1016470--3/24/2006--SRS_LABS_INC

related topics
{product, market, service}
{customer, product, revenue}
{cost, contract, operation}
{operation, international, foreign}
{property, intellectual, protect}
{personnel, key, retain}
{provision, law, control}
{stock, price, share}
{stock, price, operating}
We are exposed to risks in our licensing business related to product and customer concentration. Our business is highly dependent on the consumer electronics market, which is characterized by short product life cycles, fluctuations in demand and seasonality, and is subject to risks related to product transitions and supply of other components. Pricing pressures on the consumer electronics product manufacturers, who incorporate our technologies into their products, could limit the licensing fees we charge for our technologies, which could adversely affect our revenues. We conduct operations in a number of countries and are subject to risks of international operations, particularly in Asia and the People s Republic of China. Our ability to generate revenues and meet with customers may be effected by widespread illness We are uncertain of the total costs associated with the planned divestiture of Valence. If the sale of consumer electronics products incorporating our technologies does not grow in emerging markets, our ability to increase our licensing revenue may be limited. We have a long and unpredictable sales cycle, which can result in uncertainty and delays in generating additional revenues. If our patents and other intellectual property rights do not adequately protect our products, we may lose market share to our competitors and be unable to operate our business profitably. If we lose the services of our key personnel, or if we are unable to attract and retain other key personnel, we may not be able to manage our operations or meet our growth objectives. The market price of our common stock is volatile and your investment in our common stock could suffer a decline in value. Our certificate of incorporation and bylaws as well as Delaware law contain provisions that could discourage transactions resulting in a change in control, which may negatively affect the market price of our common stock. We face intense competition from companies with greater brand recognition and resources.

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