This Risk Disclosure Statement (this “Risk Disclosure”) contains explanation on some of the risks associated with participation and activities of all end users (“Users”) in the platform operated by Nexpace (“our” or “us”) which comprises our websites, mobile applications, forums, marketplaces, blogs, hubs, tools, protocols, games, interactive software products and services, and any supporting servers used to deliver our services (collectively, the “Platform”) and the community which comprises of Platform and third-party integrations to the Platform, including decentralized applications (dApps) developed by third parties (the “MSU Community”). The Platform contains gaming communities including but not limited to MapleStory Universe, a virtual world where different games and applications that share the MapleStory intellectual property can interact through MapleStory Non-Fungible Tokens (NFTs) (“MapleStory Universe”), and MapleStory N, a new massively multiplayer online role-playing game (MMORPG) that merges NFTs and blockchain technology with MapleStory (“MapleStory N”). This Risk Disclosure also contains explanation on some of the risks associated with the Users’ activities involving any of the digital assets deployed within the MSU Community, including but not limited to digital items, characters, tokens used in the MSU Community, NFTs and Fungible Tokens (FT), such as NXPC and NESO, and any other digital representation which can be minted or exchanged into other digital assets (collectively, the “Digital Assets”). The term “Digital Assets” as used in this Risk Disclosure should not be construed to refer to any financial or economic value of those assets issued, deployed, or utilized across the MSU Community, including any services or contents offered therein.

Please note that the risks set forth in this Risk Disclosure are for Users’ reference and information only, and are not intended to be exhaustive or comprehensive, and does not reflect all of the risks (or other important factors) that Users should consider when participating in, or interacting with other Users through, the MSU Community including in connection with any activities involving the Digital Assets. Therefore, Users’ interaction with other parties through, and participation in, the MSU Community and the related Digital Assets is entirely at Users’ discretion and should be based on independent research, self-due diligence, and understanding of the specific risks involved.

Please be aware that User’s participation in any activities in relation to the Digital Assets which may include acquiring, holding, or transferring the Digital Assets, or taking part in any transaction in connection with the Digital Assets is inherently risky, which risks may include the potential loss of User’s Digital Assets. Therefore, Users are strongly encouraged to carefully assess the following risks applicable to the activities involved in their participation in, and/or interaction with other parties through the MSU Community and the Digital Assets.

1. Value Fluctuation Risk

1.1. The Digital Assets minted or used in the MSU Community may permanently lose their value partially or entirely. There is no assurance of future value, and Users should not expect any financial return or economic representation. Market conditions and other factors outside the control and/or management of the MSU Community may affect the value and utility of the Digital Assets.

1.2. The fluctuation in value of the Digital Assets, if any, may potentially impact the value of Digital Asset rewards earned by Users and affect how the Digital Assets may be exchanged between each other. Therefore, all Users should acknowledge that use of the MSU Community or the Digital Assets involves inherent risks. Users must carefully consider the potential challenges and uncertainties before engaging in any transactions or activities involving the Digital Assets.

2. Transferability Risk

The Digital Assets may not always be transferable, especially during specific phases of the project, or in the event they lose their utility or value in whole or part. Transferability may be restricted based on technology, smart contract conditions, compliance of laws, AML/CFT policies, sanctions, 3rd party activities or MSU Community limitations, impacting Users’ ability to interact with their Digital Assets in any intended manner.

3. Liquidity Risk

The Digital Assets do not have any resale or speculative value, and are not created with the intent of being sold, traded, exchanged or transferred and might not be liquid in secondary markets. Hence, Users may not be able to exchange their Digital Assets on secondary markets (especially in the event the Digital Assets lose their utility or value in whole or in part). Exchange of the Digital Assets on secondary markets is strongly discouraged, and any liability arising therefrom are the sole and absolute responsibility of Users.

4. Technical Risks

4.1. The MSU Community relies on numerous technologies including blockchain technology, which may be subject to vulnerabilities such as smart contract bugs, network congestion, or other technical failures. Such issues could disrupt the Digital Assets’ issuances, transfers, or other functionalities. Technical discrepancies in smart contracts may potentially affect any intended conversion among Digital Assets.

