

The SEC and its staff have taken the position that certain digital assets fall within the definition of a “security” under the U.S. federal securities laws. The legal test for determining whether any given digital asset is a security is a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict. The SEC generally does not provide advance guidance or confirmation on the status of any particular digital asset as a security. Furthermore, the SEC’s views in this area have evolved over time and it is difficult to predict the direction or timing of any continuing evolution. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff. Public statements by senior officials at the SEC indicate that the SEC does not intend to take the position that Bitcoin or Ether are securities (in their current form). Bitcoin and Ether are the only digital assets as to which senior officials at the SEC have publicly expressed such a view. Moreover, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital asset. With respect to all other digital assets, there is currently no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular digital asset could be deemed a “security” under applicable laws. Similarly, though the SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given digital asset is a security in April 2019, this framework is also not a rule, regulation or statement of the SEC and is not binding on the SEC.

Several foreign jurisdictions have taken a broad-based approach to classifying digital assets as “securities,” while other foreign jurisdictions, such as Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain digital 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 digital assets as “securities.” The classification of a digital 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.

Additionally, we do not currently intend to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If certain digital assets that form a part of our ETPs are determined to be digital assets, we may be obligated to register as an investment company under the Investment Company Act, and we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

Further, the classification of certain digital assets as securities could draw negative publicity and a decline in the general acceptance of the digital asset, which could have a negative effect on our ETPs that contain such digital assets.

Issuance of Crypto ETPs in the EU

As mentioned above, the Valour Base Prospectus and VDSL Base Prospectus covering the public offering of the ETPs in the EU has been approved by the SFSA, the Swedish financial authority, and is passported to Austria, Belgium, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Malta, Poland, Portugal, Romania, Slovakia and Spain where the ETPs can be offered and sold via the respective stock exchange listings.

The following provides an overview on the digital assets regulatory landscape on supra-national EU level, the various EU countries in which Valour issued ETPs are available or the primary EU countries where Valour may issue ETPs in the future.

EU

The EU is the first major jurisdiction worldwide to provide a comprehensive, dedicated regulatory framework for crypto-assets, the EU Markets in Crypto-Asset Regulation (“MiCA”). MiCA has four specific objectives. The first is to provide a legal framework for crypto-assets not covered by existing EU legislation on financial services. Secondly, by setting up a sound and transparent legal framework, it would support innovation, promote crypto-assets and the wider use of distributed ledger technology (“DLT”). Thirdly, the proposal would secure an appropriate level of consumer and investor protection and market integrity. Finally, it would enhance financial stability, as some of the crypto-assets may ‘become widely accepted and potentially systemic’.

MiCA is set to regulate crypto-assets, including so-called stablecoins that do not already fall under existing EU rules, by setting regulatory requirements for the public offer and marketing of crypto-assets and the provision of services related to them. In addition, MiCA includes provisions to prevent market abuse involving crypto-assets. More specifically, with regard to stablecoins and with a view to mitigate risks to investors and financial stability, MiCA provides that issuers of stablecoins will need to be authorised (either as a credit institution or an e-money institution for e-money tokens, or under MiCA for asset-referenced tokens) and have in place a robust and segregated reserve of assets to support the peg, and in the case of e-money tokens enable holders to redeem at par. For issuers of significant so-called stablecoins, supplemental requirements and EU-level (instead of national) supervision apply. Yet, while MiCA is intended to create a comprehensive regulatory framework for cryptoassets, continuous monitoring will remain necessary. As the system continues to evolve quickly, with novel business models and emerging risks, further regulatory actions may be required through time. A wider crypto adoption among European citizens and institutions may also expand intersystem exposures. While the broader ecosystem (asset service providers) may be subject to regulation under MiFID II or MiCA, it does not directly impact Valour as an issuer of Exchange Traded Products (ETPs).

MiCA and Crypto-Assets

MiCA represents a landmark regulatory framework for the crypto industry in the EU, aiming to provide legal certainty, enhance consumer protection, and support innovation while maintaining financial stability. MiCA applies to crypto-assets not covered by existing financial services legislation, including e-money tokens, asset-referenced tokens, and other tokens.

Especially, Crypto issuers must publish detailed white papers outlining specifics of crypto-assets, potential risks, and environmental impacts. White papers must be transparent, fair, and non-misleading and contain detailed information that mimick what is required in a prospectus. This is set to create a significant change in the writing of white paper and include requirements that are not seen in other parts of the world, enhancing consumer protection while posing a significant regulatory burden for companies targeting EU clients.

Crypto Asset Service Providers (“CASPs”) will need to obtain authorization to provide digital asset services relating to digital assets within the EU, such as custody, digital asset trading platforms, exchange of digital assets for other ones or funds, advice, portfolio management, etc. As usual, the “target test” will apply and non-EU companies targeting EU clients must comply with MiCA standards and may need to establish an EU presence.

Providers must act in clients’ best interests, offering transparent information about pricing, fees, and risks. Especially, Client assets must be kept separate from providers’ own assets. Prompt and effective handling of client complaints is required.

By mid-2025, the European Commission will report on the need for additional laws to address NFTs and decentralized finance. Other EU laws impacting the crypto sector, such as those addressing money laundering, tax avoidance, and cybersecurity, will complement MiCA.

MiCA creates a regulatory framework for crypto-assets that are not covered by existing financial services legislation. This regulation focuses on the issuance, trading, and custody of crypto-assets, as well as the provision of crypto-asset services. Conversely, MiCA does not apply to crypto-assets that qualify as financial instruments under MiFID II.

MiFID II

Under MiFID II, transferable securities are defined as classes of securities negotiable on the capital market, excluding instruments of payment. These include:

1. Shares in companies and equivalent securities

2. Bonds and other forms of securitized debt

3. Any other securities giving the right to acquire or sell transferable securities or leading to cash settlement

While the provision of investment services related to these securities is regulated, the issuance of transferable securities itself is not a regulated activity under MiFID II.

Valour

The issuance of transferable securities linked to underlying assets is not inherently a regulated activity under MiFID II or MiCA.

This remains true regardless of how the relevant underlying assets are classified or treated under these regulatory frameworks. Furthermore, the regulatory status of parties providing services related to these securities does not affect the issuer’s position. In essence, the issuer’s regulatory status remains unchanged under MiFID II or MiCA, irrespective of the nature of the underlying assets or the regulatory obligations of associated service providers.

The act of issuing transferable securities linked to underlying assets does not, by itself, subject the issuer to regulation under MiFID II or MiCA. The regulatory treatment of the underlying assets (whether they are traditional financial instruments or crypto-assets) does not directly impact the issuer’s regulatory position. Similarly, Even if parties providing services related to these securities are regulated under MiFID II or MiCA, this does not alter the regulatory status of the issuer.

Valour’s regulatory position therefore remains consistent, regardless of the complex interplay between the securities, their underlying assets, and the broader regulatory environment.

While the issuance itself may not be a regulated activity, Valour comply will continue to comply with other regulatory obligations, such as disclosure requirements or compliance with securities laws, depending on the nature of their offerings and the jurisdictions in which they operate.

Valour will continue to monitor the evolving regulatory landscape, as interpretations and applications of these regulations may change over time.

Sweden

The Financial Supervisory Authority (FSA) and the central bank have publicly declared that bitcoin is legal but not an official form of payment or legal tender. From a tax perspective they are viewed as an asset, not a currency or cash. The FSA has warned of the risks associated with cryptos and investment products with cryptos as underlying assets such as exchange-traded products (ETPs). Sweden has imposed registration requirements that mean custodians, wallet providers and exchanges must comply with the Swedish Currency Exchange Act. The act requires certain types of financial institutions (which are otherwise largely unregulated and unsupervised) to comply with AML provisions. The scope of the Currency Exchange Act now includes custodian wallet providers and providers of virtual currency exchange services in accordance with the implementation of the Fifth Anti-Money Laundering Directive (AMLD5). Mining activities are not regulated under Swedish law. There are no licensing or registration requirements specifically applicable to virtual currency mining activities. Sweden’s Central Bank, the Riksbanken, has been a leader in developing a CBDC, the e-krona.

