1131096--3/2/2009--ATHENAHEALTH

related topics

{system, service, information}

{financial, litigation, operation}

{acquisition, growth, future}

{product, market, service}

{stock, price, share}

{property, intellectual, protect}

{stock, price, operating}

{regulation, government, change}

{regulation, change, law}

{customer, product, revenue}

{provision, law, control}

{competitive, industry, competition}

{control, financial, internal}

{debt, indebtedness, cash}

{personnel, key, retain}

{condition, economic, financial}

{tax, income, asset}

{product, candidate, development}

{operation, international, foreign}

We have incurred significant operating losses in the past and may not remain profitable in the future. We operate in a highly competitive industry, and if we are not able to compete effectively, our business and operating results will be harmed. The market for our services is immature and volatile, and if it does not develop or if it develops more slowly than we expect, the growth of our business will be harmed. If we do not continue to innovate and provide services that are useful to users, we may not remain competitive, and our revenues and operating results could suffer. As a result of our variable sales and implementation cycles, we may be unable to recognize revenue to offset expenditures, which could result in fluctuations in our quarterly results of operations or otherwise harm our future operating results. If the revenue of our clients decreases, our revenue will decrease. We may not see the benefits of government programs initiated to counter the effects of the current economic situation. If participants in our channel marketing and sales lead programs do not maintain appropriate relationships with current and potential clients, our sales accomplished with their help or data may be unwound and our payments to them may be deemed improper. Failure to manage our rapid growth effectively could increase our expenses, decrease our revenue, and prevent us from implementing our business strategy. We depend upon a third-party service provider for important processing functions. If this third-party provider does not fulfill its contractual obligations or chooses to discontinue its services, our business and operations could be disrupted and our operating results would be harmed. Various risks could interrupt international operations, exposing us to significant costs. Because competition for our target employees is intense, we may not be able to attract and retain the highly skilled employees we need to support our planned growth. If we acquire companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our operating results and the value of our common stock. If we are required to collect sales and use taxes on the services we sell in additional jurisdictions, we may be subject to liability for past sales, and our future sales may decrease. We may be unable to adequately protect, and we may incur significant costs in enforcing, our intellectual property and other proprietary rights. We may be sued by third parties for alleged infringement of their proprietary rights. We are bound by exclusivity provisions that restrict our ability to enter into certain sales and marketing relationships in order to market and sell our services. We may require additional capital to support business growth, and this capital might not be available. Our loan and capital lease agreements contain operating and financial covenants that may restrict our business and financing activities. We have entered into a derivative contract with a financial counterparty, the effectiveness of which is dependent on the continued viability of this financial counterparty, and its nonperformance could harm our financial condition. We may incur additional costs as a result of continuing to operate as a public company, and our management may be required to devote substantial time to new compliance initiatives. Current and future litigation against us could be costly and time-consuming to defend. RISKS RELATED TO OUR SERVICE OFFERINGS Our proprietary software or our services may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business and operating results. If our security measures are breached or fail, and unauthorized access is obtained to a client s data, our services may be perceived as not being secure, clients may curtail or stop using our services, and we may incur significant liabilities. Failure by our clients to obtain proper permissions and waivers may result in claims against us or may limit or prevent our use of data, which could harm our business. Various events could interrupt clients access to athenaNet, exposing us to significant costs. Interruptions or delays in service from our third-party data-hosting facilities could impair the delivery of our services and harm our business. We rely on Internet infrastructure, bandwidth providers, data center providers, other third parties, and our own systems for providing services to our users, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation and negatively impact our relationships with users, adversely affecting our brand and our business. We rely on third-party computer hardware and software that may be difficult to replace or that could cause errors or failures of our services, which could damage our reputation, harm our ability to attract and maintain clients, and decrease our revenue. We are subject to the effect of payer and provider conduct that we cannot control and that could damage our reputation with clients and result in liability claims that increase our expenses. If our services fail to provide accurate and timely information, or if our content or any other element of any of our services is associated with faulty clinical decisions or treatment, we could have liability to clients, clinicians, or patients, which could adversely affect our results of operations. We may be liable for use of incorrect or incomplete data that we provide, which could harm our business, financial condition, and results of operations. Government regulation of healthcare creates risks and challenges with respect to our compliance efforts and our business strategies. Potential regulatory requirements placed on our software, services, and content could impose increased costs on us, delay or prevent our introduction of new services types, and impair the function or value of our existing service types. Potential additional regulation of the disclosure of health information outside the United States may adversely affect our operations and may increase our costs. Errors or illegal activity on the part of our clients may result in claims against us. Our services present the potential for embezzlement, identity theft, or other similar illegal behavior by our employees or subcontractors with respect to third parties. Potential subsidy of services similar to ours may reduce client demand. RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK An active, liquid, and orderly market for our common stock may not be sustained. If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline. A limited number of stockholders have the ability to influence the outcome of director elections and other matters requiring stockholder approval. Actual or potential sales of our stock by our employees, including members of our senior management team, pursuant to pre-arranged stock trading plans could cause our stock price to fall or prevent it from increasing for numerous reasons, and actual or potential sales by such persons could be viewed negatively by other investors. Provisions in our certificate of incorporation and by-laws or Delaware law might discourage, delay, or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Full 10-K form ▸

1131096--3/2/2009--ATHENAHEALTH_INC