TERMS AND CONDITIONS V8

TERMS AND CONDITIONS

VERSION 8.0

GROOVY COMPANY, INC. DBA OTCM PROTOCOL

Wyoming Corporation | CIK: 1499275 | OTC: GROO

12 Daniel Rd East, Fairfield, NJ 07004

SEC Category 1 Model B Compliant | Release No. 33-11412 (March 17, 2026)

Issuer-Sponsored Tokenized Securities pursuant to SEC–CFTC Joint Interpretive Release No. 33-11412 (March 17, 2026) and SEC Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets Joint Statement dated January 28, 2026.

By accessing or using the Groovy Company, Inc. dba OTCM Protocol platform (“Platform”), websites located at https://otcm.io, https://cedex.otcm.io, https://otcm.network, or https://otcm.info, or any related services (collectively, the “Services”), you agree to be bound by:

Document	Status
These Terms and Conditions	Required acceptance
Privacy Policy	Required acceptance
Risk Disclosure	Required acceptance
Cookie Notice	Required acceptance
All applicable laws and regulations	Required compliance

1. Company Information

Field	Information
Legal Entity	Groovy Company, Inc. dba OTCM Protocol
Entity Jurisdiction	Wyoming Corporation
Regulatory Framework	SEC Category 1 Model B — Release No. 33-11412 (March 17, 2026)
SEC EDGAR CIK	1499275
OTC Ticker	GROO
Headquarters	12 Daniel Rd East, Fairfield, NJ 07004
Contact	invest@otcm.io \| frank@otcm.io

2. Description of Services

2.1 Platform Overview

Groovy Company, Inc. dba OTCM Protocol operates a SEC Category 1 Model B compliant blockchain-based platform that enables the tokenization of equity securities as ST22 Digital Securities on the Solana blockchain under Release No. 33-11412.

Service	Description	Regulatory Status
Securities Tokenization	Tokenization of issuer equity through Common Class B Share structures	Category 1 Model B compliant
1:1 Backed Tokens	Creation of tokens backed by shares held at Empire Stock Transfer (SEC-registered transfer agent and qualified custodian)	Category 1 Model B compliant
CEDEX Trading	Trading of ST22 Digital Securities through compliant bonding curves and the Global Unified CEDEX Liquidity Pool	Category 1 Model B compliant
Market Infrastructure	Providing permanent market infrastructure for previously illiquid securities	Category 1 Model B compliant
OTCM Utility Token	Platform governance participation, fee discounts, and staking (separate from ST22 Digital Securities)	Utility token (counsel analysis pending)

2.2 Critical Token Classification

Two Different Token Types: OTCM Protocol operates two fundamentally different token types. You must understand which you are using.

Token Type	Classification	Backing	Regulatory Status
ST22 Digital Securities	SECURITIES	1:1 Common Class B Shares (third-party issuers) or Series “S” Preferred Shares (OTCMS)	SEC Category 1 Model B — Release No. 33-11412
OTCM Utility Token	Utility Token	None	Utility token framework (counsel analysis pending)

CRITICAL: ST22 Digital Securities ARE SECURITIES under federal securities laws. Purchasing ST22 tokens constitutes purchasing securities. Different rules, restrictions, and investor protections apply to each token type.

2.3 Not Investment Advice

You should conduct your own due diligence, seek advice from qualified financial, legal, and tax advisors, make informed investment decisions independently, and carefully review all risk disclosures before investing.

3. Eligibility and Registration

3.1 General Eligibility Requirements

• Be at least 18 years of age (21 in some jurisdictions)

• Have the legal capacity to enter into binding contracts

• Not be prohibited from using the Services under applicable laws

• Not be located in a prohibited or restricted jurisdiction

• Complete all required KYC and AML verification procedures

3.2 Additional Requirements for ST22 Digital Securities

ST22 Digital Securities are offered under Reg D to U.S. accredited investors and under Reg S to non-U.S. investors.

