Eaco (EACO)

Risks

• Our business and results of operations may be adversely impacted as a result of the recent COVID-19 outbreak.
• We generally do not have long-term supply agreements or guaranteed price or delivery arrangements with the majority of our suppliers.
• Our supply agreements are generally terminable at the suppliers’ discretion.
• We generally do not have long-term sales contracts with our customers.
• We rely on third party suppliers for most of our products, and may not be able to identify and procure relevant new products and products lines that satisfy our customers’ needs on favorable terms and prices, or at all.
• Our advertising and marketing efforts may be costly and may not achieve desired results.
• Increases in the costs of energy, shipping and raw materials used in our products could impact our cost of goods and distribution and occupancy expenses, which would result in lower operating margins.
• The unauthorized access to, or theft or destruction of, customer or employee personal, financial or other data or of our proprietary or confidential information that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues.
• We rely heavily on our internal information systems, which, if not properly functioning, could materially and adversely affect our business.
• We may not be able to attract and retain key personnel.
• The competitive pressures we face could have a material adverse effect on our business.
• Our strategy of expanding into new geographic areas could be costly and may not expand our revenues.
• We may be unable to meet our goals regarding new office openings.
• Opening sales offices in new markets presents increased risks that may prevent us from being profitable in these new locations, and/or may adversely affect our operating results.
• Our ability to successfully attract and retain qualified sales personnel is uncertain.
• We have incurred significant losses in the past from trading in securities, and we may incur such losses in the future, which may also cause us to be in violation of covenants under our loan agreement.
• We may not have adequate or cost-effective liquidity or capital resources.
• We are exposed to foreign currency exchange rate risk, and changes in foreign exchange rates could increase our costs to procure products and impact our foreign sales.
• The Company’s Chairman and CEO holds almost all of our voting stock and can control the election of directors and significant corporate actions.
• Sales of our common stock by Glen Ceiley could cause the price of our common stock to decline.
• Changes and uncertainties in the economy have harmed and could continue to harm our operating results.