4.2. The Digital Assets or the related blockchain network could be attacked by hackers or groups or organizations or countries with malicious intent in any number of ways, including service attacks, denial of service attacks, Sybil attacks, spoofing, smurfing malware attacks, or consensus-based attacks, phishing or other novel methods that may or may not be known, and a third party or any person participating in MSU Community could intentionally or unintentionally render the Digital Assets or the related blockchain network vulnerable. Furthermore, other technical risk factors that are unpredictable at the moment (for instance, the development of technology such as quantum computing which could neutralize the consensus mechanism in blockchain) may arise, and as a result, the Digital Assets or the related blockchain network could be deemed inactive and/or obsolete, or temporarily or permanently suspended.

4.3. Blockchain technology is relatively new and untested. In addition to the risks stipulated in this Risk Disclosure, further risks, including unanticipated combinations or variations of the discussed risks or entirely novel risks may materialize.

5. Regulatory and Jurisdictional Risks

5.1. Changes in laws or regulations related to blockchain or the Digital Assets may impact the MSU Community’s operation, the value of the Digital Assets, or Users’ ability to use, trade, or otherwise interact with Digital Assets. Regulatory actions or decisions in certain jurisdictions could also limit the availability of the Digital Assets, or Users’ ability to access and/or interact with the MSU Community. These restrictions could vary significantly from one country or region to another, depending on factors such as the legal classification, understanding, and connotation of the Digital Assets, regulatory frameworks, or compliance requirements.

5.2. Users are responsible for understanding and complying with all legal and regulatory requirements that are applicable in the respective country or region pertaining to the usage of the MSU Community, and the interaction with any of the Digital Assets deployed on it, as well as the activities in the MSU Community. Therefore, each User is responsible for any liability or disadvantage arising out of such User’s use of VPN technologies or any other tools to disguise such User’s real location (including any liability arising out of such User’s breach of any law or regulation as a result thereof). Likewise, each User shall be exclusively liable for any liability or disadvantage arising out of User’s efforts to bypass any restrictions to the MSU Community.

5.3. Due to legal and regulatory requirements including, but not limited to, AML/CFT or sanction-related obligations, the bridge-out or transfer of the Digital Assets used in MapleStory Universe to external blockchain networks, together with the onchain-offchain conversion of such Digital Assets or exchange among the Digital Assets, may be limited or restricted.

5.4. Any obligations under relevant regulations including but not limited to, the applicability of tax or any regulatory reporting obligations in relation to the User’s use of, and interaction with other parties through, the MSU Community and the Digital Assets are to be understood and fulfilled by the Users. Users are advised to consult with legal, tax or regulatory professionals if they are uncertain about the rules and requirements regarding their use of, and interaction with, the MSU Community or the Digital Assets in their jurisdiction.

5.5. The regulatory regime applicable to any activity pertaining to the Digital Assets is subject to changes, modifications and amendments, and is subject to significant uncertainty and varying interpretations. Various legislative and executive bodies in the respective country or region may in the future adopt laws, regulations, policies, guidance, or other actions, in each case pertaining to the usage of the MSU Community, which may severely impact the adoption and utility of any of the Digital Assets. Users are responsible for understanding the applicability and the obligations specified by such laws and regulations, and any liability arising out of Users’ failure to understand or comply with such regulatory obligations are the sole and absolute liability of such Users.

6. Wallet Security Risks

Users are solely responsible for securing their wallets, private keys and the seed phases linked to their wallets. Any unauthorized access, loss of private keys, and loss of access due to hacking, phishing, or mismanagement of wallet credentials could result in the permanent loss of the Digital Assets stored in the wallets, with no recourse available for recovery. For the avoidance of doubt, Users shall be solely and absolutely responsible or liable for any loss resulting from, among other things, the loss of private keys or access to the User’s wallet. Notwithstanding the foregoing, in relation to User’s use of their wallets, Users shall be solely and absolutely responsible or liable for any losses, damages, or claims arising from (i) errors including forgotten passwords, or incorrectly construed smart contracts, wallets or other transactions; (ii) severe failure and/or data loss; (iii) corrupted wallet files; (iv) intellectual property infringement by Users; or (v) unauthorized access or activities by third parties. Therefore, Users are strongly encouraged to learn and apply appropriate security measures to protect their Digital Assets, wallets, and their keys from any unauthorized access from a third party.

