Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - MMMW

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ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below as well as the other information in this filing before deciding to invest in our company. Any of the risk factors described below could significantly and adversely affect our business, prospects, financial condition and results of operations. Additional risks and uncertainties not currently known or that are currently considered to be immaterial may also materially and adversely affect our business, prospects, financial condition and results of operations. As a result, the trading price or value of our common stock could be materially adversely affected and you may lose all or part of your investment.

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RISK FACTORS

Mass Megawatts Wind Power was incorporated in 1997 in Massachusetts. Our principal offices are located Worcester, Massachusetts. Our telephone number is (508) 942-3531. References herein to “Mass Megawatts” “we”, “us”, and “our”, mean Mass Megawatts Wind Power, Inc. unless the context otherwise requires.

RISK FACTORS

Investing in our shares is risky. You should carefully consider the following risks before making an investment decision. The trading price of our shares could decline due to any of these risks, and you could lose all or a part of your investment.

1. New Product Development

The technological and operational success is the key to the Company’s success. As in the commercial development of any new mechanical product, long-term operation may lead to the discovery of deficiencies in the solar tracker design, MAT design and/or in its manufacturing. For instance, long-term operation might disclose that the loading exceeds design criteria, resulting in materials fatigue failure. Significant developments in technologies, such as advanced fracking, ethanol, improved natural gas, or improvements in competitive solar trackers, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Any failure by us to develop new technologies or to react to improvements with existing technologies, could materially delay our new technologies, which could result in the decreased revenue and reduction of overall market share in both the solar marketplace and larger energy market.

2. Developing Business Risks

The early stages of any start-up business are subject to many risks. Company success is highly influenced by the normal expenses, problems, complications, and frequent delays associated with a new business. It is likely that Mass Megawatts will continue to require substantial capital in addition to the proceeds of this offering. The ability to raise capital and support growth of its operations is dependent on maintaining suitable profit margins for each investment the Company makes in its solar power technology. Additionally, numerous factors including the nation’s economy, conditions of the capital markets in general, and conditions affecting the solar and wind energy industry may affect Mass Megawatts’ ability to raise capital. There is no assurance that the Company’s products will result in a commercial success.

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3. Company not at Mass Production Stage

Currently no solar tracker prototypes suitable for commercial or mass production have been completed or tested. Fatigue and weather related structural testing has been done on a limited basis with a proof of concept prototype. The future success of the Company is dependent on its ability to manufacture and to deliver the solar trackers on a timely basis at a sustained and acceptable cost. While the assembly capacity could be established without much difficulty, no full scale production is currently implemented. Increasing this assembly capacity might involve uncertainty and risk. Any delay in the financing, design, manufacture and could materially damage our business, financial condition and operating results. New solar technology often experience delays in the design and manufacture. Mass Megawatts experienced significant delays in launching the solar tracker. We initially announced that we would begin delivering at an earlier date, These delays resulted in additional costs and adverse publicity for our business. We may experience similar delays in launching our production, and any such delays could be significant. In addition, final designs for the build out of the planned facilities are still in process, and component procurement and manufacturing plans have not been finalized. We are currently evaluating our suppliers for planned production. However, we may not be able to engage suppliers for the remaining components. In addition, we will also need to do extensive testing to ensure that the Solar Tracker is in compliance with UL 3703 prior to beginning mass production. Our plan to is dependent upon the timely availability of funds. The build out of our manufacturing plans in a timely manner and ability to execute plans are critical.

4. Market Risk

No utility purchase agreement has been signed at a purchase price that would result a profit. There can be no assurances that the Company’s own marketing efforts will be successful. The Company has not entered into any distribution arrangements. The Company requires significant investment prior to commercial introduction, and may never be successfully developed or commercially successful. There can be no assurance that we will be able to meet the expectations of our customers or will become commercially viable. The Company may not able to build the solar trackers to the expectations created by the early prototype. The customers may not accept our solar tracker and our future sales could be adversely affected. In the future, the Company may be required to introduce on a regular basis new and enhanced solar trackers. As technologies change, we will be expected to upgrade or adapt our products and introduce improved versions. We have limited experience simultaneously designing, manufacturing and marketing our product.

