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Pedevco Corp (PED)
XASE:PED
Risk Overview Q2, 2024
Risk Distribution
57% Finance & Corporate
13% Legal & Regulatory
13% Production
13% Macro & Political
4% Tech & Innovation
0% Ability to Sell
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Pedevco Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2024
Main Risk Category
Finance & Corporate
With 27 Risks
Finance & Corporate
With 27 Risks
Number of Disclosed Risks
47
-31
From last reportS&P 500 Average: 31
47
-31
From last reportS&P 500 Average: 31
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Jun 2024
0Risks added
0Risks removed
0Risks changed
Since Jun 2024
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1
0
No changes from last report
S&P 500 Average: 1
See the risk highlights of Pedevco in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 47
Finance & Corporate
Total Risks: 27/47 (57%)Above Sector Average
Share Price & Shareholder Rights14 | 29.8%
Share Price & Shareholder Rights - Risk 1
Our board of directors can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change in control of our company more difficult even if it might benefit our stockholders.Share Price & Shareholder Rights - Risk 2
Anti-takeover provisions in our Certificate of Formation and our Bylaws, as well as provisions of Texas law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our securities.Our governing documents include measures such as restrictions on calling special stockholder meetings, allowing the Board to amend bylaws without stockholder approval, and provisions that limit stockholder influence in director elections. Additionally, provisions in the Texas Business Combination Law may restrict certain transactions. These anti-takeover provisions could make our stock less attractive to investors and reduce the likelihood of favorable change-of-control offers.
Share Price & Shareholder Rights - Risk 3
Our Certificate of Formation contains a specific provision that limits the liability of our directors for monetary damages to the Company and the Company’s stockholders.Our Certificate of Formation limits director liability as permitted by the Texas Business Organizations Code. While this limitation protects directors, it may reduce incentives for shareholders to pursue derivative litigation against directors for breaches of fiduciary duty, potentially affecting shareholder interests.
Share Price & Shareholder Rights - Risk 4
Our Certificate of Formation and Bylaws provide for indemnification of officers and directors at our expense, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.Our governing documents allow us to indemnify directors and officers to the fullest extent permitted by law. However, this may lead to significant costs if claims arise, and the SEC has expressed that indemnification for federal securities law liabilities is unenforceable. Such outcomes could result in costly legal proceedings and negative publicity.
Share Price & Shareholder Rights - Risk 5
Due to the fact that our common stock is listed on the NYSE American, we are subject to financial and other reporting and corporate governance requirements which increase our costs and expenses.Our listing on the NYSE American imposes additional regulatory and compliance requirements, including regular filing of reports and adherence to corporate governance standards, which can lead to increased expenses and diversion of management’s attention from business operations.
Share Price & Shareholder Rights - Risk 6
Our outstanding options may adversely affect the trading price of our common stock.As of December 31, 2023, there are outstanding options to purchase a significant number of shares at a weighted average price of $1.28. The exercise of these options could lead to dilution and potentially depress the market price of our common stock.
Share Price & Shareholder Rights - Risk 7
An active and sustained trading market for our common stock may not develop in the future.Historically, our common stock has experienced low trading volumes. Continued illiquidity could lead to inefficiencies in executing trades, lower investor demand, and difficulties in raising capital through equity offerings, adversely affecting the market value of our stock.
Share Price & Shareholder Rights - Risk 8
We currently have a sporadic and volatile market for our common stock, and the market for our common stock is and may remain sporadic and volatile in the future.Our common stock trades in a highly sporadic and volatile market. Factors such as operating performance, growth prospects, analyst reports, and market speculation can cause significant fluctuations in the stock price and trading volume, potentially affecting liquidity and our ability to raise capital.
Share Price & Shareholder Rights - Risk 9
If persons engage in short sales of our common stock, including sales of shares to be issued upon exercise of our outstanding warrants, the price of our common stock may decline.Short selling can create downward pressure on the stock price. A significant volume of short sales, especially if coupled with additional share issuances, could lead to considerable declines in the market price of our common stock.
