Currently completing registration with the SEC as a Registered Investment Advisor (RIA), with a fiduciary and legal responsibility to act in our clients' best interest.

PALUS FINANCE, INC. — TERMS OF SERVICE

Effective Date: May 1, 2026
Last Updated: May 1, 2026

1. INTRODUCTION AND ACCEPTANCE

These Terms of Service ("Terms") constitute a legally binding agreement between you ("User," "you," or "your") and Palus Finance, Inc., a Delaware corporation ("Palus," "Company," "we," "us," or "our"). By accessing or using the Palus platform, including any associated websites, mobile applications, APIs, or related services (collectively, the "Platform"), you acknowledge that you have read, understood, and agree to be bound by these Terms.

If you do not agree to these Terms, do not access or use the Platform.

By using the Platform, you also acknowledge and agree that:

  • The Platform is currently in a closed beta phase and is provided on an "as-is" and "as-available" basis;
  • You have been individually selected and invited to participate in this beta;
  • The Platform, its features, and these Terms may change materially at any time; and
  • Your participation may be terminated by Palus at its sole discretion, at any time, for any reason or no reason, with or without notice.

2. ELIGIBILITY

To use the Platform, you represent and warrant that:

(a) You are at least eighteen (18) years of age;

(b) You have the legal capacity and authority to enter into these Terms;

(c) You are either (i) acting on behalf of a business entity and have the authority to bind that entity to these Terms, in which case all references to "you" in these Terms shall include that entity (a "Business User"), or (ii) acting in your individual capacity for your own personal account (an "Individual User");

(d) You are located in, and accessing the Platform from, a jurisdiction in which your use of the Platform is permitted by applicable law;

(e) You are not subject to any sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of State, or any other applicable governmental authority;

(f) Your use of the Platform will comply with all applicable local, state, national, and international laws and regulations; and

(g) You qualify (in the case of a Business User, the entity on whose behalf you are acting qualifies; in the case of an Individual User, you personally qualify) as an "accredited investor" as defined under Rule 501(a) of Regulation D promulgated under the U.S. Securities Act of 1933, as amended;

(h) The funds contributed through the Platform are (i) in the case of a Business User, corporate treasury funds of the entity on whose behalf you are acting, or (ii) in the case of an Individual User, your personal funds, and in either case are not borrowed for the purpose of being contributed to the Platform; and

(i) You have been invited to participate in the closed beta by Palus or its authorized representatives.

3. ACCOUNT REGISTRATION AND VERIFICATION

3.1 Account Creation

You must create an account to access the Platform. You agree to provide accurate, current, and complete information during registration and to keep your account information up to date.

3.2 Identity Verification

Palus and its third-party partners may require you to complete Know Your Customer ("KYC") and/or Know Your Business ("KYB") verification procedures as a condition of using the Platform or certain features thereof. You agree to provide all information and documentation reasonably requested in connection with such procedures. Palus reserves the right to suspend or terminate your account if verification cannot be completed to our satisfaction.

3.3 Account Security

You are solely responsible for maintaining the confidentiality of your account credentials and for all activities that occur under your account. You agree to notify Palus immediately of any unauthorized use of your account. Palus shall not be liable for any loss or damage arising from your failure to secure your account.

4. DESCRIPTION OF SERVICES

4.1 Platform Overview

The Platform is designed for use by business entities and accredited individuals seeking to earn yield on idle funds. The Platform enables Users to contribute funds, which Palus uses to acquire shares of Regan Floating Rate MBS ETF ("MBSF" or the "Fund"), a publicly traded exchange-traded fund that invests primarily in floating-rate agency mortgage-backed securities. The shares acquired with your contribution are held with an SEC-registered custodian, segregated from Palus's business assets and accounted for independently from the assets of other Users. Palus directs the investment and management of these assets on your behalf, and the Platform displays a redemption price reflecting the value at which you may redeem your beneficial interest, as further described below.

