Our operations and financial results are subject to various risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock.
−Removed: You should carefully consider the risks and uncertainties described below in
−Removed: addition to the other information set forth in this Annual Report on Form 10-K, including the section titled Managements Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and related notes, before making any investment in our common stock.
+Added: You should carefully consider the risks and uncertainties described below in addition to the other information set forth in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making any investment in our common stock.
The risks and uncertainties described below are not the only ones we face.
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Unfavorable or adverse outcomes may result in losses, exhaustion of financial resources or other adverse effects, which could encumber our ability to develop and commercialize our products.
−Removed: We may need to raise additional capital to support our business growth, and this capital will be dilutive, may cause our stock price to drop or may not be available on acceptable terms, if at all.
−Removed: We may need to raise additional capital, which may not be available to us when needed or may not be available on terms acceptable to us, to support our business growth or to respond to business opportunities, challenges or unforeseen circumstances, including sales under our ATM or our universal shelf registration statement.
−Removed: Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, the condition of the capital markets, the terms of our current contractual obligations and other factors.
−Removed: If we raise additional funds through the issuance of equity, equity-linked or debt securities, including those under our ATM or our Universal Shelf Registration Statement, those securities may have rights, preferences, or privileges senior to the rights of our common stock, and our existing stockholders may experience dilution.
−Removed: Additionally, we are unable to predict the future success of our ATM offering or any other offering.
−Removed: Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales or other financings might occur, could depress the market price of our common stock and could also impair our ability to raise capital through the sale of additional equity securities.
−Removed: If we issue debt securities or incur indebtedness, we could experience increased future payment obligations and a need to comply with restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
−Removed: If we are unable to obtain additional capital or are unable to obtain additional capital on satisfactory terms, our ability to continue to support our business growth or to respond to business opportunities, challenges, or other circumstances could be adversely affected, and our business may be harmed.
We may not be able to capitalize on market opportunities related to our licensing strategy or our patent portfolio.
Our business strategy includes licensing our patents and technology to other companies in order to reach a larger end-user base than we could reach through direct sales and marketing efforts;
−Removed: as such, our business strategy and revenues will depend on intellectual property licensing fees and royalties for the majority of our revenues.
+Added: as such, our business strategy and revenues may depend on intellectual property licensing fees and royalties for the majority of our revenues.
We currently derive minimal revenue from licensing activities, and royalties, and we cannot assure you that we will successfully capitalize on our market opportunities or that our current business strategy will succeed.
−Removed: Factors that may affect our ability to execute our current business strategy include, but are not limited to, the following:
Although to date we have entered into a limited number of settlement and license agreements, we may not be successful in entering into further licensing relationships, or if we are successful in entering into such relationships, the acquisition of them may be expensive, and they, as well as our existing settlement and our existing and pending license agreements may not generate the financial results, we expect.
+Added: Factors that may affect our ability to execute our current business strategy include, but are not limited to, the following:
Third parties may challenge the validity of our patents;
The pendency of our various litigations may cause potential licensees not to do business with us;
+Added: Our patents may expire before we can make our business strategy successful;
We face, and we expect to continue to face, intense competition from new and established competitors who may have superior products and services or better marketing, financial or other capacities than we do;
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Further, we can give no assurance that we will not unintentionally violate such laws or regulations or that such laws or regulations will not be modified, or that new laws or regulations will be enacted in the future which would cause us to be in violation of such laws or regulations.
−Removed: For example, Voice-Over-Internet Protocol (VoIP) services are not currently subject to all the same regulations that apply to traditional telephony, but it is possible that similar regulations may be applied to VoIP in the future and that these could result in substantial costs
−Removed: to us which could adversely affect the marketability of our products and planned products related to VoIP.
+Added: For example, Voice-Over-Internet Protocol (“VoIP”) services are not currently subject to all the same regulations that apply to traditional telephony, but it is possible that similar regulations may be applied to VoIP in the future and that these could result in substantial costs to us which could adversely affect the marketability of our products and planned products related to VoIP.
