| PLUG POWER INC Item 1A Risk Factors This Annual Report on Form 10-K contains statements that are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 |
| These forward-looking statements contain projections of our future results of operations, our product development expectations and our financial position or state other forward-looking information |
| In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or similar words |
| We believe that it is important to communicate our future expectations to our investors |
| However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements |
| Investors are cautioned not to rely on forward-looking statements because they involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including, but not limited to, those factors described below |
| Readers should not place undue reliance on our forward-looking statements |
| These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of the future performance |
| Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Annual Report on Form 10-K 5 ______________________________________________________________________ [28]Table of Contents We may never complete the research and development of certain commercially viable on-site energy products |
| We are a development stage company |
| Other than our GenCore^® product, which we believe to be commercially viable, we do not know when or whether we will successfully complete research and development of other commercially viable on-site energy products |
| If we are unable to develop additional commercially viable on-site energy products, we will not be able to generate sufficient revenue to become profitable |
| The commercialization of our products depends on our ability to reduce the costs of our components and subsystems, and we cannot assure you that we will be able to sufficiently reduce these costs |
| In addition, the commercialization of our products requires achievement and verification of their overall reliability, efficiency and safety targets and we cannot assure you that we will be able to develop, acquire or license the technology necessary to achieve these targets |
| Although we have sold a limited number of our initial products, including our GenCore^® product, we must complete substantial additional research and development before we will be able to manufacture commercially viable products in commercial quantities |
| In addition, while we are conducting tests to predict the overall life of our products, we may not have run our products over their projected useful life prior to large-scale commercialization |
| We have incurred losses and anticipate continued losses for at least the next several years |
| As of December 31, 2005 we had an accumulated deficit of dlra407dtta1 million |
| We have not achieved profitability in any quarter since our formation and expect to continue to incur net losses until we can produce sufficient revenue to cover our costs, which is not expected to occur for at least the next several years |
| We anticipate that we will continue to incur losses until we can produce and sell our products on a large-scale and cost-effective basis |
| However, we cannot predict when we will operate profitably, if ever |
| Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future |
| We have only been in business for a short time, and your basis for evaluating Plug Power is limited |
| We were formed in June 1997 to further the research and development of stationary fuel cell systems |
| While we delivered our initial product in the third quarter of 2001 and our initial GenCore^® product in the fourth quarter of 2003, we do not expect to be profitable for at least the next several years |
| Accordingly, there is only a limited basis upon which you can evaluate our business and prospects |
| Before investing in our common stock, you should consider the challenges, expenses and difficulties that we will face as a development stage company seeking to develop and manufacture new products |
| A viable market for our products may never develop or may take longer to develop than we anticipate |
| Our on-site energy products represent an emerging market, and we do not know the extent to which our targeted distributors and resellers will want to purchase them and whether end-users will want to use them |
| If a viable market fails to develop or develops more slowly than we anticipate, we may be unable to recover the losses we will have incurred to develop our products and may be unable to achieve profitability |
| The development of a viable market for our products may be impacted by many factors which are out of our control, including: • the cost competitiveness of our products; • the future costs of natural gas, propane, hydrogen and other fuels expected to be used by our products; • consumer reluctance to try a new product; • consumer perceptions of our products’ safety; • regulatory requirements; 6 ______________________________________________________________________ [29]Table of Contents • barriers to entry created by existing energy providers; and • the emergence of newer, more competitive technologies and products |
| We have no experience manufacturing our products on a large-scale commercial basis and may be unable to do so |
| To date, we have focused primarily on research, development and low volume manufacturing and have no experience manufacturing our products on a large-scale commercial basis |
| In 2000, we completed construction of our 50cmam000 square foot manufacturing facility, and have continued to develop our manufacturing capabilities and processes |
| We do not know whether or when we will be able to develop efficient, low-cost manufacturing capabilities and processes that will enable us to manufacture our products in commercial quantities while meeting the quality, price, engineering, design and production standards required to successfully market our products |
| Our failure to develop such manufacturing processes and capabilities could have a material adverse effect on our business, financial condition and results of operations |
| Even if we are successful in developing our manufacturing capabilities and processes, we do not know whether we will do so in time to meet our product commercialization schedule or to satisfy the requirements of our distributors or customers |
