Legal

This web page does not contain all the information that may be important to potential lenders, and it should be read as an introduction to this MIRIS Green Bond. The summary of the information and financial and other data appearing elsewhere in this MIRIS Green Bond Information is qualified in its entirety by such more detailed information set forth elsewhere herein and, in the documents, incorporated hereto by reference. Potential lenders should consider the MIRIS Green Bond Information as a whole, including the risk factors and the more detailed financial and other data included herein or incorporated hereto by reference, before making an investment decision. The lenders could lose all or part of the invested capital. However, the lenders liability is limited to the amount of investment. Where a claim relating to the information contained in this MIRIS Green Bond Information is brought before a court, the plaintiff may, under the national legislation of the member state where the claim is brought, be required to bear the costs of translating this MIRIS Green Bond Information before the legal proceedings are initiated. Civil liability will attach only to the persons who have tabled this summary, including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent when read together with the other parts of this MIRIS Green Bond Information, or where it does not provide, when read together with the other parts of the MIRIS Green Bond Information, key information in order to aid lenders when considering whether to lend cash to the Company.

General information

Other important investor information

The Management disclaims, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise, which it might otherwise be found to have in respect of this Information or any such statement.

Neither the Company nor the Management, or any of their respective affiliates, representatives, advisers or selling agents, is making any representation to any offeree or purchaser of the Loan regarding the legality of an investment in the Loan. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Loan.

Investing in the Loan involves a high degree of risk. Investors should make their own assessment as to the suitability of investing in the Loan.

Mandatory Anti-Money Laundering Procedures

The Loan Issue is subject to the Norwegian Money Laundering Act of 1 June 2018 No. 23 and the Norwegian Money Laundering Regulations of 14 September 2018 No. 1324 (collectively, the “Anti-Money Laundering Legislation“).

Jurisdiction and governing law

The Information herein, the Application Form and the terms and conditions in the Loan Agreement of the Loan Issue shall be governed by and construed in accordance with, and the Loan will be issued pursuant to, Norwegian law. Any dispute arising out of, or in connection with, this Information or the Loan Issue shall be subject to the exclusive jurisdiction of Oslo District Court (Norwegian: “Oslo tingrett“).

Risk factors

Introduction

The primary purpose of this section is to ensure that lenders can assess the relevant risks related to their investment and make a qualified investment decision with the full knowledge of relevant facts.

The risk factors featured in this section include both general risks and risks which are specific to the Group or to the Loan, which are material for making a qualified investment decision. If any of these risks were to materialize, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or the Loan.

By subscribing for an interest in the Company, lenders will be deemed to have acknowledged that an investment in the Loan will carry risks, and that such investment is suitable only for lenders who understand the risks associated with this type of investment and who can afford to lose all or part of their investment.

Risks related to the Group's financial situation

The Group is exposed to changes in the general economic situation
The Company and the Group may be affected by the general state of the economy and business conditions, including, but not limited to, the occurrence of recession and inflation, unstable or adverse credit markets, fluctuations in operating expenses.

No guarantee as to future performance
The different business areas of the Company and the Group are in an early to late development phase, and none of them are currently generating any substantial income. There can be no assurance that the Company will be able to achieve its targets and goals and thereby be able to achieve the returns on its investments, as described in this Information.

No guarantee of profitability
The Company and/or the Group companies’ ability to achieve profitability is to a large extent dependent on the successful implementation of the different project and the spin out of the project companies.

The Company is a company under change
MIRIS is currently under change from mainly operating at a loss making R&D investments to develop new technologies, financed by issuance of financial securities to moving into an operational phase with commercialization of products. It is dependent on the successful realisation of its key projects to generate sufficiently high cash flow to repay the Loan. The successful completion of the projects by the Company is not guaranteed, and may take longer than anticipated, or may not be completed at all. The company has various projects that are somewhat diversified, so the company is not dependent on all projects to be successful to be able to repay the Loan.

Fluctuations in the Company’s future operating results
The Company’s operating results may fluctuate significantly due to a variety of factors affecting revenues and expenses in any particular financial period. The financial results may fall below expectations.

The Company is exposed to interest rate fluctuations on its floating rate debt. Any period of unexpected or rapid increase in interest rates may hence negatively affect the Company’s cash flows and profitability. The interest rate level over time will also be an important factor in the development of the value of the properties and the return which investors can obtain.

Need for additional funding
MIRIS will need additional funding to complete its real estate projects. The ability to obtain such funding will depend on several factors, some outside the Company’s control. These include, but are not limited to, the general financial market conditions, stock exchange climate, interest level, the investors’ interest in the Group and the share price of the Company. There can be no assurance that the Svart project will be perceived as sufficiently attractive to secure the necessary project profitability and the additional funding necessary to complete the project.

The additional financing may not be available on terms favourable to the Company, or at all. If adequate funds are not available on acceptable terms, the Company may be unable to (without limitation):

  • fund its expansion and growth;
  • complete investments and/or developments and/or acquisitions, in particular the Svart-project;
  • respond to competitive pressure; or
  • take advantage of acquisition opportunities.

A lack of access to external capital or material changes in the terms and conditions relating to the same could have an adverse impact on the Company’s financing costs. The absence of additional suitable funding may result in the Company having to delay, reduce or abandon all or part of its intended business, including the Svart project.

Risks related to the financial profile of the Group
The Group’s degree of debt leverage could affect its ability to obtain additional financing for its working capital needs, capital expenditures, acquisitions and development and completion of the Svart project.

Financial Risks related to the Loan

Credit Risk
MIRIS is currently in a late developing phase and has limited income. The Company is dependent on the successful development and launching of its stand-alone key product projects and construction projects.

