THANKS BRAD PART 3 SEC fiilng
TOUCHSTONE SOFTWARE CORP /CA/ (TSSW)
Quarterly Report (SEC form 10QSB)
BUSINESS RISKS
This report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. The actual future results
of the Company could differ materially from those statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this report.
All product development efforts include the risk that products under development prove more difficult to develop than currently
anticipated, resulting in delays in reaching the market, significantly greater development costs, or even in planned products
having to be abandoned. Moreover, with or without delays in bringing new products to market, it is possible that the
Company's competitors will bring to market successful competing products which reduce the size of, or eliminate altogether, the
market for the Company's planned products. In addition, the software industry is characterized by rapid change and
technological advancement, including a trend by hardware manufacturers to feature pre-loaded software packages in
computers. This could reduce demand for the Company's products, if such pre-loaded software performs many of the same
functions as the Company's currently marketed product or technology currently under-development.
The utility software business is part of a fast changing industry and the ability of the Company to grow or to predict future
revenue is dependent to a large extent on the ability of the Company to develop new products and new versions of existing
products. Given the results of the last two years, and the competitive factors affecting this industry, as discussed elsewhere in
this report, management is unable to predict at this time whether the Company can be successful at designing and developing
products that can compete profitably in this industry. Furthermore, several of the products currently under consideration involve
complicated diagnostic technologies which are significantly more complex than those previously encountered in the development
of the Company's products. This may result in significant delays and greater expense than normally encountered by the
Company in the development of its products.
With respect to statements regarding the strategy to broaden the Company's customer base, the Company intends on entering
new markets and, in so doing, will compete against other companies having greater resources. There is a risk that the Company
will not be able to penetrate these new markets successfully, but will nonetheless incur sales and administrative expenses in
attempting to do so, as well as research and development costs. To a large extent, the Company's success in this regard will be
a function of the Company's ability to develop new products or new versions of existing products, along with acceptance of the
Company's products in the commercial market as well as in the retail market.
Management has assessed the impact of the transition to the year 2000 on its products and the software applications that are
used internally. Management believes that all current versions of the Company's products are, and future releases will be, year
2000-compliant. Management has received confirmation from vendors of certain purchased software used internally by the
Company that current releases or upgrades eliminate any year 2000-related issues. The Company believes that becoming year
2000-compliant has not had a significant impact on the financial position or results of operations of the Company. If the
Company has failed to become year 2000-compliant with respect to any of its products, such failure could have a material
adverse effect on the Company. |
