23. IF WE ARE UNABLE TO HIRE, TRAIN AND RETAIN ADDITIONAL
SALES, MARKETING, OPERATIONS, ENGINEERING AND FINANCE PERSONNEL, OUR GROWTH WILL
To grow our business successfully and maintain
a high level of quality, we will need to recruit, retain and motivate additional
highly-skilled sales, marketing, engineering and finance personnel. If we are
not able to hire, train and retain a sufficient number of qualified employees,
our growth will be impaired. In particular, we will need to expand our sales and
marketing organizations in order to increase market awareness of our products
and to increase revenue. In addition, as a company focused on the development of
complex products, we will need to hire additional engineering staff of various
experience levels in order to meet our product roadmap. Competition for skilled
employees, particularly in the San Francisco Bay Area, is intense. We may have
even greater difficulty recruiting potential employees after this offering if
prospective employees perceive the equity component of our compensation package
to be less valuable after this offering than before this offering.
24. SEVERAL OF OUR EXECUTIVES AND OTHER
EMPLOYEES HAVE JOINED US ONLY RECENTLY,
AND IF THEY ARE UNABLE TO WORK TOGETHER EFFECTIVELY, WE MAY NOT BE ABLE TO
MANAGE OUR GROWTH AND OPERATIONS.
Several of our executives and other
employees joined us only recently and have had only a limited time to work
together. Mark K. Allen, our President and Chief Operating Officer, joined us in
January 2000; David P. Jensen, our Vice President of Operations, joined us in
February 2000; Merle A. McClendon, our Chief Financial Officer, joined us in
March 2000; John O. Horsley, our General Counsel, joined us in July 2000; and
Barry L. Rubinson, our Vice President of Software, joined us in August 2000. If
our management team is not able to work effectively together or with the rest of
our employees to develop our technology and manage our growth and continuing
operations, our business would be harmed.
25. WE MAY MAKE ACQUISITIONS, WHICH COULD PUT A STRAIN ON OUR RESOURCES, CAUSE
DILUTION TO OUR STOCKHOLDERS AND ADVERSELY AFFECT OUR FINANCIAL RESULTS.
We may acquire companies to expand our
business. Integrating newly acquired organizations and technologies into our
company could put a strain our resources and be expensive and time consuming. We
may not be successful in integrating acquired businesses or technologies and may
not achieve anticipated revenue and cost benefits. In addition, future
acquisitions could result in potentially dilutive issuances of equity securities
or the incurrence of debt, contingent liabilities or amortization expenses
related to goodwill and other intangible assets, any of which could adversely
affect our balance sheet or operating results. Moreover, we may not be able to
identify future suitable acquisition candidates or, if we are able to identify
suitable candidates, we may not be able to make these acquisitions on
commercially reasonable terms or at all.
26. THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY COULD CREATE FLUCTUATIONS
IN OUR OPERATING RESULTS.
The semiconductor industry has
historically been cyclical, and characterized by wide fluctuations in product
supply and demand. From time to time, the industry has also experienced
significant downturns, often in connection with, or in anticipation of, maturing
product cycles and declines in general economic conditions. Industry downturns
have been characterized by diminished product demand, production overcapacity
and accelerated decline of average selling prices, and in some cases have lasted
for more than a year. A downturn of this type occurred in 1997 and 1998. Our
business could be harmed by industry-wide fluctuations in the future.
27. WE PLAN TO EXPAND OUR INTERNATIONAL OPERATIONS, AND THE SUCCESS OF OUR
INTERNATIONAL EXPANSION IS SUBJECT TO SIGNIFICANT UNCERTAINTIES.
We believe that we must expand our
international sales and distribution operations to be successful. We expect to
sell a significant portion of our products to customers overseas. In attempting
to conduct and expand business internationally, we are exposed to various risks
that could adversely affect our international operations and, consequently, our
operating results, including: - difficulties and costs of staffing and managing
international operations; - fluctuations in currency exchange rates; -
unexpected changes in regulatory requirements, including imposition of currency
exchange controls; - longer accounts receivable collection cycles; - import or
export licensing requirements; - potentially adverse tax consequences; -
political and economic instability; and - potentially reduced protection for
intellectual property rights. In addition, because we have suppliers that are
located outside of the United States, we are subject to risks generally
associated with contracting with foreign suppliers and may experience problems
in the timeliness and the adequacy or quality of product deliveries.