Rubicon Technology (RBCN) Risk Analysis
Risk Overview Q4, 2022
Source: the company's latest filing for the period ended Dec 31, 2022, filed Mar 30, 2023
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Our NOL carryforwards may expire or could be substantially limited if we experience an ownership change as defined in the IRC or if changes are made to the IRC.
We have significant NOL carryforwards. Under federal tax laws, we can carry forward and use our NOLs to reduce our future U.S. taxable income and tax liabilities until such NOL carryforwards expire in accordance with the IRC. Our NOL carryforwards provide a benefit to us, if fully utilized, of significant future tax savings. However, our ability to use these tax benefits in future years will depend upon the amount of our federal and state taxable income. If we do not have sufficient federal and state income in future years to use the benefits before they expire, we will permanently lose the benefit of the NOL carryforwards. Our ability to use the tax benefits associated with our NOL carryforwards is dependent upon our generation of future taxable profits and our ability to successfully identify and consummate suitable acquisitions or investment opportunities. Additionally, Section 382 and Section 383 of the IRC provide an annual limitation on our ability to utilize our NOL carryforwards, as well as certain built-in losses, against the future U.S. taxable income in the event of a change in ownership, as defined under the IRC. While we have implemented a stockholder's right plan to protect our NOL carryforwards, there is no assurance that we will not experience a change in ownership in the future as a result of changes in our stock ownership, and any such subsequent changes in ownership for purposes of the IRC could further limit our ability to use our NOL carryforwards. Under the recently enacted Tax Cut and Jobs Act, NOLs generated on or after January 1, 2018, could be limited to 80% of taxable income. If other changes were made to the IRC, they could impact our ability to utilize our NOLs. Accordingly, any such occurrences could adversely affect our financial condition, operating results and cash flows.
- Accounting & Financial Operations - Risk 2Our Board of Directors may declare or pay any dividends to our stockholders in the foreseeable future.
The declaration, payment and amount of any future dividends will be made at the discretion of our Board of Directors and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors the Board of Directors considers relevant. Historically, the Company has never declared or paid cash dividends on its common stock. At the end of August 2022, the Company returned $27,092,000 of capital to its shareholders. At the time of the distribution, the Company had an accumulated deficit of approximately $331 million. The Company accounted for the distribution as a reduction of additional paid in capital (see Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for more information). The Company may decide to make similar distributions or declare cash dividends in the future, but there is no assurance that the Company will do so.
- Corporate Activity and Growth - Risk 3We are exploring, evaluating, and may begin to implement certain strategic alternatives with a goal of providing greater value to our stockholders. There can be no assurance that we will be successful in identifying additional strategic alternatives or implementing any strategic alternative, or that any strategic alternative will yield additional value for stockholders.
Our management and the Board of Directors are continuing to review strategic alternatives with a goal of providing greater value to our stockholders. These alternatives could result in, among other things, modifying or eliminating certain of our operations, selling material assets, seeking additional financing, selling the business, making investments, effecting a merger, consolidation or other business combination, partnering or other collaboration agreements, or potential acquisitions or recapitalizations, in one or more transactions. There can be no assurance that our continued exploration of strategic alternatives will result in the identification of additional alternatives or that any transaction will be consummated. The process of exploring strategic alternatives may be costly and may be time consuming, distracting to management and disruptive to our business operations. If we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected. We also cannot provide assurance that any potential transaction, investment or other alternative identified, evaluated and consummated, will provide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or investment would be dependent upon a number of factors that may be beyond our control, including, among other factors, market conditions, industry trends and the availability of financing to us on reasonable terms.
Risk Highlights Q4, 2022
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 21
- Share Price & Shareholder Rights - Risk 1Our certificate of incorporation, bylaws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in their best interests.
A number of provisions in our certificate of incorporation and bylaws, as amended, as well as anti-takeover provisions of Delaware law, may have the effect of delaying, deterring, preventing or rendering more difficult a change in control of Rubicon that our stockholders might consider in their best interests. These provisions include: - a classified Board of Directors; - a tax benefit preservation plan designed to preserve our ability to utilize our net operating losses as a result of certain stock ownership changes, which may have the effect of discouraging transactions involving an actual or potential change in our ownership; - granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; - limitations on the ability of stockholders to remove directors; - the ability of our Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may be determined at the sole discretion of the Board of Directors; - prohibition on stockholders from calling special meetings of stockholders; - prohibition on stockholders from acting by written consent; - establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings; and - a requirement that any action taken by the Company or any stockholder that would result in a stockholder owning greater than 49% (an "Above 49% Stockholder") of the outstanding shares of common stock, would require the approval of a majority of stockholders of the common stock, excluding such Above 49% Stockholder and any entity or person(s) affiliated with such Above 49% Stockholder; These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future. The foregoing provisions of our certificate of incorporation and bylaws, as amended, may also make it difficult for stockholders to replace or remove our management. These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.
- Share Price & Shareholder Rights - Risk 2The trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyond our control, and each of which could adversely affect our stockholders' value.
Our common stock was listed on the Nasdaq Capital Market under the symbol "RBCN" until it was delisted effective December 30, 2022 (see Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for more information). On January 3, 2023, our common stock began trading on the OTCQB Capital Market under the symbol "RBCN." Factors related to our Company and our business, as well as broad market and industry factors, may adversely affect the market price of our common stock, regardless of our actual operating performance. Such factors that could cause fluctuations in our stock price include, among other things: - changes in financial guidance or estimates by us, by investors or by any financial analysts who might cover our stock or our industry; - our ability to meet the performance expectations of financial analysts or investors; - general market and economic conditions; and - the size of the public float of our stock.
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.
