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TABLE OF CONTENTS
Businessacquisitions,suchasthePSISystems,Inc.(Endicia),AuctaneLLC(ShipStation)andInterapptive,Inc.(ShipWorks)
acquisitionsalsoinvolverisksofunknownliabilitiesandpotentiallitigationassociatedwiththeacquiredbusiness.Inaddition,wemay
notrealizetheanticipatedbenefitsofanyacquisition,includingsecuringtheservicesofkeyemployees.Incurringunknownliabilities
orthefailuretorealizetheanticipatedbenefitsofanacquisitioncouldseriouslyharmourbusiness.
Our operating results could be impaired if we or the Internet become subject to additional government regulation.
ChangesinthelawsandregulationsapplicabletotheInternetorus,includingthoserelatingtouserprivacy,pricing,content,
copyrights,distribution,characteristicsandqualityofproductsandservices,andexportcontrols,couldseriouslyharmourbusiness,
financialconditionandresultsofoperations.Moreover,theapplicabilityofexistinglawstotheInternetisuncertainwithregardto
manyissues,includingpropertyownership,exportofspecializedtechnology,salestax,stateincometaxes,libelandpersonalprivacy,
andchangesintheirinterpretationcouldsimilarlyharmus.Theapplicationoflawsandregulationsfromjurisdictionswhoselawsdo
notcurrentlyapplytoourbusiness,ortheapplicationofexistinglawsandregulationstotheInternetandotheronlineservicescould
alsoharmourbusiness.
Wehaveemployeesandofferourservicesinmultiplestates,andwemayinthefutureexpandinternationally.Thesejurisdictions
mayclaimthatwearerequiredtoqualifytodobusinessasaforeigncorporationineachstateorforeigncountry.Ourfailuretoqualify
asaforeigncorporationinajurisdictionwherewearerequiredtodosocouldsubjectustotaxesandpenalties.Otherstatesandforeign
countriesmayalsoattempttoregulateourservicesorprosecuteusforviolationsoftheirlaws.
We do not collect sales or consumption taxes in some jurisdictions.
U.S.SupremeCourtdecisionsrestricttheimpositionofobligationstocollectstateandlocalsalestaxeswithrespecttoremote
sales.However,anincreasingnumberofstateshaveconsideredoradoptedlawsoradministrativepracticesthatattempttoimpose
obligationsonout-of-stateretailerstocollecttaxesontheirbehalf.Asuccessfulassertionbyoneormorestatesorforeigncountries
requiringustocollecttaxeswherewedonotdosocouldresultinsubstantialtaxliabilities,includingforpastsales,aswellaspenalties
andinterest.
Risks Related to Our Stock
The tax value of our net operating losses could be impaired if we trigger a change of control pursuant to Section 382 of the
Internal Revenue Code.
WecurrentlyhavefederalandstateNOLcarry-forwardsofapproximately$123millionand$1.5million,respectively.Under
InternalRevenueCodeSection382rules,ifa“changeofownership”istriggered,ourNOLassetmaybeimpaired.Achangein
ownershipcanoccurwheneverthereisashiftinownershipbymorethan50percentagepointsbyoneormore“5%shareholders”
withinathree-yearperiod.WeestimatethatasofDecember31,2015wewereatapproximatelya10%levelcomparedwiththe50%
levelthatwouldtriggerimpairmentofourNOLasset.
Underourcertificateofincorporation,anypersonorentity,includingcompanyorinvestmentfirm,thatwishestobecomea“5%
shareholder”(asdefinedinourcertificateofincorporation)mustfirstobtainawaiverfromourBoardofDirectors.Inadditionany
personorentity,includinganycompanyorinvestmentfirm,thatisalreadya“5%shareholder”ofourscannotmakeanyadditional
purchasesofourstockwithoutawaiverfromourBoardofDirectors.TheseNOLProtectiveMeasuresaremoreparticularlydiscussed
inourDefinitiveProxyStatementfiledwiththeSEConApril2,2008.
OnJuly22,2010,ourBoardofDirectorssuspendedtheNOLProtectiveMeasuresbyapprovingawaiverfromtheNOL
ProtectiveMeasurestoallpersonsandentities,includingcompaniesandinvestmentfirms.Asaresult,asofthedateoffilingofthis
AnnualReportonForm10-K,ourstockholdersarenowallowedtobecome“5%shareholders”andexisting“5%shareholders”are
allowedtomakeadditionalpurchasesofourstockeachwithouthavingtocomplywiththerestrictionscontainedintheNOLProtective
Measures.ThiswaivermayberevokedbyourBoardofDirectorsatanytimeiftheBoarddeemstherevocationnecessarytoprotect
againstaSection382“changeofownership”thatwouldlimitourabilitytoutilizefutureNOLs.Forcompletedetailsaboutthiswaiver
fromtheNOLProtectiveMeasures,pleaseseeourForm8-KfiledonJuly28,2010.Asof
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