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American Clean Resources Group (ACRG)
OTHER OTC:ACRG
Risk Overview Q4, 2023
Risk Distribution
61% Finance & Corporate
17% Legal & Regulatory
11% Production
6% Tech & Innovation
6% Macro & Political
0% Ability to Sell
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
American Clean Resources Group 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 Q4, 2023
Main Risk Category
Finance & Corporate
With 11 Risks
Finance & Corporate
With 11 Risks
Number of Disclosed Risks
18
+1
From last reportS&P 500 Average: 31
18
+1
From last reportS&P 500 Average: 31
Recent Changes
1Risks added
0Risks removed
1Risks changed
Since Dec 2023
1Risks added
0Risks removed
1Risks changed
Since Dec 2023
Number of Risk Changed
1
-1
From last reportS&P 500 Average: 3
1
-1
From last reportS&P 500 Average: 3
See the risk highlights of American Clean Resources Group 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 18
Finance & Corporate
Total Risks: 11/18 (61%)Above Sector Average
Share Price & Shareholder Rights3 | 16.7%
Share Price & Shareholder Rights - Risk 1
Investors may be unable to accurately value our common stock.Share Price & Shareholder Rights - Risk 2
The market for our common stock may fluctuate.Currently, our common stock is traded on the OTC Market. Stock prices on the OTC Markets can be more volatile than stocks trading on national market systems such as NSADAQ, NYSE or AMEX. Our stock price may be affected by factors outside of our control and unrelated to our business operations.
Share Price & Shareholder Rights - Risk 3
Our major assets are encumbered under a deed of trust or pledged.The Tonopah property is subject to a first deed of trust securing the Line of Credit held by GPR, a related party.
On March 16, 2020, the Company executed a Line of Credit ("LOC") with Granite Peak Resources, LLC ("GPR"), a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, matures over three years and may be increased by up to another $1,000,000 and extended an additional two years at GPR's sole option. The LOC is for funding operating expenses critical to the Company's basic operations and redirection and all requests for funds may be approved or disapproved in GPR's sole discretion. The LOC bears interest at 10% per annum, was convertible into shares of the Company's common stock at a per share price of $1.65 and is secured by the real and personal property of the Company and its subsidiaries, and the subsidiaries' stock GPR already has under lien (See Note 8 of the notes to the consolidated financial statements).
The Company entered into an Amendment and Forbearance Agreement with GPR on January 5, 2023 wherein GPR agreed to: (a) increase the existing LOC from $5,000,000 due March 16, 2025 to $35,000,000 due March 16, 2027, (b) roll two existing promissory notes and the judgement purchased by GPR into the LOC resulting in the extinguishment of such notes and judgement as separate instruments, and (c) to forebear until January 12, 2024, on exercising its foreclosure rights under its Senior Secured Note. The Company's Board of Directors approved a revision in the conversion price at which the LOC may convert into the Company's common stock from $1.65 per share to $1.05 per share, based upon the market price of the Company's common stock over the 3 days preceding the agreement. GPR is the Company's majority shareholder and largest debtholder. GPR holds a senior secured interest in all of the assets of the Company, including the stock of its subsidiary entities. Effective June 12, 2023, the Company entered into a Third Amendment Agreement with GPR, wherein the LOC was increased to $52,500,000 and both the Senior Secured Promissory Note (previously held by Pure Path and acquired in 2019) and the Flechner Judgment (see the Company's 10-K for 2022) were rolled into the balance of the LOC and the Deed of Trust was increased to $250,000,000 and the appropriate paperwork was filed with the requisite government office(s).
Advances by GPR to pay directly certain operating expenses, reduce certain accounts payable, or acquire certain notes payable on the Company's behalf have been included in the promissory issued by the Company in connection with the LOC and classified accordingly in the accompanying consolidated financial statements.
In furtherance of the preparation for the planned merger with the SMS Group, Granite Peak Resources, LLC converted a $5,250,000 portion of the LOC into 5 million shares of restricted common stock effective August 2, 2023. The remaining $5,506,441 balance of the LOC was converted into 5,244,230 shares of restricted common stock effective August 15, 2023.
As of the date of this filing, GPR owns 10,542,989 shares of common stock, which is 73% of the Company's outstanding shares of common stock.
Accounting & Financial Operations3 | 16.7%
Accounting & Financial Operations - Risk 1
We have not yet begun operations and we expect to incur losses for the foreseeable future.Accounting & Financial Operations - Risk 2
We do not intend to pay dividends for the foreseeable future.We have never declared or paid any dividends on our common stock. We intend to retain all of our earnings, if any, for the foreseeable future to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. Our Board of Directors retains the discretion to change this policy.
Accounting & Financial Operations - Risk 3
We have limited assets.Our assets to be used in the development of a toll milling service have not yet been utilized, we will need to acquire additional equipment and construct additional facilities and there can be no guarantee that we will be successful in utilizing our current assets or obtaining the additional equipment and facilities that we will need to operate going forward. We do not anticipate having any revenues from our permitted custom toll milling processing for the foreseeable future. Additionally, without adequate funding, we may never produce any significant revenues.
