RISK WARNING

RISK DISCLOSURE STATEMENT TO MINIMALLY BE PROVIDED DURING PRE-QUALIFICATION OF POTENTIAL ACCREDITED INVESTORS

RISK DISCLOSURE STATEMENT – OFFER MADE TO ACCREDITED INVESTORS AS DEFINED IN SECTION 4A(1)(a) OF THE SECURITIES AND FUTURES ACT (“SFA”)

Prospective investors who consented to being treated as an accredited investor by us will have fewer regulatory protections than retail investors will have under Singapore law. As provided under Singapore law, accredited investors are deemed to be sufficiently knowledgeable or experienced in managing their financial affairs (whether directly or through professional advice), better able to access resources to protect their own investment interests and suitably well-placed to understand and manage investment risks. Where we deal with you as an accredited investor, we would be exempt from complying with certain requirements under the SFA including certain regulations and notices imposed thereunder.

In addition, prospective accredited investors should consider carefully, together with all other information contained in this Statement including, among others, any relevant documents such as the declaration of accredited investor status, the factors described below before deciding to invest in the securities offered to you through this platform The securities made available through this platform are offered to you in reliance on the exemption under SFA and these offers are not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore (“MAS”). Our role is strictly to provide an online crowdfunding platform for companies to raise funds and to enable eligible investors to invest through the platform.

This Statement also contains forward-looking statements (including profit forecasts and projections) that involve risks, uncertainties and assumptions having direct and/or indirect implications on the future performance. The actual results and return on investment could differ materially from those anticipated in these forward-looking statements as a result of certain factors, as described below and elsewhere in this Statement. The risks factors set forth below are not an exhaustive list of the challenges currently faced by us and the same may develop in the future. There may be additional risks not described below or not presently known to us or that we currently consider as immaterial that could turn out to be material, which may in the future have a material adverse effect on the securities or the trading price of the securities.

Prospective accredited investors should be aware that the price of securities, and the income therefrom, may fall or rise. Thus, the prospective accredited investors should note that they may not get back their original investment. Before deciding to invest in the securities, prospective accredited investors are advised to apprise themselves of all factors involving the risks of investing in the securities and seek professional advice from their relevant advisers about their particular circumstances.

Please note the following regulatory requirements that we are exempted from when dealing with you as an accredited investor, which may be amended and updated from time to time due to regulatory changes or otherwise:

PROSPECTUS EXEMPTIONS UNDER SECTION 275 AND 305 OF THE SFA

According to Part 13 of the SFA, any offers involving securities or securities-based derivatives contracts must be made in or accompanied by a prospectus in respect of the offer that is lodged and registered with MAS and which complies with the prescribed content requirements, unless exempted. The SFA further provides for criminal liability for false and misleading statements contained in the prospectus, omissions to state any information required to be included in the prospectus or omissions to state new circumstances that have risen since the prospectus was lodged with the MAS which would have been required to be included in the prospectus if it had arisen before the prospectus was lodged with the MAS.

Furthermore, certain individuals, such as the offeror, the issuer, the issue manager, and the underwriter (“Persons“), may be held responsible for compensating any individual who suffers loss or damage due to false or misleading statements or omissions in the prospectus, even if these individuals were not involved in creating the misleading information or omission. Sections 275 and 305 of the SFA provide exemptions from the prospectus registration requirement, allowing the offeror to omit the registration of a prospectus when offering securities or securities-based derivatives contracts to specific individuals, including accredited investors. Moreover, secondary sales made to institutional investors and relevant persons, which comprise of accredited investors, remain exempt from the prospectus registration requirement as long as specific criteria are met.

Subsequent Sales: Subsequent sales of securities and securities-based derivatives contracts are subject to restrictions under Section 276(1) and 276(2) such that subsequent sales to relevant persons (including accredited investors) will continue to be exempt from prospectus requirements. Where securities and securities-based derivatives contracts are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

• a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor (“Corporation”); or
• a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor (“Trust”),

securities or securities-based derivatives contracts of that Corporation or the beneficiaries’ rights and interest (howsoever described) in that Trust shall not be transferred within six months after that Corporation or that Trust has acquired the securities or securities-based derivatives contracts pursuant to an offer made under Section 275 of the SFA except, inter alia, to an institutional investor or to a relevant person.

If you opt to be treated as an accredited investor, the above restrictions will not apply and you will not be prohibited from being a transferee of the securities of the Corporation or interests in the Trust in the circumstances specified.