Requirement	Description	Regulatory Basis
Accredited Investor	Qualify as an accredited investor under SEC Rule 501	Reg D
Verification	Complete accredited investor verification through Empire Stock Transfer	Reg D
Documentation	Provide required financial documentation	SEC regulations
OFAC Clearance	Pass OFAC sanctions screening	U.S. Treasury requirements

Accredited Investor Qualification (SEC Rule 501)

Qualification	Threshold
Individual Income	$200,000+ annually for last 2 years (expecting same this year)
Joint Income	$300,000+ annually with spouse for last 2 years
Net Worth	$1,000,000+ (excluding primary residence)
Entity	$5,000,000+ in assets, or all equity owners are accredited
Professional Certification	Series 7, 65, or 82 license holders
Institutional	Banks, broker-dealers, insurance companies, registered investment advisers

3.3 Account Registration

You must provide accurate, current, and complete information during registration and maintain the accuracy of such information. You are responsible for safeguarding your account credentials and wallet private keys, all activities that occur under your account, immediately notifying us of any unauthorized use, maintaining accurate account information, and providing updated compliance documentation when requested.

4. Tokenization Process (ST22 Digital Securities)

4.1 Company Tokenization — Category 1 Model B Requirements

Requirement	Description	Category 1 Alignment
Board Resolution	Board of Directors authorization for Common Class B creation	Direct issuer authorization
Certificate of Designation	Filed with issuer’s state of incorporation	Official shareholder register
Custody Deposit	Deposit shares with Empire Stock Transfer	Regulated custody (qualified custodian)
Due Diligence	Complete OTCM Protocol due diligence review	Issuer verification
Minting Fee	Pay $1,000–$25,000 minting fee (tiered by market cap)	Service fee
Compliance Agreement	Execute required compliance documentation	Category 1 compliance

4.2 ST22 Token Characteristics

Characteristic	Description	Category 1 Requirement
Classification	ARE SECURITIES under federal securities laws	Category 1 acknowledgment
Backing	Backed 1:1 by Common Class B Shares at Empire Stock Transfer	True equity backing
Supply Limit	Cannot exceed the number of shares held in custody	Verified backing
Transaction Fee	Subject to 5% total transaction fee (4.56% OTCM Protocol + 0.44% Global Pool)	Fee structure
Security Controls	Subject to 42 Transfer Hook security controls	Category 1 investor protection
Shareholder Rights	Issuer-designated per Certificate of Designation (voting, dividends, liquidation)	True equity ownership
Conversion Rights	Convertible to common stock per Certificate of Designation	Protective conversion

4.3 Transfer Hook Security Controls

All ST22 transactions are subject to 42 mathematically-enforced security controls including:

Control Category	Examples	Purpose
Custody Verification	1:1 backing check on every transaction	True equity backing
Investor Verification	KYC/AML/accreditation status via Empire Stock Transfer	Investor protection
Wallet Limits	4.99% maximum per wallet	Concentration prevention
Circuit Breakers	>10% price move in 5 minutes triggers 15-minute trading halt	Volatility protection
Holding Period	Rule 144 (6-month) and Reg S (12-month) enforcement via Control 24	Securities law compliance
OFAC Screening	Real-time three-layer sanctions check on both counterparties	Sanctions compliance

Non-Bypassable: These controls execute inside the Solana runtime on every transaction and cannot be disabled or circumvented by any party, including OTCM Protocol.

4.4 Issuer Restrictions

• Common Class B share deposits are PERMANENT and IRREVOCABLE

• Issuers must comply with token vesting schedules

• Issuers must maintain compliance with Certificate of Designation

• Transfer Hook controls cannot be disabled or circumvented

5. Trading and Fees

5.1 Fee Structure

All ST22 Digital Securities transactions are subject to the following fees:

Fee Type	Rate	Recipient	Purpose
Total Transaction Fee	5.00%	Split below	All CEDEX trades and primary offerings
OTCM Protocol Revenue	4.56%	OTCM Protocol	Operations, compliance, development, staking rewards
Global Pool Lock	0.44%	Global Unified CEDEX Liquidity Pool	Permanently locked — not withdrawable by any party

Issuers receive 95% of primary offering gross subscription proceeds in USD. Issuers receive NO share of secondary CEDEX trading fees.