For further example, the use of the Internet and private Internet Protocol (“IP”) networks for communication is largely unregulated within the United States, but may become regulated in the future;
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Our business depends on the growth of instant messaging, VoIP, mobile services, streaming video, file transfer and remote desktop and other next-generation Internet-based applications.
−Removed: A decline in the use of these applications due to complexity or cost of these applications relative to alternate traditional or newly developed communications channels, or development of alternative technologies, could cause a material decline in the number of users in these areas.
+Added: A decline in the use of these applications due to complexity or cost relative to alternate traditional or newly developed communications channels, or development of alternative technologies, could cause a material decline in the number of users in these areas.
More aggressive domestic or international regulation of the Internet in general, and Internet telephony providers and services specifically may materially and adversely affect our business, financial condition, operating results, and future prospects .
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Compliance with any new or existing laws or regulations could be difficult and expensive, affect the manner in which we conduct our business and negatively impact our business, prospects, financial condition, and results of operations.
+Added: We may need to raise additional capital to support our business growth, and this capital will be dilutive, may cause our stock price to drop or may not be available on acceptable terms, if at all.
+Added: We may need to raise additional capital, which may not be available to us when needed or may not be available on terms acceptable to us, to support our business growth or to respond to business opportunities, challenges, or unforeseen circumstances, including sales under our ATM or our universal shelf registration statement.
+Added: Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, the condition of the capital markets, the terms of our current contractual obligations and other factors.
+Added: If we raise additional funds through the issuance of equity, equity-linked or debt securities, including those under our ATM or our Universal Shelf Registration Statement, those securities may have rights, preferences, or privileges senior to the rights of our common stock, and our existing stockholders may experience dilution.
+Added: Additionally, we are unable to predict the future success of our ATM or any other offering.
+Added: Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales or other financings might occur, could depress the market price of our common stock, and could also impair our ability to raise capital through the sale of additional equity securities.
+Added: If we issue debt securities or incur indebtedness, we could experience increased future payment obligations and a need to comply with restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
+Added: If we are unable to obtain additional capital or are unable to obtain additional capital on satisfactory terms, our ability to continue to support our business growth or to respond to business opportunities, challenges, or other circumstances could be adversely affected, and our business may be harmed.
If we experience security breaches, we could be exposed to liability and our reputation and business could suffer.
We expect to retain certain confidential and proprietary customer information in our secure data centers and secure domain name registry, as well as personal data and other confidential and proprietary information relating to our business.
−Removed: It will be critical to our business strategy that our facilities and infrastructure remain secure and are
−Removed: perceived by the marketplace to be secure.
+Added: It will be critical to our business strategy that our facilities and infrastructure remain secure and are perceived by the marketplace to be secure.
Our secure domain name registry operations will also depend on our ability to maintain our computer and telecommunications equipment in effective working order and to reasonably protect our systems against interruption, and potentially depend on protection by other registrars in the shared registration system.
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It is possible that we may have to expend additional financial and other resources to address such problems.
+Added: The COVID-19 pandemic is increasing vulnerability to cyber-attacks, as more individuals and companies work online, which increases these risks.
As a provider of Internet security software and technology, we may be the target of dedicated efforts by hackers and other third parties to overcome or defeat our security measures.
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The United Kingdom enacted a Data Protection Act that substantially implements the GDPR.
−Removed: We are evaluating obligations imposed on us by the GDPR and we may be required to incur substantial expense in order to make significant changes to our product and business operations
−Removed: in connection with obtaining and maintaining compliance with the GDPR and similar legislation, such as the UK Data Protection Act, all of which may adversely affect our revenue and product sales.
+Added: We are evaluating obligations imposed on us by the GDPR and we may be required to incur substantial expense in order to make significant changes to our product and business operations in connection with obtaining and maintaining compliance with the GDPR and similar legislation, such as the UK Data Protection Act, all of which may adversely affect our revenue and product sales.
Additionally, California recently enacted legislation, the California Consumer Privacy Act (the “CCPA”) that, among other things, requires covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information.
