Lithium & Boron Technology (LBTI) Risk Analysis
Risk Overview Q2, 2022
Risk Change Over Time
No filing history is available.
- Corporate Activity and Growth - Risk 1While We Have Commenced Limited Lithium Production and Book Revenue Through our Joint Venture, We Have not Established A Mechanism Where We can Withdraw Funds From The Joint Venture to Support our Operations.
While our joint venture has commenced limited production, our joint venture partner, while a minority owner, has substantial influence on the ability of the joint venture to declare cash dividends. Until we establish a services agreement with the Joint Venture or some other agreement where we can receive funds from the operations of the Joint Venture, we will not receive funds in order to support our operations. While we expect to make suitable arrangements, there can be no guaranty that such arrangement will provide sufficient amounts of cash to support our operations. Even though our financial statements indicate that we are receiving revenues due to GAAP accounting, we do are not at this time able to use these funds for our operations.
Risk Highlights Q2, 2022
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 58
- Share Price & Shareholder Rights - Risk 1The mining rights that Qinghai Mining hold equity interests in have a limited life and these operations will entail costs and risks regarding monitoring, rehabilitation and compliance with environmental standards which could increase our costs.
The leases to brine that Qinghai Mining holds in the PRC have limited lives and will eventually be depleted. We may need to replenish our lithium and boron supply sources from time to time in order to enhance our existing needs. Due to the limited supply of lithium and boron supply sources, there is no assurance that we will be able to acquire new and valuable lithium and boron supplies or resources, or that the actual production results may match the expected results. In the event of the closure of Qinghai Mining, we need to perform certain procedures to remedy and rehabilitate the environmental and social impact that the mining operations have had on local communities. We may experience a difficult closure, the consequences of which range from increased closure costs, handover delays and conflicts with local communities in relation to ongoing monitoring and environmental rehabilitation costs and damage to our reputation if desired outcomes cannot be achieved. In the event of a difficult closure, our business, financial condition and results of operations could be materially and adversely affected. Moreover, we have not made any provision for restoration or rehabilitation costs. Only mines that have commenced exploitation incur restoration or rehabilitation costs.
- Share Price & Shareholder Rights - Risk 2The market price for our common stock may be volatile and subject to wide fluctuations, which may adversely affect the price at which you can sell our shares.
The market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following: - actual or anticipated fluctuations in our quarterly operations results;- filing of a class action lawsuit against us and certain of our current and former officers;- changes in financial estimates by securities research analysts;- conditions in foreign or domestic fertilizer and agricultural markets;- changes in the economic performance or market valuations of other companies in the same industry;- announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;- addition or departure of key personnel;- fluctuations of exchange rates between the RMB and the U.S. dollar;- intellectual property litigation;- general economic or political conditions in the PRC; and - Other events or factors, many of which are beyond our control. In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of companies. These market fluctuations may also materially and adversely affect the market price of our stock, regardless of our actual operating performance.
- Share Price & Shareholder Rights - Risk 3The interests of our controlling shareholder who exerts significant influence over us may conflict with ours.
As of February 2019, our largest shareholder, Mao Zhang, directly and indirectly owned 45.08% of our issued and outstanding common stock. Mr. Zhang is also the controlling stockholder of Qinghai Mining and its General Manager. The interests of Mr Zhang and Qinghai Mining may conflict or even compete with our interests and those of our public shareholders. Mr Zhang may take actions that are in the interest of Qinghai Mining, its stockholders and other related entities to our detriment. For example, Mr. Zhang may seek to influence Qing Hi Tech's purchasing and pricing of brine, payments to Qinghai Mining's officers and directors which will impact its margins and capital expenditure programs and thus may adversely affect our future prospects and financial condition. In addition, Qinghai Mining is our exclusive source of raw and supplemental materials necessary for our operations. It would be difficult, if not impossible, to find an alternative source for the raw materials that we receive from Qinghai Mining. Our cost of operations would substantially increase if Qinghai Mining are unable to continue providing such raw materials to us.
- Share Price & Shareholder Rights - Risk 4We have a limited public market for our shares of common stock and you may not be able to resell our shares at or above the price you paid, or at all.
There is a limited public market for our common stock in the OTC (Pink) market. We intend to apply for quotation on the OTCBB or OTCBB through a market maker; however, there can be no assurance that our common stock will ever be quoted on any quotation service. In order to be eligible for trading on the OTCBB we must a market maker file an application with FINRA to have our common stock quoted on the OTCBB and remain current in our filings with the Securities and Exchange Commission. In order to be eligible for the OTCQB we must have a minimum bid price of $0.01, have at least 50 beneficial stockholders, each owning at least 100 shares, have a freely traded public float of at least 10% of our issued and outstanding shares of Common Stock or qualify from an exemption thereof and pay initial listing fees. We cannot assure you that an active public market for our common stock will develop or that the market price of our shares will not decline below the public offering price. The public offering price of our shares may not be indicative of prices that will prevail in the trading market following any purchase of your shares.
- Share Price & Shareholder Rights - Risk 5Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.
The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.
- Share Price & Shareholder Rights - Risk 6Future sales of substantial amounts of the shares of common stock by substantial stockholders could adversely affect the price of our common stock.
If our existing shareholders sell substantial amounts of the shares, the market price of our common stock could fall. Such sales by our existing shareholders might make it more difficult for us to issue new equity or equity-related securities in the future at a time and place we deem appropriate. If any of our shareholders sell a substantial number of shares, the prevailing market price for our shares could be adversely affected.
- Share Price & Shareholder Rights - Risk 7Our management collectively owns a substantial majority of our common stock.
Collectively, our officers, our directors and other stockholders own or exercise voting and investment control of approximately 91% of our outstanding common stock. As a result, investors may be prevented from affecting matters involving our company, including: - the composition of our Board of Directors and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers; - any determinations with respect to mergers or other business combinations; - our acquisition or disposition of assets; and - our corporate financing activities. Furthermore, this concentration of voting power could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders. This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company that is controlled by a small number of stockholders.
- Share Price & Shareholder Rights - Risk 8If securities or industry analysts do not publish research or reports about us, our business or our market, or if they make and then change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline.
The trading market for our common stock, should it develop, may be influenced by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.
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