Reserve methodology for tokenized silver.

1. Purpose

This Reserve Methodology describes how Assetiko Commodities Ltd. maintains, values, reconciles and reports the reserve assets supporting XAGa.

XAGa is designed to provide tokenized exposure to silver through a physical silver reserve framework consisting of allocated or segregated physical silver, custody records, insurance materials, verification materials and supporting settlement assets.

The objective of this methodology is to ensure that the total reserve portfolio maintains sufficient silver-equivalent value to support all XAGa outstanding.

2. Product unit

Each XAGa represents one fine troy ounce of silver for reserve measurement purposes.

This does not mean that each XAGa holder owns a specific identified silver bar. Holder rights are governed by the XAGa Product Terms, Redemption Policy and applicable issuer documentation.

3. Reserve objective

The reserve portfolio is managed with four core objectives: full reserve coverage, silver exposure, liquidity and transparency.

The issuer seeks to maintain a coverage ratio of at least 100.00% at all times, with an internal operating buffer above 100.00% where practical.

4. Eligible reserve assets

Eligible reserve assets may include physical silver and supporting settlement assets.

4.1 Physical Silver

Physical silver may include allocated or segregated bullion held with approved professional custodians. Eligible physical silver should generally be silver measured in fine troy ounces, held through approved professional vaults or custodians, insured where available and commercially appropriate, and subject to reconciliation, reporting and independent review.

4.2 Custody records

Custody records may include vault statements, bar lists, warehouse confirmations, custodian reports, reconciliation files and other records evidencing physical silver held for the product.

4.3 Insurance and verification materials

Insurance and verification materials may include insurance certificates, custodian confirmations, inspection records, independent review materials and other documentation supporting the existence, quality, custody and protection of physical silver holdings.

4.4 Cash, Cash Equivalents and Settlement Assets

Liquidity assets may be held for redemption operations, network settlement, fees, cash management and product administration. Eligible liquidity assets may include cash, short-term cash equivalents, USDV, RLUSD, USDC and USDT where supported by the issuer. Liquidity assets should generally remain a limited portion of total reserves and are not intended to replace silver exposure.

5. Ineligible reserve assets

The following should not be treated as eligible core reserve assets.

6. Reserve allocation policy

The issuer may manage the reserve portfolio within published allocation ranges. These ranges are policy guidelines. Temporary deviations may occur due to issuance activity, redemption activity, market disruption, settlement timing, custodian transfers, rebalancing or extraordinary events.

Material deviations should be corrected within a reasonable period, subject to market conditions and operational constraints.

7. Reserve coverage

The reserve portfolio should be maintained so that total silver-equivalent reserve value is equal to or greater than total XAGa outstanding multiplied by the silver reference price.

A coverage ratio above 100.00% means reserve assets exceed the calculated value of XAGa obligations.

The issuer may also calculate coverage in silver-equivalent ounces by dividing confirmed physical silver ounces, net of applicable adjustments, by XAGa outstanding.

8. Valuation methodology

The Silver Reference Price is used to calculate the value of XAGa obligations and reserve assets. The issuer may use a recognized institutional silver benchmark, institutional spot silver data source or other published market reference determined in accordance with the Valuation Policy.

Physical silver is valued as confirmed fine troy ounces held multiplied by the Silver Reference Price. Custody records, verification materials and insurance materials are used to support reserve confirmation and are not treated as a substitute for physical silver unless expressly stated in issuer documentation.

Cash is valued at face value, subject to bank, currency and counterparty considerations. Stable settlement assets may be valued based on redeemable value, market value or a conservative internal value determined by the issuer. If a settlement asset materially deviates from expected value, the issuer may apply a valuation haircut.

9. Net reserve value

Net Reserve Value is calculated by subtracting product liabilities, accrued fees and known settlement obligations from Gross Reserve Asset Value.

Product liabilities may include unpaid custody fees, redemption payables, brokerage settlement items, delivery charges owed by the product, audit expenses or other product-related obligations.

10. XAGa outstanding

For reserve calculation purposes, XAGa Outstanding means all XAGa tokens issued and circulating outside issuer-controlled reserve, treasury, burn or operational wallets.

Issuer treasury inventory, burn wallet balances, locked pre-issuance supply and redemption processing wallet balances should generally be excluded from circulating supply. The issuer should reconcile XAGa Outstanding against XRPL ledger data and internal records.

11. Issuance controls

New XAGa should only be released into circulation when sufficient reserve assets have been acquired, allocated or otherwise confirmed under this methodology.

The issuer should not release new XAGa into circulation if doing so would cause reserve coverage to fall below the required threshold.

12. Redemption methodology

XAGa may support digital redemption and physical redemption. Physical redemption is available only through approved arrangements in London, Zurich, Singapore or Hong Kong SAR from 1,000 XAGa, is not offered in the United States, and remains subject to eligibility, written confirmation, compliance review, fees, liquidity, operational availability and Product Terms.

12.1 Digital Redemption

Eligible holders may redeem XAGa into supported settlement assets. Digital redemption value is calculated as redeemed XAGa multiplied by the Silver Reference Price, less applicable fees, network costs or settlement costs. Redeemed XAGa should be burned, locked or otherwise removed from circulating supply in accordance with issuer procedures.