We cannot fully predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
+Added: Additionally, a new privacy law, the California Privacy Rights Act (“CPRA”), recently was certified by the California Secretary of State to appear on the ballot for the November 3, 2020 election.
+Added: If this initiative is approved by California voters, the CPRA would significantly modify the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs.
More generally, we cannot yet fully determine the impact these or future laws, regulations and standards may have on our business.
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The need to educate potential customers about our patent rights and our product and service capabilities;
+Added: The impact of the COVID-19 pandemic on our potential customers and their business operations, including their budgetary constraints and resources devoted to adopting new products.
Our customers’ willingness to invest potentially substantial resources and modify their network infrastructures to take advantage of our products;
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Sales to government authorities can be extended and unpredictable.
−Removed: Government authorities generally have complex budgeting, purchasing, and regulatory processes that govern their capital spending, and their spending is likely to be adversely impacted by economic conditions.
+Added: Government authorities generally have complex budgeting, purchasing, and regulatory processes that govern their capital spending, and their spending is likely to be adversely impacted by economic conditions, including impacts from the COVID-19 pandemic.
In addition, in many instances, sales to government authorities may require field trials and may be delayed by the time it takes for government officials to evaluate multiple competing bids, negotiate terms, and award contracts.
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We currently generate revenue from a limited number of customers that have entered settlement and license agreements.
−Removed: Our GABRIEL Collaboration Suite™ is currently generating limited revenue, it will take time for us to grow our installed user base and generate new customers.
+Added: Our GABRIEL Collaboration Suite™ is currently generating limited revenue, and it will take time for us to grow our installed user base and generate new customers.
Additionally, there is no guarantee that we will be able to derive revenue from new customers, sustain or increase revenue from existing customers or replace customers from whom we currently generate revenue.
As a result, our revenue may be limited or static.
−Removed: We have limited technical resources and are at an early stage in commercialization of our GABRIEL Collaboration Suite ™ .
+Added: We have limited technical resources and are at an early stage in commercialization of our GABRIEL products.
Part of our business includes the internal development of commercial products we seek to monetize.
This aspect of our business may require significant capital, time and resources and we cannot guarantee that it will be successful or meet our expectations.
−Removed: We currently have only one commercial product, the GABRIEL Collaboration Suite™.
As such, we have a small technical team, which may limit our ability to rapidly adapt our product to customer requirements or add new product features to maintain our competitive edge and drive adoption.
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Our business will depend upon, among other things, the capacity, reliability, security, and unimpeded access of the infrastructure owned by third parties that we will use to deploy our offerings.
−Removed: We have no control over the operation,
−Removed: quality or maintenance of a significant portion of that infrastructure or whether those third parties will upgrade or improve their equipment.
+Added: We have no control over the operation, quality, or maintenance of a significant portion of that infrastructure or whether those third parties will upgrade or improve their equipment.
We depend on these companies to maintain the operational integrity of our connections.
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Use of the Internet has over-burdened existing telecommunications infrastructures, and many high traffic areas have begun to experience interruptions in service.
−Removed: As a result, certain local telephone carriers have petitioned governmental
−Removed: agencies to enforce regulatory tariffs on IP telephony traffic that crosses over their traditional telephone networks.
+Added: As a result, certain local telephone carriers have petitioned governmental agencies to enforce regulatory tariffs on IP telephony traffic that crosses over their traditional telephone networks.
If the relief sought in these petitions is granted, the costs of communicating via online could increase substantially, potentially adversely affecting the growth in the use of online secure communications.
Any of these developments could have an adverse effect on our business.
−Removed: The departure of Kendall Larsen, our Chief Executive Officer and President, and/or other key personnel could compromise our ability to execute our strategic plan and may result in additional severance costs to us.
+Added: The departure of Kendall Larsen, our Chief Executive Officer and President, and/or other key personnel could compromise our ability to execute our strategic plan and materially harm our business.
Our success largely depends on the skills, experience, and performance of our key personnel.
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The loss of Mr.
−Removed: Larsen, or our failure to retain other key personnel or failure to adequately plan for the succession of key personnel, would jeopardize our ability to execute our strategic plan and materially harm our business.
