DTLK » Topics » Item 1A. Risk Factors.

This excerpt taken from the DTLK 10-Q filed May 15, 2009.

Item 1A.  Risk Factors.

 

Except as provided below there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2008.

 

Dependence on Significant Customers.  We had no single customer account for 10% or greater of our revenues for the three  months ended March 31, 2009 and 2008, respectively.

 

Our Profitability Depends in Part on Vendor Incentive Programs.  Several of our key vendors regularly provide us with economic incentives for achieving various sales performance targets on their product.  The vendors may terminate or change these programs at any time.  We cannot assure that these vendor incentive programs will continue to provide us with rebates at current levels, or at all.  To the extent that we do not qualify for vendor incentives, or they are cut back, our profitability may suffer.

 

Effect of Credit Market Tightening on Data Storage Spending.  Initially in response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

 

This excerpt taken from the DTLK 10-Q filed Nov 14, 2008.

Item 1A.  Risk Factors.

 

Except as provided below there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2007.

 

Dependence on Significant Customers.  We had no single customer account for 10% or greater of our revenues for the three and nine months ended September 30, 2008 and 2007, respectively.

 

Our profitability depends in part on vendor incentive programs.  Several of our key vendors regularly provide us with economic incentives for achieving various sales performance targets on their product.  The vendors may terminate or change these programs at any time.  We cannot assure that these vendor incentive programs will continue to provide us with rebates at current levels, or at all.  To the extent that we do not qualify for vendor incentives, or they are cut back, our profitability may suffer.

 

Effect of Credit Market Tightening on Data Storage Spending.  Initially in response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

 

This excerpt taken from the DTLK 10-Q filed Aug 14, 2008.

Item 1A.  Risk Factors.

 

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2007.

 

Dependence on Significant Customers.  We had no single customer account for greater than 10% of our revenues for the three and six months ended June 30, 2008 and the three months ended June 30, 2007.  We derived 10% of our revenue for the six months ended June 30, 2007 from AT&T Inc.  We cannot provide assurance that this customer will account for a substantial portion of our future sales.

 

Our profitability depends in part on vendor incentive programs.  Several of our key vendors regularly provide us with economic incentives for achieving various sales performance targets on their product.  The vendors may terminate or change these programs at any time.  We cannot assure that these vendor incentive programs will continue to provide us with rebates at current levels, or at all.  To the extent that we do not qualify for vendor incentives, or they are cut back, our profitability may suffer.

 

Effect of Credit Market Tightening on Data Storage Spending.  Initially in response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

 

This excerpt taken from the DTLK 10-Q filed May 12, 2008.

Item 1A.  Risk Factors.

 

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2007.

 

Dependence on Significant Customers.  We had no single customer account for greater than 10% of our revenues for the three months ended March 31, 2008.  We derived 12% of our revenues for the three months ended March 31, 2007 from AT&T Inc.  We cannot provide assurance that this customer will account for a substantial portion of our future sales.

 

Our profitability depends in part on vendor incentive programs.  Several of our key vendors regularly provide us with economic incentives for achieving various sales performance targets on their products.  The vendors may terminate or change these programs at any time.  We cannot assure that these vendor incentive programs will continue to provide us with rebates at current levels, or at all.  To the extent that we do not qualify for vendor incentives, or they are cut back, our profitability may suffer.

 

Effect of Credit Market Tightening on Data Storage Spending.  In response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

 

These excerpts taken from the DTLK 10-K filed Mar 28, 2008.

Item 1A.    Risk Factors.

        As indicated in this Annual Report under the caption "Note Regarding Forward-Looking Statements," certain information contained in this Annual Report consists of forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements made in this Annual Report include the following:

We cannot assure future profitability.

        Although we achieved positive net income for fiscal years 2007 and 2006, and for the second, third and fourth quarters of 2005, we have incurred net losses all other quarters since the fourth quarter of 2001. We cannot assure that we will remain profitable in the foreseeable future, or at all. In particular, recent economic conditions may adversely affect our customers' decisions or timing to purchase, or the prices at which we sell, our products and services, which would negatively impact our operating results. If we incur losses in the futures our stock price may be adversely affected.

Competition could prevent us from increasing or sustaining our revenues or profitability.