| We have not developed and produced the products that we have agreed to sell to GE Fuel Cell Systems |
| Our distribution agreement with GEFCS has been amended on a number of occasions, most recently in April 2005 |
| The amendments to our distribution agreement permit us the ability to sell directly or negotiate nonexclusive distribution rights to third parties for our GenCore^® back-up power product line, our GenSite™ hydrogen generation product line and our GenSys^® prime power product line (for telecommunication and broadband applications) |
| In exchange, starting in the fourth quarter of 2005 we are required to pay a 5prca commission for GenCore^®, and starting in the fourth quarter of 2005 we are required to pay a 5prca commission for GenSite™, in each case based on sales price, to GEFCS We are also required to pay a 5prca commission for GenSys^® sales beginning in the fourth quarter of 2006 |
| The distribution agreement expires on December 31, 2014 |
| We have not developed products meeting all specifications required by the GEFCS distribution agreement |
| There can be no assurance that we will complete development of products meeting specifications required by GEFCS and deliver them on schedule |
| Pursuant to the distribution agreement, GEFCS has the right to provide notice to us if, in its good faith judgment, we have materially deviated from the multi-generation product plan in the distribution agreement |
| Should GEFCS provide such notice, and we cannot mutually agree to a modification to the multi-generation product plan, then GEFCS has the right to terminate the distribution agreement for cause, subject to our rights to cure |
| In addition, GEFCS has the right to terminate the distribution agreement for cause if we fail to provide GEFCS with products that, in GEFCS’ reasonable judgment, are materially competitive with alternative PEM fuel cell-powered generator sets, subject to our rights to cure |
| GE Energy, the operating business of General Electric Company, which controls GEFCS through GE MicroGen, has agreed not to sell or distribute PEM fuel cell systems and related components manufactured by parties other than us through any entity other than GEFCS GE Energy is not, however, prohibited from developing non-PEM fuel cell systems and other distributed energy systems and products that would compete directly or indirectly against our PEM fuel cell systems or other products we may manufacture |
| GE Energy is not required to provide us with any information concerning the developments of such products, or plans or intentions to manufacture such products by GE Energy |
| The development of different energy product solutions by GE Energy could harm the marketability of our technology by providing potential customers with an alternative to our products |
| As discussed above in “Distribution, Marketing and Strategic Relationships” we are currently in discussion with GE to restructure our agreements, including the distribution agreement, and cannot predict the outcome of those discussions |
| 7 ______________________________________________________________________ [30]Table of Contents Delays in our product development would have a material impact on our commercialization schedule |
| If we experience delays in meeting our development goals or if our products exhibit technical defects or if we are unable to meet cost or performance goals, including power output, useful life and reliability, our commercialization schedule will be delayed |
| In this event, potential purchasers of our products may choose alternative technologies and any delays could allow potential competitors to gain market advantages |
| We cannot assure you that we will successfully meet our commercialization schedule in the future |
| We may need to secure additional funding to complete our product development and commercialization plans and we may be unable to raise additional capital |
| Our cash requirements depend on numerous factors, including completion of our product development activities, ability to commercialize our products and market acceptance of our products |
| We expect to devote substantial capital resources to continue development programs, establish a manufacturing infrastructure and develop manufacturing processes |
| Additionally, we expect to devote substantial capital resources to expand our marketing organization and establish a sales organization |
| We may need to raise additional funds to achieve commercialization of our products |
| However, we do not know whether we will be able to secure additional funding, or funding on acceptable terms, to pursue our commercialization plans |
| If additional funds are raised through the issuance of equity securities, the percentage ownership of our then current stockholders will be reduced |
| If adequate funds are not available to satisfy either short-term or long-term capital requirements, we may be required to limit operations in a manner inconsistent with our development and commercialization plans, which could affect operations in future periods |
| We may be unable to establish relationships, or we may lose existing relationships, with third parties for certain aspects of product development, manufacturing, distribution and servicing and the supply of key components for our products |
| We will need to enter into additional strategic relationships in order to complete our current product development and commercialization plans |
| We will also require partners to assist in the distribution, servicing and supply of components for our anticipated back-up power and on-site hydrogen generation products, both of which are in development |
| If we are unable to identify or enter into satisfactory agreements with potential partners, including those relating to the distribution of and service and support for our anticipated back-up power and on-site hydrogen generation products, we may not be able to complete our product development and commercialization plans on schedule or at all |
| We may also need to scale back these plans in the absence of needed partners, which would adversely affect our future prospects for development and commercialization of future products |
