investment statement for - Pumpkin Patch investor relations

Tax implications on returnsThis summary addresses certain New Zealand taxconsequences for New Zealand tax residents who arenatural persons. The summary is not a comprehensivedescription of all New Zealand tax considerations that may berelevant to a decision to purchase, sell or hold Shares orOptions. Therefore it is strongly recommended that allprospective investors obtain professional advice relevant totheir own particular circumstances.SharesDividends – Dividends paid to shareholders will be subject toNew Zealand withholding tax and final taxes but liability inrespect of such taxes may be reduced or satisfied to theextent the dividends have imputation credits attached.Sale of Shares – A profit on the sale of Shares could be subjectto New Zealand tax in certain circumstances. Gains on thesale of Shares by a New Zealand tax resident will be subject toNew Zealand tax if the seller is in the business of dealing inshares or if the Shares were acquired for the purpose of sale orif the Shares were sold as part of a profit-making undertakingor scheme.OptionsThere will be no tax implications until such time that theOptions are exercised. Upon exercise, the holder of the Optionwill be taxed on the difference between the Exercise Price andthe market price of the Shares at the time the Option wasexercised. Once an Option converts to Shares uponconversion, the same tax implications as described for Sharesabove will apply.what are my risks?Principal risksSharesThe principal risk to investors under the Share Offer is that theymay not be able to recoup their original investment or theymay not receive the returns they expect. This could happen fora number of reasons including that:• The price at which the Shares trade may be lower than theprice paid for them;• There is no ready market for Pumpkin Patch shares;• Pumpkin Patch does not have funds available to paydividends;• Pumpkin Patch becomes insolvent or does not havesufficient assets to pay returns to holders of the Shares;• The operational and financial performance of PumpkinPatch falls below expectation; and/or• The Company is placed in receivership or liquidation.The Shares will be fully paid ordinary shares and holders ofShares will have no liability to Pumpkin Patch for any furtherpayment in respect of the Shares.Risk factors exist that are both specific to Pumpkin Patch'sbusiness activities and of a general nature. These factors may,individually or in combination, affect the future operatingperformance of Pumpkin Patch and the value of a holder'sinvestment in Pumpkin Patch.Many factors will affect the price of the Shares includingeconomic conditions in New Zealand and elsewhere, theoperational and financial performance of Pumpkin Patch,changes in government policies and regulations in countrieswhere Pumpkin Patch operates and movements in interestrates or currency exchange rates.fashion created for kids41