Stamps.com 2007 Annual Report Download - page 18

Our charter documents could deter a takeover effort, which could inhibit your ability to receive an acquisition premium for
your shares.
The provisions of our certificate of incorporation, bylaws and Delaware law could make it difficult for a third party to
acquire us, even if it would be beneficial to our stockholders. In addition, we are subject to the provisions of Section 203 of the
Delaware General Corporation Law, which could prohibit or delay a merger or other takeover of our company, and discourage
attempts to acquire us.
The USPS may object to a change of control of our common stock.
The USPS may raise national security or similar concerns to prevent foreign persons from acquiring significant ownership of
our common stock or of our company. The USPS also has regulations regarding the
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change of control of approved PC Postage providers. These concerns may prohibit or delay a merger or other takeover of our
company. Our competitors may also seek to have the USPS block the acquisition by a foreign person of our common stock or
our company in order to prevent the combined company from becoming a more effective competitor in the market for PC
Postage.
Our stock price is volatile.
The price at which our common stock has traded since our initial public offering in June 1999 has fluctuated significantly.
The price may continue to be volatile due to a number of factors, including the following, some of which are beyond our control:
As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above their
original purchase price. In the past, securities class action litigation often has been instituted against companies following
periods of volatility in the market price of their securities. This type of litigation, if directed at us, could result in substantial costs
and a diversion of management’s attention and resources.
Shares of our common stock held by existing stockholders may be sold into the public market, which could cause the price of
our common stock to decline.
If our stockholders sell into the public market substantial amounts of our common stock purchased in private financings prior
to our initial public offering, or purchased upon the exercise of stock options or warrants, or if there is a perception that these
sales could occur, the market price of our common stock could decline. All of these shares are available for immediate sale,
subject to the volume and other restrictions under Rule 144 of the Securities Act.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our corporate headquarters are located in a 36,000 square foot facility in Los Angeles, California under a lease expiring in
February 2010. We believe that our existing facility is suitable and adequate for our present purposes.
Item 3. Legal Proceedings.
On October 22, 2004, Kara Technology Incorporated filed suit against us in the United States District Court for the Southern
District of New York, alleging, among other claims, that we infringed certain Kara Technology patents and that we
misappropriated trade secrets owned by Kara Technology, most particularly with respect to our NetStamps feature. Kara
Technology seeks an injunction, unspecified damages, and attorneys’ fees. On February 9, 2005, the court granted our motion to
• variations in our operating results,
• variations between our actual operating results and the expectations of securities analysts,
• investors and the financial community,
• announcements of developments affecting our business, systems or expansion plans by us or others, and
• market volatility in general.