Share Price & Shareholder Rights - Risk 10
Securities analysts may not cover, or continue to cover, our common stock and this may have a negative impact on our common stock’s market price.The market liquidity and visibility of our common stock depend partly on research coverage by securities analysts. A reduction or discontinuation in coverage could lead to decreased investor interest, reduced trading volumes, and a lower market price for our stock.
Share Price & Shareholder Rights - Risk 11
Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.To raise capital or satisfy obligations, we may issue additional shares or other dilutive securities, which can reduce the ownership percentage and book value of existing stockholders, potentially impacting the value of their investments.
Share Price & Shareholder Rights - Risk 12
Future sales of our common stock could cause our stock price to decline.Large or rapid sales of our common stock by existing shareholders may result in an oversupply in the market, depressing the stock price. Such dilution could make it more difficult for us to raise capital in the future and negatively impact shareholder value.
Share Price & Shareholder Rights - Risk 13
Dr. Simon G. Kukes, our Chief Executive Officer and a member of board of directors, beneficially owns 66.5% of our common stock, which gives him majority voting control over stockholder matters and his interests may be different from your interests; and as a result of such ownership, we are a “controlled company” under applicable NYSE American rules.Dr. Simon G. Kukes, through his individual ownership and as trustee and beneficiary of The SGK 2018 Revocable Trust, beneficially owns approximately 66.5% of our issued and outstanding common stock. As such, he can control stockholder votes on matters including the election of directors, amendments to our certificate of formation or bylaws, and approval of significant transactions. While his interests are generally aligned with other stockholders, differences may arise, particularly regarding future financings or strategic decisions. His control may delay or prevent changes in management, and existing stockholders may find it difficult to replace him. This concentration of control may result in decisions adverse to other stockholders. Additionally, under NYSE American rules, a company with more than 50% voting control can elect to be exempt from certain corporate governance requirements such as maintaining a majority of independent directors or establishing a nominations committee.
Share Price & Shareholder Rights - Risk 14
Potential conflicts of interest that could arise for certain members of our management team and board of directors that hold management positions with other entities and our largest stockholder.Accounting & Financial Operations6 | 12.8%
Accounting & Financial Operations - Risk 1
We have a limited operating history, have incurred net losses in the past and may incur net losses in the future.Accounting & Financial Operations - Risk 2
We do not presently intend to pay any cash dividends on or repurchase any shares of our common stock.Our future dividend payments or share repurchases will depend on our financial performance, capital requirements, and other strategic considerations. Investors should not expect regular cash returns on their investment, which could limit the attractiveness of our stock.
Accounting & Financial Operations - Risk 3
Because we are a small company, the requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.As a public company, we face significant regulatory and compliance obligations that require substantial administrative resources. These include implementing robust internal controls, preparing and filing detailed reports, and incurring additional legal and accounting costs. Failure to comply could negatively impact our reputation and operational efficiency.
Accounting & Financial Operations - Risk 4
We have in the past incurred impairments and future conditions might require us to incur additional impairments or make write-downs in our assets, which would adversely affect our balance sheet and results of operations.We regularly review our tangible and intangible assets for impairment when circumstances indicate that an asset’s carrying value may not be recoverable. Past impairments, such as the $19.3 million impairment in 2020, demonstrate our vulnerability. Future significant impairments or write-downs could similarly negatively affect our financial condition and operating results.
Accounting & Financial Operations - Risk 5
We might be adversely impacted by changes in accounting standards.Future revisions or reinterpretations of U.S. GAAP, as issued by the FASB or SEC, could require changes to our financial reporting, potentially leading to increased costs, adjustments to our financial statements, or other adverse effects on reported results.
Accounting & Financial Operations - Risk 6
We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.Maintaining effective internal control over financial reporting is essential for reliable financial statements. As of December 31, 2023, our CEO and CAO have determined that our disclosure controls and internal controls are not effective, particularly in reviewing inputs for depreciation, depletion, and amortization calculations. Although we have a plan to remediate these weaknesses, there is no assurance of timely or complete remediation, which could lead to material misstatements and adverse effects on our financial condition and stock price.
