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Kelso Technologies (LB4A) Risk Analysis

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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. Kelso Technologies disclosed 17 risk factors in its most recent earnings report. Kelso Technologies reported the most risks in the “Production” category.

Risk Overview Q4, 2022

Source: the company's latest filing for the period ended Dec 31, 2022, filed Apr 05, 2023

Risk Distribution
17Risks
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

Kelso Technologies disclosed risks per quarterNo. of Risks17Q4Showing: Q4, 2022
Risks removedRisks addedRisks changedKelso Technologies Risk Factors
  • Employment / Personnel - Risk 1
    "The success of the Company's business depends substantially on the continuing efforts of the Company's senior executives, and the Company's business may be severely disrupted if the Company loses their services."

    The future success of the Company heavily depends upon the continued services of the Company's senior executives and other key employees. In particular, the Company relies on the expertise and experience of the Company's Chief Executive Officer, its Chief Financial Officer and its Chief Operating Officer. The Company also relies on the expertise of senior executives of certain of its subsidiaries; in particular, the President of KIQ X Industries Inc. These individuals are under contractual obligations to the Company expiring on June 30, 2023; however, if one or more of the Company's senior executives were unable or unwilling to continue in their present positions, the Company might not be able to replace them easily or at all. If any of the Company's senior executives joins a competitor or forms a competing company, the Company may lose clients, suppliers, key professionals, technical know-how and staff members. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those described on forward-looking statements.

  • Costs - Risk 2
    "Raw materials used by the Company for the production of the Company's products are subject to price fluctuations which could change profitability expectations."

    Many of the materials used in the Company's products are common raw materials such as steel and rubber. These raw materials can be subject to significant price fluctuations. A steep rise in the price of such raw materials may have an adverse effect on the financial returns of the Company's products and could negatively impact the Company's operating results. As the Company does not have any purchase agreements with customers, the Company are able to mitigate the risks associated with price fluctuations in the Company's raw materials by adjusting the pricing of the Company's products per quoted purchase order. However, there is no guarantee that customers will continue to purchase the Company's products if prices are adjusted due to the fluctuation in the price of raw materials.

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Risk Highlights Q4, 2022

Main Risk Category
Production
With 6 Risks
Number of Disclosed Risks
17
No changes from last report
S&P 500 Average: 32
Recent Changes
2Risks added
2Risks removed
0Risks changed
Since Dec 2022
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

"the company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria. if the company is not able to effectively protect the company's intellectual property or cater to specific customer adoption criteria, the company's business may suffer a material negative impact and could fail."to effectively protect"the company is engaged in complex research and development activities where testing results may deem prospective products technologically or economically infeasible."deem prospective products technologically"unforeseen competition could affect the company's ability to grow revenues as projected."ability to grow revenues"the company has a limited history of earnings and may not be able to achieve the company's growth objectives."limited history of earnings"raw materials used by the company for the production of the company's products are subject to price fluctuations which could change profitability expectations."subject to price fluctuations"the company may not have sufficient capital to meet increases in business demands and may be unable to sustain the company's ability to grow the company's operations as anticipated."sufficient capital to meet increases"the company is dependent on a small number of oem customers."small number of oem customers"the company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria. if the company is not able to effectively protect the company's intellectual property or cater to specific customer adoption criteria, the company's business may suffer a material negative impact and could fail."specific customer adoption criteria"the company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria. if the company is not able to effectively protect the company's intellectual property or cater to specific customer adoption criteria, the company's business may suffer a material negative impact and could fail."products involve detailed proprietary"the company may not have sufficient capital to meet increases in business demands and may be unable to sustain the company's ability to grow the company's operations as anticipated."ability to grow

Risk Factors Full Breakdown - Total Risks 17

Manufacturing2 | 11.8%
  • Manufacturing - Risk 1
    "Production capacity may not be large enough to handle growth in market demand."

    The Company's production facilities may not be large enough to handle growing market demand for the Company's products if market demand is above projected levels. The Company may not have sufficient capital to fund increased production at the Company's existing facilities or to add new production facilities, and even if the Company did have sufficient funds for these purposes, the turnaround time to increase production may not be fast enough to meet market demand. This may have a material negative impact on the Company's ability to maintain existing customers and expand the Company's customer base, and the Company's ability to generate revenue at current and projected levels.

  • Manufacturing - Risk 2
    "Current products may not perform as well as expected."

    There is a risk that the Company's products may not perform as well as expected, which may result in customer complaints, returned products, product recalls and/or loss of repeat customer orders. Any one of these effects may have a material negative impact on the Company's ability to generate revenue and continue operations.

Employment / Personnel1 | 5.9%
Supply Chain1 | 5.9%
Costs2 | 11.8%

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.