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ITEX (ITEX) 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. ITEX disclosed 24 risk factors in its most recent earnings report. ITEX reported the most risks in the “Finance & Corporate” category.

Risk Overview Q1, 2017

Source: the company's latest filing for the period ended Apr 30, 2017, filed Jun 13, 2017

Risk Distribution
24Risks
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 changedITEX Risk Factors
No changes from previous report

Risk Highlights Q1, 2017

Main Risk Category
Finance & Corporate
With 10 Risks
Number of Disclosed Risks
24
No changes from last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Apr 2017
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

our ability to use our net operating loss carryforwards to offset future taxable income would be limited if we do not generate sufficient taxable income or if an ownership change occurs, which would negatively impact our results of operations and stockholders' equitygenerate sufficient taxable incomewe may be required to record a further charge to earnings as a result of impairment of goodwill or intangible assets, which could have a negative impact on stockholders' equityresult of impairment of goodwillfuture revenue growth remains uncertain and our operating results and profitability may declinefuture revenue growth remains uncertainescheatment of our unclaimed common stock could result in our being eligible to deregister our stock under the exchange acteligible to deregister our stockour ability to pay dividends on our common stock is subject to the discretion of our board of directors and may be limited by our lack of liquidity or access to capital.our ability to pay dividendswe may need additional financing; current funds may be insufficient to finance our plans for growth or our operationsinsufficient to finance our plansour business is subject to online security risks, including security breaches and identity theftsubject to online security risksthe emergence of increased regulation related to virtual currencies could increase our costs by requiring us to update our products and services; or subject us to operational requirements that result in substantial compliance costs which would adversely affect our businesssubject us to operational requirementsour revenue growth and success is tied to the operations of our broker network, and as a result the loss of our brokers or the financial performance of our brokers can negatively impact our businessoperations of our broker networkour revenue growth and success is tied to the operations of our broker network, and as a result the loss of our brokers or the financial performance of our brokers can negatively impact our businessfinancial performance of our brokers

Risk Factors Full Breakdown - Total Risks 24

Share Price & Shareholder Rights3 | 12.5%
  • Share Price & Shareholder Rights - Risk 1
    Stockholders or investors may attempt to effect changes or acquire control over our business, which could adversely affect our results of operations and financial condition.

    During the past several years, U.S. companies have seen an increasing level of insurgent campaigns, proxy solicitations, and shareholder derivative actions or other attempts to acquire control of companies or effect operational changes. In recent years, we have been the subject of two proxy contests seeking control of our board of directors, as well as a related lawsuit. We cannot assure you that we will not be subject to further proxy contests, litigation or other activity or demands in the future. If we are, such activity or demands could harm the Company because: - Responding to proxy contests, litigation and other actions by dissident shareholders could interfere with our ability to execute our strategic plan, disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees from the pursuit of business strategies;- Perceived uncertainties as to our future direction diverts the attention of, damages morale and creates instability among members of our Broker Network, and adversely impact our existing and potential strategic and operational relationships and opportunities;- We may experience difficulties in hiring, retaining and motivating personnel during the resulting uncertain and turbulent times;- We would experience substantial increases in legal fees, insurance, administrative and associated costs incurred in connection with responding to proxy contests and related litigation;- A change in the composition of the Board of Directors could result in additional compensation charges and other expenses, including reimbursement of proxy or takeover expenses; and may not produce an effective business strategy or create additional value for stockholders.

  • Share Price & Shareholder Rights - Risk 2
    The market for our securities has limited liquidity and may become less liquid

    Our common stock trades on the OTC Pink tier of the over-the-counter market known as the OTC Marketplace. The OTC Marketplace has three tiers, consisting of OTCQX, OTCQB and OTC Pink marketplaces. Many of the securities quoted in the OTC Marketplace do not have a liquid market. They are infrequently traded and can move up or down in price substantially from one trade to the next. As a result, an investment in our shares may be illiquid even if there is a market. Moreover, our securities are not listed on a national securities exchange. Under current regulations national securities exchanges have the ability to offer certain advantages to listed companies. For example, securities listed on a national securities exchange are exempt from state Blue Sky laws covering the offer or sale of securities within the state. We avail ourselves of applicable Blue Sky exemptions, however there are certain states in which we have not qualified for an exemption and our shares may not be traded. National securities exchanges also offer the ability to margin certain listed securities and the potential inclusion of listed securities in certain exchange-traded funds and indices. These differences between our marketplace and the national securities exchanges may make certain investors choose to not invest in our stock.

  • Share Price & Shareholder Rights - Risk 3
    Escheatment of our unclaimed common stock could result in our being eligible to deregister our stock under the Exchange Act

    We are subject to state unclaimed property (escheat) laws which require us to turn over to state authorities unclaimed property including stocks and uncashed dividends. We work with an agent to comply with applicable unclaimed property laws, including preparation of unclaimed property reports, completion of required due diligence notifications, delivery of abandoned stock and dividends to various states and other services as necessary. It is expected that as the process is completed there will be some escheatment of shares owned by lost stockholders. It is possible that as the process continues there will be escheatment of a sufficient number of shares owned by lost stockholders to reduce our number of registered stockholders to below 300. As of July 31, 2016, we had 472 stockholders of record. If the number of registered stockholders drops below 300, we would be eligible to deregister our shares under the Exchange Act, and to exit the SEC reporting system. If we are eligible, a decision to deregister could be viewed in a negative manner by stockholders due to diminished available information about the Company and the potentially adverse impact on liquidity in the trading market for our shares and our stock price.

Accounting & Financial Operations4 | 16.7%
Debt & Financing2 | 8.3%
Corporate Activity and Growth1 | 4.2%

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.