Risk Disclosure Statement

1. Nature of Investment

When you purchase Lots in FarmDirect, you are acquiring a contractual right to receive a share of the farm's net revenue as daily payouts for a defined period (249 weekdays). This is not:

• A bank deposit, fixed deposit, or savings account
• A bond, debenture, or regulated debt instrument
• A mutual fund, ETF, or collective investment scheme
• Insured by DICGC, RBI, SEBI, or any government agency
• Guaranteed, assured, or protected against loss

2. Key Risks

Agricultural & Operational Risks

• Weather & Climate: Drought, floods, unseasonal rain, extreme temperatures can destroy crops and reduce yield
• Pests & Diseases: Crop pests, plant diseases, livestock illness can significantly reduce production
• Market Price Volatility: Vegetable, fruit, and livestock prices fluctuate daily based on supply/demand
• Input Cost Increases: Seeds, feed, fertilizer, labor, electricity, fuel costs may rise unexpectedly
• Labor Issues: Shortages, strikes, wage disputes can disrupt operations

Business & Financial Risks

• Revenue Shortfall: Farm revenue may be insufficient to cover projected payouts
• Liquidity Risk: Your capital is locked for 249 weekdays; early withdrawal of principal is not available
• Concentration Risk: All revenue comes from a single farm location in Coimbatore
• Expansion Risk: Planned growth (new outlets, processing) may not materialize or may lose money
• Partner Risk: Dependence on partner farmers who may default or supply poor quality

Regulatory & Legal Risks

• Regulatory Changes: New laws on agriculture, land use, investment products, or taxation
• Compliance Costs: Increased licensing, reporting, or environmental compliance expenses
• Land Title Issues: Disputes, encumbrances, or government acquisition of farm land

Platform & Operational Risks

• Technology Failure: System outages, data loss, payment processing errors
• Cybersecurity: Hacking, data breaches, unauthorized access to accounts
• Key Person Risk: Dependence on founding team; loss of key personnel

3. Risk Mitigation Measures

We implement several measures to reduce (but not eliminate) risks:

• Diversified Revenue: Multiple income streams — crops, livestock, restaurant, tourism, wholesale
• Zero-Waste Processing: Surplus converted to shelf-stable products (powders, snacks)
• Partner Network: 200+ farmers reduce single-source dependency
• Insurance: Crop and livestock insurance where available
• Reserves: Maintaining cash reserves for lean periods
• Transparent Reporting: Daily payout tracking, regular farm updates for investors
• Asset Backing: Investment tied to tangible farm assets (land, equipment, livestock)

4. What You Could Lose

• Partial Returns: Daily payouts may be lower than projected if farm revenue falls short
• Delayed Payouts: Cash flow gaps may cause temporary delays in wallet credits
• Capital Loss: In extreme scenarios (total crop failure, regulatory shutdown), you could lose your entire invested principal
• No Compensation: There is no investor protection fund, insurance, or government backstop

5. Who Should NOT Invest

Do not invest if you:

• Cannot afford to lose your entire investment
• Need guaranteed returns or capital protection
• Require immediate liquidity (funds locked ~1 year)
• Do not understand agricultural business risks
• Are investing borrowed money or emergency funds
• Are under 18 years of age

6. No Advice or Recommendation

FarmDirect does not provide financial, tax, or legal advice. The information on this Platform is for educational purposes only. You should consult your own financial advisor, tax consultant, and legal counsel before investing. Past or projected returns are not indicative of future performance.

7. Regulatory Status

FarmDirect operates as a private farm revenue-sharing arrangement. It is not registered with SEBI, RBI, or any financial regulator as an investment product. The contractual relationship is governed by the Terms & Conditions and Indian Contract Act, 1872.

8. Acknowledgment

By investing through FarmDirect, you acknowledge that you have read, understood, and accepted these risks. You confirm that your investment decision is based on your own judgment and risk tolerance, not on any representation or guarantee by FarmDirect or its representatives.