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Username: Gregory W. Krajewski
Date/Time: Wed, November 1, 2000 at 4:18 AM GMT
Browser: Microsoft Internet Explorer V5.01 using Windows 98
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Subject: Business Risks....IOD is correct in how they wrote about them in their application

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      Since you want us to go easy on you, I will...

I just have to make a comment about IOD's business risks (the way it is written in their application)...That is STANDARD way it is written in most business proposals (the good ones)..YOU DO NOT GLOSS OVER BUSINESS RISKS...If you write about business risks in the "it can never happen" prose or a less than truthful manner, then you open yourself up for unecessary litigation (which shows IOD's knowledge about business plans, and the potential risks a registry may come across)...

I have a link I think everyone would find interesting...I have copied a portion of NSI's Risk factors with regards to it's stock and company (from circa 1997--LOTS OF INTERESTING FACTS, OTHER THAN RISKS)....To read it in it's entirety, click on the link below...(you will just have to scroll till you get to risk factors)...

(I cut and pasted from the NSI material, you can find on the link below--This is just to back up what I am saying about how business risks are written)

                              RISK FACTORS

     An investment in the shares of Class A Common Stock offered hereby involves a high degree of risk. Prospective investors should consider carefully the following risk factors, in addition to the other information presented in this Prospectus, before purchasing the shares of Class A Common Stock offered hereby.
This Prospectus contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ materially from the results discussed in the forward-looking statements as a result of certain factors, including, but not limited to, those set forth under "Risk Factors" and elsewhere in this Prospectus.

     Limited Operating History.  While the Company has been in business since 1979, it has been involved in the domain name registration business pursuant to the Cooperative Agreement since 1993. Further, prior to September 14, 1995, the
Company operated its domain name registration business under a cost
reimbursement plus fixed-fee contract with the NSF and the Company was paid directly by the NSF for providing registration services. Accordingly, the Company has only a limited operating history under its current subscription-based pricing model for its domain name registration business, upon which an evaluation of the Company and its prospects can be based. The Company's
prospects must be considered in light of the risks frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets. To address these risks, the Company must, among other things, respond to competitive developments, increase its sales and marketing organization, continue to identify, attract, retain and motivate
qualified persons and continue to upgrade its technologies and commercialize products and services incorporating such technologies. While the Company has been involved in network services and consulting since its inception, due to the
rapidly evolving nature of Internet technologies, the Company's Intranet services business faces similar risks. There can be no assurance that the Company will be successful in addressing such risks or that the Company will continue to obtain new registrations at current rates or renew the registration
of a significant portion of its customers. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "-- Absence of Sales and Marketing Experience; Evolving Distribution Channels."

     As a result of the Company's limited operating history, especially with regard to its subscription-based registration services business, the Company
does not have significant historical financial data on which to base planned operating expenses. Accordingly, the Company's expense levels are based in part on its expectations as to future revenue and to a large extent are fixed. As a result, quarterly sales and operating results generally depend on the volume of and ability to fulfill registration requests, which are difficult to forecast.
The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall of demand for the Company's services in relation to the Company's expectations
would have an immediate adverse impact on the Company's business, operating results and financial condition. In addition, the Company expects a significant increase in its operating expenses as it funds greater levels of product and services development, increases its sales and marketing operations, upgrades systems and infrastructure, opens new offices, develops new distribution channels and broadens its customer support capabilities. To the extent that such
expenses precede or are not subsequently followed by an increase in revenue, the Company's business, operating results and financial condition will be materially and adversely affected......(yada, yada, etc)

(more of the same...this was just to give you an example, then when your writing about business risks, you DO NOT gloss over anything...)


      
     

 

Link: NSI information sent to the Securities and Exchange Commission - 7/97


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