909793--3/23/2006--NETMANAGE

related topics

{property, intellectual, protect}

{product, market, service}

{acquisition, growth, future}

{stock, price, operating}

{regulation, change, law}

{control, financial, internal}

{cost, operation, labor}

{operation, natural, condition}

{operation, international, foreign}

{customer, product, revenue}

{product, liability, claim}

{personnel, key, retain}

{provision, law, control}

{competitive, industry, competition}

{product, candidate, development}

Our operating results and net income have fluctuated significantly in the past and may continue to do so in the future, which could cause our stock price to decline. We have only been profitable in two years since 1995 and may never achieve profitability in the future which would weaken our financial condition. We rely in part on third parties for sales of our products and our revenues could decline significantly with little or no notice. We have undergone significant restructurings, which may have a material adverse effect on our operating results. We may not be able to successfully make acquisitions of or investments in other companies or technologies which could limit our future growth and access to technology. We are dependent upon our key management and employees for our future success, and few of our key managers and employees are obligated to stay with us. We face significant competition and competition in our market is likely to increase which could harm our business. If we fail to manage technological change, respond to consumer demands or evolving industry standards or if we fail to enhance our products interoperability with the products of our customers, demand for our products will decrease and our business will suffer. We depend upon technology licensed from third parties, and if we do not maintain these license arrangements we will not be able to ship many of our products and our business will be seriously harmed. We depend upon the compatibility of our products with applications operating on Microsoft Windows to sell our products. We depend upon the compatibility of our products with applications operating on UNIX platforms to sell our products. The loss of any of our strategic relationships would make it more difficult to keep pace with evolving industry standards and to design products that appeal to the marketplace. We may be subject to product returns, product liability claims and reduced sales because of defects in our products which could reduce our revenues and otherwise adversely affect our financial results. Our business depends upon licensing our intellectual property, and if we fail to protect our proprietary rights, our business could be harmed. We rely upon our patents, trademarks, copyrights and trade secrets to protect our proprietary rights, but they may be only of limited value as we may not be able to prevent misappropriation of our technology. Our pending patent applications may never be issued, and even if issued, may provide us with little protection. We have received notices of claims that may result in litigation and we may become involved in costly and time-consuming litigation over proprietary rights. Our business is subject to risks from international operations such as legal uncertainty, tariffs, trade barriers and political and economic instability which could restrict our ability to compete effectively. Terrorist attacks and threats or actual war could adversely affect our operating results and the price of our common stock. It may be difficult to raise needed capital in the future, which could significantly harm our business by limiting our ability to grow or make acquisitions. Because of their significant stock ownership, our officers and directors can exert significant control over our future direction. Certain provisions of our stock option plan, our stockholder rights plan and our certificate of incorporation and bylaws make changes of control difficult even if they would be beneficial to stockholders. We face risks from the uncertainties of current and future governmental regulation which could have a negative impact on our ability to operate our business. Our acquisitions may have a material adverse effect on our operating results and financial condition. Standards for compliance with section 404 of the Sarbanes-Oxley Act of 2002 are complex, and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline. Increased costs associated with corporate governance compliance may significantly impact the results of our operations.

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909793--3/23/2006--NETMANAGE_INC