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Accuray (XEJ) 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. Accuray disclosed 52 risk factors in its most recent earnings report. Accuray reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2026

Source: the company's latest filing for the period ended Jun 30, 2026, filed Aug 27, 2026

Risk Distribution
52Risks
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

Accuray disclosed risks per quarterNo. of Risks4648505254Q3Q4Q12023Q2Q3Q4Q12024Q2Q3Q4Q12025Q2Q4Q12026Q2Showing: Q2, 2026
Risks removedRisks addedRisks changedAccuray Risk Factors
Risk Changed (5)
  • Share Price & Shareholder Rights - Risk 1
    TCW Asset Management Company LLC and its affiliates will have significant influence over us following the conversion of the Series A Convertible Preferred Stock and the exercise of the July 2026 Warrants, if any, and their interests may conflict with those of our other stockholders in the future.

    TCW and its affiliates currently have the largest ownership position in the Company, which position will increase upon any conversion of the Series A Convertible Preferred Stock and any exercise of the July 2026 Warrants. So long as they hold a significant amount of our voting power, TCW and its affiliates will have significant influence over the outcome of all matters requiring stockholder approval, including the election and removal of our directors, and thereby over our corporate and management policies. In addition, TCW and its affiliates may vote their shares in a manner that, in their judgment, could enhance their investment, but which may conflict with our interests or those of our other stockholders. This concentration of ownership may also delay or deter possible changes in control of the Company or deprive our other stockholders of an opportunity to receive a premium for their shares of common stock as part of a sale of the Company, which may ultimately affect the market price of our common stock. Further, under the terms of the Securities Purchase Agreement, TCW has the right to designate up to two preferred directors (the "Preferred Directors") as members of the board of directors. TCW has initially designated Chan W. Galbato and Steven F. Mayer, both of whom are currently serving as members of the board of directors, to serve as the Preferred Directors. As a result, TCW may exercise significant influence over the composition of our board of directors and may have the ability to influence the outcome of certain matters affecting our business, governance and capitalization. We cannot predict how TCW and its affiliates will exercise their influence over the Company, and their interests may differ from, or conflict with, the interests of our other stockholders. This concentration of ownership and control may also have the effect of delaying, deterring or preventing a change in control of the Company or other transaction that might otherwise be beneficial to our other stockholders, and could adversely affect the market price of our common stock.

  • Share Price & Shareholder Rights - Risk 2
    If the Financing Transaction is consummated, our stockholders will experience substantial dilution as a result of any conversion of the Series A Convertible Preferred Stock or the exercise of the July 2026 Warrants.

    As of July 31, 2026, we had 122.5 million and 119.4 million shares of common stock issued and outstanding, respectively, and 75.6 million shares of common stock reserved for future issuance, including 15.3 million shares reserved for issuance upon exercise of all of the July 2026 Warrants. In addition, the Securities Purchase Agreement obligates us to reserve and keep available at least 100% of the maximum number of shares of common stock issuable upon conversion of all the Series A Convertible Preferred Stock then outstanding, which is currently 110,000,000 shares (which will be adjusted if the Reverse Stock Split is effected). Consummation of the Financing Transaction and exercise of some or all of the July 2026 Warrants will result in significant dilution of stockholders' ownership and voting interests in the Company.

  • Share Price & Shareholder Rights - Risk 3
    If we do not regain compliance with or continue to satisfy Nasdaq's continued listing standards and other Nasdaq rules, our common stock could be delisted, which would harm our business, the trading price of our common stock, our ability to raise additional capital and the liquidity of the market for our common stock.

