Risk warning
To help you understand the risks involved when investing in shares in Pure Medical Group Limited, please read the following risk summary. Please invest aware and diversify your investments.
The need for diversification when you invest
Diversification involves spreading your money across different types of investments with different risks to reduce your overall risk. However, it will not lessen all types of risk. Diversification is an essential part of investing. Investors should only invest a proportion of their available investment funds in Pure Medical and should balance this with safer, more liquid investments.
Risks when investing in equity or funds
Investing in shares (also known as equity) in Pure Medical does not involve a regular return on your investment, unlike mini-bonds which offer interest paid regularly. Investing in a fund may help to diversify your investments and to spread the risk but general risks while investing in equity continue to apply. Please bear in mind the following particular risks for equity and fund investments:
Loss of investment or tax relief
The majority of start-up businesses fail or do not scale as planned and therefore investing in these businesses may involve significant risk. It is likely that you may lose all, or part, of your investment. You should only invest an amount that you are willing to lose and should build a diversified portfolio to spread risk and increase the chance of an overall return on your investment capital. If a Pure Medical fails, neither the company – nor the Directors – will pay you back your investment.
Tax relief may also be lost due to your personal circumstances or due to the activities of a company.
Lack of liquidity
Liquidity is the ease with which you can sell your shares after you have purchased them. Buying shares in Pure Medical cannot be sold easily and they are unlikely to be listed on a secondary trading market, such as AIM, Plus or the London Stock Exchange in the near future. Even successful companies rarely list shares on such an exchange. In addition, if you purchase B Investment Shares, these are non-voting shares and may not be attractive to potential buyers.
Rarity of dividends
Dividends are payments made by a business to its shareholders from the company’s profits. Pure Medical is a start-up, early-stage company, and will rarely pay dividends to our investors. This means that you are unlikely to see a return on your investment until you are able to sell your shares. Profits are typically re-invested into the business to fuel growth and build shareholder value. Pure Medical has no obligation to pay shareholder dividends.
Dilution
Any investment in shares made in Pure Medical may be subject to dilution in the future. Dilution occurs when Pure Medical issues more shares. Dilution affects every existing shareholder who does not buy any of the new shares being issued. As a result, an existing shareholder’s proportionate shareholding of the company is reduced, or ‘diluted’-this has an effect on a number of things, including voting, dividends and value.
Pure Medical will give shareholders with B-Ordinary Shares the opportunity to buy additional shares during any subsequent fundraising round so that they can maintain or preserve their shareholding.
Loss of investment and interest payments
If a Pure Medical Group Limited fails, neither the company – nor the Directors – will pay you back your investment. You should only invest an amount that you are willing to lose and should build a diversified portfolio to spread risk.
Lower in the pecking order on winding up
If Pure Medical falls into financial difficulty and goes out of business, other creditors and debt holders with seniority – including fixed charge holders, administrators, employees who are owed wages, banks, and secured debtors – will be compensated first. This means it is unlikely investors, whose unsecured investment sits below all of the previously mentioned in the pecking order, will have their initial investment or outstanding interest payments returned to them after higher ranked creditors are compensated.
Risk warning
Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Pure Medical is exclusively targeting investors who are sufficiently sophisticated to understand these risks and make their own investment decisions.
Pitches for investment are not offers to the public and investments can only be made by sophisticated investors