| In addition, any arrangement with a strategic partner may require us to issue a significant amount of equity securities to the partner, provide the partner with representation on our board of directors and/or commit significant financial resources to fund our product development efforts in exchange for their assistance or the contribution to us of intellectual property |
| Any such issuance of equity securities would reduce the percentage ownership of our then current stockholders |
| While we have entered into relationships with suppliers of some key components for our products, we do not know when or whether we will secure supply relationships for all required components and subsystems for our products, or whether such relationships will be on terms that will allow us to achieve our objectives |
| Our business, prospects, results of operations and financial condition could be harmed if we fail to secure relationships with entities which can develop or supply the required components for our products and provide the required distribution and servicing support |
| Additionally, the agreements governing our current relationships allow for termination by our partners under certain circumstances |
| If any of our current strategic partners was to terminate any of its agreements with us, there could be a material adverse impact on the development and commercialization of our products and the operation of our business, financial condition, results of operations and prospects |
| 8 ______________________________________________________________________ [31]Table of Contents We will rely on our partners to develop and provide components for our products |
| A supplier’s failure to develop and supply components in a timely manner or at all, or to develop or supply components that meet our quality, quantity or cost requirements, or our inability to obtain substitute sources of these components on a timely basis or on terms acceptable to us, could harm our ability to manufacture our products |
| In addition, to the extent that our supply partners use technology or manufacturing processes that are proprietary, we may be unable to obtain comparable components from alternative sources |
| We face intense competition and may be unable to compete successfully |
| The markets for on-site energy products are intensely competitive |
| There are a number of companies located in the United States, Canada and abroad that are developing PEM and other fuel cell technologies and energy products that compete with our products |
| Some of our competitors in the fuel cell sector are much larger than we are and may have the manufacturing, marketing and sales capabilities to complete research, development and commercialization of commercially viable fuel cell products more quickly and effectively than we can |
| In addition, there are many companies engaged in all areas of traditional and alternative energy generation in the United States, Canada and abroad, including, among others, major electric, oil, chemical, natural gas, batteries, generators and specialized electronics firms, as well as universities, research institutions and foreign government-sponsored companies |
| These firms are engaged in forms of power generation such as solar and wind power, reciprocating engines and microturbines, as well as traditional grid-supplied electric power |
| Many of these entities have substantially greater financial, research and development, manufacturing and marketing resources than we do |
| We must lower the cost of our products and demonstrate their reliability |
| Our initial fuel cell systems currently cost significantly more than many established competing technologies |
| If we are unable to develop products that are competitive with competing technologies in terms of price, reliability and longevity, consumers will be unlikely to buy our products |
| The price of our products depends largely on material and manufacturing costs |
| We cannot guarantee that we will be able to lower these costs to the level where we will be able to produce a competitive product or that any product produced using lower cost materials and manufacturing processes will not suffer from a reduction in performance, reliability and longevity |
| Failure of our field tests could negatively impact demand for our products |
| We are currently field-testing a number of our products and we plan to conduct additional field tests in the future |
| We may encounter problems and delays during these field tests for a number of reasons, including the failure of our technology or the technology of third parties, as well as our failure to maintain and service our products properly |
| Any problem or perceived problem with our field tests could materially harm our reputation and impair market acceptance of, and demand for, our products |
| Further regulatory changes and electric utility industry restructuring may affect demand for our products |
| The market for electric power generation products is heavily influenced by federal and state governmental regulations and policies concerning the electric utility industry |
| A change in the current regulatory policies could deter further investment in the research and development of alternative energy sources, including fuel cells, and could result in a significant reduction in the demand for our products |
| We cannot predict how deregulation or restructuring of the industry will affect the market for our products |
| 9 ______________________________________________________________________ [32]Table of Contents Our business may become subject to future government regulation, which may impact our ability to market our products |
| Our products will be subject to federal, local, and non-US laws and regulations, including, for example, state and local ordinances relating to building codes, public safety, electrical and gas pipeline connections, hydrogen transportation and siting and related matters |
| Further, as products are introduced into the market commercially, governments may impose new regulations |
| We do not know the extent to which any such regulations may impact our ability to distribute, install and service our products |
