885074--9/13/2007--AUTHENTIDATE_HOLDING

related topics

{product, market, service}

{system, service, information}

{stock, price, share}

{tax, income, asset}

{personnel, key, retain}

{property, intellectual, protect}

{regulation, change, law}

{customer, product, revenue}

{financial, litigation, operation}

{cost, operation, labor}

{stock, price, operating}

Risks Related to Our Business Failure to increase our revenue and keep our expenses consistent with revenues could prevent us from achieving and maintaining profitability. Our capital requirements are significant and we have historically financed our operations through private placements of securities. If the United States Postal Service cancels our new license agreement, we may need to incur additional costs in our efforts to successfully commercialize this technology. We depend on growth in the software as a service market, and lack of growth or contraction in this market could materially adversely affect our sales and financial condition. We have been named as a party to several class action and derivative action lawsuits, and we may be named in additional litigation, all of which could require significant management time and attention and result in significant legal expenses. An unfavorable outcome in one or more of these lawsuits could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our success is dependent on the performance of our management and the cooperation, performance and retention of our executive officers and key employees. If we lose key personnel or fail to integrate replacement personnel successfully, our ability to manage our business could be impaired. Our reported financial results could be adversely affected by changes in financial accounting standards or by the application of existing or future accounting standards to our business as it evolves. For example, accounting for employee stock options under FAS 123R has had a material impact on our consolidated results of operations and earnings per share. If the carrying value of our long-lived assets is not recoverable, an impairment loss must be recognized which would adversely affect our financial results. We have incurred significant additional costs concerning our international operations and may incur additional costs in the future. Developing and implementing new or updated software and services may take longer and cost more than expected. New or updated software and services will not become profitable unless they achieve sufficient levels of market acceptance, which may require significant efforts and costs. We do not have patents on all the technology we use, which could harm our competitive position. Because we derive a majority of our revenues from a few software and service offerings, any decline in demand for these offerings could severely harm our ability to generate revenues. Some of our software and service offerings have long and unpredictable sales cycles, which may impact our quarterly operating results. The failure to properly manage our growth could cause our business to lose money. Our software and web-based services and web site may be subject to intentional disruption. Performance problems with our systems or system failures could cause us to lose business or incur liabilities. Our software and service offerings may not be accepted by the market, which would seriously harm our business. If we cannot continuously enhance our software and web-based service offerings in response to rapid changes in the market, our business will be harmed. If our software and web-based service offerings are not competitive, our business will suffer. Our software and web-based services are complex and are operated in a wide variety of computer configurations, which could result in errors or product failures. We have a significant amount of net operating loss carryforwards which we may not be able to utilize in certain circumstances. Risks Related to Our Common Stock Our stock price is volatile and could decline. Since we have not paid dividends on our common stock, you may not receive income from this investment. The exercise of our outstanding options and warrants, or conversion of our outstanding shares of Series B Preferred Stock, may depress our stock price.

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885074--9/13/2007--AUTHENTIDATE_HOLDING_CORP