Want to see SLNG full AI Analyst Report?
Risk Overview Q2, 2026
Risk Distribution
34% Finance & Corporate
23% Production
18% Macro & Political
11% Legal & Regulatory
11% Ability to Sell
2% Tech & Innovation
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Stabilis Solutions Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2026
Main Risk Category
Finance & Corporate
With 15 Risks
Finance & Corporate
With 15 Risks
Number of Disclosed Risks
44
No changes from last report
S&P 500 Average: 31
44
No changes from last report
S&P 500 Average: 31
Recent Changes
2Risks added
0Risks removed
0Risks changed
Since Jun 2026
2Risks added
0Risks removed
0Risks changed
Since Jun 2026
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1
0
No changes from last report
S&P 500 Average: 1
See the risk highlights of Stabilis Solutions in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 44
Finance & Corporate
Total Risks: 15/44 (34%)Above Sector Average
Share Price & Shareholder Rights5 | 11.4%
Share Price & Shareholder Rights - Risk 1
Raising additional capital may cause dilution to our stockholders or restrict our operations.Share Price & Shareholder Rights - Risk 2
Our common stock is thinly traded with a limited market and volatile.There is currently a limited public market for our common stock. Holders of our common stock may, therefore, have difficulty selling their shares, should they decide to do so. The market price of our shares may not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value, and may not be indicative of the market price for our common stock in the future. Further, the purchase or sale of relatively small common stock positions may result in disproportionately large increases or decreases in the price of our common stock. There can be no assurance that a more active market for our common stock will develop, or if one should develop, that it will be sustained. There can be no assurances that any shares which are purchased will be sold without incurring a loss.
In addition to being thinly traded, market prices for securities of energy producers, distributors and other businesses in the energy generation and distribution industry have been particularly volatile. Factors that may cause the market price of our common stock to fluctuate include, but are not limited to:
- period-to-period fluctuations in our financial results from current and any future business operations;- issues in developing and expanding our LNG infrastructure and facilities, and service and delivery operations;- our ability to obtain regulatory approvals for LNG business expansions, and delays or failures to obtain such approvals;- the entry into, or termination of, key agreements, including key commercial partner agreements;- the initiation of, material developments in, or conclusion of litigation to enforce or defend any of our rights under our material contracts or defend against the rights of others;- the introduction of technological innovations or new energy products or methods of distribution that compete with our potential products;- the loss of key employees;- changes in estimates or recommendations by securities analysts, if any, who cover our common stock;- fluctuations in actual and anticipated future commodity prices; and - general and industry-specific economic conditions that may affect our research and development expenditures.
In the past, following periods of volatility in the market price of a company's securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation. Our insurance coverage may not be sufficient to cover all costs and damages.
Share Price & Shareholder Rights - Risk 3
We are a "smaller reporting company" and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors.We are a "smaller reporting company," within the meaning of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a "smaller reporting company," we are subject to lesser disclosure obligations in our SEC filings compared to other issuers. Specifically, "smaller reporting companies" are able to provide simplified executive compensation disclosures in their filings, are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting, and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status a "smaller reporting company" may make it harder for investors to analyze our operating results and financial ability to execute our strategy and make our common stock less attractive to investors. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
Share Price & Shareholder Rights - Risk 4
J. Casey Crenshaw has voting control over our Company.As of December 31, 2025, J. Casey Crenshaw has beneficial ownership of 71.2% of the outstanding shares of our common stock. As a result, Mr. Crenshaw may control all matters that require stockholder approval, as well as our management and affairs. For example, Mr. Crenshaw may unilaterally approve the election of directors and any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership makes it unlikely that any other holder or group of holders of our common stock will be able to affect the way the Company is managed or the direction of its business. Mr. Crenshaw's interests with respect to matters potentially or actually involving or affecting the Company, such as future acquisitions, financings and other corporate opportunities and attempts to acquire the Company, may conflict with the interests of our other stockholders. This concentration of ownership control may:
- delay, defer or prevent a change in control;- entrench management;- involve related party transactions we cannot assure you will be in the best interest of the stockholders;- impede a merger, consolidation, takeover or other business combination involving the company that other stockholders may desire; or - exempt us from certain corporate governance requirements that provide protection to stockholders of other public companies.
