882154--3/13/2007--METRETEK_TECHNOLOGIES

related topics

{regulation, government, change}

{customer, product, revenue}

{product, market, service}

{acquisition, growth, future}

{operation, natural, condition}

{stock, price, share}

{provision, law, control}

{property, intellectual, protect}

{condition, economic, financial}

{financial, litigation, operation}

{personnel, key, retain}

Our recent growth and operating results have resulted from significant purchase commitments from one customer, and if we suffer any cancellation, reduction or delay in these large purchase commitments from this customer or if we do not receive additional significant purchase commitments in the future, our business and operating results could be materially and adversely affected. We do not have long-term or recurring commitments with most of our customers and may be unable to retain existing customers, attract new customers or replace departing customers with new customers that can provide comparable revenues. Price increases in some of the key components in our products could materially and adversely affect our operating results and cash flows. We depend on sole source and limited source suppliers for some of the key components and materials in our products, which makes us susceptible to supply shortages or price increases that could materially and adversely affect our business. PowerSecure s business is subject to the risk of changes in tariff structures, which changes could materially and adversely affect PowerSecure s business as well as our financial condition and results of operations. PowerSecure s business is subject to the risk of changes in environmental requirements, which changes could materially and adversely affect PowerSecure s business as well as our financial condition and results of operations. Some of PowerSecure s long-term turn-key contracts subject us to risks. Severe, adverse weather conditions, such as hurricanes, can cause a severe disruption in the business of Southern Flow by significantly reducing the short and mid-term demand requirements of its customers. Because some of our business and product offerings have limited histories and their business strategies are still being developed and are unproven, limited information is available to evaluate their future prospects. Changes in our product mix could materially and adversely affect our business. We may not be able to maintain our recent levels of growth and profitability. We are subject to lawsuits, claims and proceedings from time to time, and in the future we could become subject to new lawsuits, and if any of those lawsuits are material and are successfully prosecuted against us, our business, financial condition and results of operations could be materially and adversely affected. We extend product warranties which could adversely affect our operating results Because we are dependent upon the utility industry for a significant portion of our revenue, continued reductions of purchases of our products and services by utilities caused by regulatory reform may materially and adversely affect our business. Many of our products and services experience long and variable sales cycles, which could have a negative impact on our results of operations for any given quarter or year. If we are unable to develop new and enhanced products and services that achieve market acceptance in a timely manner, our operating results and competitive position could be harmed. Rapid technological changes may prevent us from remaining current with our technological resources and maintaining competitive product and service offerings. If we are unable to continue to attract and retain key personnel, our business will be materially and adversely affected. We face intense competition in the markets for our products, services and technology, and if we cannot successfully compete in those markets, our business will be materially and adversely affected. Downturns in general economic and market conditions could materially and adversely affect our business. If we fail to effectively manage our future growth, our ability to market and sell our products and services and to provide quality service to our customers may be adversely affected. Our management of MM 1995-2, a private program, presents risks to us. We may be unable to acquire other businesses, technology or companies or engage in other strategic transactions, or to successfully realize the benefits or avoid the difficulties of any such strategic transactions. If we fail to adequately protect our intellectual property rights, we could lose important proprietary technology, which could materially and adversely affect our business. If we face claims of intellectual property infringement by third parties, we could encounter expensive litigation, be liable for significant damages or incur restrictions on our ability to sell our products and services. We face some risks that are inherent in natural gas and electrical operations. We could become subject to burdensome government regulation that affects our ability to offer our products and services or that affects demand for our products and services. Our business could suffer if we cannot maintain and expand our current strategic alliances and develop new alliances. Terrorist activities and other international hostilities, including the expanding hostilities in the Middle East, could adversely affect our business and our results of operations. Risks Related to the Ownership of our Shares Our charter documents, as well as Delaware law, contain anti-takeover provisions that could discourage or prevent a third-party acquisition of our common stock, even if an acquisition would be beneficial to our stockholders. Our stockholder rights agreement makes effecting a change of control more difficult, which may discourage offers for shares of our common stock. We have not in the past and we do not currently intend to pay dividends on our common stock, and even if we change our intentions our ability to pay dividends is limited. The market for our common stock is volatile and subject to extreme trading price and volume fluctuations, which could adversely affect an investment in our common stock.

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882154--3/13/2007--METRETEK_TECHNOLOGIES_INC