1077926--3/31/2006--AUDIBLE

related topics

{system, service, information}

{product, market, service}

{property, intellectual, protect}

{personnel, key, retain}

{control, financial, internal}

{operation, international, foreign}

{operation, natural, condition}

{gas, price, oil}

{stock, price, share}

{provision, law, control}

{competitive, industry, competition}

{cost, regulation, environmental}

{customer, product, revenue}

We have a limited operating history with which you can evaluate our business and our future prospects. We have limited revenue, we have a history of losses, we may not be profitable in the future, and we may need additional financing, which may not be available to us. We have identified material weaknesses in internal control over financial reporting which may adversely affect our operations. If too many AudibleListener members refrain from using their audio credits on a timely basis, there will be a delay in recognizing the revenue until the credits are either used or expire. If our efforts to attract new AudibleListeners are not successful, our revenues will be affected adversely. If we experience excessive rates of churn, our revenues and business will be harmed. The market for our service is uncertain and consumers may not be willing to use the Internet to purchase spoken audio content, which could harm our business. We may not be able to license or produce sufficiently compelling audio content to attract and retain customers and grow our revenue. Manufacturers of electronic devices may not manufacture, make available, or sell a sufficient number of products suitable for our service, which would limit our revenue growth. We must establish, maintain, and strengthen our brand names, trademarks, and service marks in order to acquire customers and generate revenue, or our business will be harmed. Increasing availability of digital audio technologies may increase competition and reduce our revenue, market share, and profitability. Our industry is highly competitive and we cannot assure you that we will be able to compete effectively, which would harm our business. Capacity constraints and failures, delays, or overloads could interrupt our service and reduce the attractiveness of our service to existing or potential customers. We could be liable for substantial damages if there is unauthorized duplication of the content we sell, which would adversely affect our business. We do not have a comprehensive disaster recovery plan and we have limited back-up systems, and a disaster could severely damage our operations and could result in loss of customers. Problems associated with the Internet could discourage use of Internet-based services like ours and adversely affect our business. The loss of key employees could jeopardize our growth prospects. Our common stock has been relatively thinly traded and we cannot predict the extent to which a trading market will develop, which may adversely affect our share price. Our inability to hire new employees may hurt our growth prospects. We may not be able to protect our intellectual property, which could jeopardize our competitive position. Other companies may claim that we infringe their copyrights or patents, which could subject us to substantial damages. We could be sued for content that we distribute over the Internet, which could subject us to substantial damages. Future government regulations may increase our cost of doing business on the Internet, which could adversely affect our cost structure. We may become subject to sales and other taxes for direct sales over the Internet, which could affect our revenue growth. A variety of risks could adversely affect our international activities. Our charter and bylaws could discourage an acquisition of our company that would benefit our stockholders.

Full 10-K form ▸

1077926--3/31/2006--AUDIBLE_INC