        The enterprise-class information storage market is rapidly evolving and highly competitive. As technologies change rapidly, we expect that competition will increase in the future. We compete with independent storage system suppliers to the mid to large enterprise market and numerous value added resellers, distributors and consultants. We also compete in the storage systems market with computer platform suppliers. Many of our current and potential competitors have significantly greater financial, technical, marketing, purchasing and other resources than we do. As a result, they may respond more quickly to new or emerging technologies and changes in customer requirements, devote greater resources to the development, promotion and sale of products and deliver competitive products at lower end-user prices.

        Some of our current and potential competitors include our suppliers. We are not the exclusive reseller of any data storage product we offer. Instead, our suppliers market their products through other independent data storage solution providers, original equipment manufacturers and through their own internal sales forces. We believe direct competition from our suppliers is likely to increase if, as expected, the data storage industry continues to consolidate. This consolidation would likely result in fewer suppliers with greater resources to devote to internal sales and marketing efforts. In addition, our suppliers have established and will probably continue to establish cooperative relationships with other suppliers and other data storage solution providers. These cooperative relationships are often intended to enable our suppliers to offer comprehensive storage solutions, which compete with those we offer. If our relationships with our suppliers become adversarial, it will be more difficult for us to stay ahead of industry developments and provide our customers with the type of service they expect from us.

        In addition, most of our customers already employ in-house technical staffs. To the extent a customer's in-house technical staff develops sophisticated storage systems expertise, the customer may be less likely to seek our services. Further, we compete with storage service providers who manage, store and backup their customers' data at off-site, networked data storage locations.

We derive a significant percentage of our revenues from a small number of customers.

        In 2007 and 2005, we had no customers that accounted for at least 10% of our revenues. In 2006, we had one customer, AT&T Inc., which accounted for approximately 13.9% of our revenues. In addition, our top five customers collectively accounted for 21%, 28%, and 27% of our 2007, 2006 and

9



2005 revenues, respectively. Because we intend to continue to seek out large projects, we expect that a significant percentage of our revenues will continue to come from a small number of customers, although the composition of our key customers is likely to change from year to year. If we fail to obtain a growing number of large projects each year, our revenues and profitability will likely be adversely affected. In addition, our reliance on large projects makes it more likely that our revenues and profits will fluctuate unpredictably from quarter to quarter and year to year. Unpredictable revenue and profit fluctuations may make our stock price more volatile and lead to a decline in our stock price.

Our revenue recognition policies unpredictably defer reporting of our revenues.

        We increasingly sell complex enterprise-class information storage solutions, which include installation and configuration services. We do not recognize revenues from our sale of hardware and software products to our customers until we complete our required installation or configuration of these products. Installation and configuration of these solutions requires significant coordination with our customers and vendors. Therefore, even if we have shipped all products to our customers, we may be unable to control the timing of product installation and configuration. These delays can prevent us from recognizing revenue on products we ship and may adversely affect our quarterly reported revenues. As a result, our stock price may decline.

Our key vendors could discontinue their incentive programs, which could adversely affect our business.

        Several of our key vendors have offered incentive programs to us over the past several years based on our achievement of particular sales levels of their products. These programs contributed to our profitability in 2007, 2006 and 2005. We cannot assure that these programs will continue. If they do not, we may be unable to achieve profitability in the future.

Our business depends on our ability to hire and retain technical personnel and highly qualified sales people.

        Our future operating results depend upon our ability to attract, retain and motivate qualified engineers and sales people with enterprise-class information storage solutions experience. If we fail to recruit and retain additional engineering and sales personnel, or if losses require us in the future to terminate employment of some of these personnel, we will experience greater difficulty realizing our growth strategy, which could negatively affect our business, financial condition and stock price.

We generally do not have employment agreements with our key employees.

        Our future operating results depend in significant part upon the continued contributions of our executive officers, managers, salespeople, engineers and other technical personnel, many who have substantial experience in our industry and would be difficult to replace. Except as to our Chief Financial Officer and Senior Vice President of Field Operations, we do not have employment agreements with our officers or employees, including our executive officers. Accordingly, our employees may voluntarily leave us at any time and work for our competitors. Our growth strategy depends in part on our ability to retain our current employees and hire new employees. Any failure to retain our key employees will make it much more difficult for us to maintain our operations and attain our growth objectives and could therefore be expected to adversely affect our operating results, financial condition and stock price.

10


Our long sales cycle may cause fluctuating operating results, which may adversely affect our stock price.