Debt & Financing2 | 11.1%
Debt & Financing - Risk 1
We currently do not have enough cash to fund operations and/or reduce our debt during 2024.Changed
Debt & Financing - Risk 2
We will require additional financing to fund our permitted custom processing toll milling development and operations.Substantial additional financing will be needed to fund the current plan to begin toll milling services and develop and maintain the Tonopah property. Our means of acquiring investment capital is limited to private equity and debt transactions. We have no significant sources of currently available funds to engage in additional development. Without significant additional capital, we will be unable to fund our current property interests or effectuate our current business plan for permitted custom processing toll milling and mining services. See "-Risks Relating to Our Financial Condition – We Currently Do Not Have Enough Cash to Fund Operations, and/or Reduce Debt During 2024".
Corporate Activity and Growth3 | 16.7%
Corporate Activity and Growth - Risk 1
Our management team may not be able to successfully implement our business strategies.Corporate Activity and Growth - Risk 2
Our success in the future may depend on our ability to establish and maintain strategic alliances, and any failure on our part to establish and maintain such relationships would adversely affect our market penetration and revenue growth.We may be required to establish strategic relationships with third parties in the mining and toll milling industries. Our ability to establish strategic relationships will depend on a number of factors, many of which are outside our control, such as the suitability of our property, facilities and equipment relative to our competitors, or the quality grade of precious minerals we are able to extract from the ore we process. We can provide no assurance that we will be able to establish strategic relationships in the future.
In addition, any strategic alliances that we establish, will subject us to a number of risks, including risks associated with sharing proprietary information, loss of control of operations that are material to developed business and profit-sharing arrangements. Moreover, strategic alliances may be expensive to implement and subject us to the risk that the third party will not perform its obligations under the relationship, which may subject us to losses over which we have no control or expensive termination arrangements. As a result, even if our strategic alliances with third parties are successful, our business may be adversely affected by a number of factors that are outside of our control.
Corporate Activity and Growth - Risk 3
Our management has substantial doubt about our ability to continue as a going concern.The consolidated financial statements for each of these periods were prepared assuming that we would continue as a going concern. We have had net losses for each of the years ended December 31, 2023 and 2022, and we have an accumulated a deficit as of December 31, 2023, of $107,939,395. Virtually all of the Company's assets are encumbered or pledged under senior secured debt that is in default. These conditions raise substantial doubt about our ability to continue as a going concern. Furthermore, since we do not expect to generate any significant revenues from operations for the foreseeable future, our ability to continue as a going concern depends, in large part, on our ability to raise additional capital through equity or debt financing transactions. If we are unable to raise additional capital, we may be forced to discontinue our business.
Legal & Regulatory
Total Risks: 3/18 (17%)Below Sector Average
Regulation2 | 11.1%
Regulation - Risk 1
Investors may face significant restrictions on the resale of our common stock due to federal regulation of penny stocks.Regulation - Risk 2
U.s. Federal lawsUnder the U.S. Resource Conservation and Recovery Act, companies such as ours may incur costs for generating, transporting, treating, storing, or disposing of hazardous waste. Our permitted custom processing toll milling operations may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources such as trucks and heavy construction equipment which are subject to review, monitoring and/or control requirements under the Federal Clean Air Act and state air quality laws. Permitting rules may impose limitations on our production levels or create additional capital expenditures in order to comply with the rules.
The U.S. Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended ("CERCLA") imposes strict joint and several liability on parties associated with releases or threats of releases of hazardous substances. The groups who could be found liable include, among others, the current owners and operators of facilities which release hazardous substances into the environment and past owners and operators of properties who owned such properties at the time the disposal of the hazardous substances occurred. This liability could include the cost of removal or remediation of the release and damages for injury to the surrounding property. We cannot predict the potential for future CERCLA liability with respect to our property.
Environmental / Social1 | 5.6%
Environmental / Social - Risk 1
Our permitted custom processing toll milling operations are subject to environmental regulations and permitting, which could result in the incurrence of additional costs and operational delays.Production
Total Risks: 2/18 (11%)Below Sector Average
Supply Chain1 | 5.6%
Supply Chain - Risk 1
Our permitted custom processing toll milling operations will require us to depend on third parties and other elements beyond our control, which could result in harm to our business.Costs1 | 5.6%
Costs - Risk 1
Our performance may be subject to fluctuations in mineral prices.Tech & Innovation
Total Risks: 1/18 (6%)Below Sector Average
Cyber Security1 | 5.6%
Cyber Security - Risk 1
Cybersecurity.Added
Macro & Political
Total Risks: 1/18 (6%)Below Sector Average
Capital Markets1 | 5.6%
Capital Markets - Risk 1
The global financial market may have impacts on our business and financial condition that we currently cannot predict.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.