MAZARO 1A
€1,625,000
total amount raised
- Backed by over 100 investors
This campaign ended
Main risks specific to MAZARO and its sector
The risks related to relationships with clients
At the commercial level, MAZARO's business plan is based on existing discussions with clients and only part of the forecast turnover is formally signed and related to preliminary engineering studies. Although this conservative approach does not take into account new clients to prospect, the potential risk cannot be ruled out. The time to market between first commercial contact and production in series is +/- 2 years including engineering, prototype and testing.
MAZARO works with Tier 1 parts manufactures and cannot fully control them in the production of transmissions. An error in this process may lead to poor performance or even accidents that may damage the image and reputation of MAZARO.
MAZARO is currently developing prototypes for three clients. If one or more of these clients stop their commercial relationship with MAZARO, it might postpone the realization of the business plan.
Although MAZARO's product has already been tested by an independent firm, one cannot exclude that some tests might be non-conclusive and that the series production might be delayed or canceled.
The risks related to the sensitivity of the automotive sector to economic cycles
Activities related to the sale of heavy equipment and the automotive industry in general are procyclical in nature. To minimize this risk, MAZARO is active in different market segments – on-road, off-road and wind power – and in different geographical areas: Asia, Europe and intentions for the US.
The risk related to the size of MAZARO and the team structure
The small size of MAZARO's staff, 4 FTE (including the two active self-employed shareholders) and one part-time advisor, resulting in a concentration of know-how on a small group of people may lead to operational risk. However, this risk would fade with the gradual expansion of the commercial and engineering teams.
The risks related to the business and political environment
As a large part of MAZARO's business is intended for export, adverse foreign policy intervention cannot be excluded, particularly with regard to political decisions about electrification of mobility.
The Covid-19 pandemic has strongly increased delivery times of outsourced parts and electronic components and this can delay part of MAZARO’s activities and also its licensees’ activities. If this situation does not improve, it might have a negative impact on MAZARO’s revenues.
The financial risks related to the potential insolvency of MAZARO
The attention of the Investors is directed towards the risk of insolvency of MAZARO, without guarantee of returns on the investment. Although MAZARO has no external financial debts and very low working capital needs, the risks affecting the performance of MAZARO (for example, a bankruptcy would lead to the loss of all or part of the investment) puts the investor at risk on MAZARO. The insolvency of an important client or a licensee would also negatively affect MAZARO.
The financial risk related to currency prices volatility
There is a risk associated with foreign exchange transactions when MAZARO's transactions are carried out in currencies other than the Euro in its dealings with foreign clients. This is the case with the client Anand that invoices its clients in Indian rupees (INR). About 50% of MAZARO’s sales will be done with foreign countries with a possible (adverse) forex impact.
Thus, a sudden fluctuation, affecting one of the currencies with which MAZARO’s clients and/or licensees operate, is likely to have a negative or positive effect on the business of MAZARO.
The risks related to intellectual property infrigements
Although the essence of MAZARO’s technology is protected by international patents, there is a risk that competitors copy the technology anyway. In such a case, the only way to enforce MAZARO's patent rights are costly and long legal proceedings.
The confidential know-how which is adequately protected by contracts with the employees, suppliers and licensees. The best protection of this know-how is that it is coded in the controller software which makes it almost impossible to regenerate.
Nevertheless, as MAZARO is expected to become more successful and known, the efforts from competitors to get access to his hidden know-how and to by-pass the patents can grow.
At the commercial level, MAZARO's business plan is based on existing discussions with clients and only part of the forecast turnover is formally signed and related to preliminary engineering studies. Although this conservative approach does not take into account new clients to prospect, the potential risk cannot be ruled out. The time to market between first commercial contact and production in series is +/- 2 years including engineering, prototype and testing.
MAZARO works with Tier 1 parts manufactures and cannot fully control them in the production of transmissions. An error in this process may lead to poor performance or even accidents that may damage the image and reputation of MAZARO.
MAZARO is currently developing prototypes for three clients. If one or more of these clients stop their commercial relationship with MAZARO, it might postpone the realization of the business plan.
Although MAZARO's product has already been tested by an independent firm, one cannot exclude that some tests might be non-conclusive and that the series production might be delayed or canceled.
The risks related to the sensitivity of the automotive sector to economic cycles
Activities related to the sale of heavy equipment and the automotive industry in general are procyclical in nature. To minimize this risk, MAZARO is active in different market segments – on-road, off-road and wind power – and in different geographical areas: Asia, Europe and intentions for the US.
The risk related to the size of MAZARO and the team structure
The small size of MAZARO's staff, 4 FTE (including the two active self-employed shareholders) and one part-time advisor, resulting in a concentration of know-how on a small group of people may lead to operational risk. However, this risk would fade with the gradual expansion of the commercial and engineering teams.
The risks related to the business and political environment
As a large part of MAZARO's business is intended for export, adverse foreign policy intervention cannot be excluded, particularly with regard to political decisions about electrification of mobility.
The Covid-19 pandemic has strongly increased delivery times of outsourced parts and electronic components and this can delay part of MAZARO’s activities and also its licensees’ activities. If this situation does not improve, it might have a negative impact on MAZARO’s revenues.
