FL Entertaiment SPAC
Risk factors (2/3)
As an online business, the Betclic Everest Group depends on the reliable functioning of the internet and information technology and equipment systems. Failure in IT systems and serious interference with IT systems,
particularly through adverse external influences such as hacker attacks, may have a negative impact on the Betclic Everest Group's financial position, financial performance and cash flows.
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The Betclic Everest Group is exposed to risks of fraud or cheating and fraudulent activities.
Due to the nature of its business, the Betclic Everest Group processes a significant amount of consumer data. The Betclic Everest Group's inability to protect consumer data may lead to reputational damage and
regulatory scrutiny or penalties, which could adversely affect the Betclic Everest Group's business, financial condition and results of operations.
The Betclic Everest Group is subject to banking regulations due to deposits made by customers.
The Betclic Everest Group may not be able to adequately protect or enforce its intellectual property rights, or third parties may allege that the Betclic Everest Group is infringing their intellectual property rights.
The Betclic Everest Group relies on other third-party service providers and if such third parties do not perform adequately or terminate their relationships with the Betclic Everest Group, the Betclic Everest Group's costs
may increase and its business, financial condition and results of operations could be adversely affected.
The Betclic Everest Group's Bet-at-home.com business is subject to additional risks.
Risks relating to Taxation
The Betclic Everest Group has been subject to a VAT reassessment with respect to its activities of sports betting in France.
As a significant portion of the Betclic Everest Group's revenues are generated in a limited number of geographies, a change in the taxation applicable to online sports betting and gaming may have a significant adverse
impact on the profitability of the Betclic Everest Group.
Changes in tax laws or successful challenges to the Group's tax position could adversely affect its results of operations or financial condition.
The adoption by the Council of the European Union of an EU list of non-cooperative jurisdiction for tax purposes and the use of this list in the jurisdictions where the Group operates may impact its financial results.
Tax legislation, tax audits or disputes and the Group's results may restrict its ability to use tax loss carry-forwards, and/or deduct interest.
A change of control of the Group may restrict its ability to use tax loss carry-forwards.
The services that the Group provides are subject to VAT and sales taxes that may increase.
The Group may become subject to social security contributions reassessments.
The Company intends to be treated exclusively as a resident of France for tax purposes, but the Company also is a resident of the Netherlands for certain Dutch tax purposes, and other tax authorities may seek to treat
the Company as a tax resident of another jurisdiction, as a result of which the Company could be subject to increased and/or different taxes.
Dividends distributed by the Company may be subject to dividend withholding tax in both France and the Netherlands.
The number of issued and outstanding Ordinary Shares and/or Warrants may fluctuate substantially, which could lead to adverse tax consequences for the holders thereof.
Risks relating to Financial Matters, Capital Structure and Corporate Structure of the Company and the Group
Following the Listing, Financière LOV will continue to be in a position to exert substantial influence over the Company and its respective interests may differ from the interests of the Company's other shareholders.
The Company relies on its operating subsidiaries to provide the Company with funds necessary to meet its financial obligations and the Company's ability to pay dividends may be constrained.
The Group's significant leverage may make it difficult for the Group to operate its businesses.
Failure to comply with the covenants or other obligations contained in the Banijay Indentures and in the Senior Credit Facilities Agreements could result in an event of default. Any failure to repay or refinance the
outstanding debt when due could materially and adversely affect the Group's business.
The Group is subject restrictive cover ants which limit its operating, strategic and financial flexibility.
The Group is exposed to interest rate risks, and such rate may adversely affect its debt service obligations.
Risks relating to the Business Combination
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Actual or alleged procedural errors in the processing of online sports betting and gaming orders and the payment of winnings could result in claims for damages by customers for lost income from online sports betting
or gaming, in regulatory risks and could have a material adverse effect on the Betclic Everest Group's business and reputation.
The Betclic Everest Group may not be able to guarantee to its customers responsible gaming conditions.
The Betclic Everest Group is subject to laws aimed at preventing money laundering, bribery and the financing of terrorism. Failure to comply with these laws could have a negative effect on the Betclic Everest Group's
business and reputation.
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Pegasus Entrepreneurs and the Group have incurred significant transaction expenses and transition costs in connection with the Business Combination.
The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from the Company's business operations.
BNP Paribas and Citigroup Global Markets Limited have acted as Joint Global Coordinator and Joint Bookrunner with respect to the Pegasus IPO, and have also acted as a Placement Agent in the PIPE Financing (with BNP
Paribas as financial advisor to Pegasus Entrepreneurs) in connection with the Business Combination. A conflict of interest might be perceived as a result of such relationships.
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