This concentration of stock ownership may adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with a significant stockholder.
Share Price & Shareholder Rights - Risk 5
In addition to Mr. Crenshaw's ability to control all matters that require stockholder approval, provisions in our corporate charter documents and under Florida law could make an acquisition of the Company, which may be beneficial to stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.Provisions in our corporate charter and bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our Company that stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because the Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by stockholders to replace or remove the current management by making it more difficult for stockholders to replace members of the Board of Directors. Among other things, these provisions:
- allow the authorized number of our directors to be fixed only by resolution of our Board of Directors;- establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board of Directors;- require that stockholder actions must be effected at a duly called stockholder meeting or by our stockholders by written consent of the holders of over 50% of the votes that all our stockholders would be entitled to cast;- authorize our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a shareholder rights plan, or so-called "poison pill," that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors; and - require the proposal of our Board of Directors and the approval of the holders of over 50% of the votes that all our stockholders would be entitled to cast to amend our charter.
Moreover, because we are incorporated in Florida, we are governed by the provisions of Section 607.0901 and 607.0902 of the Florida Business Corporation Act. In general, Section 607.0901 regulates certain transactions between a corporation and an "interested shareholder," one who beneficially owns more than fifteen percent of the corporation's outstanding voting shares. The statute provides significant protection to minority shareholders by assuring that the transactions covered by the statute are either (a) procedurally fair (i.e., the transaction is approved by disinterested directors or disinterested shareholders) or (b) substantively fair (i.e., result in a fair price to the shareholders).
In general, Section 607.0902 focuses on the acquisition of "control shares" in an issuing public corporation. When control shares are acquired in a "control share acquisition," the shares do not have voting rights. Voting rights may be restored only if the bidder files an acquiring person statement and requests a shareholder meeting to vote on whether the bidder's shares should be accorded voting rights. Voting rights are restored only to the extent approved by the disinterested shareholders (which excludes both the bidder and management shareholders). Alternatively, the bidder's shares will have voting rights if the acquisition is approved by the target company's board of directors. As a result, mergers or other takeover or change in control attempts of us may be discouraged or prevented.
Accounting & Financial Operations4 | 9.1%
Accounting & Financial Operations - Risk 1
We do not anticipate that we will pay any cash dividends in the foreseeable future.Accounting & Financial Operations - Risk 2
We may incur impairments to goodwill or long-lived assets.We test our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. We test goodwill for impairment annually, or more frequently as circumstances dictate. Significant negative industry or economic trends, and decline of market capitalization, reduced estimates of future cash flows for business segments or disruptions to business could lead to an impairment charge of the long-lived assets, including our goodwill. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and to rely heavily on projections of future operating performance. Projections of future operating results and cash flows may vary significantly from actual results. In addition, if our analysis results in an impairment to our goodwill or long-lived assets, we may be required to record a charge to earnings in our consolidated financial statements during a period in which such impairment is determined to exist, which may negatively impact our operating results.
Accounting & Financial Operations - Risk 3
We may incur losses over the next several years and may not maintain profitability.We may incur significant expenses and operating losses for the foreseeable future. The net results the Company incurs may fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we:
- seek to identify additional expansion of business operation opportunities;- establish a sales, marketing and distribution infrastructure to commercialize our business and products; and - add operational, financial and management information systems and personnel, including personnel to support our business development and planned future commercialization efforts.
To be and remain profitable, we must develop and execute our strategy which will require us to be successful in a range of challenging activities. We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability. Our failure to become and remain profitable would decrease the value of the Company and could impair our ability to raise capital, maintain our existing business operations and development efforts, expand our business or continue our operations and may require us to raise additional capital that may dilute the ownership interest of common stock holders.
