Risk Disclosure Statement

BitLease Technologies Ltd. A subsidiary of 49G Holding Ltd. Incorporated in Abu Dhabi Global Market (ADGM) Registered Address: Unit PC-1, Level 7, Al Maryah Tower, Abu Dhabi Global Market Square, Abu Dhabi, Al Maryah Island, United Arab Emirates

ADGM Registration No.: 34619

Last Updated: 21 March 2026

Effective Date: 21 March 2026

Version: 1.0

Important Notice

You must read this Risk Disclosure Statement in its entirety before using the BitLease platform or entering into any Lease-to-Own (LTO) Contract.

This document describes the material risks associated with using the Platform and participating in LTO Contracts. It does not describe every possible risk. The risks involved may interact in ways that make them difficult to predict. You should evaluate the suitability of the LTO model for your individual financial situation, risk tolerance, and investment objectives.

BitLease does not provide financial, investment, legal, or tax advice. You should seek independent professional advice before entering into any LTO Contract.

By using the Platform, you acknowledge that you have read, understood, and accepted all risks described in this document.

1. Nature of the Platform

1.1 What BitLease Is

BitLease is a structured digital asset financing platform operating a Lease-to-Own (LTO) model. You enter into a contractual installment agreement to obtain Economic Utility (economic rights and benefits) of a digital asset from day one, while Formal On-Chain Ownership remains with BitLease until all payment obligations are fulfilled. All contracts are denominated in stablecoins and settled through your LTO Wallet.

1.2 What BitLease Is Not

BitLease is neither a cryptocurrency exchange, a broker-dealer, a lending platform, a provider of investment services, an asset manager, a money transmitter, nor a collective investment scheme. BitLease does not maintain an order book, does not facilitate trading, and does not provide price discovery services.

1.3 Why This Matters for Risk

The LTO model avoids the risks associated with crypto, such as price-based liquidation, margin calls, and the use of collateral. However, it also comes with other risks associated with structured finance. This document highlights the risks associated with the LTO model to enable you to make an informed decision.

2. Digital Asset Risks

2.1 Price Volatility

Digital assets are inherently volatile. The value of any digital asset held under an LTO Contract, including Bitcoin, Ethereum, BNB, Solana, and XRP, can fluctuate dramatically, rapidly, and unpredictably. Price movements can be extreme: assets can lose 50%, 80%, or even substantially all of their value within days, hours, or minutes.

What this means for your LTO Contract:

Your payment obligations remain unchanged regardless of price movements. If the asset drops 90%, your installments remain the same. If you initiate a Buyout when the asset’s value has declined below your outstanding obligations, you will receive no Surplus Value, and your loss will equal the total payments you have made (Down Payment plus installments paid). LTO protects you from liquidation, meaning your contract is never terminated because of price, but it does not protect you from economic loss if the asset declines in value.

2.2 Total Loss Risk

It is possible for a digital asset to lose all or substantially all of its value due to market forces, technological failure, regulatory action, or other events. In such a scenario, your LTO Contract continues as long as you make payments (there is no price-based termination). However, the Economic Utility you hold has little or no economic value. If you Buyout, your loss equals all payments made. If you continue paying and the asset recovers, you benefit from the recovery. If you continue paying and the asset does not recover, you complete the contract and receive formal ownership of an asset that may be worth significantly less than what you paid.

2.3 Liquidity Risk

In some cases, there are market conditions where there is a decrease in liquidity, and therefore, it is not possible to sell a digital asset at a reasonable price or at all. Liquidity risk can affect the platform reference price for your digital asset for Buyout or termination, the execution spread used for contract termination, the time it takes to settle a Buyout or termination, and the availability of a specific supported digital asset for new LTO contracts.

