Risk Disclosure for Clients : Private Financing Platform

Private Financing Platform (PFP) Risk Warning

Private Financing Platforms (“PFPs”) are online platforms that allow private companies, such as start-ups and small and medium enterprises (“SMEs”) (“hereinafter referred to as ‘Prospects’”) to source financing from lenders and investors (“hereinafter referred to as ‘Clients’”) to launch and scale their businesses. The regulated activity of operating a Private Financing Platform is defined in Schedule 1, Chapter 17C, Section 73E of FSMR.

The PFP Operator is “Klub Capital Technologies Limited”, a company established and registered under the laws of Abu Dhabi Global Market having its office at Office No. 8, 11th Floor, Tamouh Tower, Tamouh, Al Reem Island, Abu Dhabi, United Arab Emirates, bearing registered number 000009390 and FSRA license number 220119. The PFP Operator shall provide the Client access to the PFP platform, hereby known as the Capital Partner Platform (CPP) to receive details of the Prospects.

This document provides a comprehensive overview of the significant risks associated with investing through the PFP by the Clients. Potential Clients must carefully read and understand these risks before participating in any transaction.

PFP Operator does not provide financial advisory services to Clients. Under these circumstances, the onus is on Clients to seek independent financial advice or to make their own evaluation of the risks associated with any potential loan or investment.

The foregoing risks are only indicative in nature. It is recommended that you seek independent legal and tax advice and perform necessary due diligence before investing in a Prospect.

Key Risk Categories

Capital Loss Risk

PFPs will mainly attract start-ups and SMEs that have no or very little established track record, for which the observed failure rate is generally high. Investments in the above mentioned Prospects involve a high degree of risk. The market in which the Prospect operates may be highly competitive and it might be unlikely for a Prospect to survive and prosper in the long run. There is no guarantee that any Prospect will succeed and it is possible that the Client may lose all the invested capital than see a return on capital or a profit. Therefore, it is very crucial for the Client to analyze and gauge the risks that are involved with investing in a Prospect and shall contemplate and be familiar with any and all shortfalls that may arise including unexpected problems in the areas of product development, manufacturing, marketing, financing, and general management that a company often experiences.

Changing Economic Conditions

The success of any investment activity is determined to a certain extent by general economic conditions. The availability, unavailability or unhindered operation of external credit markets, equity markets, stability in global economies, etc., may have a significant negative impact on a Prospect’s operations and profitability. The stability and sustainability of growth in global economies may be impacted by terrorism, acts of war or a variety of other unpredictable events. There can be no assurance that such markets and economic systems will be available or will be available as anticipated or needed for an investment in a Prospect to be successful. Changing economic conditions could potentially, and frequently do, adversely impact the revenue of the Prospect.

Future and Past Performance

The past performance of a Prospect or its management cannot be a means to evaluate its future results. There is no assurance that the targeted results will be achieved. Each Prospect’s future statements are based on management's current expectations and assumptions regarding the Prospect’s business and performance, the economy, etc. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances.

Liquidity Risk

Investments facilitated through this platform carry substantial liquidity constraints:

• No established secondary market for transactions
• Extremely limited options for early exit
• Potential requirement to transfer investments at significant discounts
• No guarantee of finding a buyer for your investment

Information Asymmetry Risk

Clients might face inherent challenges in obtaining comprehensive information about the Prospects:

• Limited disclosure about potential investment targets
• Potential gaps in available due diligence materials
• Difficulty in fully assessing the true financial health and prospects of the enterprise

Platform Operational Risk

The PFP platform itself presents potential operational vulnerabilities:

• Risk of platform failure or unexpected closure
• Potential challenges in recovering client assets
• Limited recourse in case of platform insolvency

Conflict of Interest Risk

The platform's economic model may create potential misalignments:

• The PFP Operator compensation is typically linked to the funds raised
• Potential prioritization of fundraising over investor protection

Client Responsibilities

While this platform applies its own due diligence criteria, this should not substitute for your independent investigation. The platform's review is not a guarantee of investment success or safety.

Recommended Due Diligence Approach

• Independent Verification: Cross-reference all provided information
• Professional Consultation: Engage financial, legal, and technical experts
• Comprehensive Research: Utilize multiple sources of information
• Continuous Monitoring: Maintain ongoing assessment of your investment

Acknowledgment of Understanding

By proceeding with an investment on the PFP, you explicitly acknowledge that:

• You have read and understood this comprehensive risk warning
• You accept the potential for total loss of invested capital
• You are making an independent investment decision

Contact Information

For further clarifications or questions about these risks, please email at uaeplatform@klubworks.com