{"component": "clause", "props": {"groups": [{"size": 70, "snippet": "We Have a Limited History of Profitability, We Are Not Currently Profitable and We Cannot Assure You That We Will Return to Profitability in the Future Fiscal 2000 was the first year in which Extreme achieved profitability in each of the four quarters. We reported a loss for each of the quarters ended March 31, 2001 and June 30, 2001, and for the fiscal year ended June 30, 2001. In the foreseeable future, we anticipate continuing to incur significant sales and marketing, product development and general and administrative expenses and, as a result, we will need to generate and sustain significantly higher revenue to return to and sustain profitability. In addition, the amortization of purchased goodwill and intangibles, and deferred compensation associated with acquisitions, will result in material charges that will reduce our profitability. Further, the impact of the current economic slowdown could result in additional one-time charges. A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price We plan to increase our operating expenses to expand our sales and marketing activities, broaden our customer support capabilities, develop new distribution channels, fund increased levels of research and development, and expand our operational infrastructure. We base our operating expenses on anticipated revenue trends, and a high percentage of our expenses are fixed in the short term. As a result, any delay in generating or recognizing revenue, as occurred in the quarter ended March 31, 2001, could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall. We may experience a delay in generating or recognizing revenue for a number of reasons. Orders at the beginning of each quarter typically do not equal expected revenue for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter for shipment in that quarter to achieve our revenue objectives. In addition, the timing of product releases, purchase orders and product availability could result in a majority of our product shipments to be scheduled for the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customer agreements include acceptance provisions that delay our ability to recognize revenue upon shipment. Our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following: . changes in general and/or specific economic conditions in the networking industry; . seasonal fluctuations in demand for our products and services, particularly in Asia and Europe; . our ability to accurately forecast demand for our products, which in the case of lower-than-expected sales may result in excess and/or obsolete inventory on hand or under non cancelable purchase commitments; . unexpected product returns or the cancellation or rescheduling of orders; . our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions; . announcements and new product introductions by our competitors; . our ability to develop and support relationships with enterprise customers, service providers and other potential large customers; . our ability to achieve targeted cost reductions; . our ability to obtain sufficient supplies of sole or limited-source components for our products on a timely basis; . increases in the prices of the components that we purchase; . decreases in the prices of the products that we sell; . our ability to achieve and maintain desired production volumes and quality levels for our products; . the mix of products sold and the mix of distribution channels through which products are sold; . costs relating to possible acquisitions and the integration of technologies or businesses; and . the effect of amortization of goodwill, deferred compensation, and purchased intangibles resulting from existing or new transactions. Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance. As a result of the September 11, 2001 events in New York City and Washington, D.C., U.S. and global economies may weaken, which may result in a decrease in our revenues and cause our stock price to decline. In addition, it is anticipated that in the wake of these events, U.S. and global capital markets will experience a period of extreme volatility. Intense Competition in the Market for Networking Equipment Could Prevent Us from Increasing Revenue and Sustaining Profitability The market for networking equipment is intensely competitive. Our principal competitors include Cisco Systems, Enterasys Networks, Foundry Networks, Nortel Networks and Riverstone Networks. In addition, a number of private companies have announced plans for new products that may compete with our own products. Some of our current and potential competitors have superior market leverage, longer operating histories and substantially greater financial, technical, sales, and marketing resources, in addition to wider name recognition and larger installed customer bases. These competitors may have developed, or may in the future develop, new competing products based on technologies that compete with our own products or render our products obsolete. Furthermore, a number of these competitors may merge or form strategic partnerships that enable them to offer or bring to market competitive products. To remain competitive, we believe that we must, among other things, invest significant resources in developing new products, improve our current products and maintain customer satisfaction. If we fail to do so, we may not compete successfully with our competitors, which could have a material adverse effect on our revenue and future profitability. We Expect the Average Selling Prices of Our Products to Decrease Which May Reduce Gross Margins or Revenue The network equipment industry has experienced rapid erosion of average selling prices due to a number of factors, including competitive pricing pressures, promotional pricing, rapid technological change and a slowdown in the economy that has resulted in excess inventory and lower prices as companies attempt to liquidate this inventory. We may experience substantial decreases in future operating results due to the erosion of our average selling prices. We anticipate that the average selling prices of our products will decrease in the future in response to competitive pricing pressures, increased sales discounts and new product