Accounting & Financial Operations - Risk 4
If we fail to maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
In addition, we are required to be compliant with public company internal control requirements mandated under Section 302 and 906 of the Sarbanes-Oxley Act and we may become subject to the requirements of Section 404b of the Sarbanes-Oxley Act at some future date. We are implementing measures designed to improve our internal controls over financial reporting, including the hiring of accounting personnel and establishing new accounting and financial reporting procedures to establish an appropriate level of internal controls over financial reporting. Implementing any appropriate changes to our internal controls may distract our officers and employees, entail substantial costs to modify existing processes and take significant time to complete. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase operating costs and harm the business. In addition, investors' perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our stock price.
Debt & Financing4 | 9.1%
Debt & Financing - Risk 1
Failure to maintain compliance with debt covenants could give our lenders the right to accelerate payment which could adversely affect our liquidity, our ability to continue expansion efforts and continue normal operations.Debt & Financing - Risk 2
Investment in us is speculative.We will continue to incur significant capital and operating expenditures while we develop infrastructure for our supply chain and other future projects. We will need to invest significant amounts of additional capital to implement our strategy. We could experience delays beyond the expected development period, which could create operating losses and negative operating cash flows. Our future liquidity may also be affected by the timing of construction financing availability in relation to the incurrence of construction costs and other outflows and by the timing of receipt of cash flows under our customer contracts in relation to the incurrence of project and operating expenses. Our strategy may not be successful, and if unsuccessful, we may be unable to modify it in a timely and successful manner.
We cannot provide any assurance that we will be able to implement our strategy on a timely basis, if at all, or achieve our internal forecast or that our assumptions will be accurate. Accordingly, an investment in our Company is speculative and subject to a high degree of risk, and you should understand that there is a possibility of the loss of your entire investment.
Debt & Financing - Risk 3
We may require additional funding from various sources, which may not be available or may only be available on unfavorable terms.We expect our working capital needs to increase to fund capital expenditures as we expand our operations to include construction of our proposed new Galveston LNG liquefaction facility and for our multi-year, on-site power generation for a data center beginning in 2027. Our current net working capital may not be sufficient to expand our operations in accordance with our strategy. In the future, we may pursue offerings of debt or equity securities or rely on future borrowings of debt to provide additional working capital as well as seek prepayments from customers. We also have working capital requirements driven by the delay between the purchase of and payment for natural gas and the payment terms that we offer our customers. Differences between the date when we pay our LNG supply and service providers and the date when we receive payments from our customers may adversely affect our liquidity and our cash flows.
If we are unable to secure additional funding, or if it is only available on terms that we determine are not acceptable, we may be forced to delay, reduce or eliminate parts of our expansion efforts, or we may otherwise be unable to fully execute our business plan, and our business, financial condition or results of operations may be adversely affected. Our ability to raise additional capital will depend on financial, economic and market conditions and other factors, many of which are beyond our control. We cannot assure you that such additional funding will be available on acceptable terms, or at all. A variety of factors beyond our control could impact the availability or cost of capital, including domestic or international economic conditions, increases in key benchmark interest rates and/or credit spreads, the adoption of new or amended banking or capital market laws or regulations, the re-pricing of market risks and volatility in capital and financial markets, risks relating to the credit risk of our customers and the jurisdictions in which we operate, as well as general risks, including limitations on investment capital, applicable to the energy sector, which may not be available as needed, or may be available in more limited amounts or on more expensive or otherwise unfavorable terms. In the event any of the lenders under these potential debt instruments were unable to perform on its commitments, we may need to seek replacement financing.
If we do not have sufficient working capital, we may not be able to pursue our growth strategy, respond to competitive pressures or fund key strategic initiatives which, in turn, may harm our business, financial condition and results of operations.