7. Standardization Risk

The Digital Assets that may be deployed within the MSU Community will be issued based on specific token standards, including but not limited to ERC-20, ERC-721, and ERC-1155, that may have inherent limitations and/or be subject to changes over time including but not limited to implementation of extended functionalities not contemplated in relevant token standards. These limitations or changes might affect the Digital Assets on the MSU Community and their mutability, existence, and performance. All of these limitations or changes are due to external factors outside the MSU Community, and Users shall be solely responsible for liability related to any limitations or changes in token standards and/or implementation of external functionalities that may potentially affect in any extent, the Digital Assets on the MSU Community.

8. Gas Fee Obligation

A non-refundable network fee or transaction fee (commonly referred to as “Gas Fee”) may be imposed when interacting with the blockchain networks. Gas Fee may fluctuate based on factors including supply, demand, and network capacity and may increase at any time and for any reason. Users are solely responsible for any liability associated with fluctuations or changes to Gas Fees of any kind, which may, among other things, affect the usability of the Digital Assets or the MSU Community. Users are solely responsible for the payment of any Gas Fee.

9. Voluntary Access

9.1. The access to, participation in, and/or interaction with other parties through the MSU Community or the use of or any activity involving the Digital Assets is entirely voluntary and Users are solely responsible for any liability arising from their decision to access, participate in, and/or interact with the MSU Community or to use or interact with the Digital Assets. Users will not be compelled or asked in the MSU Community to indulge in the MSU Community’s activities or recommend or encourage the participation of other Users.

9.2. Users shall be solely responsible and liable for any loss or damages or any consequences arising from Users’ decision to participate in, or access the activities on the MSU Community. Users assume and acknowledge all the risks associated with their access to, and involvement on, the MSU Community.

10. Third Party Risk

10.1. The MSU Community and/or the Digital Assets may be made available to Users through, and may be linked to or include, services or contents provided by third-party organizations or individuals who shall have sole control and responsibility over their services or contents.

10.2. When using the MSU Community, Users’ device may connect to or utilize third party networks, including blockchain networks, and Users may incur fees based on their use of such networks. Users are solely responsible for any and all costs and fees in connection with accessing and using the MSU Community, including without limitation internet service provider fees, telecommunications fees, text messaging fees, excess broadband fees, gas fees, and the costs of any and all devices and equipment used in connection with the MSU Community.

10.3. Use of any third party services or contents is at the risk of the relevant User using such services or contents, and Users are recommended to familiarize themselves with all the policies, procedures, terms, and risks applicable to such third party organizations or individuals. Users shall be solely responsible and liable for their reliance on or use of third party services or content.

11. Incomplete Participation Risk

Users are expected to follow instructions carefully when participating in any or all activities on the MSU Community. Users are solely responsible for ensuring that they have completed all necessary steps and activities required to fully engage with the MSU Community. Failure to comply with instructions may result in the forfeiture of participation rights, with no compensation for lost opportunities, rewards, or other benefits. Users shall be solely responsible and liable for any losses, damages, inconveniences, or any loss of opportunity that may arise from incomplete or interrupted participation.

12. Applicable Restrictions and Banning Actions

12.1. All activities are subject to the existing rules of the MSU Community as defined in the respective Terms of Service and End User License Agreement (“ToS”) and the whitepaper, which include but are not limited to restrictions on banned words, inappropriate terms, and restricted activities. Users who do not comply with or adhere to the ToS, relevant whitepapers or any other associated document may be subject to restriction or ban in participation in the MSU Community. Each User shall be fully liable for any losses, damages, or disadvantages arising as a result of such User being restricted or banned, including, among others, any damages or effects related to the relevant User’s Digital Assets.