Debt & Financing5 | 10.6%
Debt & Financing - Risk 1
The $1.1 million owed to us under a secured convertible promissory note due from Tilloo Exploration may not be repaid timely, if at all.Debt & Financing - Risk 2
We may not be able to generate sufficient cash flow to meet any future debt service and other obligations due to events beyond our control.Our ability to generate cash flow depends on multiple uncontrollable factors, including commodity prices, economic conditions, and operational challenges. A significant reduction in cash flows could require us to adopt alternative strategies such as delaying capital expenditures, selling assets, or restructuring debt. Failure to meet debt service obligations could lead to default, foreclosure, and a material adverse impact on our financial condition.
Debt & Financing - Risk 3
We may incur indebtedness which could reduce our financial flexibility, increase interest expense and adversely impact our operations and our unit costs.Taking on debt could constrain our cash flows due to servicing obligations, increase our exposure to economic downturns, and restrict our flexibility in making strategic decisions. Covenants associated with debt may further limit our operational and financial maneuverability, placing us at a competitive disadvantage.
Debt & Financing - Risk 4
We may need additional capital to complete future acquisitions, conduct our operations and fund our business beyond 2024, and our ability to obtain the necessary funding is uncertain.We may need to raise additional funds through public or private debt/equity financing to complete potential acquisitions and to fund exploration, drilling, and operational activities beyond 2024. Adequate funds may not be available on favorable terms, leading to potential dilution if additional equity is issued. If sufficient funding is not raised, we may be forced to scale back our business plan, sell assets, or otherwise compromise operations.
Debt & Financing - Risk 5
We have in the past been significantly dependent on capital provided to us by Dr. Simon G. Kukes and may rely on Dr. Kukes for additional funding in the future.In 2018 and 2019, Dr. Simon G. Kukes, the Company’s Chief Executive Officer and director, loaned us an aggregate of $51.7 million to support our operations and for acquisitions through an entity owned and controlled by him, all of which loans were evidenced by promissory notes. The promissory notes generally had terms which were more favorable to us than we would have been able to obtain from third parties, including generally favorable interest rates, no restrictions on further borrowing or financial covenants and no security interests in our assets. All such notes have to date been converted into 29.5 million shares of common stock at conversion prices which were above the then-trading prices of our common stock. Additionally, pursuant to subscription agreements, Dr. Kukes’ entity purchased an additional aggregate of 15.0 million shares of common stock from the Company in private transactions for $28.0 million in 2019, also on substantially more favorable terms than could be obtained with third parties. Subsequent to September 2019, we have not received any additional capital from Dr. Kukes, instead funding our operations primarily through the sale of securities in public offerings, the sale of oil and gas properties, and sales of crude oil and natural gas. While Dr. Kukes has verbally advised us that he intends to provide additional funding as needed, nothing has been documented to date, and such future funding, if any, may not be provided on favorable terms, if at all. In the event that we are forced to obtain funding from parties other than Dr. Kukes, such funding terms will likely not be as favorable and may not be available in such amounts as previously provided by Dr. Kukes. If Dr. Kukes fails to provide future funding when needed, it could have a material adverse effect on our liquidity and results of operations.
Corporate Activity and Growth2 | 4.3%
Corporate Activity and Growth - Risk 1
If we complete acquisitions or enter into business combinations in the future, they may disrupt or have a negative impact on our business.Corporate Activity and Growth - Risk 2
We may have difficulty managing growth in our business, which could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan in a timely fashion.Rapid growth may strain our financial, operational, and managerial resources. Difficulties in scaling operations, integrating new systems, and hiring and retaining qualified personnel could hamper our ability to realize expected growth and adversely affect our performance.
