WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS.
A significant component of our business strategy is to continue to operate
and expand internationally. We currently operate a 150,000 square foot
distribution center in Liege, Belgium and a 33,000 square foot distribution
center in Richmond Hill, Canada, near Toronto. We cannot assure you that we will
be successful in expanding into additional international markets. In addition to
the uncertainty regarding our ability to generate revenue from foreign
operations and expand our international presence, there are risks inherent in
doing business internationally, including:
- changing regulatory requirements;
- legal uncertainty regarding foreign laws, tariffs and other trade
barriers;
- political instability;
- potentially adverse tax consequences;
- foreign currency fluctuations; and
- cultural differences.
Any one or more of these factors may materially adversely affect our
business in a number of ways, such as increased costs, operational difficulties
and reductions in revenue.
WE ARE UNCERTAIN ABOUT OUR NEED FOR AND THE AVAILABILITY OF ADDITIONAL FUNDS.
Our future capital needs are difficult to predict. We may require
additional capital in order to take advantage of unanticipated opportunities,
including strategic alliances and acquisitions, or to respond to changing
business conditions and unanticipated competitive pressures. In addition, we may
require additional funds to finance our operating losses. Should these
circumstances arise, we may need to raise additional funds either by borrowing
money or issuing additional equity. We cannot assure you that we will be able to
raise such funds on favorable terms or at all. If we were successful in
completing an equity financing, this could result in dilution to our
stockholders. We currently do not have any credit facility in place under which
we can borrow funds when needed. If we are unable to obtain additional funds, we
may be unable to take advantage of new opportunities or take other actions that
otherwise might be important to our business.
WE MAY ENGAGE IN FUTURE STRATEGIC ALLIANCES OR ACQUISITIONS THAT COULD DILUTE
OUR EXISTING STOCKHOLDERS, 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 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 stockholders. In
addition, we have limited ability to issue capital stock during the two-year
period following the spin-off. 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 by us could
also result in incremental expenses and the incurrence of debt and contingent
liabilities, or amortization of expenses related to goodwill and other
intangibles, any of which could harm our operating results.
OUR BUSINESS COULD BE ADVERSELY AFFECTED BY A SYSTEMS OR EQUIPMENT FAILURE,
WHETHER OUR OWN OR OF OUR CLIENTS.
Our operations are dependent upon our ability to protect our distribution
facilities, customer service centers, computer and telecommunications equipment
and software systems against damage and failures. Damage or failures could
result from fire, power loss, equipment malfunctions, system failures, natural
disasters and other causes. Although we believe we have sufficient property and
business interruption
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