        Our sales cycle is typically long and unpredictable, making it difficult to plan our business. Recent economic conditions will likely increase this uncertainty. Our long sales cycle requires us to invest resources in potential projects that may not occur. In addition, our long and unpredictable sales cycle may cause us to experience significant fluctuations in our future annual and quarterly operating results. It can also result in delayed revenues, difficulty in matching revenues with expenses and increased expenditures. Our business, operating results or financial condition and stock price may suffer as a result of any of these factors.

If the data storage industry fails to develop compelling new storage technologies, our business may suffer.

        Rapid and complex technological change, frequent new product introductions and evolving industry standards increase demand for our services. Because of this, our future success depends in part on the data storage industry's ability to continue to develop leading-edge storage technology solutions. Our customers utilize our services in part because they know that newer technologies offer them significant benefits over the older technologies they are using. If the data storage industry ceases to develop compelling new storage solutions, or if a single data storage standard becomes widely accepted and implemented, it will be more difficult to sell new data storage systems to our customers.

We will be exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act.

        Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and related regulations implemented by the SEC, are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. For this Annual Report, we evaluated our internal control systems to allow management to report on our internal controls. In future years, we will evaluate our internal control systems to allow management to report on (and, if required, to enable our independent auditors' attestation of) our internal controls. If we are unable to continue to comply with the requirements of Section 404 in we may be subject to sanctions or investigations by regulatory authorities, including the SEC. This type of action could adversely affect our financial results or investors' confidence in our company and our ability to access capital markets and could cause our stock price to decline. In addition, the controls and procedures that we have implemented or will implement may not comply with all of the relevant rules and regulations of the SEC. If we fail to develop and maintain effective controls and procedures, we may be unable to provide the required financial information in a timely and reliable manner. Further, if we acquire any company in the future, we may incur substantial additional costs to bring the acquired company's systems into compliance with Section 404.

Control by our existing stockholders could discourage the potential acquisition of our business.

        Currently, our executive officers and directors beneficially own approximately 29% of our outstanding common stock. Acting together, these insiders may be able to elect our entire Board of Directors and control the outcome of all other matters requiring stockholder approval. This voting concentration may also have the effect of delaying or preventing a change in our management or control or otherwise discourage potential acquirers from attempting to gain control of us. If potential acquirers are deterred, you may lose an opportunity to profit from a possible acquisition premium in our stock price.

11


Our stock price is volatile.

        The market price of our common stock has fluctuated significantly since our initial public offering, and may continue to be volatile. We cannot assure you that our stock price will increase, or even that it will not decline significantly from the price you pay. Our stock price may be adversely affected by many factors, including:

    actual or anticipated fluctuations in our operating results, including those resulting from changes in accounting rules;

    announcements of technical innovations;

    new products or services offered by us, our suppliers or our competitors;

    changes in estimates by securities analysts of our future financial performance;

    our compliance with SEC and Nasdaq rules and regulations, including the Sarbanes-Oxley Act of 2002; and

    general market conditions, including the effects of current economic conditions and

    war and terrorism threats.

Our governing documents and Minnesota law may discourage the potential acquisitions of our business.

        Our Board of Directors may issue additional shares of capital stock and establish their rights, preferences and classes, in some cases without stockholder approval. In addition, we are subject to anti-takeover provisions of Minnesota law. These provisions may deter or discourage takeover attempts and other changes in control of us not approved by our Board of Directors. If potential acquirers are deterred, you may lose an opportunity to profit from a possible acquisition premium in our stock price.

Future goodwill impairment may unpredictably affect our financial results.

        We perform impairment analyses of our goodwill at least annually or when we believe there may be impairment. Future events could cause us to conclude that impairment indicators exist and that goodwill associated with our acquired businesses is impaired. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

The sublessee for our corporate headquarters may be unable to make their lease payments or default on their lease agreement.

        In December 2004, we agreed to sublease approximately 55,000 of the 104,000 square feet we then occupied as our corporate headquarters in Chanhassen, Minnesota. The initial sublease term is co-terminal with our lease and is 85 months starting in April 2005 and ending in April 2012. The sublessee pays us rent ranging from approximately $55,000 per month at the beginning of the term to approximately $60,000 per month by the end of the term. If the sublessee was unable to make their lease payments to us or defaulted on the lease agreement, our operating results or financial condition and stock price may suffer as a result.



