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risk and special trade factors

Principal Risks


The principal risk to investors under the Share Offer is that they may not be able to recoup their original investment or they may not receive the returns they expect. This could happen for a number of reasons including that:

  • The price at which the Shares trade may be lower than the price paid for them;

  • There is no ready market for Pumpkin Patch shares;

  • Pumpkin Patch does not have funds available to pay dividends;

  • Pumpkin Patch becomes insolvent or does not have sufficient assets to pay returns to holders of the Shares;

  • The operational and financial performance of Pumpkin Patch falls below expectation; and/or

  • The Company is placed in receivership or liquidation.

The Shares will be ordinary fully paid shares and holders of Shares will have no liability to Pumpkin Patch for any further payment in respect of the Shares.

Risk factors exist that are both specific to Pumpkin Patch’s business activities and of a general nature. These factors may, individually or in combination, affect the future operating performance of Pumpkin Patch and the

value of a holder’s investment in Pumpkin Patch.

Many factors will affect the price of the Shares including economic conditions in New Zealand and elsewhere,

the operational and financial performance of Pumpkin Patch, changes in government policies and regulations in countries where Pumpkin Patch operates and movements in interest rates or currency exchange rates.

An investor in Shares will also face the business risks arising from the assets and undertakings of the Pumpkin Patch Group.


The principal risk to holders of Options under the Option Offer is that the Options cannot be exercised because the Share price does not meet the stipulated performance benchmark. This could happen for a number of reasons including those set out above in relation to Shares. In addition once a holder of Options has paid the Exercise Price and had the Options converted to Shares, he or she is subject to the same risks as any shareholder, as set out generally in this section.

Exchange Rates

Pumpkin Patch is exposed to movements in exchange rates (in particular the exchange rates between the Australian dollar, the New Zealand dollar and the United States dollar) as:

  • In excess of 75% of Pumpkin Patch’s inventory is purchased internationally in United States dollars; and

  • The majority of Pumpkin Patch’s stock is sold in currencies other than New Zealand dollars with approximately

60% of the Company’s sales denominated in Australian dollars.

Exchange rate movements affecting these currencies will impact the financial performance and financial position of Pumpkin Patch to the extent the foreign exchange rate is not hedged.


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