Hexagon Purus SPAC Presentation Deck

Risk factors (1/4) RISKS RELATED TO THE BUSINESS OF THE COMPANY AND THE INDUSTRY IN WHICH IT OPERATES HEXAGON PURUS Business risk: Business risk relates to the risk of loss and reduced profitability due to changes in the Group's competitive position. Factors which can impact the Group's competitive position include new players in the industry, pressure on market prices and future demand and supply factors, including the price of hydrogen fuel, electricity, fuel cells, batteries and drivetrain components and their relative attractiveness compared with diesel, gas or other fuels, and conventional vehicle technologies. Depending on developments, these factors can have a negative impact on the results and financial position of the Company and the Group. Operational and technological risk: The Group uses its expertise to develop and commercialize new products, processes and technologies. The Group is exposed to competing technologies and processes that could have a negative effect on the Group's competitive positions and, in turn profitability and financial position. The composite pressure vessel technology used by the Group is seen as modern and typically competes with existing type-1 all-steel and type-3 metal inner-lined composite over-wrapped pressure vessels or liquified storage solutions. Should competing products be perceived by customers and the market as cheaper, better and safer, this may have a material adverse effect on the Company's profitability and financial position. TM Production risk: The Group operates in markets with strict standards for quality and delivery. Deviations from these standards could result in significant additional costs, lost sales revenues and damage to the Group's reputation. In order to mitigate this risk, the Group has procedures and controls in place to identify and prevent deviations. The Group is exposed to risks related to production such as production errors or shut downs of its facilities. Any such events would have a material adverse effect on the Group's results of operations, cash flow and financial condition. Uncertainty relating to global economic conditions and development may reduce demand for the Group's services or result in contract delays or cancellations: Volatility and sustained weakness in general economic conditions and global or regional financial markets may negatively affect and may continue to negatively affect the adoption of hydrogen or battery storage as core energy vectors used to decarbonize hard-to-abate sectors, such as transportation. Limitations on the availability of capital or higher costs of capital for financing expenditures, or the desire to preserve liquidity, may cause potential customers to make reductions in future capital budgets and outlays and could result in project modifications, delays and/or cancellations. Such adjustments could reduce demand for the Group's services, which could have a material adverse effect on the Group's results of operations, cash flow and financial condition. Intellectual property rights: The Group must observe third parties' patent rights and intellectual rights. There is always an inherent risk of third parties claiming that the technology utilized in the Group's operations infringes third parties' patents or intellectual property rights, and any such claim, if successful, could have a material adverse effect on the Group's results of operation Raw material risks and volatility and price levels of oil: The Group is exposed to developments in the prices of its raw materials and in particular the cost of carbon fiber and lithium ion batteries. The prices of these raw materials are linked to various factors including developments in the price of oil, precursor commodities and energy and the prevailing market balance where supply is dependent on a limited number of suppliers. The announced plans for Chinese manufacturing and assembly joint ventures may be unavailable on attractive or acceptable terms: The Group has announced a term sheet for a strategic partnership with CIMC ENRIC to jointly establish facilities for manufacturing of cylinders and assembly of systems to serve the Chinese and Southeast Asian markets. Final agreements have not been entered into, and there is both a risk that final terms are less attractive and contain greater risk for the Group than desired, and that the parties cannot reach agreement on final terms and the strategic partnership is not realized. Risk of investing in China: The Group has announced a term sheet for a strategic partnership with CIMC ENRIC, to jointly establish facilities for manufacturing of cylinders and assembly of systems to serve the Chinese and Southeast Asian markets. If the partnership develops, this will subject the Group to risks specific to China. China may be subject to considerable degrees of economic, political and social instability. China demonstrates significantly higher volatility from time to time in comparison to many other developed markets. Over the last few decades, the Chinese government has undertaken reform of economic and market practices and has expanded the sphere of private ownership of property in China. However, Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency non- convertibility, interest rate fluctuations and higher rates of inflation. Further, investments in China may be subject to loss due to expropriation or nationalization of assets and property or the imposition of restrictions on foreign investments and repatriation of capital. Labor issues: Labor unrest could prevent or hinder the Group's services from being carried out normally and, if not resolved in a timely and cost effective manner, could adversely affect its business, results of operations, cash flows and financial condition. New technology and/or products may cause the Group to become less competitive: The composite pressure cylinders industry and the market for fuel cell and battery electric drivetrain integration is subject to the introduction of new technologies, some of which may be subject to patent protection. As competitors and others use or develop new technologies, the Group may be placed at a competitive disadvantage, and it may face competitive pressure to implement or acquire certain new technologies at a substantial cost. The Company cannot be certain that the Group will be able to implement and use new technology or products on a timely basis or at an acceptable cost. Thus, the Group's inability to implement and use new and emerging technology in an effective and efficient manner may have a material and adverse effect on its business, financial condition, results of operations and cash flows. Failure to employ a sufficient number of skilled workers or an increase in labor costs could hurt the Group's operations: The Group's future operational performance depends to a significant degree upon the continued service of key members and key personnel in the Group and the Group's business, as well as a competent and experienced sales force in order to achieve sufficient sales volumes. The shortage of qualified personnel or the inability of the Group to obtain and retain qualified and key personnel, could also negatively affect the quality and timeliness of its work, which in turn could have a material adverse effect on the business, financial position, results of operations and cash flows of the Company and the Group. The Group's business involves numerous operating hazards: The Group's products are used to transport and store energy in the form of highly flammable, pressurized gases or high voltage battery packs. All of the Group's products are tested and approved in accordance with established safety standards. Production and related processes are regularly monitored and controlled. The Group designs its products according to national and international standards. All relevant aspects of products and manufacturing processes are monitored and recorded. Notwithstanding the above, the Group's operations will be subject to the usual hazards inherent in the Group's industry, such as inter alia loss of production, fires, bursts and pollution. The Group may also be subject to property, environmental and other damage claims by third parties, in addition to personal injury and other claims of the personnel. The occurrence of any one of these (or similar) events could result in the suspension of production operations, claims by third parties, severe damage to, or destruction of, the property and equipment involved, injury or death to personnel and environmental damage. Any one of the above could have a material adverse effect on the Group's business, financial position, results of operations and cash flow. 37