Enfuse

Risks

• The Company derives a significant portion of its revenues from clients located in the United States of America and Netherland and any adverse developments in these markets could adversely affect the company`s business.

• The company is dependent on a few customers for a major part of the company is revenues. Further its do not have any long-term commitments from customers and any failure to continue the company is existing arrangements could adversely affect its business and results of operations.

• Exchange rate fluctuations may adversely affect its results of operations as significant portion of the company`s revenues and some portion of its expenditure is denominated in foreign currencies.

• Its business will suffer if the company fails to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and the industries on which the company focus.

• Its success depends largely upon its skilled professionals and its ability to attract and retain these personnel. The industry where the Company operates is a highly skilled and technical employee intensive industry.

• The company does not own the Registered office, Corporate office and Delivery Centres from where the company carry out its business activities.

• Intense competition in the market for technology services could affect its pricing, which could reduce its share of business from clients and decrease the company`s revenues and profitability.

• The company has not complied with some statutory provisions of the Companies Act. Such non- compliance may attract penalties against the Company which could impact the financial position of it to that extent.

• Its services may contain coding or configuration errors or other defects that could harm its reputation, be expensive to correct, delay revenues, and expose it to litigation.

• Its insurance coverage may not be adequate to protect the company against all potential losses to which its may be subject and this may have a material effect on its business and financial condition.

• Cyber risk and the failure to maintain the integrity of its operational or security systems or infrastructure, or those of its customers with which the company conduct business, could have a material adverse effect on its business, results of operations, financial condition and cash flows.

• Its global operations expose it to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm its business.

• The company has a Subsidiary company named Enfuse Solutions S.R.L. in Romania which is not operational and in the process of closure.

• The company is dependent on information technology systems in carrying out its business activities and it forms an integral part of the company`s business.

• The implementation process of solutions may in some cases be time consuming, and any failure to satisfy its clients or perform as desired could harm the company`s business, results of operations, and financial condition.

• Any unfavorable publicity in service quality may cause the Company substantial costs which in turn could adversely affect its goodwill and the company sales could be diminished.

• The company ha in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company`s financial condition and results of operations.

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

• If the company is unable to collect its receivables from, or bill the company unbilled services to, its clients, its results of operations and cash flows could be materially adversely affected.

• Its inability to modify the company`s pricing models to retain existing clients and attract prospective clients may have an adverse impact on its business, financial condition and results of operations.

• The company relies on third-party data centres and cloud computing providers, and any interruption or delay in service from these facilities could impair the delivery of its products and adversely impact the company`s business and results of operations.

• The Company`s logo `Enfuse` is not registered as on date of this Draft Red Herring Prospectus.

• The company is heavily dependent on its Promoters and Key Managerial Personnel for the continued success of its business through their continuing services and strategic guidance and support.

• The loss of licences to use third party software or the lack of support or enhancement of such software could adversely affect its business and operations.

• Increases in manpower cost for IT professionals could reduce its cash flows and profit margins.

• Its ability to design and implement solutions depends in part on the company`s ability to operates with third-party products and services, and if the company is not successful in maintaining and expanding the capability of its workforce in using such third party products and services, business, financial condition, and results of operations could be adversely impacted.

• Its marketing and advertising campaigns may not be successful in increasing the popularity of the company`s products and offerings. If its marketing initiatives are not effective, this may adversely affect its business and results of operations.

• The company has experienced negative operating cash flows in the past. Any operating losses or negative cash flows in the future could adversely affect its results of operations and financial conditions.

• The company has incurred indebtedness which exposes it to various risks which may have an effect on its business and results of operations

• Loans availed by the Company has been secured on personal guarantees of its directors.

• Failure or malfunction of its equipment could adversely affect the company`s ability to conduct its operations.

• The Company has unsecured loans which are repayable on demand. Any demand from lenders for repayment of such unsecured loans may adversely affect its cash flows.

• The company is required to comply with certain restrictive covenants under its financing agreements. Any non-compliance may lead to, amongst others, accelerated repayment schedule and suspension of further drawdowns, which may adversely affect its business, results of operations, financial condition and cash flows.

• The company is subject to the risk of failure of, or a material weakness in, its internal control systems.

• The company has issued Equity Shares in the last 12 months at a price which could be lower than the Issue Price.

• The average cost of acquisition of Equity Shares by its Promoters, could be lower than the price determined at time of filing the Draft Red Herring Prospectus.

• Any Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.

• The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.

• The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the section titled "Objects of the Issue".

• If the company is unable to manage its growth effectively and further expand into new markets its business, future financial performance and results of operations could be materially and adversely affected.

• Its ability to pay dividends in the future will depends upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• Any future issuance of Equity Shares, convertible securities or other equity linked securities by it and any sale of Equity Shares by its significant shareholders may dilute your shareholding and adversely affect the trading price of the Equity Shares.

• Employee misconduct or failure of its internal processes or procedures could harm it by impairing the company ability to attract and retain customers and subject it to significant legal liability and reputational harm.

• Certain relevant copies of experience certificates of its Independent Directors and company Secretary are not traceable.

• Its business operations may be disrupted by an interruption in power supply which may impact its business operations.

• Its Promoter and the Promoter Group will jointly continue to retain majority shareholding in the Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.

• The determination of the Price Band is based on various factors and assumptions, and the Issue Price of its Equity Shares may not be indicative of the market price of the company`s Equity Shares after the Issue.

• Certain key performance indicators for certain listed industry peers included in this Draft Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.

• Certain data mentioned in this Draft Red Herring Prospectus has not been independently verified.

• The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Issue Price, or at all.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the Emerge Platform of National Stock Exchange of India Limited in a timely manner or at all.

• QIBs and Non-Institutional Bidders are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid and Retail Individual Investors are not permitted to withdraw their Bids after Bid/Issue Closing Date.