France

In April 2019, the French National Assembly adopted the Plan d’Action pour la Croissance et la Transformation de Enterprises (PACTE – Action Plan for Business Growth and Transformation) that will establish a framework for digital asset services providers. France’s Financial Market Authority (AMF) has adopted new rules and regulations for cryptocurrency service providers and ICOs, related to the (PACTE). Ordinance № 2020-154452, was issued on December 9, 2020, to compliment France’s cryptocurrency regulations. In June 2021, the regulations were finalized and went into effect. Firms are now subject to mandatory registration and subject to stricter KYC regulations. The rules established new AML/CFT rules related to digital assets. They imposed new requirements on crypto exchanges and prohibit anonymous accounts, expand AML/CFT and KYC obligations to better harmonize the French AML framework with Financial Action Task Force (FATF) principles and respond to new risks associated with digital assets. France has been actively involved in shaping EU-wide crypto regulations, such as the Markets in Crypto-Assets Regulation (MiCA), which will impact its domestic regulatory landscape, as other EU Member States.

Germany

The German government was one of the first countries to provide legal certainty to financial institutions, allowing them to hold crypto-assets. Regulations stipulate that citizens and legal entities can buy or trade crypto-assets as long as it is done through licensed exchanges and custodians. Pursuant to those regulations crypto-assets qualify as financial instruments under the German Banking Act and firms providing services in regard to crypto-assets must be licensed by the German Federal Financial Supervisory Authority (BaFin). With the applicability of MiCA, the German supervisory framework for the provision of digital asset services has been changed by the German Financial Market Digitalization Act, with changes to the German Banking Act (KWG) set to come into effect on December 30, 2024. The German Banking Act is still applicable for crypto-assets which fall under the MiFID II regime. Crypto-assets falling within the scope of MiCA are exclusively subject to the requirements of MiCA. Germany has signed up to requirements under AMLD5.

Italy

In February 2022, Italy published new AML rules for crypto firms which outline registration and reporting requirements for VASPs that align with the EU AMLD5 and the Financial Action Task Force (FATF) guidelines for crypto firms. The new rules also require virtual asset service providers to register in a special roster for crypto firms. Registration is required if firms offer any digital asset-related services in the country. Italy joined the European Blockchain Partnership (EBP) along with 22 other countries in April 2018. The EBP was established to enable member states to work together with the European Commission on blockchain technology. Cryptocurrencies and blockchain are regulated at the legislative level in Italy under Legislative Act no. 90. The decree in 2017 grouped cryptocurrency exchanges with foreign currency exchanges. Although the decree states that cryptocurrencies are not issued by the central bank and are not correlated with other currencies, it is a virtual currency used as a medium of exchange for goods and services.

Austria

The Financial Market Authority (“FMA”) has warned investors that cryptocurrencies are risky and that the FMA does not supervise or regulate virtual currencies, including bitcoin, or cryptocurrency trading platforms. The FMA’s regulations follow Austria’s implementation of the Fifth Money Laundering Directive (“AMLD5”), defining crypto-assets as “financial instruments.” The FMA regulations provide registration requirements with respect to the issuance and selling of virtual currencies as well as transferring them, trading and exchange platforms for them as well as providers of custodian wallets. Cryptocurrencies are legal but are not considered as legal tender. The Austrian Ministry of Finance classes cryptocurrencies as “other (intangible) commodities.”

Belgium

The Belgian Financial Services and Markets Authority and the National Bank of Belgium are the primary regulatory bodies for financial services in Belgium. The regulators have published guidance and warnings to the public that cryptocurrencies are not legal tender and have also issued statements regarding scams and investor protection. Belgium has, however, fostered a strong fintech community involved in digital assets and blockchain. The minister of justice has announced plans to establish a legal framework related to cryptos. In February 2022 Belgium announced new rules for certain virtual asset service providers. The rules, which took effect in May 2022, require service providers “to meet a series of conditions, including ones relating to their professional integrity and compliance with the anti-money laundering legislation.”

Denmark

The Danish Financial Supervisory Authority is the main regulator in Denmark. Cryptocurrency regulation is, however, influenced by EU law. An amendment in January 2020 to the Danish Act on Measures to Prevent Money Laundering and Financing of Terrorism defines a virtual currency as “a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically.” There is no regulation of mining for virtual currencies in Denmark. Denmark amended the AML Act in 2020 to implement AMLD5, which is designed to bring virtual currencies within the scope of the existing AML-laws. The Danish central bank, the Nationalbanken, is researching the development of a digital currency, the “e-krone.”

Finland

In May 2019, Finland’s Financial Supervisory Authority (FSA) began regulating virtual currency exchange providers, wallets and issuers of virtual currencies. Registration is required to ensure compliance with statutory requirements surrounding reliability of the provider, protection of client money, segregation of assets, marketing and compliance with AML/CFT regulations. The FSA has warned consumers of the risky, volatile and speculative nature of the investments. The Finnish FSA has published stricter rulings regarding crypto marketing saying “Only registered virtual currency providers can market virtual currencies and related services in Finland. The marketing of virtual currencies in Finnish and in Finland is only allowed for entities registered as virtual currency providers in Finland.” The list of supervised entities operating in the cryptocurrency and digital currency sector is small; although, the FSA does not advise on or restrict Finnish customers visiting foreign websites. Finland has joined the European Blockchain Partnership and agreed to AMLD5.

Luxembourg

In the Luxembourg, there is not yet a formal regulatory stance on crypto-assets, but the “Virtual Assets – FAQ” document published in November 2021 and updated in January 2022 by the Commission de Surveillance du Secteur Financier (CSSF) has shed a light on some aspects.

For instance, it clarified that Undertaking for Collective Investment in Transferable Securities (UCITS) funds and Undertakings for Collective Investment (UCIs) addressing non-professional customers and pension funds are forbidden to invest directly or indirectly in Virtual Assets. The document also outlines the conditions under which Alternative Investment Funds (AIFs) may invest in crypto-assets, as well as the requirements for the Alternative Investment Fund Manager (AIFM) and the specific Anti-Money Laundering (AML) considerations.

Lastly, in a FAQ document on virtual assets for credit institutions issued in January 2022 by the CSSF, the regulator states that credit institutions may directly invest in virtual assets and open accounts that allow customers to invest in virtual assets. On the other hand, credit institutions cannot open bank accounts in virtual assets, must submit a business case as well as an application file to the CSSF to provide virtual assets services and must set up an effective investor protection framework.

The Netherlands

The Dutch Central National Bank De Nederlandsche N.V. (DNB) requires crypto firms to register with it. Dutch regulations require VASPs to provide identifying information on themselves and their customers. The DNB also supervises crypto service providers’ compliance with the Sanctions Act 1977. The DNB defines cryptos as “a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically.” In May 2020 the Dutch Implementation Act amended Dutch AML rules and implemented AMLD5.

Norway

Cryptocurrencies are legal. They are defined as an asset and not any type of money. Norway has been an attractive location for blockchain start-ups. The Financial Supervisory Authority of Norway “Finanstilsynet” and the country’s Ministry of Finance has established money laundering regulations which apply to “Norwegian providers of virtual currency exchange and storage services.” The legislation requires firms such as storage services and exchanges that convert cryptos to fiat currency to comply with AML rules, but it does not impose regulatory obligations on other crypto services. “Finanstilsynet will ensure that virtual currency exchange and storage providers comply with the money laundering rules. However, FSA does not have any tasks monitoring other areas of these providers, such as investor protection,” the regulator said. In June 2021, Finanstilsynet published a warning which said, “Most cryptocurrencies are subject to extreme price fluctuations. The risk of loss is high… Price formation is in many cases not transparent.” It also warned of significant criminal activity. “Scammers use spam, computer viruses, fake drawings and a variety of other techniques to deceive consumers,” the warning stated.

Spain

Like its neighbor Portugal, Spain was a notable early hot spot for cryptocurrencies among EU members, with merchants accepting payments and bitcoin kiosks in the streets. Despite having no formal legal status, virtual currencies in Spain are taxable as income and under VAT. In 2021 the Spanish Securities and Exchange Commission, the Comision Nacional del Mercado de Valores (CNMV) and the Bank of Spain issued a joint statement warning of the risks and volatility associated with cryptos. The joint statement also highlighted that, from a legal standpoint, cryptocurrencies are not a means of payment and are not backed by a central bank or other customer protection mechanisms or authority. Spain issued the Royal Decree Law 5/202176 which included a provision giving the CNMV power to regulate advertising related to cryptocurrencies. In January 2022, the CNMV published a circular saying it would begin to regulate rampant advertising of digital assets, including by social media influencers, to make sure investors are aware of risks.

