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performance, and you should not rely on them to predict our future performance or the future performance of our Class A common
stock. If our operating results in future quarters fall below the expectations of market analysts and investors, the market price of our
stock may fall.
Factors that have either caused our results to fluctuate in the past or that are likely to do so in the future include:
x
changes in our relationships with wireless carriers, the U.S. government or other customers;
x
timing and success of introduction of new products and services and our wireless carrier partners’ marketing expenditures;
x
changes in pricing policies and product offerings by us or our competitors;
x
changes in projected profitability of acquired assets requiring the write down of the value of the goodwill reflected on our
balance sheet;
x
loss of subscribers by our wireless carrier partners or a reduction in the number of subscribers to plans that include our
services;
x
the timing and quality of information we receive from our wireless carrier partners;
x
the timing and success of new mobile phone introductions by our wireless carrier partners;
x
our ability to attract new end users;
x
the extent of any interruption in our services;
x
costs associated with advertising, marketing and promotional efforts to acquire new customers;
x
capital expenditures and other costs and expenses related to improving our business, expanding operations and adapting to
new technologies and changes in consumer preferences; and
x
our lengthy and unpredictable sales cycle.
We may not have, and may not have the ability to raise, the funds necessary to repurchase our currently outstanding
Convertible Senior Notes upon a fundamental change, as required by the indenture governing the Convertible Senior Notes.
Following a fundamental change as described in the indenture governing the Convertible Senior Notes, holders of those notes
may require us to repurchase their notes for cash. A fundamental change may also constitute an event of default or prepayment under,
and result in the acceleration of the maturity of, our then existing indebtedness. We cannot provide any assurance that we will have
sufficient financial resources, or will be able to arrange financing to pay the repurchase price in cash with respect to any notes
tendered by holders for repurchase upon a fundamental change. In addition, restrictions in our then-existing credit facilities or other
indebtedness, if any, may not allow us to repurchase the Convertible Senior Notes. The failure of us to repurchase the notes when
required would result in an event of default with respect to the Convertible Senior Notes which could in turn constitute a default under
the terms of our other indebtedness, if any, and have an adverse effect on our business, financial position, results of operations or cash
flows.
Future sales of our Class A common stock in the public market or issuances of securities convertible into our Class A
common stock and hedging activities could lower the market price for our Class A common stock and adversely impact the trading
price of the notes.
As of December 31, 2013, we had outstanding approximately 56 million shares of our Class A common stock and options to
purchase approximately 17 million shares of our Class A common stock. In the future, we may sell additional shares of our Class A
common stock to raise capital. In addition, a substantial number of shares of our Class A common stock is reserved for issuance upon
the exercise of stock options and upon conversion of the Convertible Notes. Our Class A common stock may also be issued upon
conversion of our Class B common stock, which is convertible into our Class A common stock on a one-for-one basis. As of
December 31, 2013, we had 5 million shares of Class B common stock outstanding. We cannot predict the size of future issuances or
the effect, if any, that they may have on the market price for our Class A common stock. The issuance and sale of substantial amounts
of Class A common stock, or the perception that such issuances and sales may occur, could adversely affect the trading price of the
Convertible Notes and the market price of our Class A common stock and impair our ability to raise capital through the sale of
additional equity securities.
