Textbook-based learning has been the mainstay of science education for the last 100 years. Administrators in certain districts may be hesitant to use a program that does not use a textbook, and some parents may want to see a textbook. However, we have spoken to dozens of school districts so far, and the majority have expressed a preference for a program that is NOT textbook-based.
The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
The State of California has a formal adoption process for instructional materials. Although we are carefully developing the product to meet all the criteria, it is a very stringent process. The risk is that we miss a qualification and are not included on the approved list. This would have an impact on our ability to sell to school districts. We are being careful to read all documentation and make sure we comply with all the requirements. And there are still many other state markets that we could sell to.
If we are unable to raise all the capital necessary we will need to start out with a smaller sales force until we have enough revenue to hire a larger team. This will limit our revenue growth early on.
This will directly impact the number and frequency of license sales.
A new competitor that we are currently unaware of could enter the marketplace and add to the challenge of attracting school and district dollars for curriculum. However, we have been keeping a careful eye on competitors for the past 3 years and always ask customers what other programs they are considering. So far the coast is clear.
Good product developers and lesson writers are hard to find. Though we have the personnel currently to finish the product in a timely manner, there is the risk that a competitor hires away some of our existing talent with promises of higher salaries or benefits. Raising money and being able to pay our contractors more competitively will help us mitigate this risk.
Robin Cooper is part-time. As such, it is likely that the company will not make the same progress as it would if that were not the case.