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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Commission file number: 333-153574
CHINA EXECUTIVE EDUCATION CORP .
(Exact name of small business issuer as specified in its charter)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition for “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer o Non-Accelerated Filer o Accelerated Filer o Smaller Reporting Company x
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of the common stock held by non-affiliates (3, 510,000 shares), based on the closing market price ($ 0.15 per share) of the common stock as of December 31, 2009 was $ 526,500.
There were a total of 22,000,000 shares of the registrant’s common stock outstanding as of April 14, 2010.
Documents Incorporated by Reference: None
Certain financial information included in this transition report has been derived from data originally prepared in Renminbi (“RMB”), the currency of the People’s Republic of China (“China” or “PRC”). For purposes of this transition report, “U.S. dollar,” “$” and “US$” refers to the legal currency of the United States. For all U.S. dollar amounts reported, the dollar amount has been calculated on the basis that $1 = RMB6.8282 for its audited balance sheet at December 31, 2009 which were determined based on the currency conversion rate at the end of each respective period. The conversion rates of $1 = RMB6.8314 is used for the consolidated statement of income and comprehensive income and consolidated statement of cash flows for its December 31, 2009, which were based on the average currency conversion rate for each respective period.
Special Note Regarding Forward Looking Statements
The following discussion of the financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. China Executive Education Corp. is referred to herein as “we”, “us”, “our”, the “Registrant” or the “Company.” The words or phrases “would be,” “will allow,” “expect to,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources.” Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
ITEM 1. BUSINESS
We operate comprehensive business training programs through our controlled affiliates and subsidiaries in Hangzhou and Shanghai, which are two prosperous and commercial cities of China. Our executive training programs are designed to fit the needs of Chinese entrepreneurs, and to improve their leadership skill, management skills and marketing skills, as well as bottom-line results. Our comprehensive business training initiatives integrate research-based, proprietary content with processes that are specifically and explicitly connected to the critical business issues that most private Chinese companies are facing. This allows the trainees to better utilize achieve their potentials and better align individual goals and competencies with organizational objectives of their employers or business. We have developed 22 training courses which include a core course, named “Seven Essential Classes for Business Executives”.
We derive our sales revenue from selling our proprietary training courses. We also generate sales revenue from our “Featured Lectures” events which are organized by us periodically with the presence of world masters or well-known keynote speakers. In 2009, we have organized four (4) such Featured Lectures in Shanghai. The featured speakers are Mr. Mark Hansen, Writer of Chicken Soup for the Soul , Roger Dawson, a top US negotiator, Joe Girard, a top sales executive and keeper of Guinness Record, and Mr. John C. Maxwell, the “ World Master of Leadership ” .
We sell our training programs through our own sales team which consists of a sales staff of 220. We also promote our services through the internet. Our websites are www.magicyourlife101.com and www.myl101.com . The domain name of www.magicyourlife101.com was registered by Mr. Kaien LIANG in the name of Surmounting Limit Marketing Adviser Limited (Shanghai). The registered operator of this website is Shanghai Kaiye Investment Consulting Co., Ltd.. The domain name of www.myl101.com is registered by Dreamer Marketing Adviser (Shanghai) Co., Ltd.. The registered operator of this website is MYL Commercial.
Our principal executive offices are located at Hangzhou MYL Business Administration Consulting Co. Ltd., Room 307, Hualong Business Building, 110 Moganshan Road, Hangzhou, P.R.China 310005 and our telephone number is (86) 0571-8880-8109.
We are required to file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the Securities and Exchange Commission (the “SEC”). You may read and copy any document we file with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet website at http://www.sec.gov, from which interested persons can electronically access our SEC filings.
Corporate History & Background
We were incorporated under the laws of the State of Nevada, U.S. on May 9, 2008, under the name of On Demand Heavy Duty Corp. From our inception until our reverse acquisition of Surmounting Limit Marketing Adviser Limited, a Hong Kong corporation (“SLM”) on February 12, 2010, we were in the development stage as defined under Statement on Financial Accounting Standards No. 7, Development Stage Enterprises (“SFAS No.7”) and intended to commence business operations by purchasing and distributing eco-friendly building supplies for sale throughout Europe and North America.
