We are a Health & Wellness Holding Company (HWHC) vertically integrating Nutraceutical companies from farm to market.
Gravitas Infinitum is a Health & Wellness Holding Company (HWHC), vertically integrating health and wellness companies & products from farm to market.
Focused on Nutraceutical products at the core, we integrate growing of known crop varieties rich in extractable proteins, lipids, and fibers.
We process them into various isolated and refined products which are blended and mixed into 100's of nutraceutical brands. All are sold and marketed through multiple channels globally.
Capital Raise startedJune, 2019
Private Placement Memorandum and business model startedJanuary, 2019
Sweet spot criteria is established and target search started, 360 companies, short-listed to 117, with 4 entered into preliminary diligenceNovember, 2018
Gravitas Infinitum is formed as a micro Berkshire Hathaway model holding company to acquire Nutraceutical Contract Manufacturing CompaniesMay, 2018
Analyzed a lack of mid-market inventory in Private Equity & Hedge fund buying. A conglomerator of micro-caps is needed.February, 2018
Thesis is established on Baby-Boomer lack of succession plans, and how they have great micro-cap companies.July, 2017
We look for companies that are 10-30 years old with accurate forecastable revenues, and costs of goods. This greatly risk reduces our business risk vs, unproven guesstimate projections that have no repeatable historical basis.
Buying existing companies allows us to assume their revenue streams which have been built over decades of organic growth. Our process is limited by our ability to finance and integrate acquisition targets.
This is the 1st tranche, we wanted to open it up to smaller investors that want a good performing alternative investment without the startup risk.
The term "Nutraceuticals" was created by combining the words "nutrition" and "pharmaceuticals." It was coined in 1989 by Dr. Stephen L. De Felice in the U.S. and refers to foods and drinks that have a scientific base, and contribute to the maintenance of everyday health.
We will vertically integrate where it makes market/revenue/earnings sense, so in some states or countries we will be involved with Growing of feed stock (we have trade-secrets here), Processing (we have trade-secrets here), Manufacturing (we have trade-secrets) Logistics, Branding, and E-Commerce.
We utilize CBD in our manufactured products, we have technologies for growing aquaponic, hydroponic hemp and marijuana, we also have proprietary industrial scale modular oil & fiber processing technologies.
From Private Placement Memorandum
25 RISK FACTORS
THIS INVESTMENT INVOLVES A DEGREE OF RISK. AN INDIVIDUAL CONTEMPLATING INVESTMENT IN THIS OFFERING SHOULD GIVE CAREFUL CONSIDERATION TO THE ELEMENTS OF THE RISK SUMMARIZED BELOW, AS WELL AS THE OTHER RISK FACTORS IDENTIFIED ELSEWHERE IN THIS PRIVATE OFFERING MEMORANDUM.
25.1 FORMATION OF THE COMPANY MAY 20, 2018.
It is therefore subject to all the risks inherent in the creation of a new company. Unforeseen expenses, complications and delays may occur with a new company.
THERE IS NO MINIMUM CAPITALIZATION REQUIRED IN THIS OFFERING. There is no minimum capitalization for this Offering This Offering is being made on a “best efforts” basis with no minimum number of Notes required to be sold. There is no assurance that all or a significant number of Notes may be sold in this Offering. As subscriptions are accepted (and any required rescission periods expire), the subscription funds will be available for use by the Company immediately. If only small portions of the Notes are placed, then the Company may not have sufficient capital to operate. There is no assurance that we could obtain additional financing or capital from any source, or that such financing or capital would be available to us on terms acceptable to us. Under such circumstances, the Company’s plans would need to be scaled down, and this would have a material adverse effect on the Company’s business.
25.2 CONTROL BY COMPANY
After completion of this Offering and before conversion of the Notes, the Company will own one hundred percent (100%) of the issued and outstanding Membership Units. Such ownership will enable the Company to continue to elect all the Managers and to control the Company’s policies and affairs. The Noteholders will not have any voting rights in the Company. If all Noteholders were to convert, at maturity and using a 6x EBITDA value, noteholders will have after 100% Note conversion 49% of the Company.
25.3 RELIANCE ON THE COMPANY MANAGEMENT
All decisions with respect to the management of the Company will be made exclusively by the Managers of the LLC. The Noteholders do not have the right or power to take part in the management of the Company. Accordingly, no person should purchase a Note unless he is willing to entrust all aspects of the management of the Company to existing Management.
25.4 LIMITED TRANSFERABILITY OF THE NOTES
The transferability of the Securities in this offering are limited, and potential investors should recognize the nature of their investment in the offering. It is not expected that there will be a public market for the Securities because there will be only a limited number of investors and restrictions of the transferability of Securities. The Securities have not been registered under the Securities Act of 1933, as amended, or qualified or registered under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently so registered or qualified or an exemption from such registration is available. The offering also contains restrictions on the transferability of the Securities. Accordingly, purchasers of Securities will be required to hold such Securities unless otherwise approved by the Company. The Company does not intend to register the Notes under the Securities Act of 1933.
25.5 IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY, WE MAY BE UNABLE TO EXECUTE OUR BUSINESS PLAN AND MAINTAIN HIGH LEVELS OF CUSTOMER SATISFACTION.
We expect to experience a period of rapid growth in our personnel and operations. In particular, we will increase our number of full-time employees from four as of the date of this offering. To an expected several hundred within the next twelve months through our multiple acquisitions. Acquisitions are a primary component of our growth strategy and, as a result, we anticipate that we will continue to experience further rapid growth in our personnel and operations in the future. Our growth has placed, and future growth will place, a significant strain on our managerial, administrative, operational, financial and other resources. To manage the expected growth of our personnel and operations, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. Failure to effectively manage our growth could result in difficulty or delays in deploying our products and services, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.