Debt & Financing - Risk 4
Any failure to perform by our counterparties under agreements may adversely affect our operating results, liquidity and access to financing.Our business involves our entering into various purchase and sale and other transactions with numerous third parties (commonly referred to as "counterparties"). In such arrangements, we are exposed to the performance and credit risks of our counterparties, including the risk that one or more counterparties fails to perform its obligation to make deliveries of commodities and/or to make payments. These risks may increase during periods of commodity price volatility. Defaults by suppliers and other counterparties may adversely affect our operating results, liquidity and access to financing.
Corporate Activity and Growth2 | 4.5%
Corporate Activity and Growth - Risk 1
Our ability to implement our business strategy may be materially and adversely affected by many known and unknown factors.Corporate Activity and Growth - Risk 2
Our Chinese joint venture, BOMAY, has a limited life and is subject to risk that it may not be renewed.We hold a 40% interest in BOMAY Electric Industries Company, Ltd. ("BOMAY"), which builds electrical systems for sale in China. The majority partner in this foreign joint venture is Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation), who owns 51%. The remaining 9% is owned by AA Energies, Inc. Our joint venture, BOMAY, has a finite life that is set to terminate in 2028. The joint venture may be terminated earlier for valid business reasons including force majeure. In the event the joint venture is to be terminated, either party may acquire the other parties' interests and continue the operations of the joint venture. Additionally, the term of the joint venture may be extended upon agreement of all parties subject to approval from the relevant Chinese authority six months before expiration of the venture. At this time, Stabilis has no indication that the joint venture will not be extended; however, U.S. and Chinese political relations are strained and we can provide no assurance that such an extension will occur. The balance of our investment in BOMAY at December 31, 2025 was $11.9 million accounted for using the equity method of accounting and is subject to risk. See Note 6 of the Notes to Consolidated Financial Statements for further discussion of our investment in BOMAY.
Production
Total Risks: 10/44 (23%)Above Sector Average
Manufacturing5 | 11.4%
Manufacturing - Risk 1
We may not be able to purchase or receive physical delivery of natural gas in sufficient quantities and/or quality or at economically attractive prices to satisfy our delivery obligations under our commercial agreements, which could have a material adverse effect on our business.Manufacturing - Risk 2
Technological innovation may render our liquefaction processes obsolete or significantly decrease the demand of LNG as a fuel source for our customers.The success of our current operations and future projects will depend in part on our ability to create and maintain a competitive position in the natural gas liquefaction industry. Although we plan to utilize proven technologies such as those currently in operation at our George West and Port Allen liquefiers, we do not have any exclusive rights to any of these technologies. In addition, such technologies may be rendered obsolete or uneconomical by legal or regulatory requirements, technological advances, more efficient and cost-effective processes or entirely different approaches developed by one or more of our competitors or others. Failure to keep up with the pace of technological innovation could materially and adversely affect our business, ability to realize benefits from future projects, results of operations, financial condition, liquidity and ability to execute our strategy.
Manufacturing - Risk 3
Operation of our LNG infrastructure, liquefaction and other facilities involves significant risks.The operation of our LNG infrastructure, liquefaction and other facilities involve particular, significant risks that could involve interruption of our operations, including, among others: performing below expected levels of efficiency, breakdowns or failures of equipment, operational errors by trucks, operational errors by us or any contracted facility operator, industrial accidents, labor disputes and weather-related or natural disasters. Additional risks include, but are not limited to: failure to maintain the required license(s) or other permits required to operate our plants; failure in health and safety performance and management of health and safety risks; failure to comply with applicable laws and regulations, including environmental laws and regulations; failure to properly manage environmental risks, including pollution, contamination, and exposure to hazardous materials; the inability, or failure, of any counterparty to any plant-related agreements to perform their contractual obligations to us and planned and unplanned power outages due to maintenance, expansion and refurbishment. We cannot assure you that future occurrences of any of the events listed above or any other events of a similar or dissimilar nature would not significantly decrease or eliminate the revenues from, or significantly increase the costs of operating expenses related to our LNG infrastructure, liquefaction or other operation which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute of our strategy.