The financial risks related to the potential insolvency of MAZARO
The attention of the Investors is directed towards the risk of insolvency of MAZARO, without guarantee of returns on the investment. Although MAZARO has no external financial debts and very low working capital needs, the risks affecting the performance of MAZARO (for example, a bankruptcy would lead to the loss of all or part of the investment) puts the investor at risk on MAZARO. The insolvency of an important client or a licensee would also negatively affect MAZARO.
The financial risk related to currency prices volatility
There is a risk associated with foreign exchange transactions when MAZARO's transactions are carried out in currencies other than the Euro in its dealings with foreign clients. This is the case with the client Anand that invoices its clients in Indian rupees (INR). About 50% of MAZARO’s sales will be done with foreign countries with a possible (adverse) forex impact.
Thus, a sudden fluctuation, affecting one of the currencies with which MAZARO’s clients and/or licensees operate, is likely to have a negative or positive effect on the business of MAZARO.
The risks related to intellectual property infrigements
Although the essence of MAZARO’s technology is protected by international patents, there is a risk that competitors copy the technology anyway. In such a case, the only way to enforce MAZARO's patent rights are costly and long legal proceedings.
The confidential know-how which is adequately protected by contracts with the employees, suppliers and licensees. The best protection of this know-how is that it is coded in the controller software which makes it almost impossible to regenerate.
Nevertheless, as MAZARO is expected to become more successful and known, the efforts from competitors to get access to his hidden know-how and to by-pass the patents can grow.
Main risks specific to the Shares of MAZARO
Risks related to the volatility, the Euronext Access market and the liquidity
In case of non-realization of the forecasts, there is a risk that the value of the shares of MAZARO will be lower than expected, leading to low returns, even nil or negative returns, for the investors.
The share price of a listed technological company can be highly volatile. The price at which MAZARO's shares will be traded and the price investors can realize for their shares will be influenced by a large number of factors, including the performance of MAZARO, but also specific offer and demand on the trading order book and general economic circumstances.
MAZARO has requested the admission of (part of its) shares to trading on Euronext Access, which is a multilateral trading facility and not a regulated market. The rules and regulations (regarding reporting, information, governance rules, transparency of shareholding,...) applicable to companies listed on Euronext Access are less severe than those applicable to a regulated market (such as Euronext Brussels).
Moreover, the regulations and thresholds aiming to protect minority shareholders in case of change of control are less strict on Euronext Access than on the regulated markets. Investing in securities traded on Euronext Access, such as MAZARO’s shares, is therefore likely to be associated with a higher risk than an investment in shares which are listed on a regulated market.
The admission to trading on Euronext Access may not be considered as an implication that a liquid market for the shares will develop or will be maintained after admission to trading on Euronext Access. The liquidity of MAZARO’s shares on Euronext Access may be very limited given the shareholding structure of MAZARO. It might be difficult to sell large blocks of shares because there won’t necessarily be a counterparty.
The double fixing method generates some lack of liquidity and transparency. As a reminder, in a double fixing listing system, the fixing negotiations take place every day at 11:30 a.m. and 4:30 p.m. and the fixings then give rise to the comparison of the buy and sell orders accumulated since the opening of the central order book without resulting in transactions.
Transactions are then possible during a defined period, at the price of the fixing, which makes it possible to somewhat increase the liquidity of this market.
In case of non-realization of the forecasts, there is a risk that the value of the shares of MAZARO will be lower than expected, leading to low returns, even nil or negative returns, for the investors.
The share price of a listed technological company can be highly volatile. The price at which MAZARO's shares will be traded and the price investors can realize for their shares will be influenced by a large number of factors, including the performance of MAZARO, but also specific offer and demand on the trading order book and general economic circumstances.
MAZARO has requested the admission of (part of its) shares to trading on Euronext Access, which is a multilateral trading facility and not a regulated market. The rules and regulations (regarding reporting, information, governance rules, transparency of shareholding,...) applicable to companies listed on Euronext Access are less severe than those applicable to a regulated market (such as Euronext Brussels).
Moreover, the regulations and thresholds aiming to protect minority shareholders in case of change of control are less strict on Euronext Access than on the regulated markets. Investing in securities traded on Euronext Access, such as MAZARO’s shares, is therefore likely to be associated with a higher risk than an investment in shares which are listed on a regulated market.
The admission to trading on Euronext Access may not be considered as an implication that a liquid market for the shares will develop or will be maintained after admission to trading on Euronext Access. The liquidity of MAZARO’s shares on Euronext Access may be very limited given the shareholding structure of MAZARO. It might be difficult to sell large blocks of shares because there won’t necessarily be a counterparty.
The double fixing method generates some lack of liquidity and transparency. As a reminder, in a double fixing listing system, the fixing negotiations take place every day at 11:30 a.m. and 4:30 p.m. and the fixings then give rise to the comparison of the buy and sell orders accumulated since the opening of the central order book without resulting in transactions.
Transactions are then possible during a defined period, at the price of the fixing, which makes it possible to somewhat increase the liquidity of this market.