introductions by us or our competitors, including, for example, competitive products manufactured with low-cost merchant silicon. Competitive pressures are expected to increase as a result of the industry slowdown that occurred in the first half of 2001 coupled with the recent downturn in the broader economy. To maintain our gross margins, we must develop and introduce on a timely basis new products and product enhancements and continually reduce our product costs. Our failure to do so would cause our revenue and gross margins to decline, which could have a material adverse effect on our operating results and cause the price of our common stock to decline. Some of Our Customers May Not Have the Resources to Pay for Our Products as a Result of the Current Economic Environment With the recent economic slowdown, some of our customers are forecasting that their revenue for the foreseeable future will generally be lower than anticipated. Some of these customers are experiencing, or are likely to experience, serious cash flow problems and they are finding it increasingly difficult to obtain financing on attractive terms, if at all. As a result, if some of these customers are not successful in generating sufficient revenue or securing alternate financing arrangements, they may not be able to pay, or may delay payment for the amounts that they owe us. Furthermore, they may not order as many products from us as originally forecast. The inability of some of our potential customers to pay us for our products may adversely affect our cash flow and the timing of our revenue recognition, which may cause our stock price to decline. The Market in Which We Compete is Subject to Rapid Technological Change and to Compete We Must Continually Introduce New Products that Achieve Broad Market Acceptance The network equipment market is characterized by rapid technological change, frequent new product introductions, changes in customer requirements and evolving industry standards. If we do not address these changes by regularly introducing new products, our product line will become obsolete. Developments in routers and routing software could also significantly reduce demand for our products. Alternative technologies could achieve widespread market acceptance and displace the Ethernet technology on which we have based our product architecture. We cannot assure you that our technological approach will achieve broad market acceptance or that other technologies or devices will not supplant our own products and technology. When we announce new products or product enhancements that have the potential to replace or shorten the life cycle of our existing products, customers may defer purchasing our existing products. These actions could have a material adverse effect on our operating results by unexpectedly decreasing sales, increasing inventory levels of older products and exposing us to greater risk of product obsolescence. The market for switching products is evolving and we believe our ability to compete successfully in this market is dependent upon the continued compatibility and interoperability of our products with products and architectures offered by other vendors. In particular, the networking industry has been characterized by the successive introduction of new technologies or standards that have dramatically reduced the price and increased the performance of switching equipment. To remain competitive we need to introduce products in a timely manner that incorporate or are compatible with these emerging technologies. We cannot assure you that new products will be commercially successful. We have experienced delays in releasing new products and product enhancements in the past that resulted in lower quarterly revenue than anticipated. We may experience similar delays in product development and releases in the future, and any delay in product introduction could adversely affect our ability to compete, causing our operating results to be below our expectations or the expectations of public market analysts or investors. Continued Rapid Growth Will Strain Our Operations and Will Require Us to Incur Costs to Upgrade Our Infrastructure We have experienced a period of rapid growth and expansion that has placed, and continues to place, a significant strain on our resources. Even if we manage this growth effectively, we may make mistakes in operating our business such as inaccurate sales forecasting, incorrect material planning or inaccurate financial reporting. This may lead to unanticipated fluctuations in our operating results. Our net revenue increased significantly during the last fiscal year, and from June 30, 2000 to June 30, 2001, the number of our employees increased from 680 to 970. We expect our anticipated growth and expansion to strain our management, operational and financial resources. Our management team has had limited experience managing rapidly growing companies on a public or private basis. To accommodate this anticipated growth, we will be required to: . improve and update operational, information and financial systems, procedures and controls; . hire, train and manage additional qualified personnel in the fields of engineering, sales, marketing and networking technology; and . effectively manage multiple relationships with our customers, suppliers and other third parties. We may not be able to install adequate control systems in an efficient and timely manner, and our current or planned personnel systems, procedures, and controls may not be adequate to support our future operations. We may need to modify and improve our management information system to meet the increasing needs associated with our growth. The difficulties associated with installing and implementing these new systems, procedures, and controls may place a significant burden on our management and our internal resources. In addition, as we grow internationally, we need to expand our worldwide operations and enhance our communications infrastructure. Any delay in the implementation of such new or enhanced systems, procedures or controls, or any disruption in the transition to such new or enhanced systems, procedures or controls, could adversely affect our ability to accurately forecast sales demand, manage our supply chain, and record and report