Item 1A.    Risk Factors.



        As indicated in this Annual Report under the caption "Note Regarding Forward-Looking Statements," certain information contained in this Annual Report consists of
forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements made in this Annual Report include the following:



We cannot assure future profitability.



        Although we achieved positive net income for fiscal years 2007 and 2006, and for the second, third and fourth quarters of 2005, we have incurred net losses all
other quarters since the fourth quarter of 2001. We cannot assure that we will remain profitable in the foreseeable future, or at all. In particular, recent economic conditions may adversely affect
our customers' decisions or timing to purchase, or the prices at which we sell, our products and services, which would negatively impact our operating results. If we incur losses in the futures our
stock price may be adversely affected.



Competition could prevent us from increasing or sustaining our revenues or profitability.



        The enterprise-class information storage market is rapidly evolving and highly competitive. As technologies change rapidly, we expect that competition will
increase in the future. We compete with independent storage system suppliers to the mid to large enterprise market and numerous value added resellers, distributors and consultants. We also compete in
the storage systems market with computer platform suppliers. Many of our current and potential competitors have significantly greater financial, technical, marketing, purchasing and other resources
than we do. As a result, they may respond more quickly to new or emerging technologies and changes in customer requirements, devote greater resources to the development, promotion and sale of products
and deliver competitive products at lower end-user prices.



        Some
of our current and potential competitors include our suppliers. We are not the exclusive reseller of any data storage product we offer. Instead, our suppliers market their products
through other independent data storage solution providers, original equipment manufacturers and through their own internal sales forces. We believe direct competition from our suppliers is likely to
increase if, as expected, the data storage industry continues to consolidate. This consolidation would likely result in fewer suppliers with greater resources to devote to internal sales and marketing
efforts. In addition, our suppliers have established and will probably continue to establish cooperative relationships with other suppliers and other data storage solution providers. These cooperative
relationships are often intended to enable our suppliers to offer comprehensive storage solutions, which compete with those we offer. If our relationships with our suppliers become adversarial, it
will be more difficult for us to stay ahead of industry developments and provide our customers with the type of service they expect from us.



        In
addition, most of our customers already employ in-house technical staffs. To the extent a customer's in-house technical staff develops sophisticated storage
systems expertise, the customer may be less likely to seek our services. Further, we compete with storage service providers who manage, store and backup their customers' data at off-site,
networked data storage locations.



We derive a significant percentage of our revenues from a small number of customers.



        In 2007 and 2005, we had no customers that accounted for at least 10% of our revenues. In 2006, we had one customer, AT&T Inc., which accounted for
approximately 13.9% of our revenues. In addition, our top five customers collectively accounted for 21%, 28%, and 27% of our 2007, 2006 and



9











2005
revenues, respectively. Because we intend to continue to seek out large projects, we expect that a significant percentage of our revenues will continue to come from a small number of customers,
although the composition of our key customers is likely to change from year to year. If we fail to obtain a growing number of large projects each year, our revenues and profitability will likely be
adversely affected. In addition, our reliance on large projects makes it more likely that our revenues and profits will fluctuate unpredictably from quarter to quarter and year to year. Unpredictable
revenue and profit fluctuations may make our stock price more volatile and lead to a decline in our stock price.



Our revenue recognition policies unpredictably defer reporting of our revenues.



        We increasingly sell complex enterprise-class information storage solutions, which include installation and configuration services. We do not recognize revenues
from our sale of hardware and software products to our customers until we complete our required installation or configuration of these products. Installation and configuration of these solutions
requires significant coordination with our customers and vendors. Therefore, even if we have shipped all products to our customers, we may be unable to control the timing of product installation and
configuration. These delays can prevent us from recognizing revenue on products we ship and may adversely affect our quarterly reported revenues. As a result, our stock price may decline.



Our key vendors could discontinue their incentive programs, which could adversely affect our business.



        Several of our key vendors have offered incentive programs to us over the past several years based on our achievement of particular sales levels of their
products. These programs contributed to our profitability in 2007, 2006 and 2005. We cannot assure that these programs will continue. If they do not, we may be unable to achieve profitability in the
future.



Our business depends on our ability to hire and retain technical personnel and highly qualified sales people.



