| PROXYMED INC /FT LAUDERDALE/ ITEM 1A RISK FACTORS FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS FINANCIAL CONDITION OR BUSINESS As discussed under the caption, “Cautionary Statements Pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” in Item 7, certain statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report that are not related to historical results are forward looking statements |
| Forward-looking statements present our expectations or forecasts of future events |
| You can identify these statements by the fact that they do not relate strictly to historical or current facts |
| They frequently are accompanied by words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning |
| Actual results may differ materially from those projected or implied in the forward-looking statements |
| Subsequent written and oral forward looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth below and elsewhere in this report and in other reports filed by us with the Securities and Exchange Commission |
| We disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report |
| Risks Related to Acquisitions Our business will suffer if we fail to successfully integrate into our business the customers, products, and technology of the companies we acquire |
| We have undertaken several acquisitions in the past few years as part of a strategy to expand our business, and we may continue in the future to acquire businesses, assets, services, products, and technologies from other persons or entities |
| The anticipated efficiencies and other benefits to be derived from these acquisitions and future acquisitions may not be realized if we are unable to successfully integrate the acquired businesses into our operations, including customers, personnel, product lines, and technology |
| We are in the process of integrating into our operations, the customers, products, personnel and technology of our prior acquisitions, including MedUnite, Inc |
| (“MedUnite”) and PlanVista Corporation (“PlanVista”) |
| We may not be able to successfully integrate our past acquisitions, including MedUnite and PlanVista, or any future acquired businesses into our operations |
| Integration of acquired businesses can be expensive, time consuming, and may strain our resources |
| Integration may divert management’s focus and attention from other business concerns and expose us to unforeseen liabilities and risks |
| We may also lose key employees, strategic partners, and customers as a result of our inability to successfully integrate in a timely manner or as a result of relationships the acquired businesses may have with our competitors or 11 _________________________________________________________________ [13]Table of Contents the competitors of our customers and strategic partners |
| Some challenges we face in successfully integrating past and future acquired businesses into our operations include: • conflicts or potential conflicts with customers, suppliers, and strategic partners; • integration of platforms, product lines, networks, and other technology; • migration of new customers and products to our existing network; • ability to cross-sell products and services to our new and existing customer base; • retention of key personnel; • consolidation of accounting and administrative systems and functions; • coordinating new product and process development; • increasing the scope, geographic diversity and complexity of operations; • difficulties in consolidating facilities and transferring processes and know-how; and • other difficulties in the assimilation of acquired operations, technologies or products |
| Businesses we acquire may have undisclosed liabilities or contingent liabilities that are indeterminable and which may have a negative impact on our results of operations and require unanticipated expense |
| In pursuing our acquisition strategy, our investigations of the acquisition candidates may fail to discover certain undisclosed liabilities of the acquisition candidates, or may determine that certain contingent liabilities are indeterminable |
| If we acquire a company having undisclosed liabilities, as a successor owner we may be responsible for such undisclosed liabilities |
| If we acquire a company with liabilities that are indeterminable at the time of the acquisition, we may be required to make subsequent payments that could have a material adverse effect on our business |
| PlanVista did not indemnify us in connection with the merger between the Company and PlanVista in March 2004 |
| In connection with the MedUnite acquisition, we have only limited indemnification rights that may not be sufficient in amount or scope to offset losses resulting from unknown and undisclosed liabilities |
| Furthermore, the introduction of new products and services from acquired companies may have a greater risk of undetected or unknown errors, “bugs,” or liabilities than our historic products |
| We may lose customers as a result of acquisitions which may have an adverse impact on our business or operations |
| Acquisitions may cause disruptions in our business or the business of the acquired company, which could have material adverse effects on our business and operations |
| In addition, our customers, licensors and other business partners, in response to an acquisition or merger, may adversely change or terminate their relationships with us, which could have a material adverse effect on us |
| In addition, our customers may expect preferential pricing as a result of an acquisition or merger |
| An acquisition or merger may also adversely affect our ability to attract new customers which may have an adverse impact on our business or operations |
| Risks Related to Our Industry Government regulation and new legislation may have a negative impact on our business and results of operations |
| The healthcare industry is highly regulated and is subject to extensive and frequently changing federal and state healthcare laws |
| Several state and federal laws, including without limitation, the Health Insurance Portability and Accountability Act of 1996, commonly referred to as HIPAA, govern the collection, dissemination, use and confidentiality of patient healthcare information |