financial and management information on a timely and accurate basis. We Must Develop and Expand Our Indirect Distribution Channels to Increase Net Revenue and Improve Our Operating Results Our distribution strategy focuses primarily on developing and expanding indirect distribution channels through resellers and distributors, in addition to expanding our field sales organization. If we fail to develop and cultivate relationships with significant resellers, or if these resellers are not successful in their sales efforts, sales of our products may decrease and our operating results would suffer. Many of our resellers also sell products that compete with our products. We are developing a two-tier distribution structure in Europe and the United States that has required, and will in the future require, us to enter into agreements with a number of stocking distributors. We have entered into two-tier distribution agreements; however, we cannot assure you that we will be able to enter into additional distribution agreements or that we will be able to successfully manage the transition of resellers to a two-tier distribution channel. Our failure to do any of these could limit our ability to grow or sustain revenue. In addition, our operating results will likely fluctuate significantly depending on the timing and amount of orders from our resellers. We cannot assure you that our resellers will market our products effectively or continue to devote the resources necessary to provide us with effective sales, marketing and technical support. In an effort to support and develop leads for our indirect distribution channels and to attempt to expand our direct sales to customers, we plan to continue to expand our field sales and support staff. We cannot assure you that this internal expansion will be successfully completed, that the cost of this expansion will not exceed the net revenue generated, or that our expanded sales and support staff will be able to compete successfully against the significantly more extensive and well-funded sales and marketing operations of many of our current or potential competitors. Our inability to effectively establish our distribution channels or manage the expansion of our sales and support staff may have a material adverse effect on our ability to grow our business and increase revenue. Most of Our Revenue is Derived From Sales of Three Product Families, So We are Dependent on Widespread Market Acceptance of These Products In the year ended June 30, 2001, we derived substantially all of our revenue from sales of our Summit, BlackDiamond and Alpine products. We expect that revenue from these product families will account for a substantial portion of our revenue for the foreseeable future. Accordingly, widespread market acceptance of our product families is vital to our future success. 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by the Investor from the Company involves a high degree of risk. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the securities being purchased by the Investor from the Company. The Investor warrants that such Investor is able to bear the complete loss of such Investor\u2019s investment in the securities being purchased by the Investor from the Company.", "samples": [{"hash": "95YZqMsox1y", "uri": "/contracts/95YZqMsox1y#risk-factors", "label": "Common Stock Purchase Agreement", "score": 29.8016529083, "published": true}, {"hash": "dfyMQ3zb54L", "uri": "/contracts/dfyMQ3zb54L#risk-factors", "label": "Common Stock Purchase Agreement (BRS Group Inc)", "score": 22.6180706024, "published": true}, {"hash": "amRxoaDJzSB", "uri": "/contracts/amRxoaDJzSB#risk-factors", "label": "Common Stock Purchase Agreement (BRS Group Inc)", "score": 22.6180706024, "published": true}], "snippet_links": [{"key": "such-investor", "type": "clause", "offset": [30, 43]}, {"key": "the-securities", "type": "clause", "offset": [60, 74]}, {"key": "by-the-investor", "type": "clause", "offset": [91, 106]}, {"key": "from-the-company", "type": "clause", "offset": [107, 123]}, {"key": "high-degree-of-risk", "type": "definition", "offset": [135, 154]}, {"key": "united-states-federal", "type": "definition", "offset": [189, 210]}, {"key": "state-agency", "type": "definition", "offset": [214, 226]}, {"key": "governmental-agency", "type": "clause", "offset": [254, 273]}, {"key": "investor-warrants", "type": "definition", "offset": [402, 419]}, {"key": "loss-of", "type": "clause", "offset": [468, 475]}], "hash": "a917221930af319a3252d9f558c6cd35", "id": 2}, {"size": 27, "snippet": "Purchaser hereby agrees and acknowledges that it has been informed of the following: (i) there are factors relating to the subsequent transfer of any Securities acquired hereunder that could make the resale of such Securities difficult; and (ii) there is no guarantee that Purchaser will realize any gain from the purchase of the Securities. The purchase of the Securities involves a high degree of risk and is subject to many uncertainties. These risks and uncertainties may adversely affect the Company\u2019s business, operating results and financial condition. In such an event, the trading price for the Common Stock could decline substantially and Purchaser could lose all or part of its investment.", "samples": [{"hash": "R75VqVFXLg", "uri": "/contracts/R75VqVFXLg#risk-factors", "label": "Securities Purchase Agreement (CannLabs, Inc.)", "score": 25.7720737457, "published": true}, {"hash": "8KgzHqbjITJ", "uri": "/contracts/8KgzHqbjITJ#risk-factors", "label": "Securities Purchase Agreement (CannLabs, Inc.)", "score": 25.446269989, "published": true}, {"hash": "iLl5yAL5kVP", "uri": "/contracts/iLl5yAL5kVP#risk-factors", "label": "Securities Purchase Agreement (Zurvita Holdings, Inc.)", "score": 22.9931545258, "published": true}], "snippet_links": [{"key": "relating-to", "type": "definition", "offset": [107, 118]}, {"key": "transfer-of", "type": "definition", "offset": [134, 145]}, {"key": "no-guarantee", "type": "clause", "offset": [255, 267]}, {"key": "purchaser-will", "type": "clause", "offset": [273, 287]}, {"key": "purchase-of-the-securities", "type": "clause", "offset": [314, 340]}, {"key": "high-degree-of-risk", "type": "definition", "offset": [384, 403]}, {"key": "subject-to", "type": "clause", "offset": [411, 