+Added: Larsen, or our failure to retain other key personnel or adequately plan for the succession of key personnel, would jeopardize our ability to execute our strategic plan and materially harm our business.
We will need to recruit and retain additional qualified personnel to successfully grow our business.
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Our international expansion will subject us to additional costs and risks, and our plans may not be successful.
−Removed: We expect to expand our presence internationally in Japan and elsewhere through, for example, international partnerships, joint ventures and other arrangements with third parties and the possibility of establishing international subsidiaries and offices.
+Added: We expect to expand our presence internationally in Japan and elsewhere through, third party arrangements such as international partnerships, joint ventures and potentially establishing international subsidiaries and offices.
Our international expansion may present challenges and risks, including those inherent in international operations, to us and may require significant attention from management.
−Removed: For example, the recent outbreak of the coronavirus could disrupt and slow our international expansion and partnership efforts, as our international partners businesses could be disrupted by the outbreak.
−Removed: We may not be successful in our international partnerships, expansion efforts, and we may incur significant operating expenses.
−Removed: For instance, as previously disclosed in our public filings, we terminated certain agreements with Public Intelligence Technology Associates in March 2018.
+Added: For example, the COVID-19 pandemic could disrupt and slow our international expansion and partnership efforts, as our international partners’ businesses could be disrupted.
+Added: We may not be successful in our international partnerships, expansion efforts, and we may incur significant operating expenses in our efforts to expand internationally.
We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to continue to devote substantial time to various compliance initiatives.
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If we experience any material weaknesses in our internal control over financial reporting in the future or are unable to provide unqualified management or attestation reports about our internal controls, we may be unable to meet financial and other reporting deadlines and may incur costs associated with remediation, and any of which could cause our share price to decline.
−Removed: Moreover, if we identify
−Removed: deficiencies in our internal control over financial reporting that are deemed to be material weaknesses in future periods, the market price of our ordinary shares could decline, and we could be subject to potential delisting by the NYSE and review by the NYSE, the SEC, or other regulatory authorities, which would require the expenditure by us of additional financial and management resources.
+Added: Moreover, if we identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses in future periods, the market price of our ordinary shares could decline, and we could be subject to potential delisting by the NYSE and review by the NYSE, the SEC, or other regulatory authorities, which would require the expenditure by us of additional financial and management resources.
As a result, our shareholders could lose confidence in our financial reporting, which would harm our business and the market price of our ordinary shares.
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and foreign tax law on our business is uncertain and could be adverse, and we will continue to monitor and assess the impact of any such changes .
+Added: War, terrorism, other acts of violence, or natural or manmade disasters may affect the markets in which we operates, our clients and our service delivery.
+Added: Our business may be adversely affected by instability, disruption, or destruction in a geographic region in which we operates, regardless of cause, including war, terrorism, riot, civil insurrection, or social unrest, and natural or manmade disasters, including famine, flood, fire, earthquake, storm, or pandemic events and spread of disease, such as the COVID-19 pandemic.
+Added: Such events may cause our customers to delay their decisions on spending for the services we provide and give rise to sudden significant changes in regional and global economic conditions and cycles.
+Added: These events may also pose risks to our personnel and to physical facilities and operations, which could adversely affect our financial results.
+Added: The global COVID-19 pandemic may harm our business, financial condition, and results of operations .
+Added: In December 2019, a novel coronavirus, COVID-19 was reported in China and in March 2020, the World Health Organization declared it a pandemic.
+Added: This contagious disease outbreak has continued to spread across the globe and is impacting worldwide economic activity and financial markets.
+Added: In light of the uncertain and rapidly evolving situation relating to the spread of COVID-19, we have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and other third parties with whom we interact.
+Added: We are requiring all employees to work remotely and have also suspended all non-essential travel worldwide for our employees.
+Added: While we have a distributed workforce and our employees are accustomed to working remotely or working with other remote employees, our workforce is not fully remote.
