Travelzoo 2003 Annual Report Download - page 34

to obtain a manually signed and dated written receipt of the document before eÅecting any transaction in a
penny stock for the investor's account. Moreover, Rule 15g-9 promulgated under the Securities Exchange Act
of 1934 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. These requirements signiÑcantly increase the time
necessary for a broker-dealer to sell a stock and limit the available purchasers for a stock.
Our stock price has been volatile historically and may continue to be volatile.
The trading price of our common stock has been and may continue to be subject to wide Öuctuations.
During 2003, the sale prices of our common stock on the OTC Bulletin Board and on the NASDAQ
SmallCap Market ranged from $3.50 to $11.00 per share. Our stock price may Öuctuate in response to a
number of events and factors, such as quarterly variations in operating results; announcements of technological
innovations or new products by us or our competitors; changes in Ñnancial estimates and recommendations by
securities analysts; the operating and stock price performance of other companies that investors may deem
comparable to us; and news reports relating to trends in our markets or general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in
particular, have experienced volatility that often has been unrelated to the operating performance of such
companies. These broad market and industry Öuctuations may adversely aÅect the price of our stock,
regardless of our operating performance.
Risks Related to Legal Uncertainty
We may become subject to burdensome government regulations and legal uncertainties aÅecting the
Internet which could adversely aÅect our business.
To date, governmental regulations have not materially restricted use of the Internet in our markets.
However, the legal and regulatory environment that pertains to the Internet is uncertain and may change.
Uncertainty and new regulations could increase our costs of doing business, prevent us from delivering our
products and services over the Internet or slow the growth of the Internet. In addition to new laws and
regulations being adopted, existing laws may be applied to the Internet. New and existing laws may cover
issues which include:
‚ user privacy;
‚ consumer protection;
‚ copyright, trademark and patent infringement;
‚ pricing controls;
‚ characteristics and quality of products and services;
‚ sales and other taxes; and
‚ other claims based on the nature and content of Internet materials.
We may be unable to protect our registered trademark or other proprietary intellectual property rights.
Our success depends to a signiÑcant degree upon the protection of the Travelzoo brand name. We rely
upon a combination of copyright, trade secret and trademark laws and non-disclosure and other contractual
arrangements to protect our intellectual property rights. The steps we have taken to protect our proprietary
rights, however, may not be adequate to deter misappropriation of proprietary information.
The U.S. Patent and Trademark OÇce registered the trademark for ""Travelzoo'' on January 23, 2001. If
we are unable to protect our rights in the mark, a key element of our strategy of promoting Travelzoo as a
brand could be disrupted and our business could be adversely aÅected. We may not be able to detect
unauthorized use of our proprietary information or take appropriate steps to enforce our intellectual property
rights. In addition, the validity, enforceability and scope of protection of intellectual property in Internet-
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