712511--3/31/2009--PROXIM_WIRELESS

related topics

{customer, product, revenue}

{product, market, service}

{property, intellectual, protect}

{acquisition, growth, future}

{operation, international, foreign}

{product, candidate, development}

{regulation, change, law}

{cost, operation, labor}

{stock, price, operating}

{personnel, key, retain}

{financial, litigation, operation}

{condition, economic, financial}

{stock, price, share}

{competitive, industry, competition}

{regulation, government, change}

{control, financial, internal}

{interest, director, officer}

{investment, property, distribution}

{system, service, information}

{cost, regulation, environmental}

We cannot predict whether we will be able to achieve profitability, which could adversely affect our ability to continue as a going concern and our stock price. We currently have limited capital resources, which could adversely impact our operations, ability to grow our business, attractiveness as a supplier to customers, attractiveness to investors, and viability as an ongoing company. We have limited capital resources and our prospects for obtaining additional financing, if required, are uncertain. Our common stock may be delisted from the Nasdaq Capital Market, which could adversely affect our business and relations with employees, customers, and others. We have engaged an investment bank to assist us with the exploration of strategic alternatives, but there can be no certainty as to whether any strategic transaction will occur or the terms of any such transaction We may raise additional capital on terms that we or our stockholders find onerous, which could adversely affect our financial results and stock price. We may sell or otherwise dispose of portions of our business and assets for strategic reasons or to raise capital, which could adversely affect our business, financial results, and relationships. Our lower stock price and weaker financial condition may make it harder to attract and retain qualified employees. The current economic downturn is having a significant adverse impact on our business due in part to our being a smaller, younger company. The broadband wireless equipment industry in which we principally operate is intensely competitive which could negatively impact our financial results. We face substantial competition from a number of larger companies with substantially greater resources and longer operating histories, and we may not be able to compete effectively. We also face competition from private and start-up companies given the limited barriers to entry in our business. We may experience difficulty in differentiating our products from other broadband wireless products which may reduce our sales and gross margins. Potential customers may view price as the primary differentiator between our products and products of our competitors, which could reduce the price at which we can sell our products and negatively impact our financial results. Alternative broadband connectivity technologies may have advantages over our products and make our products less attractive to customers. New broadband connectivity technologies may be developed that have advantages over our products and make our products less attractive to customers. The actual or potential availability of new broadband connectivity technologies could cause our customers to delay buying decisions. The costs of developing products to operate in accordance with these new broadband connectivity technologies would be substantial and could adversely affect our operating results. We are selling into a market that has a broad range of desired product characteristics and features which may make it difficult for us to develop products that will address a broad enough market to be commercially viable. We may not develop products for the portions of the broadband connectivity and access markets that grow. Our sales may decline if we are unable to keep pace with rapid technological changes and industry standards. We believe that the prices for our products will decline over time which could hurt our financial results. The expected price decline of our products will hurt our financial results unless we are able to offset those declines with cost savings or new product introductions. Our plans to continue to introduce new products will require capital and other investments that may not be recovered. Our financial results have fluctuated significantly, and we expect the fluctuations will continue for a variety of reasons, many of which are out of our control. Our past acquisition and disposition activity contributes to the difficulty in predicting our future financial performance. We may not achieve the contemplated benefits of any acquisition we make which could materially and adversely affect our business. Our past acquisitions and dispositions have exposed us to risks and liabilities, which could have a material adverse affect on our business. The fact that we receive few long-term purchase commitments from customers contributes to the difficulty in predicting our future financial performance. The fact that we receive few long-term purchase commitments from customers contributes to our inventory risk which could adversely affect our financial results. Receipt of significant customer orders have caused our financial results to fluctuate and contribute to the difficulty in predicting our future financial performance. Changes in stock option accounting rules have adversely impacted our reported operating results and may adversely affect our competitiveness in the employee marketplace. Our indirect sales model makes us dependent on third party distributors and resellers, which could adversely impact our financial results and reputation. We have a limited number of distributors so any decrease in business from them could cause a decline in our revenue. We may be unsuccessful in our efforts to obtain larger customers, and these efforts could adversely impact our current business. Our business depends