Any failure in health and safety performance from our operations may result in an event that causes personal harm or injury to our employees, other persons, and/or the environment, as well as the imposition of injunctive relief and/or penalties for non-compliance with relevant regulatory requirements or litigation. Such a failure, or a similar failure elsewhere in the energy industry (including, in particular, LNG liquefaction, storage, transportation or regasification operations), could generate public concern, which may lead to new laws and/or regulations that would impose more stringent requirements on our operations, have a corresponding impact on our ability to obtain permits and approvals, and otherwise jeopardize our reputation or the reputation of our industry as well as our relationships with relevant regulatory agencies and local communities. Individually or collectively, these developments could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute our strategy.
Manufacturing - Risk 4
Construction of new LNG infrastructure including new liquefaction and other facilities involves significant risks.Included in our near-term and long-term growth strategy, is the completion of the construction of our proposed Galveston LNG liquefaction facility which will require significant amounts of capital during construction and involves numerous operational, regulatory, environmental, political, legal and economic risks beyond our control and may require the expenditure of significant amounts of capital during construction and thereafter. These potential risks include, among other things, the following:
- we may be unable to complete construction projects on schedule or at the budgeted cost due to the unavailability of required construction personnel or materials, inability obtain key permits or land use approvals including those required under environmental laws, occurrence of accidents or weather conditions, changes in regulatory requirements or challenges by citizens groups or non-governmental organizations, including those opposed to fossil fuel energy sources;- we will not receive any material increase in operating cash flows until a project is completed, even though we may have expended considerable funds during the construction phase, which may be prolonged;- we may construct facilities to capture anticipated future energy consumption growth in a region in which such growth does not materialize;- we may experience material cost overruns due to unforeseen additional costs incurred or material cost increases incurred, with no alternative avenues for remedy; and - we may be unable to secure financing sufficient to commence or complete construction, or the financing terms may be uneconomic.
In the event we are unable to obtain financing to construct the proposed Galveston LNG liquefaction facility, or are unable to complete the construction on time, the counterparties to our bunkering agreements may terminate such agreements, which would have an adverse effect on our financial condition and results of operations. Even if the proposed Galveston LNG facility is completed, unanticipated additional costs, or failure to secure agreements to utilize the full capacity of the facility could have an adverse effect on our financial condition and results of operations.
Manufacturing - Risk 5
We may be unable to integrate additions of new equipment and personnel to successfully deliver to our customers.Meeting our obligations to our customers, including our newly executed multi-year on-site power generation contract for a data center, will require additions of new equipment and personnel. The supply agreement will require investment of up to $25.0 million in capital additions and near-term working capital needed to fund the start-up of the project. In the event, the data center is unable to properly integrate LNG into their operations, if we are unable to integrate additions of new equipment and personnel necessary to successfully deliver LNG to the customer, or if our sources of LNG are inadequate to service this contract, we may incur losses in cash flow and loss to our reputation related to future projects.
Employment / Personnel1 | 2.3%
Employment / Personnel - Risk 1
We may experience increased labor costs, and the unavailability of skilled workers or failure to attract and retain qualified personnel could adversely affect us.Supply Chain2 | 4.5%
Supply Chain - Risk 1
We expect to be dependent on contractors for the successful completion of our energy-related infrastructure.Supply Chain - Risk 2
Failure to secure additional off-take from the proposed Galveston LNG liquefaction facility, could adversely affect the Company's ability to secure financing for the projectAdded
Financing for the proposed new Galveston LNG liquefaction facility may be based on having firm contractual LNG off-take from the facility prior to closing on the financing. Failure to obtain additional contractual off-take could prevent the Company from being able to finance the project, adversely impacting potential profits, results of operations, cash flows and financial condition. At June 30, 2026, the Company has capitalized $9.4 million of costs related to the proposed new Galveston LNG liquefaction facility and related dedicated Jones Act-compliant LNG bunkering vessel.
