growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and
sell our products will be harmed.
business plan contemplates a period of substantial growth and business activity. This growth and activity will likely result in
new and increased responsibilities for management personnel and place significant strain upon our operating and financial systems
and resources. To accommodate our growth and compete effectively, we will be required to improve our information systems, create
additional procedures and controls and expand, train, motivate and manage our work force. We cannot be certain that our personnel,
systems, procedures, and controls will be adequate to support our future operations. Any failure to effectively manage our growth
could impede our ability to successfully develop, market, and sell our products.
face currency and other risks associated with international operations.
intend to continue to devote significant efforts to marketing our systems and products outside of the U.S. This strategy will
expose us to numerous risks associated with international operations, which could adversely affect our results of operations and
financial condition, including the following:
fluctuations that could impact the demand for our products or result in currency exchange losses; |
restrictions, tariff and trade regulations and foreign tax laws; |
duties, export quotas or other trade restrictions; |
and political instability; and |
addition, contracts may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system.
are limited by our inability to use a short form registration statement on Form S-3, which may affect our ability to access the
capital markets, if needed.
Registration Statement on Form S-3 permits an eligible issuer to incorporate by reference its past and future filings and reports
made under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In addition, Form S-3 enables eligible issuers
to conduct primary offerings “off the shelf” under Rule 415 of the Securities Act of 1933, as amended, or the Securities
Act. The shelf registration process under Form S-3 combined with the ability to incorporate information on a forward basis, allows
issuers to avoid additional delays and interruptions in the offering process and to access the capital markets in a more expeditious
and efficient manner than raising capital in a standard offering on Form S-1.
be eligible to use Form S-3 for a registered offering of our securities to investors, either (1) the aggregate market value of
our common stock held by non-affiliates would have to exceed $75 million or (2) our common stock would have to be listed and registered
on a national securities exchange. Currently, we do not meet either of those eligibility requirements and are therefore precluded
from using a Form S-3 in connection with a registered offering of our securities to investors.
to our present inability to use Form S-3, if we wanted to conduct a registered offering of securities to investors, we will be
required to use long form registration and may experience delays. In addition, our ability to undertake certain types of financing
transactions may be limited or unavailable to us without the ability to use Form S-3. Furthermore, because of the delay associated
with long form registration and the limitations on the financing transactions we may undertake, the terms of any financing transaction
we are able to conduct may not be advantageous to us or may cause us not to obtain capital in a timely fashion to execute our
business strategies and continue to operate as a going concern.
Related To Our Common Stock
principal stockholders continue to own a large percentage of our voting stock, and they have the ability to substantially influence
matters requiring stockholder approval.
of our directors and individuals or entities affiliated with them as well as other principal stockholders beneficially own or
control a substantial percentage of the outstanding shares of our common stock. Moreover, as a result of the issuance of warrants
to certain institutional investors, certain of our directors and their affiliated funds have the ability to obtain a substantial
portion of our common stock. Accordingly, these stockholders acting as a group, will have substantial influence over the outcome
of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of
all or substantially all of our assets or any other significant corporate transaction. These stockholders may also delay or prevent
a change of control, even if such a change of control would benefit our other stockholders. This significant concentration of
stock ownership may adversely affect the trading price of our common stock due to investors’ perception that conflicts of
interest may exist or arise.