**Exhibit 99****RISK FACTORS***You should carefully consider the following risks before you decide to buy ourcommon stock. If any one of these risks or uncertainties were to occur, our business, financialcondition, results and performance could be seriously harmed and/or the price of our common stockmight significantly decrease.***Unfavorable economic events including competitive pricing pressure in our target markets could leadto lower sales of our products**.Sales of our products depend on the growth of the Fixed Cellular telecommunicationsindustry in general and increased demand for Fixed Cellular products worldwide. The Company hasidentified significant growth opportunities in a variety of markets. Each of these markets willdevelop at a different pace, and the sales cycle for these markets is likely to be several monthsor quarters.Pricing for Fixed Cellular Terminals has been declining along with pricing ingeneral for telecommunications equipment and other technology products. We believe that thesepricing trends will continue in the future and perhaps accelerate, particularly if large companieswith greater purchasing power enter the market or other competitors enter the market with lesserquality products or improper license rights.In addition, unfavorable general economic conditions in any market will have anegative effect on sales in that market. Because economic conditions in one region often affectconditions globally, unfavorable general economic conditions in one market or region might resultin damage to industry growth and demand in other markets as well.The decline in the U.S. housing market may negatively impact sales and profitability of theCompany’s Telguard products and services. Since end users oftentimes purchase security systems andassociated cellular alarm communicators, such as Telguard, when they are moving into a newresidence, a slowdown in the housing sector could cause purchase of Telguard services to slow ordecline. Furthermore, if general economic conditions slow or if a recession occurs, end users maychoose to eliminate the protection offered by Telguard services as consumers re-examinediscretionary expenditures.**The intense competition in the fixed cellular telecommunications industry could prevent us fromachieving or sustaining profitability**.The market for fixed cellular products is extremely competitive, and we may not beable to successfully compete with other companies already in the market and new companies thatenter the market. Our competitors in this market include: **•** LG Electronics;  **•** Axesstel, Inc.;  **•** Ericsson;  **•** Huawei Technologies Co., Ltd.;  **•** ZTE Corporation;  **•** Numerex Corporation;  **•** Honeywell International, Inc.; and  **•** Tyco International, Ltd.
 
 

 
Many of these competitors have greater resources than us in many areas critical to succeeding inthe industry, including: **•** financial resources;  **•** manufacturing capabilities;  **•** name recognition;  **•** research and development capabilities;  **•** technical expertise;  **•** sales and marketing resources; and  **•** distribution channels.Further, these competitors may be able to: **•** select more accurately the new or emerging technologies desired by the market;  **•** respond more rapidly than we can to new or emerging technologies;  **•** respond more rapidly than we can to changes in customer requirements;  **•** devote greater resources than we do to research and development efforts;  **•** promote their products more effectively, including selling their products ata loss in order to obtain market share or bundling their products with otherproducts that we do not offer in order to promote an end-to-end solution fortheir customers that we cannot match; and  **•** obtain components and manufacture and sell products at lower prices as aresult of efficiencies of scale or purchasing power, thereby rendering ourproducts non-competitive or forcing us to sell our products at reduced ornegative gross margins.Because of these advantages our competitors may succeed in developing products thatare more effective, desirable and/or cheaper than ours or that render our products and technologyobsolete. They also may have better and more efficient marketing and distribution structures.In addition, we havegranted non-exclusive, royalty bearing licenses to Ericsson, which permits Ericsson toproduce and sell products using our technology thatcompete with ours. Because these companies have greater resources than we do, they may be able tosell similar products more effectively than we can.**Our success depends on the growth and availability of wireless telecommunications services in themarkets we target.**Currently, some of our largest potential markets for Fixed Cellular Terminals aredeveloping countries. Our success depends to a large extent on the continued growth and increasedavailability of cellular and other wireless telecommunications services in these countries and theavailability of such services at competitive prices. Construction of wireless systems in thesecountries may be delayed for a variety of reasons, including government regulation, generaleconomic factors, the availability of funding and other competitive factors. These factors mayalso limit or delay purchases of equipment used to provide voice and data services, such as ourproducts. If system construction and equipment purchases in these countries are not made or are delayed, the demand for our products inthese countries will be limited or delayed. Similarly, if the cost of using wirelesstelecommunications services in these countries is not cost effective, the demand for our productsmay be limited. In some cases, service providers purchase our products from us and resell them totheir end users at reduced prices. If those providers cease to be willing to provide thesesubsidies, our revenues may decline if end users cannot afford our products.
 
