Forza Innovations (FORZ) Risk Analysis
Risk Overview Q2, 2019
Source: the company's latest filing for the period ended Jun 30, 2019, filed Oct 15, 2019
Risk Change Over Time
No filing history is available.
- Share Price & Shareholder Rights - Risk 1Shareholders 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.
Risk Highlights Q2, 2019
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 42
- Share Price & Shareholder Rights - Risk 1Stockholders 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 2Our 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 3Opt-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 4If 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 5We 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 6Our 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 7Limited 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 8Shareholders 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 9Shareholders 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 10Our 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 11Our 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 12Sales 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 13Our 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 14Our 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.
