Stamps.com 2001 Annual Report Download - page 14

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business strategy could result in a substantial loss of customers which would have an adverse impact on our financial condition and results of
operations.
Recent personnel changes may interfere with our operations.
For the year ended December 31, 2001, we experienced significant changes at the senior management level. In August, 2001, Ken McBride was
appointed as our new President and Chief Executive Officer. Mr. McBride served as our Chief Financial Officer since April 1999, and replaced
interim President and CEO Bruce Coleman. In August 2001, Marvin Runyon resigned from our board of directors and Vice President of
Marketing Kathy Brush left Stamps.com. In September, 2001, Seth Weisberg was appointed as our new Secretary. In the quarter ended June 30,
2001, we experienced significant changes at the board of directors level. Following the sale of our iShip assets in May 2001, John A Duffy and
Stephen M. Teglovic, who served on our board of directors after the acquisition of iShip, resigned from our board of directors. In June, 2001,
Carolyn M. Ticknor and Thomas N. Clancy resigned from our board of directors. If we fail to attract members to, or retain members on, our
board of directors, our business, financial condition and results of operations will be adversely affected.
If we do not successfully attract and retain skilled personnel for permanent management and other key personnel positions, we may not be able
to effectively implement our business plan.
Our success depends largely on the skills, experience and performance of the members of our senior management and other key personnel. Any
of the individuals can terminate his or her employment with us at any time. If we lose additional key employees and are unable to replace them
with qualified individuals, our business and operating results could be seriously harmed. In addition, our future success will depend largely on
our ability to continue attracting and retaining highly skilled personnel. As a result, we may be unable to successfully attract, assimilate or retain
qualified personnel. Further, we may be unable to retain the employees we currently employ or attract additional personnel. The failure to
attract and retain the necessary personnel could seriously harm our business, financial condition and results of operations.
We cannot predict the value of our acquisition of certain intellectual property assets of E-Stamp Corporation.
We acquired intellectual property assets relating to Internet-based postage printing and management from E-Stamp Corporation, one of our
former competitors. There can be no assurance that the intellectual property assets we acquired will provide value or will help us to achieve
profitability as currently planned, if at all. In addition, a portion of the intellectual property rights we acquired from E-Stamp Corporation are
the subject of a lawsuit brought by Pitney Bowes and could be determined by a court to be invalid or unenforceable. An invalidity or
unenforceability determination could make the intellectual property rights we acquired worthless. See "Legal Proceedings".
The success of our business will depend upon acceptance by customers of our Internet postage services.
We expect that our Internet postage services will generate a significant portion of our future revenues. Accordingly, we depend heavily on the
commercial acceptance of our Internet postage services. If we fail to successfully gain commercial acceptance of our Internet postage services,
we will be unable to generate significant revenues. To date, a substantial market for Internet postage has not developed, and we cannot assure
you that it will develop. More specifically, we cannot predict if our target customers will choose the Internet as a means of purchasing postage,
or if customers will be willing to pay a fee to use our service, or if potential users will select our system over our competitors' systems or over
alternative methods such as online invoicing, bill payment and financial transactions.
11
2002. EDGAR Online, Inc.