320333--2/21/2006--HANOVER_DIRECT

related topics

{control, financial, internal}

{customer, product, revenue}

{stock, price, share}

{personnel, key, retain}

{system, service, information}

{financial, litigation, operation}

{competitive, industry, competition}

{product, market, service}

{provision, law, control}

{debt, indebtedness, cash}

{capital, credit, financial}

Factors That May Affect Future Results. We have experienced several years of operating losses. We are dependent on having sufficient financing to meet our requirements. The Restatement, the delay in filing financial statements and the commencement of an informal SEC inquiry have adversely affected us and may continue to do so in the future. There is limited liquidity in our shares of Common Stock. There can be no assurance that we will be able to successfully remedy material weaknesses in our internal controls. Our success depends on our ability to publish the optimal number of catalogs to the correct target customer with merchandise that our target customers will purchase. Our catalogs are in highly competitive markets. We must effectively manage our inventories and control our product fulfillment costs We may have difficulty sourcing our products, especially those sourced overseas. Our success is dependent on the performance of our vendors and service providers. Our business is subject to a number of external costs that we are unable to control. We have a new management team that is critical to our success. We are dependent on the continued growth of Internet sales. We have a majority shareholder who controls the Board and is also a secured lender. Our Series C Preferred Stock begins to accrue dividends in 2006 and is subject to mandatory redemption in 2009. We have not fully assessed the effectiveness of our internal controls over financial reporting. If we fail to comply in a timely manner with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements and cause a default under the Company s credit facilities, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock. We receive a material portion of our operating profits from our sale of third party membership services and derive a material portion of our revenues by providing fulfillment services to third parties.

Full 10-K form ▸

320333--2/21/2006--HANOVER_DIRECT_INC