On February 12, 2010, we acquired all of the outstanding capital stock SLM, through China Executive Education Corp., a Nevada corporation (the “Merger Sub”) wholly owned by the Company. SLM is a holding company whose asset, held through a subsidiary, is 100% of the registered capital of Hangzhou MYL Business Administration Consulting Co., Ltd. (“MYL Business”), a limited liability company organized under the laws of the People’s Republic of China (“China” or “PRC”). Substantially all of SLM's operations are conducted in China through MYL Business, and through contractual arrangements with several of MYL Business’s consolidated affiliated entities in China, including Hangzhou MYL Commercial Services Co., Ltd. (“MYL Commercial”) and its subsidiaries.MYL Commercial is a fast-growing executive education company with dominant operation in Shanghai, the commercial center of China.
In connection with the acquisition, the following transactions took place:
As a result of these transactions, persons affiliated with Surmounting Limit Marketing Adviser Limited now own securities that in the aggregate represent approximately 98% of the equity in the Company.
We conduct our operations in China through MYL Business and through contractual arrangements with several of MYL Business’s consolidated affiliated entities in China, including Hangzhou MYL Commercial Services Co., Ltd. (“MYL Commercial”) and its subsidiaries. The following chart reflects our current organizational structure:
* non-active subsidiaries with no operations .
We face the competition on two different fronts. First is from the major Chinese university and business schools. They provide EMBA program targeting on corporation executives and entrepreneurs. The most popular EMBA programs available in China are from Euro-China International Business College in Shanghai, Cheung Kong Graduate School of Business, Tsinghua University and Shanghai Jiaotong University, etc. These universities’ EMBA programs provide their students with approximately 300 hours of formal in-class training programs in the curriculum and issue degree certificates to students at graduation. The tuition ranges from RMB 60,000 (approximately USD 9,000) to RMB 568,000 (approximately USD 85,000) for the entire program. The top business schools enroll 400–600 students annually. Due to the strict admission requirements, many young and less qualified candidates are turned away. This increases the market opportunities for China Executive Education’s programs.
Open-enrollment programs provided by private education institutions, like ours, have emerged and constituted serious competition to the top business schools that provide formal executive training programs. These peer companies also constitute direct competition with us. Jucheng Group (founded in 2003 in Shenzhen), Action Success International Education Group (founded in 2001 in Shanghai), and Sparta Group (founded in 2002 in Beijing) are the most prominent companies in our business sector. We compete with them primarily on the basis of training courses, lecturers, prices, effectiveness of training execution and our brand name. Since those three companies have been in business longer than us and they have cross-region presence, they possess their strength in market coverage and pricing. We believe that we have a competitive advantage in our international network and broad offering.
OUR STRATEGIES, RISKS AND UNCERTAINTIES
In order to enhance our position as one of the top executive education providers in China, we intend to expand our network, promote our brand name, create increasingly channels and explore new opportunities. Our ability to realize our business objectives and execute our strategies is subject to risks and uncertainties, including the following:
These risks and uncertainties, along with others, are also described in the Risk Factors section of this transition report on Form 10-K.
An investment in our common stock or other securities involves a number of risks. You should carefully consider each of the risks described below before deciding to invest in our common stock. If any of the following risks develops into actual events, our business, financial condition or results of operations could be negatively affected, the market price of our common stock or other securities could decline and you may lose all or part of your investment.
The risk factors presented below are all of the ones that we currently consider material. However, they are not the only ones facing our Company. Additional risks not presently known to us, or which we currently consider immaterial, may also adversely affect us. There may be risks that a particular investor views differently from us, and our analysis might be wrong. If any of the risks that we face actually occur, our business, financial condition and operating results could be materially adversely affected and could differ materially from any possible results suggested by any forward-looking statements that we have made or might make. In such case, the trading price of our common stock could decline, and you could lose part or all of your investment.
We have a limited operating history, which may make it difficult for you to evaluate our business and prospects.
