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In the past, we acquired companies that we believed would enhance the expansion of our business and products. We may make selective
opportunistic acquisitions of companies or businesses with resources and product or service offerings capable of providing us with additional
product and/or market strengths. Acquisitions involve significant risks and uncertainties, including:
Our inability to successfully operate and integrate newly acquired businesses appropriately, effectively and in a timely manner could have a
material adverse effect on our ability to take advantage of further growth in demand for IP-optimized network solutions and other advances in
technology, as well as on our revenues, gross margins and expenses.
Acquisitions are inherently risky, and no assurance can be given that our previous or future acquisitions will be successful and will not
materially adversely affect our business, operating results, or financial condition. Failure to manage and successfully integrate acquisitions
could materially harm our business and operating results.
We operate in highly dynamic and volatile industries characterized by rapidly changing technologies, evolving industry standards,
frequent new product introductions and short product life cycles.
The markets for our products are characterized by rapidly changing technologies, evolving industry standards, frequent new product
introductions and short product life cycles. Our success depends, in substantial part, on the timely and successful introduction of high quality
new products and upgrades, as well as cost reductions on current products to address the operational speed, bandwidth, efficiency and cost
requirements of our customers. Our success will also depend on our ability to comply with emerging industry standards, to operate with
products of other suppliers, to integrate, simplify and reduce the number of software programs used in our portfolio of products, to address
emerging market trends, to provide our customers with new revenue-generating opportunities and to compete with technological and product
developments carried out by others. The development of new, technologically advanced products, including IP-optimized networking
solutions, software products and 3G wireless networks, is a complex and uncertain process requiring high levels of innovation, as well as the
accurate anticipation of technological and market trends. Investments in this development may result in our expenses growing at a faster rate
than our revenues, particularly since the initial investment to bring a product to market may be high. We may not be successful in targeting
new market opportunities, in developing and commercializing new products in a timely manner or in achieving market acceptance for our new
products.
The success of new or enhanced products, including IP-optimized networking solutions and 3G wireless networks, depends on a number of
other factors, including the timely introduction of those products, market acceptance of new technologies and industry standards, the quality
and robustness of new or enhanced products, competing product offerings, the pricing and marketing of those products and the availability of
funding for those networks. Products and technologies developed by our competitors may render our products obsolete. Hackers may attempt
to disrupt or exploit our customers’ use of our technologies. If we fail to respond in a timely and effective manner to unanticipated changes in
one or more of the technologies affecting telecommunications and data networking or our new products or product enhancements fail to
achieve market acceptance, our ability to compete effectively in our industry, and our sales, market share and customer relationships
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• the industry may develop in a different direction than anticipated and the technologies we acquire may not prove to be those we
need;
• the future valuations of acquired businesses may decrease from the market price we paid for these acquisitions;
• the revenues of acquired businesses may not offset increased operating expenses associated with these acquisitions;
• potential difficulties in completing in-process research and development projects and delivering high quality products to our
customers;
• potential difficulties in integrating new products, software, businesses and operations in an efficient and effective manner;
• our customers or customers of the acquired businesses may defer purchase decisions as they evaluate the impact of the acquisitions
on our future product strategy;
• potential loss of key employees of the acquired businesses;
• diversion of the attention of our senior management from the operation of our daily business;
• entering new markets in which we have limited experience and where competitors may have a stronger market presence;
• potential issuance of common stock that would dilute our shareholders’ percentage ownership; and
• potential assumption of liabilities.