ETP issuance into non-EU countries

Although some of its operational staff is located in Switzerland, Valour does not yet offer any ETPs in Switzerland. Valour offers ETPs in the United Kingdom.

Switzerland

Switzerland is known as one of the most cryptocurrency-friendly nations in the world. Switzerland’s financial markets regulator, the Swiss Financial Market Supervisory Authority (FINMA) has defined licensing requirements for cryptocurrency businesses of all types including bitcoin kiosk operations, and has created requirements for blockchain companies. Cryptocurrency businesses are subject to AML regulations and licensing requirements under FINMA. FINMA’s regulatory environment complies with the FATF’s digital asset regulation issued in June 2019. Switzerland further improved its regulations surrounding tokens with the August 2021 implementation of the Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (the “DLT Act”).

The United Kingdom

The cryptoasset legal and regulatory landscape in the UK is rapidly evolving. Since January 10, 2020, certain types of cryptoasset business operating in the UK (i.e. those offering exchange services and custody services) have been regulated by the Financial Conduct Authority (“FCA”) for anti-money laundering and counter-terrorist financing (“AML/CTF”) purposes. In March 2024, the London Stock Exchange (“LSE”) confirmed that it will accept applications for the admission of BTC and ETH backed crypto ETNs commencing from the second quarter of 2024 (for professional investors only). The FCA concurrently updated its position on cryptoassets and stated that it will not object to requests to create a UK listed market segment for asset-backed crypto ETNs. The first such ETNs were listed in 2024 and the market has grown since.

In 2023, the government announced plans to legislate for a comprehensive future financial services regime for cryptoassets—accordingly, the FCA’s remit is expected to expand from the AML/CTF regime and financial promotions rules to cover wider conduct rules in relation to a broad variety of activities involving cryptoassets (including stablecoins) and various projects are underway in relation to these matters but further final rules are not expected until 2026. In December 2024, the FCA published consultations on admissions and disclosures, and the market abuse regime for cryptoassets. Additionally, in January 2025, new legislation came into force which clarifies that cryptoasset staking arrangements do not fall within scope of the definition of “collective investment schemes”. The Prudential Regulatory Authority (“PRA”) and the Bank of England (“BoE”) are also developing their policy approach towards the prudential treatment of cryptoasset exposures (in line with the standards set out in the updated Basel Framework) – to that effect, the PRA issued a data request in December 2024 seeking to gather information from firms to inform its approach. Further, the Digital Securities Sandbox (“DSS”) formally opened for applications in September 2024. The DSS is the first FMI sandbox created under the powers conferred on HM Treasury by FSMA 2023, and provides a regulated environment for firms, in particular financial market infrastructures (“FMIs”), to test new technologies such as distributed ledger technology (“DLT”) in the issuance, trading and settlement of transferable securities. Importantly, the UK government is seeking to deliver a pilot issuance of digital gilts (known as the Digital Gilt Instrument, or DIGIT) in the short to medium term, through the DSS.

In terms of legislative reform, the Law Commission of England and Wales has carried out extensive analysis on a number of digital asset related issues, including on smart contracts, property rights of digital assets, private international law challenges in matters involving digital assets, decentralised autonomous organisation (“DAOs”), and electronic trade documents. Following the recommendation of the Law Commission, the Property (Digital Assets etc.) Bill was introduced into Parliament in 2024, which seeks to clarify that under English law, things (such as digital assets) are not prevented from being capable of attracting property rights on the basis that they do not fit easily into existing categories of “property” (as defined under historic common law). The Bill is currently progressing through the legislative process.

Venture Portfolio Exposure

Given the nature of the Company’s Venture activities, the results of operations and financial condition of the Company are dependent upon the market value of the securities, tokens and cryptocurrencies that comprise Venture’s portfolio assets. Market value can be reflective of the actual or anticipated operating results of companies or projects in the portfolio and/or the general market conditions that affect the technology, crypto and DeFi sectors. Various factors affecting these sectors could have a negative impact on the Company’s portfolio of investments and thereby have an adverse effect on its business. Additionally, the Company’s investments are mostly in early stage ventures that may never mature or generate adequate returns or may require a number of years to do so. Junior companies may never achieve commercial success. This may create an irregular pattern in the Company’s investment gains and revenues (if any) and an investment in the Company’s securities may only be suitable for investors who are prepared to hold their investment for a long period of time. Macro factors such as commodity prices, the growth and decline of disruptive technologies, including DeFi technologies, and global political and economic conditions could have an adverse effect on the mining, technological and Defi sectors, thereby negatively affecting the Company’s portfolio of investments. Company and project-specific risks, such as the risks associated with emerging companies and project in the technology, crypto and DeFi sectors generally, could have an adverse effect on one or more of the investments in the portfolio at any point in time. Company, project and industry-specific risks that materially adversely affect the Company’s investment portfolio may have a materially adverse impact on operating results.

Banks May Cut off Banking Services to Businesses that Provide Cryptocurrency-related Services

A number of companies that provide cryptocurrency-related services have been unable to find banks that are willing to provide them with bank accounts and banking services. Similarly, a number of such companies have had their existing bank accounts closed by their banks. Banks may refuse to provide bank accounts and other banking services to cryptocurrency related companies or companies that accept cryptocurrencies for a number of reasons, such as perceived compliance risks or costs. The difficulty that many businesses that provide cryptocurrency-related services have and may continue to have in finding banks willing to provide them with bank accounts and other banking services may be currently decreasing the usefulness of cryptocurrencies as a payment system and harming public perception of cryptocurrencies or could decrease its usefulness and harm its public perception in the future. Similarly, the usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks were to close the accounts of many or of a few key businesses providing cryptocurrency-related services. This could decrease the market prices of cryptocurrencies and adversely affect the value of the Company’s cryptocurrency inventory.

Impact of Geopolitical Events

Crises may motivate large-scale purchases of cryptocurrencies which could increase the price of cryptocurrencies rapidly. This may increase the likelihood of a subsequent price decrease as crisis-driven purchasing behavior wanes, adversely affecting the value of the Company’s cryptocurrency holdings. The possibility of large-scale purchases of cryptocurrencies in times of crisis may have a short-term positive impact on the prices of same. Future geopolitical crises may erode investors’ confidence in the stability of cryptocurrencies and may impair their price performance which would, in turn, adversely affect the Company’s cryptocurrency holdings.

As an alternative to fiat currencies that are backed by central governments, cryptocurrencies are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of cryptocurrencies either globally or locally. Large-scale sales of cryptocurrencies would result in a reduction in their market prices and adversely affect the Company’s operations and profitability.

Further Development and Acceptance of Digital Assets and DeFi Networks

The further development and acceptance of digital assets and other cryptographic and algorithmic protocols governing the issuance of transactions in cryptocurrencies and DeFi Protocols, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The growth of this industry in general, and the use of cryptocurrencies in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of such networks may adversely affect the value of the corresponding cryptocurrencies and DeFi Protocol tokens, and thus may adversely affect the Company’s operations. The factors affecting the further development of the industry, include, but are not limited to the following:

Currently, there is relatively small use of digital assets in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect the Company’s operations, investment strategies, and profitability.

As relatively new products and technologies, cryptocurrencies have not been widely adopted, for example as a means of payment for goods and services, by major retail and commercial outlets. Conversely, a significant portion of digital asset demand is generated by speculators and investors seeking to profit from the short-term or long-term holding of digital assets. The relative lack of acceptance of digital assets in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services or other direct use cases that may arise. A lack of expansion by cryptocurrencies into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in their market prices, either of which could adversely impact the Company’s operations, investment strategies, and profitability. Further, if fees increase for recording transactions in the applicable Blockchain, demand for cryptocurrencies may be reduced and prevent the expansion of the network to retail merchants and commercial businesses, resulting in a reduction in the price of cryptocurrencies.

Trade Errors

We may make, or otherwise be subject to, trade errors. Errors may occur with respect to trades executed on our behalf. Trade errors can result from a variety of situations, including, for example, when the wrong investment is purchased or sold or when the wrong quantity is purchased or sold. Trade errors frequently result in losses, which could be material. To the extent that an error is caused by a third party, we may seek to recover any losses associated with the error, although there may be contractual limitations on any third party’s liability with respect to such error.

