1065860--3/21/2006--ELECTRIC_CITY

related topics

{stock, price, share}

{product, market, service}

{acquisition, growth, future}

{property, intellectual, protect}

{customer, product, revenue}

{system, service, information}

{stock, price, operating}

{personnel, key, retain}

{interest, director, officer}

{competitive, industry, competition}

{condition, economic, financial}

{financial, litigation, operation}

Our independent registered public accountants have issued a going concern opinion raising doubt about our financial viability. Failure to replace significant customer could materially and adversely affect our results of operations and financial condition. A decrease in electric retail rates could lessen demand for our products. We have a license to use certain patents and our ability to sell our products may be adversely impacted if the license expires or is terminated. If we are not able to protect our intellectual property rights against infringement, or if others obtain intellectual property rights relating to energy management technology, we could lose our competitive advantage in the energy management market. David Asplund, our new Chief Executive Officer, has limited experience operating a Company such as ours and no direct industry experience. If we are unable to achieve or manage our growth, it will adversely affect our business, the quality of our products and our ability to attract and retain key personnel. If our management fails to properly identify companies to acquire and to effectively negotiate the terms of these acquisition transactions, our growth may be impaired. Our growth may be impaired and our current business may suffer if we do not successfully address risks associated with acquisitions. If our products do not achieve or sustain market acceptance, our ability to compete will be adversely affected. Failure to meet customers expectations or deliver expected technical performance could result in losses and negative publicity. If sufficient additional funding is not available to us, the commercialization of our products and our ability to grow is likely to be hindered. Raising additional capital or consummation of additional acquisitions through the issuance of equity or equity-linked securities could dilute your ownership interest in us. Failure to effectively market our energy management products could impair our ability to sell significant quantities of these products. If we do not successfully compete with others in the very competitive energy management market, we may not achieve profitability. Product liability claims could result in losses and could divert our management s time and resources. Our current internal manufacturing capacity is limited and if demand for our products increases significantly and we are unable to increase our capacity quickly and efficiently our business could suffer. Risks Related to Our Common Stock Due to the current market price of our Common Stock, in conjunction with the fact that we are a relatively small company with a history of operating losses, the future trading market for our stock may not be active on a consistent basis, which may make it difficult for you to sell your shares. The need to raise additional capital will most likely be dilutive to our current stockholders and could result in new investors receiving rights that are superior to those of existing stockholders. Due to the concentration of holdings of our stock, four investors may be able to control matters requiring common stockholder approval or could cause our stock price to decline through future sales because they beneficially own a large percentage of our Common Stock.

Full 10-K form ▸

1065860--3/21/2006--ELECTRIC_CITY_CORP