25.6 WE HAVE MADE AND EXPECT TO CONTINUE TO MAKE ACQUISITIONS A PRIMARY COMPONENT OF OUR GROWTH STRATEGY.
We may not be able to identify suitable acquisition candidates or consummate acquisitions on acceptable terms, or we may be unable to successfully integrate acquisitions, which could disrupt our operations and adversely impact our business and operating results.
A primary component of our growth strategy has been to acquire complementary businesses to grow our company. We intend to continue to pursue acquisitions of complementary technologies, products and businesses as a primary component of our growth strategy to enhance the features and functionality of our products and services, products and services, expand our customer base and provide access to new markets and increase benefits of scale. Acquisitions involve certain known and unknown risks that could cause our actual growth or operating results to differ from our expectations. For example:we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms; we may pursue international acquisitions, which inherently pose more risks than domestic acquisitions; we compete with others to acquire complementary products, technologies and businesses, which may result in decreased availability of, or increased price for, suitable acquisition candidates; we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of our potential acquisitions; we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology, product or business; and acquired technologies, products or businesses may not perform as we expect, and we may fail to realize anticipated revenue and profits.
25.7 IN ADDITION, OUR ACQUISITION STRATEGY MAY DIVERT MANAGEMENT’S ATTENTION AWAY FROM OUR EXISTING BUSINESS, RESULTING IN THE LOSS OF KEY CUSTOMERS OR EMPLOYEES, AND EXPOSE US TO UNANTICIPATED PROBLEMS OR LEGAL LIABILITIES, INCLUDING RESPONSIBILITY AS A SUCCESSOR FOR UNDISCLOSED OR CONTINGENT LIABILITIES OF ACQUIRED BUSINESSES OR ASSETS.
If we fail to conduct due diligence on our potential targets effectively, we may, for example, not identify problems at target companies or fail to recognize incompatibilities or other obstacles to successful integration. Our inability to successfully integrate future acquisitions could impede us from realizing all of the benefits of those acquisitions and could severely weaken our business operations. The integration process may disrupt our business and, if new technologies, products or businesses are not implemented effectively, may preclude the realization of the full benefits expected by us and could harm our results of operations. In addition, the overall integration of new technologies, products or businesses may result in unanticipated problems, expenses, liabilities and competitive responses. The difficulties integrating an acquisition include, among other things:issues in integrating the target company’s technologies, products or businesses with ours; incompatibility of marketing and administration methods; maintaining employee morale and retaining key employees; integrating the cultures of both companies; preserving important strategic customer relationships; consolidating corporate and administrative infrastructures and eliminating duplicative operations; and coordinating and integrating geographically separate organizations.
25.8 IN ADDITION, EVEN IF THE OPERATIONS OF AN ACQUISITION ARE INTEGRATED SUCCESSFULLY, WE MAY NOT REALIZE THE FULL BENEFITS OF THE ACQUISITION, INCLUDING THE SYNERGIES, COST SAVINGS OR GROWTH OPPORTUNITIES THAT WE EXPECT. THESE BENEFITS MAY NOT BE ACHIEVED WITHIN THE ANTICIPATED TIME FRAME, OR AT ALL.
Further, acquisitions may cause us to:issue Securities that would dilute our current unit holders’ ownership percentage; use a substantial portion of our cash resources; increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; assume liabilities for which we do not have indemnification from the former owners; further, indemnification obligations may be subject to dispute or concerns regarding the creditworthiness of the former owners; record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges; experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates; incur amortization expenses related to certain intangible assets; lose existing or potential contracts as a result of conflict of interest issues; become subject to adverse tax consequences or deferred compensation charges; incur large and immediate write-offs; or become subject to litigation.
25.9 WE DEPEND ON OUR SENIOR MANAGEMENT TEAM AND THE LOSS OF ONE OR MORE KEY PERSONNEL OR AN INABILITY TO ATTRACT AND RETAIN HIGHLY SKILLED PERSONNEL MAY IMPAIR OUR ABILITY TO GROW OUR BUSINESS.
Our success depends in part upon the continued services of our key executive officers, including Allen Witters, Dan Bryant, John Arciero, and Cassie Miller, as well as other key personnel. We do not have employment agreements with most of our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they may terminate employment with us at any time with no advance notice. The replacement of our senior management team or other key personnel likely would involve significant time and costs, and the loss of these employees may significantly delay or prevent the achievement of our business objectives.
We face intense competition for qualified individuals from numerous companies. If we fail to attract and retain suitably qualified individuals, including sales personnel, our ability to implement our business plan and develop and maintain our products and services could be adversely affected. As a result, our ability to compete would decrease, our operating results would suffer, and our revenue would decrease.
25.10 FAILURE TO MAINTAIN AND EXPAND OUR SALES ORGANIZATION MAY NEGATIVELY IMPACT OUR REVENUE GROWTH.
We plan to sell our products and services and services primarily through a direct sales organization comprised of inside sales and field sales personnel. In addition, we have an indirect sales organization, which sells to distributors and value-added resellers. Growing sales to both new and existing customers is in part dependent on our ability to maintain and expand our sales force. Identifying, recruiting and training additional sales personnel requires significant time, expense and attention. It can take several quarters or longer before our sales representatives are fully-trained and productive. Our business may be adversely affected if our efforts to expand and train our sales organization do not generate a corresponding increase in revenue. In particular, if we are unable to hire, develop and retain sales personnel or if our new sales personnel are unable to achieve expected sales productivity levels in a reasonable period of time or at all, our revenue may grow more slowly than expected or decline and our business may be harmed.
