1073967--4/30/2007--SERENA_SOFTWARE

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{product, market, service}

{debt, indebtedness, cash}

{operation, international, foreign}

{customer, product, revenue}

{product, candidate, development}

{regulation, change, law}

{acquisition, growth, future}

{control, financial, internal}

{product, liability, claim}

{property, intellectual, protect}

{system, service, information}

{tax, income, asset}

{personnel, key, retain}

{stock, price, operating}

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Risks Related to Our Indebtedness Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the senior subordinated notes. We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. Our debt agreements contain restrictions that limit our flexibility in operating our business. Risks Related to Our Business Economic conditions worldwide could adversely affect our revenue growth and ability to plan effectively. If our target markets do not evolve as we anticipate, our business will be adversely affected. Our future revenue is substantially dependent upon our installed customers renewing maintenance agreements for our products and licensing or upgrading additional Serena products; our future professional service and maintenance revenue is dependent on future sales of our software products. If the market for IBM and IBM-compatible mainframes decreases, it could adversely affect our business. Any delays in our normally lengthy sales cycles could result in significant fluctuations in our operating results. Our license revenue from products for distributed systems may fluctuate. We expect that our operating expenses will increase in the future and these increased expenses may adversely affect our future operating results and financial condition. Our industry changes rapidly due to evolving technology standards and our future success will depend on our ability to continue to meet the sophisticated needs of our customers. We are subject to intense competition in our target markets and we expect to face increased competition in the future, including competition in the distributed systems market. We may experience delays in developing our products which could adversely affect our business. Acquisitions may be difficult to integrate, disrupt our business or divert the attention of our management. We intend to expand our international operations and may encounter a number of problems in doing so; there are also a number of factors associated with international operations that could adversely affect our business. Fluctuations in the value of foreign currencies could result in currency transaction losses. If our goodwill or amortizable intangible assets become impaired, we may be required to record a significant charge to earnings. Third parties in the future could assert that our products infringe their intellectual property rights, which could adversely affect our business. Errors in our products or the failure of our products to conform to specifications could result in our customers demanding refunds from us or asserting claims for damages against us. Product liability claims asserted against us in the future could adversely affect our business. Changes in accounting regulations and related interpretations and policies regarding revenue recognition could cause us to defer recognition of revenue or recognize lower revenue and profits. If we do not adequately manage and evolve our financial reporting and managerial systems and processes, our ability to manage and grow our business may be harmed. Our executive officers and certain key personnel are critical to our business and such officers and key personnel may not remain with us in the future. The interests of our controlling stockholder may differ from the interests of the holders of our securities.

Full 10-K form ▸

1073967--4/30/2007--SERENA_SOFTWARE_INC