Dependence on Investment Manager.

The success of the Company’s Equity Investments in Digital Assets is dependent upon the ability of the investment manager to manage the investment fund and effectively implement the investment fund’s investment program. The investment fund’s governing documents do not permit the Company participate in the management and affairs of the investment fund.

Discretion as to Distributions and Timing of Withdrawal

The investment manager of the Company’s Equity Investment in Digital Assets is not obligated to distribute digital assets in-kind nor to distribute the proceeds form the sale of any digital assets. The Company is permitted to make withdrawals, however, the ability to make withdrawals may be limited while the investment manager is actively engaged in investment strategies or for other purposes. The Company is required to be provide a significant advance notice in respect of any withdrawal and accordingly its ability to withdraw in a timely manner is limited.

Discretion as to Form of Payment.

The investment manager of the Company’s Equity Investments in Digital Assets has the discretion to make distribution and pay withdrawals in unlocked digital assets, cash or a combination. There can be no assurance as to (i) the form of distribution or payment, (ii) that the investment fund will have sufficient cash or unlocked digital assets to satisfy withdrawal requests, or that it will be able to liquidate investments at favorable prices at the time such withdrawals are requested. The Company has no right to request in-kind distributions, and should not expect the investment fund to accommodate any such request.

Conditions on Equity Investments in Digital Assets

The digital assets held by the Equity Investments in Digital Assets are subject to staggered lock up periods pursuant to which the digital assets are not freely tradeable. As a result, the Company may only request to withdraw the portion of it capital account balance that corresponds to its pro-rata share of the applicable digital assets that is no longer locked-up and freely transferable by the investment fund.

Development and Acceptance of the Digital Asset Networks

The growth and use of digital assets generally is subject to a high degree of uncertainty. The future of the industry likely depends on several factors, including, but not limited to: (a) economic and regulatory conditions relating to both fiat currencies and digital assets; (b) government regulation of the use of and access to digital assets; (c) government regulation of digital asset service providers, administrators or exchanges; and (d) the domestic and global market demand for—and availability of—other forms of digital asset or payment methods. Any slowing or stopping of the development or acceptance of digital assets may adversely affect the Company.

Digital Asset Audit Risk

Audits for entities holding digital assets are unlike audits for other types of entities. Special procedures must be taken to determine whether investments and transactions are properly accounted for and valued because independent confirmation of digital asset ownership (e.g., ownership of a balance on a digital asset exchange) differs dramatically from traditional confirmation with a securities broker or bank account. The Company requires satisfactory processes in place in order for the auditor to obtain the Company’s transaction history and properly prepare audited financials. Any breakdown in such processes may result in delays or other impediments of an audit. In addition, the complexity of digital assets generally may lead to difficulties in connection with the preparation of audited financials.

Risk of Total Loss of Equity Investment in Digital Assets.

While all investments risk the loss of capital, the equity investment in digital assets should be considered substantially more speculative and significantly more likely to result in a total loss of capital than most other investment funds. The investment manager will not attempt to mitigate the potential of loss of capital through the use of risk management techniques. Rather, the investment manager generally intends only to sell the digital assets when such sales are necessary in order to satisfy withdrawal requests. Furthermore, the investment manager does not intend to hedge potential losses and will not make investment decisions based on the price of the digital assets. Consequently, the equity investment in Digital Assets could result in the total loss of the Company’s capital.

Risk of Loss, Theft or Destruction of Cryptocurrencies

There is a risk that some or all of the Company’s cryptocurrencies could be lost, stolen or destroyed. Digital assets of Valour that are held internally via multi-signature cold storage may be prone to loss or theft as a result of hacking, loss of passwords, compromised access credentials, malware or cyberattacks. If the Company’s cryptocurrencies are lost, stolen or destroyed under circumstances rendering a party liable to the Company, the responsible party may not have the financial resources sufficient to satisfy the Company’s claim.

Irrevocability of Transactions

Bitcoin and most other cryptocurrency and DeFi protocol token transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies or DeFi protocol tokens may be irretrievable. Such transactions are not reversible without the consent and active participation of the recipient of the transaction. Once a transaction has been verified and recorded in a block that is added to the Blockchain, an incorrect transfer of cryptocurrencies or a theft of cryptocurrencies generally will not be reversible and the Company may not be capable of seeking compensation for any such transfer or theft. To the extent that the Company is unable to seek a corrective transaction with the third party or is incapable of identifying the third party that has received the Company’s cryptocurrencies through error or theft, the Company will be unable to revert or otherwise recover incorrectly transferred cryptocurrencies. The Company will also be unable to convert or recover cryptocurrencies transferred to uncontrolled accounts.

Potential Failure to Maintain Digital Asset Networks

Many digital asset networks, including the Bitcoin Network, operate based on an open-source protocol maintained by the core developers of such networks and other contributors. As such protocols are not sold and their uses do not generate revenues for its development team, the core developers are generally not compensated for maintaining and updating such network protocols. Consequently, there is a lack of financial incentive for developers to maintain or develop such networks and the core developers may lack the resources to adequately address emerging issues with such network protocol. Although the many networks, including the Bitcoin Network, are currently supported by the core developers, there can be no guarantee that such support will continue or be sufficient in the future. To the extent that material issues arise with such network protocol and the core developers and open source contributors are unable to address the issues adequately or in a timely manner, such networks and an investment in the Common Shares may be adversely affected.

Potential Manipulation of Blockchain

If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains control of more than 50% of the processing power dedicated to mining on the Bitcoin Network, it may be able to alter or manipulate the Blockchain on which the Bitcoin Network and most Bitcoin transactions rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. The malicious actor or botnet could control, exclude or modify the ordering of transactions, though it could not generate new Bitcoins or transactions using such control. The malicious actor could “double-spend” its own Bitcoins (i.e., spend the same Bitcoins in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintained control. To the extent that such malicious actor or botnet did not yield its control of the processing power on the Bitcoin Network or the Bitcoin community did not reject the fraudulent blocks as malicious, reversing any changes made to the Blockchain may not be possible. To the extent that the Bitcoin ecosystem, including the core developers and the administrators of mining pools, do not act to ensure greater decentralization of Bitcoin mining processing power, the feasibility of a malicious actor obtaining control of the processing power on the Bitcoin Network will increase.

Miners May Cease Operations

If the award of Bitcoins or other cryptocurrencies for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners in relevant networks, miners may cease expending processing power to solve blocks and confirmations of transactions on the Bitcoin Blockchain or other networks could be slowed. A reduction in the processing power expended by miners on the applicable blockchain network could increase the likelihood of a malicious actor or botnet obtaining control.

Risks Related to Insurance

The Company intends to insure its operations in accordance with technology industry practice. However, given the novelty of cryptocurrency mining and associated businesses, such insurance may not be available, may be uneconomical for the Company, or the nature or level may be insufficient to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the Company.

Concentration of Investments

Other than as described herein, there are no restrictions on the proportion of the Company’s funds and no limit on the amount of funds that may be allocated to any particular investment. The Company may participate in a limited number of investments and, as a consequence, its financial results may be substantially adversely affected by the unfavorable performance of a single investment. Completion of one or more investments may result in a highly concentrated investment in a particular company, commodity or geographic area resulting in the performance of the Company depending significantly on the performance of such company, commodity or geographic area. As at December 31, 2023, the Company’s investments through its Venture business arm comprise of C$44,184,021, which represented approximately 7.5% of the Company’s total assets.

Competition

The Company operates in a highly competitive industry and competes against unregulated or less regulated companies and companies with greater financial and other resources, and our business, operating results, and financial condition may be adversely affected if we are unable to respond to our competitors effectively.

The cryptoeconomy is highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition to further intensify in the future as existing and new competitors introduce new products or enhance existing products. The Company’s business line compete against several companies and expect that we will face even more competition in the future. These competitors could have various competitive advantages over us, including but not limited to:

If the Company is unable to compete successfully, or if competing successfully requires the Company to take costly actions in response to the actions of the Company’s competitors, the Company’s business, operating results, and financial condition could be adversely affected.

