The risk factor section of the prospectus should highlight the relevant and potential risks of the company. Anything that is a threat to the company’s business model should be explicated in this section. For example, an oil and gas exploration company may have specific risks such as drilling and finding no oil, or machinery decline, or no buyer for its supplies and so on. These are risks related to the industry. On a more global scale a recession could impact oil prices and the bottom line profits of the company. On a more general scale, natural disasters could delay exploration and therefore the selling of product. There are many more such risks associated with an oil company and for any business this is true as well. You will not want to omit risks with the hopefully intent that intent that investor will not be turned off if they learned about them. On the contrary, withholding risks can be a criminal offense and/derail your business goals.