1089542--3/23/2009--PharmaNet_Development_Group

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Lawsuits have been filed against us, the PDGI Board, JLL and Purchaser arising out of our proposed acquisition by JLL, and if the proposed settlement of those lawsuits does not receive final judicial approval, they may result in additional costs and distraction. Risks Related To Our Business We may not have sufficient funds to repurchase our outstanding convertible notes that may be put to us in August 2009, or to pay the principal due upon conversion of outstanding convertible notes or to repurchase our outstanding notes on other repurchase dates. We may be adversely affected by the current economic environment. Our indebtedness may impact our financial condition or results of operations, and the terms of our outstanding indebtedness may limit our activities. We currently do not have a credit facility. We are currently subject to an ongoing SEC investigation. Depending upon the outcome, this investigation could result in possible litigation which may lead to civil and/ or equitable relief, including payment of a fine and civil monetary penalties and a possible restatement of our prior financial statements. Our recently settled securities class action litigation, unrelated to the JLL transaction, exceeded our directors and officers, or D O, liability insurance coverage limits, and there is limited additional coverage for our recently settled derivative actions and associated legal fees. As a public company, we face risks related to class action lawsuits, including threatened litigation. We are subject to on-going tax audits, which may exceed our tax reserves. If we do not continue to generate a large number of new client contracts, or if our clients cancel or defer contracts, our profitability may be adversely affected. Our backlog may not be indicative of future results. We may bear financial risk if we under-price our contracts or overrun cost estimates, and our financial results can also be adversely affected by failure to receive approval for change orders and by delays in documenting change orders. A significant portion of our growth historically has come from acquisitions, and we may make more acquisitions in the future as part of our growth strategy. This growth strategy subjects us to numerous risks. Our business is subject to international economic, political and other risks that could negatively affect our results of operations or financial position. We are subject to changes in outsourcing trends and regulatory requirements affecting the branded pharmaceutical, biotechnology, generic drug and medical device industries which could adversely affect our operating results. If branded pharmaceutical, biotechnology, generic drug or medical device companies reduce their expenditures, our future revenue and profitability may be reduced. Actions or inspections by regulatory authorities may cause clients not to award future contracts to us or to cancel existing contracts, which may have a material and adverse effect on our results of operations. We might lose business opportunities as a result of healthcare reform. At any given time, one or a limited number of clients may account for a large percentage of our revenues, which means that we could face a greater risk of loss of revenues if we lose a major client. We may incur significant taxes to repatriate funds. Our operating results fluctuate from period to period. Our substantial non-U.S. operations expose us to currency risks. We could be adversely affected by tax law changes in Canada or in other foreign jurisdictions. Governmental authorities may question our inter-company transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business. We may lack the resources needed to compete effectively with larger competitors. If we do not continue to develop new assay methods for our analytical applications, or if our current assay methods are incorrect, we may be unable to compete with other entities offering bioanalytical laboratory services. We risk potential liability when conducting clinical trials, which could cost us large amounts of money. We face a risk of liability from our handling and disposal of medical wastes, which could cause us to incur significant costs or otherwise adversely affect our business. Failure to comply with applicable governmental regulations could harm our operating results and reputation. If we lose the services of our key personnel or are unable to attract qualified staff, our business could be adversely affected. Our business depends on the continued effectiveness and availability of our information technology infrastructure, and failures of this infrastructure could harm our operations. We self-insure our employees healthcare costs in the U.S., which exposes us to losses. If we are unable to attract suitable investigators and volunteers for our clinical trials, our clinical development business might suffer. If we incur further instances of breakdowns in our internal controls, current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the price of our common stock. We remain subject to risks and uncertainties associated with our discontinued Miami operations that could further adversely impact our company. Risks Related To Our Common Stock We may issue a substantial amount of our common stock which could cause dilution to current investors, put pressure on earnings per share and otherwise adversely affect our stock price. Our stock price can be very volatile, and stockholders investments could suffer a decline in value. Failure to satisfy NASDAQ Stock Market maintenance criteria could negatively impact the liquidity and market price of our common stock. Our common stock may not continue to qualify for exemption from the penny stock restrictions, which may make it more difficult for you to sell your shares. Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of us, which may be beneficial to our stockholders, more difficult, which could depress our stock price.

Full 10-K form ▸

1089542--3/23/2009--PharmaNet_Development_Group_Inc