    The continued listing standards of The Nasdaq Stock Market LLC ("Nasdaq") require us to satisfy minimum financial and other requirements including, without limitation, a requirement that the closing bid price of our common stock be at least $1.00 per share. On February 2, 2026, we received a letter from Nasdaq indicating that, for the previous 30 consecutive business days, the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1) (the "Minimum Bid Requirement"). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to the deadline. While we did not achieve compliance with the Minimum Bid Requirement within 180 calendar days, we were eligible for an additional 180 calendar days (the "Second Compliance Period") to regain compliance pursuant to Nasdaq Listing Rule 5810 (c)(3)(A) by transferring to The Nasdaq Capital Market. To qualify for the Second Compliance Period, we submitted a transfer application and paid an application fee. Our common stock was transferred to The Nasdaq Capital Market effective as of the opening of business on August 6, 2026, and continues to trade under the symbol "ARAY". To qualify, we are required to meet the continued listing requirement for market value of publicly held shares and all other Nasdaq initial listing standards, with the exception of the Minimum Bid Requirement, and we provided written notice of our intention to cure the minimum bid price deficiency during the second compliance period. In addition, we expect to seek to regain compliance with Nasdaq's minimum bid price requirement through a reverse stock split; however, there can be no assurance that a reverse stock split, if effected, would result in a sustained increase in the market price of our common stock or enable us to maintain compliance with Nasdaq's continued listing standards. If we fail to regain compliance with the Minimum Bid Requirement, or if we fail to continue to meet all applicable continued listing requirements for Nasdaq in the future, Nasdaq could delist our shares of common stock. There can be no assurance that we will be able to regain compliance with the Minimum Bid Requirement or maintain compliance with the other listing requirements. If our common stock were to be delisted from Nasdaq and was not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, reduced liquidity and marketability of our common stock, and reduced ability to access capital on favorable terms or at all, any of which could materially adversely affect our stockholders and cause the price of our common stock to further decline.

  • Debt & Financing - Risk 4
    There can be no assurance that the Financing Transaction will be successfully consummated or achieve the anticipated results.

    On July 29, 2026, the Company entered into Amendment No. 3 to the Financing Agreement and the Securities Purchase Agreement with certain existing investors (collectively, the "Financing Transaction"). Among other matters, the Financing Transaction provides for, subject to certain closing conditions, the issuance of $55.0 million of Series A Convertible Preferred Stock, paid in the form of (i) $15.0 million in cash, which amount was paid on the date the parties entered into the Securities Purchase Agreement, and (ii) the conversion of $40.0 million of existing indebtedness held by existing investors under the Financing Agreement, with such existing indebtedness to be cancelled and extinguished in exchange for shares of Series A Convertible Preferred Stock issued at the closing of the Securities Purchase Agreement. In addition, Amendment No. 3 to the Financing Agreement, among other things, modified certain financial covenants, including minimum liquidity requirements, provided a covenant holiday through December 31, 2027, and converted the revolving credit facility to an asset-based lending structure. In addition, the Company issued 15.3 million warrants to purchase common stock (the "July 2026 Warrants"). See Note 16, Subsequent Events, for additional information regarding these transactions. The Financing Transaction is subject to certain closing conditions, including stockholder approval and the implementation of a reverse stock split of the Company's common stock, at a ratio ranging from any whole number between 1-for-15 and 1-for-40 (the "Reverse Stock Split"), or such other ratio as may be approved by the Board, including at least one Preferred Director (as defined below). There can be no assurance that these conditions will be satisfied or waived, that the required stockholder approvals will be obtained, or that the Financing Transaction will be consummated on the terms currently contemplated, within the anticipated timeframe, or at all. If the issuance of the Series A Convertible Preferred Stock or the Reverse Stock Split is not approved by our stockholders, the Series A Convertible Preferred Stock will not be issued, and the Securities Purchase Agreement may be terminated. If the Securities Purchase Agreement is terminated for failure to obtain stockholder approval, (i) the $15.0 million cash investment will automatically be deemed to be an Obligation (as defined in the Financing Agreement) under the Financing Agreement, and (ii) we will be required to pay a fee in an amount equal to $15.0 million to TCW Asset Management Company LLC ("TCW"), as administrative agent under the Financing Agreement, to be allocated among the investors party to the Securities Purchase Agreement in accordance with the amounts funded by such investors. Such amount shall be fully earned, non-refundable, and due on such date of termination, and payable in full in cash on the earliest to occur of (A) the final maturity date under the Financing Agreement; (B) the date on which all Obligations (as defined in the Financing Agreement) that are then due and payable are indefeasibly paid in full, in cash; (C) the date on which all or any portion of the Obligations is accelerated; or (D) the date on which any of the Obligations is satisfied, released, paid, restructured, reorganized, replaced, reinstated, defeased or compromised, including through foreclosure (whether by judicial proceeding or otherwise), a deed in lieu of foreclosure, or a distribution of any kind made to TCW or the lenders in full or partial satisfaction of the Obligations. In addition, the $40.0 million debt exchange contemplated by the Securities Purchase Agreement would not occur, and such indebtedness would remain outstanding under the Financing Agreement. The warrants proposed to be cancelled in connection with the Financing Transaction would also remain outstanding, resulting in additional potential dilution to our stockholders. Together with the $15.0 million termination fee described above, these consequences would undermine many of the anticipated benefits of the Financing Transaction. Even if the Financing Transaction is consummated, there can be no assurance that we will realize the anticipated benefits of the Financing Transaction, whether within the expected timeframe or at all, and any failure to realize such benefits could have a material adverse effect on our business, financial condition, results of operations and prospects.

