1408501--6/12/2008--3PAR

related topics

{stock, price, operating}

{product, market, service}

{acquisition, growth, future}

{customer, product, revenue}

{system, service, information}

{regulation, change, law}

{property, intellectual, protect}

{operation, international, foreign}

{condition, economic, financial}

{regulation, government, change}

{provision, law, control}

{stock, price, share}

{personnel, key, retain}

{cost, regulation, environmental}

{control, financial, internal}

{product, candidate, development}

Risks Related to Our Business and Industry We have a history of losses and may never achieve profitability. Our operating results may fluctuate significantly, which makes our future operating results difficult to predict. If our operating results fall below expectations, the price of our common stock could decline. We face significant competition from a number of established companies, which may offer substantial pricing discounts and pursue other aggressive competitive tactics in order to attract and maintain customers. Many of our established competitors have long-standing relationships with key decision makers at many of our current and prospective customers. As a result, we may not be able to compete effectively and maintain or increase our market share. Our ability to increase our revenue will depend substantially on our ability to attract and retain key sales and engineering personnel, and any failure to attract and retain these employees could harm our future revenues, business, operating results and financial condition. Our sales cycle can be long and unpredictable, and our sales efforts require considerable time and expense. As a result, our sales are difficult to predict and may vary substantially from quarter to quarter, which may cause our operating results to fluctuate. We purchase our disk drives, power supplies and certain components for our processor nodes from a limited number of qualified suppliers. If these or any of our other suppliers are not able to meet our requirements, it could harm our business. We rely principally on two contract manufacturers to assemble portions of our products, and our failure to accurately forecast demand for our products or successfully manage our relationships with our contract manufacturers could negatively impact our ability to sell our products. Because of a recent change to our business model, our past results may not be meaningful as compared to our current and future results, and you should not rely on them as an indication of our future performance. Our ability to sell our products is highly dependent on the quality of our support and service offerings, and any failure to offer high-quality support and services would harm our business, operating results and financial condition. We rely on resellers and authorized service providers to sell, service and support our products in markets where we do not have a direct sales force or support and service personnel. Any disruptions to, or failure to develop and manage, our relationships with resellers and authorized service providers could have an adverse effect on our existing customer relationships and on our ability to increase revenue. If we fail to manage future growth effectively, our business would be harmed. Our international sales and operations introduce risks that can harm our business, operating results and financial condition. We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in foreign markets. We are subject to laws and regulations governing the environment and may incur substantial environmental regulation costs, which could harm our operating results. As we seek to increase our sales to the public sector, we may face difficulties and risks unique to government contracts that may have a detrimental impact on our business, operating results and financial condition. If we are unable to protect our intellectual property rights, our competitive position could be harmed and we could be required to incur significant expenses to enforce our rights. Claims by others that we infringe their proprietary rights could harm our business. We may not generate positive returns on our research and development investments. If we do not successfully anticipate market needs and develop products and product enhancements that meet those needs, or if those products do not gain market acceptance, our business, operating results and financial condition could be adversely affected. Our products are highly technical and may contain undetected software or hardware errors or failures, which could cause harm to our financial condition and our reputation and adversely affect our business. Adverse changes in economic conditions and reduced information technology spending may adversely impact our business. Changes in financial accounting standards or business practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results. We may seek to engage in future acquisitions, all or many of which could be viewed negatively, lead to integration problems, disrupt our business, increase our expenses, reduce our cash, cause dilution to our stockholders and harm our financial condition and operating results. We are incurring significantly increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives. If we need additional capital in the future, it may not be available on favorable terms, or at all. Interruption or failure of our information technology and communications systems or services provided by our suppliers and manufacturers could impair our ability to effectively provide our products and services, which could damage our reputation and harm our operating results. Risks Related to Ownership of Our Common Stock The trading price of our common stock is likely to be volatile. Reports published by securities or industry analysts, including projections in those reports that exceed our actual results, could adversely affect our stock price and trading volume. Future sales of shares by our existing stockholders could cause our stock price to decline. Insiders have substantial control over us and are able to influence corporate matters. Anti-takeover provisions in our charter documents and under Delaware law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.

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1408501--6/12/2008--3PAR_Inc.