5.2 Trading Mechanics

Mechanism	Description
Bonding Curve	Initial trading occurs through linear bonding curve for price discovery
Graduation	Tokens graduate to CPMM trading upon reaching $250,000 market cap, 127,000+ holders, or 72 hours elapsed
Finality	All trades are final and irreversible once confirmed on blockchain
24/7 Trading	Trading available 24/7/365 subject to blockchain availability
Transfer Hooks	All trades subject to 42 security control verification
Circuit Breakers	Trading halts for 15 minutes when price moves >10% in 5 minutes

5.3 CEDEX Trading Venue

ST22 Digital Securities trade exclusively on CEDEX (Compliant Exchange for Digital Securities) at cedex.otcm.io.

Feature	Description	Why It Matters
Full Transfer Hook Support	All 42 security controls active	Category 1 compliance maintained
MEV Protection	Jito bundle integration	Frontrunning and sandwich attack prevention
Circuit Breakers	Automatic trading halts	Volatility protection
Permanent Liquidity	Global Unified CEDEX Liquidity Pool — LP tokens burned	Withdrawal mathematically impossible

Why Not External DEXs: Major DEXs (Raydium, Orca, Meteora) disable Transfer Hooks, eliminating all 42 security controls and removing Category 1 investor protections. ST22 tokens trade only on CEDEX.

6. Regulatory Compliance

6.1 SEC Category 1 Model B Compliance

You acknowledge that ST22 Digital Securities ARE SECURITIES under federal securities laws, the Platform operates under SEC Category 1 Model B pursuant to Release No. 33-11412 (March 17, 2026), you are responsible for complying with all applicable securities regulations, certain tokens may be restricted based on your jurisdiction, and ST22 Digital Securities are available only to verified accredited investors (U.S.) or non-U.S. persons under Reg S.

Category 1 Requirement	Implementation	Status
Direct Issuer Authorization	Board resolution required	Satisfied
Official Shareholder Register	Certificate of Designation + Empire master file	Satisfied
Regulated Custody	Empire Stock Transfer (SEC-registered, qualified custodian)	Satisfied
True Equity Backing	1:1 Common B shares with issuer-designated rights	Satisfied
Clear Ownership Chain	CUSIP assignment	Satisfied
Investor Protection	42 Transfer Hook controls	Satisfied

6.2 KYC/AML Requirements

• Complete KYC verification procedures through Empire Stock Transfer

• Provide required identity documentation

• Verify accredited investor status (for ST22 Digital Securities)

• Pass OFAC sanctions screening

6.3 Restricted Jurisdictions

The Services are NOT available in OFAC-sanctioned countries, jurisdictions where cryptocurrency trading is prohibited, jurisdictions where tokenized securities are prohibited, or certain U.S. states with specific restrictions.

6.4 OTCM Utility Token Regulatory Status

The OTCM Utility Token is a separate utility token (NOT a security) with no asset backing. Its purpose is platform governance participation, fee discounts, and staking. Classification under the five-category taxonomy (Digital Commodity or Digital Tool) is subject to counsel analysis. Different regulatory frameworks apply from those governing ST22 Digital Securities.