4.2 Nature of the Platform and Contributions

You expressly understand and agree that:

(a) Use of Contributed Funds. When you contribute funds through the Platform, Palus uses those funds to acquire shares of MBSF on your behalf. The shares and any cash acquired with or attributable to your contribution (collectively, the "Customer Assets") are held in custody at Alpaca Securities LLC ("Alpaca"), an SEC-registered broker-dealer, and are segregated from Palus's business assets;

(b) Independent Accounting. Each User's Customer Assets are accounted for independently from the Customer Assets of other Users on a subledger maintained by Palus (the "Subledger"), which records each User's beneficial interest in the Customer Assets attributable to such User's contribution. The Subledger is maintained in Palus's internal database, with a corresponding record also recorded on a blockchain as an additional layer of integrity and redundancy. The Subledger is reconciled to the custodial records of Alpaca on a daily basis;

(c) Not General Assets of Palus. The Customer Assets are not held as general assets of Palus and, to the maximum extent permitted by applicable law, are not subject to the claims of Palus's general creditors. In the event of Palus's insolvency, cessation of operations, or pivot, you are entitled to your pro rata portion of the Customer Assets attributable to your contribution, as further described in Section 4.7;

(d) Not Bank Deposits. Funds contributed through the Platform are not bank deposits. Palus is not a bank, credit union, savings institution, or any other type of depository institution. Your funds are not insured by the Federal Deposit Insurance Corporation (FDIC). Customer Assets held with Alpaca may be eligible for protection by the Securities Investor Protection Corporation (SIPC) and Alpaca's Excess SIPC Protection policy, subject to those policies' coverage limits and terms;

(e) Not an Investment Company. Palus is not an investment adviser, broker-dealer, exchange, or investment fund. The Platform is a technology service that facilitates the contribution, investment, custody, and accounting of funds in MBSF;

(f) Variable Redemption Price. The redemption price displayed on the Platform represents the value at which you may redeem your beneficial interest in the Customer Assets, subject to the procedures described in Section 4.5. The redemption price is variable, may fluctuate, and is not guaranteed to increase at any particular rate or at all;

(g) MBSF Performance Risk. The performance of your beneficial interest is dependent on the performance of MBSF and is subject to the risks described in Section 6; and

(h) No Government Endorsement. No governmental authority has reviewed, approved, or endorsed the Platform.

4.3 Custody of Funds

(a) Custodian and Account Structure. Customer Assets are held with Alpaca, a registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), in one or more brokerage accounts maintained by Palus (each, a "Custody Account"). Although the Custody Account is held in the name of Palus, the Customer Assets in the Custody Account are at all times held by Palus solely on behalf of and for the benefit of Users; are not commingled with Palus's operating funds or other business assets; and are not used to fund Palus's business operations. Each User's beneficial interest in the Customer Assets is recorded on the Subledger described in Section 4.2(b). Customer Assets held with Alpaca may be eligible for SIPC protection, subject to SIPC's coverage limits and terms;

(b) Payment Intermediary. In the course of processing contributions and withdrawals, funds may be temporarily held by Modern Treasury, our payment operations provider, as an intermediary. Funds held with Modern Treasury are held on a transitory basis and are not intended for long-term custody; and

(c) Discretionary Authority. Although Palus does not directly custody Customer Assets, Palus maintains discretionary authority over the investment and management of Customer Assets, including the timing and execution of MBSF purchases and sales, subject to the procedures described in Section 4.5.

4.4 Investment Strategy

Palus uses contributed funds to acquire shares of MBSF. You acknowledge and agree that:

(a) Palus has sole discretion over the timing, amount, and execution of MBSF purchases and sales, subject to the netting, NAV protection, and redemption price procedures described in Section 4.5;

(b) The value of MBSF shares may fluctuate, and the redemption price of your beneficial interest depends in part on the performance of the Fund;

(c) MBSF invests in floating-rate agency mortgage-backed securities, which carry their own risks including but not limited to interest rate risk, prepayment risk, credit risk, and liquidity risk; and

(d) Palus may change its investment strategy at any time, with or without notice, including by directing the acquisition of instruments other than MBSF, provided that Palus continues to honor its obligations under these Terms.

4.5 Netting, Order Execution, NAV Protection, and Redemption Price

To manage the efficient purchase and sale of Fund shares and to protect Users from adverse pricing relative to the Fund's net asset value ("NAV"), Palus employs the following procedures:

(a) Daily Netting. Contributions received and withdrawal requests submitted on a given business day are netted against each other. Only the net amount, if any, results in a purchase or sale of MBSF shares. For example, if total contributions on a given day exceed total withdrawal requests, Palus will purchase only the net difference in MBSF shares, and vice versa;

(b) NAV Protection. Palus reserves the right to delay the purchase or sale of MBSF shares for up to three (3) business days ("T+3") in order to avoid executing transactions at prices that are materially unfavorable relative to the Fund's NAV. Specifically, Palus may delay purchases when MBSF shares are trading at a premium to NAV, and may delay sales when MBSF shares are trading at a discount to NAV;

