Invacare 2007 Annual Report Download - page 29

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owned or licensed patents, require the company to pay significant damages, seek licenses and/or pay ongoing
royalties to third parties, require the company to redesign its products, or prevent the company from
manufacturing, using or selling its products, any of which would have an adverse effect on the company’s results
of operations and financial condition. The company has brought, and may in the future also bring, actions against
third parties for an infringement of the company’s intellectual property rights. The company may not succeed in
these actions. The defense and prosecution of intellectual property suits, proceedings before the U.S. Patent and
Trademark Office or its foreign equivalents and related legal and administrative proceedings are both costly and
time consuming. Protracted litigation to defend or prosecute the company’s intellectual property rights could
seriously detract from the time the company’s management would otherwise devote to running its business.
Intellectual property litigation relating to the company’s products could cause its customers or potential
customers to defer or limit their purchase or use of the affected products until resolution of the litigation.
The company’s business strategy relies on certain assumptions concerning demographic trends that impact
the market for its products. If these assumptions prove to be incorrect, demand for the company’s products
may be lower than expected.
The company’s ability to achieve its business objectives is subject to a variety of factors, including the
relative increase in the aging of the general population. The company believes that these trends will increase the
need for its products. The projected demand for the company’s products could materially differ from actual
demand if the company’s assumptions regarding these trends and acceptance of its products by health care
professionals and patients prove to be incorrect or do not materialize. If the company’s assumptions regarding
these factors prove to be incorrect, the company may not be able to successfully implement the company’s
business strategy, which could adversely affect the company’s results of operations. In addition, the perceived
benefits of these trends may be offset by competitive or business factors, such as the introduction of new
products by the company’s competitors or the emergence of other countervailing trends.
The loss of the services of the company’s key management and personnel could adversely affect its ability to
operate the company’s business.
The company’s future success will depend, in part, upon the continued service of key managerial, research
and development staff and sales and technical personnel. In addition, the company’s future success will depend
on its ability to continue to attract and retain other highly qualified personnel. The company may not be
successful in retaining its current personnel or in hiring or retaining qualified personnel in the future. The
company’s failure to do so could have a material adverse effect on the company’s business. These executive
officers have substantial experience and expertise in the company’s industry. The company’s future success
depends, to a significant extent, on the abilities and efforts of its executive officers and other members of its
management team. If the company loses the services of any of its management team, the company’s business
may be adversely affected.
The company’s Chief Executive Officer and certain members of management own shares representing a
substantial percentage of the company’s voting power and their interests may differ from other
shareholders.
The company has two classes of common stock. The Common Shares have one vote per share and the
Class B Common Shares have 10 votes per share. As of January 1, 2008 the company’s chairman and CEO,
Mr. A. Malachi Mixon, III, and certain members of management beneficially own up to approximately 34% of
the combined voting power of the company’s Common Shares and Class B Common Shares and could influence
the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including
mergers, consolidations and the sale of all or substantially all of the company’s assets. They will also have the
power to influence or make more difficult a change in control. The interests of Mr. Mixon and his relatives may
differ from the interests of the other shareholders and they may take actions with which some shareholders may
disagree. Mr. Mixon, however, is committed to the long-term interests of all shareholders.
I-24