1374993--4/2/2009--NextWave_Wireless

related topics

{regulation, government, change}

{debt, indebtedness, cash}

{gas, price, oil}

{customer, product, revenue}

{capital, credit, financial}

{stock, price, share}

{investment, property, distribution}

{financial, litigation, operation}

{property, intellectual, protect}

{control, financial, internal}

{personnel, key, retain}

{operation, international, foreign}

{system, service, information}

{competitive, industry, competition}

Risks Relating to Our Business Our disclosure controls and procedures were determined not be effective as of December 27, 2008, in particular due to a material weakness in our internal control over financial reporting. If we cannot successfully remediate such material weakness, there is a reasonable possibility that a material misstatement in our financial statements will not be prevented or detected. We must successfully complete our global restructuring initiative in order to comply with the terms of our Senior Notes and Second Lien Notes and continue as a going concern. We are highly leveraged and our operating flexibility will be significantly reduced by our debt covenants. The terms of our Senior Notes and Second Lien Notes require us to certify our compliance with a restrictive operating budget and any failure to comply with these terms will have adverse economic consequences. We will not achieve our asset sale targets under our Senior Notes and Second Lien Notes and will accordingly incur additional interest expense and must issue additional warrants. We have substantial debt maturities in 2010 and 2011 and our ability to retire our debt on or prior to its maturity dates will require us to successfully sell a substantial portion of our domestic and international spectrum assets. If we are unable to retire our debt through asset sales, we may not be able to refinance our debt at maturity. The failure of our Multimedia segment to sustain and grow its business in the current challenging economic climate may adversely impact our ability to comply with our Operating Budget and will have an adverse effect on our business. Our common stock could be delisted from the NASDAQ Global Market if our stock price continues to trade below $1.00 per share. We have become and may continue to be the target of securities class action suits and derivative suits which could result in substantial costs and divert management attention and resources. We operate in an extremely competitive environment which could materially adversely affect our ability to win market acceptance of our products and achieve profitability. Our Multimedia business is dependent on a limited number of customers. Our customer agreements do not contain minimum purchase requirements and can be cancelled on terms that are not beneficial to us. Defects or errors in our products and services or in products made by our suppliers could harm our relations with our customers and expose us to liability. Similar problems related to the products of our customers or licensees could harm our business. We may be unable to protect our own intellectual property and could become subject to claims of infringement, which could adversely affect the value of our products and technologies and harm our reputation. We are subject to risks associated with our international operations. We are dependent on a small number of individuals, and if we lose key personnel upon whom we are dependent, our business will be adversely affected. Risks Relating to Government Regulation If we do not comply with build-out requirements relating to our domestic and international spectrum licenses, such licenses could be subject to forfeiture. We may not have complete control over our transition of BRS and EBS spectrum, which could impact compliance with FCC rules. Our use of EBS spectrum is subject to privately negotiated lease agreements. Changes in FCC rules governing such lease agreements, contractual disputes with EBS licensees, or failures by EBS licensees to comply with FCC rules could impact our use of the spectrum. We have no guarantee that the licenses we hold or lease will be renewed. Interference could negatively impact our use of wireless spectrum we hold, lease or use. Wireless devices utilizing WCS, BRS and EBS spectrum may be susceptible to interference from Satellite Digital Audio Radio Services ( SDARS ). Increasing regulation of the tower industry may make it difficult to deploy new towers and antenna facilities which could adversely affect the value of certain of our wireless spectrum assets.

Full 10-K form ▸

1374993--4/2/2009--NextWave_Wireless_Inc.