(c) Execution Deadline. If Palus has not been able to execute a purchase or sale at a price it deems acceptable within the T+3 period, Palus will execute the transaction at the then-available market price and will absorb any resulting losses attributable to unfavorable pricing relative to NAV;

(d) Withdrawal Timing. As a result of the netting and NAV protection procedures described above, withdrawals may take up to three (3) business days to process. In extraordinary circumstances, including but not limited to market disruptions, Fund trading halts, or extreme NAV dislocations, processing times may be extended, and Palus will notify affected Users as promptly as practicable;

(e) Redemption Price. The price displayed on the Platform represents the redemption price at which Users may redeem their beneficial interest in the Customer Assets. The redemption price is determined by Palus and reflects the value of underlying MBSF holdings, accrued yield, and any application of the Buffer Facility described in Section 4.5(f). The redemption price you receive upon withdrawal is the redemption price applicable as of the time your withdrawal is processed, subject to the timing provisions of this Section 4.5; and

(f) Buffer Facility. Palus may, but is not obligated to, maintain a buffer lending facility (the "Buffer Facility") to absorb small daily fluctuations in the NAV of MBSF and to support a steadily increasing redemption price displayed to Users. The Buffer Facility is funded at Palus's sole discretion and does not constitute a guarantee of any particular redemption price, yield, or rate of return. Palus reserves the right to establish, modify, suspend, or discontinue the Buffer Facility at any time, with or without notice. In periods of significant market stress, extraordinary NAV dislocation, or where the Buffer Facility is unavailable or insufficient, the redemption price may decline, and Users may receive less upon withdrawal than they contributed.

4.6 Yield

(a) Yield Accrual. Yield begins accruing on your contributed funds upon receipt by Palus and is reflected in the redemption price displayed on the Platform, regardless of whether Palus has yet acquired MBSF shares with such funds;

(b) Variable Rate. The yield reflected in the redemption price is variable and reflects the performance of MBSF, less applicable fees, smoothed (where applicable) through application of the Buffer Facility described in Section 4.5(f). The targeted annualized yield rate is between the Secured Overnight Financing Rate ("SOFR") and SOFR plus three percent (SOFR + 3.00%);

(c) Yield Reflection. Yield is reflected in the redemption price on a continuous basis. The applicable redemption price is displayed on the Platform; and

(d) No Guarantee. The yield rate is not fixed and may change at any time without notice. Palus does not guarantee any minimum yield, and there may be periods in which the effective yield is lower than SOFR or in which the redemption price declines.

4.7 Continuity of Operations and Pro Rata Disbursement

In the event that Palus ceases operations, pivots its business, becomes insolvent, or otherwise winds down the Platform:

(a) Pro Rata Entitlement. You are entitled to your pro rata portion of the Customer Assets attributable to your contribution, calculated as of the time of disbursement;

(b) Cash Disbursement. Palus, or its successor, will liquidate the Customer Assets and distribute the cash proceeds, less any applicable fees and expenses, to Users in proportion to their respective beneficial interests; and

(c) Third-Party Continuity Contingency. As a continuity-of-business contingency, Alpaca or another qualified third party may step in to administer the liquidation and disbursement of Customer Assets and proceeds to Users, in accordance with applicable U.S. Securities and Exchange Commission ("SEC") regulations and the terms of any applicable custody or successor agreement. To facilitate such administration, Palus will make the Subledger and related records available to Alpaca or such other third party. You acknowledge and consent to such third-party administration of disbursement in such circumstances.

5. CONTRIBUTIONS AND WITHDRAWALS

5.1 Contributions

You may contribute funds through the Platform using the methods made available by Palus from time to time. By contributing funds, you authorize Palus to use those funds to acquire MBSF shares on your behalf, to be held in custody on the terms set forth in these Terms.

5.2 Withdrawals

You may request a withdrawal of some or all of the value of your beneficial interest at any time through the Platform. Withdrawals are processed at the redemption price applicable at the time of processing, subject to the netting and NAV protection procedures described in Section 4.5, and may take up to three (3) business days to process under normal conditions. Palus will return cash equal to the redemption value of the portion of your beneficial interest withdrawn, minus any applicable fees.

5.3 Withdrawal Limits and Restrictions

Palus reserves the right to impose daily or periodic withdrawal limits, and to delay or restrict withdrawals in extraordinary circumstances, including but not limited to: (a) suspected fraud or unauthorized activity; (b) compliance with legal or regulatory requirements; (c) market disruptions affecting the Fund; or (d) operational or technical issues affecting the Platform. Palus will notify affected Users as promptly as practicable in such circumstances.

