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@ a loss or reduction of government funding for child care assistance programs or food reimbursement programs could adversely affect us; @ a termination or reduction of tax credits for child care could have a material adverse effect on our business; @ if we (or our subsidiaries) are unable to attract and retain sufficient qualified employees, if minimum wage rates increase or if our employees (cr our subsidiaries’ employees) unionize, our results of operations may be adversely affected; H our results of operations could be adversely affected if environmental contamination is discovered on any of our properties; and B material weaknesses in KLC’s internal controls discovered during KLC’s fiscal year 2005 audit. BACKGROUND DATA Industry and market data used throughout this Memorandum is based on independent industry publications, government publications, reports by market research firms and other published independent sources. Some data is also based on our good faith estimates, which are derived from our review of internal surveys and independent sources. Such information necessarily incorporates significant assumptions as to factual or other matters. Although we believe these sources are reliable, we have not independently verified the information from third party-sources or the assumptions on which such information is based and cannot guarantee its accuracy or completeness. Some of the industry data contained in this Memorandum has not been updated because we have been unable to obtain more recent data. Although we are not aware of trends contrary to those reflected in such data (except as otherwise stated), we cannot assure you that such data are indicative of current trends. TRADEMARKS The intellectual property portfolio of the Company includes registered and unregistered trademarks and service marks and collective trademarks that distinguish the services and products that it offers from those services and products cffered by other companies. In addition, the Company has applied to register certain other trademarks, service marks and collective trademarks in the U.S. and other countries, and likely will seek to register additional marks in the future. A federal registration in the U.S. is effective for ten years and may be renewed for ten-year periods perpetually, subject only to required filings based on continued use of the mark by a registrant. It is possible that some of these applications to register additional marks will not result in registrations. KLC’s primary trademarks are “Knowledge Learning Corporation,” “Children's World,” “Knowledge Beginnings,” “Children's Discovery Centers” and “Medallion School Partnerships.” KinderCare owns and uses various registered and unregistered trademarks and service marks covering the name “KinderCare,” its schocihouse logo and a number of other names, siogans and designs, including “KinderCare at Work” and “Mulberry.” k12’s primary trademarks are the k12 star logo, the word mark and design, which are licensed from an entity controlled by the Principals. All other product and company names referred to in this Memorandum are trademarks and registered trademarks of their respective companies. HOUSE_OVERSIGHT_024451