718096--6/29/2007--COSMO_COMMUNICATIONS_CORP

related topics
{customer, product, revenue}
{product, market, service}
{operation, international, foreign}
{stock, price, operating}
{stock, price, share}
{debt, indebtedness, cash}
We have significant working capital needs and if we are unable to obtain additional financing when needed, we may not have sufficient cash flow to continue operations. We rely on Starlight to manufacture and produce the majority of our CD players, DVD players and television sets and if Starlight does not support our delivery schedule, it would affect our revenues and profitability. We are subject to pressure from our customers relating to price reduction and financial incentive and if we are pressured to make these concessions to our customers, it will reduce our revenues and profitability. We experience difficulty forecasting the demand for our products and if we do not accurately forecast demand, our revenues, net income and cash flow may be affected. Our gross profit margins have not improved over the past year and we expect a continued competitive market in the future. Our business is seasonal and therefore our annual operating results will depend, in large part, on our sales during the relatively brief holiday season. If Cosmo does not continue to develop, introduce and achieve market acceptance of new and enhanced products, sales may decrease. Our products are shipped from China and any disruption of shipping could prevent or delay our customers receipt of inventory. Our manufacturing operations are located in the People s Republic of China, subjecting us to risks common in international operations. If there is any problem with the manufacturing process, our revenues and net profitability may be affected. We depend on third party suppliers for parts for our products, and if we cannot obtain supplies as needed, our operations will be severely damaged. We are exposed to the credit risk of our customers who are experiencing financial difficulties, and if these customers are unable to pay us, our revenues and profitability will be reduced. Our common stock currently is not actively traded. The loss of its largest customer or significant reductions in the purchases of Cosmo s products would reduce sales. If Cosmo fails to manage its inventory effectively, Cosmo could incur additional costs or lose sales. Currency fluctuations may reduce the profitability of Cosmo s foreign sales.

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