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Risk Disclosures

SUITABILITY OF THE NOTES FOR INVESTMENT

A person should reach a decision to invest in the Notes after carefully considering, with his or her advisors, the suitability of the Notes in light of investment objectives and the information set out in this documentation page. An investment in the Notes is suitable only for investors prepared to assume risks with respect to a return linked to the performance of the Underlying Asset. The Notes are designed for investors who are prepared to hold the Notes to maturity. An investment in the Notes is not suitable for an investor looking for a guaranteed return. Volatility Labs Inc. make no recommendation as to the suitability of the Notes for your investment purposes.

THE VARIABLE RETURN MAY NOT BE PAYABLE

The amount, if any, of the Variable Return payable on the Notes is uncertain in that the Notes could produce no Variable Return at all. The amount of Variable Return payable under the Notes is linked to the price performance of the Underlying Asset and the Participation Rate. The prices of the Tokens have experienced significant movements in the past and it is impossible to know the future direction. The Note will not yield any return unless the Ending Underlyling Price is greater than the Initial Underlying Price.

NOTES DIFFER FROM CONVENTIONAL INVESTMENTS

The Notes are not conventional notes or debt instruments. The Notes do not provide investors with a return or an income stream calculated using a fixed or floating rate of interest or a return that can be determined prior to the Final Valuation Date. Noteholders will not be able to determine the amount of the Variable Return, if any, that they will receive on the Notes prior to the Final Valuation Date and Time.

THERE IS NO ASSURANCE OF A SECONDARY MARKET

The Principal Amount of the Notes is only repayable at maturity. There is no assurance that a secondary market through which the Notes may be sold will develop or if such market develops, whether such market will be liquid. The Notes will not be listed on any centralized or decentralized exchange. The Noteholder may have to sell the Notes at a substantial discount from the original Principal Amount and the Noteholder may as a result suffer a substantial loss. The Notes are generally not suitable for an investor who requires liquidity prior to the Maturity Date. A Noteholder should consider consulting with his or her advisors concerning whether it would be more favourable to the Noteholder to sell the Note or hold the Note.

CALCULATION AGENT MAY MAKE ADJUSTMENTS IN RESPECT OF THE BASKET

Upon the occurrence of certain events, such as the rebasing of token supply via burning or dilution events, the Calculation Agent may make adjustments on the Participation Rate or the Initial Token Price or other adjustments.

NOTES ARE SUBJECT TO RISK FACTORS AFFECTING THE TOKEN PRICE

The value of investments, in particular - cryptographic tokens, is affected by changes in general market conditions. These changes may be caused by various factors, including corporate developments, changes in interest rates, changes in the level of inflation, and other political and economic developments. These changes can affect the price of securities and instruments which can move up or down, without any predictability. A decrease in the price of the Tokens may adversely affect the value of the Notes. Markets are subject to temporary distortions or other disruptions due to various factors, including a lack of liquidity in the markets, the participation of speculators, and government regulation and intervention. These circumstances could adversely affect the market price of the relevant futures and forward contracts, options, securities, swaps or other instruments and, therefore, the value of the Notes. Market prices of the Tokens may fluctuate rapidly based on numerous factors, including: changes in supply and demand relationships; trade; fiscal, monetary and exchange control programs; domestic and foreign political and economic events and policies; disease; pestilence; weather; technological developments and changes in interest rates. In addition, recently, the coronavirus infection has caused volatility in the global financial markets and threatened a slowdown in the global economy. Coronavirus or any other communicable disease or infection may adversely affect the market prices of the Tokens. These and other factors may affect the value of the Notes in varying ways causing the value of the Tokens, and the volatilities of their prices, to move in inconsistent directions at inconsistent rates. Potential Noteholders should undertake an independent investigation of the underlying projects, blockchain, application, or business that the Tokens represent as they deem necessary to allow them to make an informed decision with respect to an investment in the Notes.

PERFORMANCE OF THE NOTES WILL BE AFFECTED BY FACTORS AFFECTING CRYPTO / DIGITAL MARKETS AS A WHOLE

The underlying asset is a cryptographic Token that is issued on a public blockchain. The performance of the Notes will be affected by factors affecting crytographic token markets ("Crypto Markets"). Crypto Markets may be more or less volatile than other securities markets and may be affected by market developments in different ways than Canadian or other securities markets. Direct or indirect government intervention to stabilize a particular securities market and cross shareholdings in companies on international securities markets may affect prices and the volume of trading on the affected markets and may spillover to Crypto Markets. Additionally, regulatory, disclosure, and risk management standards are applied differently for Crypto Markets than traditional financial markets. Regulatory factors are extremely uncertain on categorization and corresponding treatment of Tokens - securities, commodities, or its own class, under taxation, claim, and legal status contexts. The prices and performance of Tokens and Notes may be affected by political, economic, financial and social factors that are beyond one's control.

THERE ARE TAX CONSEQUENCES ASSOCIATED WITH AN INVESTMENT IN THE NOTES

A Noteholder should consider the income tax considerations of an investment in the Notes. A Noteholder should also consider the income tax consequences of a disposition of the Notes prior to the Maturity Date. Volatility Labs Inc. makes no representation or advice, implied or directly stated, on the tax status of the Notes.

INDEPENDENT INVESTIGATION REQUIRED

Neither Volatility Labs Inc. nor its Agents and distribution partners has performed any due diligence investigation of the Tokens and its represented project, blockchain, and or application. Prospective Noteholders considering an investment in the Notes should independently develop their own views as to the future price performance of the Tokens. All information in this Documentation relating to the blockchains, projects, and applications and the Tokens is derived from publicly available sources. A prospective investor should undertake an independent investigation of the Tokens and its underlying value accrual mechanism as such investor considers necessary in order to make an informed decision as to the merits of an investment in the Notes.