Synths
Risk Disclosure Statement
Version 1.0, Effective Date: June 26, 2026
THIS RISK DISCLOSURE STATEMENT IS PROVIDED IN ACCORDANCE WITH APPLICABLE ONTARIO SECURITIES LAW AND THE EXEMPT MARKET REQUIREMENTS OF NATIONAL INSTRUMENT 45-106. THIS DOCUMENT IS NOT EXHAUSTIVE OF ALL RISKS ASSOCIATED WITH THE SYNTHS PLATFORM. YOU SHOULD READ THIS STATEMENT IN ITS ENTIRETY AND CONSULT A QUALIFIED FINANCIAL, LEGAL, AND TAX ADVISOR BEFORE MAKING ANY INVESTMENT DECISION. YOU MAY LOSE THE ENTIRE AMOUNT YOU INVEST.
Article 1 – Nature of Synthetic Units

1.1 Synthetic Units are synthetic financial instruments that trade at a Market Price determined by supply and demand between Users on the Platform. Each Synthetic Unit references a Private Company, and its Reference Price is derived by Synths from publicly available valuation data for that company. The Market Price and the Reference Price are distinct: the Market Price is what Users pay or receive on the Platform at a given moment; the Reference Price is Synths' publicly derived estimate of the underlying company valuation. These prices will differ and may diverge materially.

1.2 Synthetic Units are not, and shall not be construed as:

(a) equity, shares, or any ownership interest in the referenced Private Company;
(b) debt instruments, notes, or any obligation of the referenced Private Company;
(c) a right to vote on, receive dividends from, or participate in the governance of the referenced Private Company; or
(d) a direct legal claim of any kind against the referenced Private Company.

1.3 The value of a Synthetic Unit may fall to zero. You may lose the entirety of your investment.

Article 2 – Reference Price and Valuation Data Risk

2.1 The Reference Price is derived from publicly available information, including disclosed funding rounds, secondary market transaction prices, tender offer prices, and third-party appraisals. Private-market valuation data has the following inherent limitations:

Infrequency: private company valuations are typically established at discrete funding events that may be separated by months or years. Between such events, the Reference Price may remain static regardless of changes in the company's actual financial condition.
Incompleteness: publicly available private-market data may not reflect all transactions or all material information about a company's valuation.
Non-verifiability: reported private-market valuations may not be independently audited and may be based on estimates, projections, or negotiated terms.
Staleness: the most recent publicly available valuation data for a given company may be outdated at the time of any given trade.

2.2 The Market Price may also diverge significantly from the Reference Price due to Platform-specific supply and demand dynamics, liquidity conditions, and User sentiment.

Article 3 – Liquidity Risk

3.1 The Platform is at an early stage of development. Trading volume and market depth in Synthetic Units may be significantly lower than those of established exchanges. You may be unable to sell your Synthetic Units at your desired price, or at all, during periods of low liquidity.

3.2 Circuit breakers, confidence band interventions, and trading halts may further limit your ability to transact at times that may be disadvantageous to you.

Article 4 – Regulatory Risk

4.1 Synths operates under the accredited investor exemption in section 2.3 of NI 45-106 and is engaged with the Ontario Securities Commission LaunchPad program. The regulatory treatment of synthetic private-market instruments in Canada is subject to active development and may change without advance notice.

4.2 Future regulatory action could require Synths to restrict access to the Platform, delist certain Synthetic Units, modify the Platform structure, or cease operations entirely.

Article 5 – Custody and Counterparty Risk

5.1 User funds are held in a dedicated trust account at a Canadian Schedule I bank, segregated from Synths' operating capital. However: (a) funds in the Trust Account are not eligible for CDIC deposit insurance; (b) in the event of Synths' insolvency, User funds would be subject to applicable insolvency proceedings; (c) the custodian bank itself is subject to its own operational and credit risks; and (d) trust account segregation does not guarantee full recovery in all circumstances.

Article 6 – Concentration Risk

6.1 Synths currently lists Synthetic Units on a small number of Private Companies. A portfolio concentrated in a small number of instruments is inherently more volatile. Private unicorn companies are high-growth, high-risk enterprises. A significant proportion of venture-backed companies do not achieve their projected valuations, fail to complete a liquidity event, or are acquired at prices materially below market expectations.

Article 7 – Technology and Cybersecurity Risk

7.1 The Platform is dependent on technology infrastructure that is subject to outages, cyberattacks, software errors, and other disruptions. Synths employs reasonable security measures but cannot guarantee uninterrupted Platform availability or the absolute security of data and funds.

Article 8 – Deposit and Payment Risk

8.1 Deposits are subject to the processing times, limits, and operational risks of your financial institution and the applicable banking networks. Cryptocurrency deposits are subject to additional risks including price volatility between the time of deposit and conversion to Canadian dollars, blockchain network delays, irreversibility of transactions, and regulatory uncertainty.

Article 9 – Artificial Intelligence Risk

9.1 Synths uses Claude, an artificial intelligence system operated by Anthropic, to assist with certain Platform operations. AI systems are subject to known and unknown limitations, and AI-generated content may contain errors or inaccuracies. You must not rely solely on AI-generated content in making investment decisions.

Article 10 – No Investment Advice

10.1 Nothing on the Platform constitutes investment advice, financial advice, legal advice, tax advice, or any other form of professional advice. Synths does not recommend the purchase or sale of any Synthetic Unit. All investment decisions are made by you at your own discretion and risk.

Article 11 – Acknowledgment

11.1 By accessing the Platform and trading Synthetic Units, you acknowledge and confirm that: (a) you have read and understood this Risk Disclosure Statement in its entirety; (b) you are an Accredited Investor capable of independently evaluating the risks described herein; (c) you have had the opportunity to seek independent financial, legal, and tax advice; (d) you understand that you may lose the entire amount you invest; and (e) you accept all risks associated with trading Synthetic Units on the Platform.