| Any regulation of our products, whether at the federal, state, local or foreign level, including any regulations relating to installation and servicing of our products, may increase our costs and the price of our products |
| Utility companies could place barriers on our entry into the marketplace where customers depend on traditional grid supplied energy |
| Utility companies often charge fees to industrial companies for disconnecting from the grid, for using less electricity or for having the capacity to use power from the grid for back-up purposes, and may charge similar fees to residential customers in the future |
| The imposition of such fees could increase the cost to grid-connected customers of using our products and could make our products less desirable, thereby harming our revenue and profitability |
| Alternatives to our technology or improvements to traditional energy technologies could make our products less attractive or render them obsolete |
| Our products are among a number of alternative energy products being developed |
| A significant amount of public and private funding is currently directed toward development of microturbines, solar power, wind power and other types of fuel cell technologies |
| Improvements are also being made to the existing electric transmission system |
| Technological advances in alternative energy products, improvements in the electric power grid or other fuel cell technologies may make our products less attractive or render them obsolete |
| The hydrocarbon fuels and other raw materials on which our products rely may not be readily available or available on a cost-effective basis |
| Our products depend largely on the availability of natural gas, liquid propane and hydrogen gas |
| If these fuels are not readily available, or if their prices are such that energy produced by our products costs more than energy provided by other sources, our products could be less attractive to potential users |
| In addition, platinum is a key material in our PEM fuel cells |
| Platinum is a scarce natural resource and we are dependent upon a sufficient supply of this commodity |
| Any shortages could adversely affect our ability to produce commercially viable fuel cell systems and significantly raise our cost of producing our fuel cell systems |
| Our products use flammable fuels that are inherently dangerous substances |
| Our fuel cell systems use natural gas, liquid propane and hydrogen gas in catalytic reactions, which produce less heat than a typical gas furnace |
| While our products do not use this fuel in a combustion process, natural gas, liquid propane and hydrogen gas are flammable fuels that could leak in a home or office and combust if ignited by another source |
| Further, while we are not aware of any accidents involving our products, any such accidents involving our products or other products using similar flammable fuels could materially suppress demand for, or heighten regulatory scrutiny of, our products |
| Product liability or defects could negatively impact our results of operations |
| Any liability for damages resulting from malfunctions or design defects could be substantial and could materially adversely affect our business, financial condition, results of operations and prospects |
| In addition, a 10 ______________________________________________________________________ [33]Table of Contents well-publicized actual or perceived problem could adversely affect the market’s perception of our products resulting in a decline in demand for our products and could divert the attention of our management, which may materially and adversely affect our business, financial condition, results of operations and prospects |
| Future acquisitions may disrupt our business, distract our management and reduce the percentage ownership of our stockholders |
| As part of our business strategy we may engage in acquisitions that we believe will provide us with complementary technologies, products, channels, expertise and/or other valuable assets |
| However, we may not be able to identify suitable acquisition candidates |
| If we do identify suitable candidates, we may not be able to acquire them on commercially acceptable terms or at all |
| If we acquire another company, we may not be able to successfully integrate the acquired business into our existing business in a timely and non-disruptive manner |
| We may have to devote a significant amount of time and management and financial resources to do so |
| Even with this investment of management and financial resources, an acquisition may not produce the desired revenues, earnings or business synergies |
| In addition, an acquisition may reduce the percentage ownership of our then current stockholders |
| If we fail to integrate the acquired business effectively or if key employees of that business leave, the anticipated benefits of the acquisition would be jeopardized |
| The time, capital and management and other resources spent on an acquisition that fails to meet our expectations could cause our business and financial condition to be materially and adversely affected |
| In addition, from an accounting perspective, acquisitions can involve non-recurring charges and amortization of significant amounts of intangible assets that could adversely affect our results of operations |
| We may not be able to protect important intellectual property and we could incur substantial costs defending against claims that our products infringe on the proprietary rights of others |
| PEM fuel cell technology was first developed in the 1950s, and fuel processing technology has been practiced on a large scale in the petrochemical industry for decades |
| Accordingly, we do not believe that we can establish a significant proprietary position in the fundamental component technologies in these areas |
| However, our ability to compete effectively will depend, in part, on our ability to protect our proprietary system-level technologies, systems designs and manufacturing processes |
| We rely on patents, trademarks, and other policies and procedures related to confidentiality to protect our intellectual property |
| However, some of our intellectual property is not covered by any patent or patent application |