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Risk Highlights Q2, 2026

Main Risk Category
Finance & Corporate
With 19 Risks
Number of Disclosed Risks
52
+2
From last report
S&P 500 Average: 32
Recent Changes
4Risks added
1Risks removed
5Risks changed
Since Jun 2026
Number of Risk Changed
5
+2
From last report
S&P 500 Average: 1

Risk Word Cloud

the high unit price of the cyberknife and tomotherapy platforms, as well as other factors, may contribute to substantial fluctuations in our operating results, which could adversely affect our stock price.adversely affect our stock pricewe are subject to federal, state and foreign laws and regulations applicable to our operations, the violation of which could result in substantial penalties and harm our business.regulations applicable to our operationsany actual or perceived failure by us to comply with legal or regulatory requirements related to privacy, cybersecurity and data protection in one or multiple jurisdictions could result in proceedings, actions or penalties against us.regulatory requirements related to privacywe have identified material weaknesses in our system of internal controls as of june 30, 2025, september 30, 2025, december 31, 2025, and march 31, 2026, of which one material weakness remains unremediated as of june 30, 2026. although one previously identified material weakness was remediated as of june 30, 2026, if we fail to remediate the remaining material weakness or otherwise fail to achieve and maintain an effective system of internal control over financial reporting, our ability to produce timely and accurate financial results could be adversely impacted. as a result, current and potential stockholders could lose confidence in our financial reporting, which could have an adverse effect on our business and our stock price.our system of internal controlswe are reliant on the timely, accurate, and consistent provision of outsourced services for various services and business functions, as well as third parties who perform shipping and logistics functions on our behalf. failures, disruptions, terminations, or replacements of our outsourcing providers or our logistics providers have occurred and could occur in the future, which could adversely impact our business.replacements of our outsourcing providerstcw asset management company llc and its affiliates will have significant influence over us following the conversion of the series a convertible preferred stock and the exercise of the july 2026 warrants, if any, and their interests may conflict with those of our other stockholders in the future.tcw asset management company llcour ability to raise capital or obtain financing in the future may be limited, and our failure to raise capital when needed could prevent us from executing our growth strategy.our ability to raise capitalour ability to raise capital or obtain financing in the future may be limited, and our failure to raise capital when needed could prevent us from executing our growth strategy.our failure to raise capitalwe are reliant on the timely, accurate, and consistent provision of outsourced services for various services and business functions, as well as third parties who perform shipping and logistics functions on our behalf. failures, disruptions, terminations, or replacements of our outsourcing providers or our logistics providers have occurred and could occur in the future, which could adversely impact our business.consistent provision of outsourced servicesmodifications, upgrades, new indications and future products related to the cyberknife or tomotherapy systems or the precision treatment planning and idms data management system software may require new fda 510(k) clearances or premarket approvals and similar licensing or approvals in international markets. such modifications, or any defects in design, manufacture or labeling may require us to recall or cease marketing the affected systems or software until approvals or clearances are obtained.idms data management system software

Risk Factors Full Breakdown - Total Risks 52

Share Price & Shareholder Rights7 | 13.5%
  • Share Price & Shareholder Rights - Risk 1
    The exercise of outstanding warrants for our common stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

    The exercise of outstanding warrants to acquire our common stock will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. As of June 30, 2026, there are (i) 17,180,710 shares of our common stock issuable upon exercise of the June 2025 Premium Warrants, (ii) 6,247,531 shares of our common stock issuable upon exercise of the June 2025 Penny Warrants, (iii) 3,062,726 shares of common stock issuable upon exercise of the December 2025 Super Premium Warrants, (iv) 2,187,661 shares of common stock issuable upon exercise of the December 2025 Premium Warrants, (v) 1,750,129 shares of common stock issuable upon exercise of December 2025 Penny Warrants, (vi) 2,135,721 shares of our common stock issuable upon exercise of the DDTL Premium Warrants, (vii) 1,708,577 shares of our common stock issuable upon exercise of the DDTL Penny Warrants, and (viii) 2,990,010 shares of our common stock issuable upon exercise of the DDTL Super Premium Warrants. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our shares. In addition, the perceived risk of dilution as a result of the number of outstanding Warrants may cause our stockholders to be more inclined to sell their shares, which would contribute to a downward movement in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our common stock price could encourage investors to engage in short sales of our common stock, which could further contribute to price declines in our common stock. The fact that our warrant holders can sell substantial amounts of our common stock in the public market could make it more difficult for us to raise additional funds through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, or at all. In addition, the Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that the Company sells stock at a price below $1.00 per share in the case of the Penny Warrants, $1.25 per share in the case of the June 2025 Premium Warrants, $0.93 per share in the case of the December 2025 Premium Warrants and the May 2026 Premium Warrants, and $1.12 per share in the case of the Super Premium Warrants. Depending on the nature and price of any equity issuances by us, the number of shares of common stock issuable upon the exercise of such Warrants could be increased and that would likely make an equity financing more difficult.

