8x8 2010 Annual Report Download - page 26

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• future legislation or regulation of the Internet and/or VoIP;
• loss of key personnel;
• new entrants into the VOIP service marketplace, including cable and incumbent telephone companies and other well-
capitalized competitors;
• new products or new contracts by us, our competitors or their customers;
• the perceived or real impact of events that negatively affect our direct competitors; and
• developments with respect to patents or proprietary rights, general market conditions, changes in financial estimates
by securities analysts, and other factors which could be unrelated to, or outside of, our control.
The stock market has from time to time experienced significant price and volume fluctuations that have particularly affected
the market prices for the common stocks of technology companies and that have often been unrelated to the operating
performance of particular companies. These broad market fluctuations may adversely affect the market price of our common
stock. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation
has often been initiated against the issuing company. If our stock price is volatile, we may also be subject to such litigation.
Such litigation could result in substantial costs and a diversion of management's attention and resources, which would disrupt
business and could cause a decline in our operating results. Any settlement or adverse determination in such litigation would
also subject us to significant liability.
We may not be able to maintain our listing on the NASDAQ Capital Market.
Our common stock trades on the NASDAQ Capital Market, which has certain compliance requirements for continued listing of
common stock. We have, in the past, been subject to delisting procedures due to a drop in the price of our common stock. If our
minimum closing bid price per share falls below $1.00 for a period of 30 consecutive trading days in the future, we may again
be subject to delisting procedures. As of the close of business on May 24, 2010, our common stock had a closing bid price of
approximately $1.17 per share. We must also meet additional continued listing requirements contained in NASDAQ
Marketplace Rule 5550(b), which requires that we have either (1) a minimum of $2,500,000 in stockholders' equity, (2)
$35,000,000 market value of listed securities held by non-affiliates or (3) $500,000 of net income from continuing operations
for the most recently completed fiscal year (or two of the three most recently completed fiscal years). As of May 24, 2010,
based on our closing price as of that day, the market value of our securities held by non-affiliates approximated $73,106,000
and we were in compliance with NASDAQ Marketplace Rule 5550(b). There can be no assurance that we will continue to
meet the continued listing requirements.
Delisting could reduce the ability of our shareholders to purchase or sell shares as quickly and as inexpensively as 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
our NASDAQ Capital Market listing may (among other effects):
• 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 1B. UNRESOLVED STAFF COMMENTS
None.