Swvl (SWVL) Risk Analysis

The Swvl Public Company Articles and the shareholders agreement by and among Swvl and certain of its shareholders (the "Swvl Shareholders Agreement") contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for Swvl Securities, and therefore depress the trading price. These provisions could also make it difficult for shareholders to take certain actions, including electing directors who are not nominated by the incumbent members of the Swvl Board or taking other corporate actions, including effecting changes in Swvl's management, and may inhibit the ability of an acquiror to effect an unsolicited takeover attempt. Such provisions include, among other things: - a classified board of directors with staggered, three-year terms;- the ability of the Swvl Board to issue preferred shares and to determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval;- the right of Mostafa Kandil to serve as Chair of the Swvl Board so long as he remains Chief Executive Officer of Swvl and to serve as a director so long as he beneficially owns at least 1% of the outstanding shares of Swvl and his employment has not been terminated for cause;- until the completion of Swvl's third annual meeting of shareholders, commitments by major shareholders to vote in favor of the appointment of Swvl designees to the Swvl Board at any shareholder meeting (and, thereafter, to vote in favor of the appointment of Mostafa Kandil or his designee to the Swvl Board, subject to specified conditions);- the limitation of liability of, and the indemnification of and advancement of expenses to, members of the Swvl Board;- advance notice procedures with which shareholders must comply to nominate candidates to the Swvl Board or to propose matters to be acted upon at a shareholders' meeting, which could preclude shareholders from bringing matters before annual or special meetings and delay changes in the Swvl Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise from attempting to obtain control of Swvl;- that directors may be removed only for cause and only upon the vote of two-thirds of the directors then in office;- that shareholders may not act by written consent in lieu of a meeting;- the right of the Swvl Board to fill vacancies created by the expansion of the Swvl Board or the resignation, death or removal of a director; and - that the Swvl Public Company Articles may be amended only by the Swvl Board or by the affirmative vote of holders of a majority of not less than 75% of the votes of the shares of Swvl entitled to vote.

Swvl's corporate affairs are governed by its amended and restated memorandum and articles of association (the "Swvl Public Company Articles"), the BVI Companies Act and the common law of the BVI. The rights of shareholders to take legal action against Swvl's directors, actions by minority shareholders and the fiduciary responsibilities of directors under BVI law are governed by the BVI Companies Act and the common law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as from the common law of England, which has persuasive, but not binding, authority on a court in the BVI. The rights of Swvl's shareholders and the fiduciary responsibilities of Swvl's directors under BVI law are largely codified in the BVI Companies Act but are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the BVI has a less exhaustive body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. There is no statutory recognition in the BVI of judgments obtained in the U.S., although the courts of the BVI will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. As a result of all of the above, holders of Swvl Securities may have more difficulty in protecting their interests in the face of actions taken by Swvl's management, members of the board of directors or major shareholders than they would as shareholders of a U.S. company.

Swvl is subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer such as Swvl to follow the corporate governance practices of its home country. Certain corporate governance practices in the British Virgin Islands, which is Swvl's home country, may differ significantly from Nasdaq corporate governance listing standards. For instance, Swvl may choose to follow home country practice in lieu of Nasdaq corporate governance listing standards such as: - have a majority of the board be independent (although all of the members of the audit committee must be independent under the Exchange Act);- have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors;- have regularly scheduled executive sessions for non-management directors;- have annual meetings and director elections; and - obtain shareholder approval prior to certain issuances (or potential issuances) of securities. Swvl follows home country practice and is exempt from requirements to obtain shareholder approval for the issuance of 20% or more of its outstanding shares under Nasdaq Listing Rule 5635(d). If, in the future, Swvl chooses to follow other home country practices in lieu of Nasdaq corporate governance listing standards (such as the ones listed above), Swvl's shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers. For more information about Swvl's corporate governance practices, please see the subsection of this Report entitled "Item 16.G. Board Practices-Foreign Private Issuer Status."

Swvl is an "emerging growth company," as defined in the JOBS Act. As a result, Swvl is taking advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, the ability to furnish two rather than three years of income statements and statements of cash flows in various required filings and not being required to include an attestation report on internal control over financial reporting issued by Swvl's independent registered public accounting firm. As a result, Swvl's shareholders may not have access to certain information that they deem important. Swvl could be an emerging growth company for up to five years, although Swvl could lose that status sooner if (i) it has a total annualgross revenue of at least $1.235 billion, (ii) it is deemed to be a large accelerated filer, as defined in the rule under the Exchange Act, or (iii) if it issues more than $1.0 billion in non-convertible debt in during the three-year period. Swvl cannot predict if investors will find Swvl Securities less attractive if it relies on these exemptions. If some investors find Swvl Securities less attractive as a result, there may be a less active trading market for the Swvl Securities and its share price may be more volatile.