| Moreover, we do not know whether any of our pending patent applications will issue or, in the case of patents issued or to be issued, that the claims allowed are or will be sufficiently broad to protect our technology or processes |
| Even if all of our patent applications are issued and are sufficiently broad, our patents may be challenged or invalidated |
| We could incur substantial costs in prosecuting or defending patent infringement suits or otherwise protecting our intellectual property rights |
| While we have attempted to safeguard and maintain our proprietary rights, we do not know whether we have been or will be completely successful in doing so |
| Moreover, patent applications filed in foreign countries may be subject to laws, rules and procedures that are substantially different from those of the United States, and any resulting foreign patents may be difficult and expensive to enforce |
| In addition, we do not know whether the US Patent & Trademark Office will grant federal registrations based on our pending trademark applications |
| Even if federal registrations are granted to us, our trademark rights may be challenged |
| It is also possible that our competitors or others will adopt trademarks similar to ours, thus impeding our ability to build brand identity and possibly leading to customer confusion |
| We could incur substantial costs in prosecuting or defending trademark infringement suits |
| Further, our competitors may independently develop or patent technologies or processes that are substantially equivalent or superior to ours |
| If we are found to be infringing third party patents, we could be required to pay substantial royalties and/or damages, and we do not know whether we will be able to obtain licenses to use such patents on acceptable terms, if at all |
| Failure to obtain needed licenses could delay or prevent the development, manufacture or sale of our products, and could necessitate the expenditure of significant resources to develop or acquire non-infringing intellectual property |
| 11 ______________________________________________________________________ [34]Table of Contents Asserting, defending and maintaining our intellectual property rights could be difficult and costly and failure to do so may diminish our ability to compete effectively and may harm our operating results |
| We may need to pursue lawsuits or legal action in the future to enforce our intellectual property rights, to protect our trade secrets and domain names and to determine the validity and scope of the proprietary rights of others |
| If third parties prepare and file applications for trademarks used or registered by us, we may oppose those applications and be required to participate in proceedings to determine the priority of rights to the trademark |
| Similarly, competitors may have filed applications for patents, may have received patents and may obtain additional patents and proprietary rights relating to products or technology that block or compete with ours |
| We may have to participate in interference proceedings to determine the priority of invention and the right to a patent for the technology |
| Litigation and interference proceedings, even if they are successful, are expensive to pursue and time consuming, and we could use a substantial amount of our financial resources in either case |
| We rely, in part, on contractual provisions to protect our trade secrets and proprietary knowledge |
| Confidentiality agreements to which we are party may be breached, and we may not have adequate remedies for any breach |
| Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors |
| Our inability to maintain the proprietary nature of our technology and processes could allow our competitors to limit or eliminate any competitive advantages we may have |
| We may have difficulty managing change in our operations |
| We continue to undergo rapid change in the scope and breadth of our operations as we advance the development of our products |
| Such rapid change is likely to place a significant strain on our senior management team and other resources |
| We will be required to make significant investments in our engineering, logistics, financial and management information systems and to motivate and effectively manage our employees |
| Our business, prospects, results of operations and financial condition could be harmed if we encounter difficulties in effectively managing the budgeting, forecasting and other process control issues presented by such a rapid change |
| We face risks associated with our plans to market, distribute and service our products internationally |
| We intend to market, distribute and service our products internationally |
| We have limited experience developing and no experience manufacturing our products to comply with the commercial and legal requirements of international markets |
| Our success in international markets will depend, in part, on our ability and that of our partners to secure relationships with foreign sub-distributors, and our ability to manufacture products that meet foreign regulatory and commercial requirements |
| Additionally, our planned international operations are subject to other inherent risks, including potential difficulties in enforcing contractual obligations and intellectual property rights in foreign countries and fluctuations in currency exchange rates |
| Our government contracts could restrict our ability to effectively commercialize our technology |
| Some of our technology has been developed under government funding by the United States and by other countries |
| The United States government has a non-exclusive, royalty-free, irrevocable world-wide license to practice or have practiced any of our technology developed under contracts funded by the government |
| In some cases, government agencies in the United States can require us to obtain or produce components for our systems from sources located in the United States rather than foreign countries |
| Our contracts with government agencies are also subject to the risk of termination at the convenience of the contracting agency, potential disclosure of our confidential information to third parties and the exercise of “march-in” rights by the government |