ITEM 5. OTHER INFORMATION. None of the Company's officers or directors adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended June 30, 2026, as such terms are defined under Item 408(a) of Regulation S-K.
Costs2 | 4.5%
Costs - Risk 1
Our insurance may be insufficient to cover losses that may occur to our property or result from our operations.Costs - Risk 2
Our risk management strategies cannot eliminate all LNG price and supply risks. In addition, any non-compliance with our risk management strategies could result in significant financial losses.Our strategy is to maintain a manageable risk balance between LNG purchases and sales or future delivery obligations. Through these transactions, we seek to earn a margin for the LNG purchased by selling LNG for physical delivery to third-party users. These strategies cannot, however, eliminate all price risks. For example, any event that disrupts our anticipated supply chain could expose us to risk of loss resulting from price changes if we are required to obtain alternative supplies to cover these transactions. We are also exposed to basis risks when LNG is purchased against one pricing index and sold against a different index. In addition, our marketing operations involve the risk of non-compliance with our risk management policies. We cannot assure you that our processes and procedures will detect and prevent all violations of our risk management strategies, particularly if deception or other intentional misconduct is involved. If we were to incur a material loss related to commodity price risks, including non-compliance with our risk management strategies, it could have a material adverse effect on our financial position, results of operations and cash flows.
Macro & Political
Total Risks: 8/44 (18%)Above Sector Average
Economy & Political Environment4 | 9.1%
Economy & Political Environment - Risk 1
We have operations and investment in foreign countries and we could experience losses from weakening foreign economies as well as unforeseen or unexpected operating, financial, political or cultural factors in these countries.Economy & Political Environment - Risk 2
Weakened global macro-economic and geopolitical conditions may adversely affect our industry, ability to access capital, business and results of operations.Our overall performance depends in part on worldwide macro-economic and geopolitical conditions. The United States has experienced cyclical downturns from time to time in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy. These global macro-economic conditions can suddenly arise and the full impact of such conditions can remain uncertain. In addition, geopolitical developments, such as existing and potential trade wars and other events beyond our control, such as the COVID-19 pandemic, can increase levels of political and economic unpredictability globally and increase the volatility of global financial markets. Weakened global macro-economic conditions could cause the demand for and price of our products to decrease. In addition, restricted credit conditions could limit our ability to access capital on favorable terms, if at all. A deterioration in the macro-economic could have a material adverse effect on our business, financial position, results of operations and liquidity.
Economy & Political Environment - Risk 3
Geopolitical events in the Middle East with the U.S. and Iran conflict could have some adverse impact on our business and results of operationsAdded
Recent geopolitical developments in the Middle East, including the U.S. conflict with Iran, may contribute to an increase in energy related costs and related market uncertainties. The Company's pricing structure related to LNG product revenues may absorb most, if not all, volatility associated with the price of natural gas. However, failure to absorb the full impact of any price increases could adversely impact the Company's business and results of operations. The Company continues to monitor the risk associated with the Middle East conflicts.
Economy & Political Environment - Risk 4
Increased inflation or periods of prolonged inflation may adversely impact the economy, our industry and results of operations.While we pass a significant portion of the cost of natural gas and transportation on to our customers, we are not able to pass through all costs. No assurances can be made about future price trends, and the ultimate extent and effects of these impacts are difficult to estimate; however, continued periods of increasing costs could adversely impact our future results and operating cash flows.
