1091756--3/16/2006--IBASIS

related topics

{system, service, information}

{product, market, service}

{acquisition, growth, future}

{regulation, change, law}

{personnel, key, retain}

{operation, international, foreign}

{loss, insurance, financial}

{property, intellectual, protect}

{stock, price, share}

{provision, law, control}

{stock, price, operating}

{competitive, industry, competition}

Factors That May Affect Future Results and Financial Condition Risks Related to Our Operations Our results of operations may fluctuate and the market price of our common stock may fall. We may never generate sufficient revenue and gross margin to become profitable if telecommunications carriers and other communications service providers or others are reluctant to use our services or do not use our services, including any new services, in sufficient volume. We may not be able to collect amounts due to us from our customers and we may have to disgorge amounts already paid. We may increase costs and risks in our business to the extent we rely on third parties. We may not be able to succeed in the intensely competitive market for our Trading services. We may not be able to succeed in the intensely competitive market for prepaid calling services. We are subject to downward pricing pressures and a continuing need to renegotiate overseas rates. A variety of risks associated with our international operations could materially adversely affect our business. International governmental regulation and legal uncertainties and other laws could limit our ability to provide our services, make them more expensive, or subject us or our employees to legal or criminal liability. The telecommunications industry is subject to domestic governmental regulation and legal uncertainties and other laws that could materially increase our costs and prevent us from executing our business plan. If we are not able to keep up with rapid technological change in a cost-effective way, the relative quality of our services could suffer. We may not be able to expand and upgrade our network adequately and cost-effectively to accommodate any future growth. We may not be able to maintain our routing, reporting, and billing systems and related databases adequately and cost-effectively to accommodate our continuing needs. Single points of failure on our network may make our business vulnerable. We depend on our current personnel and may have difficulty attracting and retaining the skilled employees we need to execute our business plan. We will need to retain skilled personnel to execute our plans. If we are unable to protect our intellectual property, our competitive position would be adversely affected. We rely on a variety of technologies, primarily software, which is licensed from third parties or is freely available. We may undertake strategic acquisitions or dispositions, or may be the target of similar strategic initiatives, that could be difficult to integrate or could damage our business. Risks Related to the Internet and Internet Telephony Industry If the Internet infrastructure is not adequately maintained, we may be unable to maintain the quality of our services and provide them in a timely and consistent manner. Network security breaches could adversely affect our operations. Undetected defects in our technology could adversely affect our operations. Our ability to provide our services using the Internet may be adversely affected by computer vandalism. Risks Related to Our Company A failure to obtain necessary additional capital in the future could jeopardize our operations. Investor interest in our common stock may be negatively affected by our continued trading on the Over-the-Counter Bulletin Board. Provisions of our governing documents and Delaware law could also discourage acquisition proposals or delay a change in control.

Full 10-K form ▸

1091756--3/16/2006--IBASIS_INC