 

 
While wireless telecommunication systems in the United States are more developedthan in many other markets that we target, continued expansion of wireless infrastructure in theUnited States is still important for the growth of our sales of Fixed Cellular Terminals in theUnited States. As is the case with conditions in other target markets, there is no guarantee thatwireless telecommunications systems will continue to develop.**Our efforts to increase the focus of our production, marketing and sales efforts to the FixedCellular Terminals may not be successful.**Although we have always been involved in the Fixed Cellular Terminal market as well as theFixed Cellular Phone market, the success of our current efforts to increase our focus on the FixedCellular Terminal market will depend on our ability to develop and market products that areattractive to wireless telecommunications providers and their customers, and to control our costsfor those products. Particularly in the competitive telecommunications equipment market in whichwe operate, we cannot assure that these efforts will be successful.**Our efforts to sell the Fixed Cellular Phone business may not succeed.**During the third fiscal quarter of 2007, we announced our plan to sell the Fixed CellularPhone (FCP) business, which represented one of the two reporting segments of the Company and asubstantial amount of our revenue historically. The sale process is underway and there is nocertainty as to whether a buyer will be found or that a buyer will offer to pay an amount equal toor in excess of the current net book value of the FCP assets. Therefore, it is possible that theCompany may need to sell the business at a loss and take unanticipated charges to write-down thevalue of these assets upon their sale. Alternatively, if no buyer is found, the Company may beforced to close the operation and write-down the entire remaining book value of the assetsassociated with this business, which could have a material effect on our financial results.**If we cannot sustain profitable operations, we may not be able to obtain the funding we need tooperate our business.**Historically, the Company has incurred significant operating losses. We incurred anet loss of $1.9 million for the year ended September 30, 2007; $11.8 million for the year endedSeptember 30, 2006; and $10.9 million for the year ended September 30, 2005. Achievingprofitability will require us to increase our revenues, control our costs, and increase the focusof our sales to product lines with higher margins. We cannot guarantee that we will be successfulin achieving profitability or that we will do so within any specific time frame.Our ability to continue operations depends on having adequate funds to cover our expenses.Our current operating plan provides for significant expenditures for research and development ofnew products, development of new markets for our products, and marketing programs for ourproducts. At September 30, 2007, we had $10.3 million in cash and cash equivalents, a workingcapital surplus of $34.6 million. Based on our current operating plan, we believe that existingcapital resources will allow us to maintain our current and planned operations.However, our cash requirements may vary and are difficult to predict. We targetmarkets in developing countries for product sales, and the nature of these markets makes itdifficult to predict revenues. Events that we cannot anticipate, economic and political factorsand our customer’s ability to execute their plans, may result in order cancellations which mayincrease our capital needs. In addition, from time to time, we are required to post letters ofcredit that are collateralized with our cash to support purchase orders we place with our vendors.The effect of posting such letters of credit is that some of our cash becomes restricted andunavailable for our working capital needs until such time as theletters of credit expire. Also, it is difficult to predict the amount of royalty income we willreceive from our licensees. Thus, actual cash requirements may be greater than currentlyanticipated.
 
 