6. RISKS AND DISCLAIMERS

6.1 Beta Platform Risks

The Platform is in a closed beta phase. You acknowledge and accept the following:

(a) The Platform may contain bugs, errors, defects, or vulnerabilities;

(b) The Platform may experience downtime, interruptions, or degraded performance;

(c) Features may be added, modified, or removed at any time without notice;

(d) Data loss may occur;

(e) The Platform may be discontinued entirely at any time; and

(f) The closed beta is a testing phase, and no assurances are made regarding the future availability of the Platform.

6.2 Investment and Market Risks

You acknowledge that the investment strategy described in Section 4.4 involves risks inherent to investing in MBSF and its underlying assets. Because your beneficial interest reflects an indirect investment in MBSF, you bear the market risk of the Fund directly. You are strongly encouraged to review MBSF's prospectus and any related Fund disclosures, which describe the risks associated with the Fund in detail, including but not limited to risks related to interest rates, prepayment, liquidity, credit, and regulatory changes. The Fund's prospectus is publicly available and can be obtained from the Fund's sponsor or the SEC's EDGAR database. Palus does not guarantee the accuracy or completeness of any third-party disclosures, and the risks described therein may not be exhaustive.

6.3 Buffer Facility Risk

The Buffer Facility described in Section 4.5(f) is discretionary and may be modified, suspended, or discontinued at any time. The Buffer Facility may be insufficient to fully smooth fluctuations in the redemption price during periods of market stress or extraordinary NAV dislocation. You should not rely on the Buffer Facility to insulate you from declines in the redemption price.

6.4 Custodial and Operational Risk

Although Customer Assets are held with an SEC-registered custodian and segregated from Palus's business assets, custodial, operational, or administrative failures—whether at Palus, Alpaca, Modern Treasury, or other service providers—may delay or impair your ability to withdraw funds. SIPC protection is subject to limits and terms and does not protect against market losses.

6.5 No Advice

Nothing on the Platform or in any communication from Palus constitutes financial, investment, legal, tax, or other professional advice. You should consult your own advisers before making any decisions related to the Platform.

6.6 Tax Responsibility

You are solely responsible for determining and fulfilling your tax obligations arising from your use of the Platform, including any yield received or appreciation in the value of your beneficial interest.

7. PROHIBITED CONDUCT

You agree not to:

(a) Use the Platform for any unlawful purpose or in violation of any applicable law or regulation;

(b) Use the Platform to engage in money laundering, terrorist financing, fraud, or other financial crimes;

(c) Provide false, misleading, or inaccurate information to Palus or its verification partners;

(d) Attempt to circumvent, disable, or interfere with the Platform's security features;

(e) Access or attempt to access another User's account;

(f) Use automated means (bots, scrapers, etc.) to access or interact with the Platform without Palus's express written consent;

(g) Reverse engineer, decompile, disassemble, or otherwise attempt to derive the source code of the Platform;

(h) Use the Platform in any manner that could damage, disable, overburden, or impair the Platform or interfere with any other party's use of the Platform; or

(i) Transfer, assign, or otherwise convey your account or access rights to any third party without Palus's prior written consent.

8. INTELLECTUAL PROPERTY

All content, features, functionality, software, code, designs, text, graphics, logos, and other materials on the Platform are owned by Palus or its licensors and are protected by applicable intellectual property laws. You are granted a limited, non-exclusive, non-transferable, revocable license to access and use the Platform solely for its intended purposes and in accordance with these Terms. This license does not include the right to copy, modify, distribute, sell, or lease any part of the Platform.

9. PRIVACY AND DATA

9.1 Data Collection

Palus collects and processes certain personal information, including information provided during account registration and KYC/KYB verification, and maintains records of your contributions, withdrawals, beneficial interests, and yield. By using the Platform, you consent to the collection, use, and sharing of your information as described herein and in any applicable privacy policy.

9.2 Third-Party Data Sharing

You acknowledge and consent to the sharing of your personal information, including KYC/KYB data, with Palus's third-party service providers and partners (including Alpaca and Modern Treasury) as necessary to operate the Platform, comply with applicable law, fulfill verification requirements, and administer custody and disbursement of Customer Assets.

10. DISCLAIMER OF WARRANTIES

To the maximum extent permitted by applicable law, the Platform and all related services are provided "as is" and "as available," without warranties of any kind, whether express, implied, statutory, or otherwise. Palus expressly disclaims all warranties, including but not limited to implied warranties of merchantability, fitness for a particular purpose, title, non-infringement, and any warranties arising from course of dealing or usage of trade.

