8x8 2004 Annual Report Download - page 39

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36
they have done historically. For instance, failure to obtain listing on another market or exchange may make it more
difficult for traders to sell our securities. Broker-dealers may be less willing or able to sell or make a market in our
common stock. Not maintaining a listing on a major stock market may:
• result in a decrease in the trading price of our common stock;
• lessen interest by institutions and individuals in investing in our common stock;
• make it more difficult to obtain analyst coverage; and
• make it more difficult for us to raise capital in the future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our financial market risk consists primarily of risks associated with international operations and related foreign
currencies. We derive a significant portion of our revenues from customers in Europe and Asia. In order to reduce
the risk from fluctuation in foreign exchange rates, the vast majority of our sales are denominated in U.S. dollars. In
addition, almost all of our arrangements with our semiconductor and system vendors are denominated in U.S.
dollars. We have foreign subsidiaries and are exposed to market risk from changes in exchange rates. We have not
entered into any currency hedging activities. To date, our exposure to exchange rate volatility has not been
significant; however, there can be no assurance that there will not be a material impact in the future.
We invest the majority of our surplus cash and cash equivalents in money market funds that bear variable interest
rates, and, accordingly, fluctuations in interest rates do not have an impact on the fair values of such investments.