1366246--3/31/2010--GLU_MOBILE

related topics

{customer, product, revenue}

{product, market, service}

{operation, international, foreign}

{property, intellectual, protect}

{capital, credit, financial}

{personnel, key, retain}

{control, financial, internal}

{acquisition, growth, future}

{competitive, industry, competition}

{regulation, change, law}

{debt, indebtedness, cash}

{investment, property, distribution}

{stock, price, share}

{stock, price, operating}

{tax, income, asset}

{regulation, government, change}

{system, service, information}

We have a history of net losses, may incur substantial net losses in the future and may not achieve profitability. Our financial results could vary significantly from quarter to quarter and are difficult to predict, particularly in light of the current economic environment, which in turn could cause volatility in our stock price. We may need to raise additional capital or borrow funds to grow our business, and we may not be able to raise capital or borrow funds on terms acceptable to us or at all. The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do. Our stock price has fluctuated and declined significantly since our initial public offering in March 2007, and may continue to fluctuate, may not rise and may decline further, which could cause our stock to be delisted from trading on the NASDAQ Global Market We have outstanding debt obligations and may incur additional debt in the future, which could adversely affect our financial condition and results of operations. An acceleration in the slowdown in sales of feature phones in our traditional carrier-based business, which represents the significant majority of our revenues, or a decline in the average selling prices of our games sold through wireless carriers, could have a material adverse impact on our revenues, financial position and results of operations. Our strategy to grow our business includes developing titles for advanced platforms and smartphones beyond our wireless carrier channel, which currently comprises the significant majority of our revenues. If we do not succeed in generating considerable revenues and gross margins from these advanced platforms and smartphones, our revenues, financial position and operating results may suffer. If we do not achieve a sufficient return on our investment with respect to our efforts to develop games for social networking websites, it could negatively affect our operating results. Changes in foreign exchange rates and limitations on the convertibility of foreign currencies could adversely affect our business and operating results. Failure to renew our existing brand and content licenses on favorable terms or at all and to obtain additional licenses would impair our ability to introduce new mobile games or to continue to offer our current games based on third-party content. We currently rely primarily on wireless carriers, in particular Verizon Wireless, to market and distribute our games and thus to generate our revenues. The loss of or a change in any significant carrier relationship, including their credit worthiness, could materially reduce our revenues and adversely impact our cash position. End user tastes are continually changing and are often unpredictable; if we fail to develop and publish new mobile games that achieve market acceptance, our sales would suffer. A shift of technology platform by wireless carriers and mobile handset manufacturers could lengthen the development period for our games, increase our costs and cause our games to be of lower quality or to be published later than anticipated. Inferior deck placement or storefront featuring would likely adversely impact our revenues and thus our operating results and financial condition. We have depended on no more than ten mobile games for a majority of our revenues in recent fiscal periods. If these games do not continue to succeed or we do not release highly successful new games, our revenues would decline. If we are unsuccessful in establishing and increasing awareness of our brand and recognition of our games or if we incur excessive expenses promoting and maintaining our brand or our games, our potential revenues could be limited, our costs could increase and our operating results and financial condition could be harmed. We face added business, political, regulatory, operational, financial and economic risks as a result of our international operations and distribution, any of which could increase our costs and adversely affect our operating results. Changes made by wireless carriers to their policies regarding pricing, revenue sharing, supplier status, billing and collections could adversely affect our business and operating results. If we fail to deliver our games at the same time as new mobile handset models are commercially introduced, our sales may suffer. Future mobile handsets may significantly reduce or eliminate wireless carriers control over delivery of our games and force us to rely further on alternative sales channels, which, if not successful, could require us to increase our sales and marketing expenses significantly. If a substantial number of the end users that purchase our games by subscription change mobile handsets or if wireless carriers switch to subscription plans that require active monthly renewal by subscribers or change or cease offering subscription plans, our sales could suffer. If we fail to maintain and enhance our capabilities for porting games to a broad array of mobile handsets, our attractiveness to wireless carriers and branded content owners will be impaired, and our sales and financial results could suffer. Our industry is subject to risks generally associated with the entertainment industry, any of which could significantly harm our operating results. If one or more of our games were found to contain hidden, objectionable content, our reputation and operating results could suffer. Our business and growth may suffer if we are unable to hire and retain key personnel. Acquisitions could result in operating difficulties, dilution and other harmful consequences. Our reported financial results could be adversely affected by changes in financial accounting standards or by the application of existing or future accounting standards to our business as it evolves. If we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; in that case, our stockholders could lose confidence in our financial reporting, which could negatively impact the price of our stock. If we do not adequately protect our intellectual property rights, it may be possible for third parties to obtain and improperly use our intellectual property and our business and operating results may be harmed. Our business is subject to increasing regulation of content, consumer privacy, distribution and online hosting and delivery in the key territories in which we conduct business. If we do not successfully respond to these regulations, our business may suffer. Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition. Third parties may sue us, including for intellectual property infringement, which, if successful, may disrupt our business and could require us to pay significant damage awards. Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management s attention and affect our ability to attract and retain qualified members for our board of directors. System or network failures could reduce our sales, increase costs or result in a loss of revenues or end users of our games.

Full 10-K form ▸

1366246--3/31/2010--GLU_MOBILE_INC