Artesian Resources (ARTNA) risk factors, FY2024 10-K

Risks Related to Our Operations

1. 01We are dependent upon the ability of our suppliers and independent contractors to meet performance specifications, quality standards and delivery schedules at our anticipated costs
2. 02We are subject to risks associated with the collection, treatment and disposal of wastewater
3. 03Aging infrastructure may lead to service disruptions, property damage and increased capital expenditures and operation and management costs, all of which could negatively impact our financial results
4. 04Potential terrorist attacks, sabotage, or accidental damage by outside parties may disrupt our operations and adversely affect our business, operating results and financial condition
5. 05We depend on the availability of capital for expansion, construction and maintenance. Weaknesses in capital and credit markets or increased interest rates may limit our access to capital
6. 06We may be adversely affected by the implementation of new regulations, the reinterpretation or recission of existing regulations, or regulatory uncertainty. Changes in local, state or federal policy or administrative priorities could adversely affect our business
7. 07We may be adversely affected by global climate change or by regulatory, legal or market responses to such change

Risks Related to Governmental Laws and Regulations

1. 08Our water and wastewater operations are subject to extensive federal and state laws and regulations. In addition, our operating costs and capital expenditures could be significantly increased if new or stricter regulatory standards are imposed by federal or state environmental agencies

Risks Related to Our Financial Statements and Operating Results

1. 09Our business is subject to seasonal fluctuations, which could affect demand for our water service and our revenues
2. 10Drought conditions and government-imposed water use restrictions may impact our ability to serve our current and future customers, and may impact our customers’ use of our water, which may adversely affect our financial condition and results of operations
3. 11General economic conditions may materially and adversely affect our financial condition and results of operations
4. 12We could be adversely impacted by macroeconomic factors outside of our control, including but not limited to inflation, interest rates, tariffs, trade wars and/or recession
5. 13We may be required to record impairments of goodwill, or otherwise change the fair value of certain assets, in the future that could have a material adverse effect on our financial condition and results of operations

Risks Related to Our Business Strategy

1. 14We face competition from other water and wastewater utilities for the acquisition of new exclusive service territories
2. 15Any future acquisitions we undertake or other actions to further grow our water and wastewater business may involve risks
3. 16Some or all of these items could have a material adverse effect on our business and our ability to finance our business and comply with regulatory requirements. The organizations we acquire in the future may not achieve sales and profitability that would justify our investment

Risks Related to Legal Uncertainty

1. 17Contamination of our water supply or wastewater operational malfunctions may result in disruption in our services and could lead to litigation that may adversely affect our business, operating results and financial condition
2. 18We are subject to various federal and state laws and regulations, including environmental laws and regulations, violations of which can involve civil or criminal sanctions

Risk Related to Cybersecurity and Technology

1. 19We are dependent on the continuous and reliable operation of our information technology systems that require potentially costly maintenance, and could become subject to cyberattacks disrupting our operations
2. 20Turnover in our management team could have an adverse impact on our business or the financial market’s perception of our ability to continue to grow
3. 21We depend on our ability to attract and retain qualified, skilled employees and independent contractors
4. 22Employee and independent contractor misconduct could harm us by subjecting us to legal liability and reputational harm

Risks Related to Our Common Stock

1. 23There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends
2. 24Holders of Class A Non-Voting Common Stock have no voting rights. As a result, holders of Class A Non-Voting Common Stock will not have any ability to influence stockholder decisions and the principal holders of Class B Common Stock have significant control over the outcome of most fundamental corporate matters
3. 25The price of our common stock may be volatile and may be affected by market conditions beyond our control

Risk Related to Pandemics

1. 26Our business, results of operations, financial condition, cash flows and stock price may be adversely affected by pandemics, epidemics or other public health emergencies