        Our future operating results depend upon our ability to attract, retain and motivate qualified engineers and sales people with enterprise-class information
storage solutions experience. If we fail to recruit and retain additional engineering and sales personnel, or if losses require us in the future to terminate employment of some of these personnel, we
will experience greater difficulty realizing our growth strategy, which could negatively affect our business, financial condition and stock price.




We generally do not have employment agreements with our key employees.



        Our future operating results depend in significant part upon the continued contributions of our executive officers, managers, salespeople, engineers and other
technical personnel, many who have substantial experience in our industry and would be difficult to replace. Except as to our Chief Financial Officer and Senior Vice President of Field Operations, we
do not have employment agreements with our officers or employees, including our executive officers. Accordingly, our employees may voluntarily leave us at any time and work for our competitors. Our
growth strategy depends in part on our ability to retain our current employees and hire new employees. Any failure to retain our key employees will make it much more difficult for us to maintain our
operations and attain our growth objectives and could therefore be expected to adversely affect our operating results, financial condition and stock price.



10









Our long sales cycle may cause fluctuating operating results, which may adversely affect our stock price.



        Our sales cycle is typically long and unpredictable, making it difficult to plan our business. Recent economic conditions will likely increase this uncertainty.
Our long sales cycle requires us to invest resources in potential projects that may not occur. In addition, our long and unpredictable sales cycle may cause us to experience significant fluctuations
in our future annual and quarterly operating results. It can also result in delayed revenues, difficulty in matching revenues with expenses and increased expenditures. Our business, operating results
or financial condition and stock price may suffer as a result of any of these factors.



If the data storage industry fails to develop compelling new storage technologies, our business may suffer.



        Rapid and complex technological change, frequent new product introductions and evolving industry standards increase demand for our services. Because of this, our
future success depends in part on the data storage industry's ability to continue to develop leading-edge storage technology solutions. Our customers utilize our services in part because
they know that newer technologies offer them significant benefits over the older technologies they are using. If the data storage industry ceases to develop compelling new storage solutions, or if a
single data storage standard becomes widely accepted and implemented, it will be more difficult to sell new data storage systems to our customers.



We will be exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act.



        Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and related regulations
implemented by the SEC, are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. For this Annual Report, we
evaluated our internal control systems to allow management to report on our internal controls. In future years, we will evaluate our internal control systems to allow management to report on (and, if
required, to enable our independent auditors' attestation of) our internal controls. If we are unable to continue to comply with the requirements of Section 404 in we may be subject to
sanctions or investigations by regulatory authorities, including the SEC. This type of action could adversely affect our financial results or investors' confidence in our company and our ability to
access capital markets and could cause our stock price to decline. In addition, the controls and procedures that we have implemented or will implement may not comply with all of the relevant rules and
regulations of the SEC. If we fail to develop and maintain effective controls and procedures, we may be unable to provide the required financial information in a timely and reliable manner. Further,
if we acquire any company in the future, we may incur substantial additional costs to bring the acquired company's systems into compliance with Section 404.



Control by our existing stockholders could discourage the potential acquisition of our business.



        Currently, our executive officers and directors beneficially own approximately 29% of our outstanding common stock. Acting together, these insiders may be able to
elect our entire Board of Directors and control the outcome of all other matters requiring stockholder approval. This voting concentration may also have the effect of delaying or preventing a change
in our management or control or otherwise discourage potential acquirers from attempting to gain control of us. If potential acquirers are deterred, you may lose an opportunity to profit from a
possible acquisition premium in our stock price.



11









Our stock price is volatile.



        The market price of our common stock has fluctuated significantly since our initial public offering, and may continue to be volatile. We cannot assure you that
our stock price will increase, or even that it will not decline significantly from the price you pay. Our stock price may be adversely affected by many factors, including:





    actual
    or anticipated fluctuations in our operating results, including those resulting from changes in accounting rules;


    announcements
    of technical innovations;


    new
    products or services offered by us, our suppliers or our competitors;


    changes
    in estimates by securities analysts of our future financial performance;


    our
    compliance with SEC and Nasdaq rules and regulations, including the Sarbanes-Oxley Act of 2002; and


    general
    market conditions, including the effects of current economic conditions and


    war
    and terrorism threats.



Our governing documents and Minnesota law may discourage the potential acquisitions of our business.