5. Possible Loss of Investment

Prospective investors should be aware that their entire investment could be at risk. Quarterly variations in financial results could cause the market price of the Common Stock to fluctuate substantially. Mass Megawatts’ revenues and earnings are difficult to predict because of the unpredictable timing related to the production goals. In addition, the stock marketing in general could experience wide price and volume fluctuations. There are no assurances that an investment in this company will be profitable.

6. Intellectual Property

There can be no assurances that patents will issue from any of the pending applications. In addition, with regard to any patent that may issue, there can be no assurance that the claims allowed will be sufficiently broad to protect the Company’s technology or that issued patents will not be challenged or invalidated. There is no certainty that we are the first inventor of a new product covered by pending patent applications or the first to file patent applications. We be certain that the pending patent applications of our company or any licensor will result in issuing of patents or that there would be sufficient protection against a competitor. In addition, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents will be issued. Furthermore, some foreign countries provide significantly less effective patent protection than in the United States. The status of patents involves complex legal and factual questions and the breadth of claims allowed is uncertain. As a result, we cannot be certain that the patent applications will result in patent issuances. The protection against competitors with similar technology is uncertain. Additionally, patents issued are subject to infringement and potentially be redesigned by others. Competitors may obtain patents that we need to license or design around. The increased costs may have a negative impact on our business.

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7. Risk of Inability to Achieve the Maximum Proceeds in the Amount of the Offering

It will be more difficult for the company to achieve a successful implementation of its business plan if the maximum proceeds made available through this offering cannot be raised. Wind power generating facilities require substantial investments. General economic and capital market conditions may have a negative impact in the Company’s ability to achieve the maximum proceeds amount. If less than the maximum proceeds are sold, the percentage of non-product manufacturing expenses (offering, legal, accounting, and advertising expenses) to the overall use of offering proceeds will be greater than the percentage if the maximum proceeds are sold.

8. Stock Market Risk

Although, there is some liquidity of the company’s Common Stock on OTC Markets at the current time, there has been no guarantee of a market for our Common Stock and the Investors may not be able to sell their shares after the offering is completed. There is no guarantee of liquidity at any time in the future with the common stock of Mass Megawatts being traded on OTC Markets. There can be no assurance that a significant public market will develop or be sustained after this offering. In addition, there is risk that the offering will not be able to be completed.

9. Growth Management

Rapid growth could impair the Company’s ability to effectively manage growth. Managing growth requires expanding the employee, operational, and financial bases. Failure to develop efficient construction and manufacturing processes of the solar technology could have a negative impact on the ability to manage growth. Mass Megawatts might not have the ability to execute its forward commitments to manufacture and construct its solar trackers. If we are unable to establish and maintain confidence with business prospects among consumers, then our financial condition and business outlook may suffer. Suppliers and installers will be less likely to invest time and resources in developing business opportunities with Mass Megawatts if they do not have confidence with us. In order to build and maintain our business, we must maintain confidence among customers and suppliers Many factors are largely outside our would likely harm our business and make it more difficult to raise additional funds when needed.

10. Retention of Key Employees Risk

Our key employees are not bound by any employment agreement. There can be no assurance that we will be able to successfully attract key people necessary to grow our business. A good part of our future success is dependent upon our ability to attract key technology, sales, marketing and support personnel and any failure to do so could adversely impact our business. The Company may in the future experience difficulty in retaining members of our management team. Additionally, we do not have “key person” life insurance policies covering any of our officers or other key employees. There is substantial competition for qualified individuals with the specialized knowledge of solar energy and this competition affects both our ability to retain and hire key employees.

11. “Going Concern” Qualifications

Our accountants have included an explanatory paragraph in their report on our financial statements regarding our ability to continue as a going concern. During the ordinary course of business, operating losses have incurred each period since inception, resulting in an accumulated deficit and negative cash flows. In addition, the Company has a history of negative working capital. Currently, management is soliciting additional equity investors to fund these losses. However, these conditions raise substantial doubt about the Mass Megawatts, ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

12. Limited Site Locations

Local regulatory, permitting, and zoning constraints may limit, delay, or affect the cost of site development. The visibility of solar energy farms and wind turbines as well as threats to endangered or migratory birds may require wind turbines to not be sited near areas where such species might be threatened. In addition, suitable sites may be located in areas where the availability of solar or wind resource does not coincide with power needs and it may be remote from adequate transmission facilities. In some otherwise favorable sites the energy cost may be low. Some sites might be limited with the high cost of acquiring easements and other land use rights. Site development may be affected by social policy concerns, such as noise and visibility of wind energy systems. The danger to migratory birds and other wildlife may require the site locations to be abandoned or moved to areas where the endangered species might not be threatened. Other site related issues include local regulatory, zoning and permitting constraints which may delay, limit or affect the cost of site development.