There is no statutory enforcement in the British Virgin Islands of judgments obtained in the U.S., however, the courts of the British Virgin Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that: - the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;- the judgment is final and for a liquidated sum;- the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;- in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;- recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and - the proceedings pursuant to which judgment was obtained were not contrary to natural justice. The British Virgin Islands courts are unlikely: - to recognize or enforce against Swvl, judgments of courts of the U.S. predicated upon the civil liability provisions of the securities laws of the U.S.; and - to impose liabilities against Swvl, predicated upon the certain civil liability provisions of the securities laws of the U.S. so far as the liabilities imposed by those provisions are penal in nature.

We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.0025 per Warrant, provided that the last reported sales price of the Ordinary Shares equals or exceeds $450 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Warrants could force you to (a) exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (b) sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants, or (c) accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants. In addition, we have the ability to redeem the outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.0025 per Warrant upon a minimum of 30 days' prior written notice of redemption provided that the last reported sales price per Ordinary Share equals or exceeds $250 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption, and provided that certain other conditions are met, including that holders will be able to exercise their Warrants prior to redemption for a number of Ordinary Shares determined based on the redemption date and the fair market value of our Ordinary Shares. The value received upon exercise of the Warrants (i) may be less than the value the holders would have received if they had exercised their Warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of the Warrants, including because the number of Ordinary Shares received is capped at 0.361 Ordinary Shares per Warrant (subject to adjustment) irrespective of the remaining life of the Warrants. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are "out-of-the-money," in which case you would lose any potential embedded value from a subsequent increase in the value of the Ordinary Shares had your warrants remained outstanding.

Sales of a substantial number of Swvl securities, including our Ordinary Shares, in the public market could occur at any time. Sales of a substantial number of Swvl securities in the public market or the perception that these sales might occur, could depress the market price of our securities and could impair our ability to raise capital through the sale of additional equity securities. Sales of a substantial number of our securities upon any future waivers or expiration of lock-up agreements entered into by our shareholders, or the perception that such sales may occur, could have a material and adverse effect on the trading price of our securities. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could cause the market price of our securities to decline or increase the volatility in the market price of our securities.

The market price of Swvl Securities is affected by the supply and demand for such shares, which may be influenced by numerous factors, many of which are beyond Swvl's control, including: - fluctuation in actual or projected operating results;- failure to meet analysts' earnings expectations;- the absence of analyst coverage;- negative analyst recommendations;- changes in trading volumes in Swvl Securities;- changes in Swvl's shareholder structure;- changes in macroeconomic conditions;- the activities of competitors;- changes in the market valuations of comparable companies;- changes in investor and analyst perception with respect to Swvl's business or the mass-transit ridesharing industry in general; and - changes in the statutory framework applicable to Swvl's business. As a result, the market price of Swvl Securities may be subject to substantial fluctuation. In addition, general market conditions and fluctuation of share prices and trading volumes could lead to pressure on the market price of Swvl Securities, even if there may not be a reason for this based on Swvl's business performance or earnings outlook. Furthermore, investors in the secondary market may view Swvl's business more critically than prior or current investors, which could adversely affect the market price of Swvl Securities in the secondary market. If the market price of Swvl Securities declines as a result of the realization of any of these or other risks, investors could lose part or all of their investment in Swvl Securities. Additionally, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the shares. If any of Swvl's shareholders brought a lawsuit against Swvl, Swvl could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of management from the business, which could significantly harm Swvl's business, financial condition and operating results.

Swvl Securities are listed on Nasdaq Capital Market. If Swvl violates Nasdaq listing requirements, Swvl Securities may be delisted. On May 4, 2023, Swvl received written notice from Nasdaq indicating that, as a result of not having timely filed its Annual Report on Form 20-F for the fiscal year ended December 31, 2022, Swvl was not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the Securities and Exchange Commission. On July 20, 2023, Swvl obtained an extension from Nasdaq permitting it to regain compliance with Nasdaq Listing Rule 5250(c)(1) provided it files its Annual Report on Form 20-F for the fiscal year ended December 31, 2022 no later than October 30, 2023. Swvl regained compliance with Nasdaq Listing Rule 5250(c)(1) after the filing of its prior Annual Report. If Swvl fails to meet any of Nasdaq's listing standards, Swvl Securities may be delisted. In addition, the Swvl Board may determine that the cost of maintaining the listing on a national securities exchange outweighs the benefits of such listing. A delisting of Swvl Securities ordinary shares may materially impair shareholders' ability to buy and sell our ordinary shares and could have an adverse effect on the market price of, and the efficiency of the trading market for, Swvl Securities. The delisting of Swvl Securities could significantly impair Swvl's ability to raise capital and the value of your investment.