+Added: Our employees and consultants travel frequently to establish and maintain relationships with one another, our customers and prospective customers, partners, and investors.
+Added: Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available, temporarily suspending travel and restricting the ability to do business in person could negatively affect our customer success efforts, sales and marketing efforts, challenge our ability to enter into customer contracts in a timely manner, slow down our recruiting efforts, or create operational or other challenges, any of which could harm our business, financial condition and results of operations.
+Added: Furthermore, if a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, not possible, for us to continue our business for a substantial period of time.
+Added: The increase in remote working may also result in consumer privacy, IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.
+Added: In addition, the COVID-19 pandemic may disrupt the operations of our customers, partners, suppliers, and other third-party providers for an indefinite period of time, including as a result of travel restrictions, adverse effects on budget planning processes, and/or business shutdowns, all of which could negatively impact our business, financial condition, and results of operations.
+Added: More generally, the COVID-19 pandemic could continue to adversely affect economies and financial markets globally, potentially leading to an economic downturn, which could decrease technology spending and adversely affect our business.
Risks Related to Our Common Stock
Trading in our common stock is limited and the price of our common shares may be subject to substantial volatility.
−Removed: Our common stock is listed on the NYSE American LLC (formerly the NYSE MKT LLC).
+Added: Our common stock is currently listed on the NYSE and was previously listed on the NYSE American LLC (formerly the NYSE MKT LLC).
Over the past years, the market price of our common stock has experienced significant fluctuations.
−Removed: Between January 1, 2019, and December 31, 2019, the reported last adjusted closing price on NYSE American LLC for our common stock ranged between $2.40 and $7.63 per share.
+Added: Between January 1, 2020, and December 31, 2020, the reported last adjusted closing price on the NYSE American LLC, and now NYSE, for our common stock ranged between $3.20 and $7.54 per share.
The price of our common stock may continue to be volatile as a result of several factors, some of which are beyond our control.
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General conditions in the markets in which we compete;
−Removed: • General social, political, economic and financial conditions, including the significant volatility in the global financial markets.
+Added: General social, political, economic, and financial conditions, including the significant volatility in the global financial markets, and impacts from the COVID-19 pandemic.
In addition, we believe there has been and may continue to be substantial trading in derivatives of our stock, including short selling activity or related similar activities, which are beyond our control and which may be beyond the full control of the SEC and Financial Institutions Regulatory Authority or “FINRA”.
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Factors that could cause fluctuations in the market price of our common stock include, but are not limited to the following:
−Removed: • Price and volume fluctuations in the overall stock market from time to time;
+Added: Price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment, in particular related to the COVID-19 pandemic;
Volatility in the market prices and trading volumes of companies in our industry or companies that investors consider comparable;
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Any significant change in our management;
−Removed: • General economic conditions and slow or negative growth of our markets.
+Added: General economic conditions and slow or negative growth of our markets, including any economic downturn from the COVID-19 pandemic;
Further, in recent years the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
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In addition, the stock prices of many technology companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies.
−Removed: These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, government shutdowns, global pandemics (such as the recent outbreak of the coronavirus), interest rate changes the stability of the EU and the exit of the United Kingdom or international currency fluctuations, may cause the market price of our common stock to decline.
+Added: These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, government shutdowns, global pandemics (such as the COVID-19 pandemic), interest rate changes the stability of the EU and the exit of the United Kingdom or international currency fluctuations, may cause the market price of our common stock to decline.
In the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.
−Removed: We do not currently pay dividends on our common stock and thus stockholders must look to appreciation of our common stock to realize a gain on their investments.
+Added: We have broad discretion in how we apply our funds, and we may not use these funds effectively, which could affect our results of operations and cause our stock price to decline.
+Added: Our management will have broad discretion in the application of our existing cash, cash equivalents and marketable securities and could spend these funds in ways that do not improve our results of operations or enhance the value of our common stock.
+Added: Pending their use, we may invest our available funds in a manner that does not produce income or that loses value.
+Added: The failure by our management to apply our available funds effectively could result in financial losses that could cause the price of our common stock to decline and delay the development of our products.