2.4 Technology and Blockchain Risk

Digital assets depend on blockchain technology, which carries inherent risks:

1. Network failures: Blockchain networks may experience congestion, outages, or degraded performance, potentially delaying transactions, ownership transfers, or staking operations;
2. Hard forks and protocol changes: The underlying blockchain may undergo a hard fork or protocol change that creates incompatibilities, new tokens, or changes to the asset’s characteristics. BitLease will determine, at its discretion, how forks are handled.
3. Smart contract vulnerabilities: Where digital assets depend on smart contracts (e.g., tokens, staking protocols), those contracts may contain bugs, vulnerabilities, or design flaws that result in loss of funds or functionality;
4. 51% attacks and consensus failures: Blockchain networks may be vulnerable to attacks that compromise their integrity;
5. Irreversibility: Blockchain transactions are generally irreversible. Errors in on-chain operations cannot be undone through traditional dispute resolution.

2.5 Emerging and Unknown Risks

It is worth noting that the digital asset world is still in its developmental stages and is still evolving. This means that new risks can emerge, and they cannot be predicted at this point, including new types of attacks, unexpected technological problems, changes in the structure of the market, or systemic crises affecting the whole world of digital assets.

3. LTO-Specific Risks

These are the risks that arise from the structure of the Lease-to-Own model itself. Understanding them clearly is essential before entering into any contract.

3.1 Platform Reference Price Risk

All financial calculations on the Platform, including contract execution, Buyout proceeds, Full Settlement amounts, and termination settlements, are based on BitLease’s proprietary Platform Reference Prices, not real-time exchange prices.

Platform Reference Prices may differ, and at times may differ materially, from prices quoted on cryptocurrency exchanges.

This means:

1. The price at which your LTO Contract is executed may be higher or lower than what you could obtain on an exchange at the same moment.
2. The Buyout value of your position may be higher or lower than what you could realize by selling the equivalent asset on an exchange.
3. The settlement value upon termination may differ from what you expect based on exchange prices.
4. These differences are inherent to the Platform’s pricing methodology and are not errors, defects, or grounds for adjustment.

You should not rely on external exchange prices as indicative of what you will receive on the BitLease Platform.

3.2 Buyout Deficit Risk

If you initiate a Buyout when the Platform Reference Price of the asset is less than your total outstanding obligations (remaining principal + overdue amounts + penalties + fees), there is no Surplus Value to return. In this scenario, you receive nothing from the Buyout, and your total loss equals the Down Payment plus all installments paid. The LTO Contract is non-recourse, meaning you do not owe any additional amount. BitLease absorbs the deficit.

Worst-case Buyout scenario: You have paid a 30% Down Payment and several months of installments. The asset has lost significant value. You Buyout. You receive zero. Your loss is 100% of all payments made. This is the maximum loss under the non-recourse structure.

3.3 Termination Risk

If you fail to make installment payments, your contract will be terminated when overdue amounts plus accumulated penalties reach the equivalent of two (2) full installments. Upon termination:

1. The asset is liquidated at the Platform Reference Price with an execution spread.
2. All obligations are deducted.
3. You receive any Surplus Value, but this may be zero if the asset has declined significantly or if penalties have accumulated.
4. You permanently lose the LTO Contract and all rights to the asset;
5. Your loss equals all payments made if no surplus exists.

The 10% daily penalty on overdue amounts accelerates the termination timeline. Under complete non-payment, termination typically occurs within approximately 10 days.

3.4 Commitment Risk

An LTO Contract is a financial commitment, and you have the responsibility to make installment payments throughout the entire contract term. You need to consider whether you can make these payments over time, including in the event of a potential deterioration in your financial situation, such as the loss of a job, unexpected expenses, and lower income.
An LTO Contract is not a spot purchase, where you make a one-time payment and receive the asset. Instead, you have a financial commitment over time. This is a risk because you might not be able to make the payments in the future.

3.5 Opportunity Cost Risk

You have a financial commitment to make payments under the LTO Contract, including the Down Payment and installment payments. These payments cannot be made for any other use. During the contract term, the Down Payment is generally not refundable except in the event of a Cooling-Off Period. You cannot reverse the installment payments made during the contract term, except in the event of a Full Settlement, Buyout, or termination, subject to Surplus Value.
You might have other financial opportunities during the contract term, but you still have a financial commitment to the LTO Contract.

