Risk Factors

Investing in Metalfrio’s common shares involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Metalfrio’s business, financial condition, liquidity, results of operations, cash flows and/or prospects could be adversely affected by any of these risks. The market price of its common shares could decline due to any of these risks or other factors, and you may lose all or part of your investment. Additional risks and factors not currently known to the company or those that we currently deem to be immaterial, may also adversely affect its business, financial condition, liquidity, results of operations, cash flow and/or prospect, and/or the price of its common shares.

For purposes of this section, when we state that a risk, uncertainty or problem may, could or will have an “adverse effect” or “negative effect” on Metalfrio or “adversely affect” Metalfrio’s business, it means that the risk, uncertainty or problem could have an adverse effect on its business, financial condition, results of operations, cash flow, liquidity and/or prospect, and/or the price of Metalfrio’s common shares, except as otherwise indicated. You should view similar expressions in this section as having similar meaning.

1) Risks Related to Macroeconomic Factors

  • The company are subject to substantial risks related to Metalfrio’s operations outside Brazil.
  • The governments of emerging markets have exercised, and continue to exercise, significant influence over the economy of those countries. This influence, as well as the political and economic conditions in those countries, may adversely affect the Company and the market price of its common shares.
  • The deterioration of economic and market conditions outside Brazil, especially in emerging markets, may adversely affect its business.
  • We are subject to monetary fluctuations and other exchange risks affecting Metalfrio’s operations outside Brazil.
  • The expansion and current operations of its subsidiaries outside Brazil involve particular challenges that we may not be able to overcome. The Company’s inability to overcome these challenges may adversely affect Metalfrio.
  • Inflation and government measures to curb inflation may contribute to economic uncertainty in Brazil and in the other emerging market countries in which the Company operates, and could have an adverse impact on Metalfrio and the market price of its common shares.
  • Exchange rate instability may adversely affect the Brazilian economy and the market price of its common shares.

2) Risks Related to the Company and to the Industry

  • Changes in the international prices of the commodities that Metalfrio uses in its production processes may adversely affect the Company.
  • The consolidation of the industry in which the Company operates may adversely affect Metalfrio.
  • The Company is subject to risks associated with developing products and technologies, which could lead to delays in new product launches and could involve substantial costs.
  • The company may be adversely affected if it is unable to offer its products at competitive prices, retain its existing customers or attract new customers.
  • A significant part of Metalfrio’s gross operating revenue comes from a small number of clients and any reduction in this number may affect it adversely.
  • A significant portion of its gross operating revenue comes from a limited number of customers, and the loss of these customers or reduction in sales to them may have an adverse effect on Metalfrio.
  • Metalfrio depends on a limited number of suppliers, and the loss of any of them may have a significant adverse effect on its business.
  • The Company is subject to extensive regulation and environmental legislation, which may result in an increase in its costs.
  • There are several risks inherent in its past and future acquisitions, and the Company may not be able to meet its financial targets or implement its strategies.
  • Metalfrio may face difficulties in integrating the operations of the acquired companies with its operations.
  • The Company may be adversely affected if current tax incentives granted them cease to exist or are suspended.
  • The interests of the Company’s management and employees may be excessively linked to the price of its shares, given that their compensation is also based on stock options.

3) Risks Related to Offering and to Our Shares

  • The relative volatility and the limited liquidity of the Brazilian securities market may adversely affect the liquidity and the market price of Metalfrio’s common shares.
  • Economic development and investor perception of risk in other countries, including emerging countries, may adversely affect the trading price of Brazilian securities, including its common shares.
  • Metalfrio do not currently have and, after this offering, the Company will continue not to have a controlling shareholder or control group holding more than 50% of its voting capital, which may make the Company susceptible to alliances and conflicts between shareholders and other events resulting from the absence of a controlling shareholder or control group that holds more than 50% of its voting capital.
  • The Company may raise additional funds in the future by issuing securities, which may result in dilution of its common shares.
  • As a result of the investment in its common shares you will suffer an immediate dilution in the net book value of your investment.