We did not begin our business operations until after merger aforementioned in February 12, 2010. Accordingly, we have a limited operating history for our current operations upon which you can evaluate the viability and sustainability of our business and its acceptance by private business owners and executives. It is also difficult to evaluate the viability of our business model because we do not have sufficient experience to address the risks frequently encountered by early stage companies using new means to deliver education programs and entering new and rapidly evolving markets. These circumstances may make it difficult for you to evaluate our business and prospects.
Our senior management and employees have worked together for a short period of time, which may make it difficult for you to evaluate their effectiveness and ability to address challenges.
Due to our limited operating history and recent additions to our management team, certain of our senior management and employees have worked together at our company for only a relatively short period of time. As a result, it may be difficult for you to evaluate the effectiveness of our senior management and other key employees and their ability to address future challenges to our business.
Failure to manage our growth could strain our management, operational and other resources, which could materially and adversely affect our business and growth potential.
We have been rapidly expanding, and plan to continue expansion of our operations in China. We will continue to expand our operations to meet the demands of customers for executive training for larger and more diverse market coverage. This expansion has resulted in substantial demands on our management resources. To manage our growth, we must develop and improve our existing administrative and operational systems and, our financial and management controls and further expand, train and manage our work force. We have already begun selling our executive education training program through our sales agents who operate in the inland provinces and may in the future expand our presence to some major cities in China. As we continue this effort, we may incur substantial costs and expend substantial resources in connection with any such expansion. We may encounter difficulties when we expand into other cities or if we begin operations in other inland provinces in China due to different business practice, local government regulations and cultural factors. We may not be able to manage our current or future cross-region operations effectively and efficiently or compete effectively in such markets. We cannot assure you that we will be able to efficiently or effectively manage the growth of our operations, recruit top talent and train our personnel. Any failure to efficiently manage our expansion may materially and adversely affect our business and future growth.
We may need additional capital and we may not be able to obtain it, which could adversely affect our liquidity and financial position.
To further expand our executive education business, we may require additional cash resources. If these sources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of convertible debt securities or additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity.
Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.
We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and, if determined adversely against us, may materially disrupt our business.
We cannot be certain that our lectures or other aspects of our business do not or will not infringe upon patents, copyrights or other intellectual property rights held by third parties. Although we are not aware of any such claims, we may become subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives. In addition, we may incur substantial expenses in defending against these third party infringement claims, regardless of their merit. Successful infringement or licensing claims against us may result in substantial monetary liabilities, which may materially and adversely disrupt our business.
If the PRC government finds that the agreements that establish the structure for operating our China business do not comply with PRC governmental restrictions on foreign investment in the executive education industry, we could be subject to severe penalties.
Substantially all of our operations are or will be conducted through our indirectly wholly-owned operating subsidiaries in China, which we collectively refer to as our PRC operating subsidiaries, and through our contractual arrangements with our consolidated affiliated entities in China. PRC regulations still have strict restriction on foreign entities operating in the executive education industry in China. Accordingly, our PRC operating subsidiaries which are directly owned by non-PRC subsidiaries of ours, which we collectively refer to as wholly-foreign owned, or WOFE, operating subsidiaries, are currently ineligible to apply for the required licenses for providing executive education services in China. Our non-PRC subsidiaries are ineligible to apply for such required licenses too. As such, our executive education businesses are currently primarily provided through contractual arrangements between our WOFE operating subsidiaries and our consolidated affiliated entities in China, which we collectively refer to as our PRC operating affiliates. These PRC operating affiliates include MYL Commercial, MYL Business, Hangzhou Gongshu MYL Training School and Shanghai MYL Business Administration Consulting Co. Ltd. Accordingly, our executive education businesses are currently conducted by (i) our indirect PRC operating subsidiaries and (ii) our PRC operating affiliates. Our PRC operating affiliates, which we control through contractual relationship are owned by either (i) one or more PRC citizens designated by us, (ii) one or more PRC entities owned by our subsidiaries or by our designated appointees or (iii) a combination of PRC citizens and PRC entities owned by our subsidiaries designated by us or our designated appointees. Our PRC operating affiliates, certain of their respective subsidiaries and certain of our indirect PRC operating subsidiaries hold the requisite licenses to provide executive education services in China. Our PRC operating affiliates and their respective subsidiaries directly operate our executive education business. While our indirect PRC operating subsidiaries are eligible for the required licenses for providing executive education services in China and some of our indirect PRC operating subsidiaries have obtained such licenses, we have been using and are expected to continue to use PRC operating affiliates and their subsidiaries to operate a significant portion of our executive education business for the foreseeable future. We have entered into contractual arrangements with PRC operating affiliates and their respective subsidiaries, pursuant to which we, through our PRC operating subsidiaries or non-PRC subsidiaries, provide technical support and consulting services to our PRC operating affiliates and their subsidiaries. In addition, we have entered into agreements with our PRC operating affiliates and each of their shareholders which provide us with the substantial ability to control these affiliates and their existing and future subsidiaries.