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13. Regulations

The electric industry is subject to energy and environmental laws at the federal, state, and local levels. The Public Utility Regulatory Act of 1978 provides qualifying facilities (“QFs”) important exemptions from substantial federal and state legislation, including regulation as public utilities. Loss of QF status by any one of the Company’s projects could cause the Company to become a public utility holding company, thereby causing many of the Company’s other projects to lose their QF status and become subject to regulation as public utilities. The compliance of the regulations may be complicated or difficult. Specialized or legal assistance may be required for the company to carry out its business. Electric generation projects also are subject to federal, state, and local laws and administrative regulations, which govern the geographic location, zoning, land use, and operation of plants and emissions produced by said plants. Recently, modified legislation of the Public Utility Holding Company Act of 1935 (“PURPA”) increases competition by allowing utilities to develop production facilities that don’t qualify as QFs without being subject to regulation under PUHCA.

14. Suppliers Reliance

Interruption of suppliers operations can delay delivery of components to the company, which could adversely impact the company’s operations. Mass Megawatts purchases components from outside venders and is aware of alternative suppliers for single-sourced items. The Company believes that the loss of any one supplier would have only a short-term impact on its production schedule. In the long term, additional suppliers will be required as production volume increases. While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for our single source components, Mass Megawatts may be unable to do so in the short term or at all at prices or costs that are favorable to us. In particular, while we believe that we will be able to secure alternate sources of supply for almost all of our single sourced components on a relatively short time frame, qualifying alternate suppliers or developing our own replacements for certain highly customized components of the solar tracker, such as the solar panels, inverters and racking.

This supply chain exposes us to multiple potential sources of delivery failure or component shortages. Mass Megawatts is currently evaluating our suppliers for the planned production solar tracker and we intend to establish suppliers for key components. Changes in business conditions beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis. If we experience increased demand, or need to replace our existing suppliers, there can be no assurance that additional supplies of component parts will be available when required on terms that are favorable to us or that any supplier would allocate sufficient supplies. The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to delays that could materially adversely affect our business. A failure by our suppliers to provide the components necessary to manufacture our solar trackers could prevent us from fulfilling customer orders in a timely fashion which could result in a material adverse effect on our business. In addition, since we have no fixed pricing arrangements with any of our suppliers which could harm our financial condition.

15. Competition

Fossil fuel-fired plants including gas-fired and petroleum-fueled power plants, are the primary competition of the Company. In addition, the increased use of competitive bidding procedures has made obtaining power purchase agreements with utilities more competitive. Competitive bidding generally has reduced the price utilities pay independent power producers, which, in turn, reduces the profitability of many independent power projects. If solar power and wind power become a more widely accepted technology, large and well-capitalized companies deciding to invest in any of the various wind power technologies, may also increase the competition.

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16. Fluctuation of Conventional Energy Prices

Survival of wind-powered facilities depends on producing electricity at a cost that is competitive with other forms of generation. Low fossil fuel prices, which reduce the cost of electricity generated by fossil fuels, may adversely affect the Company’s ability to generate profits.

17 Changes in Government Incentives

Any reduction or elimination of government incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of the solar tracker may result in the reduced competitiveness. Our growth depends in part on the availability of incentives for solar energy. Certain regulations that encourage sales of solar power equipment could be reduced or eliminated, either currently or at any time in the future. For example, while the federal and state governments have from time to time enacted tax credits and other incentives, our competitors have more resources with legislative activities.

18 Inability in Obtaining Grants

Mass Megawatts plans to apply for federal and state incentives including, loans, grants, and tax incentives designed to support renewable energy technologies. We anticipate that in the future there will be new opportunities for us. Our ability to obtain funds or incentives from government sources is subject to the approval of our applications of participating programs. The application process for these incentives will be highly competitive. There is no assurance that the Company will be successful. If there is a lack of success in obtaining any of these additional incentives and we cannot find alternative sources of funding to meet our planned expenditures, our business could be materially adversely affected.

