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Collective Mining (CNL) 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. Collective Mining disclosed 39 risk factors in its most recent earnings report. Collective Mining reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2019

Source: the company's latest filing for the period ended Dec 31, 2019, filed Mar 03, 2020

Risk Distribution
39Risks
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 changedCollective Mining Risk Factors
Risk Changed (12)
  • Accounting & Financial Operations - Risk 1
    The Registrants have identified material weaknesses in internal control over financial reporting. If these material weaknesses are not remediated, they could result in material misstatements in the Registrants' financial statements.

    A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Part II, Item 9A, "Controls and Procedures," the Registrants' identified a material weakness related to the design and operation of certain information technology general controls for information systems that are relevant to the preparation of the Registrants' financial statements. The Registrants' also identified a material weakness in the design and operating effectiveness of controls over the completeness and accuracy of billed and unbilled revenue from contracts with customers. As a result of these material weaknesses, management concluded that the Registrants did not maintain effective disclosure controls and procedures as of December 31, 2019. The Registrants have begun taking steps to remediate the underlying cause of these material weaknesses, but the Registrants cannot assure that the remediation of the material weaknesses will be successful or that additional material weaknesses in internal controls will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties encountered in implementation, could result in additional material weaknesses, or could result in material misstatements in the Registrants' financial statements. These misstatements could result in restatements of the Registrants' financial statements, failure to meet reporting obligations, or cause stakeholders to lose confidence in reported financial information of the Registrants.

  • Debt & Financing - Risk 2
    Cleco may be required to provide credit support to its counterparties, which could have a material adverse effect on the Registrants' liquidity ratios and liquidity.

    Cleco may guarantee the performance of all or some of its commercial transaction obligations and may also be required to provide counterparty credit support to secure all or part of those obligations. Downgrades in Cleco's credit quality or changes in the market prices of transaction-related energy commodities could increase the collateral required to be on deposit with the counterparty or clearing house. The required credit support or increase in credit support could have a material adverse effect on the Registrants' liquidity ratios and liquidity.

  • Debt & Financing - Risk 3
    Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to outstanding debt.

    Amounts drawn under Cleco's current debt agreements may bear interest at rates based on LIBOR. On July 27, 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out LIBOR as a benchmark by the end of 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021. In addition, the overall financial markets may be disrupted as a result of the phase-out or replacement of LIBOR. Uncertainty as to the nature of such potential phase-out and alternative reference rates or disruption in the financial market could have a material adverse effect on the Registrants' financial condition, results of operations, and cash flows.

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Production (1)

Risk Highlights Q4, 2019

Main Risk Category
Finance & Corporate
With 11 Risks
Number of Disclosed Risks
39
+2
From last report
S&P 500 Average: 32
Recent Changes
4Risks added
2Risks removed
12Risks changed
Since Dec 2019
Number of Risk Changed
12
+8
From last report
S&P 500 Average: 1

Risk Word Cloud

cleco's generation facilities are susceptible to unplanned outages, significant maintenance requirements, and interruption of fuel deliveries.interruption of fuel deliveriesthe operational and information technology systems on which cleco relies to conduct its business and serve customers could fail to function properly due to technological problems, cyber attacks, physical attacks on cleco's assets, acts of terrorism, severe weather, solar events, electromagnetic events, natural disasters, the age and condition of information technology assets, human error, or other reasons that could disrupt cleco's operations and cause cleco to incur unanticipated losses and expense.condition of information technology assetscleco's generation facilities are susceptible to unplanned outages, significant maintenance requirements, and interruption of fuel deliveries.susceptible to unplanned outagescleco's costs of compliance with environmental laws and regulations are significant. the costs of compliance with new environmental laws and regulations, as well as the incurrence of incremental environmental liabilities, could be significant to the registrants.incurrence of incremental environmental liabilitiethe operational and information technology systems on which cleco relies to conduct its business and serve customers could fail to function properly due to technological problems, cyber attacks, physical attacks on cleco's assets, acts of terrorism, severe weather, solar events, electromagnetic events, natural disasters, the age and condition of information technology assets, human error, or other reasons that could disrupt cleco's operations and cause cleco to incur unanticipated losses and expense.cleco to incur unanticipated lossesa downgrade in cleco holdings' or cleco power's credit ratings could result in an increase in their respective borrowing costs, a reduced pool of potential investors and funding sources, and a restriction on cleco power making distributions to cleco holdings.reduced pool of potential investorsthe construction of, and capital improvements to, power generation and transmission and distribution facilities involve substantial risks. should construction or capital improvement efforts be significantly more expensive than planned, the financial condition, results of operations, or liquidity of cleco could be materially affected.distribution facilities involve substantial riskscleco may enter into fuel supply contracts and/or commercial transactions, including sales to wholesale customers and physical and financial hedges. if these transactions are not managed effectively, they may have a material adverse effect on the liquidity, results of operations, and financial condition of the registrants.including sales to wholesale customerscleco is subject to mandatory reliability and cip standards. fines and civil penalties are imposed on those who fail to comply with these standards.subject to mandatory reliabilitythe outcome of legal proceedings cannot be predicted. an adverse finding could have a material adverse effect on the results of operations, financial condition, or cash flows of the registrants.outcome of legal proceedings

Risk Factors Full Breakdown - Total Risks 39

Accounting & Financial Operations5 | 12.8%
  • Accounting & Financial Operations - Risk 1Added
    The Registrants have identified material weaknesses in internal control over financial reporting. If these material weaknesses are not remediated, they could result in material misstatements in the Registrants' financial statements.