3.6 Non-Ownership Risk During Contract Term

During the term of the LTO Contract, you are entitled to Economic Utility, but you do not have Formal On-Chain Ownership of the asset:

1. You cannot sell, pledge, or otherwise use the asset as collateral outside of the Platform;
2. You cannot move the asset off the Platform until after Full Settlement has been completed;
3. Your economic rights are restricted to and governed by the BitLease contractual framework;
4. In the event of a BitLease insolvency (see Section 5.1), your rights are restricted by the status of the escrow structure and applicable insolvency legislation;
5. Economic Utility is a contractual entitlement and may not be recognized as a property interest in some jurisdictions, which may affect its legal status accordingly.

4. Stablecoin Risks

4.1 Depeg Risk

All LTO Contracts are denominated in stablecoins. Stablecoins are designed to maintain a stable value (typically pegged to the US dollar), but this peg is not guaranteed. Stablecoins may:

1. Depeg temporarily or permanently: The stablecoin you use may lose its peg to the US dollar, meaning its actual purchasing power decreases. If you need to convert the stablecoin to fiat currency, you may receive less than the nominal value.
2. Become illiquid: Under certain market conditions, stablecoins may become difficult to buy or sell at the expected price;
3. Be subject to regulatory action: Authorities may take action against stablecoin issuers, potentially freezing or restricting the use of specific stablecoins.

4.2 Stablecoin Issuer Risk

The value and usability of a stablecoin are contingent upon the financial status, reserves, and reliability of the stablecoin issuer. If a stablecoin issuer is not able to meet its reserves, becomes insolvent, or has restrictions such as a limit on redemptions or a blacklist of addresses, the stablecoin in your LTO Wallet or for making LTO Contract payments may be affected. BitLease does not guarantee the stability or solvency of any stablecoin issuer.

4.3 LTO Wallet Risk

Your LTO Wallet contains stablecoins that you use for making payments and for receiving proceeds from a Buyout or staking rewards. If the value of a stablecoin in your wallet goes down, the real value of the stablecoins in your wallet goes down even if the nominal value of the stablecoins remains the same.

5. Counterparty and Platform Risks

5.1 BitLease Counterparty Risk

BitLease is the Direct Counterparty to all LTO Contracts. This means your rights, including Economic Utility, the right to Buyout, the right to Full Settlement, and the right to receive Formal Ownership upon completion, are contractual obligations of BitLease.

If BitLease were to become insolvent, be unable to meet its obligations, or cease operations:

1. Your ability to exercise Buyout, Full Settlement, or receive Surplus Value could be impaired;
2. Transfer of Formal Ownership upon contract completion could be delayed or disrupted.
3. The treatment of escrowed assets in insolvency proceedings would depend on ADGM insolvency law and the legal characterization of the escrow arrangement.
4. While client assets are segregated from operational assets and held in MPC custody (Fireblocks), the legal enforceability of segregation in insolvency has not been tested in all relevant jurisdictions.

HyperHedge™ is designed to maintain BitLease’s solvency, but no risk management system can eliminate counterparty risk entirely.

5.2 HyperHedge™ Limitations

HyperHedge™ is BitLease’s proprietary solvency engine, designed to ensure that total asset value plus hedging profits exceed total Lessor obligations at all times. However:

1. HyperHedge™ is designed for severe stress but cannot guarantee solvency under all conceivable scenarios, including unprecedented market crashes, simultaneous failures across multiple systems, or black swan events.
2. The solvency invariant (TAV + HPNL ≥ Lessor Debt) is monitored programmatically, but technical failures in the monitoring system itself are possible.
3. HyperHedge™ relies on inputs (price feeds, position data, hedge execution) that may themselves be subject to delays, errors, or manipulation;
4. Chainlink Proof of Reserve integration, which would provide independent verification, is planned but not yet operational.
5. Historical performance or simulated previews of HyperHedge™ are not indicative of future performance under different market conditions.

5.3 Custody Risk

Digital assets under LTO Contracts are held in MPC custody provided by Fireblocks. While MPC custody represents institutional-grade security:

1. No custody solution is 100% immune to security breaches, insider threats, or sophisticated attacks;
2. Fireblocks, as a third-party custody provider, carries its own operational, financial, and technical risks.
3. If Fireblocks were to experience a catastrophic failure, breach, or insolvency, recovery of assets could be delayed or complicated, even with insurance coverage.
4. MPC key shares are distributed across independent infrastructure, but the integrity of this distribution depends on the ongoing operational security of all participating parties.
5. Insurance coverage, whether through Fireblocks or BitLease, has limits and exclusions and may not cover all loss scenarios.

