Petro River Oil (PTRC) Risk Analysis
Risk Overview Q3, 2019
Source: the company's latest filing for the period ended Oct 31, 2019, filed Dec 13, 2019
Risk Change Over Time
- Debt & Financing - Risk 1Our cash and cash equivalents have substantially decreased since April 30, 2019, as has our revenue from oil and gas sales. As a result, our planned development and acquisition activities have been substantially curtailed. These factors raise substantial doubts about our ability to continue as a going concern in the event we are unable to raise additional capital and/or otherwise take action to substantially reduce our operating and other expenses, which may include suspending our statutory reporting obligations.
Management is currently focused on limiting operating expenses, deferring certain development activity, and exploring farm-in and joint venture opportunities for the Company's oil and gas assets. In addition, management is currently exploring various options to substantially reduce operating expenses and maximize the value of its assets, including its interest in Bandolier and Horizon Energy. Such options include, but are not limited to, asset sales, mergers, voluntarily terminating and/or suspending our statutory reporting obligations under the Securities Exchange Act of 1934, as amended, and other options that would allow the Company to continue as a going concern. No assurances can be given that management will be successful. In the event management is unsuccessful in its capital raising efforts and/or its efforts to substantially reduce operating expenses, we will be unable to continue as a going concern.
Risk Highlights Q3, 2019
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 26
- Share Price & Shareholder Rights - Risk 1Our independent auditors' report for the fiscal years ended April 30, 2019 and 2018 have expressed doubts about our ability to continue as a going concern
Due to the uncertainty of our ability to meet our current operating and capital expenses, in our audited annual financial statements as of and for the years ended April 30, 2019 and 2018 our independent auditors included a note to our financial statements regarding concerns about our ability to continue as a going concern. The Company has incurred recurring losses and has generated limited revenue since inception. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about the ability to continue as a going concern. The presence of the going concern note to our financial statements may have an adverse impact on the relationships we are developing and plan to develop with third parties as we continue the commercialization of our products and could make it challenging and difficult for us to raise additional financing, all of which could have a material adverse impact on our business and prospects and result in a significant or complete loss of your investment.
- Share Price & Shareholder Rights - Risk 2The liquidity, market price and volume of our stock are volatile.
Our common stock is not traded on any exchange, but is currently quoted on the OTC Pink Marketplace ("OTC Pink"). The liquidity of our common stock may be adversely affected, and purchasers of our common stock may have difficulty selling our common stock, particularly if our common stock does not continue to be quoted on the OTC Pink or another recognized quotation services or exchange. The trading price of our common stock could be subject to wide fluctuations in response to quarter-to-quarter variations in our operating results, announcements of our drilling results and other events or factors. In addition, the U.S. stock markets have from time to time experienced extreme price and volume fluctuations that have affected the market price for many companies and which often have been unrelated to the operating performance of these companies. These broad market fluctuations may adversely affect the market price of our securities.
- Share Price & Shareholder Rights - Risk 3Our 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 $5.00 per share or an exercise price of less than $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 4We may issue preferred stock in the future with rights senior to our common stock, and the terms of the preferred stock may reduce the value of your common stock.
We are authorized to issue up to 5,000,000 shares of preferred stock in one or more series, of which, 29,500 shares of have been designated as Series B Convertible Preferred Stock and 500,000 shares have been designated as Series A Convertible Preferred Stock. Our Board of Directors may determine the terms of future preferred stock offerings without further action by our stockholders. If we issue additional share of preferred stock, it could affect your rights or reduce the value of your common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with or sell our assets to a third party. Preferred stock terms may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights and sinking fund provisions.
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.
