Risk Warning

Risk Disclosure Statement

This document aims to disclose the various potential risks associated with investing through the CycleX platform. All investments carry a certain degree of uncertainty, and investors should make independent decisions only after fully understanding the risks and assessing their own financial situation. This disclosure statement does not constitute investment advice or legal opinion, and CycleX and its affiliates are not responsible for any losses incurred by investors.

1. Market Risk

The underlying assets of this fund (such as stocks, bonds, and crypto assets) may be affected by market fluctuations, leading to a decline in the fund's net value. Market risks may include but are not limited to:

• Economic cycle fluctuations (such as recessions or slowdowns in economic growth)

• Interest rate changes (which may impact returns on fixed-income assets)

• Foreign exchange fluctuations (applicable to cross-border investments)

• Changes in market liquidity (leading to asset discounts or difficulties in liquidation)

⚠ Investors may face partial or total loss of principal. Past performance does not guarantee future returns.

2. Liquidity Risk

• RWA assets (such as real estate and private debt) generally lack immediate liquidity and may not be converted into cash quickly.

• The fund may impose lock-up periods or redemption restrictions, and investors should consider their personal liquidity needs.

• If fund tokens are tradable on secondary markets, market depth and liquidity may affect trade execution.

⚠ Investors may not be able to liquidate their investments immediately when needed or may need to sell assets at a discount.

3. Regulatory & Compliance Risk

• The compliance of this fund and tokenized assets is subject to the laws of different jurisdictions. Regulatory changes may lead to operational restrictions, additional compliance obligations, or market trading suspensions.

• Applicable laws may require additional disclosures, restrict investor eligibility, or affect distribution mechanisms.

• If regulatory authorities classify fund tokens as securities, additional licensing for issuance and trading may be required. Otherwise, the fund’s operations may face legal challenges.

⚠ Investors should ensure their investments comply with local laws and regulations and bear the corresponding legal responsibilities.

4. Securities Law & Legal Risk

• Some funds may be issued under exemptions such as Reg D (506(c)), Reg S, or other securities laws, requiring investors to qualify as Accredited Investors.

• Due to varying securities laws in different countries, certain jurisdictions may redefine the legal nature of RWA tokens, imposing additional compliance requirements or trading restrictions.

• The legal framework for asset custody and trading may change over time, affecting the fund’s compliance and operational stability.

⚠ If an investor’s country imposes restrictions on tokenized securities, they may be unable to transfer or trade fund tokens.

5. Tokenization & Blockchain Risk

• Tokenized funds rely on smart contracts and blockchain technology, which may be affected by technical failures, hacking attacks, protocol vulnerabilities, or upgrade incompatibilities.

• Blockchain networks (such as Ethereum and Polygon) may experience high transaction fees (Gas Fees) or consensus mechanism failures, leading to transaction delays or failures.

• Due to the legal nature of RWA assets, on-chain transactions may face jurisdictional conflicts or insufficient legal enforceability.

⚠ Technical risks may result in investors being unable to access or trade their tokenized assets.

6. Trading & Market Making Risk

• If fund tokens are tradable on Alternative Trading Systems (ATS) or secondary markets, price volatility may be significant.

• Liquidity providers or market makers may adjust trading mechanisms, affecting bid-ask spreads.

• Market manipulation (such as wash trading or fake volume) may mislead investors regarding market liquidity or price levels.

⚠ Secondary market trading of tokens does not guarantee minimum liquidity, and investors may face significant asset depreciation risks.

7. Custody & Third-Party Risk

• Investment assets may be managed by qualified custodians or third-party service providers. If custodians experience bankruptcy, hacking incidents, or compliance issues, asset losses may occur.

• The platform relies on third-party payment, trading, or settlement systems, and any technical or compliance issues may affect transaction execution.

⚠ If custodians or third-party service providers default, investors may be unable to recover their assets.

8. Taxation Risk

• Different countries have varying tax policies regarding RWA tokens and fund returns. Investors must evaluate their tax obligations independently.

• Changes in fund structure or investment strategies may affect tax treatment or impose additional tax liabilities.

⚠ Investors should consult tax professionals to ensure compliance with local tax regulations.

9. Macroeconomic & Political Risk

• Global economic changes, interest rate adjustments, and geopolitical conflicts may impact the performance of underlying assets.

• Regulatory policies (such as capital controls and financial sanctions) may affect cross-border investment capital flows.

⚠ Global economic and political uncertainties may impact fund returns, and investors should be prepared for long-term holdings.

10. Disclaimer

• The platform and its affiliates are not legally responsible for any investor losses. All investment decisions are made at the investor’s discretion.

• Past returns do not guarantee future performance. Investors should assess investments based on their risk tolerance.

• This document serves solely as a risk disclosure and does not constitute investment, legal, or tax advice. Investors should seek professional consultation.

⚠ By using this platform or purchasing fund tokens, investors are deemed to have read, understood, and accepted this risk disclosure statement and are willing to bear the associated investment risks.