  • Share Price & Shareholder Rights - Risk 2
    Future issuances of shares of our common stock could dilute the ownership interests of our stockholders.

    Any issuance of equity securities could dilute the interests of our stockholders and could substantially decrease the trading price of our common stock. We may issue equity securities in the future for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions), to adjust our ratio of debt to equity, to satisfy our obligations upon the exercise of outstanding options or for other reasons. In addition, to the extent we issue common stock upon conversion of any outstanding convertible notes, that conversion would dilute the ownership interests of our stockholders.

  • Share Price & Shareholder Rights - Risk 3
    The price of our common stock is volatile and may continue to fluctuate significantly, which could lead to losses for stockholders.

    The stock market in general has recently experienced relatively large price and volume fluctuations, particularly in response to macroeconomic factors. In addition, the trading prices of the stock of healthcare companies of our size can experience extreme price and volume fluctuations. These fluctuations often have been unrelated or out of proportion to the operating performance of these companies. Our stock price has experienced periods of volatility and has declined significantly in recent quarters. Broad market fluctuations may also harm our stock price. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. Any negative change in the public's perception of the prospects of companies that employ similar technology or sell into similar markets could also depress our stock price, regardless of our actual results. In addition to the other risk factors described above and below, factors affecting the trading price of our common stock include: - variations in our operating results, as well as costs and expenditures;- impacts to our business, operations or financial condition caused by concerns in connection with the global economic environment, supply chain disruptions or as a result of changes in government administration policy positions;- guidance, if any, that we provide to the public, any changes to or removal of this guidance or our failure to meet this guidance;- regulatory developments related to manufacturing, marketing or sale of the CyberKnife or TomoTherapy platform;- political or social uncertainties, including as a result of the conflicts in Russia-Ukraine, Iran, the Middle East and Southwest Asia;- changes in product pricing policies;- announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;- changes in analysts' estimates, investors' perceptions, recommendations by securities analysts or our failure to achieve analysts' and our own estimates;- recruitment or departure of key personnel;- the performance of our competitors and investor perception of the markets and industries in which we compete;- announcement of strategic transactions or capital raising activities; and - market conditions in our industry, the industries of our customers and the economy as a whole, including the impact of increased inflation, a recession or instability in the banking and financial services sector.

  • Share Price & Shareholder Rights - Risk 4
    The high unit price of the CyberKnife and TomoTherapy platforms, as well as other factors, may contribute to substantial fluctuations in our operating results, which could adversely affect our stock price.

    Because of the high unit price of the CyberKnife and TomoTherapy platforms and the relatively small number of units shipped each quarter, each shipment of a CyberKnife or TomoTherapy platform can represent a significant percentage of our revenue for a particular quarter. Therefore, if we do not ship a CyberKnife or TomoTherapy platform when anticipated (including when customers are not ready to receive shipment and postpone orders or cancel them), we will not be able to recognize the associated revenue and our operating results will vary significantly from our expectations. This is of particular concern when the economic environment is volatile, such as the current economic environment. These fluctuations and other potential fluctuations mean that you should not rely upon our operating results in any particular period as an indication of future performance.

  • Share Price & Shareholder Rights - Risk 5Added
    TCW Asset Management Company LLC and its affiliates will have significant influence over us following the conversion of the Series A Convertible Preferred Stock and the exercise of the July 2026 Warrants, if any, and their interests may conflict with those of our other stockholders in the future.

