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Highwater Ethanol (HEOL) 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. Highwater Ethanol disclosed 41 risk factors in its most recent earnings report. Highwater Ethanol reported the most risks in the “Macro & Political” category.

Risk Overview Q2, 2026

Source: the company's latest filing for the period ended Jul 31, 2026, filed Sep 11, 2026

Risk Distribution
41Risks
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Highwater Ethanol disclosed risks per quarterNo. of Risks2530354045Q3Q4Q12017Q2Q3Q4Q12018Q2Q3Q4Q12019Q2Q3Q4Q12020Q2Q3Q4Q12021Q2Q3Q4Q12022Q2Q3Q4Q12023Q2Q3Q4Q12024Q2Q3Q4Q12025Q3Q4Q12026Q2Showing: Q2, 2026
Risks removedRisks addedRisks changedHighwater Ethanol Risk Factors
  • Economy & Political Environment - Risk 1
    Military conflict in the Middle East has resulted in rising global energy prices, energy supply and shipping disruptions, and a slowdown in global economic growth which could have a negative effect on our financial condition and results of operations.

    On February 28, 2026, the United States and Israel launched a military campaign against Iran. Iran retaliated by launching strikes across the Gulf region including against energy infrastructure and by closing the Strait of Hormuz through which a significant portion of the world's oil production passes. These military operations in the Middle East have created global economic uncertainty and resulted in oil and natural gas supply and shipping disruptions and a surge in crude oil, gasoline and ethanol prices. On April 8, 2026, a temporary ceasefire took effect which was then extended for an additional 60 days on June 16, 2026, to provide a window to negotiate a final deal. However, this period has since expired and tensions remain high amid stalled negotiations. Although the duration and extent of the military conflict is highly unpredictable, if domestic demand is negatively affected by continued high gasoline prices that could have a negative effect on our financial condition and operating results. In contrast, resolution of the military conflict in the Middle East could cause a decrease in ethanol prices and our profitability.

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Risk Highlights Q2, 2026

Main Risk Category
Macro & Political
With 11 Risks
Number of Disclosed Risks
41
No changes from last report
S&P 500 Average: 32
Recent Changes
1Risks added
0Risks removed
0Risks changed
Since Jul 2026
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

increases in exports of corn produced in the united states could result in higher corn prices which could reduce our profitability.exports of corn producedlack of rail transportation infrastructure and delayed rail shipments have resulted in rail logistical problems which could negatively impact our financial performancenegatively impact our financial performancechanges and advances in ethanol production technology could require us to incur costs to update our plant or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.hinder our ability to competewe may violate the terms of our credit agreements, including the financial covenants, which could result in our lenders demanding immediate repayment.terms of our credit agreementslack of rail transportation infrastructure and delayed rail shipments have resulted in rail logistical problems which could negatively impact our financial performancelack of rail transportation infrastructurethe california low carbon fuel standard may decrease demand for corn based ethanol which could negatively impact our profitability.california low carbon fuel standardour existing debt financing agreements contain, and our future debt financing agreements may contain, restrictive covenants that limit distributions and impose restrictions on the operation of our business.our existing debt financing agreementsour existing debt financing agreements contain, and our future debt financing agreements may contain, restrictive covenants that limit distributions and impose restrictions on the operation of our business.our future debt financing agreementsa reduction in distillers grains exports to china has in the past and could continue in the future to have a negative effect on the price of distillers grains in the u.s. and negatively affect our profitability.distillers grains exports to chinaconsumer resistance to the use of ethanol based on the belief that ethanol is expensive, uses too much corn, adds to air pollution, harms engines, and/or takes more energy to produce than it contributes may affect the demand for ethanol.adds to air pollution

Risk Factors Full Breakdown - Total Risks 41

Economy & Political Environment3 | 7.3%
  • Economy & Political Environment - Risk 1Added
    Military conflict in the Middle East has resulted in rising global energy prices, energy supply and shipping disruptions, and a slowdown in global economic growth which could have a negative effect on our financial condition and results of operations.

    On February 28, 2026, the United States and Israel launched a military campaign against Iran. Iran retaliated by launching strikes across the Gulf region including against energy infrastructure and by closing the Strait of Hormuz through which a significant portion of the world's oil production passes. These military operations in the Middle East have created global economic uncertainty and resulted in oil and natural gas supply and shipping disruptions and a surge in crude oil, gasoline and ethanol prices. On April 8, 2026, a temporary ceasefire took effect which was then extended for an additional 60 days on June 16, 2026, to provide a window to negotiate a final deal. However, this period has since expired and tensions remain high amid stalled negotiations. Although the duration and extent of the military conflict is highly unpredictable, if domestic demand is negatively affected by continued high gasoline prices that could have a negative effect on our financial condition and operating results. In contrast, resolution of the military conflict in the Middle East could cause a decrease in ethanol prices and our profitability.

  • Economy & Political Environment - Risk 2
    We are subject to global and regional economic downturns, inflation, rising interest rates and related risks.

    Our business is affected by global and regional demographic and macroeconomic conditions. A significant downturn in global economic growth, or recessionary conditions in major geographic regions for prolonged periods, may lead to a variety of adverse consequences for our business including reduced demand for our products, increases in our corn and natural gas costs and rising interest rates on our variable rate loans. These and other adverse consequences could result in our inability to operate profitably and reduce our earnings.

  • Economy & Political Environment - Risk 3
    The invasion of Ukraine by Russia and resulting sanctions by the United States, European Union and other countries have resulted in a slowdown in global economic growth, rising inflation, market disruptions and increased volatility in commodity prices in the United States.

    On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. In response to the attacks on Ukraine, sanctions and other penalties have been levied by the United States, European Union and other countries and additional sanctions and penalties have been proposed. The invasion by Russia and resulting sanctions created global economic uncertainty and resulted in significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. Although the duration and extent of the ongoing military conflict is highly unpredictable and the magnitude of the potential economic impact is currently unknown, Russian military actions and resulting sanctions have had and may in the future have a negative effect on our financial condition and operating results.

Natural and Human Disruptions4 | 9.8%
Capital Markets4 | 9.8%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.