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Forza Innovations (FORZ) 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. Forza Innovations disclosed 42 risk factors in its most recent earnings report. Forza Innovations reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2019

Source: the company's latest filing for the period ended Jun 30, 2019, filed Oct 15, 2019

Risk Distribution
42Risks
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 changedForza Innovations Risk Factors
  • Share Price & Shareholder Rights - Risk 1
    Shareholders may have difficulty in depositing their shares due to regulatory burden on Clearing Firms and Broker Dealers.

    Existing and prospective shareholders may have difficulty depositing their shares because very few broker dealers and their Clearing Firms are currently accepting shares of a newly listed company on the OTC venue. Such broker dealers and their clearing firms are highly regulated and may not find accepting shares in their best interest because of the regulatory burden from FINRA and or the SEC. All Shareholders may not be able to deposit their shares at all if their broker dealer does not accept low priced stocks. Even if you do deposit shares, they may never clear if the clearing firm affiliated with the broker dealer decides not to do so based on the extreme regulatory burden in clearing low priced stock. The resale market for our common stock could be non-existent because of the above reasons, as the holders of our common stock shareholders may not be able to resell their shares ever. If we are unable to trade and access the public markets, we may be required to cease, exit the public markets, or curtail our reporting obligations.

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Risk Highlights Q2, 2019

Main Risk Category
Finance & Corporate
With 25 Risks
Number of Disclosed Risks
42
No changes from last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Jun 2019
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

we are dependent on our president, to guide our initial operations and implement our plan of operations. if we lose such services we will have to change our business plan/direction or cease operations.implement our plan of operationswe are dependent on our president, to guide our initial operations and implement our plan of operations. if we lose such services we will have to change our business plan/direction or cease operations.to guide our initial operationsour auditor has indicated in its report that there is substantial doubt about our ability to continue as a going concern as a result of our lack of revenues and if we are unable to generate significant revenue or secure financing we may be required to cease or curtail our operations.unable to generate significant revenueour articles of incorporation provide for the issuance of up to 25,000,000 shares of preferred stock. should we hereinafter issue preferred stock the rights of our common stockholders to receive dividends may be impaired.our articles of incorporation providethere may be limitations on the effectiveness of our internal controls, and a failure of our control systems to prevent error or fraud may materially harm our company.effectiveness of our internal controlswe are dependent on our president, to guide our initial operations and implement our plan of operations. if we lose such services we will have to change our business plan/direction or cease operations.to change our business plan/directionwe depend heavily on key personnel, and turnover of key senior management could harm our business.turnover of key senior managementour ability to secure and maintain sufficient credit arrangements is key to our continued operations and there is no assurance we will be able to obtain sufficient additional equity or debt financing in the future.to obtain sufficient additional equityshareholders may have difficulty in depositing their shares due to regulatory burden on clearing firms and broker dealers.shares due to regulatory burdenstockholders of our preferred stock will be able to exert substantial influence and control over the operations of the company.stockholders of our preferred stock

Risk Factors Full Breakdown - Total Risks 42

Share Price & Shareholder Rights14 | 33.3%
  • Share Price & Shareholder Rights - Risk 1
    Stockholders of our Preferred Stock will be able to exert substantial influence and control over the operations of the Company.

    Our Preferred Stock provides the shareholders thereof with particular rights which may enable them to exert substantial control over the affairs of the Company. To wit: a.Voting Rights: a holder of Class-B Preferred will have all the voting rights. b.Convertible: Our Preferred Stock constitutes a convertible stock in which (1) one preferred Share is convertible into (5) five Common Shares. c.Our Sole Officer and Director beneficially owns a substantial majority of the issued and outstanding shares of such preferred stock of the Company and will continue to own sufficient shares after this offering irrespective of its outcome. As a result, they will continue to be able to exercise substantial control over the operations of the Company. d.Agree to a merger, sale or consolidation of the Company with another entity or the effectuation of any transaction or series of related transactions in which more than 51% of the voting power of the Company is disposed.

  • Share Price & Shareholder Rights - Risk 2
    Our Articles of Incorporation provide for the issuance of up to 25,000,000 shares of Preferred Stock. Should we hereinafter issue Preferred Stock the rights of our common stockholders to receive dividends may be impaired.

    Our Preferred Stock constitutes a convertible stock in which (1) one preferred Share is convertible into (5) five Common Shares. The preferred Stock holders would be entitled to vote on any matters on which common stock holders are entitled to vote. This would include electing the Board of Directors, increasing the number of shares authorized and other corporate governance matters. Our Sole Officer and Director beneficially owns a substantial majority of the issued and outstanding shares of such preferred stock of the Company and will continue to own sufficient shares after this offering irrespective of its outcome. As a result they will continue to be able to exercise substantial control over the operations of the Company.

  • Share Price & Shareholder Rights - Risk 3
    Opt-in right for emerging growth company

    We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

  • Share Price & Shareholder Rights - Risk 4
    If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

    The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

  • Share Price & Shareholder Rights - Risk 5
    We may, in the future, issue additional shares of common stock, which would reduce investors' percent of ownership and may dilute our share value.

    Our Articles of Incorporation, as amended, authorize the issuance of 100,000,000 shares of common stock.  As of the date of this annual report the Company had 17,870,000 shares of common stock outstanding. Accordingly, we may issue up to an additional 82,130,000 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our than existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors and might have an adverse effect on any trading market for our common stock.

  • Share Price & Shareholder Rights - Risk 6
    Our common stock is considered a "penny stock," and thereby is subject to additional sale and trading regulations that may make it more difficult to sell.