Because we generally will recognize revenue from our customers over the terms of their agreements but incur most costs associated with generating such agreements in advance, rapid growth in our customer base may increase our losses in the short-term.
Expenses associated with acquiring customers, such as the expenses related to our sales organizations and related commissions, are generally expensed as incurred while most of our revenue is recognized ratably over the life of the applicable agreements. Therefore, increased sales will result in our recognition of more costs than revenue during the early periods covered by such agreements, even in cases where the agreements are expected to be profitable for us over their full terms. As a result, even if we are successful in increasing our customer base, our short-term operating results may suffer.
We recognize revenue from customers over the term of the related agreement; therefore, downturns or upturns in our business may not be immediately reflected in our operating results.
25.11 OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE IN THE FUTURE. AS A RESULT, WE MAY FAIL TO MEET OR EXCEED THE EXPECTATIONS OF RESEARCH ANALYSTS OR INVESTORS.
Our quarterly operating results may fluctuate as a result of a variety of factors, many of which are outside of our control. Accordingly, the results of any one quarter may not fully reflect the underlying performance of our business and should not be relied upon as an indication of future performance. If our quarterly operating results or outlook fall below the expectations of research analysts or investors. Fluctuations in our quarterly operating results or outlook may be due to a number of factors, including, but not limited to:the extent to which our existing customers purchase additional seats or volume for our products and services and the timing and terms of those purchases; the extent to which our existing customers renew their customer agreements for our products and services and the timing and terms of those renewals; the extent to which we cross-sell additional products to our existing customers and the timing and terms of such cross-selling; the addition or loss of customers, including through acquisitions or consolidations; the extent to which new customers are attracted to our products and services to satisfy their enterprise work management needs; the rate of adoption and market acceptance of enterprise work management products; the mix of our revenue, particularly between product and professional services revenue, for which the timing of revenue recognition is substantially different; changes in the gross profit we realize on our products and services and professional services due to our differing revenue recognition policies applicable to subscription and product and professional services revenue and other variables; the extent to which we enter into multi-year contracts, in which the support fees are typically paid in advance; the number and size of new customers and the number and size of renewals in a particular period; changes in our pricing policies or those of our competitors; the mix of products sold during a period; the amount and timing of operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure; the amount and timing of expenses related to the development of new products and technologies, including enhancements to our products and services; the amount and timing of commissions earned by our sales personnel; the timing and success of new products introduced by us or new offerings offered by our competitors; the length of our sales cycles; changes in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic collaborators; our ability to manage our existing business and future growth, including increases in the number of customers using our products and services; the seasonality of our business or cyclical fluctuations in our industry; the timing and expenses related to any international expansion efforts we may undertake and the success of such efforts; the timing of expenses related to the acquisition of technologies, products or businesses and potential future charges for impairment of goodwill from such acquisitions; various factors related to disruptions in access and delivery of our cloud-based products, errors or defects in our products and services, privacy and data security and exchange rate fluctuations, each of which is described elsewhere in these risk factors; and general economic, industry and market conditions.
25.12 WE MAY NEED FINANCING IN THE FUTURE, AND ANY ADDITIONAL FINANCING MAY RESULT IN RESTRICTIONS ON OUR OPERATIONS OR SUBSTANTIAL DILUTION TO OUR UNIT HOLDERS.
We may need to raise funds in the future, for example, to expand our business, acquire complementary businesses, develop new technologies, respond to competitive pressures or react to unanticipated situations. We may try to raise additional funds through public or private financings, strategic relationships or other arrangements.
Our ability to obtain debt or equity funding will depend on a number of factors, including market conditions, our operating performance and investor interest. Additional funding may not be available to us on acceptable terms or at all. If adequate funds are not available, we may be required to reduce expenditures, including curtailing our growth strategies, reducing our product-development efforts or foregoing acquisitions. If we succeed in raising additional funds through the issuance of equity or convertible securities, it could result in substantial dilution to existing unit holders. If we raise additional funds through the issuance of debt securities or preferred units, these new securities would have rights, preferences and privileges senior to those of the holders of our Securities. In addition, any debt financing obtained by us in the future or issuance of preferred units could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, we may need to renegotiate the terms of our loan and security agreements, and our lender may be unwilling to do so, or may agree to such changes subject to additional restrictive covenants on our operations and ability to raise capital.
25.13 OUR LOAN AGREEMENTS CONTAIN OPERATING AND FINANCIAL COVENANTS THAT MAY RESTRICT OUR BUSINESS AND FINANCING ACTIVITIES.
Future loan and security agreements and related guaranties and security agreements limit, among other things, our ability to:sell, lease, license or otherwise dispose of assets; undergo a change in control; consolidate or merge with or into other entities; make or own loans, investments and acquisitions; create, incur or assume guarantees in respect of obligations of other persons; create, incur or assume liens and other encumbrances; or pay dividends or make distributions on, or purchase or redeem, our capital units.
