Fill and Sign the Full Text of Ampquota Survey of Education in Hawaii Made under the Form

10.10 Selected Risk Factors-Telecommunications CompanyThe Company's operations and the transactions described herein are subject to certain significant risks, including the following: Risks Relating to the Company Limited Operating History of Losses; Need for Capital; Report of Independent Public Accountants. The Company has a limited operating history, has incurred significant losses from operations since its inception, and has a current working capital deficit. Since its formation, the Company has financed its operations almost exclusively through private sales of securities. There can be no assurance that the Company will ever attain profitable operations or will be able to generate future revenue levels to support operations or recover its investment in property and equipment. Financing from private sources could continue to be required to fund the Company's capital commitments and operations and is likely to continue to be required to fund the Company's expansion. These matters raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the ongoing support of its stockholders and customers and could continue to be dependent upon its ability to obtain financing from private sources. There can be no assurance that additional capital will be available to the Company from any source or that, if available, it will be on terms acceptable to the Company. The unavailability of capital could materially and adversely affect the Company's ability to implement development plans for its operations and could result in the Company's inability to continue as a going concern. Failure to Achieve Anticipated Growth. Although the Company believes that its infrastructure relative to long-distance call services, network management services, and local direct dial services within Ruratoria is relatively complete and capable of handling substantial amounts of traffic, the Company's business development plans are currently in the initial stages. The Company believes that the markets it serves with respect to long-distance call services, network management services, and local direct dial services within Ruratoria have the potential to grow significantly in the future. Accordingly, the Company expects that the volume of international long-distance calls handled, the volume utilization relative to its network management services, and the volume of local direct dial calls handled within Ruratoria will increase as the Company's development plans are implemented. There can be no assurance such market growth will occur and, due to the Company's limited liquidity and capital resources and other matters affecting operations, there can be no assurance that such volume increases will be realized and, if so, when. Competition. The long-distance call services market is intensely competitive and is significantly affected by new service introductions and the market activities of major industry participants. Competition in this market is based upon pricing, customer service, network quality and value-added services. The Company competes with numerous major companies, including _______________ and others, many of which have been in business longer than the Company, have greater name recognition, more extensive transmission networks, and greater engineering and marketing capabilities than the Company, and have, or have access to, substantially greater financial and personnel resources than those available to the Company. The Company anticipates that it will compete in the public payphone segment in Ruratoria with ________________ and other new licensed companies. Some of these companies, again, have considerably greater financial and other resources than the Company. The ability of the Company to compete effectively in the telecommunications industry will depend upon its continued ability to maintain quality, market-driven services at prices generally equal to or below those charged by its competitors. There can be no assurance that the Company will be able to compete successfully with existing or future competitors.Reliance on Key Personnel. The Company's success depends to a significant extent on a small number of key technical and managerial personnel, the loss of any one of which could have a material adverse effect on the Company's operations. The Company believes that its future success will also depend in part upon its ability to attract and retain highly skilled technical and managerial personnel. Competition for such personnel is intense. There can be no assurance that the Company will be successful in attracting and retaining the personnel it requires to grow and to attain profitability. Possible Unavailability of Leased Transmission Facilities. The Company owns only a portion of the transmission facilities needed to complete long- distance calls. Therefore, the Company's long-distance call services business is dependent upon contractual arrangements, both long- and short-term, with carriers for the transmission of calls. The Company believes it has ample access to leased transmission facilities at cost-effective rates and expects to continue to have such access in the foreseeable future because technological improvements in recent years have increased the capacity of existing digital fiber-optic and satellite-based transmission facilities. There can be no assurance, however, that such leased facilities will be available to the Company at cost-effective rates in the future. Risk of Damage, Loss or Malfunction of Satellite. The loss, damage or destruction of any of the Ruratoto satellites as a result of military actions or acts of war, anti-satellite devices, electrostatic storm or collision with space debris, or a temporary or permanent malfunction of any of the Ruratoto satellites, would likely result in a short-term interruption of service which could adversely affect the Company's operations, and possibly materially. The Company believes that suitable arrangements could be obtained with other satellite operators to provide satellite transmission capacity, although there can be no assurance that the interruption of service would not have a materially adverse effect on the Company's operations. Technological Change and New Services. The telecommunications industry has been characterized by steady technological change, frequent new service introductions, and evolving industry standards. The Company believes that its future success will depend on its ability to anticipate such changes and to offer on a timely basis market responsive services that meet these evolving industry standards. The Company has constructed its Ruratoria network control center/teleport using state-of-the-art digital satellite communications equipment, and built the network operating system modularly to enable it to expand telecommunications capacity quickly, on an as-needed basis. However, there can be no assurance that the Company will have sufficient resources to make the investments necessary to acquire new technology or to introduce new services that would satisfy an expanded range of customer needs. Service Interruptions; Equipment Failures. The Company's business requires that transmission and switching facilities and other equipment be operational 24 hours per day, 365 days per year. Long-distance telephone companies such as the Company on occasion may experience temporary service interruptions or equipment failures, in some cases resulting from causes beyond their control. Any such event experienced by