TeleNav 2010 Annual Report Download - page 41

future failure by any of our stockholders who is a Chinese resident, or controlled by a Chinese resident, to
comply with relevant requirements under this regulation could subject us to fines or sanctions imposed by the
Chinese government, including restrictions on our Chinese subsidiary’s ability to pay dividends or make
distributions to us.
We may be subject to fines and legal sanctions if we or our employees who are Chinese citizens fail to comply
with Chinese regulations relating to employee stock options granted to Chinese citizens.
On December 25, 2006, the PBOC, a Chinese government agency, issued the “Administration Measures on
Individual Foreign Exchange Control,” and its implementation rules were issued by SAFE and took effect as of
February 1, 2007. Under these regulations, all foreign exchange matters involved in an employee stock option
plan or similar plan in which Chinese citizens participate requires approval from the SAFE or its authorized
branch. On March 28, 2007, SAFE promulgated the “Application Procedure of Foreign Exchange Administration
for Domestic Individuals Participating in Employee Stock Holding Plan or Stock Option Plan of Overseas-Listed
Company,” or the Stock Option Rule. Under the Stock Option Rule, Chinese citizens who are granted stock
options or restricted share units, or issued restricted shares by an overseas publicly listed company are required to
complete certain procedures and transactional foreign exchange matters upon the examination by, and approval
of, SAFE. We and our employees who are Chinese citizens who have been granted stock options are subject to
the Stock Option Rule. Although we have made an application to SAFE, our request may not be granted in a
timely manner, if at all. If the relevant Chinese regulatory authority determines that our Chinese employees who
hold such options or our Chinese subsidiaries fail to comply with these regulations after our listing, such
employees and our Chinese subsidiaries may be subject to fines and legal sanctions.
If securities analysts do not publish research or reports about our business or if they publish negative
evaluations of our stock, the price of our stock could decline.
We expect that the trading price for our common stock will be affected by any research or reports that
industry or financial analysts publish about us or our business. If one or more of the analysts who may elect to
cover us downgrade their evaluations of our stock, the price of our stock could decline. For example, in late
July 2010, we announced that we were in discussions with Sprint to renegotiate our agreement and several
financial analysts published research reports downgrading our stock. After our announcement and the publication
of these reports, our stock price fell almost 40% in a single day. If one or more of these analysts cease coverage
of our company, our stock may lose visibility in the market, which in turn could cause its price to decline. If our
stock continues to trade at prices below $5.00 per share, financial analysts may terminate coverage of our
company due to internal policies within their investment banks, which could result in further stock price declines.
Our stock price has fluctuated and declined significantly since our IPO in May 2010, and may continue to
fluctuate or decline in the future.
Our common stock was sold in our IPO at $8.00 per share. Although our common stock traded at prices as
high as $11.48 per share shortly after our IPO, it has also traded at prices as low as $4.65 more recently. Future
fluctuations or declines in the trading price of our common stock may result from a number of events or factors,
including those discussed in the preceding risk factors relating to our operations, as well as:
• actual or anticipated fluctuations in our operating results;
• changes in the financial projections we may provide to the public or our failure to meet these
projections;
• announcements by us or our competitors of significant technical innovations, acquisitions, strategic
partnerships, joint ventures, capital raising activities or capital commitments;
• the public’s response to our press releases or other public announcements, including our filings with
the SEC; and
• lawsuits threatened or filed against us.
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