If the projects should be substantially delayed or not be completed as planned, this will adversely affect the future cash flow of the Company and its ability to secure additional funding and there is a risk that the Issuer will be unable to make interest or principal payments when they are due, and therefore default.

Interest Rate Risk
Rising interest rates are a key risk to loan lenders. Rising interest rates will result in falling loan prices, reflecting the ability of investors to obtain an attractive rate of interest on their money elsewhere. Lower loan prices mean higher yields or returns available on loan. Conversely, falling interest rates will result in rising loan prices, and falling yields. Before investing in the Loan, lenders should assess a loan’s duration of three years in conjunction with the outlook for interest rates, in order to ensure that they are comfortable with the potential price volatility of the Loan resulting from interest rate fluctuations.

Liquidity Risk
Lenders may have difficulty finding a buyer if they want to sell their loan and may be forced to sell at a significant discount to market value. The Company will seek to establish a secondary market for the Loan through the use of market maker but the establishment and the success of the market maker cannot be guaranteed, and it could prove difficult for the investor to find a buyer at an acceptable price, or any price at all depending on the development of MIRIS and the degree MIRIS is able to establish a secondary market.

Inflation Risk
Inflation reduces the purchasing power of a loan’s future coupons and principal. As loans      tend not to offer extraordinarily high returns, they are particularly vulnerable when inflation rises. Inflation may lead to higher interest rates, which is negative for loan prices and the Company’s operations.

Risks related to the Group's operations

The Group’s operations are within both traditional real estate development and the green technology sector. The aim is to incorporate and combine sustainability and green technical solutions in an industry that traditionally has not had focus on these aspects. The operations of the Company are therefore subject to risks both related to its real estate business and its technology operations.

General real estate risks

The real estate industry is subject to the general financial conditions in the sector in which it operates, see above under “Financial Risks”. In addition, technical problems, work stoppages or other labor difficulties or casualty losses which are not adequately covered by insurance, and changes in governmental regulations, such as increased taxation or introduction of new regulations are all relevant risks to the real estate business in general and may impact the company negatively.

The Company is subject to the general risks incidental to the ownership of real estate, changes in interest rates and availability of mortgage funds, changes in real estate tax rates, stamp duty, planning laws and environmental factors. The marketability and value of any real estate asset therefore depends on many factors beyond the control of the Company and there can be no assurance that there will be either a ready market for any of the properties or that those properties may be sold at a profit or that the Company is able to obtain a positive cash flow.

Particular risks pertaining to the Svart Project

In addition to the general risks associated with the real estate industry, the Svart project is a ground-breaking green real estate project aiming to be energy positive within 5 years after its completion.

The goal is to begin the construction phase of the Svart hotel in Q3 2021. The Svart hotel will be built on a site with limited or no infrastructure, such as electricity, water supply and without a road connection. All building materials will be transported to the site by sea or air. This makes the construction and building of the hotel more difficult and increases the risk of delays and other problems.

The Svart project will employ the services of external building contractors and service providers. Such projects may be exposed to cost overruns as a result of contractors experiencing financial difficulties, changes in plans or additional work outside the scope originally agreed upon.

Regulatory regime, planning, zoning and permits
The Svart project will be a green and sustainable modern new-build pursuant to the MIRIS Green Framework which is based on the current draft of EU regulations for green investments. However, the EU regulations covering green real estate development are not final and there is a regulatory uncertainty on the content of the final EU regulations. Norway may also impose additional local regulations that could make it more difficult or expensive to complete Svart hotel, for example by new regulations decreasing the real estate owners incentives to invest in and develop green real estate and technology.

The profitability of the Company will in part depend upon the continuation of a favorable regulatory regime without changes adverse to its investments. The failure to obtain or continue to comply with all necessary approvals, licenses or permits, including renewals thereof or modifications thereto, may adversely affect the Svart project, as could delays obtaining such consents due to objections from third parties.

Technological risks
The Svart project is based both on proven as well as new technologies in order to satisfy the MIRIS Green Framework, including the extensive use of solar power, geothermal heat and other renewable sources of power in addition to various forms of water and sewage treatment that does not harm the environment. However, there can be no assurances that the Company will be able to make the Svart project an energy positive hotel and obtain the goal of going “off-grid” within 5 years after the completion.

Combining all the green technologies described above has not been tried out before on a project comparable to the Svart project. Both the effectiveness and the functioning of the technological solutions may be poorer than expected and lead to delays compared to the current estimates due to unforeseen circumstances.

Other risks

The Group may not be able to manage growth effectively
The future growth and performance of the Group and its operations will partly depend on its ability to manage growth effectively, including its ability to adequately manage the number of employees, technical solutions, operational efficiency, the Group’s organization and locations and the completion of the Svart project.

The Group may not be successful in attracting or retaining sufficient skilled employees at competitive terms
The successful development and performance of the Group’s business depends on its ability to attract and retain skilled professionals with appropriate experience and expertise. There can be no assurance that the Group will have access to sufficiently skilled personnel, especially considering the current labor market with high demand for skilled personnel. Failure to attract or retain employees could result in the inability to maintain the business improvements or take advantage of new opportunities that may arise.

The Company faces the risk of litigation or other proceedings in relation to its business
The outcomes of any litigation may expose the Group to unexpected costs and losses, reputational and other non-financial consequences and diverting management attention, which may in turn have a material adverse effect on the Company’s business, operating results and financial condition.

Competition
The technology landscape within sustainability in general and property in specific, is complex and dynamic. A wide range of start-ups are entering the market on a monthly basis, at the same time as mature players are expanding their offerings into these areas. Time-to-market is therefore of high importance for the success of the Group’s innovative solutions and projects, since the Company does not have any patented technology.