We may engage in future strategic alliances or acquisitions that could dilute our existing
shareholders, cause us to incur significant expenses or harm our business.
We may review strategic alliance or acquisition opportunities that would complement our
current business or enhance our technological capabilities. Integrating any newly acquired
businesses, technologies or services may be expensive and time-consuming. To finance any
acquisitions, it may be necessary for us to raise additional funds through borrowing money or
completing public or private financings. Additional funds may not be available on terms that are
favorable to us and, in the case of equity financings, may result in dilution to our shareholders.
We may not be able to operate any acquired businesses profitably or otherwise implement our growth
strategy successfully. If we are unable to integrate any newly acquired entities or technologies
effectively, our operating results could suffer. Future acquisitions could also result in
incremental expenses and the incurrence of debt and contingent liabilities, any of which could harm
our operating results.
If we fail to maintain an effective system of internal controls, we may not be able to accurately
report our financial results or prevent fraud. As a result, current and potential shareholders
could lose confidence in our financial reporting, which could harm our business, and the trading
price of our common stock.
As of December 31, 2009 and based on the current requirements, and our public float, we were
not required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act to obtain a
report by our independent auditors opining on the effectiveness of our internal controls over
financial reporting. We will be subject to this independent auditor requirement for the year ending
December 31, 2010. If we fail to correct any issues in the design or operating effectiveness of
internal controls over financial reporting or fail to prevent fraud, current and potential
shareholders could lose confidence in our financial reporting, which could harm our business and
the trading price of our common stock.
Delivery of our and our clients products could be delayed or disrupted by factors beyond our
control, and we could lose customers and clients as a result.
We rely upon third party carriers for timely delivery of our and our clients product
shipments. As a result, we are subject to carrier disruptions and increased costs due to factors
that are beyond our control, including employee strikes, inclement weather and increased fuel
costs. Any failure to deliver products to our and our clients customers in a timely and accurate
manner may damage our reputation and brand and could cause us to lose customers and clients. We
cannot be sure that our relationships with third party carriers will continue on terms favorable to
us, if at all. If our relationship with any of these third party carriers is terminated or impaired
or if any of these third parties is unable to deliver products, we would be required to use
alternative carriers for the shipment of our and our clients products to customers. We may be
unable to engage alternative carriers on a timely basis or on favorable terms, if at all. Potential
adverse consequences include:
||reduced visibility of order status and package tracking;
||delays in order processing and product delivery;
||increased cost of delivery, resulting in reduced margins; and
||reduced shipment quality, which may result in damaged products and customer
Our profitability could be adversely affected if the operation of our distribution or call center
facilities were interrupted or shut down as the result of a natural disaster.
We operate a majority of our distribution facilities in or around the Memphis, Tennessee area
and our call center operations are centered in Plano, Texas. Any natural disaster or other serious
disruption to these facilities due to fire, tornado, flood or any other cause would substantially
disrupt our operations and would impair our ability to adequately service our customers. In
addition, we could incur significantly higher costs during the time it takes for us to reopen or
replace any one or more of these facilities, which may or may not be reimbursed by insurance. As a
result, disruption at one or more of these facilities could adversely affect our profitability.