Without limiting the foregoing, Palus makes no warranty that:

(a) the Platform will meet your requirements or expectations;

(b) the Platform will be uninterrupted, timely, secure, or error-free;

(c) any particular yield rate or redemption price will be achieved or maintained;

(d) any defects or errors in the Platform will be corrected; or

(e) the Platform or the servers that make it available are free of viruses or other harmful components.

11. LIMITATION OF LIABILITY

To the maximum extent permitted by applicable law, in no event shall Palus, its officers, directors, employees, agents, affiliates, or licensors be liable for any indirect, incidental, special, consequential, exemplary, or punitive damages, including but not limited to damages for loss of profits, revenue, goodwill, data, or other intangible losses, arising out of or in connection with your use of or inability to use the Platform, regardless of the theory of liability (whether in contract, tort, strict liability, or otherwise) and even if Palus has been advised of the possibility of such damages.

To the maximum extent permitted by applicable law, Palus's total aggregate liability to you for all claims arising out of or relating to these Terms or your use of the Platform shall not exceed the greater of (a) the total fees paid by you to Palus in the twelve (12) months preceding the event giving rise to the claim, or (b) one hundred U.S. dollars ($100.00).

12. INDEMNIFICATION

You agree to indemnify, defend, and hold harmless Palus and its officers, directors, employees, agents, affiliates, successors, and assigns from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to: (a) your use of the Platform; (b) your breach of these Terms; (c) your violation of any applicable law or regulation; (d) your violation of any rights of a third party; or (e) any information or content you provide in connection with your use of the Platform.

13. DISPUTE RESOLUTION AND ARBITRATION

13.1 Binding Arbitration

Any dispute, controversy, or claim arising out of or relating to these Terms or the Platform ("Dispute") shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in accordance with its Commercial Arbitration Rules. The arbitration shall be conducted by a single arbitrator, in the English language, and shall take place in Wilmington, Delaware, or at another location mutually agreed upon by the parties.

13.2 Class Action Waiver

You and Palus agree that each party may bring Disputes against the other only in an individual capacity and not as a plaintiff or class member in any purported class, consolidated, or representative action. The arbitrator may not consolidate more than one person's claims and may not preside over any form of a representative or class proceeding.

13.3 Exceptions

Notwithstanding the foregoing, either party may seek injunctive or other equitable relief in any court of competent jurisdiction to prevent the actual or threatened infringement, misappropriation, or violation of intellectual property rights or confidential information.

13.4 Governing Law

These Terms shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles.

14. TERMINATION

14.1 Termination by Palus

Palus may suspend or terminate your access to the Platform, your account, or your participation in the closed beta at any time, for any reason or no reason, in its sole discretion, with or without notice. Upon termination, Palus will return cash equal to the redemption value of your beneficial interest, minus any applicable fees, subject to the withdrawal procedures in Section 5, the continuity provisions in Section 4.7 (where applicable), and any applicable legal holds or regulatory requirements.

14.2 Termination by User

You may request to close your account at any time by contacting Palus. Upon account closure, Palus will process a withdrawal of your remaining beneficial interest in accordance with Section 5.

14.3 Survival

Sections 4.7, 6, 10, 11, 12, 13, and 15 shall survive any termination or expiration of these Terms.

15. GENERAL PROVISIONS

15.1 Entire Agreement

These Terms constitute the entire agreement between you and Palus with respect to the subject matter hereof and supersede all prior or contemporaneous communications, whether oral or written.

15.2 Amendments

Palus reserves the right to modify these Terms at any time. Material changes will be communicated through the Platform or by other reasonable means. Your continued use of the Platform after any modification constitutes acceptance of the revised Terms.

15.3 Severability

If any provision of these Terms is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.

15.4 Waiver

The failure of Palus to enforce any right or provision of these Terms shall not constitute a waiver of such right or provision.

15.5 Assignment

Palus may assign its rights and obligations under these Terms without restriction. You may not assign or transfer these Terms or any rights or obligations hereunder without Palus's prior written consent.

15.6 Force Majeure

Palus shall not be liable for any failure or delay in performing its obligations under these Terms due to circumstances beyond its reasonable control, including but not limited to natural disasters, war, terrorism, government actions, cyberattacks, pandemics, or disruptions to third-party services.

15.7 Contact Information

For questions about these Terms, please contact:

Palus Finance, Inc.
251 Little Falls Drive
Wilmington, DE 19808
info@palus.finance

By using the Platform, you acknowledge that you have read, understood, and agree to be bound by these Terms of Service.