MODULE 1: 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. (maximum of 5 sentences)

From a small manufacturing firm in the 1980s to one of the biggest exporters of coconut goods today,
Axelum Resources Corp. has undergone significant growth. The company sells a variety of coconut
products manufactured from all sections of the coconut, including coconut water, desiccated coconuts,
coconut milk powder, coconut milk/cream, reduced-fat coconut, sweetened coconut, and coconut oil.
Axelum serves the home market and exports a wide range of goods to more than 30 nations in North
America, Europe, Australia, South America, the Middle East, and parts of Asia. They also have
distribution expansion plans for the future. Axelum's main production facility is situated in Medina,
Misamis Oriental, in Northern Mindanao; it also has sales and marketing offices in Makati City, as well as
production and distribution facilities in the US and Australia. According to the company, the foundations
for its strong reputation and industry leadership are its broad portfolio of high-quality coconut products,
excellent distribution capabilities, exceptional customer service and relationships, sustainable supply
and quality, and commitment to world-class standards.

2. Give at least five (5) competitive advantages of Axelum based on the prospectus. The prospectus lists
the following as the Company's main competitive advantages: • Economies of scale and a varied product
line that serves several markets

• An international customer base

• Long-standing international distribution network

• A management team with extensive expertise and commitment

many quality assurances

• A history of cooperation with its major suppliers

• Ample Raw Material Supply and Access to Organic Farms

• Market pioneer in the coconut sector

3. Give at least five (5) hazards associated with the company's business based on the prospectus.
Axelum. • Any change in the availability of raw materials or a rise in their price could have a significant
and detrimental effect on the company's financial performance.

• A key factor in the company's success is its ability to obtain premium raw materials that are
consistently of the highest quality, as well as supplies that are reliable and sustainable.

• The Company might not be able to sustain and forge strong bonds with its present and potential
clients.

If this isn't done, there can be an interruption that hurts the company's operations.

• Food products that are actually contaminated or have degraded, safety concerns, and product liability
claims, consumer complaints, and other factors could all harm the company's reputation and brand,
which could have a significant and detrimental effect on how it does business.

• A failure to protect the company's logos and trademarks against infringement could result in have a
significant detrimental effect on the business.

• The Company's expansion, which entails acquisitions and expanding its distribution network in
international markets, could occasionally fail or result in hefty costs, posing a risk to its operations,
financial position, and company.

• The market perception of the Company's products may decline if it does not safeguard and promote
its brands, endangering the Company's ability to conduct business.

• Any modifications to the current environment could negatively impact the company's sales and
operations, as well as its financial condition and operational performance.

• The company may find it challenging to quickly locate a suitable successor if any of its top employees
decide to quit or transfer to a rival.

• The Company must abide by laws and regulations. Non-compliance may result in fines, penalties,
and/or other legal actions, which could interfere with the Company's business activities.

• There is no guarantee that the Company's business strategies and long-term goals will be
implemented successfully.

4. Where will Axelum put the money raised through the initial public offering or primary offer?

The Company plans to use the net proceeds from the Primary Offer to retire loans, decrease payables,
expand manufacturing facilities, install new manufacturing facilities for new products, reduce capital
expenditure requirements, and grow domestic and foreign distribution networks.

Give a brief explanation of Axelum's dividend policy. What is Axelum's dividend payout?

The Company has a dividend policy in place that requires it to distribute 15% of its reported net income
in the previous fiscal year as cash or stock dividends. Any retained earnings, if any, that are restricted for
growth or for other reasons are not included in the periodic declaration of normal cash or stock
dividends. At all times, the Board of Directors of the company has the final say on whether or not to
declare a dividend. For stock dividends, a regular or special meeting held for that purpose must have
received the affirmative vote of at least 2/3 of the outstanding capital stock of the company. The
aforementioned dividend policy shall be periodically reviewed, revised, or updated by the Board of
Directors of the Company. Dividends can only be paid from the Company's unrestricted retained
earnings and require Board approval (as well as shareholder approval if a stock dividend is declared).
The Company cannot guarantee that it will continue to pay dividends. The company was established on
August 19, 2010, and the following dividends have been declared.