19 Employee Union Activity

None of our employees are currently represented by a labor union, In the future that may change. It could result in higher employee costs and increased potential of work stoppages. As the business grows, there can be no assurances that our employees will not join or form a labor union or that we will not be required to become a union signatory. Mass Megawatts is neutral as to the formation of unions. We are also directly or indirectly dependent upon companies with unionized work forces, such as suppliers and shipping companies. Those companies may have work stoppages or strikes having a material adverse impact on our business. If a work stoppage occurs, it could delay the manufacture and sale of our solar trackers.

20. Product Liability Risk

Mass Megawatts may become subject to product liability claims. It could harm our business. A successful product liability claim against us could require us to pay a substantial monetary award and claim could generate substantial negative publicity about any significant lawsuit seeking damages exceeding our coverage may have a material adverse effect on our reputation. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for our products and are forced to make a claim under our policy.

21. Product Recall Risk

Any product recall in the future may result in adverse publicity, damage our brand. Such recalls, voluntary or involuntary, involve significant expense and diversion of management attention and other resources, which would adversely affect our brand image in our target markets and could adversely affect our business.

22. Insufficient Warranty Reserves

If our warranty reserves are inadequate to cover future warranty claims on our solar trackers, our business could be negatively impacted. We record and adjust warranty reserves based on changes in estimated costs and actual warranty costs. However, the Company has extremely limited operating experience with our solar trackers and little experience with warranty claims and estimating warranty reserves There can be no assurances that our existing warranty reserves will be sufficient to cover all claims or that our limited experience with warranty claims will adequately address the needs of our customers to their satisfaction.

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23. Supplier Ethics Risk

Our ethical standards are important to our company. Our suppliers are independent with their own business practices. A lack of demonstrated compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products or other disruptions. Legal violations by our suppliers or the divergence of an independent supplier’s labor or other practices from those generally accepted as ethical could also attract adverse publicity. If we, or other manufacturers in our industry, encounter these problems in the future, it could harm the industry’s image and our business.

24 Cost of Being Public Risk

As a public company, we will incur significant expenses that we did not incur as a private company, including legal and accounting costs associated with public company reporting and corporate governance. Mass Megawatts is planning to file a Form 10 which will result in complying with rules implemented by the Securities and Exchange Commission. In addition, our management team will also have to adapt to the additional requirements of being a SEC reporting company. We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs associated with operating as a public company will increase our expenses. Additionally, these requirements will require extra attention of our management. The uncertainty especially among anyone not familiar with the obligations of public companies may cause more difficulty to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

25. No Dividend

Mass Megawatts has not achieved a profit in its history and there is no guarantee of the company distributing a dividend in the near future. We did not declare any cash distributions or dividends in the past, and we currently do not anticipate paying any cash distributions or dividends in the foreseeable future. Our priority is supporting our operations and to finance the development of our business. Any future determination relating to dividend policy will depend on a number of facts including capital requirements and our financial condition.

26. Dilution

The proposed public offering price is higher than the average price per share paid by many investors in the Company. Accordingly, new investors in the Company will experience substantial immediate dilution with respect to their investment.

27. Penny Stock Risk

Shares of Common Stock may be considered a penny stock. Investors may have difficulty with selling the stock due to the reduced pool of investors, an illiquid market, and a low stock price. Our common stock is less than $5 per share and is defined as a penny stock being valued at less than five dollars per share. Penny stocks are considered as risky and speculative. Additionally, Mass Megawatts does not meet financial requirements that avoid being defined as a penny stock such as being registered on an Exchange with a minimum net tangible asset value requirement or minimum required value of revenue over a three-year period. Under Section 15(h) of the Exchange Act, Broker Dealers are required furnish a risk disclosure document with the risk of penny stocks and broker requirement of full disclosure related to rights customers and remedies available with respect of violations by the broker dealers related to penny stock rules and related full disclosure requirements including the potential illiquidity of the penny stock. Brokers are obligated to evaluate each individual investor experience and objectives to determine if penny stock are suitable. The due diligence of the broker dealers may require a higher transaction cost for trades in penny stocks. Violations of the due diligence obligations by broker dealers may result in compensation of financial losses to investors, fines and other penalties.

Note: In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. In reviewing this Disclosure Document, potential investors should keep in mind other possible risks that could be important.

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ITEM 1A. UNRESOLVED STAFF COMMENTS

None.

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