CGS International (CGSI) Risk Analysis
Risk Overview Q4, 2017
Source: the company's latest filing for the period ended Jan 31, 2018, filed Apr 11, 2019
Risk Change Over Time
No filing history is available.
- Accounting & Financial Operations - Risk 1We have incurred losses since inception, and we expect to continue to incur substantial losses for theforeseeable future.
We have a limited operating history and have incurred only losses in the fiscal year that ended April 30, 2016. We anticipate that our business will generate operating losses until we successfully implement our business development strategy and start generating significant additional revenues to support our level of operating expenses. Because of the numerous risks and uncertainties associated with our business development, we are unable to predict certainly when we become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase our business.
- Accounting & Financial Operations - Risk 2Because we are not established, our services and name have no recognition and we may be prevented from generating revenues, which will reduce the value of your investment.
Because we are a new company with new services and we have not conducted advertising, there is little or no recognition of our name. As a result, consumers may search services other than ours that have brand recognition in the market and we may be unable to generate sufficient revenues to meet our expenses or meet our business plan objectives, which will reduce the value of your investment.
- Accounting & Financial Operations - Risk 3Our operating results may prove unpredictable.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause our operating results to fluctuate significantly include: risk of equipment damage done by vandalism or weather. In those cases, any of these risks could have a material adverse effect on our business, financial condition and operating results. Because we have no agreement in place with any possible client and/or night club owner, there is no guarantee that our business will succeed. The success of our business depends on the authorization of the night clubs management to install our TV's on the outside of their business. Our revenue will be generated from the sale of advertisements. Because we have not yet contacted any night club or possible client, there is absolutely no guarantee that our services will be accepted. The dependence on hiring the appropriate third parties to perform essential services could result in a material adverse effect on the company's potential future operations and, consequently, on the company's business, operating results and financial condition. Further, such third party contractors have no fiduciary duty to our shareholders and may not perform these services as expected. The capacity of certain third parties for these services may be limited for economic or other reasons.
Risk Highlights Q4, 2017
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 15
- Share Price & Shareholder Rights - Risk 1Our auditors have issued a going concern opinion and we may not be able to achieve our objectives, since we do not have adequate capital and may have to suspend or cease operations.
Our auditors have issued a going concern opinion. This means that there is doubt that we can continue as an ongoing business for the next twelve months. Our ability to raise additional financing is unknown. If we do not raise additional capital through private placements of our common stock and/or through debt financing, we believe we will not be able to run our business. We have incurred losses since inception, and we expect to continue to incur substantial losses for the foreseeable future.
- Share Price & Shareholder Rights - Risk 2Because we have a very limited operating history, it is difficult to evaluate your investment in our stock.
Evaluation of our business will be difficult because we have a very limited operating history. We are in the development stage of our business and have yet to begin offering our services. To date, we have no revenues to maintain us without additional capital injection. We can't pursue a growth strategy before significant revenues are generated. We face a number of risks encountered by early-stage companies, including our need to develop infrastructure to support growth and expansion; our need to obtain long-term sources of financing; our need to disseminate our brand and establish our marketing, sales and support organizations. Our business strategy may not be successful, and we may not successfully address any risk. If we are unable to sustain profitable operations, investors may lose their entire investment.
- Share Price & Shareholder Rights - Risk 3Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations which may limit a shareholder's ability to buy and sell our stock.
Our stock is categorized as a "penny stock". The SEC 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 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.
- Share Price & Shareholder Rights - Risk 4Our common stock is not listed on any stock exchange and there is no established market for shares of our common stock. Even if a market for our common stock develops, our common stock could be subject to wide fluctuations.
Our common stock is not listed on any stock exchange. Although our common stock is quoted on the OTC Pink marketplace, operated by OTC Market Group, Inc., there is no established public market for shares of our common stock, and no trades of our common stock have taken place on OTC Pink. The liquidity and price of our common stock is expected to be more limited than if such securities were quoted or listed on a national exchange. No assurances can be given that an active public trading market for our common stock will develop or be sustained. The trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTC stocks and certain major brokerage firms restrict their brokers from recommending OTC stocks because they are considered speculative, volatile and thinly traded. Lack of liquidity will limit the price at which shareholders may be able to sell our common stock. The price of such common stock could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors. In addition, the stock market has experienced extreme price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities. Such risks could have an adverse affect on the stock's future liquidity.
- Share Price & Shareholder Rights - Risk 5We expect to experience volatility in our stock price, which could negatively affect shareholders' investments.
The market price for shares of our common stock may be volatile and may fluctuate based upon a number of factors, including, without limitation, business performance, news announcements or changes in general market conditions. Other factors, in addition to the those risks included in this section, that may have a significant impact on the market price of our common stock include, but are not limited to: ?quality deficiencies in services;?international developments, such as technology mandates, political developments or changes in economic policies: ?changes in recommendations of securities analysts;?government regulations, including stock option accounting and tax regulations;?energy blackouts;?acts of terrorism and war;?widespread illness;?proprietary rights or patent litigation;?strategic transactions, such as acquisitions and divestitures; or ?rumors or allegations regarding our financial disclosures or practices. In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. If our stock price is volatile, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management's attention and resources. Shareholders should also be aware that, according to SEC Release No. 34-29093, the market for "penny stock," such as our common stock, has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the future volatility of our share 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.