 
Accordingly, we may not have adequate funds to cover our expenses. If this were thecase, we would need to find other financing sources to provide the necessary funds, such as publicor private sales of our equity or debt securities. We cannot assure you that if we neededadditional funds we would be able to obtain them or obtain them on terms we find acceptable. If wecould not obtain the necessary financing we may cut back operations, which might include thescaling back or elimination of research and development programs.**We have one highly significant customer and the loss of this particular customer may seriously harmour business.**ADT, a customer of our Telguard products and services, represented 43% of our totalrevenue in fiscal 2007. If this customer chooses to use less of our products or stops using ourproducts in total, our financial results could be materially impacted.**Our operating results may fluctuate greatly on a quarterly and annual basis, which may cause theprice of our common stock to be volatile.**Our quarterly and annual operating results may fluctuate greatly due to numerousfactors, many of which are beyond our control. Factors that could affect our quarterly and annualoperating results include those listed below as well as others listed in this “Risk Factors”section: **•** our reliance on large volume orders from only a few customers for most of our product sales,which may result in volatility when those orders are filled and not immediately followed bycomparable orders;  **•** variations in our distribution channels;  **•** the mix of products we sell;  **•** general economic conditions in our target markets;  **•** the timing of final product approvals from our customers or regulators;  **•** the timing of orders from and shipments to major customers;  **•** the timing of new product introductions by us or our competitors;  **•** changes in our pricing policies and the pricing policies of our suppliers and our competitors;  **•** changes in the terms of our arrangements with customers and suppliers;  **•** the availability and cost to us of the key components for our products;  **•** ability of our customers to accurately forecast demand for our products by their end users;  **•** delays or failures to fulfill orders for our products on a timely basis;  **•** our inability to forecast our manufacturing needs;  **•** change in the financial position of our manufacturers;  **•** an increase in product warranty returns or in our allowance for doubtful accounts;
 
 

 
 **•** operational disruptions, such as transportation delays or failures of our order processing system;  **•** the timing of personnel hirings; and  **•** delays in the introduction of new or enhanced versions of our existing products or marketacceptance of these products.A substantial portion of our sales in a given quarter may depend on obtaining ordersfor products to be manufactured and shipped in the same quarter in which those orders are received.As a result of these factors, period-to-period comparisons of our operating results may not bemeaningful, and you should not rely on them as an indication of our future performance. Inaddition, our operating results may fall below the expectations of public market analysts orinvestors. In this event, our stock price could decline significantly. These period-to-periodfluctuations may cause volatility in the price of our common stock, as described below.**We rely on cellular networks for service revenue that may be affected by the following:** **•** service may be interrupted or limited due to carrier transmission limitations caused byatmospheric, terrain, other natural or artificial conditions adversely affectingtransmission.  **•** interruption of service due to cellular carrier equipment modification, upgrades,repairs and other similar activities.  **•** service may be limited based on available coverage.  **•** interruption of service may occur between various cellular network and participatingcarriers.  **•** carriers disclaim all liability of any nature to customers, whether direct, indirect,incidental or consequential, arising out of our customer’s use of their service.In the event that we experience significant cellular networks delays or interruption ofservice, we would have difficulty maintaining customers and our revenues could declinesubstantially and harm our business.While we utilize a number of carriers, Corr Wireless provides with a majority of our networkcapability. A network malfunction or a contractual dispute between us and this carrier or amongthis carrier and other major U.S. carriers could materially impact the operation of our servicesand/or our financial results.**Our common stock price has been extremely volatile, and extreme price fluctuations could negativelyaffect your investment.**The market price of our common stock has been extremely volatile. Since October 1,1999, the price of our common stock has ranged from a high of $32.00 to a low of $1.00 per share.Publicized events and announcements may have a significant impact on the market priceof our common stock. For example, the occurrence of any of the following events could have theeffect of temporarily or permanently driving down the price of our common stock: **•** shortfalls in our revenue or net income;  **•** the results of trials or the introduction of new products by us or our competitors;  **•** market conditions in the telecommunications, technology and emerging growth sectors; and  **•** rumors related to us or our competitors.
 
 