Furthermore, the loan and security agreements require us and our subsidiaries to comply with certain financial covenants. The operating and other restrictions and covenants in the loan and security agreements and related guaranties and security agreements, and in any future financing arrangements that we may enter into, may restrict our ability to finance our operations, engage in certain business activities, or expand or fully pursue our business strategies, or otherwise limit our discretion to manage our business. Our ability to comply with these restrictions and covenants may be affected by events beyond our control, and we may not be able to meet those restrictions and covenants. A breach of any of the restrictions and covenants could result in a default under the loan and security agreements, related guarantees and security agreements or any future financing arrangements, which could cause any outstanding indebtedness under the loan and security agreements or under any future financing arrangements to become immediately due and payable, and result in the termination of commitments to extend further credit.
25.14 IF WE ARE UNABLE TO INCREASE MARKET AWARENESS OF OUR COMPANY AND OUR PRODUCTS AND SERVICES, OUR REVENUE MAY NOT CONTINUE TO GROW, OR MAY DECLINE.
Market awareness of our company and our products and services is essential to our ability to generate new leads for expanding our business and our continued growth. If we fail to sufficiently invest in our marketing programs or they are unsuccessful in creating market awareness of our company and our products and services, our revenue may grow more slowly than expected or may decline and our financial performance may be adversely affected.
The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected.
The overall market for nutraceuticals is rapidly evolving and subject to changing technology, shifting customer needs and frequent introductions of new products. The intensity and nature of our competition varies significantly across our family of products. Many of our competitors and potential competitors are larger and have greater brand name recognition, longer operating histories, larger marketing budgets and significantly greater resources than we do. Some of our smaller competitors may offer products on a stand-alone basis at a lower price than us due to lower overhead or other factors, while some of our larger competitors may offer products at a lower price in an attempt to cross-sell additional products in the future or retain a customer using a different application.
We believe there are a limited number of direct competitors that provide a comprehensive offering. However, we face competition both from point solution providers, that may address one or more of the functional elements of our products and services, but are not designed to address a broad range of needs.
25.15 OUR PRIMARY COMPETITORS FOR OUR PRODUCTS AND SERVICES CURRENTLY INCLUDE:Amway (USA) Amyris, Inc. (USA) Aneva Nutraceuticals Ltd. (UK) AOR Canada (Canada) Archer Daniels Midland Company (USA) Arkopharma Laboratories S.A (France) Bactolac Pharmaceuticals, Inc. (USA) BASF SE (Germany) BASF Human Nutrition (Germany) Bayer Healthcare AG (Germany) Bayer Consumer Care Ceapro, Inc. (Canada) CK Life Sciences Int'l (Holdings) Inc. (Hong Kong) E.I.D Parry (India) Ltd. (India) Parry Nutraceuticals (India) Valensa International (USA) Alimtec (Chile) GlaxoSmithKline Plc. (UK) Groupe Danone (France) Infinitus (China) Company Ltd. (China) Matsun Nutrition (USA) MCM Klosterfrau Healthcare GmbH (Germany) Mead Johnson Nutritionals, Inc. (USA) Natrol Inc. (USA) NBTY, Inc. (USA) Nestlé SA (Switzerland) Nestlé HealthCare Nutrition (Switzerland) Nutraceutical Corporation (USA) PepsiCo Inc. (USA) Perrigo Company (USA) Red Bull GmbH (Austria) Royal DSM N.V. (The Netherlands) The Coca-Cola Co. (USA) Xiamen Kingdomway Group Company (China)
If our competitors’ products and/or services become more accepted than our products and services, if they are successful in bringing their products or services to market earlier than ours, or if their products or services are more capable than ours, our revenues could be adversely affected.
25.16 MERGERS OF, OR OTHER STRATEGIC TRANSACTIONS BY, OUR COMPETITORS COULD WEAKEN OUR COMPETITIVE POSITION OR REDUCE OUR REVENUE.
If one or more of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect our ability to compete effectively. In order to take advantage of customer demand for products, vendors are expanding their products through acquisitions and organic development. A potential result of such expansion is that certain of our current or potential competitors may be acquired by third parties with greater available resources and the ability to further invest in product improvements and initiate or withstand substantial price competition. Our competitors also may establish or strengthen cooperative relationships with our current or future value-added resellers, third-party consulting firms or other parties with whom we have relationships, thereby limiting our ability to promote our products and services. Disruptions in our business caused by these events could reduce our revenue.
25.17 OUR SALES CYCLES MAY BE LENGTHY AND VARIABLE, WHICH MAY CAUSE CHANGES IN OUR OPERATING RESULTS.
Our sales cycle can vary substantially from customer to customer. A number of factors influence the length and variability of our sales cycles, including, for example:the need to educate potential customers about the uses and benefits of our products and services; the duration of the commitment customers make in their agreements with us, which are typically one to three years; the discretionary nature of potential customers’ purchasing and budget cycles and decisions; the competitive nature of potential customers’ evaluation and purchasing processes; the functionality demands of potential customers; fluctuations in the needs of potential customers; the announcement or planned introduction of new products by us or our competitors; and the purchasing approval processes of potential customers.
Our sales cycles can make it difficult to predict the quarter in which revenue from a new customer may first be recognized. We may incur significant sales and marketing expenses and invest significant time and effort in anticipation of a sale that may never occur or only occur in a smaller amount or at a later date than anticipated. Delays inherent to our sales cycles could cause significant variability in our revenue and operating results for any particular period.
25.18 WE DO NOT YET HAVE A HISTORY WITH OUR PRICING MODELS AND, AS A RESULT, WE MAY BE FORCED TO CHANGE THE PRICES WE CHARGE FOR OUR PRODUCTS AND SERVICES OR THE PRICING MODELS UPON WHICH THEY ARE BASED.