+Added: In addition, an entity that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, owning, trading, or holding certain types of securities would be deemed an Investment Company under the Investment Company Act of 1940 (the “1940 Act”).
+Added: If we do not manage our investments and business in a manner that meets the requirements for an exemption under the 1940 Act, we may be deemed to be an investment company under the 1940 Act and subject to additional limitations on operating our business including limitations on the issuance of securities, which may make it difficult for us to raise capital.
+Added: We do not regularly pay dividends on our common stock and thus stockholders must look to appreciation of our common stock to realize a gain on their investments.
Our dividend policy is within the discretion of our Board of Directors and will depend upon various factors, including our business, financial condition, results of operations, capital requirements, and investment opportunities.
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This appreciation may not occur.
−Removed: The exercise of our outstanding stock options, restricted stock units and issuance of new shares would result in a dilution of our current stockholders voting power and an increase in the number of shares eligible for future resale in the public market which may negatively impact the market price of our stock.
−Removed: The exercise of our outstanding vested stock options would dilute the ownership interests of our existing stockholders.
−Removed: As of December 31, 2019, we had outstanding options to purchase an aggregate of 5,630,021 shares of common stock representing approximately 8% of our total shares outstanding of which 4,079,687 were vested and therefore exercisable.
+Added: The exercise of our outstanding stock options, warrants and RSUs and issuance of new shares would result in a dilution of our current stockholders’ voting power and an increase in the number of shares eligible for future resale in the public market which may negatively impact the market price of our stock.
+Added: The exercise of our outstanding vested stock options, warrants and RSUs would dilute the ownership interests of our existing stockholders.
+Added: As of December 31, 2020, we had outstanding options, warrants and RSUs to purchase an aggregate of 6,341,844 shares of common stock representing approximately 9% of our total shares outstanding of which 4,426,250 were vested and therefore exercisable.
To the extent outstanding stock options are exercised, additional shares of common stock will be issued, existing stockholders’ percentage voting interests will decline and the number of shares eligible for resale in the public market will increase.
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We expect that our future operating results may also fluctuate due to the same or similar factors.
−Removed: We had a net loss of $19.2 million for the year ended December 31, 2019, and;
−Removed: a net loss of $25.4 million for the year ended December 31, 2018, with an accumulated deficit of $217.6 million.
+Added: While we had net income of $280.4 million for the year ended December 31, 2020, we had net losses of $19.2 million for 2019 and $25.4 million for 2018, and as of December 31, 2020, we had accumulated deficits of $8.0 million.
The following include some of the factors that may cause our operating results to fluctuate:
The outcome of actions to enforce our intellectual property rights currently in progress or that we may undertake in the future, and the timing thereof;
+Added: The impact of the COVID-19 pandemic on our sales cycle and results;
The amount and timing of receipt of license fees from potential infringers, licensees, or customers;
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This could mean that stockholders, even those who represent a significant percentage of our shares of common stock, may need to wait for the annual meeting before nominating directors or raising other business proposals to be voted on by the stockholders.
−Removed: In addition, the provisions of Section 203 of the Delaware General Corporate Law govern us.
+Added: In addition, the provisions of Section 203 of the Delaware General Corporation Law govern us.
These provisions may prohibit large stockholders, particularly those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.
These and other provisions in our amended and restated certificate of incorporation, our bylaws and under Delaware law could discourage potential takeover attempts, reduce the price that investors might be willing to pay for shares of our common stock in the future and result in the market price being lower than it would be without these provisions.
+Added: Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
+Added: Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers, or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, or our amended and restated certificate of incorporation or amended and restated bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), in all cases subject to the court having jurisdiction over indispensable parties named as defendants.
+Added: However, notwithstanding the exclusive forum provisions, our amended and restated bylaws explicitly state that they would not preclude the filing of claims brought to enforce any liability or duty created under federal securities laws, including the Securities Act of 1933 or the Securities Exchange Act of 1934.
+Added: Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision.
+Added: This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.
+Added: If a court were to find this exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations.
Unresolved Staff Comments.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.