Risk Disclosure Statement
The securities made available through the platform operated by Slate Alt Pte Ltd (the “Platform”) are offered to you in reliance on the exemption under section 274 and section 275 of the Securities and Futures Act (Cap. 289) (the “SFA”). These offers are not made in or accompanied by a prospectus that is or will be registered by the Monetary Authority of Singapore (the “Authority”).
You should NOT invest in the Securities offered unless you fully understand the risk and are prepared to take the risks. You should carefully consider whether this investment is suitable for you in light of your knowledge and experience in financial and business matters, investment objectives, financial means and the risks that you are prepared to take. You should seek independent professional advice if you do not fully understand the risks of investing in Securities offered on this Platform or any of the statements above.
For the purposes of this Risk Disclosure Statement, any reference to “Securities” has the same meaning as provided for in s 239(1) of the SFA.
The general risks of investing in such Securities include but are not limited to the following:-
|100% loss on such investments||There is a high risk that you may lose all your money on such investments. Investments available through this platform may include equity or debt Securities of early-stage companies without a proven track record. The risk of business failure is high and you should consider your risk appetite. Some factors that may affect the business’ success include but are not limited to the abilities of the management team; quality of professional guidance and mentorship provided to the management if any; management expertise; general economic conditions; the ability of management to grow the company; the favourability of laws and regulations; protection and maintenance of confidential information and trade secrets; and the favourability of market conditions. For every 10 new businesses formed in Singapore, 7 to 8 would cease operations in the same year. In such an event, you are likely to lose all the capital of your investment. As a result, there is therefore a high risk that you may lose 100% of your investment.|
|Difficult to cash in or exit such investments||It may difficult or even impossible for you to cash in on or exit such investments. Such investments are subject to resale restrictions set out in Part XIII of the SFA, and there may not be a secondary market for them. Moreover, an investor’s investments in such Securities are generally private, illiquid holdings. There will likely be no public or secondary market for such Securities, and no readily available liquidity mechanism at any particular time for such investments.|
|Changing Economic Conditions||The success of any investment activity is determined to an extent on the general economic conditions including the availability of external credit markets, equity markets, stability in the global economy. There can be no assurance that such markets and the economy whether international or domestic will be as anticipated for an investment in a start-up to be successful.|
|Future and Past Performance||The past performance of a start-up, its management, and/or all associated persons including but not limited to its a lead investor, is not predictive of a Start-up’s future results. There can be no assurance that targeted results will be achieved. Each start-up’s future statements are based on management’s current expectations and assumptions based on many factors including but not limited to the start-up’s business, performance, the domestic and global economy. As with any prediction, such forward-looking statements are inherently susceptible to uncertainty and changes in circumstances.|
|Change of Law and Regulations||The terms and conditions governing the relevant security will likely be based on law in effect of the date of their issue. No assurance can be given that there will be no change to or implementation of relevant laws, regulations, and practices after the date of issue that may have an impact on the security and the investment.|
|Confidential Information||Certain information regarding start-ups will be highly confidential. Such confidential information includes but are not limited to trade secrets, copyrights, and business implementation plans etc. Competitors may benefit from such information if it is ever made public, and that could result in severe and adverse economic consequences to the investors.|
|Market Demand Risk||There is no assurance that there will be market acceptance of the start-up’s products, services or offerings whether by reasons including but not limited to a broad market preference of a competitor’s offerings, change in circumstances making such products, services or offerings obsolete, a changing investor sentiment and preference with regard to the start-up’s product, or exposure to government regulation, law or policy resulting in delays, hindrances, obstacles or failures in securing regulatory approvals.|
|Risk of investing in 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, transaction costs and capital controls. Investors are advised to seek adequate legal and other professional advice in this relation prior to investing in the relevant investment.|
|No 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.|
|No assurance that financial statements from the issuers will be accurate or accessible||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 the requirements in their home country for them to do so.|
|Currency and Exchange Rate Risk||An issuer may require its subscribers to pay for the Securities with particular currencies. In addition, dividends, coupon payments or other such payments including a sale may be paid or transacted with particular currencies. Unfavourable currency exchange rate movements could potentially erase any gain out of a foreign country investment.|
RISKS REGARDING EQUITY SECURITIES
|Valuation Risk||Issuers will normally set the share price of the equity security. As valuations of start-ups are difficult to ascertain, there is a risk that you may be overpaying for your investment. The share price used to value your equity investment will likely have a material impact on your eventual return (if any at all).|
|Rarity of Dividend||Start-ups rarely pay dividends to their investors. Profits are typically reinvested into the business to fuel growth and build shareholder value. In addition to this, there is a multitude of factors that may affect a start-up’s ability to declare dividends to its shareholders. This means that if you invest in a start-up as a shareholder, even if the business is successful, you are unlikely to see any return on capital or profit until you are able to sell your shares in the relevant company.|
|Dilution Risk||Start-up companies may for various reasons need issue further equity Securities to raise capital, or may be required to do so as part of an acquisition. Unless otherwise agreed or by reason of law or regulations, issuers are generally not required to offer such further equity Securities to existing investors. These new Securities may dilute the percentage ownership that you have in the business.
The start-up may also potentially issue preference shares which may accord greater rights to the holders of such shares in comparison to ordinary shareholders including but not limited to greater voting rights per share, right to yearly dividends, and right to payments ahead of ordinary shareholders. These rights may potentially be exercised by the holders of such shares and may be to your detriment.
|Minority Shareholder Risk||The shares of which you own (whether as the legal owner or beneficial owner) will likely form a small sector of the overall share capital of the start-up. In such a case, you will likely be a minority shareholder (whether legally or beneficially) and you will likely have neither control of the company nor have significant voting rights to influence the overall governance of the relevant company.|
RISKS REGARDING DEBT SECURITIES
|Default Risk||There is a possibility that start-ups may not be able to service their debt obligations including defaulting on any issued debt security.|
|Inflation Rate Risk||In the event of a higher inflation rate, such inflation may erode the anticipated rate of return of your investment in the relevant debt security.|
|Unsecured Debt Security Risk||There is a possibility that your debt security may not be furnished with a security, indemnity or guarantee. In the event of a default by the issuer and potential liquidation of the issuer, the actual return on your investment is likely to be less anticipated. Moreover, where the relevant the debt security is unsecured, such debts will likely rank lower in priority compared to secured creditors of the issuer in the event of liquidation and the return of your investment will be less than anticipated.|
|Modification of rights without personal approval||In the event of a debt restructuring of the issuer of debt Securities you hold, there is a realistic possibility that the issuer may choose to pursue legal mechanisms such as a scheme of arrangement or legally binding resolutions where provided for in the debt security agreement. Such mechanisms may allow the issuer to bind all holders of the debt security to a debt reduction or compromise even if you do not agree to such reduction or compromise.|
You should seek independent professional advice if you do not fully understand the risks of investing in Securities offered on this Platform or any of the statements above.