1112920--3/22/2007--GLOBALSCAPE

related topics

{stock, price, share}

{system, service, information}

{property, intellectual, protect}

{product, market, service}

{personnel, key, retain}

{stock, price, operating}

{acquisition, growth, future}

{provision, law, control}

{product, candidate, development}

{competitive, industry, competition}

If we are unable to develop new and enhanced products and services that achieve widespread market acceptance, or if we are unable to continually improve the performance, features, and reliability of our existing products and services, our business and operating results could be adversely affected. Fluctuations in demand for our products and services are driven by many factors and a decrease in demand for our products could adversely affect our financial results. We may not be able to develop our sales force as needed to successfully market our new products. Our products are complex and operate in a wide variety of computer configurations, which could result in errors or product failures. We have grown, and may continue to grow, through acquisitions that give rise to risks and challenges that could adversely affect our future financial results. We utilize open source software in some of our products. If we lose key personnel we may not be able to execute our business plan. We may not be able to compete effectively with larger, better-positioned companies, resulting in lower margins and loss of market share. It may be difficult for us to recruit software developers and other technical and management personnel because we are a relatively small company. Our ability to develop our software will be seriously impaired if we are not able to use our foreign subcontractors. We may incur losses as we attempt to expand our business. Our operations are vulnerable to security breaches that could harm the quality of our products and services or disrupt our ability to deliver our products and services. Our products may expose customers to invasion of privacy, causing customer dissatisfaction. Risks Related to Stock Ownership Our stock is a penny stock, which makes it more difficult to sell. Our stock price is/may be volatile. We do not pay dividends on our common stock. Anti-takeover provisions in our charter and Delaware law could inhibit others from acquiring us. Our directors and executive officers continue to have substantial control over us Stockholders ownership of our stock may be significantly diluted, affecting the value of the stock. We are vulnerable to claims that our products infringe third-party intellectual property rights particularly because our products are partially developed by independent parties. We may not be able to protect our intellectual property rights. Other companies may own, obtain or claim trademarks that could prevent limit or interfere with our use of our trademarks.

Full 10-K form ▸

1112920--3/22/2007--GLOBALSCAPE_INC