5.4 Operational Risk

The Platform depends on complex technology systems, and operational failures are possible:

1. System downtime: The Platform may be unavailable due to maintenance, technical failures, cyberattacks, or force majeure events. During downtime, you may be unable to make payments, initiate Buyouts, or manage your contracts.
2. Processing delays: Payments, settlements, or ownership transfers may be delayed due to technical issues, blockchain congestion, or third-party processing delays.
3. Errors: Despite quality controls, errors in calculations, pricing, or processing may occur. While BitLease will make reasonable efforts to correct errors, some may not be immediately detectable.
4. Data loss: Although BitLease implements comprehensive backup and recovery procedures, data loss due to catastrophic events cannot be entirely excluded.
5. Third-party dependencies: The Platform relies on third-party services (Fireblocks, payment processors, blockchain analytics providers, data feeds). Failure of any of these providers could impact Platform operations.

5.5 Cybersecurity Risk

Despite implementing institutional-grade security measures, the Platform may be subject to:

1. Hacking attacks targeting user accounts, Platform infrastructure, or custody systems;
2. Phishing, social engineering, or credential theft targeting users;
3. Distributed denial of service (DDoS) attacks affecting Platform availability;
4. Malware or ransomware affecting Platform systems;
5. Exploitation of zero-day vulnerabilities in software or blockchain protocols.

BitLease is not liable for losses resulting from the compromise of your personal account credentials. You are responsible for maintaining the security of your login information and enabling multi-factor authentication.

6. Staking Risks

6.1 Nature of LTO Staking Delegation

LTO Staking Delegation is an optional service available for eligible Supported Digital Assets. BitLease acts solely as an execution agent, delegating the escrowed asset for staking on your behalf. BitLease does not guarantee staking returns, uptime, or performance.

6.2 Specific Staking Risks

1. Slashing: Validators may be penalized by the blockchain protocol for misbehavior or downtime, resulting in a reduction of the staked asset value. Slashing losses reduces the asset value under your LTO contract.
2. Validator risk: The validator to which your asset is delegated may experience downtime, poor performance, or malicious behavior;
3. Yield variability: Staking rewards are not fixed and may vary based on network conditions, protocol changes, participation rates, and other factors. Rewards may decrease to zero;
4. Protocol changes: The underlying blockchain may change its staking mechanism, reward structure, or requirements, potentially affecting yield or eligibility.
5. Smart contract risk: Staking may involve interaction with smart contracts that could contain vulnerabilities.
6. Lock-up risk: Some staking protocols require lock-up periods during which the asset cannot be unstaked. This could affect the timing of Buyout execution or contract termination.
7. Commission: BitLease retains 20% of the staking yield as a brokerage commission. Your net yield is 80% of gross staking rewards.
8. No guarantee: BitLease does not guarantee any level of staking return. Staking yield may be zero or negative (in the case of slashing).

6.3 Impact on LTO Contract

Staking will not change the terms of your LTO Contract, your payment obligations, or the solvency structure. However, any slashing loss will reduce the asset's value, which may affect Buyout calculations or any surplus upon termination. You will earn Staking Rewards, which are free assets to you, not impacting your debt balance. Staking is voluntary, and you are responsible for any risks or consequences.

7. Regulatory and Legal Risks

7.1 Regulatory Uncertainty

The regulation of digital assets and related services is evolving rapidly across all jurisdictions. Regulatory changes may:

1. Classify the LTO model, digital assets, or stablecoins differently than currently anticipated, potentially requiring changes to the Platform’s operations, product structure, or availability;
2. Impose new licensing requirements that BitLease may not be able to meet in all jurisdictions;
3. Restrict or prohibit the provision of certain services in certain jurisdictions;
4. Require changes to KYC/AML procedures, potentially affecting your access to the Platform;
5. Impact the legal treatment of Economic Utility, Formal Ownership, or the escrow arrangement;
6. Affect the tax treatment of LTO Contracts, Buyout proceeds, staking rewards, or Surplus Value.

