VERSABANK TRANSFERS DIGITAL DEPOSIT RECEIPT ASSETS AND OTHER RESOURCES TO WHOLLY OWNED SUBSIDIARY FOCUSED EXCLUSIVELY ON DIGITAL ASSET OPPORTUNITY

Corporate Realignment and Divestiture - VersaBank announced the internal transfer of assets related to its Digital Deposit Receipt technology to a subsidiary named Digital Meteor, Inc. This move is aimed at enhancing shareholder value and supports the planned divestiture of its Cyber Security businesses [1] - The transfer is not expected to have any material financial implications for the bank [1] Digital Asset Innovation - The company is encouraged by the favorable stance of the U.S. administration towards digital assets, particularly following President Trump's executive order aimed at promoting U.S. leadership in digital assets and financial technology [2] - VersaBank has successfully completed a pilot program with its blockchain-based DDR, which provides a secure representation of federally regulated bank deposits on multiple blockchains, and received SOC 2 Type I certification for its VersaVault® technology in 2022 [2] - DDRs can be converted to and from other digital currencies like Bitcoin, combining traditional banking safety with blockchain efficiency [2] Digital Deposit Receipts (DDRs) - DDRs are highly encrypted digital assets representing actual fiat currency on deposit with the bank, issued on secure blockchains such as Algorand, Ethereum, and Stellar [3] - They offer superior security, stability, and regulatory compliance compared to traditional stablecoins, making them a trusted alternative for mainstream financial applications [3] Business Model and Market Expansion - VersaBank operates as a fully digital financial institution with a cloud-based, branchless model, focusing on underserved segments of the banking industry [4] - The bank launched its Receivable Purchase Program (RPP) in August 2024, targeting the U.S. market, which has been successful in Canada for nearly 15 years [4] - The RPP provides funding for low-risk point-of-sale finance companies through automated electronic purchases of cash flow streams from finance partners' loans [4] Cyber Security Services - VersaBank owns DRT Cyber Inc., a leader in providing cyber security services to financial institutions, multinational corporations, and government entities [5]