12.2. The MSU Community and Digital Assets may undergo significant conceptual, technical, regulatory, commercial and other changes over time without any prior notice to Users.

12.3. Users acknowledge that their access to certain Digital Assets which they own may be revoked and/or the transaction involving Digital Assets which they enter into may be unwound, in each case in exceptional circumstances (e.g., in response to unauthorized access or hacking involving relevant Digital Assets or to comply with applicable laws, regulations and/or court order), to the extent such measures are deemed necessary to maintain orderly operation of the MSU Community.

13. Not a Legal Tender

13.1. The Digital Assets offered on the MSU Community are not intended to be, nor should they be used or interpreted as, a means of payment. The Digital Assets are designed solely for their specified purposes within the gaming community as outlined in the MSU Community and the documents associated to it, including the ToS, privacy and cookies policies, whitepapers, and other explanatory documentation.

13.2. Digital Assets are not legal tender, and they operate without central authority or banks, and are not backed by governmental authorities of any kind. Users shall be solely responsible for any liability arising from their misuse of the Digital Assets as a means of payment. Users are advised to adhere to the ToS governing proper use of the Digital Assets on the MSU Community.

14. No Financial Benefit

14.1. The Digital Assets are intended exclusively for improving Users’ experience and engagement within the MSU Community. This is achieved through the deployment of blockchain technology with the purpose of improving in-game reward experience, i.e. RX.

14.2. Users may not rely on any representations about the future value of the Digital Assets or any potential for financial gain.

15. Non-Financial Asset

15.1. The Digital Assets issued in the MSU Community are intended solely for facilitation of specific gaming activities outlined in the relevant whitepaper and in other relevant communication channels deployed by the MSU Community. They are not designed or intended to be tradeable financial assets. They do not represent any form of currency, security, or investment.

15.2. The Digital Assets should not under any circumstances be considered an investment opportunity, investment contract, financial instrument or security of any type, and Users assume all risks in connection with possible characterization of the Digital Assets. The MSU Community, its website and its contents are for informational purposes only. No information and/or contents made available by and through the MSU Community constitutes or should be considered financial, investment, legal or other professional advice or recommendation. The Digital Assets are not designed or intended as an investment opportunity, investment contract, financial instrument or security of any type and should not be considered a financial investment. Further, no element of the MSU Community is intended to be a solicitation or an offering to buy or sell securities, financial products, or services, in any jurisdiction, nor does it constitute an offer or an invitation to purchase shares, securities or other financial instrument, products or services.

16. Accuracy of Information

16.1. The information provided across the MSU Community and related documentations, including the ToS, whitepapers, and another related document is not intended to be exhaustive, and there is no guarantee of their accuracy, completeness, or usefulness of any information presented. Any reliance placed on such information is therefore at the Users’ own risk.

16.2. The expected roadmap related to the Digital Assets, development, expected conditions and information including performance estimates and forecasts, opinions and other forward-looking statements across MSU Community documentation may be different from actual results and may be subject to updates, revisions, changes and/or independent tests.

16.3. Users may come across contents or materials provided by third parties when interacting with, or using the MSU Community or the Digital Assets. All statements and/or opinions expressed in any such content or materials are solely the opinions and the responsibility of the person or entity providing those materials.

17. Limited Use Cases

The Digital Assets issued have a specific purpose within MSU Community. They do not provide any intrinsic or speculative value beyond their use within the MSU Community.

18. Future Risks and Uncertainty

18.1. In addition to the aforementioned risks, various other risks that are currently not known or documented may arise in the future that may potentially affect the Digital Assets or the blockchain network generally (including the MSU Community and the Digital Assets), and as a result, the functionality of the MSU Community and the activities therein, and/or the Digital Assets may be negatively affected. Users are responsible for carrying out independent research before accessing and engaging with the MSU Community and staying informed on the evolution of blockchain developments and related constrains, failures, or limitations, among other things.

18.2. Users must understand that the risks outlined in this Risk Disclosure are not exhaustive, and that further updates and developments to the MSU Community may result in the risks not currently anticipated.

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