| The privacy regulations in particular are broad in scope, and will require constant vigilance for ongoing compliance |
| We cannot guarantee that we will be in compliance in the future |
| 12 _________________________________________________________________ [14]Table of Contents HIPAA also mandates the use of standard transactions, standard provider identifiers, security requirements and other provisions for electronic healthcare claims transactions |
| However, the Centers for Medicare and Medicaid Services, commonly referred to as CMS, announced that it would not take enforcement action against covered entities, such as us and our physician and payer customers, that continue to process non-compliant transactions after October 16, 2003 so long as we are making good faith efforts to become compliant and are operating under the “contingency planning” guidelines provided by CMS Approximately 98prca of our outbound transactions sent to payers are in a HIPAA-compliant format |
| However, in contrast, approximately 85prca of our inbound transactions from our provider customers are being received in a legacy format, and are being translated by us on behalf of these customers |
| Our contracts with our customers, strategic partners, providers, payers and other healthcare entities mandate or will mandate that our products and services be HIPAA compliant |
| If our products and services are not in compliance with HIPAA or any other alternative guidelines issued by the CMS on an ongoing basis, our customers, strategic partners, and other healthcare providers with whom we contract may terminate their contracts with us or sue us for breach of contract |
| Additionally, our revenues may be reduced as some of our non-compliant payer partners may be forced to accept paper-based transactions for which we may not be the recipient for processing |
| We may be subject to penalties for non-compliance by federal and state governments, and patients who believe that their confidential health information has been misused or improperly disclosed may have certain causes of actions under applicable state privacy or HIPAA-like laws against us, our partners or customers |
| We may not be able to maintain compliance with HIPAA standards for transaction formats, provider identifiers and security |
| Any failure to be in compliance could result in regulatory penalties being assessed against us, and weaken demand for our affected services |
| There are a significant number of state initiatives regarding healthcare services |
| If we are unable to comply with the standards set by the states in which we operate, we or our operations could be harmed |
| In our Transaction Services segment, we contract with multiple Preferred Provider Organization networks, referred to as PPO’s |
| These PPO networks are typically governed by the laws and regulations of the states in which they operate, in addition to federal Employee Retirement Income Security Act legislation, referred to as ERISA Over the last few years, a number of states have been actively changing their laws and regulations governing PPOs, and this trend may continue |
| It is difficult to determine when ERISA preemption of state PPO law applies |
| Our failure to comply with existing state laws or any new laws in the future could jeopardize our ability to continue business in the affected states, which would reduce our revenues |
| We are dependent on the growth of the Internet and electronic healthcare information markets |
| Many of our products and services are geared toward the Internet and electronic healthcare information markets |
| The perceived difficulty of securely transmitting confidential information over the Internet has been a significant barrier to conducting e-commerce and engaging in sensitive communications over the Internet |
| Our strategy relies in part on the use of the Internet to transmit confidential information |
| Any well-publicized compromise of Internet security may deter people from using the Internet to conduct transactions that involve transmitting confidential healthcare information and this may result in significantly lower revenues and operating income |
| Risks Related to Our Business General: Recent management changes may disrupt our operations, and we may not be able to retain key personnel or replace them when they leave |
| Since May 2005, we have experienced a number of changes in our senior management, including changes in our Chief Executive Officer, Chief Financial Officer, and President and Chief Operating Officer |
| John G Lettko assumed the position of Chief Executive Officer effective May 10, 2005 |
| Douglas O’Dowd became our interim 13 _________________________________________________________________ [15]Table of Contents Chief Financial Officer effective August 16, 2005, and was subsequently appointed as Chief Financial Officer in October 2005 |
| Lettko has also been appointed President, and Mr |
| O’Dowd was appointed Treasurer, each as of October 27, 2005 |
| On June 9, 2005, we announced the resignation of Nancy J Ham as President and Chief Operating Officer |
| Ham has not been replaced |
| On January 7, 2006, we entered into an agreement with David Oles pursuant to which Mr |
| Oles would resign as our General Counsel effective January 31, 2006, and terminate his employment agreement |
| These senior management changes could disrupt our ability to manage our business as we transition to and integrate a new management team, and any such disruption could adversely affect our operations, growth, financial condition and results of operations |
| Additionally, although we have entered into employment agreements with many of our senior executives, the loss of any of their services could cause our business to suffer |
| Our success is also dependent upon our ability to hire and retain qualified operations, development and other personnel |
| Competition for qualified personnel in the healthcare information services industry is intense, and we cannot assure that we will be able to hire or retain the personnel necessary for our planned operations |
