8x8 2013 Annual Report Download - page 27

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We need to retain key personnel to support our products and ongoing operations.
The development and marketing of our VoIP services will continue to place a significant strain on our limited personnel,
management, and other resources. Our future success depends upon the continued services of our executive officers and other
key employees who have critical industry experience and relationships that we rely on to implement our business plan. None of
our officers or key employees are bound by employment agreements for any specific term. The loss of the services of any of
our officers or key employees could delay the development and introduction of, and negatively impact our ability to sell our
services which could adversely affect our financial results and impair our growth. We currently do not maintain key person life
insurance policies on any of our employees.
We may need to raise additional capital to support our future operations.
As of March 31, 2013, we had cash and cash equivalents and investments of approximately $52.3 million. While we believe
these funds are sufficient to meet our current and anticipated liquidity requirements, we may need to raise additional capital to
pursue our strategic objectives. We may seek additional funding through public or private equity or debt financing. Recently,
we filed a shelf registration statement with the SEC that was declared effective on April 5, 2013. This shelf registration
statement allows us to sell up to an additional amount of approximately $250 million of our securities from time to time during
the next three years. We might decide to raise additional capital at such times and upon such terms as management considers
favorable and in our interests, including, but not limited to, from the sale of our debt and/or equity securities under our shelf
registration statement, but we cannot be certain that we will be able to complete offerings of our securities at such times and on
such terms as we may consider desirable for us. Any such financings may be upon terms that are potentially dilutive to existing
stockholders. We may not be able to obtain such additional financing as needed on acceptable terms, or at all, which may
require us to reduce our operating costs and other expenditures, including reductions of personnel and capital expenditures.
Our stock price has been highly volatile.
The market price of the shares of our common stock has been and is likely to continue to be highly volatile. It may be
significantly affected by factors such as:
actual or anticipated fluctuations in our operating results;
announcements of technical innovations;
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.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal operations are located in San Jose, CA in a facility that is approximately 104,657 square feet of office space. 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.