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Hoodless Brennan “Small Companies Big Profits – Rodney Hobson” Risk Warnings:

1. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, the Author, or by Hoodless Brennan plc.
2. Companies and case studies used in this book are for illustration only and should not be construed as investment advice. If you need investment advice, please contact Hoodless Brennan on 020 7510 8696.
3. The author of this book is Rodney Hobson, an independent financial journalist. Whilst all reasonable care is taken to ensure that the facts stated are accurate and the opinions given are fair and reasonable, neither Hoodless Brennan plc nor any director, officer or employee shall in any way be responsible for its contents. This document is intended to provide clients with information and should not be construed as an offer or solicitation to buy or sell securities.
4. All investments are speculative and prices may change quickly and go down as well as up. Past performance will not necessarily be repeated and is no guarantee of future success. There is an extra risk of losing money when shares are bought in some smaller companies including “penny shares”. There can be a big difference between the buying price and the selling price of these shares and if they have to be sold immediately, you may get back much less than you paid for them or in some circumstances, it may be difficult to sell at any price. It may also be difficult for you to obtain reliable information about the value of this investment or the extent of the risks to which it is exposed. Where a company has chosen to borrow money (gearing) as part of its business strategy its share price may become more volatile and subject to sudden and large falls. Small cap investment may not be suitable for all investors, and you should carefully consider your own personal financial circumstances before dealing in the stock market, particularly if you are on fixed incomes or approaching retirement age. If you have any doubts you should seek advice from your investment adviser or your broker.
5. Hoodless Brennan produces company research with investment recommendations. We endeavour at all times to ensure that our research is clear, fair and not misleading, however, we do not hold our research out as being impartial and it should not be viewed as wholly objective since Hoodless Brennan plc (including its parent company and its subsidiaries, their directors, officers or employees) may have or previously held a material interest in the company which is the main subject matter of the research note, or any other company mentioned, and may be providing or have provided within the previous 12 months significant advice or investment services in relation to any company or a related company referred to in the research note, or any other associated document. Hoodless Brennan’s own company research are prepared and issued by Hoodless Brennan plc on the basis of publicly available information, internally developed data and other sources believed to be reliable.
6. Hoodless Brennan plc is authorised and regulated by the Financial Services Authority (register no.155104) and a member of the London Stock Exchange and PLUS Markets. Hoodless Brennan plc is registered in England and Wales No. 2693942. Registered office: 40 Marsh Wall, Docklands, London E14 9TP.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

RISK WARNINGS

1. The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.
2. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon.
3. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us.
4. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice.
5. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful.
6. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

It is important you read, understand and acknowledge these notes.

Any investment in a Venture Capital Trust (VCT) should be viewed as a high risk and long-term commitment (i.e. at least over five years, but plan for a seven to ten year timeframe). Due to the nature of the underlying assets, VCTs are highly illiquid. As such investors must be aware that they may have difficulty, or be unable to realise their shares at levels close to that that which reflect the value of the underlying assets. The tax incentives available to investors exist in order to attract investment into an asset class that warrants high risk categorisation.

A brief summary detailing the primary risks of investing in VCTs:

* VCTs invest in small UK companies. The failure rate of these is typically much higher than that of larger companies. Qualifying companies must have gross assets of no more than £7 immediately before investment.

* All VCTs are inherently illiquid. The underlying investments are primarily in small companies, either unquoted or listed on AIM or OFEX. These investments may be extremely difficult for fund managers to realise at fair value, and therefore shareholders may not be able to dispose of shares at a price that reflects the value of the underlying assets. There is unlikely to be an active market in the shares. Any buy-back policies in place are always subject to liquidity. The future realisation of shares at, or close to net asset value can never be guaranteed by a VCT manager.

* VCTs are quoted on the stock exchange and, like investment trusts, usually trade at a discount to net asset value, which reflects the likely realisable value of the assets at any given time relative to the net value of the assets.

* There is currently no effective secondary market for VCT shares, primarily because the initial income tax relief is only available to those subscribing for newly issued shares. This compounds the difficulties shareholders may encounter when attempting to sell VCT shares.

* Shareholders must retain VCT investments for at least five years. If shares are sold within this period, the initial income tax relief will be required to be repaid. All tax reliefs are subject to change.

* VCT managers have three years from the issue of shares to invest 70% of the fund's assets in qualifying companies. If this is not achieved the fund's status as a VCT is risked meaning investors could lose their tax relief. There are additional requirements that VCTs must meet (detailed in the section: About Venture Capital Trusts). If the VCT fails to meet the requirements, HMRC may withdraw the fund's status as a VCT and associated tax reliefs.

* VCTs should be viewed as long-term investments. They are designed to give shareholders their capital gain through a tax free dividend stream. Although investors may be free to dispose of their holding after five years (in order to retain their initial income tax relief) we recommend investors should expect to retain their shares for no less than a period of seven to ten years.

* Investment strategies employed by VCT managers differ enormously. To understand the likely nature of the underlying investments, timeframe and return expectations, we strongly recommend individuals considering a VCT investment to contact us for independent advice.

* Always read the 'Risk Warning' notices included in VCT Securities Notes.

* Beware of investing in VCTs that do not have critical mass. We believe that a VCT usually requires assets of approximately £10 million in order to achieve a spread of investments and thus lower company specific risk within the portfolio. Smaller VCTs may be less diverse (increasing risk) and prove more costly to manage.

* VCTs are complex investment products and are only suitable for sophisticated investors.

* Past VCT performance is not and never should be used as a guide to future VCT performance. The value of your investment may go down as well as up.