944739--3/6/2007--TRANSWITCH_CORP

related topics

{customer, product, revenue}

{product, market, service}

{debt, indebtedness, cash}

{acquisition, growth, future}

{stock, price, share}

{property, intellectual, protect}

{condition, economic, financial}

{control, financial, internal}

{product, candidate, development}

{cost, contract, operation}

{operation, international, foreign}

{financial, litigation, operation}

{operation, natural, condition}

{provision, law, control}

{personnel, key, retain}

{stock, price, operating}

We have incurred significant net losses. Our net revenues may continue to fluctuate. We continue to have substantial indebtedness. We are using our available cash and cash equivalents each quarter to fund our operations, investments and financing activities. We may not be able to pay our debt and other obligations. We may incur additional indebtedness, including secured indebtedness, which may have rights to payment superior to our Plus Cash Notes. We may seek to reduce our indebtedness by issuing equity securities, thereby causing dilution of our stockholders ownership interests. If we seek to secure additional financing we may not be able to do so. If we are able to secure additional financing our stockholders may experience dilution of their ownership interest or we may be subject to limitations on our operations. If the trading price of our common stock fails to comply with the continued listing requirements of The NASDAQ Global Market, we would face possible delisting, which would result in a limited public market for our common stock and make obtaining future debt or equity financing more difficult for us. Our board of directors may elect to exercise its discretion to affect a reverse stock split. There are risks and uncertainties inherent in a reverse stock split. Our stock price is volatile. We may have to further restructure our business. We anticipate that shipments of our products to relatively few customers will continue to account for a significant portion of our total net revenues. The cyclical nature of the communication semiconductor industry affects our business. Our international business operations expose us to a variety of business risks. Our net product revenues depend on the success of our customers products, and our design wins do not necessarily generate revenues in a timely fashion. We must successfully transition to new process technologies to remain competitive. Our success depends on the timely development of new products, and we face risks of product development delays. We sell a range of products that each has a different gross profit. Our total gross profits will be adversely affected if most of our shipments are of products with low gross profits. The price of our products tends to decrease over the lives of our products. Our success depends on the rate of growth of the global communications infrastructure. Our products must successfully include industry standards to remain competitive. Our intellectual property indemnification practices may adversely impact our business. We continue to expense our new product process development costs when incurred. We face intense competition in the communication semiconductor market. We rely on outside fabrication facilities, and our business could be hurt if our relationships with our foundry suppliers are damaged. Reliance on third-party fabrication facilities limits our ability to control the manufacturing process. Our dependence on a small number of fabrication facilities exposes us to risks of interruptions in deliveries of semiconductor devices. We are subject to risks arising from our using subcontractors to assemble our products. Our failure to protect our proprietary rights, or the costs of protecting these rights, may harm our ability to compete. We could be subject to class action litigation due to stock price volatility, which if it occurs, will distract our management and could result in substantial costs or large judgments against us. We may engage in acquisitions that may harm our operating results, dilute our stockholders and cause us to incur debt or assume contingent liabilities. Our business could be harmed if we fail to integrate future acquisitions adequately. We have made, and may continue to make, investments in development stage companies, which may not produce any returns for us in the future. The loss of key management could affect our ability to run our business. Provisions of our certificate of incorporation, by-laws, stockholder rights plan and Delaware law may discourage take over offers and may limit the price investors would be willing to pay for our common stock. Natural disasters or acts of terrorism affecting our locations, or those of our suppliers, in the United States or internationally may negatively impact our business.

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944739--3/6/2007--TRANSWITCH_CORP_/DE