We have limited experience with respect to determining the optimal prices and pricing models for certain of our products and services and certain geographic markets. As the markets for our products and services mature, or as competitors introduce products or services that compete with ours, including bundling competing offerings with additional products or services, we may be unable to attract new customers at the same price or based on the same pricing models as we have used historically. As a result, in the future we may be required to reduce our prices, which could adversely affect our financial performance. In addition, we may offer volume price discounts based on the number of seats purchased by a customer or the number of our products and services purchased by a customer, which would effectively reduce the prices we charge for our products and services. Also, we may be unable to renew existing customer agreements or enter into new customer agreements at the same prices or upon the same terms that we have historically, which could have a material adverse effect on our financial position.
25.19 ANY DISRUPTION OF SERVICE AT THE DATA CENTERS THAT HOUSE OUR EQUIPMENT AND SUPPORT OUR PRODUCTS AND SERVICES COULD HARM OUR BUSINESS.
While we will procure and operate infrastructure equipment supporting our products and services, third parties may operate the data centers that we use. While we will control and have access to our servers and all of the other components of our network that are located in our external data centers, we may not control the operation of these data centers and we are therefore vulnerable to disruptions, power outages or other issues the data centers experience. We expect that we will in the future experience interruptions, delays and outages in service and availability from time to time.
The owners of our data centers may have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our data center operators is acquired, we may be required to transfer our servers and other infrastructure to new data centers, and we may incur significant costs and possible service interruption in connection with doing so.
Our data centers are vulnerable to damage or interruption from human error, malicious acts, earthquakes, hurricanes, tornados, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. The occurrence of a natural disaster or an act of terrorism, vandalism or other misconduct, a decision to close the data centers without adequate notice or other unanticipated problems could result in lengthy interruptions in availability of our products and services.
Any changes in third-party service levels at our data centers or any errors, defects, disruptions or other performance problems with our products and services could harm our reputation and may damage our customers’ businesses. Interruptions in availability of our products and services might reduce our revenue, cause us to issue credits to customers, subject us to potential liability.
25.20 IF WE FAIL TO ADEQUATELY MANAGE OUR DATA CENTER INFRASTRUCTURE CAPACITY, OUR EXISTING CUSTOMERS MAY EXPERIENCE SUPPORT OUTAGES AND OUR NEW CUSTOMERS MAY EXPERIENCE DELAYS IN THE ORDERING OF OUR PRODUCTS AND SERVICES.
We seek to maintain sufficient excess capacity in our operations infrastructure to meet the needs of all of our customers. We also seek to maintain excess capacity to facilitate the rapid provision of new customer deployments and the expansion of existing customer deployments. However, obtaining new data center infrastructure requires lead time. If we do not accurately predict our infrastructure capacity requirements with sufficient lead time, our customers could experience service impairment that may subject us to financial penalties and liabilities and cause us to lose customers. If our data center infrastructure capacity fails to keep pace with increased subscriptions, customers may experience delays or reductions in the quality of our service as we seek to obtain additional capacity, which could harm our reputation and harm our business.
25.21 SECURITY BREACHES MAY HARM OUR BUSINESS.
Our support of products and services may involve the storage and transmission of our customers’ proprietary and confidential information, including personal or identifying information regarding their employees and customers. Any security breaches, unauthorized access, unauthorized usage, virus or similar breach or disruption could result in loss of confidential information, damage to our reputation, early termination of our contracts, litigation, regulatory investigations, indemnity obligations or other liabilities. If our security measures or those of our third-party data centers are breached as a result of third-party action, employee error, malfeasance or otherwise and, as a result, someone obtains unauthorized access to customer data, our reputation will be damaged, our business may suffer and we could incur significant liability. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any or all of these issues could negatively affect our ability to attract new customers, cause existing customers to elect not to renew or upgrade their subscriptions, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.
25.22 OUR SUCCESS DEPENDS ON OUR ABILITY TO ADAPT TO TECHNOLOGICAL CHANGE AND CONTINUE TO INNOVATE.
The overall market for work management software is rapidly evolving and subject to changing technology, shifting customer needs and frequent introductions of new products. Our ability to attract new customers will depend in large part on our ability to develop or acquire new support systems and enhance and improve existing systems. To achieve market acceptance for our products and services, we must effectively anticipate and offer products that meet changing customer demands in a timely manner. Customers may require features and capabilities that our products do not have. We may experience difficulties that could delay or prevent our development, acquisition or implementation of new products and enhancements.
If we are unable to successfully develop or acquire new capabilities and functionality, enhance our products to anticipate and meet customer preferences, sell our products and services into new markets or adapt to changing industry standards in management, our revenue and results of operations would be adversely affected.
25.23 ADVERSE ECONOMIC CONDITIONS MAY REDUCE OUR CUSTOMERS’ ABILITY TO SPEND MONEY ON OUR PRODUCTS AND SERVICES, OR OUR CUSTOMERS MAY OTHERWISE CHOOSE TO REDUCE THEIR SPENDING ON OUR PRODUCTS AND SERVICES, WHICH MAY ADVERSELY IMPACT OUR BUSINESS.
Our business depends on the overall demand for product and service spend and on the economic health of our current and prospective customers. If worldwide economic conditions become unstable, our existing customers and prospective customers may re-evaluate their decision to purchase our products and services. Weak global economic conditions or a reduction in spending by our customers, could harm our business in a number of ways, including longer sales cycles and lower prices for our products and services.
25.24 WE WILL RELY ON THIRD-PARTY SOFTWARE THAT IS REQUIRED FOR THE DEVELOPMENT AND SUPPORT OF OUR PRODUCTS AND SERVICES, WHICH MAY BE DIFFICULT TO OBTAIN, OR WHICH COULD CAUSE ERRORS OR FAILURES OF OUR PRODUCTS AND SERVICES.