        Our Board of Directors may issue additional shares of capital stock and establish their rights, preferences and classes, in some cases without stockholder
approval. In addition, we are subject to anti-takeover provisions of Minnesota law. These provisions may deter or discourage takeover attempts and other changes in control of us not
approved by our Board of Directors. If potential acquirers are deterred, you may lose an opportunity to profit from a possible acquisition premium in our stock price.



Future goodwill impairment may unpredictably affect our financial results.



        We perform impairment analyses of our goodwill at least annually or when we believe there may be impairment. Future events could cause us to conclude that
impairment indicators exist and that goodwill associated with our acquired businesses is impaired. Any resulting impairment loss could have a material adverse impact on our financial condition and
results of operations.



The sublessee for our corporate headquarters may be unable to make their lease payments or default on their lease agreement.



        In December 2004, we agreed to sublease approximately 55,000 of the 104,000 square feet we then occupied as our corporate headquarters in Chanhassen, Minnesota.
The initial sublease term is co-terminal with our lease and is 85 months starting in April 2005 and ending in April 2012. The sublessee pays us rent ranging from approximately
$55,000 per month at the beginning of the term to approximately $60,000 per month by the end of the term. If the sublessee was unable to make their lease payments to us or defaulted on the lease
agreement, our operating results or financial condition and stock price may suffer as a result.



This excerpt taken from the DTLK 10-Q filed Nov 14, 2007.

Item 1A. Risk Factors.

 

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2006.

 

Dependence on Significant Customers.  We derived 16% of our revenues for the nine months ended September 30, 2006 from AT&T Inc.  We had no single customer account for greater than 10% of our revenues for the three or nine months ended September 30, 2007, or for the three months ended September 30, 2006. We cannot provide assurance that this customer will account for a substantial portion of our future sales.

 

Effect of Credit Market Tightening on Data Storage Spending.  In response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

 

This excerpt taken from the DTLK 10-Q filed Aug 14, 2007.

Item 1A.  Risk Factors.

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2006.

Dependence on Significant Customers.  We derived 20%, 22% and 10% of our revenues for the three months ended June 30, 2006, the six months ended June 30, 2006 and the six months ended June 30, 2007 from Cingular Wireless.  We had no single customer account for greater than 10% of our revenues for the three months ended June 30, 2007. We cannot provide assurance that this customer will account for a substantial portion of our future sales.

Effect of Credit Market Tightening on Data Storage Spending.  In response to credit risks in the subprime mortgage marketplace, lenders recently have generally made credit less available, and more expensive, for corporate borrowers, including our customers.  A reduction in the availability or an increase in the price of borrowed funds could adversely affect our customers’ decisions or timing to purchase our data storage products and services.

This excerpt taken from the DTLK 10-Q filed May 15, 2007.
Item 1A. Risk Factors.

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2006.

Dependence on Significant Customers.  We derived 12% and 24% of our revenues for the three months ended March 31, 2007 and 2006, respectively from Cingular Wireless.  We cannot provide assurance that this customer will account for a substantial portion of our future sales.

This excerpt taken from the DTLK 10-Q filed Nov 13, 2006.

Item 1A. Risk Factors.

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2005.

Dependence on Significant Customers.  We derived 13% of our revenues for the three months ended September 30, 2006, from Navitaire Inc.  We derived 16% of our revenues for the nine months ended September 30, 2006, from Cingular Wireless.  We cannot provide assurance that these customers will account for a substantial portion of our future sales.

This excerpt taken from the DTLK 10-Q filed Aug 14, 2006.

Item 1A.  Risk Factors.

Except as provided below, there has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2005.

Dependence on a Significant Customer.  We derived 20% and 22% of our revenues for the three and six months, respectively, ended June 30, 2006, from Cingular Wireless.  We cannot assure that this customer will account for a substantial portion of our future sales.

This excerpt taken from the DTLK 10-Q filed May 12, 2006.

Item 1A.  Risk Factors.

 

There has not been a material change to the risk factors as set forth in our annual report on Form 10-K for the fiscal year ended December 31, 2005.

 

This excerpt taken from the DTLK 10-K filed Mar 31, 2005.

RISK FACTORS

 

As indicated in this Annual Report under the caption “Note Regarding Forward-Looking Statements,” certain information contained in this Annual Report consists of forward-looking statements.  Important factors that could cause actual results to differ materially from the forward-looking statements made in this Annual Report include the following:

 

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