 
In addition, the stock market from time to time experiences extreme price and volumefluctuations that particularly affect the market prices for emerging growth and technologycompanies, like Telular, and which often are unrelated to the operating performance of the affectedcompanies. These broad fluctuations may negatively affect your ability to sell your shares at aprice equal to or greater than the price you paid. In addition, a decrease in the price of ourcommon stock could cause it to be delisted from the NASDAQ National Market.**Technology changes rapidly in our industry and our future success will depend on our ability tokeep pace with these changes and meet the needs of our customers.**The telecommunications industry is characterized by rapid technological advances,evolving industry standards, changing customer needs and frequent new product introductions andenhancements. The fixed cellular telecommunications industry also is experiencing significanttechnological change, such as the transformation of cellular systems from analog to digital. Theintroduction of products embodying new technologies and the emergence of new industry standardscould render our existing products and technology obsolete and unmarketable. The process ofdeveloping new technology and products is complex, uncertain and expensive, and success depends ona number of factors, including: **•** proper product definition;  **•** component cost;  **•** resolving technical hurdles;  **•** timely completion and introduction to the market;  **•** differentiation from the products of our competitors; and  **•** market acceptance of our products.To succeed, we must timely develop and market new products and enhancements toexisting products that keep pace with advancing technological developments and industry standardsand that address the needs of customers. We may not be successful in developing and marketing newproducts and enhancements or we may experience difficulties that prevent development of productsand enhancements in a timely manner. In addition, our products may fail to meet the needs of themarketplace or achieve market acceptance. Any of these circumstances would seriously harm ourresults and financial condition.**Our results depend on our ability to develop and introduce new products into existing and emergingmarkets and to reduce the costs to produce existing products.**The process of developing new technology is complex and uncertain, and if we fail toaccurately predict the changing needs of our customers and emerging technological trends, ourresults and financial condition may suffer. We must commit significant resources, including thosecontracted from third parties, to develop new products before knowing whether our investments willresult in products the market will accept. The success of new products is dependent on severalfactors, including proper new product definition, component costs, timely completion andintroduction of these products, differentiation of new products from those of our competitors, andmarket acceptance of these products. There can be no assurance that we will successfully identifynew product opportunities, develop and bring new products to market in a timely manner, and achievemarket acceptance of our products, or that products and technologies developed by others or newindustry standards will not render our products or technologies obsolete or noncompetitive.Furthermore, we may not successfully execute on new product opportunities because of technicalhurdles that we or our contractors fail to overcome in a timely fashion. This could result incompetitors providing a solution before we do, and loss of market share, revenues and earnings.
 
 

 
**Products from our investments in research and development of new products may not be realized foran extended period of time, if at all.**The Company has made significant investments in research and development for newproducts, services and technologies. Significant revenue from these investments may not beachieved for a number of years, if at all. Further, we may be required to purchase licenses fromthird parties in connection with the development of new products and these licenses may not beavailable on commercially reasonable terms, or at all. Even if we successfully introduce newproducts and technologies, our products may not be accepted by the market, we may be unable to sellour products at prices that are sufficient to recover our investment in developing those newproducts. Moreover, if these products were profitable, operating margins for these businesses arenot expected to be as high as the margins historically experienced for our other products.**We have experienced significant employee turnover as a result of moving our engineering department.**The Company moved its engineering department from New York to Atlanta and the majority ofexisting staff did not make the move. Therefore, the Company hired and continues to hire newengineering staff at our offices in Atlanta. As a result, there may be gaps in the knowledge baseamong our engineering staff with regard to our current products and our products under developmentas these new engineering employees attempt to learn historical information about our existing andplanned products.**We must devote substantial resources to research and development to remain competitive and we maynot have the resources to do so.**For us to be competitive, we must continue to dedicate substantial resources toresearch and development of new products and enhancements of current and future products asdescribed in the preceding paragraph. If we are unable to devote sufficient resources to fundnecessary research and development or if our research and development efforts are unsuccessful suchfailure may have a material adverse effect on our business and our stock price may decline.**From time-to-time we face litigation that could significantly damage our business and financialcondition.**In the telecommunications equipment and other high technology industries, litigationincreasingly has been used as a competitive tactic by both established companies seeking to protecttheir position in the market and by emerging companies attempting to gain access to the market. Inthis type of litigation, complaints may be filed on various grounds, such as: **•** antitrust;  **•** breach of contract;  **•** trade secret;  **•** copyright or patent infringement;  **•** patent or copyright invalidity; and  **•** unfair business practices.We are currently defending ourselves against several such claims. Whether or notthey have any merit, we incur substantial expense and management’s attention may be diverted fromoperations. This type of litigation also may cause confusion in the market and make our licenseesand distributors reluctant to commit resources to our products. Any of these effects could have asignificant negative impact on our business and financial condition. In particular, an adverseresult from intellectual property litigation could force us to do one or more of the following:
 
 