7. Risk Disclosures (Summary)

7.1 ST22 Digital Securities Risks

Risk	Description
Total Loss	Complete loss of invested capital is possible
Volatility	Extreme price volatility may occur
Liquidity	Limited or no liquidity for certain tokens
Technology	Technology failures or exploits
Regulatory	Regulatory changes affecting token value
Issuer Failure	Company bankruptcy or fraud
Circuit Breakers	Trading halts during volatility — do NOT guarantee price recovery

7.2 OTCM Utility Token Risks

Risk	Description
Total Loss	Complete loss is possible
No Backing	No asset backing whatsoever
Extreme Volatility	Highly speculative
Liquidity Risk	May be unable to sell

No Guarantees: We make NO guarantees regarding price appreciation, platform operation, liquidity, regulatory status, issuer success, or loss prevention. Category 1 controls do NOT prevent market losses.

7.4 Full Risk Disclosure

You must read and acknowledge the complete Risk Disclosure document before using the Services. The risks described in this Section 7 are summaries only.

8. Intellectual Property

All Platform content, features, and functionality are owned by Groovy Company, Inc. dba OTCM Protocol and are protected by copyright, trademark, patent, trade secret, and other intellectual property laws. By submitting content to the Platform, you grant us a worldwide, non-exclusive, royalty-free license to use, reproduce, and distribute such content in connection with the Services.

9. Prohibited Activities

You may NOT:

• Provide false identity or accreditation information

• Attempt to manipulate token prices or markets

• Attempt to access systems without authorization

• Evade OFAC sanctions or other restrictions

• Deploy bots designed to manipulate or exploit the platform

• Use Services for any illegal purpose

• Attempt to bypass Transfer Hook controls

• Purchase on behalf of non-accredited investors

• Spread false information about tokens or issuers

• Evade securities law requirements

10. Disclaimer of Warranties

THE SERVICES ARE PROVIDED “AS IS” AND “AS AVAILABLE” WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. GROOVY COMPANY, INC. DBA OTCM PROTOCOL DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR SECURE, OR THAT ANY DEFECTS WILL BE CORRECTED.

11. Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, GROOVY COMPANY, INC. DBA OTCM PROTOCOL AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, DATA, USE, GOODWILL, OR OTHER INTANGIBLE LOSSES, RESULTING FROM YOUR ACCESS TO OR USE OF (OR INABILITY TO ACCESS OR USE) THE SERVICES, ANY CONDUCT OR CONTENT OF ANY THIRD PARTY ON THE SERVICES, OR UNAUTHORIZED ACCESS, USE, OR ALTERATION OF YOUR TRANSMISSIONS OR CONTENT.

12. Indemnification

You agree to indemnify, defend, and hold harmless Groovy Company, Inc. dba OTCM Protocol, its officers, directors, employees, and agents from any claims, damages, losses, liabilities, and expenses (including reasonable attorneys’ fees) arising from your violation of these Terms, your violation of any applicable law, false information you provided, your trading activities and investment decisions, claims by third parties related to your use, or unauthorized use of your account due to your negligence.

13. Dispute Resolution

13.1 Arbitration Agreement

Any disputes arising from these Terms or your use of the Services shall be resolved through binding arbitration in accordance with the American Arbitration Association rules.

Arbitration Term	Description
Location	Essex County, New Jersey
Rules	AAA Commercial Arbitration Rules
Arbitrator	Single arbitrator
Costs	Each party bears own costs; filing fees split

13.2 Class Action Waiver

You waive any right to participate in class action lawsuits, class-wide arbitration, or representative or consolidated actions.

13.3 Governing Law

These Terms are governed by the laws of the State of New Jersey, United States, without regard to conflict of law principles.

14. Modifications

We reserve the right to modify these Terms at any time. For material changes, we will provide email notification to registered users. All changes will be announced on the Platform with a clearly stated effective date. Continued use of the Services after changes constitutes acceptance of modified Terms.

15. Termination

15.1 User Termination

You may terminate your account at any time, subject to completing any open transactions, satisfying any outstanding obligations, and understanding that tokens remain yours on blockchain.

15.2 Platform Termination

We may terminate or suspend your access immediately, without prior notice, for violation of these Terms, as required by law or regulation, suspected fraudulent activity, OFAC or other sanctions match, security concerns, or loss of accredited investor status.

