LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

delivery or failure to meet delivery schedules or product specifications. If any of our customers invokes these
clauses against us, we may need to defend against the relevant claims, which could be time consuming and
expensive. We may be found liable under these clauses and be required to pay damages.
We require a significant amount of cash to fund our operations as well as meet future capital
requirements; if we cannot obtain additional capital when we need it, our growth prospects and future
profitability may be materially and adversely affected.
We require a significant amount of cash to fund our operations, in particular payments to suppliers to
secure our polysilicon feedstock requirements. We will also need capital to fund the expansion of our
production capacity and other investing activities, as well as our research and development activities in order
to remain competitive. We believe that our current cash and cash equivalents, anticipated cash flow from
operations and the proceeds from this offering will be sufficient to meet our anticipated cash needs until the
end of 2007, including for working capital and capital expenditure requirements. However, future acquisitions,
expansions, market changes or other developments may cause us to require additional funds. Our ability to
obtain external financing in the future is subject to a number of uncertainties, including:
‚ our future financial condition, results of operations and cash flows;
‚ general market conditions for financing activities by companies in our industry; and
‚ economic, political and other conditions in China and elsewhere.
If we are unable to obtain funding in a timely manner or on commercially acceptable terms, or at all, our
growth prospects and future profitability may be materially and adversely affected.
Our business depends on the continued services of our executive officers and key personnel and our
business may be severely disrupted if we lose their services.
Our success depends on the continued services of our executive officers and key personnel, in particular
Mr. Xiaofeng Peng, our founder, chairman and chief executive officer. We do not maintain key-man life
insurance on any of our executive officers and key personnel. If one or more of our executive officers and key
personnel are unable or unwilling to continue in their present positions, we may not be able to replace them
readily, if at all. As a result, our business may be severely disrupted and we may have to incur additional
expenses in order to recruit and retain new personnel. In addition, if any of our executives joins a competitor or
forms a competing company, we may lose some of our customers. Each of our executive officers and key
personnel has entered into an employment agreement with us that contains confidentiality and noncompetition
provisions. However, if any dispute arises between our executive officers or key personnel and us,
we cannot assure you, in light of uncertainties associated with the PRC legal system, that these agreements
could be enforced in China where most of our executive officers and key personnel reside and hold most of
their assets. See ""Ì Risks Relating to Business Operations in China Ì The uncertain legal environment in
China could limit the legal protections available to you'' in this prospectus.
If solar power is not adopted for wide commercial application, our revenues may decline and we may be
unable to sustain our profitability.
The solar power market is at an early stage of development and the extent of acceptance of solar power
technology and products is uncertain. Many factors may affect the viability of wide commercial adoption and
application of solar power technology, including:
‚ cost-effectiveness, performance and reliability of solar power technology and products compared to
conventional and other renewable energy sources and products;
‚ availability of government subsidies and economic incentives to support the development of the solar
power industry;
‚ success of, or increased government support for, other alternative energy generation technologies, such
as fuel cells, wind power, hydroelectric power and biomass energy;
‚ fluctuations in economic and market conditions that affect the viability of renewable energy sources,
such as increases or decreases in the prices of oil and other fossil fuels;
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