    The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The OTCBB and OTC Markets do not meet such requirements and since the price of our common stock is less than $5.00, our common stock is deemed penny stocks. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stock holders may have difficulty selling their shares.

  • Share Price & Shareholder Rights - Risk 7
    Limited Public Market of our Securities, and active trading market may not develop.

    As we are in our early stages, an investment in our company will likely require a long-term commitment, with no certainty of return. The Company was recently approved to start trading its Common Stock on the OTCBB and or OTC Markets. There is currently no trading and none or limited public market for our Common Stock and there is no guarantee that any sustained trading market will develop in the near future or at all. In the absence of an active trading market: - investors may have difficulty buying and selling or obtaining market quotations;- market visibility for shares of our common stock may be limited; and - a lack of visibility for shares of our common stock may have a depressive effect on the market price for shares of our common stock. The OTC Markets is a relatively unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than NASDAQ or the NYSE MKT (formerly known as the NYSE AMEX). The market for our Common Stock may be illiquid and you may be unable to dispose of your shares of Common Stock at desirable prices or at all. Moreover, there is a risk that our Common Stock could be delisted from the OTCBB Marketplace, in which case it might be listed on the so called "Pink Sheets", which is even more illiquid than the OTCBB Marketplace. The lack of an active market impairs your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional assets by using our shares as consideration.

  • Share Price & Shareholder Rights - Risk 8
    Shareholders may have difficulty in depositing their shares due to regulatory burden on Clearing Firms and Broker Dealers.

    Existing and prospective shareholders may have difficulty depositing their shares because very few broker dealers and their Clearing Firms are currently accepting shares of a newly listed company on the OTC venue. Such broker dealers and their clearing firms are highly regulated and may not find accepting shares in their best interest because of the regulatory burden from FINRA and or the SEC. All Shareholders may not be able to deposit their shares at all if their broker dealer does not accept low priced stocks. Even if you do deposit shares, they may never clear if the clearing firm affiliated with the broker dealer decides not to do so based on the extreme regulatory burden in clearing low priced stock. The resale market for our common stock could be non-existent because of the above reasons, as the holders of our common stock shareholders may not be able to resell their shares ever. If we are unable to trade and access the public markets, we may be required to cease, exit the public markets, or curtail our reporting obligations.

  • Share Price & Shareholder Rights - Risk 9
    Shareholders may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws.

    Each state has its own securities laws, often called "blue sky" laws, which (1) limit sales of securities to a state's residents unless the securities are registered in that state or qualify for an exemption from registration, and (2) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. The applicable broker-dealer must also be registered in that state. We do not know whether our securities will be registered or exempt from registration under the laws of any state. A determination regarding registration will be made by those broker-dealers, if any, who agree to serve as market makers for our common stock. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. The resale market for our common stock could be limited, as the holders of our common stock may not be able to resell their shares without the significant expense of state registration or qualification.

  • Share Price & Shareholder Rights - Risk 10
    Our common stock could from time to time become "thinly-traded."

    The number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent. Therefore, stockholders may be unable to sell at or near ask prices or at all if they need to sell shares to raise money or otherwise desire to liquidate their shares. Our "thinly-traded" stock is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or weeks when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give stockholders any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

  • Share Price & Shareholder Rights - Risk 11
    Our common stock may experience extreme price and volume fluctuations, which could lead to costly litigation for us and make an investment in us less appealing.

    - The market price of our common stock may fluctuate substantially due to a variety of factors, including: - our business strategy and plans;- changing factors related to doing business in various jurisdictions within the United States;- new regulatory pronouncements and changes in regulatory guidelines and timing of regulatory approvals;- general and industry-specific economic conditions;- additions to or departures of our key personnel;- variations in our quarterly financial and operating results;- changes in market valuations of other companies that operate in our business segments or in our industry;- lack of adequate trading liquidity;- announcements about our business partners;- changes in accounting principles; and - general market conditions. The market prices of the securities of early-stage companies, particularly companies like ours without consistent product revenues and earnings, have been highly volatile and are likely to remain highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies. In the past, companies that experience volatility in the market price of their securities have often faced securities class action litigation and or trading halts. Whether or not meritorious, litigation brought against us could result in substantial costs, divert our management's attention and resources and harm our financial condition and results of operations.

  • Share Price & Shareholder Rights - Risk 12
    Sales of substantial amounts of our common stock in the public market could depress the market price of our common stock.

    Our common stock is quoted on the OTC Markets and or OTCBB. If our stockholders sell substantial amounts of our common stock in the public market, including the shares of common stock issuable upon the exercise of the any Warrants, shares issued in acquisitions, and shares issuable upon the exercise of outstanding stock options, or the market perceives that such sales may occur, the market price of our common stock could fall and we may be unable to sell our common stock in the future.

  • Share Price & Shareholder Rights - Risk 13
    Our Sole Officer and Director beneficially owns a significant percentage of our outstanding voting securities which could reduce the ability of minority shareholders to effect certain corporate actions

    Our Sole Officer and Director beneficially owns a substantial majority of our voting securities. As a result, currently, and after the offering, the company will possess a significant influence and can elect a majority of our board of directors and authorize or prevent proposed significant corporate transactions. The Company's ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

  • Share Price & Shareholder Rights - Risk 14
    Our auditor has indicated in its report that there is substantial doubt about our ability to continue as a going concern as a result of our lack of revenues and if we are unable to generate significant revenue or secure financing we may be required to cease or curtail our operations.

    Our auditor has indicated in its report that our lack of revenues raises substantial doubt about our ability to continue as a going concern.  The financial statements do not include adjustments resulting from the outcome of this uncertainty. If we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.

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.