Regional Brands (RGBD) Risk Analysis
Risk Overview Q3, 2019
Source: the company's latest filing for the period ended Sep 30, 2019, filed Nov 08, 2019
Risk Change Over Time
No filing history is available.
- Corporate Activity and Growth - Risk 1Difficulties in implementing our enterprise resource planning system may disrupt our business.
We placed into service an enterprise resource planning, or "ERP", system at our operating subsidiary in the second quarter of 2019. The complexities and business process changes associated with such an ERP implementation can result in various difficulties including problems processing and fulfilling orders, customer disruptions and lost business. While we believe the potential difficulties associated with implementing our ERP system have been addressed or can be mitigated, there can be no assurance that we will not experience disruptions or inefficiencies in our business operations as a result of the implementation, which could have a material adverse effect on our business, financial condition or results of operations.
Risk Highlights Q3, 2019
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 23
- Share Price & Shareholder Rights - Risk 1Affiliates of Ancora control a significant portion of our outstanding common stock and may have conflicts of interest with other stockholders.
Ancora, a private investment firm, and investment partnerships and individuals affiliated with Ancora beneficially owned approximately 36.4% of our outstanding common stock as of March 1, 2019. As a result, Ancora is able to exert significant influence on the election of our directors, our corporate and management policies, and the outcome of most corporate transactions or other matters submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales, and other significant corporate transactions. This concentrated ownership position limits other stockholders' ability to influence corporate matters and, as a result, we may take actions that some of our stockholders may not view as beneficial. Three of our four directors, including our Chief Executive Officer, are affiliated with Ancora. The interests of Ancora may not coincide with the interests of other holders of our common stock. Additionally, Ancora is in the business of making investments in companies, and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Ancora may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as Ancora continues to own a significant amount of the outstanding shares of our common stock, it will continue to be able to strongly influence our decisions, including potential mergers or acquisitions, asset sales, and other significant corporate transactions.
- Share Price & Shareholder Rights - Risk 2There is limited trading activity in our common stock and an active trading market for our shares may never develop or be sustained. As a result, investors in our common stock must bear the economic risk of holding those shares for an indefinite period of time.
Our common stock is traded on the OTC Pink marketplace under the symbol "RGBD." Although our common stock is quoted on the OTC, trading of our common stock is extremely limited and sporadic and at very low volumes. We do not now, and may not in the future, meet the initial listing standards of any national securities exchange. We presently anticipate that our common stock will continue to be quoted on OTC Pink or another over-the-counter quotation system for the foreseeable future. In those venues, our stockholders may find it difficult to obtain accurate quotations as to the market value of their shares of our common stock and may find few buyers to purchase their stock and few market makers to support its price. As a result of these and other factors, investors may be unable to resell shares of our Common Stock at or above the price for which they purchased them, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future and may impair our ability to enter into strategic partnerships or acquire companies or products by using our shares of common stock as consideration.
- Share Price & Shareholder Rights - Risk 3Shares of our common stock that have not been registered under federal securities laws are subject to resale restrictions imposed by Rule 144, including those set forth in Rule 144(i) which apply to a former "shell company."
Prior to the acquisition of the business of BRJ Inc., we were deemed a "shell company" under applicable SEC rules and regulations, because we had 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. Pursuant to Rule 144 ("Rule 144"), promulgated under the Securities Act, sales of the securities of a former shell company, such as us, under that rule are not permitted until at least 12 months have elapsed from the date on which we file a registration statement on Form 10, reflecting our status as a non-shell company, with the SEC. As a result, most of our stockholders will be forced to hold their shares of our common stock at least until the end of the 12-month period after which we file a registration statement on Form 10, before they are eligible to sell those shares, and even after that 12-month period, sales may not be made under Rule 144 unless we and the selling stockholder are in compliance with other requirements of Rule 144. Further, it may be more difficult for us to raise funding to support our operations through the sale of debt or equity securities unless we agree to register such securities under the Securities Act, which could cause us to expend additional time and cash resources. Additionally, our previous status as a shell company could also limit our use of our securities to pay for any acquisitions we may seek to pursue in the future. The lack of liquidity of our securities as a result of the inability to sell under Rule 144 for a longer period of time could cause the market price of our securities to decline.
- Share Price & Shareholder Rights - Risk 4A sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.
Because there is a limited trading market for our common stock, our common shares are relatively less liquid and therefore more susceptible to price fluctuations than many other companies' shares. If any holder of a significant amount of our common stock were to sell all or a portion of its holdings of our common stock at once or within short periods of time, or there was an expectation that such a sale was imminent, then the market price of our common stock could be negatively affected.
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