15.3 Effect of Termination

Upon termination, your access to the Platform will cease, you remain liable for all transactions prior to termination, tokens you own remain on the blockchain, certain provisions survive termination (see Section 18), and underlying shares remain at Empire Stock Transfer.

16. Privacy and Data Protection

Your use of the Services is subject to our Privacy Policy, which is incorporated by reference. You acknowledge that Category 1 compliance requires collection and retention of KYC data (5 years), accreditation data (5 years), transaction records (7 years), and custody records (7 years). While we implement reasonable security measures, no system is completely secure.

17. Third-Party Services

17.1 Empire Stock Transfer

Custody services are provided by Empire Stock Transfer, an SEC-registered transfer agent and qualified custodian under Exchange Act Section 17A. Empire holds Common Class B Shares (third-party issuers) and Series “S” Preferred Shares (OTCMS) in irrevocable custody. Empire is also the sole investor onboarding authority for all ST22 issuers. Empire services are subject to separate terms and conditions.

17.2 Blockchain Network

The Platform operates on Solana Mainnet-Beta. Network operations are outside our control and subject to network rules and conditions. Network outages may affect trading.

17.3 Compliance Providers

KYC, AML, and accreditation verification services are provided by Empire Stock Transfer with Chainalysis KYT and TRM Labs integration, subject to their own terms and privacy policies.

18. Miscellaneous

• Entire Agreement: These Terms, together with the Privacy Policy, Risk Disclosure, and other incorporated documents, constitute the entire agreement between you and Groovy Company, Inc. dba OTCM Protocol regarding the Services.

• Severability: If any provision is found unenforceable, the remaining provisions shall continue in full effect.

• Assignment: You may NOT assign your rights under these Terms without our prior written consent. We may assign our rights without restriction.

• Waiver: No waiver of any term shall be deemed a further or continuing waiver of such term or any other term.

• Survival: The following sections survive termination: 7 (Risk Disclosures), 10 (Disclaimer), 11 (Limitation of Liability), 12 (Indemnification), 13 (Dispute Resolution), and this Section 18.

19. Special Provisions for Tokenized Companies (Issuers)

19.1 Permanent Commitment

• Common Class B share deposits are PERMANENT and IRREVOCABLE

• Issuers cannot redeem tokens for deposited shares

• Issuers must maintain Category 1 Model B compliance

• Board resolution cannot be rescinded after tokenization

19.2 Ongoing Obligations

• Maintain Category 1 Model B compliance

• Provide requested documentation to OTCM Protocol and Empire Stock Transfer

• Notify OTCM Protocol of material changes

• Comply with Certificate of Designation

20. Contact Information

Contact	Information
General / Investors	invest@otcm.io
Chief Technology Officer	frank@otcm.io
Compliance	compliance@otcm.io
Privacy	privacy@otcm.io
Issuer Relations	frank@otcm.io
Mailing Address	12 Daniel Rd East, Fairfield, NJ 07004
Phone	1-404-734-3277

Final Acknowledgment

By clicking “I Accept” or using the Platform, you confirm you have read, understood, and agree to be bound by these Terms and Conditions, the Privacy Policy, the Risk Disclosure, and all applicable laws and regulations.

Document Information

Field	Value
Document Version	8.0
Effective Date	March 2026
Entity Jurisdiction	Wyoming Corporation
Governing Law	New Jersey State Law and Federal Securities Law
Regulatory Framework	SEC Category 1 Model B — Release No. 33-11412 (March 17, 2026)

ST22 Digital Securities are Category 5 Digital Securities under SEC–CFTC Release No. 33-11412 (March 17, 2026). The OTCM Utility Token is a utility token with no asset backing. This document does not constitute an offer to sell or solicitation of an offer to buy any securities. Groovy Company, Inc. dba OTCM Protocol is a Wyoming Corporation (CIK: 1499275).