7.2 Licensing Status

As of the effective date, BitLease is in the process of obtaining regulatory licenses from ADGM FSRA, VARA, MiCA-designated authorities, FCA, and MAS. These licensing processes are not yet complete. There is no guarantee that all licenses will be granted. If a license application is denied:

1. Services may be restricted or discontinued in the affected jurisdiction.
2. Active LTO Contracts may need to be wound down in an orderly manner.
3. You may be required to complete or terminate your contracts on an accelerated timeline.

7.3 Cross-Border Risk

BitLease operates across multiple jurisdictions. The legal treatment of the LTO model, your contractual rights, and the enforceability of BitLease’s obligations may vary by jurisdiction. In the event of a dispute:

1. The governing law is ADGM law, and arbitration is through the ADGM Arbitration Centre.
2. Enforcement of ADGM judgments or arbitral awards in your home jurisdiction may be subject to local legal requirements and limitations.
3. Consumer protection laws in your jurisdiction may provide additional rights not contemplated in BitLease’s Terms of Service or may limit certain terms.

7.4 Sanctions Risk

Changes to international sanctions regimes may:

1. Result in the freezing of your account or assets if you or associated persons become subject to sanctions.
2. Restrict BitLease’s ability to process transactions involving certain jurisdictions, entities, or digital assets;
3. Require BitLease to terminate your business relationship without prior notice.

7.5 Tax Risk

The tax treatment of LTO Contracts, installment payments, Economic Utility, Formal Ownership transfer, Buyout proceeds, staking rewards, Surplus Value, and stablecoin transactions is uncertain and varies by jurisdiction. Tax laws may change in ways that increase your tax obligations or change the timing of tax events. You are solely responsible for understanding and complying with your tax obligations.

8. Risks Related to the Direct Counterparty Model

8.1 Single Point of Dependency

Because BitLease is the direct counterparty to all transactions, the entire platform depends on BitLease’s continued operation and solvency. Unlike decentralized protocols, where operations continue regardless of any single entity’s status, BitLease is a centralized counterparty. If BitLease ceases operations, there is no decentralized fallback mechanism.

8.2 Client-Lessor Separation

The Direct Counterparty model means you have no relationship with Lessors. While this provides important protections (you are insulated from Lessor-side risks), it also means the following:

1. You have no visibility into the Lessor side of the platform.
2. You depend entirely on BitLease’s representation of its financial health and solvency;
3. Until Chainlink Proof of Reserve is operational, solvency claims are not independently verifiable by you on-chain.

8.3 Concentration Risk

If BitLease experiences a concentration of LTO Contracts in a single digital asset that subsequently suffers extreme loss, the impact on HyperHedge™ and BitLease’s overall solvency could be amplified, even if the solvency framework is designed to manage such scenarios.

9. Risks You Control

This section addresses risks where your own decisions and actions play a direct role.

9.1 Affordability Risk

Making an LTO Contract where you are not able to sustain for the whole term may cause you not to pay, incur penalties, and may even lead to the termination of the contract, which may cause you to forfeit all the payments you made. Before entering into any contract, it is important to assess if you are able to meet all the installment requirements for the whole term, even in adverse circumstances such as job loss, income reduction, or incurring unexpected expenses. It is not advisable to enter into a contract where you cannot afford to forfeit the money, and it is not advisable to enter into multiple LTO Contracts beyond what you can afford.

9.2 Account Security Risk

You are responsible for the security of your account credentials and devices. If your account is compromised due to failure to activate and maintain multi-factor authentication, use of weak and common passwords, failure to protect your device against malware, or falling victim to phishing, any losses incurred as a result of unauthorized access are for your account.

Note: While we have security measures in place for the platform, we cannot protect against security risks at the user level.

9.3 LTO Wallet Funding Risk

Your responsibility is to ensure that your LTO Wallet has sufficient stablecoin funds on or before each installment due date. Failure to do so, even unintentionally, may lead to non-payment and the imposition of corresponding penalties. While BitLease may send reminders for payments, we do not assume responsibility for funding your LTO Wallet.

