SanDisk 2011 Annual Report Download - page 90

cannot predict whether the government of China or any other nation will impose regulations, quotas or
embargoes upon the materials incorporated into our products that would restrict the worldwide supply of these
materials or increase their cost. If China or any other major supplier were to restrict the supply available to us or
our suppliers or increase the cost of the materials used in our products, we could experience a shortage in supply
and an increase in production costs, which would harm our operating results.
If our security measures are breached and unauthorized access is obtained to our information technology
systems, we may lose proprietary data. Our security measures may be breached as a result of third-party action,
including computer hackers, employee error, malfeasance or otherwise, and result in unauthorized access to our
customers’ data or our data, including our IP and other confidential business information, or our information
technology systems. Because the techniques used to obtain unauthorized access, or to sabotage systems, change
frequently, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Any security breach could result in disclosure of our trade secrets or confidential customer, supplier or employee
data, which could result in legal liability, harm to our reputation and otherwise harm our business.
We may need to raise additional financing, which could be difficult to obtain, and which if not obtained in
satisfactory amounts may prevent us from funding Flash Ventures, developing or enhancing our products, taking
advantage of future opportunities, growing our business or responding to competitive pressures or unanticipated
industry changes, any of which could harm our business. We currently believe that we have sufficient cash
resources to fund our operations as well as our anticipated investments in Flash Ventures for at least the next
twelve months; however, we may decide to raise additional funds to maintain the strength of our balance sheet or
fund our operations, and we cannot be certain that we will be able to obtain additional financing on favorable
terms, or at all. The current challenging worldwide financing environment could make it more difficult for us to
raise funds on reasonable terms, or at all. From time-to-time, we may decide to raise additional funds through
equity, public or private debt, or lease financings. If we issue additional equity securities, our stockholders will
experience dilution and the new equity securities may have rights, preferences or privileges senior to those of
existing holders of common stock. If we raise funds through debt or lease financing, we will have to pay interest
and may be subject to restrictive covenants, which could harm our business. If we cannot raise funds on
acceptable terms, if and when needed, our credit rating may be downgraded, and we may not be able to develop
or enhance our technology or products, fulfill our obligations to Flash Ventures, take advantage of future
opportunities, grow our business or respond to competitive pressures or unanticipated industry changes, any of
which could harm our business.
We may be unable to protect our IP rights, which would harm our business, financial condition and
operating results. We rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality
procedures and licensing arrangements to protect our IP rights. In the past, we have been involved in significant
and expensive disputes regarding our IP rights and those of others, including claims that we may be infringing
patents, trademarks and other IP rights of third-parties. We expect that we will be involved in similar disputes in
the future.
There can be no assurance that:
• any of our existing patents will continue to be held valid, if challenged;
• patents will be issued for any of our pending applications;
• any claims allowed from existing or pending patents will have sufficient scope or strength to protect us;
• our patents will be issued in the primary countries where our products are sold in order to protect our
rights and potential commercial advantage; or
• any of our products or technologies do not infringe on the patents of other companies.
In addition, our competitors may be able to design their products around our patents and other proprietary
rights. We also have patent cross-license agreements with several of our leading competitors. Under these
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