    A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Part II, Item 9A, "Controls and Procedures," the Registrants' identified a material weakness related to the design and operation of certain information technology general controls for information systems that are relevant to the preparation of the Registrants' financial statements. The Registrants' also identified a material weakness in the design and operating effectiveness of controls over the completeness and accuracy of billed and unbilled revenue from contracts with customers. As a result of these material weaknesses, management concluded that the Registrants did not maintain effective disclosure controls and procedures as of December 31, 2019. The Registrants have begun taking steps to remediate the underlying cause of these material weaknesses, but the Registrants cannot assure that the remediation of the material weaknesses will be successful or that additional material weaknesses in internal controls will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties encountered in implementation, could result in additional material weaknesses, or could result in material misstatements in the Registrants' financial statements. These misstatements could result in restatements of the Registrants' financial statements, failure to meet reporting obligations, or cause stakeholders to lose confidence in reported financial information of the Registrants.

  • Accounting & Financial Operations - Risk 2Changed
    The accounting treatment for Cleco Cajun's hedging activities may increase the volatility in Cleco's financial results.

    Cleco Cajun engages in transactions to economically hedge forward commodity market price risk exposure utilizing both physical and financial commodity purchases and sales commitments. Some of these contracts are accounted for as derivatives, which require Cleco to record the fair value of the commitment on the balance sheet with changes in the fair value of all derivatives reflected within current period earnings. As a result, Cleco is unable to accurately predict the effect that these transactions may have on its results of operations, financial condition, or cash flows.

  • Accounting & Financial Operations - Risk 3
    The LPSC conducts fuel audits that could result in Cleco Power making substantial refunds of previously recorded revenue.

    Generally, Cleco Power's cost of fuel used for electric generation and cost of purchased power are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such charges. Recovery of FAC costs is subject to periodic fuel audits by the LPSC. The LPSC FAC General Order issued in November 1997, in Docket No. U-21497 provides that an audit will be performed at least every other year. Cleco Power has FAC filings for January 2018 and thereafter that remain subject to audit. Management is unable to predict or give a reasonable estimate of the possible range of the disallowance, if any, related to these filings. If a disallowance of fuel costs is ordered resulting in a refund to Cleco Power's customers, any such refund could have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

  • Accounting & Financial Operations - Risk 4
    FERC conducts audits that could result in Cleco Power making refunds of previously recorded revenue.

    Generally, Cleco Power records wholesale transmission revenue through approved formula rates, Attachment O of the MISO tariff, and certain grandfathered agreements. The calculation of the rate formulas, as well as FERC accounting and reporting requirements, are subject to periodic audits by FERC. In March 2018, the Division of Audits and Accounting within the Office of Enforcement of FERC initiated an audit of Cleco Power for the period of January 1, 2014, through June 30, 2019. On September 27, 2019, Cleco Power received the final audit report, which indicated 12 findings of noncompliance with a combination of FERC accounting and reporting requirements and computation of revenue requirements along with 59 recommendations associated with the audit period. Cleco Power submitted a plan for implementing the audit recommendations on October 28, 2019. Cleco Power also submitted the refund analysis on November 7, 2019, which resulted in an estimated refund of $3.5 million related to the FERC audit findings, pending final assessment by the FERC Division of Audits and Accounting. Management is unable to predict the timing of future audits and whether or not the outcome of such future audits will have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

  • Accounting & Financial Operations - Risk 5
    Adverse capital market performance could result in reductions in the fair value of benefit plan assets and increase the Registrants' liabilities related to such plans. Sustained declines in the fair value of the plan's assets or sustained increases in plan liabilities could result in significant increases in funding requirements, which could adversely affect the Registrants' liquidity and results of operations.

    Performance of the capital markets affects the value of assets that are held in trust to satisfy future obligations under Cleco's defined benefit pension plan. Sustained adverse market performance could result in lower rates of return for these assets than projected by Cleco and could increase Cleco's funding requirements related to the pension plan. Additionally, changes in interest rates affect the present value of Cleco's liabilities under the pension plan. Adverse changes in assumptions or adverse actual events could cause additional minimum contributions.

Debt & Financing5 | 12.8%
Corporate Activity and Growth1 | 2.6%

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.