828747--9/22/2006--COLLEGIATE_PACIFIC

related topics

{debt, indebtedness, cash}

{stock, price, share}

{stock, price, operating}

{acquisition, growth, future}

{customer, product, revenue}

{provision, law, control}

{personnel, key, retain}

{competitive, industry, competition}

{condition, economic, financial}

{operation, natural, condition}

{product, liability, claim}

{operation, international, foreign}

{tax, income, asset}

Our strategic plan, involving growth through the acquisition of other companies, may not succeed. We may be unable to make additional acquisitions on attractive terms or successfully integrate them into our operations. Our success depends on our ability to manage our growth. We face intense competition and potential competition from companies with greater resources and our inability to compete effectively with these companies could harm our business. We are dependent on competitive pricing from our suppliers. The weak financial conditions of some of our customers may adversely affect our business. Our financial results vary from quarter to quarter, which could hurt our business and the market price of our stock. Seasonality of our business may adversely affect our net sales and operating income. We depend on key personnel for our future success. We depend on international and domestic suppliers. We depend on a growing number of domestic suppliers for our finished goods. We depend on third-party carriers. We may be subject to product liability claims if people or property is harmed by the products we sell. We have a material amount of goodwill and may be required to recognize future intangible impairment charges. Acts of war or terrorism may have an adverse effect on our business. Risks Related to our Corporate Structure and Stock Our stock price could be subject to significant volatility. A large number of our outstanding shares and shares to be issued upon exercise of our outstanding options may be sold into the market in the future, which could cause the market price of our common stock to drop significantly, even if our business is doing well. Three principal stockholders own a significant amount of our outstanding common stock. Rights of our stockholders may be negatively affected if we issue any of the shares of preferred stock, which our Board of Directors has authority to issue. Risks Related to the Senior Subordinated Notes Due 2009 We significantly increased our leverage because of the sale of the notes. The notes are subordinated and there are no financial covenants in the indenture. We may be unable to repay, repurchase or redeem the notes. Provisions of the notes could discourage an acquisition of us by a third party. The make whole premium on the notes tendered for repurchase upon a fundamental change may not adequately compensate the holders for the lost option time value of notes. A market may not develop for the notes. Conversion of the notes or issuance of additional securities convertible into or exercisable for shares of our common stock could dilute the ownership of existing stockholders.

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828747--9/22/2006--COLLEGIATE_PACIFIC_INC