Hexagon Purus SPAC Presentation Deck
Risk factors (2/4)
The international operations of the Group will be subject to a number of risks inherent in operating a business in foreign countries: The Group operates in several jurisdictions in addition to Norway. The Company and the Group will thus be subject to a number of risks inherent in
operating a business in various jurisdictions, including, but not limited to political, social and economic instability, limitations on insurance coverage, import-export quotas and costs, confiscatory taxation, work stoppages, unexpected changes in regulatory requirements, wage and price controls,
sanctions and/or other imposition of trade barriers, imposition or changes in enforcement of local content laws, changes in economic or tax policies, changes in legislation which give rise to increased compliance costs, restrictions on currency or capital repatriations, currency fluctuations and
devaluations and high levels of inflation, high interest rates, significant governmental influence over many aspects of local economies and/or other forms of government regulation and economic conditions that are beyond the Group's control, all of which could have a material adverse effect on the
Group's business, financial position, result of operations and cash flows.
HEXAGON
PURUS
The Group's insurance may not be adequate to cover the Group's losses: Insurance of all risks associated with the Group's business is not always available and, where available, the cost can be high. The occurrence of an event that is uninsurable, not covered or only partially covered by
insurance could have a material adverse effect on the Group's business and financial position. For instance, pollution and environmental risks generally are not fully insurable, and when available the insurance premiums may be high and coverage may be restricted.
Customers may be unable or unwilling to indemnify the Group: The Group may not be able to obtain agreements from customers to indemnify it for consequential damages and risks or the indemnities that it does obtain may be limited in scope and duration or subject to exceptions.
Additionally, even if the Group's customers agree to indemnify it, there can be no assurance that they will necessarily be financially able to indemnify it against all of these risks.
Risks associated with upgrades, refurbishment and repairs: The group may undertake upgrades, refurbishment and repairs on its production facilities from time to time, which involves inherent risks for delay and/or cost overruns due to various circumstances, including those outside of the
Group's control. Significant cost overruns or delays would adversely affect the Group's business, financial condition and result of operations.
TM
Hidden defects and risk related to maintenance: The Group may carry the risk for any hidden defect or defects not discovered during a warranty period. Any such defects and the Group's incurrence of costs and labilities thereof may have a materially adverse effect on the Group's business.
The Group could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws: The U.S. Foreign Corrupt Practices Act, and similar worldwide anti-bribery laws (together, anti-corruption laws) prohibit companies and their
intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. In order to effectively compete in some foreign jurisdictions, the Group may utilize local agents and seek to establish joint ventures with local operators or strategic partners.
Although the Group has policies that comply with these laws, and has procedures and controls in place to monitor internal and external compliance, if it is found to be liable for violations of anti-corruption laws, the Group could suffer from civil and criminal penalties or other sanctions, which could
have a material adverse effect on its business, financial position, results of operations and cash flows.
The Group's business is subject to numerous governmental laws and regulations, including those that may impose sanctions and/or significant costs and liability on it for environmental and natural resource damages, as well as agreements governed by foreign law: The
Group's business activities are conducted in or with relations to several different jurisdictions, and thereby exposed to a variety of different laws, regulations, rules, agreements and guidelines, which may include (without limitation) regulations related to, inter alia, anti-trust, environmental, health &
safety, anti-corruption, sanctions, and tax. Any changes thereof, or any difficulties in enforcing agreements in foreign jurisdictions, may have a significant adverse effect on the Group's operations and results. Any failure to comply with laws and regulations may result in the assessment of
administrative, civil and even criminal penalties, the imposition of remedial obligations, the denial or revocation of permits or other authorizations and the issuance of injunctions that may limit or prohibit the Company's or the relevant Group member's operations.
Counterparty risks: The ability of the Company and the Group to achieve its stated objectives will depend on the performance of the counterparties under the various agreements it has entered into. If any counterparties do not meet their obligations under the respective agreements, this may
have a material adverse effect on the Company's and the Group's operations, business and financial condition. Legal action in response to non-performance by any counterparty entails uncertainty with respect to the result of such legal action and may be costly. Without prejudice to the generality
of the foregoing, there is a risk that the Company or its subsidiaries cannot seek the legal redress that they could expect against a defaulting counterparty, or that a legal remedy will not be granted on satisfactory terms.
Competition risk: Certain of the Group's competitors are larger than the Group, both in respect of production facilities and financial position. Such competitors' greater resources could allow them to better withstand industry downturns and operational downtime, compete more effectively on the
basis of their production facilities, financial strength and technology, and retain skilled personnel. There can be no assurance that the Group can compete effectively with its competitors in the industry.
Risks relating to laws, regulations and public requirements: The Group's products are subject to governmental laws and regulations, including regulations relating to quality, health and safety. The Group manufactures its products in accordance with, and its products are subject to inspection
standards pursuant to, applicable regulation and requisite approvals. However, the Company cannot predict the future costs of complying with applicable regulations, standards and permits as these develop. Adoption of new laws, regulations or public requirements that impose more stringent
requirements concerning the safety aspects of Hexagon's products could result in increase of compliance expenditure, suspension of production, product recalls or claims from third parties, which in each case could have a material adverse effect on the Group's business, financial position, results
of operations and cash flow.
Risks related to the COVID-19 outbreak: The outbreak of the corona virus (COVID-19) may affect the overall performance of the Company, including the Company's ability to develop its products and services and implement its business plan, and may result in delays, additional costs and
liabilities, which in turn could have a material adverse effect on the Company's results, financial condition, cash flows and prospects.
Deviation from standard terms: The Company may in some circumstances for commercial reasons choose to accept customer demands for terms and conditions under customer agreements which deviate from the standard terms & conditions and therefore represent an increased liability
exposure for the Group.
Risks associated with joint ventures: The Company has entered into a joint venture (Hyon AS) and may enter into others. The success of a joint venture depends on a number of factors, a number of which are beyond one individual partner's control. Participation in joint ventures represents a
variety of legal risks inherent to joint ventures.
38View entire presentation