American Drive Acquisition Company Class A (ADAC) Risk Analysis
Risk Overview Q4, 2016
Source: the company's latest filing for the period ended Dec 31, 2016, filed Oct 13, 2017
Risk Change Over Time
No filing history is available.
Risk Highlights Q4, 2016
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 10
- Share Price & Shareholder Rights - Risk 1Trading on the OTC pink sheets may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.
We have convertible notes outstanding that may be converted, at a discount, into shares of our common stock thus increasing the number of shares issued and outstanding we have and having a potential negative effect on our stock price.
- Share Price & Shareholder Rights - Risk 2We have additional securities available for issuance, which, if issued, could adversely affect the rights of the holders of our common stock.
Our Articles of Incorporation authorize the issuance of 500,000,000 shares of our common stock and 500,000,000 shares of blank check preferred stock. The common stock or blank check preferred stock can be issued by our board of directors, without stockholder approval. Any future issuances of our common stock would further dilute the percentage ownership of our common stock held by public shareholders.
- Share Price & Shareholder Rights - Risk 3Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock. In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
- Share Price & Shareholder Rights - Risk 4Our stock price is likely to be highly volatile because of several factors, including a limited public float.
The market price of our common stock is likely to be highly volatile because there has been a relatively thin trading market for our stock, which causes trades of small blocks of stock to have a significant impact on our stock price. You may not be able to resell shares of our common stock following periods of volatility because of the market's adverse reaction to volatility. Other factors that could cause such volatility may include, among other things: - actual or anticipated fluctuations in our operating results; - the absence of securities analysts covering us and distributing research and recommendations about us; - we expect our actual operating results to continue to fluctuate; - we may have a low trading volume for a number of reasons, including that a large amount of our stock is closely held; - overall stock market fluctuations; - economic conditions generally; - announcements concerning our business or those of our competitors or vendors; - our ability to raise capital when we require it, and to raise such capital on favorable terms; - conditions or trends in the industry; - litigation; - changes in market valuations of other similar companies; - announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships or joint ventures; - future sales of common stock; - actions initiated by the SEC or other regulatory bodies; - departure of key personnel or failure to hire key personnel; and - general market conditions. - convertible note holders have the right to convert the notes to common shares at a discount which could have the effect of depressing the stock price
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.
