1012482--12/14/2006--NETOPIA

related topics

{product, market, service}

{system, service, information}

{customer, product, revenue}

{operation, international, foreign}

{stock, price, operating}

{regulation, change, law}

{cost, operation, labor}

{financial, litigation, operation}

{competitive, industry, competition}

{personnel, key, retain}

{property, intellectual, protect}

{provision, law, control}

{control, financial, internal}

{product, candidate, development}

{regulation, government, change}

If the proposed acquisition of Netopia by Motorola is not completed, our business could be materially and adversely affected and our stock price could decline. We have a history of losses. We may incur losses and negative cash flow in the future, which could significantly harm our business. We may find it difficult to raise needed capital in the future, which could delay or prevent introduction of new products or services, require us to reduce our business operations or otherwise significantly harm our business. If we are unable to resolve the private securities class action, the derivative actions and litigation related to and arising out of the restatements of our consolidated financial statements for prior periods in a timely and economic manner, our business could be significantly harmed. Substantial sales of our broadband equipment will not occur unless telecommunications carriers and service providers continue to expand their deployments of DSL and other broadband services, and without continued expansion our revenues may decline, which could significantly harm our business. We expect our revenues to be increasingly dependent on our ability to sell our broadband equipment to Independent Local Exchange Carriers (ILECs), and we may incur losses if we cannot successfully market and sell our products through ILEC channels. We expect our revenues to be increasingly dependent on our ability to develop and sell our broadband equipment into the residential broadband gateway market. The loss of, or decline in, purchases by one or more of our key customers would result in a significant decline in our revenues and harm our business. Substantial portions of our revenues are derived from sales to international customers, and currency fluctuations can adversely impact our operations. Additional risks associated with international operations could adversely affect our sales and operating results. Because the markets for our products and services are intensely competitive and some of our competitors are larger, better established and have more cash resources, we may not be able to compete successfully against current and future competitors. Our quarterly operating results are likely to fluctuate because of many factors and may cause our stock price to fluctuate. Other technologies for the broadband gateway market compete with DSL services. We purchase the semiconductor chips for our broadband equipment from a limited number of suppliers, and the inability to obtain in a timely manner a sufficient quantity of chips at an economic price would adversely affect our business. If we were unable to obtain components and manufacturing services for our broadband equipment from independent contractors and specialized suppliers, our business would be harmed. Failure to develop, introduce and market new and enhanced products and services in a timely manner could harm our competitive position and operating results. We may experience declining gross margins due to price competition and an increase in sales of lower margin broadband equipment as a percentage of our total revenues. We may incur greater losses if we cannot successfully sell our broadband software and services products. We derive a substantial portion of the recurring revenues from our broadband software and services products from a small number of large customers. If hosting services for our broadband software and services perform poorly, our revenue may decline and we could be sued. Failure to attract or retain key personnel could harm our business. Our intellectual property may not be adequately protected, and our products may infringe upon the intellectual property rights of third parties, which may adversely impact our competitive position and require us to engage in costly litigation. If we are unable to license necessary software, firmware and hardware designs from third parties, our business could be harmed. Our products are complex and may contain undetected or unresolved defects. Our industry may become subject to changes in regulations, which could harm our business. Business interruptions that prevent our ability to deliver products and services to our customers could adversely affect our business. Our stock price may be volatile, which may result in substantial losses for our stockholders. If our proposed merger with Motorola is not completed, a third party may have difficulty acquiring us, even if doing so would be beneficial to our stockholders. Changes in the accounting treatment of stock options has and will adversely affect our results of operations.

Full 10-K form ▸

1012482--12/14/2006--NETOPIA_INC