| ZIX CORP Item 1A Risk Factors (In these risk factors, “we,” “us,” “our,” and “ZixCorp” refer to Zix Corporation and its wholly-owned subsidiaries |
| ) An investment in our common stock involves a high degree of risk |
| You should carefully consider the following risk factors in evaluating an investment in our common stock |
| The risks described below are not the only ones that we face |
| If any of the following risks actually occurs, our business, financial condition, or results of operations could be materially and adversely affected |
| In such case, the trading price of our common stock could decline, and you could lose all or part of your investment |
| You should also refer to the other information set forth in this report, including our consolidated financial statements and the related notes |
| We have incurred significant operating losses in previous years and we continue to use significant amounts of cash for our business operations, which could result in us having insufficient cash to fund our operations under our current business plan |
| We have incurred significant operating losses in previous years |
| Our businesses operate in emerging markets and developing these businesses is costly and the market is highly competitive |
| Emerging-market businesses like ours involve risks and uncertainties, 12 _________________________________________________________________ [45]Table of Contents and there are no assurances that we will be successful in our efforts |
| Our liquidity and capital resources remain limited |
| There can be no assurance that our liquidity or capital resource position would allow us to continue to pursue our current business strategy after the proceeds from the issuance of our August 2005 private placement are expended |
| As a result, we could be forced to further augment our cash position through additional cost reduction measures, sales of assets, additional financings, or a combination of these actions |
| There is no assurance that we will be able to raise additional capital if and when needed or on favorable terms |
| If we cannot raise capital, we might have to alter our business model |
| Any of these adverse events could substantially diminish the value of our common stock |
| The market may not broadly accept our secure e-messaging and e-prescribing solutions and services, which would prevent us from operating profitably |
| We must be able to achieve broad market acceptance for our secure e-messaging and e-prescribing solutions and services, at a price that provides an acceptable rate of return relative to our costs in order to operate profitably |
| We have not yet been able to do this |
| Furthermore, PocketScript®, our e-prescribing service, operates in an emerging market |
| There is no assurance that this market will develop sufficiently to enable us to operate our PocketScript business profitably |
| There is no assurance that any of our services will become generally accepted or that they will be compatible with any standards that become generally accepted, nor is there any assurance that enough paying users will ultimately be obtained to enable us to operate these businesses profitably |
| Failure to enter into additional or to maintain existing sponsorship agreements for our PocketScript e-prescribing service and generate other revenue opportunities from PocketScript could harm our business |
| Our PocketScript business has incurred significant operating losses |
| Through December 31, 2005, significant orders for our PocketScript e-prescribing service came from sponsorship agreements with healthcare payors |
| Under our payor-sponsorship business model, we deploy PocketScript to the end-user physician and provide the end-user physician a subscription to use the service in return for payments from the healthcare payor |
| These payments are in the form of guaranteed payments from the healthcare payor or contingent payments that are based on contractually specified performance metrics |
| In some cases, these contingent payments could represent a substantial portion of the revenue opportunity under the contract |
| Substantially all of the end-user physicians who are using the PocketScript service and for whom we are currently recognizing revenue are doing so under a subscription arrangement that has been paid for by a healthcare payor |
| Although we believe that physicians will pay to use the PocketScript service following the one year of service paid for by the healthcare payors or that healthcare payors will extend their sponsorship, there is no assurance that they will do so |
| In addition, we obtain revenue from prescription transaction fees from pharmacy benefit managers and others with respect to the electronic prescriptions processed through our e-prescribing service |
| Increasing our active physician user base and increasing prescription transaction fees are critical to the success of our plan to achieve profitability in our e-prescribing business |
| Failure to sign follow-on orders with additional healthcare payors from whom a significant portion of our revenues are received or sign new sponsorship agreements with other payors in the coming months, or generate significant revenue from contingent payments, or maintain and identify other revenue opportunities for our e-prescribing services, such as add-on applications or prescription transaction fees, and/or new uses for the transaction data itself, will prevent us from achieving significant revenues from our e-prescribing services |
| Healthcare providers may fail to adopt our PocketScript service |
| Our PocketScript e-prescribing service is targeted to the emerging market for providing secure communications among healthcare providers to deliver information in an efficient, economical manner |
| This is an emerging market, and the success of PocketScript is dependent, in large measure, on physicians changing the manner in which they write prescriptions |
| Our challenge is to make this new business attractive to physicians, and ultimately, profitable |
| To do so has required, and will require, us to invest significant resources, including significant amounts of cash |
| There is no assurance that enough paying users will ultimately be obtained to enable us to operate the PocketScript business profitably |
| 13 _________________________________________________________________ [46]Table of Contents Failure to significantly increase our base of PocketScript users or obtain significant prescription transaction fees may result in failure to achieve the critical mass of physicians and revenue to build a successful business |
| We incur significant up front costs in connection with initially establishing our PocketScript e-prescribing service with the physician users |
| Under our current business model, third party payors typically pay all or a majority of the variable costs of initially establishing our e-prescribing service, and a limited amount of the overhead costs associated with our e-prescribing business |
| Our plan is to obtain additional revenues in the form of recurring annual subscription fees to use our e-prescribing service, either paid by the third party payors or the physicians |
| In addition, we must obtain additional revenues from prescription transaction fees to operate this line of business profitably |
| As our base of physician users grows through additional physicians subscribing to use our service and the retention of existing users, we hope to generate enough revenue to become profitable in this line of business |
| Increasing our physician user base and increasing prescription transaction fees are critical to the success of this plan |
| The preponderance of the prescription transaction fees that we currently receive are from two pharmacy benefit managers, which manage the prescription benefits for their health plan customers, and one electronic script aggregator, which receives scripts written by the physician user of our PocketScript e-prescribing service and transmits them via electronic data interchange to retail pharmacies |
| Our contracts with these persons are short term, meaning that the other party could cancel the contract and require us to renegotiate the contract at lower fee levels or on other unfavorable terms and conditions |
| These unfavorable terms and conditions could increase our costs and could require us to revise our business model |
| In sum, there is no assurance as to whether, or how quickly, we will be able to increase our user base or prescription transaction fees to such a level that would enable this line of business to operate profitably |
| If we are not successful in these endeavors, we could be required to revise our business model, exit or reduce the scale of our-e-prescribing business, or raise additional capital |
| Competition in our businesses is expected to increase, which could cause our business to fail |
| Our Zix-branded solutions and services are targeted to the secure e-messaging services market |
| Our PocketScript business is targeted to the emerging market for electronic prescriptions |
| As the public’s and governmental authorities’ awareness about the need for privacy and security of electronic communications has increased over the past few years, an increasing number of competitors have entered the market |
| Our service offerings are focused on the secure communications market, including secure e-messaging |
| Companies that compete with our Zix-branded secure e-messaging business include content management and secure delivery companies, such as Tumbleweed Communications Corp, and other secure delivery participants, such as Voltage Security, PostX, PGP Corporation, Certified Mail, Authentica, and Sigaba Corporation |
| In addition, we face competition from vendors of Internet server appliances, operating systems, networking hardware, network management solutions, and security software, many of which now, or may in the future, develop or bundle secure e-messaging into their products |
| Our PocketScript e-prescribing service applies the benefits of e-messaging to the medical prescription process by enabling providers to write and transmit prescriptions electronically directly to the pharmacy |
| Participants in the e-prescribing space include AllScripts Healthcare Solutions, MedPlus, Dr |
| First, Inc, InstantDX LLC, and iScribe |
| Competition from these companies and from vendors in related areas, such as electronic medical records vendors — who are expected to include e-prescribing services as an element of their service offering — is expected to increase |
| We may face increased competition as these competitors partner with others or develop new solution and service offerings to expand the functionality that they can offer to their customers |
| Our competitors may, over time, develop new technologies that are perceived as being more secure, effective, or cost efficient than our own |
| These competitors could successfully garner a significant share of the market, to the exclusion of our company |
| Furthermore, increased competition could result in pricing pressures, reduced margins, or the failure of our business to achieve or maintain market acceptance, any one of which could harm our business |
| Our inability to successfully and timely develop and introduce new e-messaging and e-prescribing services and related services and to implement technological changes could harm our business |
| The evolving nature of the secure e-messaging and e-prescribing businesses require us to continually develop and introduce new and related solutions and services and to improve the performance, features, and reliability of our existing solutions and services, particularly in response to competitive offerings |
| 14 _________________________________________________________________ [47]Table of Contents We have under development new feature sets for our secure e-messaging and e-prescribing businesses |
| We may also introduce new services |
| The success of new or enhanced features and services depends on several factors — primarily market acceptance |
| We may not succeed in developing and marketing new or enhanced features and services that respond to competitive and technological developments and changing customer needs |
| This could harm our business |
| If the market for secure e-messaging and e-prescribing services and related services does not continue to grow, demand for our solutions and services will be adversely affected |
| The market for e-prescribing is an emerging market |
| Continued growth of the secure e-messaging and e-prescribing services markets will depend, to a large extent, on the market recognizing the need for secure electronic communications, such as email encryption and e-prescribing |
| Future asset impairments could affect our financial results |
| On September 30, 2005, we sold our other MyDocOnline service, Dr |
| Chart, a Web-based communication tool that connects healthcare providers and hospital-based laboratories by allowing doctors to initiate lab orders, check medical necessity compliance, and view results rapidly and accurately using a secure Internet connection |
| Chart service resulted in ZixCorp recognizing a one-time, non-cash loss from the sale in the third quarter of 2005 totaling dlra4dtta8 million |
| The primary factor in determining the amount of the loss was the inclusion of the full amount of goodwill associated with the purchase of MyDocOnline, totaling dlra4dtta8 million |
| As of December 31, 2005, we have dlra2dtta2 million of goodwill on our balance sheet relating to the eSecure product line |
| Goodwill is evaluated at least on an annual basis or whenever there is a reason to question if the goodwill values are impaired |
| We also have dlra4dtta2 million of property and other long-lived assets |
| The carrying value of these assets are evaluated whenever there is reason to question if the values are impaired |
| Future events could impact the valuation of goodwill and long-lived assets |
| It is possible that we may incur further charges for other asset impairments in the future as we evaluate the prospects of our various lines of business and the use of technologies acquired by us from third parties via asset acquisitions in 2003 and 2004 |
| Capacity limits on our technology and network hardware and software may be difficult to project, and we may not be able to expand and/or upgrade our systems to meet increased use, which would result in reduced revenues |
| While we have ample through-put capacity to handle our customers’ requirements for the medium term, at some point we may be required to materially expand and/or upgrade our technology and network hardware and software |
| We may not be able to accurately project the rate of increase in usage on our network, particularly since we have significantly expanded our potential customer base by the growing use of our PocketScript service, which is supported by our ZixData Center^TM |
| In addition, we may not be able to expand and/or upgrade our systems and network hardware and software capabilities in a timely manner to accommodate increased traffic on our network |
| If we do not timely and appropriately expand and/or upgrade our systems and network hardware and software, we may lose customers and revenues |
| Security interruptions to our data centers could disrupt our business, and any security breaches could expose us to liability and negatively impact customer demand for our solutions and services |
| Our business depends on the uninterrupted operation of our data centers — currently, our ZixData Center located in Dallas, Texas; and the Austin, Texas data center used for fail-over and business continuity services |
| We must protect these centers from loss, damage, or interruption caused by fire, power loss, telecommunications failure, or other events beyond our control |
| Any damage or failure that causes interruptions in our data centers’ operations could materially harm our business, financial condition, and results of operations |
| In addition, our ability to issue digitally-signed certified time-stamps and public encryption codes in connection with our Zix-branded solutions and services and to support the PocketScript e-prescribing service depends on the efficient operation of the Internet connections between customers and our data centers |
| We depend on Internet service providers efficiently operating these connections |
| These providers have experienced periodic operational problems or outages in the past |
| Any of these problems or outages could adversely affect customer satisfaction |
| 15 _________________________________________________________________ [48]Table of Contents Furthermore, it is critical that our facilities and infrastructure remain secure and the market perceives them to be secure |
| Despite our implementation of network security measures, our infrastructure may be vulnerable to physical break-ins, computer viruses, attacks by hackers, and similar disruptions from unauthorized tampering with our computer systems |
| In addition, we are vulnerable to coordinated attempts to overload our systems with data, resulting in denial or reduction of service to some or all of our users for a period of time |
| We do not carry insurance to compensate us for losses that may occur as a result of any of these events; therefore, it is possible that we may have to use additional resources to address these problems |
| Secure messages sent through our ZixPort^® and ZixMessage Center^TM messaging portals, in connection with the operation of our secure e-messaging services, include personal healthcare information as well as personal financial information |
| This information will reside, for a user-specified period of time, in our secure data center network; and individual prescription histories transmitted through our PocketScript e-prescribing system and other personally identifiable health care information will reside in our secure data center network |
| Federal and state laws impose significant financial penalties for unauthorized disclosure of personal information |
| Exposure of this information, resulting from any physical or electronic break-ins or other security breaches or compromises of this information, could expose us to significant liability, and customers could be reluctant to use our Internet-related services |
| Pending litigation could have a material impact on our operating results and financial condition |
| Beginning in early September 2004, several purported shareholder class action lawsuits were filed in the US District Court for the Northern District of Texas against us and certain of our current and former officers and directors |
| The purported class action lawsuits seek unspecified monetary damages on behalf of purchasers of ZixCorp’s common stock between October 30, 2003 and May 4, 2004 |
| The purported shareholder class action lawsuits allege that the defendants made materially false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during this time period |
| Also, three purported shareholder derivative lawsuits have been filed against us and certain of our current and former officers and directors |
| The shareholder derivative lawsuits relate to the allegedly materially false and misleading statements and/or omissions that are the subject of the purported shareholder class action lawsuits |
| The derivative lawsuits name ZixCorp as a nominal defendant and as actual defendants the individuals named in the purported shareholder class action lawsuits mentioned above and others |
| The suits seek to require ZixCorp to initiate legal action for unspecified damages against the individual defendants named in the purported shareholder class action lawsuits |
| The suits also allege breaches of fiduciary duty, abuse of control, insider selling, and misappropriation of information; and seek contribution and indemnification against the individual defendants |
| These lawsuits may require significant management time and attention and could result in significant legal expenses |
| While we believe these lawsuits are without merit and intend to defend them vigorously, we are unable to predict the scope or outcome of these matters and quantify their eventual impact, if any, on our company |
| An unfavorable outcome could have a material adverse effect on our business, operating results, cash flow, and financial condition |
| We maintain insurance that may limit our financial exposure for defense costs and liability for an unfavorable outcome, should we not prevail, for claims covered by the insurance coverage |
| We may have to defend our rights in intellectual property that we use in our services, which could be disruptive and expensive to our business |
| We may have to defend our intellectual property rights or defend against claims that we are infringing the rights of others |
| Intellectual property litigation and controversies are disruptive and expensive |
| Infringement claims could require us to develop non-infringing services or enter into royalty or licensing arrangements |
| Royalty or licensing arrangements, if required, may not be obtainable on terms acceptable to us |
| Our business could be significantly harmed if we are not able to develop or license the necessary technology |
| Furthermore, it is possible that others may independently develop substantially equivalent intellectual property, thus enabling them to effectively compete against us |
| We subject our solutions and services to quality assurance testing prior to release |
| Regardless of the quality assurance testing, any of our solutions could contain undetected defects or errors |
| In particular, our PocketScript system is used to transmit prescriptions |
| Defects or errors in our PocketScript system could result in inaccurate prescriptions being generated, which could result in injury or death to patients |
| Undetected defects or errors could result in loss of or delay in revenues, failure to achieve market acceptance, diversion of development resources, injury to our reputation, litigation claims, increased insurance costs, or increased service and warranty costs |
| Any one of these could prevent us from implementing our business model and achieving the revenues we need to 16 _________________________________________________________________ [49]Table of Contents operate profitably |
| Public key cryptography technology is subject to risks |
| Our Zix-branded solutions and services and the PocketScript e-prescribing service employ, and future solutions and services may employ, public key cryptography technology |
| With public key cryptography technology, a public key and a private key are used to encrypt and decrypt messages |
| The security afforded by this technology depends, in large measure, on the integrity of the private key, which is dependent, in part, on the application of certain mathematical principles |
| The integrity of the private key is predicated on the assumption that it is difficult to mathematically derive the private key from the related public key |
| Should methods be developed that make it easier to derive the private key, the security of encryption services using public key cryptography technology would be reduced or eliminated and such services could become unmarketable |
| This could require us to make significant changes to our services, which could damage our reputation and otherwise hurt our business |
| Moreover, there have been public reports of the successful decryption of certain encrypted messages |
| This or related publicity could adversely affect public perception of the security afforded by public key cryptography technology, which could harm our business |
| We depend on key personnel |
| We depend on the performance of our senior management team — including our Chairman, CEO, and President, Richard D Spurr, and our Vice President of Finance and Administration, CFO, and Treasurer, Bradley C Almond, and their direct reports and other key employees, particularly highly skilled technical personnel |
