XTM Reports Everyday People Service Outage and Activity Halt Under Bank of Canada Order

XTM Inc. provides an update on the platform service outage that occurred on January 26, 2026 (the “Outage”) and is continuing in connection with the Management Services Agreement (“MSA”) entered with Everyday People Financial Corp which was previously disclosed on October 22, 2025, February 2, 2026 and February 5, 2026. The Company confirms that as part of the MSA, the Company executed a blocked account agreement on November 30, 2025 which restricts the Company’s ability to move funds from its accounts. On the date that the Company transfered control of its accounts to Everyday People Financial Corp. at 11:59 pm on November 30, 2025 the wallet balances were $12,830,224.20. Many business users as of January 26, 2026 could not transact from their business portal due to funding practices being abruptly modified without notice or specific instructions of the Company. The Company is investigating the operational level impact the unauthorized modifications had on businesses and the Company, including the cessation of lending activity and certain balancing procedures. Also, the use of pre-authorized debits without the specific instructions of the Company is under investigation. All options that may be available to the Company related to restoring portal wallet balances are being considered. At this time, the Company does not have certainty on a specific plan and is working with various parties for resolution.

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Pursuant to a compliance order issued by the Bank of Canada on February 17, 2026 (the “Order”), the Company will temporarily cease the operations of its business portal platform. Further to the Order, the Company will be ceasing all retail payment activities including withdrawals. The Company will cease to maintain operations as a payment service provider that is registered with the Bank of Canada pursuant to, and in compliance with, the Order. Pursuant to the Order, the Company expects within seven days of the date of the Order, to provide the Bank of Canada with a plan of how the Company intends on complying with its obligations under the Retail Payment Activities Act (RPAA), and if applicable, transition the Company’s retail payments activities to another payment service provider that is registered under the RPAA or has applied for registration. Pursuant to the Order, the Company has 14 days from the date of the Order to make representations to the Bank of Canada about whether the Order shall be revoked. In the event that the Company does not make representations within 14 days of the date of the Order, or if the Company makes representations, and the Bank of Canada is not satisfied that there are sufficient grounds for revoking the Order, then the Order continues to be in effect, unless it is revoked.

Unrelated to the Outage, the Company confirms that cardholder funds in respect of Everyday People Payments Financial debit cards which make up a significant portion of the Company’s revenues are held and continue to be held in trust since the program’s inception in 2020 with a Canadian Schedule 1 Chartered bank.

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The Company including its board of directors, legal counsel and accountants are considering all options available to it, including but not limited to a new lending facility, various forms of financing or restructuring arrangements and a plan to restore merchant wallet balances. The trading in the Company’s common shares under the trading ticker “PAID” on the CSE will remain halted until it is determined that the matter has been satisfactorily resolved. Company intends to make further disclosure as more information comes to light and as required by law.

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