Risk Disclosure Notice
We will not give any advice or personal recommendation in relation to shares, mini-bonds, or other financial instruments offered on the CODE Investing platform. If you require investment advice, you should consult an adviser authorised and regulated by the FCA and who specialises in investments of this kind.
There may be tax consequences to investing in shares on the Code Investing platform
You should take tax advice relevant to your own position on all matters relating to your acquiring, holding or disposing of investment products on the CODE Investing platform.
Investing in debt is risky
You may lose some, or all of your capital should you invest in mini-bonds on CODE Investing. If they are secured, the assets on which the bonds are secured may not be sufficient to pay back your investment in all circumstances.
Please read the specific risk factors for each investment. Mini-bonds may not be a suitable investment for all those who read the Invitation Document and the Bond Instrument for each investment. Each potential Applicant must determine the suitability of an investment in mini-bonds in relation to their own circumstances.
Mini-bonds are not transferable nor are they capable of being dealt in or negotiated on any stock exchange or other recognised or capital market in the UK or elsewhere.
Mini-bonds are an illiquid investment because they lack the ability to be sold before maturity. In addition, it will not be possible to obtain reliable information about all the risks to which the mini-bonds are exposed and there is no guarantee that the Company issuing the mini-bonds will be able to repay any, or all of the nominal amount and interest payable under the terms of the Bond Instrument.
Not protected by the Financial Services Compensation Scheme
Bondholders are not protected from loss by the Financial Services Compensation Scheme against the Company’s default or for any losses they may suffer in relation to their investment in mini-bonds.
Interest rate risk
Mini-bonds are normally issued for a specific term and with a fixed rate of interest. There is a risk that general economic conditions will change, such that interest rates available on other investments will increase.
Bondholders will not benefit from any such increase in the rate of interest payable on the mini-bonds.
Investing in equity securities is risky
Any investment in unlisted equity securities (shares) involves a high degree of risk and may not be suitable for everyone depending on personal circumstances and financial resources. Equity ranks junior to all other forms of securities offered by a company, and is therefore a speculative investment that should only be pursued after careful evaluation of the potential risks and merits of such investment.
You should only invest in an equity project if you understand the risks and have sufficient resources to bear any loss that might result from such an investment.
Unlisted companies are not subject to certain shareholder protection regimes
The companies that raise funds on CODE Investing are unlisted and will not be subject to protections the Listing Rules of the United Kingdom Listing Authority, the AIM Rules, the UK Corporate Governance Code or any other similar rules or regulations applying to companies with securities admitted to or traded on a regulated market, an investment exchange or other public market. Accordingly, persons who invest in equity securities through the CODE Investing platform will not have the same rights and protections as those available to shareholders in publicly listed companies.
There is no existing market for the shares offered in projects listed on CODE Investing and we cannot be certain that an active trading market will develop
There is currently no public market for the shares on CODE Investing and there can be no assurance that an active trading market for the shares will develop in the future. The lack of an active market may make it more difficult for you to sell or transfer the shares you subscribe for through the CODE Investing platform.
Your percentage ownership in a company may be diluted in the future
Your percentage ownership in a company may be diluted in the future as a result of equity awards that may be granted to a company’s directors, officers and employees. In addition, a company may raise additional capital by issuing new shares to finance all or part of the consideration paid for acquisitions and strategic investments it may make in the future.
There is no guarantee that a company will pay dividends
Although provision is made in the Articles of Association to allow companies to pay dividends to shareholders, early-stage companies like those using the CODE Investing platform generally do not pay dividends. There is no guarantee that any company will pay dividends in the future.
Minority shareholders may not be able to influence the strategic direction of a company
Even though the Articles of Association provide every share with one vote on matters put before a general meeting of shareholders, the founding entrepreneur or other significant investors may be able to carry any vote to be made at a general meeting in relation to general commercial matters.
Provisions in the UK Takeover Code may prevent or delay an acquisition of a company
Each company that offers equity on the CODE Investing platform will be subject to the Takeover Code which imposes conditions on certain persons looking to acquire a significant ownership interest in a company. While these restrictions are designed to protect all shareholders, they may prevent or delay an acquisition or deter some investors from acquiring an ownership interest in a company.