Stamps.com 2001 Annual Report Download - page 12

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RISK FACTORS
You should carefully consider the following risks and the other information in this report and our other filings with the SEC before you decide
to invest in our company or to maintain or increase your investment. The risks and uncertainties described below are not the only ones facing
Stamps.com. Additional risks and uncertainties may also adversely impact and impair our business. If any of the following risks actually occur,
our business, results of operations or financial condition would likely suffer. In that case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
This report contains forward-looking statements based on the current expectations, assumptions, estimates and projections about Stamps.com
and the Internet industry. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those
discussed in these forward-looking statements as a result of many factors, including those described in this section and elsewhere in this report.
Stamps.com does not undertake to update publicly any forward-looking statements for any reason, even if new information becomes available
or other events occur in the future.
Risks Related to Our Business
Because we have a limited operating history, there is limited information upon which you can evaluate our business.
We are still in the early stages of our development, and our limited operating history makes it difficult to evaluate our business and prospects.
Our Internet Postage service has only been available since October 22, 1999. Due to our limited operating history, it is difficult to predict future
results of operations, including operating expenses and revenues. Moreover, due to our limited operating history, any evaluation of our business
and prospects must be made in light of the risks and uncertainties often encountered by early-stage companies in new and evolving markets, like
the Internet. Many of these risks are discussed in the subheadings below, and include our (a) ability to meet and maintain government
specifications for our Internet Postage service, specifically US Postal Service requirements; (b) complete dependence on Internet Postage that
currently do not have substantial market acceptance;; (c) ability to establish and promote our brand name; (d) ability to expand our operations
to meet the commercial demand for our services, when it arises; (e) development of and reliance on strategic and distribution relationships; (f)
ability to prevent and respond quickly to service interruptions; (g) ability to minimize fraud and other security risks; and (h) ability to compete
with companies with greater capital resources and brand awareness.
If we are unsuccessful in addressing these risks or in executing our new business strategy, our business, results of operations and financial
condition would be materially and adversely affected.
Our revenues and operating results may fluctuate in future periods and we may fail to meet expectations, which may cause the price of our
common stock to decline.
Our revenues and operating results may fluctuate significantly from period-to-period particularly because our Internet Postage and shipping
services are new and our prospects uncertain. If revenues or operating results fall below the expectations of investors or public market analysts,
the price of our common stock could decline substantially. Factors that might cause our revenues, margins and operating results to fluctuate
include the factors described in the subheadings below as well as: (a) the success of our Internet Postage and shipping services; (b) the costs of
defending ourselves in litigation; (c) the costs of our marketing programs to establish and promote the Stamps.com brand name; (d) the demand
for our Internet Postage and shipping services; (e) our ability to develop and maintain strategic distribution relationships; (f) the number, timing
and significance of new products or services introduced by both us and our competitors; (g) our ability to develop, market and introduce new
and enhanced services on a timely basis; (h) the level of service and price competition; (i) the increases in our operating expenses;
(j) US Postal Service regulation and policies; (k) the success of implementing our new business strategy and of reducing expenses; and (l)
general economic factors.
9
2002. EDGAR Online, Inc.