421]}, {"key": "risks-and-uncertainties", "type": "clause", "offset": [448, 471]}, {"key": "adversely-affect", "type": "definition", "offset": [476, 492]}, {"key": "the-company", "type": "definition", "offset": [493, 504]}, {"key": "operating-results", "type": "definition", "offset": [517, 534]}, {"key": "financial-condition", "type": "definition", "offset": [539, 558]}, {"key": "an-event", "type": "clause", "offset": [568, 576]}, {"key": "trading-price", "type": "clause", "offset": [582, 595]}, {"key": "the-common-stock", "type": "clause", "offset": [600, 616]}], "hash": "b1e14ac257135ef867aea8acda21b5c4", "id": 4}, {"size": 26, "snippet": "An investment in our securities involves significant risks. Before purchasing any securities, you should carefully consider the risk factors incorporated by reference in this prospectus, including the risk factors contained in our annual, quarterly and current reports. Additional risk factors specific to particular securities will be detailed in one or more supplements to this prospectus. If any of these risks actually occur, our business, results of operations, financial condition, cash flows and prospects, the market price of our common stock and our ability to satisfy any debt service obligations may be materially and adversely affected. This could cause the value of our securities to decline and you could lose part or all of your investment. These risks are not the only ones we face. Additional risks not presently known to us or that as of the date of this prospectus we deem immaterial may also have a material adverse effect on us. Some statements included in this prospectus, in the documents incorporated by reference herein and in any prospectus supplement constitute forward-looking statements. Please refer to the sections entitled \u201cCautionary Statement Regarding Forward-Looking Statements,\u201d \u201cWhere You Can Find More Information\u201d and \u201cIncorporation of Certain Information by Reference.\u201d You should consult your financial, legal, tax and other professional advisors as to the risks associated with an investment in our securities and the suitability of the investment for you.", "samples": [{"hash": "iPm6CWmzYh5", "uri": "/contracts/iPm6CWmzYh5#risk-factors", "label": "Open Market Sale Agreement", "score": 32.9317474365, "published": true}, {"hash": "2KIgbk8toRj", "uri": "/contracts/2KIgbk8toRj#risk-factors", "label": "Open Market Sale Agreement", "score": 26.1868591309, "published": true}, {"hash": "jvxXW6wAZNa", "uri": "/contracts/jvxXW6wAZNa#risk-factors", "label": "Open Market Sale Agreement", "score": 26.1540050507, "published": true}], "snippet_links": [{"key": "significant-risks", "type": "clause", "offset": [41, 58]}, {"key": "contained-in", "type": "definition", "offset": [214, 226]}, {"key": "current-reports", "type": "clause", "offset": [253, 268]}, {"key": "additional-risk-factors", "type": "clause", "offset": [270, 293]}, {"key": "our-business", "type": "clause", "offset": [430, 442]}, {"key": "results-of-operations", "type": "definition", "offset": [444, 465]}, {"key": "financial-condition", "type": "definition", "offset": [467, 486]}, {"key": "cash-flows", "type": "definition", "offset": [488, 498]}, {"key": "the-market-price", "type": "clause", "offset": [514, 530]}, {"key": "common-stock", "type": "definition", "offset": [538, 550]}, {"key": "ability-to", "type": "definition", "offset": [559, 569]}, {"key": "debt-service-obligations", "type": "definition", "offset": [582, 606]}, {"key": "adversely-affected", "type": "definition", "offset": [629, 647]}, {"key": "the-value", "type": "clause", "offset": [666, 675]}, {"key": "your-investment", "type": "definition", "offset": [739, 754]}, {"key": "additional-risks", "type": "clause", "offset": [799, 815]}, {"key": "date-of-this", "type": "clause", "offset": [860, 872]}, {"key": "material-adverse-effect-on", "type": "definition", "offset": [919, 945]}, {"key": "documents-incorporated-by-reference", "type": "definition", "offset": [1002, 1037]}, {"key": "prospectus-supplement", "type": "clause", "offset": [1056, 1077]}, {"key": "refer-to-the", "type": "definition", "offset": [1124, 1136]}, {"key": "cautionary-statement-regarding-forward", "type": "definition", "offset": [1156, 1194]}, {"key": "where-you-can-find-more-information", "type": "clause", "offset": [1217, 1252]}, {"key": "incorporation-of-certain-information-by-reference", "type": "clause", "offset": [1259, 1308]}, {"key": "professional-advisors", "type": "definition", "offset": [1367, 1388]}, {"key": "associated-with", "type": "definition", "offset": [1405, 1420]}, {"key": "the-investment", "type": "clause", "offset": [1476, 1490]}], "hash": "582d75e3b3489a1c5de47c1a6331b29e", "id": 5}, {"size": 36, "snippet": "Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described below and under the heading \u201cRisk Factors\u201d in our most recent Annual Report on Form 10-K, as updated by our subsequent quarterly reports on Form 10-Q and other reports and documents that are incorporated by reference into this prospectus supplement, before deciding whether to purchase any of our common shares in this offering. Each of the risk factors could adversely affect our business, results of operations, and financial condition, as well as adversely affect the value of an investment in our common shares, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. Because we have not designated the amount of net proceeds from this offering to be used for any particular purpose, our management will have broad discretion as to the application of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of the offering. Our management might apply these proceeds in ways with which you do not agree, or in ways that do not improve our financial condition or market value, which could compromise our ability to pursue our growth strategy and adversely affect the market price of our common shares. The offering price per share in this offering may exceed the net tangible book value per common share outstanding prior to this offering. Assuming that an aggregate of 34,159,337 of our common shares are sold at a price of $1.17 per share, the last reported sale price of our common shares on the NYSE American on May 10, 2024, for aggregate gross proceeds