| March-in rights refer to the right of the United States government or government agency to license to others any technology developed under contracts funded by the government if the contractor fails to continue to develop the technology |
| The implementation of restrictions on our sourcing of components or the exercise of march-in rights could harm our business, prospects, results of operations and financial condition |
| In addition, under the Freedom of 12 ______________________________________________________________________ [35]Table of Contents Information Act, any documents that we have submitted to the government or to a contractor under a government funding arrangement are subject to public disclosure that could compromise our intellectual property rights unless such documents are exempted as trade secrets or as confidential information and treated accordingly by such government agencies |
| We have attracted a highly skilled management team and specialized workforce, including scientists, engineers, researchers and manufacturing, marketing and sales professionals |
| Our future success will depend, in part, on our ability to attract and retain qualified management and technical personnel |
| We do not know whether we will be successful in hiring or retaining qualified personnel |
| Our inability to hire qualified personnel on a timely basis, or the departure of key employees, could materially and adversely affect our development and commercialization plans and, therefore, our business, prospects, results of operations and financial condition |
| GE MicroGen, Inc |
| and DTE Energy Technologies, Inc |
| have representatives on our board of directors |
| Under our agreement with GE MicroGen, we are required to use our best efforts to cause one individual nominated by GE Energy, an operating business of General Electric Company, to be elected to our board of directors for as long as our distribution agreement with GEFCS remains in effect |
| Currently, Richard R Stewart serves on our board of directors as GE Energy’s nominee |
| In addition, a current employee of DTE, Robert J Buckler, and a former employee of DTE, Larry G Garberding, currently serve on our board of directors |
| Both GEFCS and DTE have entered into distribution agreements with us |
| As discussed above in “Distribution, Marketing and Strategic Relationships” we are currently in discussion with GE to restructure certain agreements, including the distribution agreement, and cannot predict the outcome of those discussions |
| Provisions in our charter documents and Delaware law may prevent or delay an acquisition of us, which could decrease the value of our common stock |
| Our certificate of incorporation and bylaws and Delaware law contain provisions that could make it harder for a third party to acquire us without the consent of our board of directors |
| These provisions include those that: • authorize the issuance of up to 5cmam000cmam000 shares of preferred stock in one or more series without a stockholder vote; • limit stockholders’ ability to call special meetings; • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and • provide for staggered terms for our directors |
| In addition, in certain circumstances, Delaware law also imposes restrictions on mergers and other business combinations between us and any holder of 15prca or more of our outstanding common stock |
| Our stock price has been and could remain volatile |
| The market price of our common stock has historically experienced and may continue to experience significant volatility |
| Since our initial public offering in October 1999, the market price of our common stock has fluctuated from a high of dlra156dtta50 per share in the first quarter of 2000 to a low of dlra3dtta39 per share in the fourth quarter of 2002 |
| Our progress in developing and commercializing our products, our quarterly operating results, announcements of new products by us or our competitors, our perceived prospects, changes in securities’ analysts’ recommendations or earnings’ estimates, changes in general conditions in the economy or the financial markets, adverse events related to our strategic relationships, significant sales of our common stock by existing stockholders including one or more of our strategic partners and other developments affecting us or our 13 ______________________________________________________________________ [36]Table of Contents competitors could cause the market price of our common stock to fluctuate substantially |
| In addition, in recent years, the stock market, and in particular the market for technology-related stocks, has experienced significant price and volume fluctuations |
| This volatility has affected the market prices of securities issued by many companies for reasons unrelated to their operating performance and may adversely affect the price of our common stock |
| In addition, we may be subject to additional securities class action litigation as a result of volatility in the price of our common stock, which could result in substantial costs and diversion of management’s attention and resources and could harm our stock price, business, prospects, results of operations and financial condition |
| Our failure to comply with Nasdaq’s listing standards could result in the delisting of our common stock by Nasdaq from the Nasdaq National Market and severely limit the ability to sell our common stock |
| Our common stock is currently traded on the Nasdaq National Market |
| Under Nasdaq’s listing maintenance standards, if the closing bid price of our common stock is under dlra1dtta00 per share for 30 consecutive trading days, Nasdaq will notify us that we may be delisted from the Nasdaq National Market |
| If the closing bid price of our common stock does not thereafter regain compliance for a minimum of 10 consecutive trading days during the 90 days following notification by Nasdaq, Nasdaq may delist our common stock from trading on the Nasdaq National Market |
| There can be no assurance that our common stock will remain eligible for trading on the Nasdaq National Market |
| In addition, if our common stock is delisted, our stockholders would not be able to sell our common stock on the Nasdaq National Market, and their ability to sell any of our common stock would be severely, if not completely, limited |