Arrowhead Sepera

Risks

• The company requires certain approvals and licenses in the ordinary course of business and are required to comply with certain rules and regulations to operate its business, and the failure to obtain, retain and renew such approvals and licenses or comply with such rules and regulations, and the failure to obtain or retain them in a timely manner or at all may adversely affect the company operations.

• Thr company has concentrated customer base, making us significantly dependent on few customers for its revenue. The loss of any one or more of such customer may have a material effect on the compay business operations and profitability.

• The company has experienced net losses in Fiscal 2021 and The company anticipate increased expenses in the future. Any loss in future periods could adversely affect its operations, financial conditions, and the trading price of the Equity Shares.

• Equipments manufactured by it is associated with long gestation period and can be encashed only after the timely delivery. The company run the risk of satisfied solution to customer for order to be completed.

• The company is heavily dependent on certain suppliers from whom its procure the company material on regular basis. Its day to day operations are dependent on their supply and availability of products. Any disruption of supply from such entities may affect its business operations.

• The company has incurred substantial indebtedness which exposes it to various risks which may have an adverse effect on its business and results of operations. The company may also be unable to obtain future financing to fund its operations, expected capital expenditure and working capital requirements on favourable terms, or at all.

• The Company may be dependent on the associate entity for the outsourcing model implemented by it.

• One of the property mortgaged for its secured loans do not belong to it and are owned by the company Associate Entity. Further, its Promoters have extended personal guarantees in connection with the company debt facilities. There can be no assurance that such properties and personal guarantees will be continued to be provided by its Promoters and related entity in the future or can be called at any time, affecting its financial condition.

• The company directors (including the promoters) and Key Management Personnel are interested in the Company to the extent of their shareholding, remuneration and dividend entitlement in the Company. In addition its Associate Entity is interested in purchases, sales and other transaction.

• The company`s success depends heavily upon the Promoters and Directors for their continuing services, strategic guidance and financial support.

• The Company has not entered into any long-term contracts with most of its customers and its typically operate on the basis of orders. Inability to maintain regular order flow would adversely impact company revenues and profitability.

• The company have reported negative net cash flows in the past and may do so in the future.

• The Company is dependent on the continuing operation of its manufacturing facility.

• The company has entered into lease agreement for the corporate office at Navi Mumbai.

• The Company has availed unsecured loan from its related parties which is repayable on demand.

• There have been instances of non-compliance, non-filing and delays in payment of Provident Fund, ESIC and Professional Tax. If the Regulatory Authorities impose monitory penalties on it or take certain punitive actions against the Company in relation to the same, its business, financial condition and results of operations could be adversely affected.

• The company has dependent on third party transportation providers for the delivery of its products to the company customers.

• The company Promoter play key role in its functioning and its heavily relies on their knowledge and experience in operating the company business and therefore, it is critical for its business that the company Promoter remain associated with it.

• The Company`s manufacturing activities are labour intensive and depend on availability of skilled and unskilled labourers in large numbers. In case of unavailability of such labourers and / or inability to retain such personnel, the company business operations could be affected.

• The deployment of the Net Proceeds from the Fresh Issue are based on management estimates and have not been independently appraised by any bank or financial institution and is not subject to any monitoring by any independent agency and the Company`s management will have flexibility in utilizing the Net Proceeds from the Fresh Issue.

• If the company is unable to manage its growth effectively or if its estimates or assumptions used in developing the company strategic plan are inaccurate or its unable to execute its strategic plan effectively, The company business and prospects may be materially and adversely affected.

• The company cost of production is exposed to fluctuations in the prices of raw materials required for the manufacture as well as its availability.

• Industrial accidents at the company manufacturing facility may adversely affect its operation.

• Any delay or defaults in receipt of payments or dues from its customers could result in a reduction of the company profits.

• The company sell its products in competitive markets and the company inability to compete effectively may lead to lower market share or reduced operating margins, and adversely affect its results of operations.

• The company insurance coverage may not be sufficient or may not adequately protect it against any or all hazards, which may adversely affect its business, results of operations and financial condition.

• Orders placed by customers may be delayed, modified, cancelled or not fully paid for by the customers, which may have an adverse effect on its business, financial condition and results of operations.

• The company has yet to make an application seeking registration of trademark of its "Arrowhead". There is no assurance that this application shall result in us being granted registration in a timely manner.

• Employee misconduct, errors or fraud could expose it to business risks or losses that could adversely affect the company business prospects, results of operations and financial condition.

• The requirements of being a public listed company may strain the company resources and impose additional requirements.

• The company has not made any alternate arrangements for repaying the unsecured loans for the Objects of the Issue. Further the company has not identified any alternate source of financing the `Objects of the Issue`.

• The company has subject to stringent labour laws and its workmen are amortized under a number of trade unions. Labour disputes could lead to lost production and increased costs.

• The Company generally does business with its customers on purchase order basis and the company has not entered into long term contracts with any of them.

• The company operations are prone to fire and could expose it to the risk of liabilities, lost revenues and increased expenses.

• Non-compliance with and changes in, safety, health and environmental laws and other applicable regulations, might adversely affect The Company`s results of operations and its financial condition.

• The outbreak of COVID-19 or outbreak of any other severe communicable disease could have a potential impact on its business, financial condition and results of operations.

• There is no existing market for our Equity Shares, and we do not know if one will develop. The company stock price may be highly volatile after the Issue and, as a result, you could lose a significant portion or all of your investment.

• Investors can be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

• The ability of Indian companies to raise foreign capital may be constrained by Indian law.

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