of approximately $39,966,424, and after deducting commissions and estimated offering expenses payable by us, you would experience immediate dilution of $0.94 per share, representing the difference between our as adjusted net tangible book value per share as of March 31, 2024 after giving effect to this offering and the assumed offering price. The exercise of outstanding stock options, and the vesting and settlement of outstanding restricted stock units, may result in further dilution of your investment. See the section titled \u201cDilution\u201d below for a more detailed illustration of the dilution you would incur if you purchase shares in this offering. Because the sales of the common shares offered hereby will be made directly into the market or in any other method permitted by law deemed to be an \u201cat the market offering\u201d as defined in Rule 415(a)(4) promulgated under the Securities Act, the prices at which we sell these shares will vary and these variations may be significant. Purchasers of the shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at which they invested. Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice to \u2587. \u2587\u2587\u2587\u2587\u2587 at any time throughout the term of the offering under this prospectus supplement. The number of shares that are sold by \u2587. \u2587\u2587\u2587\u2587\u2587 after delivering a placement notice will fluctuate based on the market price of our common shares during the sales period and limits we set with \u2587. \u2587\u2587\u2587\u2587\u2587. Because the price per share of each share sold will fluctuate based on the market price of our common shares during the sales period, it is not possible at this time to predict the number of shares, if any, that will be ultimately sold in this offering. Investors who purchase shares in this offering at different times will likely pay different prices, and as result they may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold in this offering. In addition, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they paid. To raise additional capital, we may in the future issue additional common shares or other securities convertible into or exchangeable for common shares at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing shareholders. The price per share at which we sell additional common shares, or securities convertible or exchangeable into common shares, in future transactions may be higher or lower than the price per share paid by investors in this offering.", "samples": [{"hash": "8HTC2C10hei", "uri": "/contracts/8HTC2C10hei#risk-factors", "label": "Sales Agreement", "score": 34.0273780823, "published": true}, {"hash": "6axcg7OqRMk", "uri": "/contracts/6axcg7OqRMk#risk-factors", "label": "Sales Agreement", "score": 33.8899803162, "published": true}], "snippet_links": [{"key": "high-degree-of-risk", "type": "definition", "offset": [39, 58]}, {"key": "risks-and-uncertainties", "type": "clause", "offset": [92, 115]}, {"key": "most-recent", "type": "definition", "offset": [176, 187]}, {"key": "annual-report", "type": "clause", "offset": [188, 201]}, {"key": "form-10", "type": "definition", "offset": [205, 212]}, {"key": "quarterly-reports", "type": "definition", "offset": [245, 262]}, {"key": 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"type": "clause", "offset": [4172, 4191]}, {"key": "additional-capital", "type": "definition", "offset": [4301, 4319]}, {"key": "the-future", "type": "clause", "offset": [4331, 4341]}, {"key": "additional-common-shares", "type": "clause", "offset": [4348, 4372]}, {"key": "other-securities", "type": "definition", "offset": [4376, 4392]}, {"key": "other-offering", "type": "definition", "offset": [4566, 4580]}, {"key": "by-investors", "type": "clause", "offset": [4645, 4657]}, {"key": "purchasing-shares", "type": "clause", "offset": [4690, 4707]}, {"key": "future-transactions", "type": "clause", "offset": [4923, 4942]}], "hash": "738eeda0bde698fd6ffd9047ba66972e", "id": 3}, {"size": 25, "snippet": "YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN DETERMINING WHETHER TO VOTE TO APPROVE THE MERGER PROPOSALS. THE MERGER VALUES INVOLVE ESTIMATES THAT WILL NOT BE ADJUSTED Estimates of Proved Reserves and Future Net Revenues May Change. The calculations of the partnerships' proved reserves of crude oil, natural gas liquids and natural gas and future net revenues from those reserves included in this document are only estimates. The accuracy of any reserve estimate is a function of: - the quality of available data; - engineering and geological interpretation and judgment; - the assumptions about quantities of recoverable oil, natural gas liquids and natural gas reserves; - the assumptions about prices for crude oil, natural gas liquids and natural gas; and - the assumptions about costs to extract, transport and process, if necessary, crude oil, natural gas liquids and natural gas to their point of sale. Actual prices, production, operating expenses and quantities of recoverable oil and natural gas reserves may vary from those assumed in the estimates. The variances may be significant. Any significant variance from the assumptions used could result in the actual quantity of the partnerships' reserves and future net revenues being materially different from the estimates in the partnerships' reserve reports and in the calculation of the merger values. In addition, changes in production levels and changes in crude oil, natural gas liquids and natural gas prices after the date of the estimate may result in substantial upward or downward revisions. Assumptions about Reserves, Pricing and Costs Used in the Merger Values May Be Wrong. Pioneer and Pioneer USA based the reserve value component of the merger values on the discounted, or present value of, estimated future net revenues from the partnerships' properties using estimated reserves at June 30, 1999,\n(1) an arithmetic average of the five-year NYMEX futures price as of June 30, 1999 for oil, which was approximately $18.00 per Bbl of oil, less standard industry adjustments, and (2) the NYMEX price of $2.40 per Mcf of gas, less standard industry adjustments, and - using a 12.5% discount rate. Pioneer and Pioneer USA calculated the volumes of the partnership's proved reserves as of June 30, 