1094243--3/31/2006--SOMERA_COMMUNICATIONS

related topics

{customer, product, revenue}

{product, market, service}

{personnel, key, retain}

{condition, economic, financial}

{acquisition, growth, future}

{stock, price, share}

{control, financial, internal}

{cost, regulation, environmental}

{system, service, information}

Our business depends upon our ability to match third party re-used equipment supply with telecommunications operators demand for this equipment. Our ability to meet customer demand and the growth of our net revenue could be harmed if we are unable to manage our inventory and other assets needs accurately. We do not have many formal relationships with suppliers of telecommunications equipment and may not have access to adequate product supply. Defects in the equipment we sell or failure to perform services at a high level of performance may seriously harm our credibility and our business. Our strategy to outsource services could impair our ability to deliver our equipment on a timely basis. The market for supplying equipment and services to telecommunications operators is highly competitive. We may be forced to reduce the sales prices for the equipment and services we sell. Our customer base is concentrated and the loss of one or more of our key customers would have a negative impact on our net revenue. If we do not maintain our international operations our business could suffer. Our quarterly net revenue and the price of our stock may be negatively impacted by the seasonal purchasing patterns of our customers. Our business may suffer if we are not successful in our efforts to keep up with a rapidly changing market. A downturn and/or consolidation in the telecommunications industry or an industry trend toward reducing or delaying additional equipment purchases due to cost-cutting and other pressures could reduce demand for our products. The lifecycles of telecommunications infrastructure equipment may become shorter, which would decrease the supply of, and carrier demand for, re-used equipment, and telecommunications equipment lifecycle services, which could increase our expenses. The market for telecommunications equipment lifecycle services is relatively new and it is unclear whether our service offerings will achieve long-term market acceptance. Many of our customers are telecommunications operators that may at any time reduce or discontinue their purchases of the equipment and services we sell to them. We may fail to continue to attract, develop and retain key management and sales personnel, which could negatively impact our business. If we engage in acquisitions, we may experience difficulty assimilating the operations or personnel of the acquired companies, which could threaten our future growth. New regulations related to equity compensation could adversely affect our operating results and affect our ability to attract and retain key personnel. Failure to comply with all of the requirements imposed by Section 404 of the Sarbanes-Oxley Act of 2002 could result in a negative market reaction. We are potentially subject, to new environmental legislation enacted by the European Union and, if we do not comply, our operating profit could be adversely impacted. We may not be able to continue to meet the listing criteria for The Nasdaq National Market, which would adversely affect the ability of investors to trade our common stock and could adversely affect our business and financial condition.

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1094243--3/31/2006--SOMERA_COMMUNICATIONS_INC