in part on continued demand for broadband connectivity and access. We depend on our senior employees who are extensively involved in many aspects of our business, and our business would likely be harmed if we lose their services and cannot hire additional qualified personnel. We have no key-man life insurance on any of our executive officers or other employees. We do not currently have a succession plan in place. Our limited internal manufacturing capacity may be insufficient to meet customers desires for our products, which could harm our sales and damage our reputation. Our limited internal manufacturing capacity makes us dependent on contract manufacturers, which could harm our sales and damage our reputation. We may be unable to engage contract manufacturers to manufacture our products which could force us to increase our internal manufacturing capacity. Interruptions in our manufacturing operations could have an adverse effect on our revenue. Because many of our components or products are provided by limited or single-source suppliers, we may not be able to obtain sufficient quantities to meet our business needs. Because many of our components or products are provided by limited or single-source suppliers, we may not be able to obtain sufficient quantities at prices to make our products profitably. Because many of our components or products are provided by limited or single-source suppliers, we may have to purchase extra inventory that ultimately may not be used. Our inability to receive sufficient quantities of limited or single source components or products could make us develop alternative sources, which could reduce our sales and may be time consuming and expensive if it can be done at all. Our inability to receive sufficient quantities of limited or single source components or products could make us reconfigure our products, which could reduce our sales and may be time consuming and expensive if it can be done at all. Our reliance on limited or single-source suppliers makes us vulnerable to difficulties at those suppliers. Failure to maintain adequate levels of inventory could result in a reduction or delay in sales and harm our results of operations. Difficulties in reducing our operating expenses could harm our results of operations. We typically permit flexible purchase order changes that may adversely affect our margins and operating results. Our business and financial results could be adversely affected by warranty claims. Our business and financial condition could be adversely affected by product liability claims. Our international business activities expose us to a number of risks not present in our United States operations, which we have limited experience addressing. Because of international sales and operations, we may be exposed to currency risk that could adversely affect our financial condition and results of operations. Given the extent of our international operations, the decline in the value of the dollar has increased our expenses. The laws and legal systems of foreign governments may limit our ability to enforce our rights against our customers. Lack of relationships in foreign countries may limit our ability to expand our international operations and sales. Governmental regulation affecting markets in which we compete or products we make or services we offer could adversely affect our business and results of operations. Our products typically require regulatory approval before they can be commercially deployed. New regulations could have an adverse impact on our ability to supply products and our financial results Changes in governmental regulation could adversely affect our competitive position. At time we rely on a limited number of customers for a material portion of our sales, which exposes us to risks relating to the loss of sales and credit risk. The continuing uncertainty in the telecommunications industry has caused us to maintain tight credit limits, which may be adversely affecting our sales. Given the relatively small size of some of our customers, they may not be able to pay for the products they purchase from us in the time period we expect or at all. Our failure or inability to protect our intellectual property could adversely affect our business and operations, particularly in our equipment business which has otherwise relatively low barriers to entry. Laws of foreign countries where we do business may provide less intellectual property protection for our products, which could adversely affect our ability to compete in our price-sensitive business. Our intellectual property rights do not prevent other companies from developing similar technology, which could be superior to ours. We may engage in litigation to protect our intellectual property, which could be costly, long, and distracting even if ultimately successful. Much of our material intellectual property is not protected by patents, which may reduce the extent to which we can protect our intellectual property. Our products and operations could infringe on the intellectual property rights of others, which could have an adverse impact on our business. Intellectual property litigation has adversely impacted our financial results. Compliance with governmental regulations, such as Section 404 of the Sarbanes-Oxley Act, has increased our costs and impacted our financial results and could continue to do so. We are a defendant in pending stockholder litigation that could materially and adversely affect our business. Proceeds under our directors and officers insurance policies may be unavailable or insufficient to cover our exposure arising from the pending stockholder litigation. Our stock price has been volatile and may continue to be volatile. One stockholder owns a significant beneficial interest in our common stock and has other relationships which could allow him to influence matters requiring stockholder approval and our business in general.

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712511--3/31/2009--PROXIM_WIRELESS_CORP