| We may not prevail in ongoing litigation and may be required to pay substantial damages |
| Our business entities are party to various legal actions as either plaintiff or defendant in the ordinary course of business |
| The ultimate outcome of these actions is uncertain |
| If we are not successful in these actions, we could be subject to monetary damages that could reduce our cash flows and results of operations |
| In addition, we will continue to incur additional legal costs in connection with pursuing and defending such actions |
| See footnote 17 of our consolidated financial statements concerning ongoing litigation matters |
| We have senior and subordinated debt that matures in December 2008 and 2010 |
| If we are unable to obtain additional funding to repay or refinance our senior and subordinated debt prior to maturity, the lenders could foreclose and take certain other action against us, the effect on our operations and stock price could be significantly negative and we may be unable to continue as a going concern |
| Transaction Services Segment: Changes that reduce payer compensation for electronic claims may reduce our revenue and margins |
| Several payers recently terminated existing arrangements under which they paid us for electronic claims we submitted to them on behalf of our submitter customers |
| If we are unable to shift the cost of these claims to the submitting providers and vendors, or to enter into new payment arrangements with the payers for the affected claim volume, then our revenue will be reduced |
| As electronic transaction processing penetrates the healthcare industry more extensively, we will face increasing pressure to reduce our prices which may cause us to no longer be competitive |
| As electronic transaction processing extensively penetrates the healthcare market or becomes highly standardized, competition among electronic transaction processors will focus increasingly on pricing |
| This competition is putting intense pressure on us to reduce our pricing in order to retain market share |
| If we are unable to reduce our costs sufficiently to offset declines in our prices, or if we are unable to introduce new, innovative service offerings with higher margins, our results of operations could decline |
| Consolidation in the healthcare industry may give our customers greater bargaining power and lead us to reduce our prices |
| Many healthcare industry participants are consolidating to create integrated healthcare delivery systems with greater market power |
| As provider networks and managed care organizations consolidate, competition to provide products and services such as those we provide will become more intense, and the importance of establishing and maintaining relationships with key industry participants will become greater |
| These industry participants may try to 14 _________________________________________________________________ [16]Table of Contents use their market power to negotiate price reductions for our products and services |
| If we are forced to reduce prices, our margins will decrease, unless we are able to achieve corresponding reductions in expenses |
| Our business will suffer if we are unable to successfully integrate acquired IT platforms or if our existing Phoenix^sm platform is unstable or unable to accommodate our clients’ needs |
| Our business is dependent on the successful integration of operating platforms we have designed and acquired to provide a high quality service at a competitive cost to our customers |
| To the extent that we are unable to consolidate those acquired platforms without significant disruption to our customers, our business or our operations could be harmed |
| Additionally, if our Phoenix^sm platform that is the backbone of our EDI business is unstable or does not provide satisfactory outcomes to a significant number of clients, our business and our operations will be harmed |
| Our business and future success may depend on our ability to cross-sell our products and services |
| Our ability to generate revenue and growth partly depends on our ability to cross-sell our products and services to our existing customers and new customers resulting from acquisitions |
| Our ability to successfully cross-sell our products and services is one of the most significant factors influencing our growth |
| We may not be successful in cross-selling our products and services, and our failure in this area would likely have an adverse effect on our business |
| We depend on connections to insurance companies and other payers, and if we lose these connections, our service offerings would be limited and less desirable to healthcare providers |
| Our business depends upon a substantial number of payers, such as insurance companies, Medicare and Medicaid agencies, to which we have electronic connections |
| These connections may either be made directly or through a clearinghouse |
| We may not be able to maintain our links with all these payers on terms satisfactory to us |
| In addition, we cannot assure that we will be able to develop new connections, either directly or through clearinghouses, on satisfactory terms |
| Lastly, some third-party payers provide systems directly to healthcare providers, bypassing us and other third-party processors |
| Our failure to maintain existing connections with payers and clearinghouses or to develop new connections as circumstances warrant, or an increase in the utilization of direct links between providers and payers, could cause our electronic transaction processing system to be less desirable to healthcare participants, which would slow down or reduce the number of transactions that we process and for which we are paid |
| We have important business relationships with other companies to market and sell some of our clinical and financial products and services |
| If these companies terminate their relationships with us, or are less successful in the future, we will need to add this emphasis internally, which may divert our efforts and resources from other projects |
