Reserve methodology for tokenized gold.

1. Purpose

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

XAUa is designed to provide tokenized exposure to gold through a diversified reserve portfolio consisting of physical gold, gold ETFs or ETCs, gold certificates, cash, cash equivalents and settlement assets.

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

2. Product unit

Each XAUa represents one fine troy ounce of gold for reserve measurement purposes.

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

3. Reserve objective

The reserve portfolio is managed with four core objectives: full reserve coverage, gold 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 gold, gold ETFs or ETCs, gold certificates, cash, cash equivalents and supported settlement assets.

4.1 Physical Gold

Physical gold may include allocated or segregated bullion held with approved professional custodians. Eligible physical gold should generally be gold 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 Gold ETFs and ETCs

Gold ETFs and exchange-traded commodities may be used to support liquidity and efficient reserve management. Eligible products should generally provide gold-linked or physically backed gold exposure, avoid leveraged or inverse exposure, maintain sufficient exchange liquidity and use publicly available market prices or NAVs.

4.3 Gold Certificates

Gold certificates may be used where issued by approved counterparties or custodians and where they represent a recognized claim, title or entitlement linked to gold. Certificates are subject to counterparty, documentation and settlement risk.

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 gold 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 gold-equivalent reserve value is equal to or greater than total XAUa outstanding multiplied by the gold reference price.

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

The issuer may also calculate coverage in gold-equivalent ounces by adding physical gold ounces, ETF gold-equivalent ounces, certificate gold-equivalent ounces and liquidity asset gold-equivalent ounces, then dividing that amount by XAUa outstanding.

8. Valuation methodology

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

Physical gold is valued as confirmed fine troy ounces held multiplied by the Gold Reference Price. Gold ETF or ETC holdings may be valued using official NAV, closing market price, volume-weighted market price or an independent fair value estimate during disruption. Gold certificates may be valued based on the gold quantity represented multiplied by the Gold Reference Price, less applicable risk adjustments.

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. XAUa outstanding

For reserve calculation purposes, XAUa Outstanding means all XAUa 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 XAUa Outstanding against XRPL ledger data and internal records.

11. Issuance controls

New XAUa 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 XAUa into circulation if doing so would cause reserve coverage to fall below the required threshold.

12. Redemption methodology

XAUa may support digital redemption and physical redemption. Redemptions are subject to eligibility, compliance review, fees, liquidity, supported jurisdictions, operational availability and Product Terms.

12.1 Digital Redemption

Eligible holders may redeem XAUa into supported settlement assets. Digital redemption value is calculated as redeemed XAUa multiplied by the Gold Reference Price, less applicable fees, network costs or settlement costs. Redeemed XAUa 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 100 XAUa, equal to 100 fine troy ounces. Physical redemption requires identity verification, compliance checks, supported jurisdiction, custodian availability 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.

15. Reconciliation

The issuer should conduct regular reconciliation between XRPL token supply, internal issuance records, redemption records, physical gold holdings, ETF or ETC brokerage statements, gold certificate records and cash or settlement asset balances.

16. Transparency reporting

Assetiko should publish a reserve transparency dashboard for XAUa. Suggested public metrics include XAUa outstanding, net reserve value, gold-equivalent ounces, physical gold holdings, ETF or ETC holdings, certificate holdings, liquidity assets, coverage ratio, last reserve update and latest independent review where available.

Restricted records may include detailed custodian statements, detailed ETF brokerage statements, certificate documentation, insurance certificates, independent audit materials and internal control procedures. Restricted records are available only through the applicable request workflow.

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 gold 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 XAUa 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 100 XAUa, approved jurisdiction, custodian availability, 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.

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 XAUa does not automatically create direct ownership of specific physical bars, ETF shares, gold certificates, brokerage accounts, vault accounts or issuer reserve accounts.

Holder rights are contractual and are defined by XAUa 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 gold 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 XAUa 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.