1022509--3/17/2008--TUMBLEWEED_COMMUNICATIONS

related topics

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{stock, price, operating}

{control, financial, internal}

{operation, international, foreign}

{acquisition, growth, future}

{system, service, information}

{cost, operation, labor}

{personnel, key, retain}

{tax, income, asset}

{condition, economic, financial}

We have a history of losses and may experience losses in the future. Fluctuations in our quarterly operating results may not be predictable and may result in significant volatility in our stock price. Competitive pricing, sales volume, mix and product costs could materially adversely affect our revenue and gross margins. We may have difficulty in executing our business operations. If we lose the services of executive officers or other key employees, or our new employees, our ability to develop our business and secure customer relationships will suffer. If we have elected an ineffective strategy, or do not execute our strategy well, our business could be harmed. If we do not develop our products, marketing and distribution channels more successfully than our competitors, our business could be harmed. We may be unable to keep pace with rapid industry, technological and market changes. Contractual issues may arise during the negotiation of license agreements that may delay the anticipated closure of a transaction and our ability to recognize revenue as anticipated. A limited number of customers and vertical markets have accounted for a high percentage of our revenue, and either the failure to maintain or expand these customer relationships or the failure to penetrate new vertical markets could adversely affect our future revenue. Our appliance products may not be adopted in the market and expose us to hardware costs and supply chain issues. Economic conditions that result in a decrease in information technology spending could adversely affect our business. We may be unable to adequately protect our intellectual property rights or may be subject to claims of patent infringement, either of which could result in substantial costs to us. The enforcement of our intellectual property rights, especially through patent infringement lawsuits we may initiate, could result in substantial litigation costs and ultimately may not result in additional revenue to us or a favorable judicial determination. Failure to license necessary third party software incorporated in our products could cause delays or reductions in our sales. Our international business exposes us to additional risks that may result in future additional costs or limit the market for product sales. Fluctuations in foreign currency exchange rates could affect our financial results We rely on public key cryptography and other security techniques that could be breached, resulting in reduced demand for our products and services. Our stock price could be adversely affected if we are unable to continue to favorably assess the effectiveness of our internal control over financial reporting. If our goodwill or intangible assets become impaired we may be required to record a significant charge to earnings. A principal stockholder of the Company could disrupt operations or increase our operating costs if it seeks influence or control of the Company in a manner that is not supported by our Board of Directors.

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1022509--3/17/2008--TUMBLEWEED_COMMUNICATIONS_CORP