Risk Factors

Before acquiring any Tokens, you should carefully consider various risk factors and conflicts of interest, as well as suitability requirements, restrictions on transfer of the Tokens, inability to exchange the Tokens, and various legal, tax, and other considerations, all of which are discussed elsewhere in this document.

You should consider acquiring the Tokens only if you are willing to undertake the risks involved. You should therefore bear in mind the following risk factors and conflicts of interest before purchasing the Tokens.

Potential risks include:

• Virtual Assets Generally. The characteristics of virtual assets generally differ from those of traditional currencies, commodities, or securities. Virtual assets are market-based: a virtual asset's value is determined by (and fluctuates often, according to) supply and demand factors, and the value that various market participants place on it through their mutual agreement, barter, or transactions. Virtual assets are an evolving, relatively new product and technology. The methods whereby each virtual asset is created, secured, accessed, and used may differ from one another. Different virtual assets may contain similar (or different) features.

• Market risk: Crypto-asset markets are highly volatile. The price and liquidity of the Tokens may fluctuate significantly due to market conditions, user behavior, and other external factors. No assurance is given regarding the market value or tradability of the Token at any time.

• Event revenue risk: The revenue mechanism depends on successful events. Poor ticket sales or event cancellations could reduce available funds for staking rewards.

• Regulatory risk: The regulatory framework for crypto-assets is evolving across jurisdictions, including within the European Union. Future legal developments may affect the classification, sale, transfer, or use of the Token. This could include restrictions on trading, the imposition of new tax obligations, or additional compliance and licensing requirements for token issuers and users. There is no guarantee that the current legal characterization of the Token as a utility token will remain valid in all jurisdictions. Participants are responsible for complying with applicable laws in their country of residence.

• Tax Compliance risk: Participants are solely responsible for understanding and complying with any tax obligations that may arise from the acquisition, use, or disposal of the Tokens. The project does not provide tax advice and disclaims any liability for participants’ individual tax treatment under applicable laws.

• Technical risk: The Lukas Token ecosystem relies on blockchain technology, smart contracts, and other decentralized infrastructure that may be subject to technical vulnerabilities, bugs, exploits, or operational failures. While audits and security reviews will be conducted, there is no guarantee of error-free operation. Users engage with the system at their own risk.

• Adoption risk: The long-term viability of the Token ecosystem is dependent on user engagement with its core features, including the games, merchandise offerings, and event participation. If the platform fails to attract or retain a sufficient user base, the demand for the Tokens may be limited, which could adversely affect their utility, circulation, and perceived value. The success of the ecosystem is not guaranteed and is subject to factors beyond the project’s control, including market conditions, user preferences, and technological challenges.

Investors and participants should conduct their own due diligence before purchasing or staking tokens. The whitepaper is for informational purposes only and does not constitute financial advice.