Harm to the Company’s brand and reputation could adversely affect the Company’s business. The Company’s reputation and brand may be adversely affected by complaints and negative publicity about the Company, even if factually incorrect or based on isolated incidents. Damage to the Company’s brand and reputation may be caused by:

Private Issuers and Illiquid Securities

Through its Ventures business line, the Company invests in securities and / or digital assets of private issuers or projects. These may be subject to trading restrictions, including hold periods, and there may not be any market for such securities or digital assets. These limitations may impair the Company’s ability to react quickly to market conditions or negotiate the most favourable terms for exiting such investments. Investments in private issuers or projects are subject to a relatively high degree of risk. There can be no assurance that a public market will develop for any of the Company’s private investments, or that the Company will otherwise be able to realize a return on such investments.

The value attributed to securities and / or digital assets of private issuers or projects will be the cost thereof, subject to adjustment in limited circumstances, and therefore may not reflect the amount for which they can actually be sold. Because valuations, and in particular valuations of investments for which market quotations are not readily available, are inherently uncertain, may fluctuate within short periods of time and may be based on estimates, determinations of fair value may differ materially from the values that would have resulted if a ready market had existed for the investments.

The Company may also invest in illiquid securities of public issuers. A considerable period of time may elapse between the time a decision is made to sell such securities and the time the Company is able to do so, and the value of such securities could decline during such period. Illiquid investments are subject to various risks, particularly the risk that the Company will be unable to realize its investment objectives by sale or other disposition at attractive prices or otherwise be unable to complete any exit strategy. In some cases, the Company may be prohibited by contract or by law from selling such securities for a period of time or otherwise be restricted from disposing of such securities. Furthermore, the types of investments made may require a substantial length of time to liquidate.

The Company may also make direct investments in publicly traded securities that have low trading volumes. Accordingly, it may be difficult to make trades in these securities without adversely affecting the price of such securities.

Cash Flow, Revenue and Liquidity

The Company’s revenue and cash flow is generated primarily from financing activities, proceeds from the disposition of investments, management fees of ETPs and staking and lending activities of cryptocurrencies and DeFi protocol tokens. The availability of these sources of income and the amounts generated from these sources depend upon various factors, many of which are outside of the Company’s direct control. The Company’s liquidity and operating results may be adversely affected if its access to the capital markets is hindered, whether as a result of a downturn in the market conditions generally or to matters specific to us, if the value of our investments decline, resulting in losses upon disposition, if there is low demand for our ETPs, resulting in lack of management fees received, and if rates provided by counterparties for staking and lending decrease.

Risk Management

The Company seeks to mitigate risk and have established policies for the types of risk to which the Company is subject, including operational risk, credit risk, market risk, counterparty risk, exchange risk and liquidity risk. However, there are inherent limitations to our current and future risk management strategies, including risks that management has not appropriately anticipated or identified. Accurate and timely enterprise-wide risk information is necessary to enhance management’s decision- making in times of crisis. If the Company’s risk management framework proves ineffective or if our enterprise-wide management information is incomplete or inaccurate, we could suffer unexpected losses, which could materially adversely affect our business, results of operations and financial condition. The Company continually assesses its risk profile and risk management processes across the firm to identify opportunities for improvement and to consider whether it needs to address new technologies and innovations in its risk management processes and policies. While the Company has not identified any material gaps with respect to recent digital asset market events, the Company cannot guarantee that our risk management processes will continue to be effective in preventing or mitigating losses from future market events.

Dependence on Management Personnel

The Company is dependent upon the efforts, skill and business contacts of key members of management, the Board and the Advisory Board, for among other things, the information and deal flow they generate during the normal course of their activities and the synergies that exist amongst their various fields of expertise and knowledge. Accordingly, the Company’s success may depend upon the continued service of these individuals who are not obligated to remain consultants to the Company. The loss of the services of any of these individuals could have a material adverse effect on the Company’s revenues, net income and cash flows and could harm its ability to maintain or grow existing assets and raise additional funds in the future.

Sensitivity to Macro-Economic Conditions

Due to the Company’s focus on decentralized finance industry, the success of the Company’s investments is interconnected to the growth of disruptive technologies. The Company may be adversely affected by the falling share prices of the securities of investee companies, cryptocurrencies, DeFi Protocol tokens and other digital assets, as the trading price for the Common Shares may reflect the estimated aggregate value of the Company’s portfolio of investments and assets under management. The factors affecting current macro-economic conditions are beyond the control of the Company.

Available Opportunities and Competition for Investments

The success of the Company’s Ventures line of business will depend upon: (i) the availability of appropriate investment opportunities; (ii) the Company’s ability to identify, select, acquire, grow and exit those investments; and (iii) the Company’s ability to generate funds for future investments. The Company can expect to encounter competition from other entities having similar investment objectives, including institutional investors and strategic investors. These groups may compete for the same investments as the Company, may be better capitalized, have more personnel, have a longer operating history and have different return targets. As a result, the Company may not be able to compete successfully for investments. In addition, competition for investments may lead to the price of such investments increasing which may further limit the Company’s ability to generate desired returns. There can be no assurance that there will be a sufficient number of suitable investment opportunities available to invest in or that such investments can be made within a reasonable period of time. There can be no assurance that the Company will be able to identify suitable investment opportunities, acquire them at a reasonable cost or achieve an appropriate rate of return. Identifying attractive opportunities is difficult, highly competitive and involves a high degree of uncertainty. Potential returns from investments will be diminished to the extent that the Company is unable to find and make a sufficient number of attractive investments.

Share Prices of Investments

Investments in securities of public companies are subject to volatility in the share prices of the companies. There can be no assurance that an active trading market for any of the subject shares is sustainable. The trading prices of the subject shares could be subject to wide fluctuations in response to various factors beyond the Company’s control, including quarterly variations in the subject companies’ results of operations, changes in earnings, results of exploration and development activities, estimates by analysts, conditions in the mining, technological and cryptocurrency industries and general market or economic conditions. In recent years equity markets have experienced extreme price and volume fluctuations. These fluctuations have had a substantial effect on market prices, often unrelated to the operating performance of the specific companies. Such market fluctuations could adversely affect the market price of the Company’s investments.

Additional Financing Requirements

The Company anticipates ongoing requirements for funds to support its growth and may seek to obtain additional funds for these purposes through public or private equity, or debt financing. There are no assurances that additional funding will be available on acceptable terms, at an acceptable level or at all. Any additional equity financing may cause shareholders to experience dilution, and any debt financing would result in interest expense and possible restrictions on the Company’s operations or ability to incur additional debt. Any limitations on the Company’s ability to access the capital markets for additional funds could have a material adverse effect on its ability to grow its investment portfolio.

No Guaranteed Return

There is no guarantee that an investment in the Company’s securities will earn any positive return in the short term or long term. The task of identifying investment opportunities, monitoring such investments and realizing a significant return is difficult. Many organizations operated by persons of competence and integrity have been unable to make, manage and realize a return on such investments. In addition, past performance provides no assurance of future success.

Failure to Develop and Execute Successful Investment or Trading Strategies

The success of the Company’s investment and trading activities, including though DeFi Alpha, will depend on the ability of the investment team to identify overvalued and undervalued investment opportunities and to exploit price discrepancies. This process involves a high degree of uncertainty. No assurance can be given that the Company will be able to identify suitable or profitable investment opportunities in which to deploy our capital. The success of the trading activities also depends on the Company’s ability to remain competitive with other DeFi providers. Competition in trading is based on price, offerings, level of service, technology, relationships and market intelligence. The success of investment activities depends on the Company’s ability to source deals and obtain favorable terms. The barrier to entry in each of these businesses is very low and competitors can easily and will likely provide similar services in the near future. The success of the Company’s Venture investments and trading business could suffer if the Company is not able to remain competitive.

Management of the Company’s Growth

Significant growth in the business, as a result of acquisitions or otherwise, could place a strain on the Company’s managerial, operational and financial resources and information systems. Future operating results will depend on the ability of senior management to manage rapidly changing business conditions, and to implement and improve the Company’s technical, administrative and financial controls and reporting systems. No assurance can be given that the Company will succeed in these efforts. The failure to effectively manage and improve these systems could increase costs, which could have a materially adverse effect on the Company’s operating results and overall performance.

