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MALL » Topics » We will be controlled by PC Mall as long as it owns a majority of our common stock, which may lead to conflicts of interest.

This excerpt taken from the MALL 10-K filed Mar 31, 2005.

We will be controlled by PC Mall as long as it owns a majority of our common stock, which may lead to conflicts of interest.

 

PC Mall owns approximately 80.2% of the outstanding shares of our common stock. PC Mall is able to affect the outcome of any stockholder vote at least for as long as PC Mall owns a majority of our outstanding common stock. As a result, until the completion of our spin-off from PC Mall, PC Mall will effectively be able to control all matters affecting us, including:

 

  •   the composition of our entire board of directors and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers;

 

  •   any determinations with respect to mergers or other business combinations;

 

  •   our acquisition or disposition of assets;

 

  •   our financings;

 

  •   changes to the agreements providing for our separation from PC Mall;

 

  •   the payment of dividends on our common stock; and

 

  •   determinations with respect to our tax returns.

 

Conflicts of interest may arise between PC Mall and us in a number of areas relating to our past and ongoing relationships as a result of our separation from PC Mall and PC Mall’s continued controlling interest in us. These may include:

 

  •   the nature and quality of transitional services rendered by PC Mall to us;

 

  •   how various tax and employee benefit matters are resolved or how responsibilities are allocated;

 

  •   disputes over our and PC Mall’s respective indemnification obligations;

 

  •   the allocation of any insurance proceeds;

 

  •   the structure and timing of transfers or distributions by PC Mall of all or any portion of its ownership interest in us; and

 

  •   PC Mall’s ability to control our management and affairs.

 

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We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

 

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