Every investment is subject to risk, and shareholders run a significant risk that the value of their investments may decrease. Consequently, shareholders must be prepared that all, or parts, of their investments may be lost. Should one or more risk factors materialize, including, but not limited to, those indicated below, this could potentially affect the company negatively. This may include changes in forecasts and expectations regarding the company's current and future operations, operating results, liquidity, financial position, or prospects for the Company as such. An investor should refrain from investing in shares if they do not have the financial capacity to withstand a partial or complete loss of the investment. There is no guarantee that investors will achieve positive returns in the future. It is important to recognize that financial markets can be exposed to various factors and unforeseen events that can affect the value and return on any investment, and it is consequently crucial for investors to carefully assess the risks and have realistic expectations for their investments. Note that the risk factors presented below must be considered particularly significant, but do not necessarily provide a complete picture or an exhaustive description of the total risk profile. Furthermore, attention is drawn to the fact that there is an uncertainty factor regarding the valuation of the company, and this can consequently affect the accuracy of the estimated values and its calculation. It is therefore important to be aware of this uncertainty and consequently take it into consideration when evaluating investment decisions.

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Economic and Financial Risk

There is a significant risk that the underlying sales forecasts will not be realized due to delays in development work, production, and completion. This can lead to delayed revenue growth, lost market share, and negative results in the medium term, potentially falling short of forecasts. Such conditions could significantly challenge the company's viability. Sales forecasts that are not realized will, under any circumstance, lead to an increased need for capital. There is a risk that the company will not manage to raise sufficient capital to cover the capital requirement in a future fundraising round or to finance the company's operations until it achieves profitability. The company's inability to secure necessary capital will have a significant adverse effect on the company's strategies, operations, revenues, profitability, liquidity, cash flow, financial position, and prospects.

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Strategic Risk

The company is in an early growth/research phase and in ongoing development processes. iNANOD has a limited operating history, and the implementation of business strategies will require the Company's management to make complex decisions. Therefore, no guarantee can be given that the company will achieve its goals or other expected benefits. Furthermore, risks related to the successful implementation of the company's strategies can be increased by external factors, such as changes in prices, increased competition, new technology, unexpected changes in current regulations, or the materialization of any of the risk factors mentioned herein, for example, related to relevant matters concerning the business. These factors may require the focus and resources of the executive management, which in turn may involve failure or delay in the successful implementation of iNANOD's business strategy. Failure to implement the Company's business strategy may have a significant negative effect on the Company's results, financial condition, cash flow, and/or prospects.

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Market Risk

The market for iNANOD is competitive. There is a risk that other players may develop solutions where the offering to customers is better than the company's. The company is therefore exposed to significant competition directed towards its products and services. Competition in the market may increase in the long term as a result of developments in technology and other factors. Growth targets and market shares will be challenged if other competing players develop more innovative services, or if the market response changes.

The company's growth depends, among other things, on its ability to attract stakeholders (e.g., partners, investors) who see the value in the product iNANOD has developed. If the company fails to do this for any reason, or fails to attract new such stakeholders, it will have a significant adverse effect.

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Technology Risk

The company is developing a pharmaceutical product that has a long development path with associated high technological risk. There is a significant risk that the product's assumed treatment efficacy will be lower than the ambition. The market for the company's technology is characterized by continuous and rapid technological advancements which have led to, and likely will continue to lead to, significant improvements in features and performance. As a result, the company's future success and profitability will depend on its ability to respond effectively to technological changes in order to maintain and expand its position in the market. The company's future operations will depend on the successful development, introduction, and market acceptance of existing and new products that meet customer demands in a cost-effective manner.

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Operational Risk

iNANOD is exposed to operational risk such as failures or deficiencies in internal processes and systems (including, but not limited to, financial reporting and risk management systems), IT infrastructure, equipment/machinery, documentation of transactions or agreements with third parties, inadequate safeguarding of assets, employee errors, lack of maintenance of proper authorizations, breach of authorizations, and failure to comply with regulatory requirements (including, but not limited to, data protection and anti-money laundering laws) and laws for the respective markets where the company operates.

iNANOD's success depends largely on the efforts of the individual members of the management and other key employees with experience in the industry in which the company operates. The company's ability to continue to identify and develop opportunities depends on the management's knowledge and expertise in the industry and their business connections. It cannot be guaranteed that members of the management or other key employees with special skills will remain with the company, or that the company, in such a case, will be able to find suitable candidates to replace them. Any loss of such key personnel could have a significant negative impact on the company's business, results, and financial situation.

