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Body & Mind (BMMJ) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Body & Mind disclosed 21 risk factors in its most recent earnings report. Body & Mind reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2019

Source: the company's latest filing for the period ended Jul 31, 2019, filed Nov 13, 2019

Risk Distribution
21Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

No filing history is available.

Risks removedRisks addedRisks changedBody & Mind Risk Factors
  • Natural and Human Disruptions - Risk 1
    Our cannabis crop could be harmed by pests, plant diseases or other agricultural risks which would have a material adverse effect on our business.

    Our business involves the growing of cannabis, which is an agricultural product. As such, our business is subject to the risks inherent in the agricultural business, such as pests, plant diseases and similar agricultural risks. This could lead to a reduced yield when harvesting the cannabis affecting the supply of cannabis for distribution, and therefore, could have a material adverse effect on our business operations and our ability to meet consumer demand.

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Risk Highlights Q2, 2019

Main Risk Category
Finance & Corporate
With 7 Risks
Number of Disclosed Risks
21
-2
From last report
S&P 500 Average: 32
Recent Changes
0Risks added
2Risks removed
1Risks changed
Since Jul 2019
Number of Risk Changed
1
+1
From last report
S&P 500 Average: 1

Risk Word Cloud

we face intense competition and our competitors may have a longer operating history or greater financial resources allowing them to compete more effectively.greater financial resources allowingthe independent alcohol distributors of nevada have obtained a preliminary injunction against the issuance of recreational marijuana licenses to anyone other than licensed alcohol distributors. if this injunction remains in place we will be unable to obtain a recreational marijuana distributor license which would have an adverse effect on our business operations.recreational marijuana distributor licensewe have incurred losses in prior periods, and losses in the future could cause the quoted price of our common shares to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due and on our cash flow.price of our common sharesthe independent alcohol distributors of nevada have obtained a preliminary injunction against the issuance of recreational marijuana licenses to anyone other than licensed alcohol distributors. if this injunction remains in place we will be unable to obtain a recreational marijuana distributor license which would have an adverse effect on our business operations.independent alcohol distributors of nevadaas a manufacturer and distributor of products, we face exposure to product recalls or return of products.face exposure to product recallsunder u.s. federal law, banks or other financial institutions that provide us with banking services could be found guilty of money laundering, therefore reducing our ability from receiving reputable banking services and adversely affecting business operations.found guilty of money launderingwe may experience increased costs during the growth stage of the cannabis due to the possibility of rising energy costs.possibility of rising energy costswe are a holding company and investors are subject to the risks attributable to our subsidiaries which generate substantially all of our revenues.risks attributable to our subsidiariesour public image and the consumer perception of us is greatly influenced by scientific research, regulatory investigations, and media attention. negative publicity will result in an unfavorable public image and will negatively affect our financial condition and results of operations.negatively affect our financial conditionour future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel.our key executive officers

Risk Factors Full Breakdown - Total Risks 21

Share Price & Shareholder Rights3 | 14.3%
  • Share Price & Shareholder Rights - Risk 1
    Our Common Shares are categorized as "penny stock", which may make it more difficult for investors to buy and sell our Common Shares due to suitability requirements.

    Our Common Shares are considered "penny stock". The SEC has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our Common Shares is significantly less than $5.00 per share. This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The penny stock rules require a broker-dealer buying securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or willingness of brokers or dealers to buy or sell our Common Shares, either directly or on behalf of their clients, may discourage potential stockholders from purchasing our Common Shares, or may adversely affect the ability of stockholders to sell their shares.

  • Share Price & Shareholder Rights - Risk 2
    We may issue additional Common Shares in the future, which could cause significant dilution to all shareholders.

    Our Articles of Incorporation authorize the issuance of up to 900,000,000 Common Shares, with a par value of $0.0001 per share. As of November 1, 2019, the Company had 101,760,232 Common Shares issued and outstanding, 8,775,000 stock options outstanding and 22,146,458 share purchase warrants outstanding. As at November 1, 2019, the Company's 8,775,000 stock options outstanding are exercisable into 8,775,000 common shares of the Company with the following terms: Number of Optionsoutstanding and exercisable  Exercise price  Expiry dates  3,850,000 CAD$0.66  November 24, 2022  175,000 CAD$0.41  June 6, 2023  2,050,000 CAD$0.57 December 10, 2023 2,450,000 CAD$0.88 August 21, 2024 250,000 CAD$0.93 October 1, 2024 8,775,000 As at November 1, 2019, the Company's 22,146,458 share purchase warrants outstanding are exercisable into 22,146,458 common shares of the Company with the following terms: Number of warrantsoutstanding and exercisable  Exercise price  Expiry dates  21,700 CAD$0.66  November 3, 2019 9,072,081 CAD$0.90  November 14, 2019 637,393 CAD$0.90  December 1, 2019 11,780,134 CAD$1.50  May 17, 2023 635,150 CAD$1.25 May 17, 2023 22,146,458 On November 2, 2018, the Company issued a CAD$1,600,000 principal amount 8% unsecured convertible debentures of the Company to Australis maturing two years following the date of issue. The debentures are convertible at the option of the holder into Common Shares at a conversion price equal to CAD$0.55 per Common Share up to November 2, 2020, subject to adjustment and acceleration in certain circumstances. However, on July 1, 2019, we entered into the Conversion Agreement with Australis, whereby Australis has agreed to convert the 8% unsecured convertible debenture on July 1, 2020 in exchange for an advanced interest payment of CAD$148,339 for the period of May 2, 2019 to July 1, 2020. Upon conversion of the debenture, Australis will receive 2,909,091 Common Shares at a deemed valued of CAD$0.55 per Common Share. We are also committed to issuing 211,000 Common shares to Toro Pacific Management Inc. on the following dates: 70,500 Common Shares on November 14, 2019; 70,500 Common Shares on May 14, 2020; and 70,500 Common Shares on November 14, 2020. We may issue additional Common Shares in the future in connection with a financing or an acquisition. Such issuances may not require the approval of our shareholders. Any issuance of additional shares of our Common Shares, or equity securities convertible into our Common Shares, including but not limited to, warrants and options, will dilute the percentage ownership interest of all shareholders, may dilute the book value per share of our Common Shares, and may negatively impact the market price of our Common Shares.

  • Share Price & Shareholder Rights - Risk 3
    We are a holding company and investors are subject to the risks attributable to our subsidiaries which generate substantially all of our revenues.

    We are a holding company and essentially all of our operating assets are the capital stock of our subsidiaries. As a result, investors in us are subject to the risks attributable to our subsidiaries. As a holding company, we conduct our business through our subsidiaries, which generate substantially all of our revenues. Consequently, our cash flows and ability to complete current or desirable future enhancement opportunities are dependent on the earnings of our subsidiaries and the distribution of those earnings to us. The ability of our subsidiaries to pay dividends and other distributions will depend on their operating results and will be subject to applicable laws and regulations which require that solvency and capital standards be maintained by such companies and contractual restrictions contained in the instruments governing their debt. In the event of a bankruptcy, liquidation or reorganization of any of our subsidiaries, holders of indebtedness and trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us.

Accounting & Financial Operations3 | 14.3%
Debt & Financing1 | 4.8%

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.