Stamps.com 2009 Annual Report Download - page 21

TABLE OF CONTENTS
The USPS may object to a change of control of our common stock.
The USPS may raise national security or similar concerns to prevent foreign persons from acquiring significant ownership of
our common stock or of our company. The USPS also has regulations regarding the change of control of approved PC Postage
providers. These concerns may prohibit or delay a merger or other takeover of our company. Our competitors may also seek to
have the USPS block the acquisition by a foreign person of our common stock or our company in order to prevent the combined
company from becoming a more effective competitor in the market for PC Postage.
Our stock price is volatile.
The price at which our common stock has traded has fluctuated significantly. The price may continue to be volatile due to a
number of factors, including the following, some of which are beyond our control:
As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above their
original purchase price. In the past, securities class action litigation often has been instituted against companies following
periods of volatility in the market price of their securities. This type of litigation, if directed at us, could result in substantial costs
and a diversion of management’s attention and resources.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our corporate headquarters are located in Los Angeles, California where we have approximately 41,000 square feet under a
lease expiring in May 2012. We believe that our existing facilities are suitable and adequate for our present purposes.
In November 2003, we entered into a facility lease agreement commencing in March 2004 for our corporate headquarters
through March 2010. In December 2009, we amended our lease agreement extending the term for 26 months commencing in
April 2010 through May 2012. In addition to extending our lease term, we also added lease space of approximately 5,000 square
feet.
Item 3. Legal Proceedings.
On October 22, 2004, Kara Technology Incorporated filed suit against us in the United States District Court for the Southern
District of New York, alleging, among other claims, that we infringed certain Kara Technology patents and that we
misappropriated trade secrets owned by Kara Technology, most particularly with respect to our NetStamps feature. Kara
Technology seeks an injunction, unspecified damages, and attorneys’ fees. The suit was transferred to the United States District
Court for the Central District of California. In the trial court, we won on all counts. However, on September 24, 2009, the United
States Court of Appeals for the Federal Circuit vacated-in-part and reversed-in-part a portion of the judgment of the trial court in
our favor. In particular, the Court remanded for further proceedings that portion of the complaint alleging infringement by
NetStamps and breach of contract. The findings in our favor with respect to infringement by PhotoStamps and the trade secret
claim remain in effect.
• variations in our operating results,
• variations between our actual operating results and the expectations of securities analysts,
• investors and the financial community,
• sales by stockholders holding larger blocks of our stock,
• announcements of developments affecting our business, systems or expansion plans by us or others, and
• market volatility in general.
17