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IntelliPharmaCeutics International (IPCIQ) 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. IntelliPharmaCeutics International disclosed 65 risk factors in its most recent earnings report. IntelliPharmaCeutics International reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2020

Source: the company's latest filing for the period ended Dec 31, 2020, filed Mar 31, 2021

Risk Distribution
65Risks
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 changedIntelliPharmaCeutics International Risk Factors
Risk Changed (1)
  • Debt & Financing - Risk 1
    B. Capitalization and Indebtedness

    Not applicable.

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Risk Highlights Q4, 2020

Main Risk Category
Finance & Corporate
With 16 Risks
Number of Disclosed Risks
65
-2
From last report
S&P 500 Average: 32
Recent Changes
2Risks added
4Risks removed
1Risks changed
Since Dec 2020
Number of Risk Changed
1
-3
From last report
S&P 500 Average: 1

Risk Word Cloud

we are subject to currency rate fluctuations that may impact our financial results.subject to currency rate fluctuationswe may be subject to product liability claims for which we may not have or be able to obtain adequate insurance coverage.subject to product liability claimsour business is capital intensive and requires significant investment to conduct the research and development, clinical and regulatory activities necessary to bring our products to market, which capital may not be available in amounts or on terms acceptable to us, if at all.requires significant investment to conductmarket acceptance of our products will be limited if users of our products are unable to obtain adequate reimbursement from third-party payers.unable to obtain adequate reimbursementwe may be subject to product liability claims for which we may not have or be able to obtain adequate insurance coverage.to obtain adequate insurance coverageloss of key scientists and/or failure to attract qualified personnel could limit our growth and negatively impact our operations.failure to attract qualified personnelnear-term revenue depends significantly on the success of our commercialized products.near-term revenue depends significantlyour significant expenditures on r&d may not lead to successful product introductions.lead to successful product introductionsour business and operations are increasingly dependent on information technology and accordingly we would suffer in the event of computer system failures, cyber-attacks or a deficiency in cyber-security.event of computer system failureswe may be subject to intellectual property claims that could be costly and could disrupt our business.subject to intellectual property claims

Risk Factors Full Breakdown - Total Risks 65

Share Price & Shareholder Rights12 | 18.5%
  • Share Price & Shareholder Rights - Risk 1
    There may not be an active, liquid market for our Common Shares.

    There is no guarantee that an active trading market for our common shares will be maintained on OTCQB or TSX. Investors may not be able to sell their shares quickly or at the latest market price if trading in our common shares is not active. There may be future sales or other dilution of our equity, which may adversely affect the market price of our common shares. The Company may, from time to time, issue additional common shares, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common shares. The market price of our common shares could decline as a result of sales of common shares or securities that are convertible into or exchangeable for, or that represent the right to receive, common shares or the perception that such sales could occur.

  • Share Price & Shareholder Rights - Risk 2
    Future sales of our Common Shares may cause the prevailing market price of our Common Shares to decrease.

    We have registered a substantial number of outstanding common shares and common shares that are issuable upon the exercise of outstanding warrants. If the holders of our registered common shares choose to sell such shares in the public market or if holders of our warrants exercise their purchase rights and sell the underlying common shares in the public market, or if holders of currently restricted common shares choose to sell such shares in the public market, the prevailing market price for our common shares may decline. The sale of shares issued upon the exercise of our warrants (and options) could also further dilute the holdings of our then existing shareholders. In addition, future public sales by holders of our common shares could impair our ability to raise capital through equity offerings.

  • Share Price & Shareholder Rights - Risk 3
    We may in the future issue preference shares which could adversely affect the rights of holders of our common shares and the value of such shares.

    Our Board has the ability to authorize the issue of an unlimited number of preference shares in series, and to determine the price, rights, preferences and privileges of those shares without any further vote or action by the holders of our common shares. Although we have no preference shares issued and outstanding, preference shares issued in the future could adversely affect the rights and interests of holders of our common shares.

  • Share Price & Shareholder Rights - Risk 4
    Our share price has been highly volatile and our shares could suffer a further decline in value.

    The trading price of our common shares has been highly volatile and could continue to be subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including: - sales of our common shares, including any sales made in connection with future financings;- announcements regarding new or existing corporate relationships or arrangements;- announcements by us of significant acquisitions, joint ventures, or capital commitments;- actual or anticipated period-to-period fluctuations in financial results;- clinical and regulatory development regarding our product candidates;- litigation or threat of litigation;- failure to achieve, or changes in, financial estimates by securities analysts;- comments or opinions by securities analysts or members of the medical community;- announcements regarding new or existing products or services or technological innovations by us or our competitors;- conditions or trends in the pharmaceutical and biotechnology industries;- additions or departures of key personnel or directors;- economic and other external factors or disasters or crises;- limited daily trading volume; and - developments regarding our patents or other intellectual property or that of our competitors. In addition, the stock market in general and the market for drug development companies in particular have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Further, there has been significant volatility in the market prices of securities of life science companies. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been instituted. Litigation of this type has been instituted against us could result in substantial costs, potential liabilities, and the diversion of management's attention and resources.

