1024441--4/19/2006--FACTORY_CARD_OUTLET

related topics

{cost, operation, labor}

{stock, price, share}

{acquisition, growth, future}

{product, market, service}

{condition, economic, financial}

{system, service, information}

{personnel, key, retain}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{investment, property, distribution}

{provision, law, control}

{stock, price, operating}

{financial, litigation, operation}

Intense competition in our industry could prevent us from increasing or sustaining our revenues and prevent us from achieving or sustaining profitability. Customers requirements are likely to evolve, and we will not retain customers or attract new customers if we do not anticipate and meet specific customer requirements and changes in merchandising trends. A downturn in the economy may affect consumer purchases of discretionary items, which could reduce our sales. Our business depends on continued good relations with our suppliers. We face new competitive threats as a result of Amscan s acquisition of Party City Corporation. We may need to raise additional capital to fund our operations and support our long-term growth strategy. We are substantially leveraged and our financing facility contains covenants that could adversely affect our business. The seasonal nature of our business could adversely impact our operations. We may not be able to profitably grow our business. We may not be able to effectively execute our long-term growth strategy. If we decide to change the location of the headquarters and distribution center when the lease expires at February 2008, we may experience distractions that could negatively impact operations. If we do not comply with the numerous laws and regulations that govern our business, our business could be harmed. If we are unable to hire additional qualified personnel or retain existing personnel, we may not be able to operate our business successfully. Higher administrative expenses could adversely affect our business and operations. Interruption or obsolescence of our management information systems could have a negative effect on our competitive ability and our business generally. Our warrants and stock options may have significant dilutive effects on holders of Common Stock generally. Certain provisions of our charter may prevent or delay a change of control of the Company. Adverse publicity could adversely affect our business. Our stock price may be volatile and could decline. We do not anticipate paying dividends.

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1024441--4/19/2006--FACTORY_CARD_OUTLET_CORP