1999, based on a future production curve consistent with the production curve used in the reserve report of Will\u2587\u2587\u2587\u2587\u2587\u2587 \u2587\u2587\u2587roleum Consultants, Inc. as of December 31, 1998. Actual production may vary from that assumed production. Actual prices in the future may be materially higher or lower than those used in the calculation of the merger values, even though Pioneer and Pioneer USA adjusted the estimated future net revenues for standard industry price adjustments, including: - production costs; - the effects of oil quality; - British thermal unit, or BTU, content for gas; - oil and gas gathering and transportation costs; and - gas processing costs and shrinkage.", "samples": [{"hash": "lMysSAdU7Np", "uri": "/contracts/lMysSAdU7Np#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}, {"hash": "inCHjIPfcBl", "uri": "/contracts/inCHjIPfcBl#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}, {"hash": "iLekimjHGLb", "uri": "/contracts/iLekimjHGLb#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}], "snippet_links": [{"key": "to-approve", "type": "clause", "offset": [88, 98]}, {"key": "merger-proposals", "type": "clause", "offset": [103, 119]}, {"key": "merger-values", "type": "clause", "offset": [125, 138]}, {"key": "proved-reserves", "type": "definition", "offset": [196, 211]}, {"key": "net-revenues", "type": "definition", "offset": [223, 235]}, {"key": "the-partnerships", "type": "clause", "offset": [268, 284]}, {"key": "crude-oil", "type": "definition", "offset": [305, 314]}, {"key": "natural-gas-liquids", "type": "definition", "offset": [316, 335]}, {"key": "reserve-estimate", "type": "clause", "offset": [462, 478]}, {"key": "available-data", "type": "clause", "offset": [514, 528]}, {"key": "interpretation-and", "type": "clause", "offset": [559, 577]}, {"key": "point-of-sale", "type": "definition", "offset": [911, 924]}, {"key": "expenses-and", "type": "clause", "offset": [963, 975]}, {"key": "oil-and-natural-gas-reserves", "type": "clause", "offset": [1002, 1030]}, {"key": "significant-variance", "type": "definition", "offset": [1115, 1135]}, {"key": "quantity-of", "type": "clause", "offset": [1189, 1200]}, {"key": "reserve-reports", "type": "definition", "offset": [1319, 1334]}, {"key": "calculation-of-the", "type": "clause", "offset": [1346, 1364]}, {"key": "in-addition", "type": "clause", "offset": [1380, 1391]}, {"key": "production-levels", "type": "clause", "offset": [1404, 1421]}, {"key": "gas-prices", "type": "clause", "offset": [1480, 1490]}, {"key": "date-of", "type": "clause", "offset": [1501, 1508]}, {"key": "the-estimate", "type": "clause", "offset": [1509, 1521]}, {"key": "pricing-and-costs", "type": "clause", "offset": [1606, 1623]}, {"key": "pioneer-usa", "type": "definition", "offset": [1676, 1687]}, {"key": "value-component", "type": "definition", "offset": [1706, 1721]}, {"key": "present-value", "type": "clause", "offset": [1765, 1778]}, {"key": "nymex-price", "type": "definition", "offset": [2077, 2088]}, {"key": "discount-rate", "type": "clause", "offset": [2170, 2183]}, {"key": "based-on", "type": "clause", "offset": [2290, 2298]}, {"key": "future-production", "type": "clause", "offset": [2301, 2318]}, {"key": "the-production", "type": "clause", "offset": [2341, 2355]}, {"key": "report-of", "type": "clause", "offset": [2382, 2391]}, {"key": "actual-production", "type": "definition", "offset": [2456, 2473]}, {"key": "the-future", "type": "clause", "offset": [2530, 2540]}, {"key": "price-adjustments", "type": "definition", "offset": [2733, 2750]}, {"key": "production-costs", "type": "definition", "offset": [2765, 2781]}, {"key": "oil-quality", "type": "definition", "offset": [2800, 2811]}, {"key": "british-thermal-unit", "type": "definition", "offset": [2815, 2835]}, {"key": "transportation-costs", "type": "definition", "offset": [2890, 2910]}, {"key": "processing-costs", "type": "clause", "offset": [2922, 2938]}], "hash": "2222fcedee215e0f5f02fc73808827a2", "id": 7}, {"size": 25, "snippet": "The Merger Values Involve Estimates that Will Not Be Adjusted.........", "samples": [{"hash": "lMysSAdU7Np", "uri": "/contracts/lMysSAdU7Np#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}, {"hash": "inCHjIPfcBl", "uri": "/contracts/inCHjIPfcBl#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}, {"hash": "iLekimjHGLb", "uri": "/contracts/iLekimjHGLb#risk-factors", "label": "Proxy Statement (Pioneer Natural Resources Usa Inc)", "score": 18.0, "published": true}], "snippet_links": [{"key": "merger-values", "type": "clause", "offset": [4, 17]}], "hash": "294a8a5ad0376f76d78e215bb876ca77", "id": 6}, {"size": 21, "snippet": "Each Issuer believes that the following factors may affect its ability to fulfil its obligations under Notes issued under the Programme. All of these factors are contingencies which may or may not occur and neither Issuer is in a position to express a view on the likelihood of any such contingency occurring. Factors which each Issuer believes may be material for the purpose of assessing the market risks associated with Notes issued under the Programme are also described below. Each Issuer believes that the factors described below represent the principal risks inherent in investing in Notes issued under the Programme, but an Issuer may be unable to pay interest, principal or other amounts on or in connection with any Notes for other reasons and neither of the Issuers represents that the statements below regarding the risks of holding any Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular (including any documents deemed to be incorporated by reference herein) and reach their own views prior to making any investment decision. Competition in Hong Kong from other transport providers may adversely affect MTRCL.", "samples": [{"hash": "37O0tvER6D9", "uri": "/contracts/37O0tvER6D9#risk-factors", "label": "Announcement", "score": 35.3574943542, "published": true}, {"hash": "7Sd7Zzb7YVD", "uri": "/contracts/7Sd7Zzb7YVD#risk-factors", "label": "Announcement", "score": 35.1385040283, "published": true}, {"hash": "b6h7EQXEGgC", "uri": "/contracts/b6h7EQXEGgC#risk-factors", "label": "Announcement", "score": 34.6096687317, "published": true}], "snippet_links": [{"key": "ability-to", "type": "definition", "offset": [63, 