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HighCom Global Security (HCGS) 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. HighCom Global Security disclosed 15 risk factors in its most recent earnings report. HighCom Global Security reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2018

Source: the company's latest filing for the period ended Dec 31, 2018, filed Mar 26, 2019

Risk Distribution
15Risks
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 changedHighCom Global Security Risk Factors
  • Debt & Financing - Risk 1
    Although we had a working capital of approximately $2,000,000 at December 31, 2018, there can be no assurances that we will be able to meet our obligations as they become due and payable

    While Management is projecting increased sales in 2019 as compared to the comparable period of the prior year and the expectation is that we will be able to meet our obligations as they become due and payable, we can provide no assurances that we will be successful in this regard.

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Risk Highlights Q4, 2018

Main Risk Category
Finance & Corporate
With 6 Risks
Number of Disclosed Risks
15
-2
From last report
S&P 500 Average: 32
Recent Changes
0Risks added
2Risks removed
1Risks changed
Since Dec 2018
Number of Risk Changed
1
-2
From last report
S&P 500 Average: 1

Risk Word Cloud

if we are unable to compete effectively with our competitors, we will not be successful generating revenues or attaining profits.unable to compete effectivelyalthough we had a working capital of approximately $2,000,000 at december 31, 2018, there can be no assurances that we will be able to meet our obligations as they become due and payableworking capital of approximately $2highcom armor faces intense competition that could result in our losing or failing to gain market share and suffering reduced revenue.failing to gain market sharepossible technological obsolescence of our products.technological obsolescence of our productswe may not be able to successfully use or defend our intellectual property rights, which would prevent us from developing an advantage over our competitors.defend our intellectual property rightshighcom armor faces intense competition that could result in our losing or failing to gain market share and suffering reduced revenue.highcom armor faces intense competitionwe are primarily dependent upon the sales activities of highcom armor.sales activities of highcom armordependence on outside manufacturers and suppliers could disrupt our business if they fail to meet our expectations.fail to meet our expectationsloss of key personnel could cause a major disruption in our day-to-day operations and we could lose our relationships with third-parties with whom we do business.our day-to-day operationsloss of key personnel could cause a major disruption in our day-to-day operations and we could lose our relationships with third-parties with whom we do business.loss of key personnel

Risk Factors Full Breakdown - Total Risks 15

Share Price & Shareholder Rights4 | 26.7%
  • Share Price & Shareholder Rights - Risk 1
    Purchase of our stock is a highly speculative and there can be no assurances that our operations will be profitable.

    Prior to 2014, we had been operating at a loss since inception and we have an accumulated deficit of approximately $11 million. At December 31, 2018, we have shareholder equity of approximately $8,111,555 as compared to shareholder equity of approximately $7,686,459 at December 31, 2017. We have operated at a profit for three of the last four years since 2014.

  • Share Price & Shareholder Rights - Risk 2
    We have a limited market for our common stock which causes the market price to be volatile and to usually decline when there is more selling than buying on any given day.

    Our common stock currently trades on the OTC-QB Venture marketplace under the symbol "HCGS." However, at most times in the past, our common stock has been thinly traded and as a result the market price usually declines when there is more selling than buying on any given day. As a result, the market price has been volatile, and the market price may decline immediately if you decide to place an order to sell your shares.

  • Share Price & Shareholder Rights - Risk 3
    The market price of our common stock is highly volatile and several factors that are beyond our control, including our common stock being historically thinly traded, could adversely affect its market price.

    Our common stock has been historically thinly traded and the market price has been highly volatile. For these and other reasons, our stock price is subject to significant volatility and will likely be adversely affected if our revenues or earnings in any quarter fail to meet the investment community's expectations. Additionally, the market price of our common stock could be subject to significant fluctuations in response to: - announcements of new products or sales offered by HighCom Armor or its competitors;   - actual or anticipated variations in quarterly operating results;   - changes in financial estimates by securities analysts;    - changes in the market's perception of us or the nature of our business; and   - sales of our common stock. Future sales of common stock into the public market place will increase the public float and may adversely affect the market price. As of March 1, 2019, we had outstanding 386,014,460 shares of common stock, including an estimated 141,440,289 outstanding shares held by non-affiliated persons. Holders of restrictive securities may also sell their restrictive shares pursuant to Rule 144. In general, under Rule 144 of the Securities Act of 1933, as amended, shares of our common stock beneficially owned by a person for at least six months (as defined in Rule 144) are eligible for resale under Rule 144, subject to the availability of current public information about us and, in the case of affiliated persons, subject to certain additional volume limitations, manner of sale provisions and notice provisions. Pursuant to Rule 144, non-affiliates may sell or otherwise transfer their restricted shares without compliance with current public information where the restricted securities have been held for at least one year pursuant to Rule 144(a). Future sales of common stock or the availability of common stock for sale may have an adverse effect on the market price of our thinly traded common stock, which in turn could adversely affect our ability to obtain future funding as well as create a potential market overhang.

  • Share Price & Shareholder Rights - Risk 4
    "Penny Stock" regulations may adversely affect your ability to resell your stock in market transactions.

    The SEC has adopted penny stock regulations which apply to securities traded over-the-counter. These regulations generally define penny stock to be any equity security that has a market price of less than $5.00 per share or an equity security of an issuer with net tangible assets of less than $5,000,000 as indicated in audited financial statements, if the corporation has been in continuous operations for less than three years. Subject to certain limited exceptions, the rules for any transaction involving a penny stock require the delivery, prior to the transaction, of a risk disclosure document prepared by the SEC that contains certain information describing the nature and level of risk associated with investments in the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Monthly account statements must be sent by the broker-dealer disclosing the estimated market value of each penny stock held in the account or indicating that the estimated market value cannot be determined because of the unavailability of firm quotes. In addition, the rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors (generally institutions with assets in excess of $5,000,000). These practices require that, prior to the purchase, the broker-dealer determined that transactions in penny stocks were suitable for the purchaser and obtained the purchaser's written consent to the transaction. Our common stock is currently subject to the penny stock regulations. Compliance with the penny stock regulations by broker-dealers will likely result in price fluctuations and the lack of a liquid market for the common stock and may make it difficult for you to resell your stock in market transactions.

Accounting & Financial Operations1 | 6.7%
Debt & Financing1 | 6.7%

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.