Green Dot 2014 Annual Report Download - page 30

branded and private label account programs, as well as our processing and settlement services, depends upon the
efficient and error-free handling of the money that is a) collected by our retail distributors and remitted to network
acceptance members or the banks that issue our cards and b) remitted from the IRS to taxpayers, tax refund preparation
partners and the third party processors. We rely on the ability of our employees, systems and processes and those of
the banks that issue our cards, our retail distributors, tax refund preparation partners, our network acceptance members
and third-party processors to process and facilitate these transactions in an efficient, uninterrupted and error-free
manner. Their failure to do so could materially and adversely impact our operating revenues and results of operations,
particularly during the tax season, when we derive substantially all of operating revenues for our tax refund processing
services and a significant portion of our other operating revenues.
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 implementation 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 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 interruptions 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 manage any future growth.
Our ability to continue to provide our products and services to 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.
Our future success depends on our ability to attract, integrate, retain and incentivize key personnel.
Our future success will depend, to a significant extent, on our ability to attract, integrate, retain and recognize key
personnel, namely our management team and experienced sales, marketing and program and technology development
personnel. Replacing departing key personnel can involve organizational disruption and uncertainty. We must retain
and motivate existing personnel, and we must also attract, assimilate and motivate additional highly-qualified
employees. We may experience difficulty in managing transitions and assimilating our newly-hired personnel, which
may adversely affect our business. Competition for qualified management, sales, marketing and program and
technology development personnel can be intense. Competitors have in the past and may in the future attempt to
recruit our top management and employees. If we fail to attract, integrate, retain and incentivize key personnel, our
ability to manage and grow our business could be harmed.
We might require additional capital to support our business in the future, and this capital might not be
available on acceptable terms, or at all.
If our unrestricted cash and cash equivalents balances and any cash generated from operations are not sufficient
to meet our future cash requirements, we will need to access additional capital to fund our operations. We may also
need to raise additional capital to take advantage of new business or acquisition opportunities. We may seek to raise
capital by, among other things:
• issuing additional shares of our Class„A common stock or other equity securities;
• issuing debt securities; and
• borrowing funds under a credit facility.
We may not be able to raise needed cash in a timely basis on terms acceptable to us or at all. Financings, if
available, may be on terms that are dilutive or potentially dilutive to our stockholders. The holders of new securities
may also receive rights, preferences or privileges that are senior to those of existing holders of our Class„A common
stock. In addition, if we were to raise cash through a debt financing, the terms of the financing might impose additional
conditions or restrictions on our operations that could adversely affect our business. If we require new sources of
financing but they are insufficient or unavailable, we would be required to modify our operating plans to take into account
the limitations of available funding, which would harm our ability to maintain or grow our business.
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