  • Share Price & Shareholder Rights - Risk 5
    Sales of a significant number of our Common Shares in the public markets, or the perception that such sales could occur, could depress the market price of the Common Shares.

    Sales of a substantial number of our common shares or securities convertible or exchangeable into common shares in the public markets could depress the market price of the common shares and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of common shares would have on the market price of our common shares. As of March 31, 2021, we had approximately 23,678,105 common shares outstanding. In order to raise additional capital, we intend to offer additional common shares or other securities convertible into or exchangeable for our common shares. In addition, a substantial portion of our common shares are currently freely trading without restriction under the U.S. Securities Act, having been registered for resale or held by their holders for over six months and are eligible for sale under Rule 144. If the holders of our registered common shares choose to sell such shares in the public market or if holders of our convertible securities exercise or convert their securities and sell the underlying common shares in the public market, or if holders of currently restricted common shares choose to sell such shares in the public market, the prevailing market price of our common shares may decline. The sale of shares issued upon the exercise of our securities convertible into or exchangeable for our common shares could also further dilute the holdings of our then-existing shareholders. In addition, future public sales by holders of our common shares could impair our ability to raise capital through equity offerings. On October 22, 2009, Intellipharmaceutics Ltd. ("IPC Ltd") and Vasogen Inc. ("Vasogen") completed a plan of arrangement and merger (the "IPC Arrangement Agreement"), resulting in the formation of the Company. Our shareholders who received shares under the IPC Arrangement Agreement who were not deemed "affiliates" of either Vasogen, IPC Ltd. or us prior to the IPC Arrangement Agreement were able to resell the common shares that they received without restriction under the U.S. Securities Act. The common shares received by an "affiliate" after the IPC Arrangement Agreement or who were "affiliates" of either Vasogen, IPC Ltd. or us prior to the IPC Arrangement Agreement are subject to certain restrictions on resale under Rule 144. As of March 31, 2021, there are currently common shares issuable upon the exercise of outstanding options and warrants and the conversion of the outstanding Debentures for an aggregate of approximately 26,884,914 common shares. To the extent any of our options and warrants are exercised and the Debentures are converted, a shareholder's percentage ownership will be diluted and our stock price could be further adversely affected. Moreover, as the underlying shares are sold, the market price could drop significantly if the holders of these restricted shares sell them or if the market perceives that the holders intend to sell these shares.

  • Share Price & Shareholder Rights - Risk 6
    Our shareholders may face significant restrictions on the resale of our Common Shares due to state "Blue Sky" laws.

    Each state has its own securities laws, often called "blue sky" laws, which (i) 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 (ii) 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 the transaction must be exempt from registration. The applicable broker must be registered in that state. Absent compliance with such individual state laws, our common shares may not be traded in such jurisdictions. Because the securities have not been registered for resale under the Blue Sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state Blue Sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepared to hold common shares for an indefinite period of time. You should therefore consider the resale market for our common shares to be limited, as you may be unable to resell your shares without the significant expense of state registration or qualification.

  • Share Price & Shareholder Rights - Risk 7
    As long as our stock price remains below $5.00 per share, our shareholders will face restrictions in using our shares as collateral for margin accounts.

    The closing price of our common shares on the OTCQB on March 30, 2021 was $0.20 per share. If the market price of our common shares remains below $5.00 per share, under Federal Reserve regulations and account maintenance rules of many brokerages, our shareholders will face restrictions in using such shares as collateral for borrowing in margin accounts. These restrictions on the use of our common shares as collateral may lead to sales of such shares creating downward pressure on and increased volatility in, the market price of our common shares. In addition, many institutional investors will not invest in stocks whose prices are below $5.00 per share.

  • Share Price & Shareholder Rights - Risk 8
    Our Common Shares may not continue to be listed on the TSX.