Natural and Human Disruptions3 | 6.8%
Natural and Human Disruptions - Risk 1
The spread of a new contagious illness such as COVID-19 or resurgence of a COVID-19 variant, may adversely affect our business, operations and financial condition.Natural and Human Disruptions - Risk 2
Global climate change may in the future increase the frequency and severity of weather events and the losses resulting therefrom, which could have a material adverse effect on the economies in the markets in which we operate or plan to operate in the future and therefore on our business.There is a growing concern today that climate change increases the frequency and severity of extreme weather events and, in recent years, the frequency of major weather events appears to have increased. We cannot predict whether or to what extent damage that may be caused by natural events, such as severe tropical storms and hurricanes, will affect our operations or the economies in our current or future market areas, but the increased frequency and severity of such weather events could increase the negative impacts to economic conditions in these regions and result in a decline in the value or the destruction of our liquefiers, construction in progress and downstream facilities or affect our ability to transport LNG. In particular, if one of the regions in which we operate is impacted by such a natural catastrophe in the future, it could have a material adverse effect on our business. Further, the economies of such impacted areas may require significant time to recover and there is no assurance that a full recovery will occur. Even the threat of a severe weather event could impact our business, financial condition or the price of our common stock.
Natural and Human Disruptions - Risk 3
Other natural or man-made disasters could result in an interruption of our operations, a delay in the completion of future facilities, higher construction costs or the deferral of the dates on which payments are due under our customer contracts, all of which could adversely affect us.Other disasters such as explosions, fires, seismic events, floods or accidents, could result in damage to, or interruption of operations in our supply chain, including at our facilities or related infrastructure, as well as delays or cost increases in the construction and the development of our proposed facilities or other infrastructure.
If one or more trailers, terminals, pipelines, facilities, equipment or electronic systems that we own, lease or operate or that deliver products to us or that supply our facilities and our customers' facilities are damaged by a natural or other disaster, accident, catastrophe, terrorist or cyber-attack or event, our operations could be significantly interrupted. These delays and interruptions could involve significant damage to people, property or the environment, and repairs could take a week or less for a minor incident to six months or more for a major interruption. Any event that interrupts the revenues generated by our operations, or that causes us to make significant expenditures not covered by insurance, could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute our strategy.
Capital Markets1 | 2.3%
Capital Markets - Risk 1
Changes in U.S. trade policy including tariffs may have a material adverse effect on our business and results of operations.Legal & Regulatory
Total Risks: 5/44 (11%)Above Sector Average
Regulation2 | 4.5%
Regulation - Risk 1
We will continue to incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.Regulation - Risk 2
Changes in legislation and regulations could have a material adverse impact on our business, results of operations, financial condition, liquidity and ability to execute our strategy.Our business is subject to governmental laws, rules, and regulations, and requires permits that impose various restrictions and obligations that may have material effects on our results of operations. Future legislation and regulations or changes in existing legislation and regulations, or interpretations thereof, such as those relating to the liquefaction, storage, or regasification of LNG, or its transportation, exportation, or importation could cause additional expenditures, restrictions and delays in connection with our operations as well as other future projects, the extent of which cannot be predicted and which may require us to limit substantially, delay or cease operations in some circumstances. Revised, reinterpreted or additional laws and regulations that result in increased compliance costs or additional operating costs and restrictions could have an adverse effect on our business, results of operations, financial condition, liquidity and execution of our strategy.
We use third party LNG transportation providers that are subject to various trucking safety regulations, including those which are enacted, reviewed and amended by the Federal Motor Carrier Safety Administration ("FMCSA"). These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, driver licensing, insurance requirements, financial reporting and review of certain mergers, consolidations and acquisitions, and transportation of hazardous materials. All federally regulated carriers' safety ratings are measured through a program implemented by the FMCSA known as the Compliance Safety Accountability ("CSA") program which measures a carrier's safety performance. The quantity and severity of any violations are compared to a peer group of companies of comparable size and annual mileage. If a company rises above a threshold established by the FMCSA, it is subject to action from the FMCSA and ultimately revocation of the company's operating authority if the issues are not corrected. To a large degree, intrastate motor carrier operations are subject to state and/or local safety regulations that mirror federal regulations but also regulate the weight and size dimensions of loads. Applicable regulatory requirements and limitations are subject to change, either through new regulations enacted on the federal, state or local level, or by new or modified regulations that may be implemented under existing law. Any changes in trucking operations due to changes in regulations or loss of a LNG transportation provider could have an adverse effect on our business, results of operations, financial condition, liquidity and execution of our strategy.
