CompUSA 2015 Annual Report Download - page 18

Table of Contents
TheCompany'sAuditCommittee,withtheassistanceofindependentoutsidecounsel,hasbeencooperatingwitharequestbytheUSAOthatitassist
theUSAO’sinvestigationintoallegationsarisingfromtheFiorentinoinvestigationregardingpossibleexecutiveofficerconflictsofinterestandinternal
controls and books and records violations.  The Company’s Audit Committee, along with the Audit Committee’s independent outside counsel,
conductedaninvestigationoftheallegationsanditscounselpresentedtheAuditCommittee’sfindingstotheUSAOinJuly2015.TheCompanyhas
been advised that the Audit Committee investigation has found no evidence of executive officer conflicts of interest, and no material evidence of
internalcontrolsviolationsorbooksandrecordsviolations.TheAuditCommitteeconsidersitsinvestigationtobeclosedatthistimeandtheCompany
hasbeenadvisedtherehasbeennofurthercontactfromtheUSAO.Notwithstanding,itisnotpossibleatthistimetopredictiforwhentheUSAOwill
concludeitsinvestigation;whatsubject(s)willbeinvestigated;whatactions,ifany,maybetakenbythegovernmentasaresultofitsinvestigation;or
whetheranyofthesematterswillhaveamaterialadverseimpactontheCompany.

·Our profitability can be adversely affected by changes in our income tax exposure due to changes in tax rates or laws, changes in our effective tax rate
due to changes in the mix of earnings among different countries, restrictions on utilization of tax benefits and changes in valuation of our deferred tax
assets and liabilities.
Changes in our incometax expense due to changes inthe mix of U.S. andnon-U.S. revenues and profitability, changes intax rates or exposure to
additionalincometaxliabilitiescouldaffectourprofitability.WearesubjecttoincometaxesintheUnitedStatesandvariousforeignjurisdictions.
Oureffectivetaxratehasbeeninthepastandcouldbeinthefutureadverselyaffectedbychangesinthemixofearningsincountrieswithdiffering
statutorytaxrates,restrictionsonutilizationoftaxbenefits,changesinthevaluationofdeferredtaxassetsandliabilities,changesintaxlawsorby
material audit assessments.  The carrying value of our deferred tax assets is dependent on our ability to generate future taxable income in those
jurisdictions.Inaddition,theamountofincometaxeswepayissubjecttoauditinourvariousjurisdictionsandamaterialassessmentbyataxauthority
couldaffectourprofitability.

·Changes in accounting standards or practices, as well as new accounting pronouncements or interpretations, may require us to account for and report
our financial results in a different manner in the future, which may be less favorable than the manner used historically.
Achangeinaccountingstandardsorpracticescanhaveasignificanteffectonourreportedresultsofoperations.Newaccountingpronouncementsand
interpretationsofexistingaccountingrulesandpracticeshaveoccurredandmayoccurinthefuture.Changestoexistingrulesmayadverselyaffectour
reportedfinancialresults.
·Concentration of Ownership and Control Limits Stockholders Ability to Influence Corporate Actions
RichardLeeds,RobertLeeds,andBruceLeeds(eacharebrothersanddirectorsandexecutiveofficersoftheCompany),togetherwithtrustsforthe
benefitofcertainmembersoftheirrespectivefamiliesandotherentitiescontrolledbythem,controlapproximately68.6%ofthevotingpowerofour
outstanding common stock. Due to such holdings, the Leeds brothers together with these trusts and entities are able to determine the outcome of
virtually all matters submitted to stockholders for approval, including the election of directors, the appointment of management, amendment ofour
articlesofincorporation,significantcorporatetransactions(suchasamergerorothersaleofourcompanyorourassets),thepaymentsofdividendson
our common stock and the entering into of extraordinary transactions.  Further, a s a "controlled company" under NYSE rules,  the Company has
elected to opt-out of certain New York Stock Exchange listing standards that, among other things, require listed companies to have a majority of
independent directors on their board; the Company does however currently have an independent Audit, Compensation Committee and Corporate
GovernanceandNominatingCommittees.
·Risk of Thin Trading and Volatility of our Common Stock Could Impact Stockholder Value
OurcommonstockiscurrentlylistedontheNYSEandisthinlytraded.Volatilityofthinlytradedstocksistypicallyhigherthanthevolatilityofmore
liquid stocks with higher trading volumes. The trading of relatively small quantities of shares of common stock by our stockholders may
disproportionatelyinfluencethepriceofthosesharesineitherdirection.Thismayresultinvolatilityinourstockpriceandcouldexacerbatetheother
volatility-inducingfactorsdescribedbelow.Themarketpriceofourcommonstockcouldbesubjecttosignificantfluctuationsasaresultofbeingthinly
traded.
Item 1B. Unresolved Staff Comments.
None.
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