Legal & Regulatory
Total Risks: 6/47 (13%)Above Sector Average
Regulation3 | 6.4%
Regulation - Risk 1
We have entered into a Stipulated Final Order (“SFO”) with the Director of the Oil and Gas Conservation Division of the State of New Mexico Energy (“OCD”) which requires that the Company fund the plugging and abandonment of an aggregate of approximately 299 legacy vertical wells in our Permian Basin Asset, with any failure by us to comply with the SFO likely to materially and adversely affect our business, results of operations and cash flows.Regulation - Risk 2
Changes in the legal and regulatory environment governing the oil and natural gas industry, particularly changes in the current Colorado forced pooling system and drilling operation set-back rules, salt water disposal permitting regulations in New Mexico or Wyoming, and new federal orders restricting operations on federal lands, could have a material adverse effect on our business.Regulation - Risk 3
· Current and future declines in economic activity and recessions, changes in inflation and interest rates, and their effect on the Company, its property, prospects and the supply and demand, and ultimate price of oil and natural gas; ? The status and availability of oil and natural gas gathering, transportation, and storage facilities owned and operated by third parties; ? An increase in the differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we receive for our production may adversely affect our business, financial condition, and results of operations; ? New or amended environmental legislation or regulatory initiatives which could result in increased costs, additional operating restrictions, or delays, or have other adverse effects on us; ? The effect of future shut-ins of our operated production, should market conditions significantly deteriorate; ? Declines in the value of our crude oil, natural gas and NGL properties resulting in impairments; ? Our need for additional capital to complete future acquisitions, conduct our operations and fund our business, and our ability to obtain such necessary funding on favorable terms, if at all; ? Our ability to generate sufficient cash flow to meet any future debt service and other obligations due to events beyond our control; ? The fact that all of our assets and operations are located in the Permian Basin and the D-J Basin, making us vulnerable to risks associated with operating in only two geographic areas; ? The speculative nature of our oil and gas operations, and general risks associated with the exploration for, and production of oil and gas; including accidents, equipment failures or mechanical problems which may occur while drilling or completing wells or in production activities; operational hazards and unforeseen interruptions for which we may not be adequately insured; the threat and impact of terrorist attacks, cyber-attacks or similar hostilities; declining reserves and production; and losses or costs we may incur as a result of title deficiencies or environmental issues in the properties in which we invest; The speculative nature of our oil and gas operations, and general risks associated with the exploration for, and production of oil and gas; including accidents, equipment failures or mechanical problems which may occur while drilling or completing wells or in production activities; operational hazards and unforeseen interruptions for which we may not be adequately insured; the threat and impact of terrorist attacks, cyber-attacks or similar hostilities; declining reserves and production; and losses or costs we may incur as a result of title deficiencies or environmental issues in the properties in which we invest, any one of which may adversely impact our operations.
Environmental / Social3 | 6.4%
Environmental / Social - Risk 1
New or amended environmental legislation or regulatory initiatives could result in increased costs, additional operating restrictions, or delays, or have other adverse effects on us.Environmental / Social - Risk 2
We may be adversely affected by climate change or by legal, regulatory or market responses to such change.The long-term effects of climate change, including more frequent extreme weather events, regulatory changes, and shifts in consumer demand, could lead to increased operating costs, damage to assets, and other adverse impacts on our business. Additionally, efforts to transition to a lower-carbon economy may reduce demand for our products.
Environmental / Social - Risk 3
Increasing attention to environmental, social, and governance (“ESG”) matters may impact our business.Rising expectations regarding ESG performance could result in higher operating costs, increased regulatory scrutiny, potential litigation, and negative investor sentiment. Adverse ESG ratings or divestment trends could also affect our access to capital and stock market performance.
Production
Total Risks: 6/47 (13%)Above Sector Average
Manufacturing3 | 6.4%
Manufacturing - Risk 1
Drilling for and producing oil and natural gas are highly speculative and involve a high degree of risk, with many uncertainties that could adversely affect our business. We have not recorded significant proved reserves, and areas that we decide to drill may not yield oil or natural gas in commercial quantities or at all.Manufacturing - Risk 2
All of our crude oil, natural gas and NGLs production is located in the Permian Basin and the D-J Basin, making us vulnerable to risks associated with operating in only two geographic areas. In addition, we have a large amount of proved reserves attributable to a small number of producing formations.Our operations are geographically concentrated in the Permian Basin (New Mexico) and the D-J Basin (Colorado), with limited diversification. This concentration exposes us to risks from regional disruptions, such as price fluctuations, natural disasters, regulatory changes, or infrastructure interruptions, which could disproportionately impact our production and profitability compared to more diversified competitors.