If the PRC government finds that the agreements that establish the structure for operating our China business do not comply with PRC governmental restrictions on foreign investment in the executive education industry, the PRC government may impose the following penalties:
We rely on contractual arrangements with MYL Commercial and its subsidiaries and shareholders for a substantial portion of our China operations, which may not be as effective in providing operational control as direct ownership.
We rely on contractual arrangements with MYL Commercial and its subsidiaries and shareholders to operate our executive education business. For a description of these contractual arrangements, see “Corporate Structure” and “Related Party Transactions”. These contractual arrangements may not be as effective in providing us with control over MYL Commercial as direct ownership. If we had direct ownership of MYL Commercial, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of MYL Commercial which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However, under the current contractual arrangements, as a legal matter, if MYL Commercial or any of its subsidiaries and shareholders fails to perform its or his respective obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you to be effective. For example, if the shareholders of MYL Commercial were to refuse to transfer his equity interest in MYL Commercial to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if the shareholders of MYL Commercial were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to fulfill their contractual obligations.
Many of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our operating entities, and our ability to conduct our business may be negatively affected.
Contractual arrangements we have entered into among our subsidiaries and affiliated entities may be subject to scrutiny by the PRC tax authorities and a finding that we owe additional taxes or are ineligible for our tax exemption, or both, could substantially increase our taxes owed, and reduce our net income and the value of your investment.
Under PRC law, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. If any of the transactions we have entered into among our subsidiaries and affiliated entities are found not to be on an arm’s-length basis, or to result in an unreasonable reduction in tax under PRC law, the PRC tax authorities have the authority to disallow our tax savings, adjust the profits and losses of our respective PRC entities and assess late payment interest and penalties.
As a result of this risk, you should evaluate our results of operations and financial condition without regard to these tax savings.
Our business is dependent upon the PRC government’s educational policies and programs.
As a provider of educational services, we are dependent upon governmental educational policies. Almost all of our revenue to date has been generated from the sale of lectures and materials relating to executive training. To the extent that the government adopts policies changes that significantly alter what is allowed in China, our products could become obsolete, which would affect our ability to generate revenue and operate profitably. We cannot assure you that the PRC government agencies would not adopt such changes.
We are subject to numerous PRC rules and regulations which restrict the scope of our business and could have a material adverse impact on us.
We are subject to numerous rules and regulations in the PRC, including, without limitation, restrictions on foreign ownership of internet and education companies and regulation of Internet content. Many of the rules and regulations that we face are not explicitly communicated, but arise from the fact that education and the internet are politically sensitive areas of the economy. We are not aware that any of our agreements or our current organizational structure is in violation of any governmental requirements or restrictions, explicit or implicit. However, there can be no assurance that we are in compliance now, or will be in the future. Moreover, operating in the PRC involves a high risk that restrictive rules and regulations could change. Indeed, even changes of personnel at certain ministries of the government could have a negative impact on us. The determination that our structure or agreements are in violation of governmental rules or regulations in the PRC would have a material adverse impact on us, our business and on our financial results.
Our business may be subject to seasonal and cyclical fluctuations in sales.