| Our success depends on our ability to attract, retain, and motivate these individuals |
| There are no binding agreements with any of our employees that prevent them from leaving our company at any time |
| There is competition for these personnel |
| In addition, we do not maintain key person life insurance on any of our personnel |
| The loss of the services of any of our key employees or our failure to attract, retain, and motivate key employees could harm our business |
| We rely on third parties |
| If critical services and products that we source from third parties were to no longer be made available to us or at a considerably higher price than we currently pay for them, and suitable alternatives could not be found, our business could be harmed |
| For certain elements of our service offerings, we sometimes rely on the products and services of third parties under contracts |
| Those third parties are not under our control beyond the terms of their agreements and, therefore, should they elect to withhold their products or services or significantly raise their prices, we could be damaged financially in lower returns on sales and a lessening of competitive advantages if suitable alternatives could not be found in a reasonable period of time |
| We could be affected by government regulation |
| Exports of software solutions and services using encryption technology, such as our Zix-branded solutions and services, are generally restricted by the US government |
| Although we have obtained US government approval to export our solutions and services to almost all countries, the list of countries to which our solutions and services cannot be exported could be revised in the future |
| Furthermore, some countries impose restrictions on the use of encryption solutions and services, such as ours |
| Failure to obtain the required governmental approvals would preclude the sale or use of our solutions and services in international markets |
| Furthermore, boards of pharmacy in the various states in which our PocketScript business operates regulate the process by which physicians write prescriptions |
| While regulations in the states in which this business currently operates generally permit the electronic writing of prescriptions, such regulations could be revised in the future |
| Moreover, regulations in states in which our PocketScript business does not currently operate may not be as favorable and may impede our ability to develop business in these states |
| The federal government has proposed regulations to create an exception to the prohibition on physicians’ referrals to health care entities with which they have financial relationships for certain electronic prescribing arrangements, to be codified at 42 CFR §411dtta357(v), and an exception to the related federal health care anti-kickback rules for certain electronic prescribing arrangements, to be codified at 42 CFR §1001dtta952(x) |
| The purpose of the proposed regulations is to encourage physicians to use electronic prescribing systems to create and deliver prescriptions to the pharmacy |
| The proposed regulations seek to accomplish this purpose by creating certain safe harbors that are intended to encourage health care entities, such as health insurance companies and hospitals, to provide financial incentives to physicians to use electronic prescribing systems |
| There is no assurance that the final regulations will actually encourage the use of electronic prescribing systems |
| Furthermore, the final regulations could provide other participants in the market a competitive advantage or could have currently unforeseen consequences that harm our business |
| 17 _________________________________________________________________ [50]Table of Contents Also, future state or federal regulation could mandate standards for the electronic writing of prescriptions or for the secure electronic transmittal of personal health information through the Internet that our technology and systems do not comply with, which would require us to modify our technology and systems |
| The costs of compliance could be substantial |
| Our stock price may be volatile |
| The market price of our common stock has fluctuated significantly in the past and is likely to fluctuate in the future |
| Our stock price may decrease as a result of the dilutive effect caused by the additional number of shares that may become available in the market due to the issuances of our common stock in connection with the capital funding and acquisition transactions we completed over the last few years |
| As of February 15, 2006, there was a short position in our common stock of 3cmam552cmam617 shares, which may affect the volatility of our stock price |
| One investor owns a large percentage of our outstanding stock and could significantly influence the outcome of actions |
| Haywood beneficially own approximately 11dtta4prca of our outstanding common stock (measured as of February 13, 2006) |
| Therefore, Mr |
| Haywood could exert substantial influence over all matters requiring approval by our shareholders, including the election of directors |
| Haywood’s interests may not be aligned with the interests of our other shareholders |
| This concentration of ownership and voting power may discourage or prevent someone from acquiring our business |
| We have a certain amount of debt and may be unable to service or refinance this debt, or servicing this debt may restrict cash available for our business operations, or complying with the covenants of the debt could restrict certain desired business actions |
| As of December 31, 2005 our total outstanding indebtedness, including capital leases, requires us to make payments totaling dlra8dtta1 million payable over the next two years, excluding interest |
| This level of debt could have negative consequences |