73]}, {"key": "obligations-under-notes", "type": "clause", "offset": [85, 108]}, {"key": "the-programme", "type": "clause", "offset": [122, 135]}, {"key": "for-the-purpose-of", "type": "definition", "offset": [361, 379]}, {"key": "associated-with", "type": "definition", "offset": [407, 422]}, {"key": "principal-risks", "type": "definition", "offset": [550, 565]}, {"key": "pay-interest", "type": "clause", "offset": [656, 668]}, {"key": "other-amounts", "type": "definition", "offset": [683, 696]}, {"key": "in-connection-with", "type": "clause", "offset": [703, 721]}, {"key": "for-other-reasons", "type": "clause", "offset": [732, 749]}, {"key": "the-issuers", "type": "clause", "offset": [765, 776]}, {"key": "represents-that", "type": "clause", "offset": [777, 792]}, {"key": "the-risks", "type": "clause", "offset": [824, 833]}, {"key": "prospective-investors", "type": "definition", "offset": [871, 892]}, {"key": "detailed-information", "type": "definition", "offset": [914, 934]}, {"key": "set-out", "type": "definition", "offset": [935, 942]}, {"key": "offering-circular", "type": "definition", "offset": [961, 978]}, {"key": "incorporated-by-reference", "type": "clause", "offset": [1017, 1042]}, {"key": "prior-to", "type": "clause", "offset": [1077, 1085]}, {"key": "investment-decision", "type": "definition", "offset": [1097, 1116]}, {"key": "hong-kong", "type": "clause", "offset": [1133, 1142]}, {"key": "transport-providers", "type": "clause", "offset": [1154, 1173]}, {"key": "adversely-affect", "type": "definition", "offset": [1178, 1194]}], "hash": "4119543f03cca133eb7b8848fa3753bb", "id": 9}, {"size": 23, "snippet": "The purchase of Shares is subject to a number of significant risks in the Company or businesses in which the Company operates. The following risk factors should be carefully considered. Investments in small businesses and start-up companies are often risky. Small businesses may depend heavily upon a single customer, supplier, or employee whose departure would seriously damage the Company\u2019s profitability. The demand for the Company\u2019s product may be seasonal or be impacted by the overall economy, or the Company could face other risks that are specific to its industry or type of business. The Company may also have difficulty competing against larger companies who can negotiate for better prices from suppliers, produce goods and services on a large scale more economically, or take advantage of bigger marketing budgets. Furthermore, a small business could face risks from lawsuits, governmental regulations, and other potential impediments to growth. The Company may need additional capital, which may not be available. The Company may require funds in excess of its existing cash resources to fund operating deficits, develop new products or services, establish, and expand its marketing capabilities, and finance general and administrative activities. Due to market conditions at the time the Company may need additional funding, or due to its financial condition at that time, it is possible that the Company will be unable to obtain additional funding as and when it needs it and that could significantly affect the success of the Company. The Company\u2019s management has broad discretion in how the Company use the net proceeds of an offering. The Company\u2019s management will have considerable discretion over the use of proceeds from their offering. You may not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The Company faces significant competition and operates in a highly regulated industry. The Company operates in the areas of bio-technology products and services, which is a highly competitive industry. There is substantial competition in the industry and many of the competitors are larger companies with deeper resources than the Company. Therefore, the Company will face stiff competition as it seeks to grow and execute its business plan. In addition, the Company operates in a highly regulated industry and as a result can incur significant costs and regulatory hurdles in bringing its products to market. Competitors may be better financed and able to overcome these regulatory hurdles and as such the Company may be at a disadvantage in the marketplace as a result. The Company may not be able to manage its potential growth. For the Company to succeed, it needs to experience significant expansion. There can be no assurance that it will achieve this expansion. This expansion, if accomplished, may place a significant strain on the Company\u2019s management, operational and financial resources. To manage any material growth, the Company will be required to implement operational and financial systems, procedures and controls. It will also be required to expand its finance, administrative and operations staff. There can be no assurance that the Company\u2019s current and planned personnel, systems, procedures and controls will be adequate to support its future operations at any increased level. The Company\u2019s failure to manage growth effectively could have a material adverse effect on its business, results of operations and financial condition. The Company\u2019s success relies on market acceptance. While the Company believes that there will be significant customer demand for its products/services, there is no assurance that there will be broad market acceptance of the Company\u2019s product offerings. In such event, there may be a material adverse effect on the Company\u2019s results of operations and financial condition, and the Company may not be able to achieve its business goals. We have a limited operating history, which may make it difficult for investors to predict future performance based on current operations. We have a limited operating history upon which investors may base an evaluation of our potential future performance. In particular, our limited staff and operating history means that there is a high degree of uncertainty regarding our ability to (i) develop and commercialize our technologies and proposed products (ii) obtain regulatory approval to commence the marketing of our products, (iii) manage growth, (iv) achieve market acceptance or insurance reimbursement for any of our proposed products, if successfully developed, or (v) respond to competition. As a result, there can be no assurance that we will be able to develop or maintain consistent revenue sources, or that our operations will be profitable and/or generate positive cash flows. Any forecasts we make about our operations may prove to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in our product lines, respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain, and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing such risks and the failure to do so could have a materially adverse effect on our business, results of operations, and financial condition. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in the early stage of development. As a result of these risks, challenges, and uncertainties, the value of your investment could be significantly reduced or completely lost. If we are unable to successfully identify, develop, and commercialize any product candidates, or experience significant delays in doing so, our business, financial condition, and results of operations will be materially adversely affected. Our ability to generate revenue from sales of any of our product candidates, which we do not expect to occur for at least the next several years, if ever, will depend heavily on the timely and successful identification, development, regulatory approval, and eventual commercialization of any such product candidates, which may never occur. To date, we have not generated revenue from sales of any products, and we may never be able to develop, obtain regulatory approval for, or commercialize a marketable product. Before we generate any revenue from product sales of any of our current or potential future product candidates, we will need to manage preclinical, clinical, and manufacturing activities, including undertaking significant clinical development, obtain regulatory approval in multiple jurisdictions, establish manufacturing supply, including commercial manufacturing supply, and build a commercial organization, which will require substantial investment and significant marketing efforts. We may never receive regulatory approval for any of our product candidates, which would prevent us from marketing, promoting, or selling any of our product candidates and generating revenue. Our success depends on our ability to protect our intellectual property rights and proprietary technologies, and we may not be able to protect our intellectual property rights throughout the world. Patent rights are generally national or regional rights. The filing, prosecution, maintenance, and defense of patent rights on our platform technologies and product candidates worldwide would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may have a different scope and strength than do those in the United States. In addition, the laws of some foreign countries, particularly certain developing countries, do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our intellectual property rights in all countries outside the United States or from making, using, selling, or importing products made using our intellectual property rights in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained intellectual property rights, including patent protection, to develop their own products and may also export otherwise infringing products to territories where we have intellectual property rights, including patent protection, but enforcement rights are not as strong as those in the United States. These products may compete with our products and our patent or other intellectual property rights may not be effective or adequate to prevent them from competing. The Company\u2019s founders, directors and executive officers own or control a majority of the Company. Additionally, the holdings of the Company\u2019s directors and executive officers may increase in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted or if they otherwise acquire additional interest in the Company. The interests of such persons may differ from the interests of the Company\u2019s other stockholders, including purchasers of securities in the offering. As a result, in addition to their board seats and offices, such persons will have significant influence over and control all corporate actions requiring stockholder approval, irrespective of how the Company\u2019s other stockholders, including purchasers in the offering, may vote. The Company may not be able to accomplish its public listing, and a market may not develop for the Shares. The Company is planning to become publicly listed within 12 months from the date hereof. 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DISCLOSURE", "SEC DOCUMENTS; DISCLOSURE"], ["cautionary-note-regarding-forward-looking-statements", "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS", "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS"], ["disclosures", "Disclosures", "Disclosures"], ["risk-disclosure", "RISK DISCLOSURE", "RISK DISCLOSURE"], ["forward-looking-information", "Forward-Looking Information", "Forward-Looking Information"]], "related_snippets": [], "updated": "2026-07-15T04:26:25+00:00", "also_ask": ["What are the essential elements that must be included in a robust risk factors clause?", "How can risk factors be strategically drafted to limit liability without over-disclosing?", "What are the most common pitfalls or fatal flaws in risk factor disclosures?", "How do risk factor requirements differ across key jurisdictions or regulatory regimes?", "What standards do courts use to assess the adequacy and enforceability of risk factor disclosures?"], "drafting_tip": "Identify all material risks to inform parties; use clear, specific language to avoid ambiguity; update regularly to reflect current circumstances and ensure accuracy.", "explanation": "The RISK FACTORS clause identifies and discloses potential risks and uncertainties that could affect the parties involved in an agreement or transaction. It typically outlines specific areas of concern, such as market volatility, regulatory changes, or operational challenges, providing context for each risk and its possible impact. By clearly presenting these risks, the clause ensures that all parties are aware of potential issues, thereby promoting informed decision-making and helping to allocate or mitigate risk appropriately."}, "json": true, "cursor": ""}}