    Failure to maintain the applicable continued listing requirements of the TSX could result in our common shares being delisted from the TSX. The TSX will normally consider the delisting of securities if, in the opinion of the exchange, it appears that the public distribution, price, or trading activity of the securities has been so reduced as to make further dealings in the securities on TSX unwarranted. For example, participating securities may be delisted from the TSX if, among other things, the market value of an issuer's securities that are listed on the TSX is less than C$3,000,000 over any period of 30 consecutive trading days. In such circumstances, the TSX may notify an issuer that it is under delisting review and the issuer will normally be given up to 120 days from the date of such notification to correct the fall in market value and such other deficiencies noted by the TSX. At any time prior to the end of the delisting review period, the TSX will provide the issuer with an opportunity to be heard where the issuer may present submissions to satisfy the TSX that all deficiencies identified in the TSX's notice have been rectified. If at the conclusion of the hearing the issuer cannot satisfy the TSX that the deficiencies identified have been rectified and that no other delisting criteria are then applicable to the issuer, the TSX will determine whether to delist the issuer's securities. If the market price of our common shares declines further or we are unable to maintain other listing requirements, the TSX may determine to delist our common shares. If our common shares are no longer listed on the TSX, they may be eligible for listing on the TSX Venture Exchange. In the event that we are not able to maintain a listing for our common shares on the TSX or the TSX Venture Exchange, it may be extremely difficult or impossible for shareholders to sell their common shares in Canada. Moreover, if we are delisted from the TSX, but obtain a substitute listing for our common shares on the TSX Venture Exchange, our common shares will likely have less liquidity and more price volatility than experienced on the TSX. Shareholders may not be able to sell their common shares on any such substitute exchange in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common shares are delisted from the TSX, the price of our common shares is likely to decline. Our common shares are currently a "penny stock" under SEC rules. It may be more difficult to resell shares of common shares classified as "penny stock." Our common shares are a "penny stock" under applicable SEC rules. Transactions in securities that are traded in the United States by companies with net tangible assets of $5,000,000 or less and a market price per share of less than $5.00 that are not traded on Nasdaq or on other securities exchanges may be subject to the "penny stock" rules promulgated under the U.S. Exchange Act. Under these rules, broker-dealers who recommend such securities to persons other than institutional investors must: -  make a special written suitability determination for the purchaser;- receive the purchaser's written agreement to a transaction prior to sale;-  provide the purchaser with risk disclosure documents which identify risks associated with investing in "penny stocks" and which describe the market for these "penny stocks" as well as a purchaser's legal remedies; and - obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a "penny stock" can be completed. As a result of these requirements, since our common shares are subject to the "penny stock" rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in these shares in the United States may be significantly limited. Accordingly, the market price of the shares may be depressed, and investors may find it more difficult to sell the shares.

  • Share Price & Shareholder Rights - Risk 9
    Authorized capital includes an unlimited number of shares of Common Shares.

    The Company's authorized capital consists of an unlimited number of shares of one class designated as common shares. The directors may create any class or series of shares by resolution but may not make any modification to the provisions attaching to our common shares without the affirmative vote of two-thirds of the votes cast by the holders of the Common Shares. The Company's common shares do not have pre-emptive rights to purchase additional shares.

  • Share Price & Shareholder Rights - Risk 10
    Shareholder ownership interest in the Company may be diluted as a result of future financings and acquisitions.

    The Company may seek to raise funds from time to time in public or private issuances of equity in the near future or over the longer term. Sales of the Company's securities offered through future equity offerings may result in substantial dilution to the interests of the Company's current shareholders. The sale of a substantial number of securities to investors, or anticipation of such sales, could make it more difficult for the Company to sell equity or equity-related securities in the future at a time and at a price that the Company might otherwise wish to effect sales. In addition, the Company may issue its common shares for various acquisitions in the future, which may also result in substantial dilution to the interests of the Company's current shareholders.

  • Share Price & Shareholder Rights - Risk 11
    Future issuances of our shares could adversely affect the trading price of our Common Shares and could result in substantial dilution to shareholders.

    We may need to issue substantial amounts of common shares in the future. There can be no assurance that we will be able to sell any additional shares. To the extent that the market price of our common shares declines, we will need to issue an increasing number of common shares per dollar of equity investment. In addition to our common shares issuable in connection with the exercise of our outstanding warrants, our employees, and directors will hold rights to acquire substantial amounts of our common shares. In order to obtain future financing if required, it is likely that we will issue additional common shares or financial instruments that are exchangeable for or convertible into common shares. Also, in order to provide incentives to employees and induce prospective employees and consultants to work for us, we may offer and issue options to purchase common shares and/or rights exchangeable for or convertible into common shares. Future issuances of shares could result in substantial dilution to shareholders. Capital raising activities, if available, and dilution associated with such activities could cause our share price to decline. In addition, the existence of common share purchase warrants may encourage short selling by market participants. Also, in order to provide incentives to current employees and directors and induce prospective employees and consultants to work for us, we have historically granted options and deferred share units ("DSUs"), and intend to continue to do so or offer and issue other rights exchangeable for or convertible into common shares. Future issuances of shares could result in substantial dilution to all our shareholders. In addition, future public sales by holders of our common shares could impair our ability to raise capital through any future equity offerings.

  • Share Price & Shareholder Rights - Risk 12
    Our founders potentially may be able to exercise influence over certain corporate actions.

    Our founders, Drs. Amina and Isa Odidi, our President, Chief Operating Officer and Co-Chief Scientific Officer and our Chairman, Chief Executive Officer and Co-Chief Scientific Officer, respectively, and shareholders of our Company, and Odidi Holdings Inc., a privately-held company controlled by Drs. Amina and Isa Odidi, own in the aggregate approximately 2.44% of our issued and outstanding common shares as of March 31, 2021 (and collectively beneficially owned in the aggregate approximately 19.79% of our common shares, including common shares issuable upon the exercise of outstanding options and the conversion of the 2018 Debenture (as defined below), May 2019 Debenture (as defined below) and the November 2019 Debenture (as defined below and collectively with the 2018 Debenture and the May 2019 Debenture, the "Debentures"). As a result, these shareholders potentially may be able to exercise influence over matters submitted to our shareholders for approval.

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.