| For the marketing and sale of some of our products and services, we entered into important business relationships with physician office management information system vendors, with electronic medical record vendors, and with other distribution partners |
| These business relationships, which have required and may continue to require significant commitments of effort and resources, are an important part of our distribution strategy and generate substantial recurring revenue |
| Most of these relationships are on a non-exclusive basis |
| We may not be able to continue our relationships with our electronic commerce partners and other strategic partners, most of whom have significantly greater financial and marketing resources than we do |
| Also, our arrangements with some of our partners involve negotiated payments to the partners based on percentages of revenues generated by the partners |
| The success of our important business relationships will depend in part upon our partners’ own competitive, marketing and strategic considerations, including the relative advantages of alternative products being developed and marketed by such partners |
| If any such partners are unsuccessful in marketing our products, we will need to place added emphasis on these aspects of our business internally, which may divert our planned efforts and resources from other projects |
| 15 _________________________________________________________________ [17]Table of Contents A significant amount of our revenues in our Transaction Services segment is from one party |
| Loss of this relationship may adversely affect our profitability |
| NDCHealth Corporation, referred to as NDCHealth, represents approximately 8dtta0prca, 8dtta0prca and 15dtta0prca of our consolidated revenues for the years ended December 31, 2005, 2004 and 2003, respectively and 10prca, 10prca and 10prca of our Transaction Services revenues for the same periods |
| The relationship with NDCHealth is an important one and provides us with a base of physicians who utilize our services |
| Loss of this relationship without any ability to contact these physicians directly may significantly reduce our revenues and operating profits |
| The adoption of electronic processing of clinical transactions in the healthcare industry is proceeding slowly; thus, the future of our business is uncertain which may have an adverse impact on our business or operations |
| Our strategy anticipates that electronic processing of clinical healthcare transactions, including transactions involving prescriptions and laboratory results, will become more widespread and that providers and third-party institutions increasingly will use electronic transaction processing networks for the processing and transmission of data |
| The rate at which providers adopt the use of electronic transmission of clinical healthcare transactions (and, in particular, the use of the Internet to transmit them) continues to be slow, and the continued or accelerated conversion from paper-based transaction processing to electronic transaction processing in the healthcare industry, using proprietary healthcare management systems or the Internet, may not occur |
| An error by us in the process of providing clinical connectivity or transmitting prescription and laboratory data could result in substantial injury to a patient, and our liability insurance may not be adequate in a catastrophic situation which may have an adverse impact on our business or operations |
| Our business exposes us to potential liability risks that are unavoidably part of being in the healthcare electronic transaction processing industry |
| Since some of our products and services relate to the prescribing and refilling of drugs and the transmission of medical laboratory results, an error by any party in the process could result in substantial injury to a patient |
| As a result, our liability risks are significant |
| Our insurance may be insufficient to cover potential claims arising out of our current or proposed operations, and sufficient coverage may not be available in the future at a reasonable cost |
| A partially or completely uninsured claim against us, if successful and of sufficient magnitude, would have significant adverse financial consequences |
| Our inability to obtain insurance of the type and in the amounts we require could generally impair our ability to market our products and services |
| Our businesses have many competitors |
| We face competition from many healthcare information systems companies and other technology companies |
| Many of our competitors are significantly larger and have greater financial resources than we do and have established reputations for success in implementing healthcare electronic transaction processing systems |
| Other companies have targeted this industry for growth, including the development of new technologies utilizing Internet-based systems |
| We may not be able to compete successfully with these companies, and these or other competitors may commercialize products, services or technologies that render our products, services or technologies obsolete or less marketable |
| Our PPO and provider arrangements provide no guarantee of long-term relationships |
| The majority of our contracts with PPOs and providers can be terminated without cause, generally on 90 days’ notice |
| For our Transaction Services business, the loss of any one provider may not be material, but if large numbers of providers chose to terminate their contracts, our revenues and net income could be materially adversely affected |
| The termination of any PPO contract would render us unable to provide our customers with network access to that PPO, and therefore would adversely affect our ability to reprice claims and derive revenues |
| Furthermore, we rely on our participating PPOs and provider groups to ensure participation by their providers |