We may experience seasonal fluctuations in our revenue in some regions in the PRC, based on economic situation and the tendency of executives to make commitment relating to their education during the year. Any seasonality may cause significant pressure on us to monitor the development of materials accurately and to anticipate and satisfy these requirements.
Our business is subject to the health of the PRC economy.
The purchase of educational lectures and materials not provided by the state educational system is discretionary and dependent upon the ability and willingness of executives and businesses to spend available funds on extra educational products. A general economic downturn either in our market or a general economic downturn in the PRC could have a material adverse effect on our revenue, earnings, cash flow and working capital.
We depend on our senior officers to manage and develop our business.
Our success depends on the management skills of Mr. Kaien Liang, Chairman and Chief Executive Officer, and his relationships with educators, administrators and other business contacts. We also depend on successfully recruiting and retaining highly skilled and experienced authors, teachers, managers, sales persons and other personnel who can function effectively in the PRC. In some cases, the market for these skilled employees is highly competitive. We may not be able to retain or recruit such personnel, which could materially and adversely affect our business, prospects and financial condition. We do not maintain key person insurance on these individuals. The loss of Mr. Hsu would delay our ability to implement our business plan and would adversely affect our business.
We may not be successful in protecting our intellectual property and proprietary rights.
Our intellectual property consists of lectures and formats, which are contained in our library, and courseware which we developed by engaging authors and educators to develop these materials. Our proprietary products are primarily protected by trade secret laws. Although we require our authors and employees to sign confidentiality and non-disclosure agreements, we cannot assure you that we will be able to enforce those agreements or that our authors and software development employees will not be able to develop competitive products that do not infringe upon our proprietary rights. We do not know the extent that PRC courts will enforce our proprietary rights.
Others may bring defamation and infringement actions against us, which could be time-consuming, difficult and expensive to defend.
As a distributor of educational materials, we face potential liability for negligence, copyright, patent or trademark infringement and other claims based on the nature and content of the materials that we publish or distribute. Any claims could result in us incurring significant costs to investigate and defend regardless of the final outcome. We do not carry general liability insurance that would cover any potential or actual claims. The commencement of any legal action against us or any of our affiliates, whether or not we are successful in defending the action, could both require us to suspend or discontinue the distribution of some or a significant portion of our educational materials and require us to allocate resources to investigating or defending claims.
We depend upon the acquisition and maintenance of licenses to conduct our business in the PRC.
In order to conduct business in the PRC, we need licenses from the appropriate government authorities, including general business licenses and an education service provider license. The loss or failure to obtain or maintain these licenses in full force and effect will have a material adverse impact on our ability to conduct our business and on our financial condition.
Our growth may be inhibited by the inability of potential customers to fund purchases of our products and services.
Many businesses in the PRC, do not have sufficient funds to purchase textbooks, educational materials or lectures and course materials. In addition, provincial and local governments may not have the funds to support the implementation of a curriculum using our educational products or may allocate funds to programs which are different from our products. Our failure to be able to sell our products and services to students in certain areas of the PRC may inhibit our growth and our ability to operate profitably.
Changes in the policies of the government in the PRC could significant impact our ability to operate profitably.
The economy of the PRC is a planned economy subject to five-year and annual plans adopted by the government that set down national economic development goals. Government policies can have significant effect on the economic conditions of the PRC generally and the educational system in particular. Although the government in the PRC has confirmed that economic development will follow a model of market economy under socialism, a change in the direction of government planning may materially affect our business, prospects and financial condition.
Inflation in the PRC could negatively affect our profitability and growth.
While the economy in the PRC has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our services rise at a rate that is insufficient to compensate for the rise in our costs, it may have an adverse effect on profitability. In order to control inflation in the past, the government has imposed controls in bank credits, limits on loans for fixed assets purchase, and restrictions on state bank lending. Such an austerity policy can lead to a slowing economic growth which could impair our ability to operate profitably.
If we make any acquisitions, they may disrupt or have a negative impact on our business.
If we make acquisitions, we could have difficulty integrating personnel and operations of the acquired companies with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the affect expansion which may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:
Our business could be severely impaired to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with these acquisitions, many of which cannot be presently identified, these risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses a