Given the absence
of a public trading market
of our common stock, and in accordance with the American Institute
of Certified Public Accountants
Accounting and Valuation Guide, Valuation
of Privately - Held Company Equity Securities Issued as Compensation, our board
of directors exercised reasonable judgment and considered numerous and subjective factors to determine the best estimate
of fair value
of our common stock, including independent third - party valuations
of our common stock; the prices at which we sold shares
of our convertible preferred stock to outside investors in arms - length transactions; the rights, preferences, and privileges
of our convertible preferred stock relative to those
of our common stock; our operating results, financial position, and capital resources;
current business
conditions and projections; the lack
of marketability
of our common stock; the hiring
of key personnel and the experience
of our management; the introduction
of new products; our stage
of development and material risks related to our business; the fact that the option grants involve illiquid securities in a private company; the likelihood
of achieving a liquidity event, such as an initial public offering or a sale
of our company given the prevailing market
conditions and the nature and history
of our business; industry trends and competitive environment; trends in consumer spending, including consumer confidence; and overall
economic indicators, including gross domestic product, employment, inflation and interest rates, and the general
economic outlook.
The Company continuously monitors customer payments and maintains an allowance for doubtful
accounts based on its assessment
of various factors including historical experience, age
of the receivable balances, and other
current economic conditions or other factors that may affect customers» ability to pay.
Taking into
account the extent
of federal fiscal retrenchment since the inception
of its
current asset purchase program, the Committee continues to see the improvement in
economic activity and labor market
conditions over that period as consistent with growing underlying strength in the broader economy.