Green Dot 2010 Annual Report Download - page 36

operation of our systems, and provide the retail distributor with the right to collect damages and potentially
to terminate its contract with us for system downtime exceeding stated limits. If we face system inter-
ruptions or failures, our business interruption insurance may not be adequate to cover the losses or
damages that we incur.
We must be able to operate and scale our technology effectively to match our business
growth.
Our ability to continue to provide our products and services to a growing number of network
participants, as well as to enhance our existing products and services and offer new products and
services, is dependent on our information technology systems. If we are unable to manage the technology
associated with our business effectively, we could experience increased costs, reductions in system
availability and losses of our network participants. Any failure of our systems in scalability and functionality
would adversely impact our business, financial condition and results of operations.
If we are unable to keep pace with the rapid technological developments in our industry
and the larger electronic payments industry necessary to continue providing our network
acceptance members and cardholders with new and innovative products and services, the
use of our cards and other products and services could decline.
The electronic payments industry is subject to rapid and significant technological changes, including
continuing advancements in the areas of radio frequency and proximity payment devices (such as
contactless cards), e-commerce and mobile commerce, among others. We cannot predict the effect of
technological changes on our business. We rely in part on third parties, including some of our competitors
and potential competitors, for the development of, and access to, new technologies. We expect that new
services and technologies applicable to our industry will continue to emerge, and these new services and
technologies may be superior to, or render obsolete, the technologies we currently utilize in our products
and services. Additionally, we may make future investments in, or enter into strategic alliances to develop,
new technologies and services or to implement infrastructure change to further our strategic objectives,
strengthen our existing businesses and remain competitive. However, our ability to transition to new
services and technologies that we develop may be inhibited by a lack of industry-wide standards, by
resistance from our retail distributors, network acceptance members, third-party processors or consumers
to these changes, or by the intellectual property rights of third parties. Our future success will depend, in
part, on our ability to develop new technologies and adapt to technological changes and evolving industry
standards. These initiatives are inherently risky, and they may not be successful or may have an adverse
effect on our business, financial condition and results of operations.
As a newly public company, we are subject to financial and other reporting and corporate
governance requirements that may be difficult for us to satisfy, and which have raised and
may continue to raise our costs and which have diverted and may continue to divert
resources and management attention from operating our business.
We have historically operated as a private company. On July 27, 2010, we completed an initial public
offering. As a result, we are required to file with the SEC annual and quarterly information and other
reports that are specified in the Exchange Act and SEC regulations. Thus, we must be certain that we have
the ability to prepare on a timely basis financial statements that comply with SEC reporting requirements.
We are also subject to other reporting and corporate governance requirements, including the listing
standards of the New York Stock Exchange, or the NYSE, and the provisions of the Sarbanes-Oxley Act of
2002, or the Sarbanes-Oxley Act, and the regulations promulgated thereunder, which impose significant
new compliance obligations upon us. As a public company, we are required, among other things, to:
• prepare and distribute periodic reports and other stockholder communications in compliance with
our obligations under the federal securities laws and the NYSE rules;
• institute more comprehensive compliance, investor relations and internal audit functions;
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