878828--4/2/2007--WIRELESS_TELECOM_GROUP

related topics

{system, service, information}

{cost, operation, labor}

{property, intellectual, protect}

{product, market, service}

{regulation, government, change}

{regulation, change, law}

{cost, regulation, environmental}

{provision, law, control}

{personnel, key, retain}

{control, financial, internal}

{product, liability, claim}

{customer, product, revenue}

{product, candidate, development}

We face intense competition, which could result in lower revenues, higher research and development expenditures and adversely affect our results of operations. Unless we keep pace with changing technologies, we could lose customers and fail to win new customers. If our products do not perform as promised, we could experience increased costs, lower margins and harm to our reputation. The testing of electronic communications equipment and the accurate transmission of information entail a risk of product liability by customers and third parties. If we fail to adequately manage our resources, it could have a severe negative impact on our financial results or stock price. Our customers and we are subject to various governmental regulations, compliance with which may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their distribution, and we could be subject to civil or criminal penalties. We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by leading to a reduction in revenue associated with these customers. Shortages or delay of supplies of component parts may adversely affect our operating results until alternate sources can be developed. We could be subject to significant costs related to environmental contamination from past operations, and environmental contamination caused by ongoing operations could subject us to substantial liabilities in the future. The loss of key personnel could adversely affect our ability to remain competitive. Third parties could claim that we are infringing on their intellectual property rights, such as one Germany-based company that made intellectual property allegations against Willtek, which could result in substantial costs, diversion of significant managerial resources and significant harm to our reputation. Misappropriation of our intellectual property could harm our reputation, affect our competitive position and cost money. The success of our strategic plan to grow sales and develop relationships in Europe and Asia may be limited by risks related to conducting business in European and Asian markets. The new requirements of Section 404 of the Sarbanes-Oxley Act of 2002 will increase our operating expenses, and our acquisition of Willtek has increased the cost of compliance and increased the risk of achieving timely compliance. The significant direct and indirect costs of the Willtek acquisition and integration could adversely affect our financial performance. As a result of the acquisition of Willtek, we have become a substantially larger and geographically dispersed organization, and if our management is unable to effectively manage the combined company going forward, our operating results will suffer. The concentration of ownership of our outstanding common stock with the former Willtek shareholders following the Willtek acquisition, as well as certain provisions of the shareholders' agreement we entered into with the former Willtek shareholders at the closing of the Willtek acquisition, enables the former Willtek shareholders to significantly influence the outcome of all matters, transactions and corporate actions that require approval of our shareholders.

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878828--4/2/2007--WIRELESS_TELECOM_GROUP_INC