1014343--3/31/2008--Organic_To_Go_Food

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Risks Related to Our Company Our limited operating history makes it difficult for investors to evaluate our business and the risks and uncertainties frequently encountered by new companies. If we fail to open new Retail Caf s and expand our Delivery/Casual Catering Services and Wholesale operations we may not be able to achieve profitability. In order to support our future expansion and growth plans we may need additional financing, which may not be available on satisfactory terms or at all. Our reliance on our suppliers and distributors subjects us to a number of risks, including possible delays or interruptions in supplies, diminished direct control over quality and a potential lack of adequate raw material capacity. We could face labor shortages that could slow our growth. Our expansion into new markets may present increased risks due to our unfamiliarity with the area. Our expansion may strain our administrative, financial and informational infrastructure, which could slow our development. All of our operations are currently located in Washington and California. As a result, we are highly sensitive to negative occurrences in those two states. Our operation as a public company subjects us to evolving corporate governance and public disclosure regulations that result in significant expenses and liability exposures. If we fail to maintain the adequacy of our internal controls, our ability to provide accurate financial statements and comply with the requirements of the Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price to decrease substantially. We depend on our key personnel, and the loss of their services may adversely affect our business. Our past activities prior to our merger with Organic Holding Company, Inc., may lead to future liability for the combined companies. Risks Related to Our Industry We operate in a highly competitive industry where many of our competitors are larger and have more resources than we do. Our operations are susceptible to changes in food and supply costs, which could adversely affect our margins. Changes in consumer preferences or discretionary consumer spending could negatively impact our results. Our industry is affected by litigation and publicity concerning food quality, health and other issues which can cause customers to avoid our caf s and result in liabilities. Our operations are subject to governmental regulation associated with the food service industry, the operation and enforcement of which may restrict our ability to carry on our business. Risks Relating to Ownership of Our Common Stock The market price of our common stock may be highly volatile, which may result in a significant decline in the value of our common stock. We may not be able to list our common stock on a securities exchange, which may affect the liquidity of our common stock. We have a substantial number of convertible securities outstanding, which if fully exercised could require us to issue a significant number of shares of our common stock and result in substantial dilution to existing stockholders. A large number of additional shares may be sold into the public market in the near future, which may cause the market price of our common stock to decline significantly, even if our business is doing well. We have not and do not intend to pay any dividends. As a result, you may only be able to obtain a return on investment in our common stock if its value increases.

Full 10-K form ▸

1014343--3/31/2008--Organic_To_Go_Food_CORP