Risk Factors

An investment in securities involves a high degree of risk. All investors should carefully consider the following factors in addition to the other information in this investor relations website before investing in Profarma’s securities. In general, investing in the securities of issuers in emerging market countries, such as Brazil, involves a higher degree of risk than investing in the securities of U.S. issuers or issuers in other countries with highly developed capital markets. Profarma’s business, financial condition, results of operations and prospects may be materially adversely affected by any of these risks.

The risks briefly described below are those that the Company currently believes most likely may materially affect its performance.

  • The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. Brazilian economic and political conditions have a direct impact on Profarma’s business, results of operations, financial condition and/or the Company’s cash flow, as well as the market price of its common shares.
  • Political instability may adversely affect the Company’s results of operations and the price of its shares.
  • Fluctuations in the real/U.S. dollar exchange rate may adversely affect Profarma’s results of operations, financial results and the market price of its shares.
  • Inflation, and the Brazilian government’s measures to curb inflation, may contribute significantly to economic uncertainty in Brazil, and adversely affect the Company and the market price of its shares.
  • The market price of securities issued by Brazilian companies is influenced by the perception of risk in Brazil and other emerging economies, negatively affecting the market price of Profarma’s shares and restricting its access to international capital markets.
  • Changes in Brazilian tax policy may adversely affect the Company.
  • Changes in the Brazilian pharmaceutical industry may have an adverse affect on the Company.
  • Profarma’s business depends upon its ability to develop and maintain relationships with manufacturers of the products that it distributes and with retailers that purchase the company’s products, and its inability to develop or maintain these relationships could have an adverse effect on the Company.
  • Interruption or failure in the Company’s systems may have an adverse affect on it.
  • Failure to comply with existing and future regulatory requirements may have an adverse effect on the Company.
  • Competition may decrease Profarma’s profits.
  • Circumstances associated with the Company’s growth strategy may have an adverse affect on it.
  • Profarma depends on its distribution centers to distribute products to customers located in their respective areas.
  • The reduction of tax credits in connection with the purchase of products that benefit from state tax credits or the suspension, canceling or non-renewal of these tax credits may adversely affect the Company.
  • The level of Profarma’s customers’ indebtedness may significantly increase in a short period of time and may adversely affect the company.
  • Profarma’s insurance coverage may not be sufficient to cover losses related to its activities.
  • Profarma depends on third-party transportation companies. Therefore, problems in relationships with them or changes in the quality of their services could have an adverse affect on the Company.
  • The loss of third-party licenses used by Profarma’s businesses may have an adverse affect on the Company.
  • Profarma depends on members of its senior management. If the Company is unable to retain its current senior managers or hire new qualified senior managers, this could have an adverse affect on the Company.
  • An active and liquid market for Profarma’s common shares may not develop, which would limit the investor’s ability to resell the Company’s common shares.
  • Sales of a substantial number of Profarma’s common shares after the offering may adversely affect the price of its common shares. In addition, the issuance of new shares will dilute the ownership percentage held by investors.


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