1078383--3/23/2009--IPARTY

related topics

{stock, price, share}

{system, service, information}

{condition, economic, financial}

{debt, indebtedness, cash}

{investment, property, distribution}

{personnel, key, retain}

{regulation, change, law}

{stock, price, operating}

{competitive, industry, competition}

{acquisition, growth, future}

Our success depends on economic and other external factors, particularly in the New England region and during the Halloween season, that affect consumer decisions about whether and when to purchase party goods and supplies. The U.S. consumer has been experiencing rising unemployment, increasing mortgage foreclosures, higher food and gas prices, credit market turmoil, and a significant decline in the stock market. This has contributed to a loss in consumer confidence and a decline in consumer spending that has had and may continue to have an impact on our business, which represents relatively discretionary spending. Our failure to generate sufficient cash to meet our liquidity needs may affect our ability to service our indebtedness and grow our business. Our business may be adversely affected by the actions of and risks associated with our third-party vendors. We face intense competition from many sources. We face new competitive threats as a result of consolidation in our industry following Amscan Holdings, Inc. s acquisitions of Party City Corporation and Party America. A major failure of our information systems would harm our business. Our quarterly operating results are subject to significant fluctuation. Our failure to attract, retain, and motivate qualified personnel would adversely affect our business. Risks associated with recent and possible future new store openings could adversely affect our business. Our ownership structure includes large investors who own preferred stock and whose interests and rights in our company may differ in important respects from those of our common stock investors. Shares that may be resold pursuant to our prospectus on Form S-3 by the selling stockholder named therein declared effective by the SEC on April 4, 2007, or eligible for sale in the future could negatively affect our stock price. Our common stock is thinly traded, may fluctuate based on relatively small levels of trading activity, and may be adversely affected by our capital structure, which makes it more difficult for investors to value our business. Compliance with changing regulation of corporate governance, public disclosure, and accounting standards may result in additional expenses and risks. Our stock is listed on the NYSE Alternext US and subject to a number of continued listing requirements, the failure to comply with which may result in the delisting of our common stock. Product liability may adversely impact our operations and merchandise offerings. A privacy breach could adversely affect the Company s business.

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1078383--3/23/2009--IPARTY_CORP