| Our PPO contracts generally do not provide us with a direct recourse against a participating provider that chooses not to honor its obligation to provide a discount, or chooses to discontinue its participation in our National Preferred Provider Network, referred 16 _________________________________________________________________ [18]Table of Contents to as NPPN Termination of provider contracts or other changes in the manner in which these parties conduct their business could negatively affect our ability to provide services to our customers |
| Some providers have historically been reluctant to participate in secondary networks |
| Our percentage of savings business model sometimes allows a payer to utilize our network discounts in circumstances where our NPPN is not the payer’s primary network |
| In these circumstances, NPPN participating providers are not traditionally given the same assurances of patient flow that they receive when they are part of a primary network |
| Historically, some providers have been reluctant to participate in network arrangements that do not provide a high degree of visibility to patients |
| Although the steerage provided by our payers as a whole and the speed and efficiency with which we provide claims repricing services makes NPPN affiliation an attractive option for providers, our business model could discourage providers from commencing or maintaining an affiliation with NPPN Our cost containment accounts receivable are subject to adjustment |
| We generally record revenue for our services when the services are performed, less amounts reserved for claim reversals and bad debts |
| The estimates for claim reversals and bad debts are based on judgment and historical experience |
| Many of the claims are not fully adjudicated for over 90 days |
| To the extent that actual claim reversals and bad debts associated with our business exceed the amounts reserved, such difference could have a material adverse impact on our results of operations and cash flows |
| Laboratory Services Segment: Our Laboratory Services Communications Segment has a high customer concentration |
| We currently have more than 50prca of our sales to one customer |
| If this customer chooses to do business with a competitor or chooses to handle the business on its own, the loss of the associated revenue could substantially harm our business |
| Risks Related to Our Technology Evolving industry standards and rapid technological changes could result in our products becoming obsolete or no longer in demand |
| Rapidly changing technology, evolving industry standards and the frequent introduction of new and enhanced Internet-based services characterize the market for our products and services |
| Our success will depend upon our ability to enhance our existing services, introduce new products and services on a timely and cost-effective basis to meet evolving customer requirements, achieve market acceptance for new products or services and respond to emerging industry standards and other technological changes |
| We may not be able to respond effectively to technological changes or new industry standards |
| Moreover, other companies may develop competitive products or services, or that any such competitive products or services will not cause our products and services to become obsolete or no longer in demand |
| We depend on uninterrupted computer access for our customers; any prolonged interruptions in operations could cause customers to seek alternative providers of our services |
| Our success is dependent on our ability to deliver high-quality, uninterrupted computer networking and hosting, requiring us to protect our computer equipment and the information stored in servers against damage by fire, natural disaster, power loss, telecommunications failures, unauthorized intrusion and other catastrophic events |
| While we still continue to operate production networks in our Norcross facility, any damage or failure resulting in prolonged interruptions in our operations could cause our customers to seek alternative providers of our services |
| In particular, a system failure, if prolonged, could result in reduced revenues, loss of customers and damage to our reputation, any of which could cause our business to materially suffer |
| While we carry property and business interruption insurance to cover operations, the coverage may not be adequate to compensate us for losses that may occur |
| 17 _________________________________________________________________ [19]Table of Contents Computer network systems like ours could suffer security and privacy breaches that could harm our customers and us |
| We currently operate servers and maintain connectivity from multiple facilities |
| Our infrastructure may be vulnerable to computer viruses, break-ins and similar disruptive problems caused by customers or other users |
| Computer viruses, break-ins or other security problems could lead to interruption, delays or cessation in service to our customers |
| These problems could also potentially jeopardize the security of confidential information stored in the computer systems of our customers, which may deter potential customers from doing business with us and give rise to possible liability to users whose security or privacy has been infringed |
| The security and privacy concerns of existing and potential customers may inhibit the growth of the healthcare information services industry in general, and our customer base and business in particular |
| A significant security breach could result in loss of customers, loss of revenues, damage to our reputation, direct damages, costs of repair and detection and other unplanned expenses |
| While we carry professional liability insurance to cover such breaches, the coverage may not be adequate to compensate us for losses that may occur |
| The protection of our intellectual property requires substantial resources |
| We rely largely on our own security systems and confidentiality procedures, and employee nondisclosure agreements for certain employees to maintain the confidentiality and security of our proprietary information, including our trade secrets and internally developed computer applications |
| If third parties gain unauthorized access to our information systems, or if anyone misappropriates our proprietary information, this may have a material adverse effect on our business and results of operations |
