Macobs Technologies Ltd

Risks

• Its electronic products are imported from China and expose the company to geopolitical and foreign exchange risk.

• The company does not own its registered office and the locations from which the company operate.

• There are certain pending legal proceedings involving the Company as well as the Promoter and Directors of the Company. Any adverse outcome on such proceedings may affect its business, financial condition and reputation.

• The company is significantly dependent on Major E-commerce Platforms and Digital Media Marketing for the sale of its products.

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

• The company is partly dependent on third party transportation providers for delivery of goods and materials to it from its suppliers and delivery of products to the company clients. Any failure on part of such service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.

• The company does not have a Non-Compete Agreement with its Promoter.

• Certain adjustments have been made in the financial statements of the Company by its Peer Reviewed Auditors.

• The Company has delayed payment of Government and statutory dues, and has been penalized.

• The restated financial statements have been provided by peer reviewed chartered accountants who are not the statutory auditors of the Company.

• Its insurance coverage may not adequately protect the company against all material hazards, which may adversely affect its business, results of operations and financial condition.

• Its indebtedness and the conditions and restrictions imposed by the company`s financing arrangements could adversely affect its ability to conduct its business and operations.

• The company has historically not complied with Employee State Insurance (ESI) Regulations.

• The Company has faced losses in the past.

• The Company is dependent on few suppliers for purchase of products. Loss of any of these large suppliers may affect its business operations.

• The Company has entered into certain related party transactions and may continue to do so in the future.

• Reliance has been placed on declarations and affidavits furnished by its Directors and Key Management Personnel, for details of their details included in this Draft Red Herring Prospectus.

• Its technology infrastructure and the technology infrastructure of the company third-party providers are susceptible to security breaches and cyberattacks.

• If the company fail to identify and effectively respond to changing consumer preferences and spending patterns or changing fashion trends in a timely manner, the demand for its products could decrease, causing its business, results of operations, financial condition and cash flows to be adversely affected.

• Its brands and reputation are critical to the success of the company`s business and may be adversely affected due to various reasons, which could have an adverse effect on its business, financial condition, cash flows and results of operations.

• The launch of new brands or products that prove to be unsuccessful could affect its growth plans which could adversely affect the company`s business, financial condition, cash flows and results of operations.

• Its dependence on third-party manufacturers for all the company`s products subjects it to risks, which, if realized, could adversely affect its business, results of operations, cash flows and financial condition.

• The company has experienced negative cash flows from operating and investing activities in the past.

• If the company is unable to identify consumer demand accurately and maintain an optimal level of inventory, its business, results of operations, cash flows and financial condition may be adversely affected.

• The company may not be able to adequately protect its intellectual property, which may result in the inability to prevent its competitors from developing, using or commercializing products that are functionally equivalent or similar to its products.

• Its business depends upon the user behavior, growth of online commerce industry in India and continued acceptance of digital platforms.

• The company may not be successful in implementing its business strategies.

• The company may requires additional financing in the form of debt or equity to meet its business requirements.

• The company may be subject to fraud, theft, employee negligence or similar incidents.

• Ineffective execution of marketing programs and reduced marketing expenditure could have an adverse effect on its sales.

• Its Directors have extended personal guarantees in connection with some of its debt facilities. There can be no assurance that such personal guarantees will be continued to be provided by its Promoter in future or can be called at any time, affecting the financial arrangements.

• Reliance has been placed on declarations and affidavits furnished by its Promoter, Promoter Group, Directors and Key Management Personnel, for details of their details included in this Draft Red Herring Prospectus.

• The company could face customer complaints or negative publicity about its customer service.

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

• Its success depends largely on its senior management and its ability to attract and retain the company key personnel.

• Its Promoters and certain of the company`s Directors hold Equity Shares in the Company and are therefore interested in its performance in addition to their remuneration and reimbursement of expenses.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the issue price.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and any bank or financial institution or any independent agency has not appraised the same. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titles "Objects of the Issue".

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of its Management and the company`s Board of Directors, though it shall be monitored by the Audit Committee.

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

• Its future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

• Delay in raising funds from the IPO could adversely impact the implementation schedule.

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

• The company may undertake strategic acquisitions or investments, which may prove to be difficult to integrate and manage or may not be successful.

• Its Promoters will continue to have majority control over the Company which may allow them to determine the outcome of matters submitted to shareholders for approval.

• Industry information included in this Draft Red Herring Prospectus has been derived from an industry report from various websites. Reliance on the forecasts of the reports could be incorrect and would significantly impact its operations.

• You may be subject to Indian taxes arising out of capital gains on sale of Equity Shares.

• The company cannot assure you that its equity shares will be listed on the NSE EMERGE in a timely manner or at all, which may restrict your ability to dispose of the equity shares.

• Sale of Equity Shares by its Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.

• There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder`s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

• The Issue price of its Equity Shares may not be indicative of the market price of the company`s Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.

• Holders of Equity Shares may be restricted in their ability to exercise preemptive rights under Indian law and thereby may suffer future dilution of their ownership position.

• The Company as certain borrowings that are recallable at demand.