1036188--4/15/2008--QAD

related topics

{product, market, service}

{customer, product, revenue}

{stock, price, operating}

{system, service, information}

{property, intellectual, protect}

{operation, international, foreign}

{acquisition, growth, future}

{personnel, key, retain}

{control, financial, internal}

{regulation, change, law}

{product, liability, claim}

{product, candidate, development}

{operation, natural, condition}

{condition, economic, financial}

{stock, price, share}

RISKS ASSOCIATED WITH SALES CYCLE Our products involve a long sales cycle and the timing of sales is difficult to predict In some cases we provide a portion of the customer solution that involves third parties during the sales cycle. We have historically recognized a substantial portion of our revenue from sales booked and shipped in the last month of a quarter. We must hire and retain highly skilled sales and marketing personnel to be successful in the sales cycle. We are dependent on third-party suppliers, particularly Progress software The market for QAD Enterprise Applications is characterized by rapid technological change. New software releases and enhancements may adversely affect our software sales Our success is dependent upon our proprietary technology and other intellectual property Our pricing and licensing models may affect our ability to compete. We license our source code to our customers, which makes it possible for third-parties to copy or modify our software for impermissible purposes. The success of our business is highly dependent on maintenance of intellectual property rights We may be exposed to product liability claims The market for enterprise applications is uncertain and we are substantially dependent on our core product suite, QAD Enterprise Applications We may not retain or attract customers if we do not develop new products and enhance our current products in response to technological changes and competing products. QAD Enterprise Applications are often deployed in complex systems and may contain defects or security flaws. Our efforts to expand our offering beyond the traditional manufacturing ERP market may not succeed. We are dependent upon achieving success in certain concentrated markets DEPENDENCE UPON DEVELOPMENT AND MAINTENANCE OF THIRD PARTY RELATIONSHIPS TO PROVIDE SALES, SERVICES AND MARKETING FUNCTIONS We are dependent upon the development and maintenance of sales and marketing channels Our intellectual property rights may be significantly affected by third-party relationships and actions Failure to establish or maintain successful relationships with third-parties as appropriate or failure of these third-parties to fulfill their responsibilities could have an adverse effect on us. ACQUISITIONS AND INTEGRATION OF ACQUIRED BUSINESS AND INTELLECTUAL PROPERTY We may make acquisitions or investments in new businesses, products or technologies that involve additional risks. We might require additional capital to support business growth, and this capital might not be available. RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS Our operations are international in scope, exposing us to additional risk. We may experience foreign currency gains and losses. Economic, political and market conditions can adversely affect our revenue growth and profitability. RISKS DUE TO BUSINESS INTERRUPTIONS If a business interruption occurs, our business could be seriously harmed. The enterprise application market has experienced significant consolidation and increased competition We are subject to competitive attack on our existing customers. THE MARKET FOR OUR STOCK IS VOLATILE The market prices for securities of technology companies, such as QAD, have been volatile Our stock price could become more volatile and investments could lose value. INTERNAL CONTROL OVER FINANCIAL REPORTING Failure to maintain effective internal controls could adversely affect our ability to meet our reporting requirements We are required to delay revenue recognition into future periods for portions of our license fee activity. PRINCIPAL STOCKHOLDERS AND DEPENDENCE UPON KEY PERSONNEL Our principal stockholders are also directors We are a controlled company . We are dependent upon key personnel Our business is subject to changing regulations regarding corporate governance and public disclosure that have increased both our costs and the risk of noncompliance.

Full 10-K form ▸

1036188--4/15/2008--QAD_INC