Audiovox 2008 Annual Report Download - page 18

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In addition, to support our continued growth, we must effectively recruit, develop and retain additional qualified personnel both
domestically and internationally. Our inability to attract and retain necessary qualified personnel could have a material adverse effect
on our business.
We Are Responsible for Product Warranties and Defects.
Even though we outsource manufacturing, we provide warranties for all of our products for which we have provided an estimated
liability. Therefore, we are highly dependent on the quality of our supplier’s products.
Our Capital Resources May Not Be Sufficient to Meet Our Future Capital and Liquidity Requirements.
We believe that we currently have sufficient resources to fund our existing operations for the foreseeable future. However, we may
need additional capital to operate our business if:
•market conditions change,
•our business plans or assumptions change,
•we make significant acquisitions, and
•we need to make significant increases in capital expenditures or working capital.
Our Stock Price Could Fluctuate Significantly.
The market price of our common stock could fluctuate significantly in response to various factors and events, including:
•operating results being below market expectations,
•announcements of technological innovations or new products by us or our competitors,
•loss of a major customer or supplier,
•changes in, or our failure to meet, financial estimates by securities analysts,
•industry developments,
•economic and other external factors,
•general downgrading of our industry sector by securities analysts,
•inventory write-downs, and
•ability to integrate acquisitions.
In addition, the securities markets have experienced significant price and volume fluctuations over the past several years that have
often been unrelated to the operating performance of particular companies. These market fluctuations may also have a material
adverse effect on the market price of our common stock.
John J. Shalam, Our Chairman, Owns a Significant Portion of Our Common Stock and Can Exercise Control over Our Affairs.
Mr. Shalam beneficially owns approximately 55% of the combined voting power of both classes of common stock. This will allow
him to elect our Board of Directors and, in general, to determine the outcome of any other matter submitted to the stockholders for
approval. Mr. Shalam's voting power may have the effect of delaying or preventing a change in control of the Company.
We have two classes of common stock: Class A common stock is traded on the Nasdaq Stock Market under the symbol VOXX and
Class B common stock, which is not publicly traded and substantially all of which is beneficially owned by Mr. Shalam. Each share of
Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share.
Both classes vote together as a single class, except in certain circumstances, for the election and removal of directors and as otherwise
may be required by Delaware law. Since our charter permits shareholder action by written consent, Mr. Shalam may be able to take
significant corporate actions without prior notice and a shareholder meeting.
15
Source: AUDIOVOX CORP, 10-K, May 14, 2008