We will rely on software licensed from or hosted by third parties to offer our products and services. In addition, we may need to obtain licenses from third parties to use intellectual property associated with the development of our products and services, which might not be available to us on acceptable terms, or at all. Any loss of the right to use any software required for the development, maintenance and delivery of our products and services could result in delays in the provision of our products and services until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party software could result in errors or a failure of our products and services, which could harm our business.
25.25 IF OUR PRODUCTS AND SERVICES CONTAIN SERIOUS ERRORS OR DEFECTS WE MAY LOSE REVENUE AND MARKET ACCEPTANCE AND WE MAY INCUR COSTS TO DEFEND OR SETTLE PRODUCT LIABILITY CLAIMS.
Complex products such as ours often contain errors or defects, particularly when first introduced or when new versions or enhancements are released. Our current and future products may contain serious defects.
Since certain of our customers will use our products and services for health and wellness purposes, defects or other performance problems could negatively impact our customers and could result in:loss or delayed market acceptance and sales; breach of warranty or product liability claims; sales credits or refunds; cancelled contracts and loss of customers; diversion of development and customer service resources; and injury to our reputation.
The costs incurred in correcting any material errors or defects might be substantial and could adversely affect our operating results. Although our customer agreements will typically contain provisions designed to limit our exposure to certain of the claims above, existing or future laws or unfavorable judicial decisions could negate these limitations. Even if not successful, a product liability claim brought against us would likely be a distraction to management, time-consuming and costly to resolve, and could seriously damage our reputation in the marketplace, making it harder for us to sell our products and services. Additionally, our errors and omissions insurance may be inadequate or may not be available in the future on acceptable terms, or at all, and our policy may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention.
25.26 IF WE FAIL TO DEVELOP AND MAINTAIN RELATIONSHIPS WITH THIRD PARTIES, OUR BUSINESS MAY BE HARMED.
Our business depends in part on the development and maintenance of technology integration, joint sales, suppliers and reseller relationships. Maintaining relationships with third parties requires significant time and resources, as does integrating third-party content and technology. Further, third parties may not perform as expected under any relationships that we may enter into, and we may have disagreements or disputes with third parties that could negatively affect our brands and reputation. If we are unsuccessful in establishing or maintaining relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results could suffer.
25.27 OUR USE OF OPEN SOURCE SOFTWARE COULD NEGATIVELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS AND SERVICES AND SUBJECT US TO POSSIBLE LITIGATION.
A portion of our products and services may incorporate open source software, and we expect to continue to incorporate open source software in the future. Few of the licenses applicable to open source software have been interpreted by courts, and their application to the open source software integrated into our proprietary software may be uncertain. Moreover, we cannot provide any assurance that we have not incorporated additional open source software in our products and services in a manner that is inconsistent with the terms of the license or our current policies and procedures. If we fail to comply with these licenses, we may be subject to certain requirements, including requirements that we offer our products and services that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products and services that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products and services. In addition, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their products. As a result, we could be subject to suits by parties claiming infringement due to the reliance by our products and services on certain open source software. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition or require us to devote additional research and development resources to change our systems.
25.28 WE COULD INCUR SUBSTANTIAL COSTS IN PROTECTING OUR INTELLECTUAL PROPERTY FROM INFRINGEMENT, AND ANY FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY COULD IMPAIR OUR BUSINESS.
Our success and ability to compete will depend in part upon our intellectual property. We seek to protect our formulas, designs and source code for our proprietary software and other proprietary technology and information under a combination of copyright, trade secrets and patent law, and we seek to protect our brands through trademark law. Our policy is to enter into confidentiality agreements, or agreements with confidentiality provisions, with our employees, consultants, vendors and customers and to control access to our software, documentation and other proprietary information. Despite these precautions, it may be possible for unauthorized parties to copy our software or other proprietary technology or information, or to develop similar software independently.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products and services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our products and services is difficult, and we may be unable to determine the extent to which piracy of our software exists or will occur in the future. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity. Such litigation could be costly, time-consuming and distracting to management, result in a diversion of resources or the narrowing or invalidation of portions of our intellectual property and have a material adverse effect on our business, operating results and financial condition. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights or alleging that we infringe the counterclaimant’s own intellectual property. These steps may be inadequate to protect our intellectual property. Third parties may challenge the validity or ownership of our intellectual property, and these challenges could cause us to lose our rights, in whole or in part, to such intellectual property or narrow its scope such that it no longer provides meaningful protection. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties to copy our products and services and use information that we regard as proprietary to create products and services that compete with ours. Some license provisions protecting against unauthorized use, copying, transfer and disclosure of our products and services may be unenforceable under the laws of certain jurisdictions and foreign countries. Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States. To the extent we expand our international activities, our exposure to unauthorized copying, transfer and use of our products and services and proprietary technology or information may increase.
There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology. If we fail to meaningfully protect our intellectual property, our business, brands, operating results and financial condition could be materially harmed.