Social, Political, Environmental and Economic Risks in the Countries in which the Company’s Investments are Located

The Company’s investments are affected in varying degrees by the political and social stability, environmental and economic conditions in the countries in which its investments are located. Such investments may also be affected in varying degrees by terrorism, military conflict or repression, crime, populism, activism, labour unrest, renegotiation, nullification or failure to renew or grant existing concessions, licences permits and contracts, unstable or unreliable legal systems, changes in fiscal regimes including taxation, and other risks arising out of sovereignty issues.

Due Diligence

The due diligence process undertaken by the Company in connection with investment opportunities may not reveal all facts that may be relevant in connection with the investments. Before making investments, the Company conducts due diligence that it deems reasonable and appropriate based on the facts and circumstances applicable to each investment. When conducting due diligence, the Company may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of investment. Nevertheless, when conducting due diligence and making an assessment regarding an investment, the Company relies on resources available including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence process that is carried out with respect to investment opportunities may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful.

Exchange Rate Fluctuations

A significant portion of the Company’s cryptocurrency, DeFi protocol tokens and digital asset holdings could be invested in United States dollar denominated investments or other foreign currencies. Changes in the value of the foreign currencies in which the Company’s investments are denominated could have a negative impact on the ultimate return on its investments and overall financial performance.

Non-controlling Interests

The Company’s investments include debt instruments and equity securities of companies that it does not control. Such instruments and securities may be acquired through trading activities or through purchases of securities directly from the issuer. These investments are subject to the risk that the company in which the investment is made may make business, financial or management decisions with which the Company does not agree or that the majority stakeholders or the management of the investee company may take risks or otherwise act in a manner that does not serve the Company’s interests. If any of the foregoing was to occur, the value of the Company’s investments could decrease and its financial condition, results of operations and cash flow could suffer as a result.

Changes in Legislation and Regulatory Risk

There can be no assurance that laws applicable to the Company or the businesses in which the Company invests, including securities legislation, will not be changed in a manner which adversely affects the Company. If such laws change, such changes could have a negative effect upon the value of the Company and upon investment opportunities available to the Company.

Risks Relating to the Business and Financial Condition of the Company

Limited Operating History as a DeFi Company

The Company announced its focus in the DeFi industry on January 19, 2021. The Company’s limited operating history and the lack of meaningful historical financial data makes it difficult to fully evaluate the Company’s prospects. To the extent that the Company is able to execute its business plan, its business will be subject to all of the problems that typically affect a business with a limited operating history, such as unanticipated expenses, capital shortfalls, delays in program development and possible cost overruns. Investment in the securities of the Company is highly speculative given the nature of the Company’s business.

The Company’s success will depend on many factors, including some which may be beyond its control or which cannot be accounted for at this time, such as the market’s acceptance of the products of its investee companies, the emergence of potential competitors, and changes in economic conditions. For the reasons discussed in this section and elsewhere in this AIF, it is possible that the Company may not generate revenues or profits in the foreseeable future or at all.

No History of Operating Revenue and Cash Flow

The Company is dependent on financings and future cash flows to meet its obligations. The future performance of the business and the ability of the Company’s subsidiaries to provide the Company with payments may be constrained by factors such as, among others: success of the Company’s corporate strategy, economic downturns; technological and regulatory changes; the cash flows generated by operations, investment activities and financing activities; and the level of taxation, particularly corporate profits and withholding taxes. If the Company is unable to generate sufficient cash from operations, the Company may be required to incur indebtedness, raise funds in a public or private equity or debt offering, or sell some or all of its assets. There can be no assurance that any such financing will be available on satisfactory terms or that it will be sufficient.

The Company may be subject to limitations on the repatriation of earnings in each of the countries where the Company, including its investee companies, do business. In particular, there may be significant withholding taxes applicable to the repatriation of funds from foreign countries to Canada. There can be no assurance that changes in regulations, including tax treaties, in and among the relevant countries where the Company or its investee companies do business will not take place, and if such changes occur, they may adversely impact the Company’s ability to receive sufficient cash payments from its subsidiaries.

Insufficient Cash Flow and Funds in Reserve

The Company’s cash flow and funds in reserve may not be sufficient to fund its ongoing activities at all times and from time to time and it may require additional financing in order to carry out its activities. In addition, the Company may incur major unanticipated liabilities or expenses. Although the Company has been successful in the past in financing its activities, there can be no assurance that the Company will be able to obtain additional financing on commercially acceptable terms. The ability of the Company to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as the business performance of Company. There is risk that if the economy and banking industry experienced unexpected and/or prolonged deterioration, the Company’s access to additional financing may be affected. This may be further complicated by the limited market liquidity for shares of smaller companies such as the Company, restricting access to some institutional investors. Due to uncertainty in the capital markets, the Company may from time to time have restricted access to capital and increased borrowing costs. To the extent that external sources of capital become limited, unavailable, or available on onerous terms, the Company’s ability to make capital investments and maintain existing assets may be impaired, and its assets, liabilities, business, financial condition, results of operations and prospects may be affected materially and adversely as a result.

The Company, along with all other companies, may face reduced cash flow and restricted access to capital if the global economic situation deteriorates. A prolonged period of adverse market conditions may impede the Company’s ability to grow and complete additional acquisitions, if desired. In addition, a prolonged period of adverse market conditions may impede the Company’s ability to service any of its loans or arrange alternative financing when the existing loans become due. In each case, the Company’s business, financial condition, results of operations and prospects would be adversely affected.

Material Weakness in the Company’s Financial Statements

We identified a material weakness in our internal control over financial reporting and restated our financial statements for the three-month periods ended June 30, 2023, and September 30, 2023 as a result of factors related to that weakness. This may adversely affect the accuracy and reliability of our financial statements and, if we fail to maintain effective internal financial control reporting (“ICFR”) it could impact our reputation, business and the price of the Common Shares, as well as lead to a loss of investor confidence in us.

There can be no assurance that we will be able to successfully remediate the identified material weakness, or that we will not identify additional control deficiencies or material weaknesses in the future. If we are unable to successfully remediate our existing or any future material weaknesses in our ICFR, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities laws and CBOE listing requirements regarding the timely filing of periodic reports, investors may lose confidence in our financial reporting and the price of our stock may decline.

We continue to execute our plan to remediate the material weakness identified. The remediation measures are ongoing, and although not all inclusive, include implementing additional policies, procedures, and controls. We are working to remediate our material weakness as efficiently and effectively as possible. At this time, we cannot provide an estimate of the timing for achieving full remediation or the costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, could result in us incurring significant costs, and could place significant demands on our financial and operational resources. We cannot assure you that the measures undertaken to remediate the material weakness will be sufficient or that they will prevent future material weaknesses. Additional material weaknesses or failure to maintain effective internal control over financial reporting could cause us to fail to meet our reporting obligations as a public company and may result in a restatement of our financial statements for prior periods.

The preparation of financial statements and related disclosures in conformity with IFRS requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies describe those significant accounting policies and methods used in the preparation of our consolidated financial statements that we consider “critical” because they require judgments, assumptions and estimates that materially affect our consolidated financial statements and related disclosures. As a result, if future events or regulatory or auditor views differ significantly from the judgments, assumptions and estimates in our critical accounting policies, those events or assumptions could have a material impact on our consolidated financial statements and related disclosures, in each case resulting in our needing to revise or restate prior period financial statements, cause damage to our reputation and the price of our common shares, and adversely affect our business, financial condition and results of operations.

Risks related to the Expense and Impact of Restatement of the Company’s Historical Financial Statements

The Company will need to restate certain historical financial statements to reflect a correction to its accounting for its digital assets. Specifically, the Company had previously valued its position in Equity Investments in Digital Assets subject to an extended lock-up period based on market price; however, in connection with the preparation of its financial statements for the year ended December 31, 2024, the Company’s auditors concluded that the valuation of the position should use a discounted valuation reflecting the lock-up. For more information, see “Restatement of Previously Issued Condense Interim Consolidated Financial Statements” in the Company’s Annual Management’s Discussion and Analysis for the year ended December 31, 2024.

It is difficult to predict all of the ramifications to the Company from the restatement. The restatement process is time and resource-intensive and involved substantial attention from management and significant costs and expenses, including for professional advisors assisting with the restatement. It is possible that the Company will receive inquiries from the Canadian securities regulators, and/or Cboe Canada regarding the restated financial statements or related matters, which could consume a significant amount of resources. Moreover, many companies that have been required to restate their historical financial statements have experienced volatility in stock prices and declines in stock prices and shareholder lawsuits, which can be expensive to defend and divert Management attention and resources. The Company may suffer similar consequences as a result of the restatement.