However, please note that you are not entitled to sell and/or transfer any of the note(s) you subscribed, to any other person, save with the issuing company’s prior written consent. In the event that such note is sold or transferred by you to any person other than any person pursuant to an offer:

(i)              made in reliance on an exemption under any provision of Part 13 Division 1 Subdivision (4) of the SFA (other than section 272A of the SFA);

(ii)             made in reliance on an exemption under section 272A(1) of the SFA and at least six (6) months have elapsed from the Completion Date or (c) referred to in section 272A(8)(c) of the SFA,

then, if applicable, you shall comply with the requirements set out in Part 13 Division 1 Subdivisions (2) and (3) of the SFA. The issuing company will not be liable for any breach by you of such provisions and you shall keep the issuing company indemnified against any losses, costs or expenses that the issuing company may suffer or incur as a result of your breach.

When dealing with you as an accredited investor, the issuer and/or offeror is exempt from the prospectus obligations outlined in Part 13 of the SFA, as per the exemption specified in Section 275 of the SFA. Consequently, there is no statutory obligation for the issuer and/or offeror to ensure that all offers of relevant products to you are made in or accompanied by a prospectus lodged and registered with MAS, adhering to prescribed content requirements. As a result, the issuer and/or offeror is not held liable under the statutory prospectus liability provision in the SFA. Even if you experience loss or damage due to false or misleading statements or omissions in the offering document, you cannot seek compensation from the involved parties under the civil liability regime for prospectuses. Additionally, subsequent sales of securities and securities-based derivatives contracts, initially exempted under, amongst others, including Section 275, may also be made to you, as well as transfers of securities or securities-based derivatives contracts of Corporations and interests in Trusts. Therefore, you are not afforded protection by the prospectus registration requirements stipulated in the SFA.

RISKS RELATING TO 100% LOSS OF CAPITAL

Investments available through this “FundedHere” platform may include the shares or debt securities of early-stage companies or companies without a proven track record. The risk of business failure is high as the specified products or inventory which are intended to be sold by merchants whom you decide to invest in may not fully guarantee sales and the merchants may risk being insolvent should they fail to earn any profits or sell the specified products. There is therefore a high risk that you may lose 100% of your investment. In addition, most of the crowdfunding projects or campaign launched by such merchants may not have the products or even prototype available at its inception, except for an idea. Prospective investors should consider the delivery schedule, whether they are able to meet their costs and other relevant factors. There is a high risk that you may lose some or even all of your money on such investments should the project or company you decide to fund fail.

RISKS RELATING TO CASH IN OR EXIT DIFFICULTY

It may be difficult or even impossible for you to cash in on or exit such investments. Such investments are subject to resale conditions and only upon the resale of such inventory or specified products to the merchant’s customer, you will be able to receive your investment returns.

RISKS RELATING TO EQUITIES INVESTMENTS

If such investments are in shares, you may not receive a dividend, and your shareholdings could be significantly diluted if new shares are issued. In addition, if the shares are unpaid or partly paid, you will still be liable to pay the remaining amount to the company.

RISKS RELATING TO POTENTIAL FRAUD ON THE PLATFORM

Whilst we endeavour to mitigate any risks on fraudulent activities by conducting our own due diligence on the members of the platform, we may not fully guarantee that the members especially merchants, who seek funding on the platform and the conduct of their businesses are free from deliberate fraud. As the merchants may place the specified products which are subject to resale in a warehouse management system and a marketing management system (either through the merchant’s internal system or a third party) for the purpose of allowing us to track the inventory of the specified products in real-time, such systems may be tampered with (whether knowingly or recklessly) and there may be limited legal recourse available to you in the recovery process.

You should take the necessary steps to further verify the information of the merchants whom you intend to fund.

RISKS RELATING TO SALE OF THE PRODUCTS ON E-COMMERCE PLATFORMS

The funds provided to facilitate the purchase of the products from suppliers is to assist merchants in the resale of such products on e-commerce platforms. There is no guarantee that the merchants would be able to resell such products promptly or be able to resell such products at all. In the event that the merchants are unable to resell the products, FH and/or its affiliate(s) may need to proceed with the recovery process of obtaining title and possession of the products and reselling such products. Failure of the merchants to resell the products promptly on e-commerce platforms may affect collection of payments from the merchants, and in turn affect or delay the repayment and redemption of the notes.

RISKS RELATING TO POLITICAL, ECONOMIC AND SOCIAL DEVELOPMENTS IN SINGAPORE AND GLOBALLY

While we operate in Singapore, the merchants and investors may come from various countries. As such, our business, prospects, financial position and results of operations may be adversely affected by political, economic, social and legal developments in Singapore and globally that are beyond our control. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, changes in interest rates, rates of economic growth, fiscal and monetary policies of the government, inflation, deflation, methods of taxation and tax policy, unemployment trends, and other matters that influence consumer confidence, spending and tourism. In particular, factors such as gross domestic product growth, disposable income and unemployment rates, both in Singapore and globally, may affect the number of merchants or investors and indirectly affect our business operations. Given the uncertainties of the future economic outlook, there is no assurance that the merchants or we will be able to grow our business and that of the companies you decide to invest, or that we or the companies will be able to react promptly to any changes in economic conditions. In the event that we or the companies fail to react promptly to the change of economic conditions, our business and the companies’ performance, future plans and operations may be adversely affected.

