Quest Resource Holding (QRHC) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We have incurred historical net losses and could have net losses in the future as we take steps to expand our business, which may negatively impact our ability to achieve our business objectives and our profit margins
2. 02Our business depends to a certain extent upon our largest customers, and any material reduction in our business with those customers or changes to their contractual terms could have an adverse effect on our company
3. 03To expand our recycling and waste services business, we must attract additional customers and expand the services we offer
4. 04We may not be able to enhance our existing recycling, reuse, and proper disposal solutions and develop new solutions in a timely manner
5. 05We rely on independent third-party subcontractors to provide recycling services to our customers, and any interruptions of these arrangements could increase our costs, disrupt our services, and result in our inability to service our recycling customers, which would adversely affect our business
6. 06We may face potential environmental liabilities that may not be covered by our insurance, and changes in insurance costs and availability may also impact our financial results
7. 07Fluctuations in prices for recycled commodities that we sell to third parties may adversely affect our revenue and to a lesser extent our operating income and cash flows
8. 08Cyberattacks and security vulnerabilities could lead to increased costs, liability claims, unauthorized access to customer data, or harm to our reputation
9. 09A significant disruption in our computer systems or problems with our computer and communication systems may harm our business
10. 10We rely on third-party providers to provide services and technology, server, and hardware for our operations and for maintaining our data, and a failure of service by these providers could adversely affect our business and reputation
11. 11name registrars. A failure or limitation of service or available capacity by any of these third-party providers could adversely affect our business
12. 12We may be subject to intellectual property claims that create uncertainty about ownership of technology essential to our business and divert our managerial and other resources
13. 13The waste and recycling industries are subject to extensive government regulation, and existing or future regulations may adversely affect our current or future operations, increase our costs of operations, or require us to make additional capital expenditures
14. 14mandates regarding the disposal of solid waste, including requirements to recycle rather than landfill certain disposables
15. 15Price increases may not be adequate to offset the impact of increased costs and may cause us to lose volume
16. 16We face intense competition from larger, more established companies, and we may not be able to compete effectively, which could reduce demand for our recycling services
17. 17Our customers impose substantial requirements relating to the recycling and waste management services that we provide
18. 18Our current indebtedness requires us to comply with certain restrictive loan covenants which may limit our ability to operate our business
19. 19Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
20. 20We may need additional capital in the future
21. 21Our operating results may experience significant fluctuations, which may make them difficult to predict
22. 22Any acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute stockholder value, and harm our operating results
23. 23the impact on our internal controls of compliance with the regulatory requirements under Sarbanes-Oxley Act of 2002
24. 24Our strategy to increase our growth through acquisitions may be unsuccessful and could adversely affect our business and results
25. 25If the benefits of any completed or proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our Common Stock may decline
26. 26If we are unable to maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected
27. 27Increased prices and inflation could negatively impact our financial results
28. 28We depend on key personnel who would be difficult to replace, and our business will likely be harmed if we lose their services or cannot hire additional qualified personnel
29. 29The effects of global economic conditions may impact our business, operating results, or financial condition

Risks Related to Ownership of Our Securities

1. 30Our stock price has been and will likely continue to be volatile, and the value of an investment in our Common Stock may decline
2. 31general economic, political, and financial market conditions or events
3. 32Our directors, executive officers, and principal stockholders have substantial control over us and will be able to exert significant control over matters subject to stockholder approval
4. 33The members of our board of directors and our executive officers have broad rights
5. 34Certain provisions of our articles of incorporation and bylaws and applicable provisions of Nevada law may have the effect of rendering more difficult, delaying, or preventing an acquisition of our company, even when this would be in the best interest of our stockholders
6. 35provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum
7. 36Since we do not expect to pay any cash dividends for the foreseeable future, our stockholders may be forced to sell their stock in order to obtain a return on their investment
8. 37Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities
9. 38Future sales of our Common Stock in the public market by our existing stockholders, or the perception that such sales might occur, could depress the market price of our Common Stock
10. 39Future sales and issuances of our Common Stock or rights to purchase Common Stock by us, including pursuant to our equity incentive plan and employee stock purchase plan, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall