NewGen BioPharma (NEWG) Risk Analysis
Risk Overview Q3, 2016
Source: the company's latest filing for the period ended Oct 31, 2016, filed Jan 25, 2017
Risk Change Over Time
No filing history is available.
Risk Highlights Q3, 2016
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 18
- Share Price & Shareholder Rights - Risk 1We may in the future issue additional shares of common stock, which would reduce investors' percent of ownership and may dilute our share value.
Our Articles of Incorporation authorize the issuance of 300,000,000 shares of common stock, par value $0.001 per share, of which 47,600,000 shares are issued and outstanding. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
- Share Price & Shareholder Rights - Risk 2Because our sole officer and director may have other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.
Our sole officer and director, Jerwin Alfiler, will only be devoting limited time to our operations. Because our sole officer and director will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to our management. As a result, operations may be periodically interrupted or suspended, which could result in a lack of revenues and a possible cessation of operations.
- Share Price & Shareholder Rights - Risk 3U.s. Investors may experience difficulties in attempting to effect a service of process and to enforce judgments based upon U.S. Federal securities laws against the company and its non U.S. Resident officer and director.
While we are organized under the laws of State of Nevada, our sole officer and director is a non-U.S. resident. Consequently, it may be difficult for investors to affect service of process on Mr. Alfiler in the United States and to enforce in the United States judgments obtained in United States courts against Mr. Alfiler based on the civil liability provisions of the United States securities laws. Since all our assets are located outside the United States, it may be difficult or impossible for U.S. investors to collect a judgment against us. Additionally, any judgment obtained in the United States against us may not be enforceable in the United States.
- Share Price & Shareholder Rights - Risk 4We are an "emerging growth company" and we cannot be certain if we will be able to maintain such status or if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 or "JOBS Act," and we may adopt certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive and stockholder approval of any golden parachute payments not previously approved. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. We may remain an "emerging growth company" for up to five full fiscal years following our initial public offering. We would cease to be an emerging growth company, and, therefore, ineligible to rely on the above exemptions, if we have more than $1 billion in annual revenue in a fiscal year, if we issue more than $1 billion of non-convertible debt over a three-year period, or if we have more than $700 million in market value of our common stock held by non-affiliates as of June 30 in the fiscal year before the end of the five full fiscal years. Additionally, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result of our reduced disclosures, there may be less active trading in our common stock (assuming a market ever develops) and our stock price may be more volatile.
- Share Price & Shareholder Rights - Risk 5Shares of our common stock that have not been registered under the securities act of 1933, as amended, regardless of whether such shares are restricted or unrestricted, are subject to resale restrictions imposed by rule 144, including those set forth in rule 144(i) which apply to a "shell company." in addition, any shares of our common stock that are held by affiliates, including any received in a registered offering, will be subject to the resale restrictions of rule 144(i).
Pursuant to Rule 144 of the Securities Act of 1933, as amended ("Rule 144"), a "shell company" is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets. As such, we are a "shell company" pursuant to Rule 144 and as such, sales of our securities pursuant to Rule 144 are not able to be made until a period of at least twelve months has elapsed from the date that a Current Report on Form 8-K is filed with the Commission reflecting the Company's status as a non- "shell company." Therefore, any restricted securities we sell in the future or issue to consultants or employees, in consideration for services rendered or for any other purpose will have no liquidity until and unless such securities are registered with the Commission and/or until a year after the date of the filing of a Current Report on Form 8-K reflecting non-"shell company" status, and we have otherwise complied with the other requirements of Rule 144. As a result, it may be harder for us to fund our operations and pay our consultants with our securities instead of cash. Furthermore, it will be harder for us to raise funding through the sale of debt or equity securities unless we agree to register such securities with the Commission, which could cause us to expend additional resources in the future. Our status as a "shell company" could prevent us from raising additional funds, engaging consultants, and using our securities to pay for any acquisitions (although none are currently planned), which could cause the value of our securities, if any, to decline in value or become worthless. Lastly, any shares held by affiliates, including shares received in any registered offering, will be subject to the resale restrictions of Rule 144(i).
- Share Price & Shareholder Rights - Risk 6Our stock is categorized as a penny stock. Trading of our stock may be restricted by the sec's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.
Our stock is categorized as a penny stock. The SEC has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. 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 in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must 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. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must 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 the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
- Share Price & Shareholder Rights - Risk 7Finra sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares
- Share Price & Shareholder Rights - Risk 8If we do not file a registration statement on form 8-a to become a mandatory reporting company under section 12(g) of the securities exchange act of 1934, we will not be subject to reporting requirements under section 15(d). Additionally we will not be subject to the proxy statement requirements, and our officers, directors and 10% stockholders will not be required to submit reports to the sec on their stock ownership and stock trading activity, all of which could reduce the value of our shares and the amount of publicly available information about us.
As a result of our registered offering on Form S-1, as required under Section 15(d) of the Securities Exchange Act of 1934, we were required to file periodic reports with the Securities and Exchange Commission through October 31, 2014, including a Form 10-K for the year ended October 31, 2014. We have not filed a registration statement on Form 8-A to date, and for periods subsequent to October 31, 2014, we will not be subject to all of the reporting requirements of the 1934 Act, including the filing of quarterly and annual reports with the SEC and the proxy rules. In addition, our officers, directors and 10% stockholders will not be required to submit reports to the SEC on their stock ownership and stock trading activity. We are not required under Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have more than 2,000 stockholders (or 500 total non-accredited stockholders) and total assets of more than $10 million.
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