Fractal Analytics Ltd IPO

Security breaches, cyber-attacks, computer viruses and hacking activities may cause material adverse effects on our business, financial performance and results of operations and expose us to liability, which could adversely affect our business and our reputation.

Our success depends on our ability to attract, retain and expand relationships with our clients. We derived 54.2% of our revenue from operations in our Fractal.ai segment from our top-10 clients, of which one client contributed 8.2% of our revenue, in the six months ended September 30, 2025. We also derived 79.6% of our revenue from operations in our Fractal.ai segment from our existing "Must Win Clients" ("MWC") in the six months ended September 30, 2025. If we cannot maintain and expand our relationships with our existing client base or add new clients, our business, financial condition, cash flows and results of operations may be adversely affected.

Our focus industries - consumer packaged goods and retail ("CPGR"), technology, media and telecom ("TMT"), healthcare and life sciences ("HLS"), and banking, financial services and insurance ("BFSI") contributed 37.5%, 27.2%, 17.0%, and 12.2%, respectively in the six months ended September 30, 2025 to our revenue from operations in the Fractal.ai segment. Any decrease in demand for AI solutions in these industries could adversely affect our business, financial condition and results of operations.

We had a net loss in Fiscal 2024 and losses before exceptional items and tax expense in Fiscals 2024 and 2023. There is no assurance that we will not incur losses in the future as we expand our operations.

Our Company, Subsidiaries, and two of our Directors are involved in certain legal proceedings. Any adverse decision in such proceedings may render us/them liable to liabilities/penalties and may adversely affect our business, cash flows and reputation.

We derived 64.9%, 64.1%, 65.2%, 61.9% and 66.0% of our revenue from operations from the United States of America for the six months ended September 30, 2025, six months ended September 30, 2024, Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively. Our global operations involve challenges and risks that could increase our expenses, adversely affect our results of operations and require increased time and attention from our management.

Our business depends on the quality and successful implementation of our AI solutions. Delays or failure in meeting contractual timelines or the expectation of our clients may result in cost overrun, loss of business and disputes which in turn could adversely impact our business, financial condition and results of operations.

We have incurred negative cash flows in the past. There is no assurance that we will not incur losses in the future as we expand our operations.

We may be adversely affected by the evolving laws and regulations governing our business and the introduction of any new applicable laws and regulations in the jurisdictions we operate in. Failure to comply with the existing, and changes to, laws and regulations applicable to our business could subject our Company to enforcement actions and penalties and otherwise harm our business.

Our Statutory Auditor has noted certain observations in auditor's report under "Report on Other Legal and Regulatory Requirements" and in their reporting under the Companies (Auditor's Report) Order, 2020.