 
 **•** cease selling, incorporating or using products that incorporate the challenged intellectual property;  **•** obtain a license from the holder of the infringed intellectualproperty right, which license may not be available on reasonableterms, if at all; and  **•** redesign products that incorporate the disputed technology.If we are forced to take any of the foregoing actions, we could face substantial costs andshipment delays and our business could be seriously harmed. Although we carry general liabilityinsurance, our insurance may not cover potential claims of this type or be adequate to indemnify usfor all liability that may be imposed.In addition, it is possible that our customers or end users may seek indemnity from us in theevent that our products are found or alleged to infringe the intellectual property rights ofothers. Any such claim for indemnity could result in substantial expenses to us that could harm ouroperating results. Our largest customer is entitled to indemnification for such claims and has, infact, sought such indemnification recently based on notice of infringement provided to thiscustomer and to the Company by a party that has recently begun litigation against the Company andour customer based on this infringement claim.Although our patents have been successfully defended in courts in the United States andNew Zealand, rulings in such cases may not apply to new products. In the event that any of ourpatents or other intellectual property rights were deemed invalid or were determined not toprohibit competing technologies as a result of litigation, our competitive position may besignificantly harmed.**We rely on third parties to manufacture our products and others to manufacture components for ourproducts.**We use subcontractors to manufacture our products and product components, such as cellulartransceivers and radio modules, and to assemble our products, such as Fixed Cellular Terminals. Inthe past, we experienced delays in receiving subcontracted components and assembled products thatresulted in delays in our ability to deliver products. We may experience similar delays in thefuture.Our inability to obtain sufficient quantities of raw materials and key componentswhen required could result in delays or reductions in product shipments and increased costs foraffected parts. In addition, production capacity constraints at our subcontractors could preventus from meeting production obligations.Delays in product deliveries for any reason or our failure to deliver products couldsignificantly harm customer relationships and result in the loss of potential sales. Deliverydelays or failures could also be subject to litigation.**We rely on limited or sole sources for many of our components, and the loss of any such sources mayadversely impact our business.**It is not always possible to maintain multiple qualified suppliers for all of our componentsand subassemblies. As a result, some key components are purchased only from a single supplier or alimited number of suppliers. If demand for a specific component increases, we may not be able toobtain an adequate supply of that component in a timely manner. In addition, if our suppliersexperience financial or other difficulties, the availability of these components could be limited.It could be difficult, costly and time-consuming to obtain alternative sources for these componentsor to change product designs to make use of alternative components. If we are unable to obtain asufficient supply of components, if we experience any interruption in the supply of components orif the cost of our components increases, our ability to meet scheduled product deliveries could beharmed, which could result in lost orders, harm to our reputation and reduced revenues.Several of our sole sourced components in existing products are at end-of-life from theirmanufacturers. We are attempting to source more of these components using brokers in the secondarymarket but expect that we will run out of these components for several of our products duringfiscal 2008. While we are attempting to design replacement productswith available components, we can not assure you that we will successfully redesign these productsand retain the revenue associated with the existing products which are subject to end-of-lifecomponents.
 
 

 
**Our costs may increase if we are unable to accurately forecast our needs.**Lead times for ordering components from our manufacturers vary significantly and depend onvarious factors, such as the specific supplier, contract terms and demand for and availability of acomponent at a given time. If our forecasts are less than our actual requirements, we may not beable to obtain products in a timely manner. Furthermore, if we cannot produce our products in atimely manner, the liquidated damages provisions in some of our contracts with our customers mayresult in our selling our products at a loss. If our forecasts are too high, we and ourmanufacturer will be unable to use the components that were purchased based on our forecasts. Thecost of the components used in our products tends to drop rapidly as volumes increase andtechnologies mature. Therefore, if we are unable to use components purchased based on ourforecasts, our cost of producing products may be higher than our competitors’. Excess componentsor inventory will tie up working capital and cause us to incur storage and other carrying costs,which may cause us to borrow additional funds that may not be available on commercially reasonableterms. Further, excess components or inventory not used or sold in a timely manner may becomeobsolete, causing write-offs or write-down’s, which could seriously harm our results of operations.**Quality control problems could harm our sales.**We believe that our products currently meet high standards of quality. We haveinstituted quality-monitoring procedures, and we are ISO-9001:2000 compliant. Most of our majorsubcontractors also have quality control procedures in place and are ISO-9001:2000 compliant, butcould experience quality control problems. If this occurs, the quality of our products couldsuffer, which could significantly harm product sales.**We may experience long sales cycles for our products, as a result of a variety of factors.**Our sales cycle depends on the length of time required for adoption of new technologies in ourtarget markets. In addition, the period between our initial contact with a potential customer andits decision to purchase our products is relatively long. The evaluation, testing, acceptance,proposal, contract negotiation, funding and implementation process can extend over many months.Based on our limited operating history, it generally takes us between three and nine months tocomplete a sale to a customer. However, in certain instances the sales cycle may be substantiallylonger. If our sales cycle unexpectedly lengthens in general or for one or more large orders, thetiming of our revenues and results of operations could be harmed, which in turn could reduce ourrevenues in any quarter. Therefore, period-to-period comparisons of our results of operations maynot necessarily be meaningful, and these comparisons should not be relied upon as indications offuture performance. Further, sales cycles that are longer than we expect likely will harm ourability to generate sufficient cash to cover our working capital requirements for a given period.**We operate in developing markets, which may subject us to volatile conditions not present in theUnited States.**Developing countries are some of our largest potential markets. As we expand ouroperations and products in these countries, our business and performance could be negativelyaffected by a variety of factors and conditions that businesses operating in the United Statesgenerally do not have to contend with, such as: **•** foreign currency exchange fluctuations and instability of foreign currencies;  **•** political or economic instability and volatility in particular countries or regions;  **•** limited protection for intellectual property;  **•** difficulties in complying with foreign regulatory requirements applicable to our operations and products;
 
