1133324--6/1/2007--INPHONIC

related topics

{product, market, service}

{system, service, information}

{control, financial, internal}

{stock, price, operating}

{acquisition, growth, future}

{customer, product, revenue}

{capital, credit, financial}

{property, intellectual, protect}

{tax, income, asset}

{financial, litigation, operation}

{personnel, key, retain}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{provision, law, control}

{regulation, change, law}

Risks Related to Our Business We have historically incurred significant losses and may not be profitable in the future. We expect our financial results to fluctuate, which may lead to volatility in our stock price. If we are unable to maintain strong relationships with wireless carriers, our business would be adversely affected. The restatements of our consolidated financial statements may subject us to actions or additional litigation which could have an adverse effect on our business, results of operations, financial condition and liquidity. Certain consequences of our late filing of our Annual Report on Form 10-K for the 2006 fiscal year and our Quarterly Report in Form 10-Q for the fiscal quarter-ended March 31, 2007 under the federal securities laws may adversely affect our financial condition and results of operations, including our ability to raise capital. Because of the delayed filing of our periodic reports, we face delisting from NASDAQ which would adversely affect the trading price of our common stock. Our internal control and procedures for financial reporting may not ensure that our public filings include timely and reliable financial information. Ongoing consolidation among wireless carriers could result in revenue and pricing pressure and adversely impact our results of operations. A failure to continue to improve our customer experience could adversely affect our operating results. In the event we do not meet our financial or affirmative covenants under our term loan, we cannot ensure the receipt of a waiver of or extension of time to comply with our covenants A decrease in the growth rate of our wireless service activations could adversely affect our operating results. We may require additional cash to upgrade and expand our operations, which may not be available on terms acceptable to us, or at all. The market for our services is becoming increasingly competitive with the emergence of additional retail and online distributors of wireless services and devices, which could adversely affect our business. Increasing costs of online advertising and or misjudgments in making advance commitments to purchase online advertising could have an adverse affect on our financial results. We depend on Internet search engines to attract a substantial portion of the customers who use our websites, and losing these customers would adversely affect our revenue and financial results. Any unanticipated increase in our rate of deactivation of active accounts could result in a decrease in our revenue. If we do not continue to attract customers through our existing online marketing programs, our revenue may be affected adversely and our marketing expenses may increase. Announcements and delays relating to the release of new wireless devices could adversely affect our revenue. An interruption in the supply of wireless devices could hinder our ability to fulfill customer orders and cause a decline in our revenue. If our distribution operations are interrupted for any significant period of time, our business and results of operations would be substantially harmed. Interruptions or delays in service from third parties could impair our service offerings. We have grown rapidly, and we must manage additional growth and the demands on our resources and personnel in order to be successful. If we do not adequately protect our intellectual property, others could copy aspects of our services and operational technology, which could force us to become involved in expensive and time-consuming litigation. If we are unable to maintain the integration of our services with the wireless carriers existing credit and activation systems, we will be unable to process orders in a timely manner and our business may suffer. Our failure to protect our customers confidential information and our network against security breaches could damage our reputation and substantially harm our business and results of operations. If the technology we use infringes upon the proprietary rights of others, we may be forced to seek expensive licenses, reengineer our services, engage in expensive and time-consuming litigation or stop selling our services. If we are unable to attract and retain management and key personnel, we may not be able to implement our business plan. Our failure to identify and integrate successfully any businesses or technologies that we acquire may increase our costs and reduce our revenue. Vendors in India support our operating activities. Any difficulties experienced with these services could result in additional expense or loss of customers and revenue. Risks Related to Our Industry If the online market for wireless services and devices does not gain widespread acceptance, our business would suffer. We may be exposed to risks associated with credit card fraud and identity theft that could cause us to incur unexpected expenditures and loss of revenue. Our net sales may be negatively affected if we are required to charge taxes on purchases. Government regulation of the Internet and e-commerce is evolving and unfavorable changes could substantially harm our business and results of operations. The wireless services industry may experience a decline in new subscriber growth rate. We may be unable to effectively market our wireless services if wireless carriers do not deliver acceptable wireless networks and service plans, which would cause our revenue to decline. Use of wireless devices may pose health risks or cause injuries, which could increase our exposure to litigation and result in increased operating expenses. The market price of our common stock has been and will likely continue to be subject to fluctuation. If securities or industry analysts do not continue to publish research or reports about our business, our stock price and trading volume could decline. Anti-takeover provisions and other restrictions in our certificate of incorporation, bylaws and applicable law might discourage, delay or prevent a change of control of our company or changes in our management that our stockholders might find desirable. Our ability to utilize net operating loss carryforwards to offset future taxable income may be limited.

Full 10-K form ▸

1133324--6/1/2007--INPHONIC_INC