25.29 UNANTICIPATED CHANGES IN OUR EFFECTIVE TAX RATE OR CHALLENGES BY TAX AUTHORITIES COULD HARM OUR FUTURE RESULTS.
We are subject to income and other taxes in the United States and may be subject to certain taxes in various non-U.S. jurisdictions. Our effective tax rate could be adversely affected by changes in the allocation of our pre-tax earnings and losses among countries with differing statutory tax rates, in certain non-deductible expenses as a result of acquisitions, in the valuation of our deferred tax assets and liabilities, or in federal, state, local or non-U.S. tax laws and accounting principles, including increased tax rates, new tax laws or revised interpretations of existing tax laws and precedents. In particular, the United States is currently considering various changes to the U.S. taxation of international business activities, which, if enacted, could impact the U.S. taxation of our non-U.S. earnings as well as our cash maintained outside the United States. Increases in our effective tax rate would adversely affect our operating results.
In addition, we may be subject to income tax audits by various tax jurisdictions, many of which have not established clear guidance on the tax treatment on-line sales companies. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on the results of operations for that period.
25.30 TAXING AUTHORITIES MAY SUCCESSFULLY ASSERT THAT WE SHOULD HAVE COLLECTED OR IN THE FUTURE SHOULD COLLECT ADDITIONAL SALES AND USE TAXES, AND WE COULD BE SUBJECT TO LIABILITY WITH RESPECT TO PAST OR FUTURE SALES, WHICH COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
We may not file sales and use tax returns or collected sales and use taxes in all jurisdictions in which we have sales, based on our belief that such taxes are not applicable. Taxing authorities may seek to impose such taxes on us, including for past sales, which could result in penalties and interest. Any such tax assessments may adversely affect the results of our operations.
We may conduct integrated operations internationally through subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between our subsidiaries and between our subsidiaries and us. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally require that transfer prices be the same as those between unrelated companies dealing at arms’ length and that contemporaneous documentation is maintained to support the transfer prices. While we plan to operate in compliance with applicable transfer pricing laws, our transfer pricing procedures will not be binding on applicable tax authorities. If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arms’ length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us. Such reallocations may subject us to interest and penalties that would increase our consolidated tax liability and could adversely affect our financial condition, results of operations and cash flows.
25.31 PRIVACY CONCERNS AND LAWS OR OTHER DOMESTIC OR FOREIGN REGULATIONS MAY REDUCE THE EFFECTIVENESS OR DESIRABILITY OF OUR PRODUCTS AND SERVICES AND ADVERSELY AFFECT OUR BUSINESS.
Our customers can use our products and services to collect, use and store personal or identifying information regarding their customers. Federal, state and foreign government bodies and agencies have adopted, are considering adopting or may adopt laws and regulations regarding the collection, use, storage and disclosure of personal information obtained from individuals. The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our customers may limit the use and adoption of our products and services and reduce overall demand, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy laws. For example, the European Union and many countries in Europe have stringent privacy laws and regulations that may impact our ability to profitably operate in certain European countries. Furthermore, privacy concerns may cause our customers to resist providing the personal data necessary to allow them to use our products and services effectively. Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of our products and services in certain industries. All of these domestic and international legislative and regulatory initiatives may adversely affect our customers’ ability to process, handle, store, use and transmit demographic and personal information from their customers and employees, which could reduce demand for our products and services.
In addition to government activity, privacy advocacy groups and the technology and other industries are considering various new, additional or different self-regulatory standards that may place additional burdens on us. If the processing of personal information were to be curtailed in this manner, our products and services would be less effective, which may reduce demand for our products and services and adversely affect our business.
25.32 WE MAY BE SUBJECT TO GOVERNMENTAL EXPORT AND IMPORT CONTROLS THAT COULD IMPAIR OUR ABILITY TO COMPETE IN INTERNATIONAL MARKETS DUE TO LICENSING REQUIREMENTS AND SUBJECT US TO LIABILITY IF WE ARE NOT IN COMPLIANCE WITH APPLICABLE LAWS.
Our products and services may be subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our products and services must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including: the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. Obtaining the necessary authorizations, including any required license, for a particular sale may be time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities. In addition, changes in our products and services or changes in applicable export or import regulations may create delays in the introduction and sale of our products and services in international markets, prevent our customers with international operations from deploying our products and services or, in some cases, prevent the export or import of our products and services to certain countries, governments or persons altogether. Any change in export or import regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could also result in decreased use of our products and services, or in our decreased ability to export or sell our products and services to existing or potential customers with international operations. Any decreased use of our products and services or limitation on our ability to export or sell our products and services would likely adversely affect our business.
Furthermore, we incorporate encryption technology into certain of our services. Various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products and services or could limit our customers’ ability to implement our products and services in those countries. Encrypted products and the underlying technology may also be subject to export control restrictions. Governmental regulation of encryption technology and regulation of imports or exports of encryption products, or our failure to obtain required import or export approval for our products and services, when applicable, could harm our international sales and adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of our products and services, including with respect to new releases of our products and services, may create delays in the introduction of our products and services in international markets, prevent our customers with international operations from deploying our products and services throughout their globally-distributed systems or, in some cases, prevent the export of our products and services to some countries altogether.
Moreover, U.S. export control laws and economic sanctions programs prohibit the shipment of certain products and services to countries, governments and persons that are subject to U.S. economic embargoes and trade sanctions. Even though we take precautions to prevent our products and services from being shipped or provided to U.S. sanctions targets, our products and services and services could be shipped to those targets or provided by third parties despite such precautions. Any such shipment could have negative consequences, including government investigations, penalties and reputational harm.
25.33 IF WE ARE UNABLE TO IMPLEMENT AND MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL REPORTING IN THE FUTURE, INVESTORS MAY LOSE CONFIDENCE IN THE ACCURACY AND COMPLETENESS OF OUR FINANCIAL REPORTS AND THE MARKET PRICE OF OUR SECURITIES MAY BE NEGATIVELY AFFECTED.