the Company would impair the Company's ability to service its customers and could have a material adverse effect on the Company's operations. The Company's ______________________ control center/teleport is, however, protected through an uninterruptible power supply system which, upon commercial power failure, utilizes battery back-up until an on-site generator is automatically triggered to supply power.Increased Expenditures for Anticipated Expansion. To facilitate and support the growth anticipated in its business, the Company anticipates that it will be required to spend increased amounts on personnel, equipment and facilities. There can be no assurance that the Company will have sufficient funds to support any such growth or expansion, which could adversely affect the Company's operations. Customer Attrition. The Company believes that a certain level of customer attrition is common in the long-distance call services industry. Although the Company has not experienced significant attrition in its various businesses, the Company's historical levels of customer attrition may not be indicative of future attrition levels, and there can be no assurance that any steps taken by the Company to counter increased customer attrition would accomplish the Company's objectives. In addition, recent acquisitions and consolidations in the telecommunications industry have resulted in, and may in the future result in, loss of customers by the Company because of the acquisition of these customers by large companies that have existing contractual relationships with the Company's competitors. Regulations. The Company's domestic long-distance call services activities are subject to the regulations of the United States Federal Communications Commission (FCC) and the public utility commissions of the various states in which the Company operates. These regulatory agencies are governed by respective federal or state legislation and, therefore, any change or modification to such regulation or legislation can result in positive or negative effects upon the Company. Decisions by the state or federal legislative or regulatory bodies with respect to the permissible business activities or pricing practices of the Company's competitors may also have an adverse impact on the Company's operations. Moreover, any significant change in regulations by federal or state governmental agencies could significantly increase the Company's costs or otherwise have an adverse effect on the Company's activities and on its expansion efforts. Federal. The Company is subject to regulation by the FCC, and the regulations promulgated by the FCC are subject to change in the future. There can be no assurance that future judicial and legislative changes will not have a material adverse effect on the Company, that regulators or third parties will not raise material issues with regard to the Company's compliance with applicable regulations, or that regulatory activities will not have a material adverse effect on the Company. The Company has been granted requisite authorization from the FCC to operate its _______________-based satellite teleport (the Teleport), which transmits and receives signals from the Ruratorian government-owned and - operated Ruratoto Satellite System (Ruratoto). FCC licensing decisions or changes in United States government policies increasing or decreasing access to non-Intelsat satellites or other network components could adversely affect the Company, particularly if such decisions or changes were to result in a reallocation of access rights among the Company and its competitors. There can be no assurance that the Company will receive all authorizations or licenses necessary for new communications services or that delays in the licensing process will not adversely affect the Company's business. In addition, there can be no assurance that such authorizations will not be rescinded, although such action is unlikely. The Company's transmitting equipment must comply with FCC technical standards, which are subject to change and can result in the premature obsolescence of equipment. The Company monitors its compliance with federal, state, and local regulations governing the discharge and disposal of hazardous and environmentally sensitive materials, including, but not limited to, the emission of electromagnetic radiation. Although the Company believes it is in compliance with such regulations, there can be no assurance that any such discharge, disposal or emission will not expose the Company to claims or actions that could have a material adverse effect on the Company's financial results. To originate and terminate calls in connection with providing their services, long-distance carriers such as the Company must purchase "access" from the local exchange carriers (LECs). Access charges represent a portion of the Company's cost of services and, generally, such access charges are regulated by the FCC. The FCC issued an order reforming its regulation of these access charges. The new regulations are intended to create a system that is more economically efficient, fair, and compatible with growing competition. Implementation of a new access charge structure could place many interexchange carriers, including the Company, at a cost disadvantage, either in absolute terms or in relative terms, to the larger competitors. As a result of the passage of the Telecommunications Act of 1996 and the resultant growth in competition, the FCC has issued, and continues to issue, major changes to their telecommunications regulations. Many of these regulatory changes will have a substantial impact on the Company's business groups. At this time, however, the Company cannot predict the ultimate effect of these changes on its revenues or expenses. Agreements with foreign carriers are also subject to FCC regulations, foreign laws, and the terms of international treaties. If these regulations, laws or treaties are construed in such fashion as to require changes to the Company's current agreements, such changes could have a material adverse effect on the Company. Additionally, if a concept proposed by the FCC whereby a caller could make a long-distance call from any publicly available telephone and have the call automatically routed over the long-distance telephone network of the caller's choice, called Billed Party Preference (BPP), is implemented, such implementation could have a material adverse effect on the Company. State. The Company is subject to state regulation that varies by jurisdiction and is subject to change. Generally, the Company must obtain and maintain certificates of public convenience and necessity from many state regulatory authorities where it offers intrastate long-distance services. In most cases, it must also file tariffs for its intrastate offerings. To date, the Company has experienced no unusual difficulties or delays in obtaining necessary state authorizations. However, there can be no assurance that the Company will not experience difficulties or delays in the future or that any such difficulties or delays will not adversely affect the Company's business. Additionally, many states are relaxing the regulatory restrictions currently imposed on the LECs. There can also be no assurance that future judicial and legislative changes will not have a material adverse effect on the Company. Seasonal Variations in Revenues. The Company's call service revenues are typically higher on a per phone basis during January through July, the peak tourism months in Ruratoria, and drop off thereafter.