832767--11/19/2009--PHOENIX_TECHNOLOGIES

related topics

{system, service, information}

{product, market, service}

{acquisition, growth, future}

{customer, product, revenue}

{operation, international, foreign}

{control, financial, internal}

{financial, litigation, operation}

{property, intellectual, protect}

{tax, income, asset}

{regulation, change, law}

{stock, price, share}

{personnel, key, retain}

{stock, price, operating}

{competitive, industry, competition}

{operation, natural, condition}

{capital, credit, financial}

We have generated significant losses in the past and we may be unable to achieve operating profitability and positive cash flows in the foreseeable future, and if we achieve profitability and positive cash flows, we may not be able to maintain them, which could result in a decline in our stock price and we therefore may not be able to meet our capital requirements over the long term. We may need additional capital in the future to support our operations and, if such additional financing is not available to us, on reasonable terms or at all, our liquidity and results of operations will be materially and adversely impacted. Our success depends on our ability to attract and retain key personnel; if we were unable to attract and retain key personnel in the future, our business and operating results could be materially and adversely impacted. We operate in intensely and increasingly competitive markets, and our business may be adversely affected if we fail to achieve or maintain market acceptance of our products, manage complex third party relationships, or effectively compete in the markets in which we operate. As we seek to enter into new markets, we may encounter competitors with greater resources and customers that require greater levels of support than we have encountered in the past and there can be no assurance that we will be able to effectively compete in such new markets, which may cause increase in our overall costs and the timing of recognition of revenue. The emergence of the netbook portable computer category may result in downward pressure on the average selling price of our CSS products, which could adversely affect our revenue and results of operations. A decrease in end-user demand for products with our security and availability features could have a significant adverse impact on our business. Delays in our customers new product releases could adversely affect our ability to generate revenues from our own products. Our customers may delay payments to us in order to manage their own liquidity positions which could adversely affect our liquidity. If we fail to successfully integrate our past or future acquisitions or acquired technologies, we may to fail to realize the anticipated benefits of such acquisitions, incur unanticipated liabilities and adversely affect our business, operating results or financial condition. We may become involved in litigation claims and disputes which can be expensive, disrupt our normal business operations, and, in the event of an unfavorable resolution, have a material adverse effect on our business, operating results or financial condition. We rely on a combination of legal and contractual provisions to protect our proprietary rights in our software products, and any failure or unavailability of these protections or development by competitors of equivalent or superior technologies could have an adverse effect on our business, results of operations and financial condition. Development of alternate product strategies by leading software and semiconductor companies, such as Microsoft and Intel that conflict with our product strategies, or our failure to create new features to sustain and increase our software s value to our customers may adversely impact our business and results of operations. Variability in demand for newer operating systems and microprocessor designs may adversely impact our future revenues. If we fail to renew customer subscriptions and convert free and trial users to paying customers on terms favorable to us, our revenue may grow more slowly than expected or decline, either of which could adversely impact our profitability and gross margin. Our stock price is extremely volatile, and such volatility may hinder investors ability to resell their shares and also could require us to record a further charge for impairment of goodwill and other assets. Our significant international operations subject us to increased costs and risks, which may result in significant fluctuations in our international revenues and adversely affect our operations and financial results. We have carried out restructuring activities in the current fiscal year as well as in the past and may continue to do so in the future, which may require us to record additional or accelerated accounting charges that may have an adverse impact on our operating results. Our operating results have fluctuated in the past and may continue to fluctuate in the future. Lower than anticipated revenues in any period, coupled with fixed or additional unplanned expenses in such period, would adversely affect our operating results for such period. We may be required to expend significant capital and resources to protect against or alleviate problems caused by viruses and breaches of our network security. Any security breaches or unauthorized access of customer s information stored on our systems may harm our reputation and expose us to unanticipated liabilities. If we fail to effectively upgrade or modify our information technology system, it may have an adverse impact on our business and results of operations. If we fail to effectively manage our growth through implementation of improved controls, systems and procedures, our ability to manage our growth and our financial position could be harmed. The costs incurred in correcting any defects or errors in our software products and services could be substantial and could harm our operating results. The consolidation in the industry in which we operate or unanticipated competition could result in a substantial loss of our customers and may materially and adversely affect our revenues. Our business depends partially on the accessibility to the Internet by customers, and other Internet-related factors beyond our control and any Internet outages or delays could adversely affect our ability to provide services to our customers. Our use of open source software in some of our products exposes us to certain risks related to license and usage requirements and restrictions that, if not properly addressed by us, could negatively affect our business. Failure by our third party service providers, vendors and resellers to provide services, fulfill obligations, and properly maintain customer financial information could result in significant loss of revenue, disruption of our business, reputational harm and loss of customers. If we fail to maintain the adequacy of our internal controls, our business and results of operations could suffer, the price of our securities could be materially and adversely affected, and we may encounter difficulties in marketing and selling our products and services. Changes to existing accounting pronouncements or practices and increased cost of compliance may cause adverse revenue fluctuations and affect our revenues, results of operations or how we conduct our business. Business disruptions could impact our ability to conduct business in certain regions and could have an adverse effect on our business, results of operations and financial condition. If the market for device designs based on the x86 microprocessor architecture does not continue to hold a large market share, our business, results of operations and financial condition may be adversely affected.

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832767--11/19/2009--PHOENIX_TECHNOLOGIES_LTD