China Changjiang Mining & New Energy Co (CHJI) Risk Analysis
Risk Overview Q2, 2017
Source: the company's latest filing for the period ended Jun 30, 2017, filed Aug 14, 2017
Risk Change Over Time
No filing history is available.
Risk Highlights Q2, 2017
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 17
- Share Price & Shareholder Rights - Risk 1The chinese legal system differs from that of the united states, providing less protection for investors, and it may be difficult for investors to seek legal redress against us or our officers and directors, including claims that are based upon U.S. Securities laws.
All of our current operations are conducted in China. All of our current directors and officers are nationals or residents of China. All of the assets of these persons are located in China. The PRC legal system is a civil law system. Unlike the common law system, the civil law system is based on written statutes in which decided legal cases have little value as precedents. Differences in interpretations and rulings can occur with limited opportunity for redress or appeal. It may not be possible to effect service of process within the U.S. or elsewhere outside China upon our officers and directors. Even if service of process were successful, considerable uncertainty exists as to whether Chinese courts would recognize and enforce U. S. laws or judgments obtained in the U.S. federal and state securities laws as the U. S. laws confer substantial rights to investors and shareholders that have no equivalent in China. Therefore a claim against us or our officers and/or directors or even a final judgment in the U. S. may not be recognized or enforced by Chinese courts. In 1979, the PRC began to reform its legal system and has enacted numerous laws regulating economic and business development, including those related to foreign investment. Currently many of the approvals required for our business may be obtained at local or provincial level. We believe that it is relatively easier and faster to obtain provincial approval than central government approval. Changes to existing laws that repeal or alter local regulatory authority and preempt it with national laws could negatively affect our business and the value of our securities. China's regulations and policies regarding investments, including investment in the PV business, are subject to continued reformation and revisions. They may change in a manner adverse to us and our stockholders.
- Share Price & Shareholder Rights - Risk 2There is currently a large market overhang in our common stock and future sales of our common stock could depress the market price and diminish the value of your investment.
On February 9, 2010, we filed a Certificate of Amendment to our Articles of Incorporation to effect a 1-for-10 reverse split of our common stock, after which all shares of our Series C Preferred Stock were converted into an aggregate of 609 million shares of our common stock. This effectively eliminated the ability of our other common stock holders to have a significant role in the election of directors and other corporate changes. Future sales of shares of our common stock or securities that are convertible into our common stock could adversely affect the market price of our common stock. If any of our principal stockholders sells a large number of shares or if we issue a large number of shares, the market price of our common stock could significantly decline. Moreover, the perception in the public market that our principal stockholders might sell shares of common stock could further depress the market for our common stock.
- Share Price & Shareholder Rights - Risk 3Because our officers and directors control the majority of the voting power of our common stock, investors in our common stock will not be able to determine the outcome of stockholder votes.
Our officers and directors currently control approximately 85% of our common stock. So long as they continue to hold, directly or indirectly, shares of common stock representing more than 50% of the combined voting power of our common stock, they will be able to direct the election of all of the members of our board of directors who will determine our strategic plans and financing decisions and appoint top management. They will also be able to determine the outcome of substantially all matters submitted to a vote of our stockholders, including matters involving mergers, acquisitions and other transactions resulting in a change of control of us, and our pursuit of corporate opportunities. They may seek to cause us to take courses of action that, in their judgment, could enhance their investment in us, but which might involve risks to holders of our common stock or adversely affect us or other investors.
- Share Price & Shareholder Rights - Risk 4The market for shares of our common stock has been limited and sporadic, and there is no guarantee that a market will be available for you to sell your shares.
Shares of our common stock are not listed on any exchange but have been sporadically traded in over the counter transactions or in inter-dealer quotations. There is no assurance that any market makers will in the future post bid and ask prices for our shares of common stock. Our stock has been very thinly traded and there were many days or weeks that the shares did not trade at all. There is no assurance that any market will exist at the time that a shareholder wishes to sell his or her shares and there is no assurance that any market will continue.
- Share Price & Shareholder Rights - Risk 5Our common stock price is volatile and may not appreciate in value.
The market price of shares of our common stock fluctuated and is likely to continue to fluctuate significantly. Fluctuations could be rapid and severe and may provide investors little opportunity to react. Factors such as changes in commodity prices, conversion of our preferred shares, results of operations, and a variety of other factors, many of which are beyond the control of the Company, could cause the market price of our common stock to fluctuate substantially. Also, stock markets in penny stock shares tend to have extreme price and volume volatility. The market prices of the securities of many smaller public companies are subject to volatility for reasons that frequently are unrelated to operating performance, earnings or other recognized measurements of value. This volatility may cause declines, including very sudden and sharp declines, in the market price of our common stock. We cannot assure investors that the stock price will appreciate in value, that a market will be available to resell your securities or that the shares will retain any value at all.
- Share Price & Shareholder Rights - Risk 6Our stock is a penny stock. Trading of our stock may be restricted by the sec's penny stock regulations and the finra's sales practices, which may limit a stockholder's ability to buy and sell our stock.
Our stock is a penny stock currently. 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", as defined. Rule 15g-2 requires 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 required by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market, and cautions investors against making a hurried investment decision. The broker-dealer must also provide the customer with the current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction. The broker-dealer must also send a confirmation of these prices after the trade. After a purchase of penny stock, the broker-dealer must send a monthly account statement that gives an estimate of the value of each penny stock purchased. 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 SEC, the 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. 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.
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