8x8 2012 Annual Report Download - page 26

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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.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal operations are located in Sunnyvale, CA in a facility that is approximately 52,000 square feet and is leased
through August 2012. On April 27, 2012, we entered into a lease pursuant to which we will lease approximately 104,657
square feet of office space in San Jose, California for our principal headquarters. The scheduled commencement date for the
San Jose, California facility is August 1, 2012, and the term of the lease is seven years. We believe our new facilities will
adequately meet our current and foreseeable future needs. For additional information regarding our obligations under leases see
Note 4 to the consolidated financial statements contained in Part II, Item 8 of this Report.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we become involved in various legal claims and litigation that arise in the normal course of our operations.
While the results of such claims and litigation cannot be predicted with certainty, we are not currently aware of any such
matters that we believe would have a material adverse effect on our financial position, results of operations or cash flows.
On October 6, 2010, we were named a defendant in a lawsuit, Ceres Communications Technologies, LLC (“Ceres”) v. 8x8,
Inc. et al., along with over a dozen other defendants in the United States District Court for the District of Delaware. On
November 16, 2010, we agreed to represent and indemnify OfficeMax in this lawsuit for the period in which our prior retail
agreement with them was in effect, in accordance with the terms of that agreement. On June 8, 2011, the Ceres suit against
8x8 and OfficeMax was settled after we acquired license rights for the subject patent from a licensor of third party intellectual
property.
On March 15, 2011, we were named a defendant in a lawsuit, Bear Creek Technologies, Inc. v. 8x8, Inc. et al., along with 20
other defendants. On August 17, 2011, we were dismissed without prejudice from this lawsuit under Rule 21 of the Federal
Rules of Civil Procedure. On August 17, 2011, we were sued again by Bear Creek Technologies, Inc. in the United States
District Court for the District of Delaware. We filed a motion to dismiss the complaint on October 11, 2011, which motion is
still pending. We have not answered the complaint. We believe we have factual and legal defenses to these claims and are
presenting a vigorous defense. We cannot estimate potential liability in this case at this early stage of litigation. Further, on
April 26, 2012, the U.S. Patent & Trademark Office initiated a Reexamination proceeding with a Reexamination Declaration
explaining that there is a substantial new question of patentability affecting each claim of the patent that is the basis for the
complaint against us.
On October 25, 2011, we were named a defendant in a lawsuit, Klausner Technologies, Inc. v. Oracle Corporation et al., along
with 30 other defendants. On November 1, 2011, Klausner dismissed the complaint voluntarily and filed new complaints
separating the defendants, including a new complaint against us. We believe we have factual and legal defenses to these claims
and are presenting a vigorous defense. The plaintiff has not made a specific monetary demand and we cannot estimate potential
liability in this case at this early stage of litigation. We filed a motion to dismiss the complaint on February 23, 2012, and the
motion is still pending. We have not answered the complaint.