RISKS RELATING TO OUR BUSINESS

FUNDED HERE PTE. LTD. holds a Capital Markets Services Licence and is regulated by the Monetary Authority of Singapore. Our business is subject to various laws, regulations, licensing and accreditation requirements in Singapore which govern, among others, the conduct of our business operations. If we or any of our licensed affiliates do not comply with the requisite terms of such Licence, we may be subject to administrative penalties including fines, revocation of licences or restrictions imposed on our business operations, which could materially and adversely affect our reputation, business, results of operations, financial condition and prospects.

There is no assurance that we will continue to be able to do so. Regulatory authorities may exercise broad discretion in assessing our compliance with licensing requirements, varying licensing requirements or introducing new licensing requirements, and we may incur significant costs and suffer operational restrictions that could be harmful to our business. Any changes to the existing laws and regulations may require us to apply for new approvals, licences and/or permits and there is no assurance that we will be able to obtain these new approvals, licences and/or permits. In the event that we are unable to obtain or renew the requisite approvals, licences and/or permits, or such approvals, licences and/or permits are withdrawn by us, we may be required to cease operations and our business, results of operations, financial condition and prospects may be adversely affected.

RISKS RELATING TO FOREIGN ISSUERS

If such investments are offered by an issuer in a foreign jurisdiction, your investment will be subject to the laws and regulations of that jurisdiction. You may also be subject to additional tax liabilities including but not limited to transaction costs and capital controls.

RISKS RELATING TO NON-DISCLOSURE REQUIREMENTS

You may not have sufficient information to make fully informed investment decisions. There is no statutory obligation for issuers or intermediaries to provide you with information that you would reasonably require to make informed assessments of offers being made to you.

RISKS RELATING TO THE ASSURANCE OF ACCURATE OR ACCESSIBLE FINANCIAL STATEMENTS

In the event that you invest in shares or other forms of equity securities, the financial statements of the companies which you invest in may not be subject to a statutory audit. As such, the financial information presented to you may not have been ascertained by a qualified professional auditor. An unaudited financial statement may not accurately reflect the financial health of a company. In addition, the financial statements of the companies may not be made accessible to you in the absence of requirements in their home country for them to do so. Such unaudited combined financial information merely reflects the estimates, assumptions and judgements made by the company. The estimates, assumptions and judgements affect the reported amounts of assets and liabilities as of the dates presented as well as revenue and expenses reported for the periods presented. As a result, such unaudited combined financial information is not necessarily indicative of the actual results of operations, financial position and cash flow would have been on or as of such dates, nor does it purport to project the results of operations, financial position or cash flows for any future period or date. The unaudited combined financial information does not include all of the information required for financial statements under the Singapore Financial Reporting Standards (I) and should be read in conjunction with the historical combined financial statements provided by the company.

RISKS RELATING TO ECONOMIC CONDITIONS AND VOLATILITY

The proposed sale of the products by merchants on e-commerce platforms are mere business plans, and are subject to the prevailing economic conditions of each of the geographical regions in which the products are sold in. Thus, in the wake of economic fluctuations, the merchants and its business may suffer fluctuations in their development and consequentially obtain returns different from those anticipated in the beginning or during the course of development of the merchant’s operations due to macroeconomic changes such as inflation.

In addition, resurgent volatility in the e-commerce markets may pose economic challenges and may lead to major supply disruptions of the specified products. The occurrence of such events may give rise to the potential risk for loss of capital. For the avoidance of doubt, merchants on the platform may come from and incorporated in various countries other than Singapore. Thus, overseas markets are substantially influenced by the economic developments in the foreign jurisdiction including the political and social developments, which may be uncertain and increase the risk of investing in the specified products sold by merchants from foreign jurisdictions.

RISKS RELATING TO FOREIGN EXCHANGE

All issue and offer of shares or debt securities placed on the FH platform are denominated in various currency. Upon converting a foreign currency for the purpose of investment via the platform, there is a risk that you may suffer losses due to unfavourable fluctuations in currency exchange rates.

RISKS RELATING TO CHANGES IN LEGAL ENVIRONMENT

As we operate in a highly regulated environment, we may be exposed to potential legal liabilities, sanctions, reprimands or enforcement actions and investigations under the applicable laws during the course of our business. As much as we strive to avoid and mitigate any potential legal liabilities, such liabilities may significantly impact us if not properly mitigated which in turn, may adversely affect our business operations, prospects and financial standing. For example, in the event there is any contravention of the applicable laws and regulatory actions such as revocation of licences or penalties are imposed against us, we may not be able to operate in the ordinary and usual course of business. In addition, with the fast pace of regulatory changes, there is the ever present risks that we may be subject to new regulations which may affect the provision of our services to you.