The Company is presently operating at a substantial net cash loss without any realistic prospect of reducing the rate at which the value of the
intent, ChoicePoint would pay the Company $10,700,000 for all the assets of the Company and assume $3,146,785 in liabilities, as well as assuming certain future vendor obligations and leases. The offer was subject to certain conditions. On November 4, 2002, the Company was informed by Choicepoint that they were withdrawing their offer.
NASDAQ regulations require a Company's common stock trading price to remain above $1.00. The NASDAQ closely monitors the compliance with its financial and corporate governance requirements, including the requirement that Company's maintain a $1.00 share price. The closing bid price for Company's common stock has been less than $1.00 for more than 30 consecutive trading days and the Company therefore has not been in compliance with NASDAQ requirements for continued listing. On September 27, 2001, the Company was informed by the staff of NASDAQ Stock Market, Inc. that they would delay enforcing the $1.00 minimum bid price requirement. The Company has been unable to meet these requirements and effective March 8, 2002 requested a voluntary de-listing of its common stock from the NASDAQ National Market. As a result, there is no assurance that an active market will be sustained for trading in the Company's stock, in which case the shares may be difficult or impossible to sell.
Technological change and new product development risks. The market for INSpire's services is characterized by rapidly changing technology, evolving industry standards, and frequent introductions of new products and enhancements. INSpire's future success depends in part on its ability to enhance its existing services and develop new services to meet changing customer requirements. The introduction of competing services or products incorporating new technologies could render some or all of INSpire's services obsolete or unmarketable. As a result, INSpire has expended substantial resources for the enhancement of its services and for product development. The development of new or enhanced services or products results in expenditures and capital costs that may not be recovered if the service or product is unsuccessful. Development projects can be lengthy and subject to changing market requirements and unforeseen costs and delays. The failure of INSpire to develop and introduce new or enhanced services or products in a timely and cost-effective manner could have a material adverse effect on the Company's business, financial condition, cash flows, and results of operations. See "Item 1 - Business Product Development."
Dependence on key personnel. INSpire's future success will depend largely on the efforts and abilities of its executive officers and certain key technical, managerial, and sales employees. The loss of any of these key employees could have a material adverse effect on the Company's business, financial condition, cash flows, and results of operations. INSpire cannot assure that it will be successful in retaining key personnel. See "Item 10 - Directors and Executive Officers of the Registrant."
The FASB has issued Statements of Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets"("SFAS 142"). SFAS 141 prohibits the use of the pooling of interests method for business combinations initiated after June 30, 2001 and also applies to all business combinations accounted for by the purchase method that are completed after June 30, 2001. There are also transition provisions that apply to business combinations completed before July 1, 2001 that were accounted for by the purchase method. SFAS 142 is effective for fiscal years beginning after December 15, 2001 for all goodwill and intangible assets recognized in an entity's statement of financial position at that date regardless of when those assets were initially recognized. The Company does not expect the adoption of SFAS 141 and SFAS 142 to have a material effect on its consolidated financial statements.