Legend Oil and Gas (LOGL) Risk Analysis
Risk Overview Q4, 2016
Risk Change Over Time
Risk Highlights Q4, 2016
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 19
- Share Price & Shareholder Rights - Risk 1Risks Associated with Our Securities Our Board of Directors' ability to issue undesignated preferred shares and the existence of anti-takeover provisions may depress the value of our common shares.
Our authorized capital includes 100,000,000 preferred shares, all of which are blank check preferred shares available for issuance. Our Board of Directors has the power to issue any or all of the preferred shares, including the authority to establish one or more series and to fix the powers, preferences, rights and limitations of such class or series, without stockholder approval. Our Board may, in the future, consider adopting additional anti-takeover measures. The authority of our Board to issue undesignated stock and the anti-takeover provisions of Colorado law, as well as any future anti-takeover measures adopted by us, may, in certain circumstances, delay, deter or prevent takeover attempts and other changes in control of us that are not approved by our Board. As a result, our stockholders may lose opportunities to dispose of their common shares at favorable prices generally available in takeover attempts or that may be available under a merger proposal and the market price, voting and other rights of the holders of common shares may also be affected.
- Share Price & Shareholder Rights - Risk 2Our common shares are quoted on the Over-the-Counter Bulletin Board, which may have an unfavorable impact on our stock price and liquidity.
Our common shares are quoted on the Over-the-Counter Bulletin Board (the "OTCBB"). The OTCBB is a significantly more limited market than the New York Stock Exchange, the American Stock Exchange or NASDAQ system. The OTCBB market is an inter-dealer market much less regulated than the major exchanges and the common shares are subject to abuses, volatility and shorting. There is currently no broadly followed and established trading market for our common shares. An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. Absence of an active trading market reduces the level of liquidity available to the holders of our common shares. It may not be possible for a stockholder to sell their common shares within any particular time period, for an acceptable price, or at all. There is no certainty that a holder of common shares will be able to identify a buyer for common shares or realize any monetary value whatsoever from a sale thereof. Our common shares are considered highly speculative and there is no certainty that common shares will continue to be quoted for trading on the OTCBB or on any other form of quotation system or stock exchange, and even if the common shares were to be listed on a quotation system or stock exchange senior to the OTCBB, the common shares would continue to be subject to the resale restrictions and other limitations described above.
- Share Price & Shareholder Rights - Risk 3Our common shares are thinly traded, so you may be unable to sell at or near asking prices or at all.
Currently, our common shares are quoted in the OTCBB and the trading volume in our common shares may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTCBB stocks and certain major brokerage firms restrict their brokers from recommending OTCBB stocks because they are considered speculative, volatile and thinly traded. The market price of our common shares could fluctuate substantially due to a variety of factors, including market perception of its ability to achieve its planned growth, quarterly operating results of other companies in the same industry, trading volume in the common shares, changes in general conditions in the economy and the financial markets or other developments affecting us or our competitors. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common shares. The trading volume of our common shares has been and may continue to be limited and sporadic. As a result of such trading activity, the quoted price for our common shares on the OTCBB may not necessarily be a reliable indicator of its fair market value. When fewer shares of a security are being traded on the OTCBB, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Due to lower trading volumes in the common shares, there may be a lower likelihood of one's orders for common shares being executed, and current prices may differ significantly from the price one was quoted at the time of one's order entry. Further, if our common shares cease to be quoted, holders would find it more difficult to dispose of their common shares or to obtain accurate quotations as to the market value of the common shares and as a result, the market value of the common shares likely would decline.
- Share Price & Shareholder Rights - Risk 4Our common shares may not become listed or quoted on a stock market senior to the OTCBB.
In the future, we may seek to apply for listing on another market or exchange within the United States, such as Nasdaq or the New York Stock Exchange. We currently do not meet all of the initial listing standards for any of these exchanges, particularly the corporate governance requirements and director independence. There are no assurances that we will satisfy the applicable listing standards of any such market that we apply to, or that we will be able to obtain or maintain a more senior listing for our common shares.
- Share Price & Shareholder Rights - Risk 5We are subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks. These disclosure requirements may make it difficult for our stockholders to sell their shares.
Our common shares are subject to the SEC regulations for "penny stock." Penny stock includes any non-NASDAQ or other exchange listed equity security that has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock. The regulations also require that monthly statements be sent to holders of penny stock which disclose recent price information for the penny stock and information of the limited market for penny stocks. These requirements adversely affect the market liquidity of our common stock. In addition, our common stock is subject to Rule 15g-1 through 15g-9 under the Exchange Act, which imposes certain sales practice requirements on broker-dealers who sell our common stock to persons other than established customers and "accredited investors" (generally, individuals with a net worth in excess of $1,000,000 (exclusive of the value of their primary residence) or annual incomes exceeding $200,000 individually, or $300,000 together with their spouse)). For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. This rule adversely affects the ability of broker-dealers to sell our common stock and purchasers of our common stock to sell their shares of such common stock.
- Share Price & Shareholder Rights - Risk 6Restricted securities may not be resold outside of a registered offer and sale.
Securities that we sell and issue and that have not been registered under the Securities Act are "restricted securities" within the meaning of Rule 144. As a result, such restricted securities may not be offered, sold, pledged or otherwise transferred by the holders of such shares, directly or indirectly, unless the shares are registered under the Act and all applicable states securities laws, or unless there is an available exemption or exclusion from such registration requirements. Unless certain conditions are met, Rule 144 is not available for the resale of securities of issuers that are, or have ever previously been, issuers with (i) no or nominal operations and (ii) no or nominal assets other than cash and cash equivalents (a "shell company"). The Asset Purchase Agreement with Wi2Wi concluded that we may have been at one time a "shell company" in the past. We believe that we were never a shell company and that, even if we were deemed to have been a shell, we ceased to be a shell company in October 2010, when we acquired our first oil and gas producing properties, and that the filing of our Annual Report on Form 10-K for the year ended December 31, 2010 satisfied the Form 10 disclosure requirements. However, if it is deemed that we did not satisfy the conditions for use of Rule 144, our stockholders would not be able to use Rule 144 for resales of restricted securities.
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.