9.4 Decision-Making Risk

Your decision to enter into LTO Contracts, select digital assets, set parameters for LTO Contracts, including but not limited to Down Payment Percentage and installment duration, effect Buyouts, enable Staking, or effect Full Settlements, is entirely and exclusively within your discretion. BitLease does not offer advice on the foregoing. You shall assume full responsibility for the consequences of your decisions, including but not limited to those that result in profit or loss.

10. No Guarantees

10.1 BitLease Does Not Guarantee

1. The future price or performance of any digital asset;
2. That any LTO Contract will result in profit or avoid loss;
3. The accuracy or timeliness of Platform Reference Prices relative to external market prices;
4. Any specific level of staking reward or yield;
5. Uninterrupted availability of the Platform;
6. The solvency of stablecoin issuers.
7. The ongoing availability of any specific Supported Digital Asset for LTO;
8. That regulatory changes will not affect the Platform or your contracts;
9. That HyperHedge™ will maintain solvency under all possible market conditions;
10. Fireblocks custody will be immune to all security events.

10.2 Past Performance

Any historical data, simulated previews (including HyperHedge™ solvency data), illustrative examples (including persona stories on the Platform), or market analyses presented on the Platform are for informational purposes only. Past performance is not indicative of future results. Simulated performance is not actual performance and may not reflect real-world conditions.

11. Risk Mitigation: What BitLease Provides

While risks cannot be eliminated, BitLease’s LTO model incorporates structural protections designed to mitigate certain risks:

These protections reduce but do not eliminate risk. You can still lose money. The maximum loss under LTO is 100% of payments made (Down Payment + installments), which occurs if the asset loses all value and you Buyout, or if your contract is terminated with no Surplus Value.

12. Who Should Not Use BitLease

You should not enter into an LTO Contract if:

1. You cannot afford to lose the Down Payment and all scheduled installments.
2. You do not have a stable, predictable income sufficient to meet installment payments for the full contract duration;
3. You are seeking short-term speculative gains rather than structured, long-term asset acquisition.
4. You do not understand the LTO model, the two-layer ownership structure, or the risks described in this document;
5. You are expecting guaranteed returns or risk-free exposure to digital assets.
6. You have not sought independent financial advice and are uncertain about whether LTO is suitable for your circumstances;
7. You are using funds that you need for essential living expenses, debt repayment, or emergency savings;
8. You are a citizen, resident, or tax resident of the United States of America or any Restricted Jurisdiction.

13. Acknowledgment

By accessing the Platform and entering into any LTO Contract, you confirm that:

1. You have read and understood this Risk Disclosure Statement in its entirety;
2. You understand that digital assets are volatile and that you may lose all payments made under an LTO Contract;
3. You understand that Platform Reference Prices may differ from exchange prices, and you accept this pricing methodology.
4. You understand that BitLease does not guarantee any return, profit, or outcome;
5. You understand that LTO is a structured financing arrangement with binding payment obligations.
6. You understand the non-recourse structure and that your maximum loss is limited to payments made;
7. You understand the Buyout mechanism (EVS) and how Surplus Value is calculated;
8. You understand the risks of staking (if opted in) and that BitLease acts solely as an execution agent;
9. You accept that stablecoin values may fluctuate and that stablecoin issuers carry their own risks.
10. You have considered whether you can sustain installment payments for the full contract duration.
11. You accept counterparty risk, meaning your rights depend on BitLease’s continued solvency and operation;
12. You understand that HyperHedge™ is designed for resilience but does not constitute an absolute guarantee;
13. You understand that regulatory changes may affect the Platform and your contracts;
14. You have been advised to seek independent professional advice and have either done so or chosen to proceed without it;
15. You are acting on your own judgment and have not relied on any statement by BitLease as financial or investment advice.

14. Contact

If you have questions about this Risk Disclosure Statement or the risks associated with using the Platform, please contact:

BitLease Technologies Ltd. A subsidiary of 49G Holding Incorporated in Abu Dhabi Global Market (ADGM)

Website: www.bitlease.com