Manufacturing - Risk 3
Our exploration, development and exploitation projects require substantial capital expenditures that may exceed cash on hand, cash flows from operations and potential borrowings, and we may be unable to obtain needed capital on satisfactory terms, which could adversely affect our future growth.Our business is capital intensive, and our ability to grow depends on securing sufficient funds at acceptable terms. Variables such as reserve estimates, production levels, sales prices, and operational costs affect our cash flows. Economic downturns or credit market disruptions could limit our ability to raise necessary capital, forcing us to delay or alter our growth strategies, which could adversely affect our future prospects.
Employment / Personnel1 | 2.1%
Employment / Personnel - Risk 1
We depend significantly upon the continued involvement of our present management.Costs2 | 4.3%
Costs - Risk 1
Our success is dependent on the prices of oil, NGLs and natural gas. Low oil or natural gas prices and the substantial volatility in these prices have adversely affected, and are expected to continue to adversely affect, our business, financial condition and results of operations and our ability to meet our capital expenditure requirements and financial obligations.Costs - Risk 2
The Company does not insure against all potential losses, which could result in significant financial exposure.We are not fully insured against all operational risks and liabilities. In the event of a catastrophic loss or an incident for which insurance is not available or there is a delay in recovery, our financial condition could be severely impacted.
Macro & Political
Total Risks: 6/47 (13%)Above Sector Average
Economy & Political Environment5 | 10.6%
Economy & Political Environment - Risk 1
Global economic conditions could materially adversely affect our business, results of operations, financial condition and growth.Economy & Political Environment - Risk 2
Economic uncertainty may affect our access to capital and/or increase the costs of such capital.Volatile global economic conditions, including fears of recession, trade wars, fluctuating interest rates, and uncertainty in consumer credit and government stimulus, create unpredictability in our ability to raise capital, potentially leading to higher costs or unavailability of necessary funds.
Economy & Political Environment - Risk 3
We have been and may continue to be negatively impacted by inflation.Recent inflation has adversely affected our operations by increasing costs of labor, equipment, and services, as well as raising interest rates and debt costs. Future inflationary pressures, driven by supply chain disruptions, fiscal policies, and geopolitical instability, could further harm our financial results.
Economy & Political Environment - Risk 4
Our industry and the broader US economy have experienced higher than expected inflationary pressures in 2022, related to continued supply chain disruptions, labor shortages and geopolitical instability. Should these conditions persist our business, results of operations and cash flows could be materially and adversely affected.In 2022, increases in costs for services and materials (such as steel, sand, and fuel) were observed due to supply constraints, heightened demand, and geopolitical events including conflicts in Ukraine and the Middle East, resulting in cost increases of 25-30% per well on our Permian Asset and 10-20% on our D-J Basin Asset. Although costs stabilized in 2023 and early 2024, continued supply chain and inflation issues could lead to reduced margins and production delays.
Economy & Political Environment - Risk 5
Declining general economic, business or industry conditions have, and will continue to have, a material adverse effect on our results of operations, liquidity and financial condition, and are expected to continue having a material adverse effect for the foreseeable future.Global economic uncertainties, including recession risks, reduced consumer confidence, and declining business activity, could further depress demand for petroleum products and adversely affect our ability to sell our production at favorable prices, thereby impacting our overall financial performance.
Natural and Human Disruptions1 | 2.1%
Natural and Human Disruptions - Risk 1
The threat and impact of terrorist attacks, cyber-attacks or similar hostilities may adversely impact our operations.Tech & Innovation
Total Risks: 2/47 (4%)Above Sector Average
Cyber Security2 | 4.3%
Cyber Security - Risk 1
Our business could be adversely affected by security threats, including cybersecurity threats.Cyber Security - Risk 2
Failure to adequately protect critical data and technology systems could materially affect our operations.Failures in our IT systems, data breaches, or other cybersecurity incidents could disrupt our operations, lead to loss or compromise of sensitive information, and cause significant financial and reputational damage.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.