Lack of Comprehensive Accounting Guidance for Digital Assets under IFRS Accounting Standards

The holding of digital assets in Canada is an emerging industry with unique technological aspects, a number of novel auditing challenges have arisen. Audit firms, standard setters, and regulatory bodies continue to explore these challenges and potential solutions. Because there has been limited precedent set and a lack of specific accounting guidance for cryptocurrencies under certain applicable accounting standards, including, among other things, revenue recognition, it is unclear if DeFi companies (in particular, companies like the Company that utilize IFRS Accounting Standards) may be required to account for cryptocurrency operations, transactions and assets and related revenue recognition. A change in regulatory or financial accounting standards, or interpretations thereof by the Canadian Securities Administrators, particularly as they relate to the Company and the financial accounting of its DeFi-related operations, could result in changes in the Company’s accounting policies. Further, unlike in the case of U.S. generally accepted accounting principles where the Financial Accounting Standards Board has recently issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets, no similar guidance has yet been issued in respect of IFRS Accounting Standards. In addition, the accounting policies of many Bitcoin mining companies are being subjected to heightened scrutiny by regulators and the public.

It is possible that, as a result of the determinations by applicable securities regulators as to the application of the relevant IFRS Accounting Standards, the Company could be obligated in the future to restate historical financial statements. In connection with any such restatement the market price of the Common Shares could be adversely affected, and the Company could become subject to private litigation or to investigations or enforcement actions by the Ontario Securities Commission or other regulatory authorities, all of which could require the Company’s expenditure of additional financial and management resources. Furthermore, continued uncertainty with regard to financial accounting matters, particularly as they relate to the Company, the financial accounting of its DeFi-related operations, could negatively impact the Company’s business, prospects, financial condition and results of operations and its ability to raise capital on terms acceptable to the Company or at all.

Conflicts of Interest may Arise

Certain current or future directors and officers of the Company and its subsidiaries may be shareholders, directors and officers of other companies that may operate in the same sectors as the Company. Such associations may give rise to conflicts of interest from time to time. The directors and officers of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board, any director in such conflict is required under the applicable corporate laws to disclose his or her interest and to abstain from voting on such matter.

Hedging Risk

Except as described in the Base Prospectus and the VDSL Base Prospectus We are not obligated to, and often times may not, hedge our exposures. However, from time to time, we may use a variety of financial instruments and derivatives, such as options, swaps, and forward contracts, for risk management purposes, including to: protect against possible changes in the market value of our investment or trading assets resulting from fluctuations in cryptocurrency markets or securities markets and changes in interest rates; protect our unrealized gains in the value of our investments or trading assets; facilitate the sale of any such assets; enhance or preserve returns, spreads or gains on any trade or investment; hedge the interest-rate or currency-exchange risk on any of our liabilities or assets; protect against any increase in the price of any assets that we anticipate purchasing at a later date; or to any other end that we deem appropriate. The success of any hedging activities by us will depend, in part, on our ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the assets being hedged. Since the characteristics of many assets change as markets change or time passes, the success of our hedging strategy will also be subject to our ability to continually recalculate, readjust and execute hedges in an efficient and timely manner. In addition, while we may enter into hedging transactions to seek to reduce risk, such transactions may actually increase risk or result in a poorer overall performance for us than if we had not engaged in such hedging transactions.

With respect to Valour, Valour’s hedging programs will not fully eliminate the market and other risks related to its ETPs, and the hedging programs themselves expose Vaour to additional risks. Valour’s hedging programs are not designed to completely offset all risks associated with the various exposures embedded in the ETPs. The profit (loss) on the hedge instruments employed may not completely offset the underlying losses (gains) related to its ETPs for many potential reasons including

Valour’s hedging programs may employ various types of instruments including, but not long and short direct and indirect positions on underlying assets, swaps, options, forwards and futures. Improper use of these instruments could have an adverse impact on earnings.

Risks Relating to the Common Shares

Market Price of Common Shares may Experience Volatility

The market price of the Common Shares has been volatile in the past and may continue to be volatile. The market price is, and could be, subject to wide fluctuations due to a number of factors, including actual or anticipated fluctuations in the Company’s results of operations, changes in estimates of its future results of operations by management or securities analysts, market rumours, investments or divestments by the Company or its competitors and general industry changes.

Many of the factors that could affect the market price of the Common Shares are outside of the Company’s control. Broad market fluctuations, as well as economic conditions generally, may adversely affect the market price of the Common Shares. The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of the Common Shares.

Shareholders’ Interest in the Company may be Diluted in the Future

If the Company raises additional funding by issuing additional equity securities, or securities convertible into equity, such financing may substantially dilute the interests of shareholders.

The Company has Never Paid Dividends and may not do so in the Foreseeable Future

The Company has never paid cash dividends on its Common Shares. Currently, the Company intends to retain its future earnings, if any, to fund the development and growth of its business, and does not anticipate paying any cash dividends on its Common Shares in the near future. As a result, shareholders will have to rely on capital appreciation, if any, to earn a return on investment in any Common Shares in the foreseeable future. See “Dividends”.

DIVIDENDS

The Company has not paid any dividends since its incorporation. Any determination to pay any future dividends will be at the discretion of the Board and will be made based on the Company’s financial condition and other factors deemed relevant by the Board. There are currently no restrictions on the ability of the Company to pay dividends except as set out under the OBCA.

DESCRIPTION OF SHARE CAPITAL

The Company is authorized to issue an unlimited number of Common Shares without par value. The holders of Common Shares are entitled to dividends, subject to the rights of holders of any other class of shares of the Company, if, as and when declared by the Board. The holders of Common Shares are also entitled to one vote per Common Share at meetings of the shareholders of the Company and, subject to the rights of holders of any other class of shares of the Company, to share, on a pro rata basis with the other holders of Common Shares, the net assets of the Company, upon liquidation, dissolution or winding up of the Company. The Common Shares are not subject to call or assessment nor do they carry any pre-emptive or conversion rights. There are no provisions attached to such shares for redemption, purchase for cancellation, surrender or sinking or purchase funds.

As of the date hereof, 327,070,307 Common Shares are issued and outstanding.

As of the date hereof, the Company also has 26,906,187 options, 23,125,000 warrants and 13,156,507 deferred share units (“DSUs”) issued and outstanding. See the notes to the Company’s audited financial statements for the year ended December 31, 2024 for additional information regarding the Company’s convertible securities.

MARKET FOR SECURITIES

Trading Price and Volume

The Common Shares are listed and posted for trading on Cboe Canada under the symbol “DEFI”. The following table sets forth, on a monthly basis, the reported high and low sale prices (which are not necessarily closing prices) and the aggregate volume of trading of the Common Shares on Cboe Canada during the financial year ended December 31, 2024.

Prior Sales

During the financial year ended December 31, 2024, with respect to each class of securities of the Company that is outstanding as of the date of this AIF and not listed or quoted on a marketplace, the Company issued the following securities:

Escrowed securities

To the Company’s knowledge, no securities of the Company are held in escrow or that are subject to a contractual restriction.

DIRECTORS AND OFFICERS

The following table sets forth for each director and executive officer of the Company as at the date of this AIF, each such individual’s name, province or state and country of residence, position(s) held with the Company, principal occupation(s) for the last five years, if currently a director, period(s) during which such individual has served as a director of the Company, and the number and percentage of issued and outstanding Common Shares beneficially owned, or controlled or directed, directly or indirectly, by such individual (for avoidance of doubt, excluding any convertible securities in the capital of the Company held by such individual). The statements as to principal occupation(s) for the last five years of, and the number and percentage of Common Shares beneficially owned, or controlled or directed, directly or indirectly, by, the directors and executive officers of the Company are in each instance based upon information furnished by the individuals concerned. All directors of the Company hold office until the next annual meeting of shareholders of the Company or until their successors are elected or appointed.

