Risk Warning Statement

1. INTRODUCTION
   
   
   • AMB CONNECT SDN. BHD. (REGISTRATION NO. 202201042696 (1488393-H)) hereinafter “AMB Connect”, “we”, “us”, or “our” extends a warm welcome to everyone (“you” or your”) who is considering to embark on a journey into equity crowdfunding (“ECF”) with AMB Connect.
   • ECF is a new form of fundraising that allows companies and limited liability partnerships (“Issuers”) to obtain capital through small equity investments from relatively large numbers of investors, using online portals to publicise and facilitate such offers to crowd investors. In Malaysia, the regulatory oversight of ECF is administered by the Securities Commission Malaysia (“SC”).
   • Prior to venturing into any ECF campaigns hosted on AMB Connect, it is strongly recommended that you carefully read and understand the risks associated with ECF as outlined below. Please take note that the risks associated with ECF as stated below are not intended to be exhaustive.


2. BUSINESS RISK
   
   
   • Unlike the more conventional initial public offerings (“IPO”), which primarily involve established and larger corporations, the companies featured on AMB Connect range from early-stage startups to those in the midst of growth. Consequently, investing in such entities carries inherent risks.
   • There might be scenarios where an issuer may not grow as expected, thereby falling short of their projected targets. Additionally, in the unfortunate event of an issuer's business failure, there exists the possibility of a complete loss of your investment.


3. INFORMATION ACCURACY
   
   
   • While Issuers are obligated to disclose and furnish information in accordance with the disclosure requirements stipulated by the SC's guidelines and the standards prescribed by AMB Connect, it is important to acknowledge that verifying all the information provided by the issuer may not always be feasible to the same standard as other securities offerings under Malaysian law, such as an IPO.


4. LACK OF ILLIQUIDITY
   
   
   • As the Issuers are private limited companies, your investment in an issuer has limited exit options unless you can secure a willing buyer at an acceptable price for your shares. Currently, there is also no recognized secondary market for trading shares in companies funded by ECF.
   • Alternatively, you may find yourself waiting until the occurrence of liquidity events such as an IPO or trade sale before you can transfer, sell, or dispose of your shares. It is worth noting that most liquidity events typically take a number of years to materialize.


5. UNCERTAINTY OF RETURNS
   
   
   • Most of startups and early-stage companies operate with a primary focus on growth rather than immediate returns.
   • Subject to terms outlined in the respective shareholders' agreement (which can differ significantly from one business to another), most Issuers commonly choose to reinvest profits back into their businesses to fuel further development and expansion, instead of distributing profits to shareholders.


6. DILUTION RISKS
   
   
   • When an issuer achieves its funding target, there remains the possibility of requiring additional funding for future growth or survival. This subsequent funding may prompt the issuer to issue more shares, thereby diluting your stake unless you choose to contribute to the new funding round proportionally.
   • Newly issued shares by the issuer, particularly those with preferential attributes, may carry certain preferential rights to dividends, sales proceeds, and other matters, prioritizing them over the shares held by you. The exercise of these rights by the issuer and/or its new investors could potentially work to your disadvantage.
   • While dilution is not inherently detrimental and can sometimes signify an increase in the valuation of your stake, contingent upon the issuer's overall valuation also rising in the subsequent funding round, there exists a risk scenario where your stake may suffer dilution both in terms of percentage ownership and economic value if the issuer fails to experience a corresponding increase in valuation.


7. RECLASSIFICATION OF SHARIAH-STATUS RISK
   
   
   • The currently held Shariah-compliant shares by investors may be subsequently reclassified as Shariah non-compliant after periodic review is conducted by the appointed Shariah adviser.
   • If such event occurs, the issuer may take time to rectify the Shariah non-compliant element and regain its Shariah-compliant status.


8. INVESTOR'S RESPONSIBILITY
   
   
   • Investing in an issuer through ECF entails inherent risks, making it a potentially long-term commitment. Should any uncertainty arise regarding your financial position or your investment portfolio allocation strategy, we strongly recommend engaging a certified financial planner approved by the SC to assist you in assessing your financial health before venturing into any ECF campaign hosted on AMB Connect, ensuring informed decision-making aligned with your financial objectives.
   • As an investor, it is your responsibility to diligently scrutinize the claims or representations put forth by the issuer, ensuring they align with your risk tolerance and investment objectives.
   • Should you find yourself requiring additional information from an issuer, we highly recommend seeking clarification directly from the issuer's management team. If their explanation is insufficient or unsatisfactory, you have the discretion to refrain from proceeding with your investment decision. Your confidence in the information presented is vital in making well-informed investment choices.
   • You are always advised to exercise caution and judgment when evaluating any past performance and forecasts made by any issuer hosted on AMB Connect. While insightful, past performance doesn't guarantee future success. Similarly, forecasts are speculative and subject to uncertainties. Conduct thorough due diligence and consider broader market conditions before making investment decisions based on this information.