1105542--3/31/2006--AIRSPAN_NETWORKS

related topics

{product, market, service}

{customer, product, revenue}

{operation, international, foreign}

{control, financial, internal}

{acquisition, growth, future}

{property, intellectual, protect}

{product, liability, claim}

{stock, price, operating}

{stock, price, share}

{system, service, information}

If we continue to incur substantial losses and negative operating cash flows, we may not succeed in achieving or maintaining profitability in the future. Any reduction in expenditures by communications service providers could have a negative impact on our results of operations. Since a significant percentage of our expenses are fixed and do not vary with revenues, our quarterly operating results are volatile and difficult to predict, and our stock price could decline. If we are not able to implement a program to reduce costs over time, introduce new products or increase sales volume to respond to declines in the average selling prices of our products, our gross margin may decline. to change as a result of emerging new technologies and industry standards. to change as a result of emerging new technologies and industry standards. Since we incur most of our expenses and a portion of our cost of goods sold in foreign currencies, fluctuations in the values of foreign currencies could have a negative impact on our profitability. We operate in highly dynamic and volatile industries characterized by rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles. The adoption of open standards in the broadband wireless communications industry could result in increased competition. If we are not able to implement a program to conform our products to industry standards or to successfully market and sell our standards-based products, our revenues may decline Competition from larger, better-capitalized or emerging competitors could result in price reductions, reduced gross margins and loss of or inhibited growth of market share. An inability to overcome competition from alternative communication systems could adversely affect our results of operations. We currently depend on a few key customers for substantially all of our sales. A loss of one or more of those customers could cause a significant decrease in our net revenue. Our customer contracts vary widely in terms and duration, with a many of our customers executing only short-term purchase orders, and allow our customers to terminate without significant penalties. Changes in telecommunications regulation or delays in receiving licenses could adversely affect many of our customers and may lead to lower sales. Our sales cycle is typically long and unpredictable, making it difficult to accurately predict inventory requirements, forecast revenues and control expenses. Our international sales may be difficult and costly as a result of the political, economic and regulatory risks in those regions. We may not be able to expand our sales and distribution capabilities, including establishing relationships with distributors and major system integrators and telecommunications equipment OEMs, which would harm our ability to generate revenue. Our operations in Israel may be disrupted by political and military tensions in Israel and the Middle East. Our dependence on key suppliers and contract manufacturers may result in product delivery delays if they do not have components in stock or terminate their non-exclusive arrangements with us. If we lose Eric Stonestrom or any of our other executive officers, we may encounter difficulty replacing their expertise, which could impair our ability to implement our business plan successfully. We may not have adequate protection for our intellectual property, which may make it easier for others to misappropriate our technology and enable our competitors to sell competing products at lower prices and harm our business. Our products may infringe on the intellectual property rights of third parties, which may result in lawsuits that could be costly to defend and prohibit us from selling our products. A material defect in our products that either delays the commencement of services or affects customer networks could seriously harm our credibility and our business, and we may not have sufficient insurance to cover any potential liability. We have made, and may continue to make, strategic acquisitions or enter into joint ventures. If we are not successful in operating or integrating these acquisitions or joint ventures, our business, results of operations and financial condition may be materially and adversely affected. If our stock price falls below $1.00 per share, our common stock may be de-listed from the Nasdaq National Market. For 2004 and 2005, our independent registered public accounting firm reported material weaknesses in our internal control over financial reporting. If such material weaknesses were to recur, they could result in a material misstatement in our financial statements that would not be prevented or detected, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our stock.

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1105542--3/31/2006--AIRSPAN_NETWORKS_INC