Notes:

As of the date hereof, the directors and executive officers of the Company, as a group, beneficially owned, or controlled or directed, directly or indirectly, 22,675,460 Common Shares, representing 6.9% of the total issued and outstanding Common Shares.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or executive officer of the Company is, as at the date hereof, or has been, within the ten years before the date hereof, a director, chief executive officer or chief financial officer of any company (including the Company) that:

No director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company:

As at the date hereof, no director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to:

Conflicts of Interest

The directors and officers of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board, any director in a conflict is required to disclose his interest and abstain from voting on such matter in accordance with the OBCA. In appropriate cases, the Company will establish a special committee of independent non-executive directors to review a matter in which one or more directors or officers may have a conflict.

To the best of the Company’s knowledge, and other than as disclosed herein, there are no known existing or potential material conflicts of interest between the Company or a subsidiary of the Company and any director or officer of the Company or a subsidiary of the Company, except that certain of the directors and officers serve as directors and officers of other public or private companies and therefore it is possible that a conflict may arise between their duties as a director or officer of the Company and their duties as a director or officer of such other companies.

AUDIT COMMITTEE DISCLOSURE

National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators (“NI 52 110”) requires the Company to have a written audit committee charter and to make the disclosure required by Form 52-110F1.

Audit Committee Charter

A copy of the Charter of the Audit Committee of the Board, which has been adopted by the Board in order to comply with NI 52 110 and to more properly define the role of the Audit Committee in the oversight of the financial reporting process of the Company is attached hereto as Schedule “A”. Nothing in the Charter is intended to restrict the ability of the Board or Committee to alter or vary procedures in order to comply more fully with the Instrument, as amended from time to time.

The Audit Committee is comprised of Suzanne Ennis, Mikael Tandetnik and Stefan Hascoet. Each member of the Audit Committee is independent of the Company and financially literate, as such terms are defined in NI 52 110.

Relevant Education and Experience

The following is a brief summary of the education and experience of each member of the Audit Committee that is relevant to the performance of his or her responsibilities as a member of the Audit Committee.

Sue Ennis is an award-winning technology and innovation advocate, currently serving as Head of Investor Relations at Hut 8, a major U.S data infrastructure operator and Bitcoin miner. With over 15 years of experience, she has raised over a billion dollars for Canadian and U.S structured product and small cap companies, emphasizing the fintech and digital asset sectors. Before Hut 8, she held roles at Shyft Networks, Coinsquare, Voyager, and Invesco. A chartered investment manager and certified blockchain expert, Sue is known for simplifying complex concepts as a global keynote speaker. She advises Locera Vision, a health tech spin-out from Tufts University. Ms. Ennis obtained a Bachelor of Arts degree from McMaster University.

Mr. Tandetnik is a seasoned wealth manager and CEO with a strong background in finance. He embarked on his career as a Salesperson for equity and structured products at BNP Paribas, gaining valuable experience in the field. Subsequently, he transitioned to various brokerage firms, honing his expertise in investment management. After founding LS Advisor in Paris and driven by his passion for the cryptocurrency industry, Mr. Tandetnik established Ariane Group SA in Geneva, a wealth management companies specializing in catering to cryptocurrency clients and investments. He played a pivotal role in numerous fundraising initiatives for both listed and unlisted private crypto companies, demonstrating his deep involvement in the crypto space. Mr. Tandetnik’s academic qualifications include a Bachelor’s degree in Business from the Ecole Supérieure de Gestion et Finance (ESGF) in France and a Master’s degree from ESLSCA, where he specialized in Trading and Options.

Mr. Hascoet is a capital markets professional who spent 12 years in the City of London in the field of equity derivatives and cross-asset structured products working for three global investment banks, including at RBC Capital Markets, leading a team covering Swiss clients. After his initial training in the institutional finance world, Mr. Hascoet decided to focus on the dual fields of finance & blockchains through various entrepreneurial endeavors, focusing on making blockchain assets investible and building bridges with the established banking systems and capital markets frameworks. Mr. Hascoet is a Swiss resident, based in Geneva, Managing Partner of Deep Knowledge Ventures Suisse, a data-driven investment holding of commercial and non-profit organizations active in the fields of DeepTech, Fintech and Longevity. Mr. Hascoet is a graduate of the French Grande Ecole system, having studied at l’Ecole Ste Genevieve in Versailles and ESCP Business School in Paris.

Audit Committee Oversight

At no time since the commencement of the Company’s most recently completed financial year has there been a recommendation of the Audit Committee to nominate or compensate an external auditor that was not adopted by the Board.

Reliance on Certain Exemptions

At no time since the commencement of the Company’s most recently completed financial year has the Company relied on any available exemption regarding the composition, responsibilities, independence, financial literacy or otherwise of the Audit Committee.

Pre-Approval Policies and Procedures

The Audit Committee has not adopted specific policies and procedures for the engagement of non audit services. In accordance with its charter, all non-audit services are pre-approved by the Audit Committee.

External Auditor Service Fees

Audit Fees

The Company’s external auditors, HDCPA Professional Corporation, billed the Company $524,342 in the financial year ended December 31, 2024 for audit fees and $186,450 in the financial year ended December 31, 2023 for audit fees.

Audit-Related Fees

The Company’s external auditors, HDCPA Professional Corporation, billed the Company $NIL in the financial year ending December 31, 2024 and $NIL in the financial year ending December 31, 2023 for assurance and related services related to the performance of the audit or review of the Company’s financial statements, which are not included in audit fees.

Tax Fees

The Company’s external auditors, HDCPA Professional Corporation, billed the Company $21,00 in the financial year ending December 31, 2024 and $NIL in the financial year ending December 31, 2023 for tax compliance, tax advice and tax planning.

All Other Fees

No other fees were charged by the external auditors for the financial years ended December 31, 2024 and December 31, 2023.

PROMOTER

The Company does not have a promoter.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

The Company has not been since, and was not during, the financial year ended December 31, 2024 a party to any legal proceedings, nor has any of its property been since nor was any of its property during the financial year ended December 31, 2024, subject of any legal proceedings.

There have been no penalties or sanctions imposed against the Company by a court relating to securities legislation or by any securities regulatory authority since or during the financial year ended December 31, 2024, or any other penalties or sanctions imposed by a court or regulatory body against the Company that would likely be considered important to a reasonable investor in making an investment decision, and the Company has not entered into any settlement agreements with a court relating to securities legislation or with a securities regulatory authority since or during the financial year ended December 31, 2024.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as disclosed herein, none of the directors or executive officers of the Company, nor any person or company that beneficially owns, or controls or directs, directly or indirectly, more than 10% of the issued and outstanding Common Shares, nor any associate or affiliate of the foregoing persons or companies, has or has had any material interest, direct or indirect, in any transaction within the three most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to materially affect the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Shares is Odyssey Trust Company, at #702-67 Yonge Street, Toronto ON M5E 1J8.

MATERIAL CONTRACTS

The Company has no material contracts.

INTERESTS OF EXPERTS

The Company’s external auditor during the financial year ended December 31, 2023 was HDCPA Professional Corporation. HDCPA Professional Corporation has advised the Company that it is independent of the Company in accordance with the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario.

ADDITIONAL INFORMATION

Additional information relating to the Company may be found under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and securities authorized for issuance under equity compensation plans, is contained in the Company’s management information circular dated May 14, 2024 prepared in connection with the Company’s annual and special meeting of shareholders held on June 25, 2024.

Additional financial information is provided in the Company’s annual consolidated financial statements and management’s discussion and analysis for the financial year ended December 31, 2024, both of which are available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Schedule “A”

Audit Committee Charter

Mandate

The primary function of the audit committee (the “Committee”) is to assist the board of directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company’s systems of internal controls regarding finance and accounting and the Company’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to (i) serve as an independent and objective party to monitor the Company’s financial reporting and internal control system and review the Company’s financial statements; (ii) review and appraise the performance of the Company’s external auditors; and (iii) provide an open avenue of communication among the Company’s auditors, financial and senior management and the board of directors.

Composition

The Committee shall be comprised of three directors as determined by the board of directors, the majority of whom shall be free from any relationship that, in the opinion of the board of directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.

At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of this Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company’s financial statements.

The members of the Committee shall be elected by the board of directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full board of directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.

Meetings

The Committee shall meet at least four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions.

Responsibilities and Duties

To fulfil its responsibilities and duties, the Committee shall:

Documents/Reports Review

External Auditors

Provided the pre-approval of the non-audit services is presented to the Committee’s first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.

Financial Reporting Processes

Other

Review any related party transactions.