| We are in the process of acquiring patent protection for our Phoenix^sm technology and other proprietary technology, however we have not traditionally sought patent protection for our technology |
| Trade secret laws offer limited protection against third party development of competitive products or services |
| Because we lack the protection of registered copyrights for our internally-developed software and software applications, we may be vulnerable to misappropriation of our proprietary technology by third parties or competitors |
| The failure to adequately protect our technology could adversely affect our business |
| We may be subject to infringement claims |
| As our competitors’ healthcare information systems increase in complexity and overall capabilities, and the functionality of these systems further overlap, we could be subject to claims that our technology infringes on the proprietary rights of third parties |
| These claims, even if without merit, could subject us to costly litigation and could require the resources, time, and attention of our technical, legal, and management personnel to defend |
| The failure to develop non-infringing technology or trade names, or to obtain a license on commercially reasonable terms, could adversely affect our operations and revenues |
| We are currently involved in a trademark dispute with Metavante Corporation that may limit our ability to use our new name |
| We have recently been sued by Metavante Corporation over our use of the tradename “MedAvant |
| ” We are defending this case vigorously |
| If we are unsuccessful, we may incur damages or have to limit or curtail further use of the MedAvant mark |
| Loss of the mark would require us to incur the cost to develop and implement a new mark, and may reduce our ability to compete effectively in the marketplace, and reduce our revenue |
| If our ability to expand our network infrastructure is constrained, we could lose customers, and that loss could adversely affect our operating results |
| We must continue to expand and adapt our network and technology infrastructure to accommodate additional users, increased transaction volumes, and changing customer requirements |
| We may not be able to accurately project the rate or timing of increases, if any, in the volume of transactions we process, reprice or otherwise service or be able to expand and upgrade our systems and infrastructure to accommodate such increases |
| We may be unable to expand or adapt our network infrastructure to meet additional demand or our customers’ changing needs on a timely basis, at a commercially reasonable cost or at all |
| Our current information systems, procedures and controls may not continue to support our operations while maintaining acceptable overall performance and may hinder our 18 _________________________________________________________________ [20]Table of Contents ability to exploit the market for healthcare applications and services |
| Service lapses could cause our users to switch to the services of our competitors |
| Risks Related to Our Stock We incurred losses in 2003, 2004 and 2005 |
| We may not be able to generate positive earnings in the future and this could have a detrimental effect on the market price of our stock |
| In the last three years we have incurred substantial losses, including losses of dlra105dtta3 million for the year ended December 31, 2005, dlra3dtta8 million for the fiscal year ended December 31, 2004, and dlra5dtta0 million in the fiscal year ended December 31, 2003 |
| As of December 31, 2005, December 31, 2004 and December 31, 2003, we had an accumulated deficit of dlra209dtta4 million, dlra104dtta1 million and dlra100dtta3 million, respectively |
| Continued shortfalls could deplete our cash reserves, making it difficult for us to obtain credit at a favorable rate, or continue investing in infrastructure we need to compete in the future |
| Continued shortfalls may also cause our share price to decline |
| An inability to maintain effective internal controls over financial reporting as required by the Sarbanes-Oxley Act of 2002 could have an adverse affect on our stock price |
| Our certification that we have sufficient internal controls in place today is no guarantee that we will maintain those controls in the future or that those controls will be effective in ensuring the accuracy of the financial reports |
| An inability to maintain effective controls or our receiving an adverse or qualified opinion on the effectiveness of our internal controls from our independent registered public accounting firm could have a negative impact on our stock price |
| We may issue additional shares that could adversely affect the market price of our Common Stock |
| Certain events over which you have no control could result in the issuance of additional shares of our Common Stock which would dilute your ownership percentage in the Company and could adversely affect the market price of our Common Stock |
| We may issue additional shares of Common Stock or Preferred Stock for many reasons including: • to raise additional capital or finance acquisitions; • upon the exercise or conversion or an exchange of outstanding options, warrants and shares of convertible preferred stock; or • in lieu of cash payment of dividends |
| In addition, the number of shares of common stock that we are required to issue in connection with our outstanding warrants may increase if certain anti-dilution events occur (such as, certain issuances of common stock, options and convertible securities) |
| The trading price of our common stock may be volatile |
| The stock market, including the Nasdaq National Market, on which the shares of our common stock are listed, has from time to time experienced significant price and volume fluctuations that may be unrelated to the operating performance of particular companies |
| In addition, the market price of our common stock, like the stock prices of many publicly traded companies in the healthcare industry, has been and may continue to be highly volatile |