Green Dot 2010 Annual Report Download - page 35

• integration of the acquired company’s accounting, information management, human resource and
other administrative systems and operations generally with ours;
• liability for activities of the acquired company prior to the acquisition, including violations of law,
active litigation, intellectual property or commercial disputes, and tax and other known and unknown
liabilities; and
• litigation or other claims in connection with the acquired company, including claims brought by
terminated employees, customers, former stockholders or other third parties.
If we are unable to address these difficulties and challenges or other problems encountered in
connection with our bank acquisition or any future acquisition or investment, we might not realize the
anticipated benefits of that acquisition or investment, we might incur unanticipated liabilities or we might
otherwise suffer harm to our business generally.
To the extent we pay the consideration for any future acquisitions or investments in cash, it would
reduce the amount of cash available to us for other purposes. Future acquisitions or investments could
also result in dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities,
amortization expenses, or impairment charges against goodwill on our balance sheet, any of which could
harm our financial condition and negatively impact our stockholders.
Economic, political and other conditions may adversely affect trends in consumer
spending.
The electronic payments industry, including the prepaid financial services segment within that
industry, depends heavily upon the overall level of consumer spending. Sustained deterioration in general
economic conditions in the United States might reduce the number of our cards that are purchased or
reloaded, the number of transactions involving our cards and the use of our reload network and related
services. If general economic conditions result in a sustained reduction in the use of our products and
related services, either as a result of a general reduction in consumer spending or as a result of a
disproportionate reduction in the use of card-based payment systems, our business, results of operations
and financial condition would be materially harmed.
Our business is dependent on the efficient and uninterrupted operation of computer net-
work systems and data centers.
Our ability to provide reliable service to cardholders and other network participants depends on the
efficient and uninterrupted operation of our computer network systems and data centers as well as those
of our retail distributors, network acceptance members and third-party processors. Our business involves
movement of large sums of money, processing of large numbers of transactions and management of the
data necessary to do both. Our success depends upon the efficient and error-free handling of the money
that is collected by our retail distributors and remitted to network acceptance members or the banks that
issue our cards. We rely on the ability of our employees, systems and processes and those of the banks
that issue our cards, our retail distributors, our network acceptance members and third-party processors to
process and facilitate these transactions in an efficient, uninterrupted and error-free manner.
In the event of a breakdown, a catastrophic event (such as fire, natural disaster, power loss,
telecommunications failure or physical break-in), a security breach or malicious attack, an improper
operation or any other event impacting our systems or processes, or those of our vendors, or an improper
action by our employees, agents or third-party vendors, we could suffer financial loss, loss of customers,
regulatory sanctions and damage to our reputation. The measures we have taken, including the imple-
mentation of disaster recovery plans and redundant computer systems, may not be successful, and we
may experience other problems unrelated to system failures. We may also experience software defects,
development delays and installation difficulties, any of which could harm our business and reputation and
expose us to potential liability and increased operating expenses. Some of our contracts with retail
distributors, including our contract with Walmart, contain service level standards pertaining to the
26