Litigation & Legal Liabilities1 | 2.3%
Litigation & Legal Liabilities - Risk 1
From time to time, we may be involved in legal proceedings and may experience unfavorable outcomes.Environmental / Social2 | 4.5%
Environmental / Social - Risk 1
Existing and future environmental, health and safety laws and regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions.Environmental / Social - Risk 2
Environmental, social, and governance ("ESG") goals, programs, and reporting are being identified by capital providers and investors as a priority for the energy industry, and access to capital and investors for companies not prioritizing ESG may become limited.Spurred by increasing concerns regarding climate change, the energy industry faces growing demand for corporate transparency and a demonstrated commitment to sustainability goals. ESG goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility and corporate governance, have become a focus of some investors and shareholders across the industry. While reporting on ESG metrics remains voluntary, access to capital and investors is likely to favor companies with robust ESG programs in place. In addition, if ESG metrics and/or reporting become mandatory, our costs of planning, measuring, monitoring, and reporting on our operations could increase and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute our strategy.
Ability to Sell
Total Risks: 5/44 (11%)Above Sector Average
Competition3 | 6.8%
Competition - Risk 1
Some of our competitors have greater financial, technological and other resources than we currently possess.Competition - Risk 2
Failure of LNG to be a competitive source of energy in the markets in which we operate, and seek to operate, could adversely affect our expansion strategy.Natural gas competes with other sources of energy, including coal, oil, nuclear, hydroelectric, wind and solar energy, which may become available at a lower cost in certain markets. Our operations are, and will be, dependent upon LNG being a competitive source of energy in the markets in which we operate. In the United States, imported LNG has not developed into a significant energy source. The success of the domestic liquefaction component of our business plan is dependent, in part, on the extent to which natural gas can, for significant periods and in significant volumes, be produced in the United States at a lower cost than the cost to produce some domestic supplies of other alternative energy sources, and that it can be transported at reasonable rates through appropriately-scaled infrastructure. The failure of natural gas to be a competitive supply alternative to oil and other alternative energy sources could adversely affect our ability to deliver LNG or natural gas to our customers in North America or other locations on a commercial basis.
Competition - Risk 3
We face competition based upon market price for LNG or natural gas.Our business is subject to the risk of natural gas and LNG price competition which may prevent us from entering into new or replacement customer contracts on economically comparable terms to existing customer contracts, or at all which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute our strategy. Factors which may negatively affect potential demand for LNG from our business are diverse and include, among others:
- increases in worldwide LNG production capacity and availability of LNG for market supply;- increases or decreases in the cost of LNG;- decreases in the cost of competing sources of natural gas, LNG or alternate fuels such as coal, heavy fuel oil and diesel; and - displacement of LNG or fossil fuels more broadly by alternate fuels or energy sources or technologies (including but not limited to nuclear, wind, solar, biofuels and batteries) in locations where access to these energy sources is not currently available or prevalent.
Decreased demand for natural gas may result in significant price competition and decrease the prices we are able to charge, which would have a material adverse effect on our results of operations, financial condition and ability to execute our strategy.
Demand1 | 2.3%
Demand - Risk 1
Cyclical or other changes in the demand for and price of LNG and natural gas may adversely affect our business and the performance of our customers which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flows, liquidity and ability to execute our strategy.Sales & Marketing1 | 2.3%
Sales & Marketing - Risk 1
The loss of a significant customer or inability of a significant customer to perform under contract could adversely affect our operating results and ability to generate cash flows.Tech & Innovation
Total Risks: 1/44 (2%)Above Sector Average
Cyber Security1 | 2.3%
Cyber Security - Risk 1
A cyber incident could result in information theft, data corruption, operational disruption, operational delays and/or financial loss.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.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.