    TCW and its affiliates currently have the largest ownership position in the Company, which position will increase upon any conversion of the Series A Convertible Preferred Stock and any exercise of the July 2026 Warrants. So long as they hold a significant amount of our voting power, TCW and its affiliates will have significant influence over the outcome of all matters requiring stockholder approval, including the election and removal of our directors, and thereby over our corporate and management policies. In addition, TCW and its affiliates may vote their shares in a manner that, in their judgment, could enhance their investment, but which may conflict with our interests or those of our other stockholders. This concentration of ownership may also delay or deter possible changes in control of the Company or deprive our other stockholders of an opportunity to receive a premium for their shares of common stock as part of a sale of the Company, which may ultimately affect the market price of our common stock. Further, under the terms of the Securities Purchase Agreement, TCW has the right to designate up to two preferred directors (the "Preferred Directors") as members of the board of directors. TCW has initially designated Chan W. Galbato and Steven F. Mayer, both of whom are currently serving as members of the board of directors, to serve as the Preferred Directors. As a result, TCW may exercise significant influence over the composition of our board of directors and may have the ability to influence the outcome of certain matters affecting our business, governance and capitalization. We cannot predict how TCW and its affiliates will exercise their influence over the Company, and their interests may differ from, or conflict with, the interests of our other stockholders. This concentration of ownership and control may also have the effect of delaying, deterring or preventing a change in control of the Company or other transaction that might otherwise be beneficial to our other stockholders, and could adversely affect the market price of our common stock.

  • Share Price & Shareholder Rights - Risk 6Added
    If the Financing Transaction is consummated, our stockholders will experience substantial dilution as a result of any conversion of the Series A Convertible Preferred Stock or the exercise of the July 2026 Warrants.

    As of July 31, 2026, we had 122.5 million and 119.4 million shares of common stock issued and outstanding, respectively, and 75.6 million shares of common stock reserved for future issuance, including 15.3 million shares reserved for issuance upon exercise of all of the July 2026 Warrants. In addition, the Securities Purchase Agreement obligates us to reserve and keep available at least 100% of the maximum number of shares of common stock issuable upon conversion of all the Series A Convertible Preferred Stock then outstanding, which is currently 110,000,000 shares (which will be adjusted if the Reverse Stock Split is effected). Consummation of the Financing Transaction and exercise of some or all of the July 2026 Warrants will result in significant dilution of stockholders' ownership and voting interests in the Company.

  • Share Price & Shareholder Rights - Risk 7Added
    If we do not regain compliance with or continue to satisfy Nasdaq's continued listing standards and other Nasdaq rules, our common stock could be delisted, which would harm our business, the trading price of our common stock, our ability to raise additional capital and the liquidity of the market for our common stock.

    The continued listing standards of The Nasdaq Stock Market LLC ("Nasdaq") require us to satisfy minimum financial and other requirements including, without limitation, a requirement that the closing bid price of our common stock be at least $1.00 per share. On February 2, 2026, we received a letter from Nasdaq indicating that, for the previous 30 consecutive business days, the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1) (the "Minimum Bid Requirement"). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to the deadline. While we did not achieve compliance with the Minimum Bid Requirement within 180 calendar days, we were eligible for an additional 180 calendar days (the "Second Compliance Period") to regain compliance pursuant to Nasdaq Listing Rule 5810 (c)(3)(A) by transferring to The Nasdaq Capital Market. To qualify for the Second Compliance Period, we submitted a transfer application and paid an application fee. Our common stock was transferred to The Nasdaq Capital Market effective as of the opening of business on August 6, 2026, and continues to trade under the symbol "ARAY". To qualify, we are required to meet the continued listing requirement for market value of publicly held shares and all other Nasdaq initial listing standards, with the exception of the Minimum Bid Requirement, and we provided written notice of our intention to cure the minimum bid price deficiency during the second compliance period. In addition, we expect to seek to regain compliance with Nasdaq's minimum bid price requirement through a reverse stock split; however, there can be no assurance that a reverse stock split, if effected, would result in a sustained increase in the market price of our common stock or enable us to maintain compliance with Nasdaq's continued listing standards. If we fail to regain compliance with the Minimum Bid Requirement, or if we fail to continue to meet all applicable continued listing requirements for Nasdaq in the future, Nasdaq could delist our shares of common stock. There can be no assurance that we will be able to regain compliance with the Minimum Bid Requirement or maintain compliance with the other listing requirements. If our common stock were to be delisted from Nasdaq and was not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, reduced liquidity and marketability of our common stock, and reduced ability to access capital on favorable terms or at all, any of which could materially adversely affect our stockholders and cause the price of our common stock to further decline.

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.