As a private company, we are not required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. If we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We are in the process of designing and implementing the internal controls over financial reporting required to comply with this obligation, which process will be time consuming, costly and complicated. We may need additional finance and accounting personnel with certain skill sets to assist us with the reporting requirements we will encounter as a public company and to support our anticipated growth. In addition, implementing internal controls may distract our officers and employees, entail substantial costs to modify our existing processes and take significant time to complete.
In the future, if we identify material weaknesses in our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports.
25.34 WE WILL INCUR INCREASED COSTS AND DEMANDS UPON MANAGEMENT AS A RESULT OF COMPLYING WITH THE LAWS AND REGULATIONS AFFECTING CONGLOMERATE COMPANIES, WHICH COULD HARM OUR OPERATING RESULTS.
As a conglomerating company, we will incur significant legal, accounting, investor relations and other expenses that we would not incur as a single company. We will incur costs associated with current corporate governance requirements. We expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We are unable to currently estimate these costs with any degree of certainty. We also expect that, as a conglomerating company, it will be more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantially higher costs to obtain coverage or to accept reduced policy limits and coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our boards or as our executive officers.
25.35 RISKS RELATED TO THIS OFFERING, AND CONVERSION TO OWNERSHIP OF OUR SECURITIES
An active trading market for our Securities does not presently exist and may not develop, and you may not be able to resell your converted shares of our Securities.
There is no trading market for our Securities or for the Securities. If a market for our Securities does not develop or is not sustained, it may be difficult for you to sell your Securities at an attractive price or at all after conversion. The conversion price of the Notes to our Securities will be determined through the future value of the common unit at maturity of the notes. In the absence of an active trading market for our Securities, investors may not be able to sell their converted Securities. We cannot predict the prices or time at which our Securities will trade. It is possible that in one or more future periods our results of operations may be below the expectations of market analysts and investors and, as a result of these and other factors, the price of our Securities may fall.
25.36 THE MARKET PRICE OF OUR SECURITIES MAY BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES FOR INVESTORS CONVERTING TO UNITS IN THIS OFFERING.
The price of our Securities could be subject to significant fluctuations after this offering, and it may decline. Some of the factors that may cause the price of our Securities to fluctuate include:actual or anticipated changes in the estimates of our operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our Securities; price and volume fluctuations in the overall equity markets from time to time; significant volatility in the market price and trading volume of comparable companies; changes in the market perception of enterprise work management software generally or in the effectiveness of our products and services in particular; disruptions in our business operations due to computer hardware, software or network problems; announcements of technological innovations, new products or services, strategic alliances or significant agreements by us or by our competitors; announcements of new customer agreements or upgrades and customer downgrades or cancellations or delays in customer purchases; litigation involving us; investors’ general perception of us; recruitment or departure of key personnel; the expiration of market standoff or contractual lock-up agreements; sales of our Securities by us or our unit holders; fluctuations in the trading volume of our shares or the size of our public float; and general economic, legal, industry and market conditions and trends unrelated to our performance.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of our units price, we may become the target of securities litigation in the future. If we were to become involved in securities litigation, it could result in substantial costs, divert management’s attention and resources from our business and adversely affect our business.
25.37 OUR EXISTING DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL UNIT HOLDERS WILL CONTINUE TO HAVE SUBSTANTIAL CONTROL OVER THE COMPANY AFTER THIS OFFERING, WHICH COULD LIMIT YOUR ABILITY TO INFLUENCE THE OUTCOME OF KEY TRANSACTIONS, INCLUDING A CHANGE OF CONTROL.
After this offering, our directors, executive officers, principal unit holders and their affiliates will beneficially own or control, directly or indirectly, in the aggregate, approximately 100% of our outstanding Securities. As a result, these unit holders, acting together, could have significant influence over the outcome of matters submitted to our unit holders for approval, including the election or removal of directors, any amendments to our certificate of formation or bylaws and any merger, consolidation or sale of all or substantially all of our assets, and over the management and affairs of our company.
25.38 OUR MANAGEMENT WILL HAVE BROAD DISCRETION OVER THE USE OF THE PROCEEDS WE RECEIVE FROM THIS OFFERING.
Our management will have broad discretion to use our net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply the net proceeds of this offering in ways that increase the value of your investment. We expect to use the net proceeds to us from this offering for acquisition capital and other general corporate purposes, including to finance our growth by investing in or acquiring complementary companies, products or technologies, expanding our sales force, growing sales of our products and services and improving and enhancing our products and services. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. These investments may not yield a favorable return to our investors. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.
25.39 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the sections titled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements. In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:our financial performance and our ability to achieve or sustain profitability or predict future results; our ability to attract and retain customers; our ability to deliver high-quality customer service; the growth of demand for enterprise work management products; our ability to effectively manage our growth; our ability to consummate and integrate acquisitions; maintaining our senior management team and key personnel; our ability to maintain and expand our direct sales organization; our ability to obtain financing in the future on acceptable terms or at all; our ability to adapt to changing market conditions and competition; our ability to successfully enter new markets and manage our international expansion; the operation and reliability of our third-party data centers; our ability to adapt to technological change and continue to innovate; economic and financial conditions; our ability to integrate our products and services with other software products; maintaining and expanding our relationships with third parties; costs associated with defending intellectual property infringement and other claims; our ability to maintain, protect and enhance our brand and intellectual property; our ability to comply with privacy laws and regulations; and other factors discussed in this prospectus in the sections titled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly-changing environment. New risks emerge from time to time. It is not possible for our management to predict.