Mendoza, Geraldine P. Ms.

Jemmalene Viado

OVERVIEW OF FINANCIAL STATEMENT ANALYSIS:

CASE STUDY 1

The attached file is the Prospectus or main marketing document of Axelum Resources Corp. during its
Initial Public Offering (IPO) or the first sale of common stock to the public. Using this as your basis,
kindly answer the following questions:

1. Describe the operating activities of Axelum or give a brief business description about the
company.

Axelum R esources Corp. has evolved from a humble manufacturing company in the 1980s
to one of the world's leading export manufacturers of coconut products today. Coconut water,
desiccated coconuts, coconut milk powder, coconut milk/cream, reduced-fat coconut, sweetened
coconut, coconut oil, and various coconut products made from all parts of the coconut are among
the set of products the company offers. Axelum exports a diverse product line to over 30 countries
in North America, Europe, Australia, South America, the Middle East, and portions of Asia; they also
serve the domestic market, with plans to extend distribution in the future. Medina, Misamis
Oriental, in Northern Mindanao, is where Axelum's primary production site is located; also, it has
sales and marketing offices in Makati City, as well as production and distribution operations in the
US and Australia. Its extensive portfolio of high-quality coconut products, excellent distribution
capabilities, exceptional customer service and relationship, sustainable supply and quality, and
commitment to world-class standards, according to the company, are the foundations for its strong
reputation and industry leadership.

2. Based on the prospectus, give at least five (5) competitive strengths of Axelum.

The following are the Company's primary competitive advantages, according to the prospectus:

 Economies of scale and diversified product line catering to different markets

 International network of customers
 Well-established global distribution network
 Highly experienced and dedicated management team
 Multiple quality certifications
 Long-standing relationship with its key suppliers
 Ample Supply of Raw Materials/Availability of Organic Farms
 Industry leader in the coconut industry

3. Based on the prospectus, give at least five (5) risks relating to the company’s business of
Axelum.

 Any disruption in raw material supply or increases in raw material costs could have a
considerable and negative impact on the Company's financial performance.
 The Company's ability to source high-quality raw materials at consistent excellent quality
and supply reliability and sustainability is critical to the company's success.
  The Company may not maintain and develop good relationships with its current and future
customers. Failure to do so could result in disruptions and negatively affect its business.
 Actual or alleged contamination or degradation of food goods, safety issues, product liability
claims, and consumer complaints may all impair the Company's reputation and brand, which
might have a meaningful and negative impact on its operations.
 Any infringement of the company's brands and trademarks, or inability to defend them,
could have a material and negative impact on the company.
 The Company's growth, which involves acquisitions and growing its distribution network in
international markets, may not always be successful or incur significant expenses, posing a
risk to its business, financial condition, and results of operations.
 If the Company fails to protect and promote its brands, the market perception of its
products may deteriorate, thus compromising the company's business.
 Any changes in the existing landscape could harm the Company's sales and operations and
hurting the Company's financial position or operating results.
 If any of the company's key members decide to leave or transfer to a competitor, the
company may have a tough time finding a suitable replacement promptly.
 The Company is subject to government regulations. Non-compliance may lead to fines,
penalties and/or other legal sanctions, which may disrupt the operations of the Company
 There is no assurance that the Company's business strategies and future plans will be
successfully implemented.

4. Where will Axelum use the proceeds from the Primary Offer or Initial Public Offering?

The Company intends to use the net proceeds from the Primary Offer for the following:
strategic fund acquisitions, expand domestic and international distribution networks, install new
manufacturing facilities for new products, expand manufacturing facilities, retire loans and reduce
payables and other capital expenditure requirements.

5. Briefly describe the dividend policy of Axelum. What is the dividend payout of Axelum?

The Company has implemented a dividend policy of paying out 15 percent of its reported net income
in cash or stock dividends in the prior fiscal year. Any retained earnings restricted for expansion, if
any, or other reasons shall be excluded from such periodic regular money or stock dividend
declaration. Dividends are subject to the ultimate approval of the Company's Board of Directors at
all times. In the case of stock dividends, at least 2/3 of the Company's total outstanding capital stock
must have approved it in a regular or special meeting called for the purpose. The Company's Board
of Directors shall review, revise, or update the foregoing dividend policy on a regular basis.
Dividends must be approved by the Board (and shareholders if a stock dividend is declared) and can
only be paid from the Company's unrestricted retained earnings. The Company can give no
assurance that it will pay any dividends in the future.

The Company was incorporated on August 19, 2010 and has declared the following dividends:

 Stock dividends of ₱55 million on June 10, 2014;

 Stock dividends of ₱50 million on September 30, 2015;

 Cash dividends of ₱50 million on August 01, 2018; and

 Stock dividends of ₱550 million on February 7, 2019.