| For example, it could: • result in our inability to comply with the financial and other restrictive covenants in our outstanding convertible notes, which among other things, require us to maintain specified cash levels and limit our ability to incur debt and sell assets, which could in turn result in an event of default that, if not cured or waived, could have a material adverse effect on our operations; • require us to dedicate a substantial portion of our cash flow from operations to make scheduled principal payments on our debt or to meet required cash reserves, thereby reducing the availability of our cash flow for working capital, capital investments, and other business activities; • increase our vulnerability to adverse industry and general economic conditions; • limit our ability to obtain additional financing to fund future working capital, capital investments, and other business activities; • limit our ability to refinance our indebtedness on terms that are commercially reasonable; and • limit our flexibility to plan for, and react to, changes in our business and our industry |
| We have a significant amount of convertible securities and related warrants outstanding and may issue additional equity securities in the future |
| Conversion or redemption of our outstanding convertible note into our common stock, exercise of the outstanding warrants, and future issuances or conversion of other securities will dilute the ownership interests of existing shareholders |
| The outstanding balance of our convertible promissory note was dlra5dtta0 million at December 31, 2005 |
| Per the terms of our convertible note, the full amount outstanding may be converted by the holders at a conversion price of dlra5dtta38 per share |
| If fully converted at this price, we could be obligated to issue an additional 929cmam368 shares of our common stock, assuming shareholder approval |
| We have also issued warrants covering 1cmam910cmam834 shares of our common stock to the current and former holders of the convertible notes and additional warrants to purchase 166cmam667 shares of common stock were issued to the placement agent for the transaction |
| Including these warrants, we have outstanding warrants and options, including options held by our employees, covering 18 _________________________________________________________________ [51]Table of Contents approximately 15dtta2 million shares of our common stock with exercise prices ranging from dlra1dtta44 to dlra57dtta60 |
| The issuances of shares of common stock in respect of the convertible note and these warrants and options would result in a substantial voting dilution of our current shareholders |
| Any sales in the public market of the common stock issuable upon such conversion or redemption of the notes or exercise of the warrants and options could adversely affect prevailing market prices of our common stock |
| In the future, we may determine to seek additional capital funding or to acquire additional businesses, which could involve the issuance of one or more types of equity securities, including convertible debt, common and convertible preferred stock, and warrants to acquire common or preferred stock |
| Such equity securities could be issued at or below the then-prevailing market price of our common stock |
| In addition, we incent our employees and attract new employees by issuing shares of our common stock and options to purchase shares of our common stock |
| The interest of our existing shareholders may be diluted by any equity securities issued in capital funding financings or business acquisitions and would be diluted by any such future share issuances and stock option grants to employees |
| Finally, as a result of the anti-dilution provisions of the warrants described above, we may be obligated to register with the SEC additional shares of common stock issuable to the warrant holders for public resale |
| We may have liability for indemnification claims arising from the sale of our Web Inspector ^^® , Message Inspector ^^® , and Dr |
| We disposed of our Web Inspector and Message Inspector product lines in March 2005 and our Dr |
| Chart product line in September 2005 |
| In selling those products, we agreed to provide customary indemnification to the purchasers of those businesses for breaches of representations and warranties, covenants, and other specified matters |
| Indemnification claims could be asserted against us with respect to these matters |
| The Company has evaluated these indemnifications and determined that no accrual is currently necessary |
| We may encounter other risks |
| We may encounter other unanticipated risks and uncertainties in the markets we serve or in developing new services, and we cannot give assurance that we will be successful in responding to any unanticipated risks or uncertainties |
| There are no assurances that we will be successful or that we will not encounter other, and even unanticipated, risks |
| We discuss other operating, financial or legal risks or uncertainties in our periodic filings with the SEC We are, of course, also subject to general economic risks |
| NOTE ON FORWARD-LOOKING STATEMENTS AND RISK FACTORS This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Exchange Act |
| All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: any projections of future business, market share, earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing |
| Forward-looking statements may include the words “may,” “will,” “predict,” “project,” “forecast,” “plan,” “should,” “could,” “goal,” “estimate,” “intend,” “continue,” “believe,” “expect,” “outlook,” “anticipate,” “hope,” and other similar expressions |
| Such forward-looking statements may be contained in the “Risk Factors” section above, and the “Management’s Discussion and Analysis” below, among other places |
| Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements |
| Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this document |
| We do not intend, and undertake no obligation, to update any forward-looking statement |