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Regulatory and Legal Risk

Regulatory conditions can impact the business, ranging from tax and support rules to various requirements and new directives that may be implemented in the future. A comprehensive and complex regulatory framework for conducting business can place strict demands on corporate governance and control of the company. Changes in laws and regulations can make it more costly to operate the business or require the company to change the way it operates its business. New regulations may limit the ability to offer the services the company currently offers, or plans to offer in the future. Among other things, it may be difficult for the company to predict regulatory or legal changes affecting the business, and any measures required to respond to or prepare for such changes, and this may lead to an increased budget or have a negative impact on the company's operations. Laws and regulations can consequently hinder or delay the company's operations, increase the company's operating costs, and reduce demand for the services. Failure to comply with certain regulatory obligations can furthermore lead to incurring significant costs, for example, if serious breaches involving personal data, among other things, are not reported to relevant supervisory authorities, and are not rectified without undue delay. There may be negative publicity associated with any serious incident, such as one involving personal data following reporting to a supervisory authority, and significant administrative fines or other sanctions may be imposed, which can have an overall negative effect on the company's business, financial position, and operating results.

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There is risk associated with potential future litigation, complaints, and claims.

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Political Risk

The industry the company operates in is a heavily regulated industry, and there is significant risk associated with the company's future approvals. There is also risk related to the handling of personal data (GDPR and related legislation) and risk related to IP (intellectual property). International trade restrictions may arise which in turn relate to and affect the Company's operations. There is risk associated with potential future litigation, complaints, and claims.

The company is exposed to changes in tax laws in the geographical areas where the Company operates, and/or non-compliance with existing tax laws which in turn can have consequences for the Company. The company is exposed to various insurance-related risks.

 

Norwegian authorities can at any time within the framework of the EEA Agreement introduce regulations or implement financial or monetary policy measures, including changes in tax, duty, and currency legislation, which could affect the company's revenues and costs. Through their control over supervisory and governing institutions in the financial market, the authorities could also make decisions that directly affect the company's business. For example, a change in the tax level can directly affect the attractiveness of investments, as capital taxation influences saving and investment behaviour, potentially impacting the company. Tax rules related to investments in startup companies may also be subject to change, which can affect the possibility of deducting losses on investments in the company. 

The industry the company operates in can also be subject to such extensive regulation that there is risk related to the company's current concessions and licenses, as well as the possibility of acquiring additional concessions and licenses.

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Reputation Risk

The Company's reputation and ability to operate can be weakened by inappropriate conduct from employees or partners. Although the company is committed to operating in a legal and ethical manner, there is a risk that employees or partners may take actions that violate the law and could result in financial sanctions against the company. This can damage the reputation, and thus the company's ability to operate. Damage to the company's reputation can have a significant negative effect, beyond any financial sanctions imposed on the company as a result of potential legal violations.

Related events where the reputation/brand is weakened due to negative publicity about products, negative customer experiences, or technical errors can lead to negative attention, and thus constitute a risk.

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Share Marketability

There does not exist, nor can it be expected, a liquid market for the shares. The value of the shares may decrease in the future. Shares in iNANOD AS will not be listed on any form of regulated market, and there are currently no concrete plans for such a listing. As an unlisted share, the share will have very limited liquidity. Finding buyers for the share could present significant challenges, and potential buyers will normally demand a significant liquidity premium (i.e., a discount against underlying values). Consequently, there is no guarantee that the shares can be sold at acceptable prices or at all. A potential stock exchange listing may be delayed, postponed, or cancelled.

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Risk of Dilution and Reduction of Company Value

Future share issues and issuance of other securities in the company may lead to dilution of shareholders and have the potential to cause a reduction in company value. Any foreign investors are additionally exposed, among other things, to risks related to legal and tax matters.

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Risk of Future Tax Position upon a Potential Future Reorganization of the Shareholder Structure

The investment entails a risk of capital gains tax on any increase in fair value generated between the time of investment and the time ownership is potentially moved to a holding company. By imposing an obligation on shareholders to contribute their shares into an overlying holding company (contribution-in-kind share issue / share-for-share exchange), this could trigger tax liability on gains that would otherwise have been deferred until final realization (sale). This could result in an unexpected tax burden for the shareholders. Any tax liability in such a context would arise without realized returns (cash proceeds), so that it must be covered without the shareholder simultaneously receiving a payout that can be used to cover the tax liability. Shareholders should therefore carefully consider the tax consequences of such a transaction and potentially consult with a tax expert.

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Valuation Risk

Valuation of businesses involves, among other things, an assessment of the potential for future earnings. These will be subjective judgments. The conclusions will be debatable as there is rarely one exact answer.