12.2 Physical Redemption

Physical delivery may be available upon request for eligible holders meeting the minimum redemption threshold. The minimum physical redemption threshold is 1,000 XAGa, equal to 1,000 fine troy ounces. Approved delivery hubs are London, Zurich, Singapore and Hong Kong SAR; physical redemption is not offered in the United States. Every request requires written issuer confirmation, identity verification, compliance checks, available delivery format, custodian capacity and payment of applicable delivery, insurance, storage, taxes and duties.

Physical redemption may be fulfilled using available bars or bullion formats held by the relevant custodian. If exact bar weights create a residual difference, the issuer may settle the residual amount digitally or require an adjustment in accordance with Product Terms. Physical redemption is not guaranteed in every jurisdiction.

13. Rebalancing policy

The issuer may rebalance the reserve portfolio to maintain the product objective, liquidity and allocation policy. Rebalancing may occur due to new issuance, redemptions, allocation drift, market volatility, liquidity needs, custodian changes or risk management requirements.

Rebalancing should be conducted in a manner intended to protect reserve coverage and support orderly redemptions.

14. Custody standards

Reserve assets should be held through approved custodians, brokers, banks, vault operators or counterparties. Custody arrangements should generally support separation of reserve assets from operating assets where practical, clear recordkeeping, access controls, verification, insurance where available and no unapproved encumbrance. Named providers, exact vault locations, serial or bar lists, transport routes and security controls are confidential and are not published as public product information.

15. Reconciliation

The issuer should conduct regular reconciliation between XRPL token supply, internal issuance records, redemption records, physical silver holdings, custody records, insurance records, verification records and cash or settlement asset balances.

16. Transparency reporting

Assetiko should publish a reserve transparency dashboard for XAGa. Suggested public metrics include XAGa outstanding, net reserve value, silver-equivalent ounces, physical silver holdings, coverage ratio and latest independent verification report.

Reserve verification will be conducted quarterly by an independent auditor. Each completed report will be published as a public product record once issued and will identify its auditor, scope, procedures, reporting period, limitations and conclusions. No report is treated as completed or available before publication.

Restricted records may include detailed custodian statements, bar lists, verification documentation, insurance certificates, independent audit materials, internal control procedures, facility references, insurance schedules and reconciliation workpapers. They are available only through the applicable request workflow, subject to identity checks, a legitimate purpose, confidentiality undertakings and issuer approval; material may be redacted or withheld where security, privacy, contractual or legal obligations require.

17. Coverage events

An undercoverage event occurs when the calculated coverage ratio falls below 100.00%. If an undercoverage event occurs, the issuer may suspend new issuance, add reserve assets, rebalance the portfolio, use issuer capital, publish a notice or temporarily limit redemptions to manage orderly settlement during disruption.

If reserve coverage materially exceeds the required reserve level, the excess may be retained as a buffer or adjusted in accordance with Product Terms. Any release of excess reserve assets should only occur after confirming that coverage remains above the required threshold.

18. Market disruption events

The issuer may use alternative valuation, redemption or settlement procedures during a market disruption. Market disruption events may include silver market disruption, exchange closure, custodian disruption, banking disruption, settlement asset disruption, XRPL disruption, regulatory event or force majeure.

During disruption, the issuer may delay valuation, delay redemption, use backup pricing, change settlement assets or suspend affected operations in accordance with Product Terms.

19. Fees and expenses

Fees may be charged for product administration, custody, brokerage, redemption, physical delivery, settlement, compliance review, audit and network transactions.

Fees may be collected through redemption deduction, separate invoice, product expense accrual or network fee deduction. Fees should be disclosed in the XAGa Fee Schedule.

20. Physical delivery policy

Physical delivery is a premium redemption route and may not be available to all holders. Physical redemption may require a minimum redemption of 1,000 XAGa, an approved delivery arrangement in London, Zurich, Singapore or Hong Kong SAR, written issuer confirmation, verified identity, sanctions and compliance clearance, payment of delivery costs, storage costs, insurance, taxes and duties, completion of custodian documents and acceptance of bar size and delivery logistics. Physical redemption is not offered in the United States. See the Physical Delivery & Confidential Records Policy.

The issuer may reject or delay a physical redemption request if the request cannot be completed lawfully, safely or operationally.

21. Legal nature of reserve rights

Holding XAGa does not automatically create direct ownership of specific physical bars, vault accounts, custodian accounts or issuer reserve accounts.

Holder rights are contractual and are defined by XAGa Product Terms, Reserve Methodology, Redemption Policy, Fee Schedule, applicable account rules and compliance rules. Where physical redemption is approved and completed, ownership or possession of delivered silver transfers only in accordance with the applicable custodian and delivery procedures.

22. Methodology governance

The Reserve Methodology may be reviewed and updated periodically by the issuer. Changes may be made for operational improvement, risk management, regulatory change, product development, market structure or technology reasons.

Material changes should be published on the XAGa product page. Where practical, the issuer should provide advance notice before material changes become effective. Emergency changes may be implemented immediately where necessary to protect holders, reserves, settlement integrity or legal compliance.