Jamba Juice 2009 Annual Report Download - page 28

Table of Contents
receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and exclusions, which, although we believe
are standard in the food service industry, may nevertheless increase our costs.
Restaurant companies, including Jamba Juice, have been the target of class action lawsuits and other proceedings alleging, among other
things, violations of federal and state workplace and employment laws. Proceedings of this nature, if successful, could result in our payment of
substantial damages.
Our results of operations may be adversely affected by legal or governmental proceedings brought by or on behalf of employees or customers. In recent
years, a number of restaurant companies, including Jamba Juice Company, have been subject to lawsuits, including class action lawsuits, alleging violations
of federal and state law regarding workplace and employment matters, discrimination, tip policy and similar matters. A number of these lawsuits have
resulted in the payment of substantial awards by the defendants. Similar lawsuits have been instituted against us in the past alleging violations of state and
federal wage and hour laws and failure to pay for all hours worked. Although we are not currently a party to any class action lawsuits, we could incur
substantial damages and expenses resulting from lawsuits, which would increase the cost of operating the business and decrease the cash available for our
business.
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We currently fail to meet one of NASDAQ’s listing requirements and if our common stock is delisted it could negatively impact the price of
our common stock, our ability to access the capital markets, and trigger a put right.
Our common stock is currently listed on the NASDAQ Global Market. A continual listing requirement of the NASDAQ is that the bid price of our
common stock not close below the minimum of $1.00 per share for a 30-consecutive business day period. We are not currently in compliance with this
requirement. However, NASDAQ has suspended enforcement of this requirement until April 20, 2009. If, absent a continued suspension of this rule by
NASDAQ after April 20, 2009, we fail to regain compliance with the minimum bid price requirement after enforcement of this requirement is resumed on
April 20, 2009, or if at any time we fail to satisfy any of the other requirements for continued listing, our common stock could be delisted from the NASDAQ
Global Market. The delisting of our common stock would significantly affect the ability of investors to trade our securities and would negatively affect the
value and liquidity of our common stock.
If delisted from the NASDAQ Global Market, our common stock will likely be quoted in the over-the-counter market in the so-called “pink sheets” or
quoted in the OTC Bulletin Board. In addition, our common stock would be subject to the rules promulgated under the Securities Exchange Act of 1934
relating to “penny stocks.” These rules require brokers who sell securities that are subject to the rules, and who sell to persons other than established
customers and institutional accredited investors, to complete required documentation, make suitability inquiries of investors and provide investors with
information concerning the risks of trading in the security. These requirements could make it more difficult to buy or sell our common stock in the open
market. In addition, the delisting of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting
from the NASDAQ Global Market could also have other negative results, including the potential loss of confidence by suppliers and employees, the loss of
institutional investor interest and fewer business development opportunities.
Furthermore, delisting from the NASDAQ Global Market would trigger a put right on behalf of our lenders requiring us to repurchase 2,000,000 shares
of common stock held by them at a price of $1.50 per share.
Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to
various factors.
Our quarterly operating results may fluctuate significantly because of various factors, including:
• the impact of inclement weather;
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