Risk Disclosure

Nature of the Notes

Bhupen Varsani issues fixed rate notes (the “Notes”) as unsecured, non-convertible debt instruments issued as a private arrangement to invited individuals only. Each Note represents an unconditional obligation of the Issuer to pay interest and repay the principal in accordance with the agreed repayment type.

Notes are offered with two repayment profiles. Interest-only notes pay a constant monthly interest amount, with the full principal returned as a lump sum at maturity. Capital-and-interest (amortising) notes pay a fixed monthly amount comprising a declining interest component and an increasing capital repayment, with the outstanding balance reducing to zero over the term.

The Notes are not shares, units in a collective investment scheme, or any other form of equity participation. Holders of the Notes have no ownership interest in Varsani Capital, no voting rights, and no entitlement to dividends or a share in profits. The Notes do not convert into equity under any circumstances.

Unsecured Obligation

The Notes are unsecured. They are not backed by any specific asset, charge, guarantee, or collateral. In the event of the Issuer’s bankruptcy or individual insolvency, holders of the Notes would rank as unsecured creditors. There is no guarantee that the full principal or any accrued interest would be recovered in such circumstances.

The Notes are not protected by the Financial Services Compensation Scheme (FSCS) or any equivalent deposit protection arrangement.

Fixed Interest Rate

The interest rate applicable to each Note is fixed at the point of investment and is determined by reference to the prevailing Bank of England Base Rate plus a fixed spread corresponding to the selected term. Once fixed, the rate does not change for the duration of the Note, irrespective of subsequent movements in the Bank of England Base Rate or other market interest rates.

For interest-only Notes, interest is calculated on the full principal balance throughout the term. For capital-and-interest Notes, interest is calculated on the outstanding (declining) balance, meaning the interest component of each payment decreases over time while the capital component increases. In both cases, payments are made monthly by direct credit to the Noteholder’s designated bank account.

Terms and Maturity

Notes are issued with terms of three, five, or ten years. For interest-only Notes, the Issuer is obligated to return the full principal amount as a lump sum at maturity. For capital-and-interest Notes, principal is repaid progressively through the monthly payments over the term, with the final payment discharging the remaining balance at maturity.

The minimum investment amount is £5,000 per Note. The Issuer reserves the right to amend the minimum investment threshold at his discretion for future issuances.

Early Redemption

Noteholders may request early redemption of their Notes prior to the stated maturity date via the Platform. Upon submission, the redemption request is submitted to the Issuer for processing. The Noteholder may cancel the request before confirming it on the Platform, but a submitted request may not be withdrawn.

All early redemptions are subject to an early redemption charge. For interest-only Notes, the charge equals the total interest due on the outstanding balance for the remaining term. For amortising Notes, the charge equals the sum of the remaining scheduled interest payments. The charge is deducted from the outstanding balance; the resulting net amount is returned to the Noteholder.

The Platform displays the early redemption charge and net amount returned before the Noteholder confirms the request. The figures displayed represent the amounts that will be applied upon settlement.

Settlement of early redemptions is typically completed within five Business Days, reflecting T+2 LSE settlement plus one to two days for broker withdrawal processing. Noteholders should be prepared to hold their Notes to maturity and should not invest funds that may be required before the maturity date.

Capital Risk

Your capital is at risk. The value of your investment may go down as well as up, and you may not recover the full amount of your original investment. Past performance is not a reliable indicator of future results.

The ability of the Issuer to meet his obligations under the Notes depends on his financial condition, the performance of his investment activities, and his ability to generate sufficient returns to service interest payments and repay principal at maturity.

Liquidity Risk

The Notes are not listed on any recognised exchange and there is no secondary market for their sale or transfer. Noteholders should treat the Notes as illiquid investments and should not expect to be able to sell or transfer their Notes prior to maturity except through the early redemption mechanism described under Early Redemption above.

Regulatory Status

Bhupen Varsani is not authorised or regulated by the Financial Conduct Authority (FCA). The Notes are not regulated investment products and the protections afforded to investors in regulated products, including access to the Financial Ombudsman Service, do not apply. This is a private arrangement for invited individuals only.

This document does not constitute financial advice, an invitation or inducement to engage in investment activity, or a personal recommendation. Noteholders are strongly encouraged to seek independent legal, financial, and tax advice before investing.

Tax Considerations

Interest received on the Notes may be subject to United Kingdom income tax. The tax treatment of interest income depends on the individual circumstances of each Noteholder. The Issuer does not provide tax advice and Noteholders are responsible for their own tax reporting obligations. Noteholders should consult a qualified tax adviser regarding the tax implications of their investment.

Conflicts of Interest

The Issuer invests the proceeds received from Noteholders in his own Investment ISA, which holds a mix of liquid financial assets including equities, bonds, and exchange-traded funds. As the Issuer manages these investments directly, conflicts may arise between his personal investment decisions and the interests of Noteholders. The Issuer will endeavour to manage such conflicts fairly and in accordance with his obligations, but Noteholders should be aware that conflicts may arise.

Amendments

The Issuer reserves the right to amend this Risk Disclosure at any time. Material amendments will be communicated to existing Noteholders in writing. The most current version of this document is available on the Varsani Capital platform.