 

 
 **•** difficulties in obtaining domestic and foreign export, import and other governmental approvals, permitsand licenses and compliance with foreign laws, including employment laws;  **•** difficulties in staffing and managing international operations, including work stoppages or strikes andcultural differences in the conduct of business, labor and other workforce requirements and inadequatelocal infrastructure;  **•** trade restrictions or higher tariffs, quotas, taxes and other market barriers;  **•** transportation delays and difficulties of managing international distribution channels;  **•** longer payment cycles for, and greater difficulty in collecting accounts receivable; and  **•** public health emergencies such as SARS and avian bird flu.To date, our sales have not been negatively affected by currency fluctuations. Wecurrently seek prepayment, letters of credit or qualification for export credit insuranceunderwritten by the U.S. Export-Import Bank or other third-party insurers on a substantial portionof our international orders, but some international customers are granted open credit terms and weare exposed to some international credit risk. We also try to conduct all of our internationaltransactions in U.S. dollars to minimize the effects of currency fluctuations. However, as ourinternational operations grow, foreign exchange fluctuations and foreign currency inflation maypose greater risks for us and we may need to develop and implement additional strategies to managethese risks. If we are not successful in managing these risks our business and financial conditioncould be seriously harmed.**Certain Company patents have expired, and patent protection for other Company products is notavailable in all markets.**The original principal United States patent for the Company’s system for interfacinga standard telephone set with a radio expired on September 18, 2004. Although the Company holdsother relevant United States and foreign patents, core aspects of our technology are not covered bypatent protection. As a result, a competitor may be able to develop technologies that aresubstantially similar to our products, which would have a material adverse effect on our businessand future prospects.It also is possible that a competitor may independently develop and/or patent technologiesthat are substantially equivalent to or superior to our technology. If this happens, our patentswill not provide protection and our competitive position may be significantly harmed.As we expand our product line or develop new uses for our products, these productsor uses may be outside the protection provided by our current patents and other intellectualproperty rights. In addition, if we develop new products or enhancements to existing products wecannot assure you that we will be able to obtain patents to protect them. Even if we do getpatents for new products, these patents may not provide meaningful protection. Any patent that wemay obtain will expire, and it is possible that it may be challenged, invalidated or circumvented.In some countries outside of the United States, patent protection is not available.Moreover, some countries that do allow registration of patents do not provide meaningful redressfor violations of patents. As a result, protecting intellectual property in these countries isdifficult. In addition, neither we nor any known competitors in the past obtained patentprotection for our core intelligent interface technology in many countries, including the principalcountries of Western Europe, and we and those competitors are now legally barred from obtainingpatents in these countries.In countries where we do not have patent protection or where patents provide little,if any, protection, we have to rely on other factors to differentiate our products from ourcompetitors’ products.
 
 

 
Although we believe our products are superior to those of competitors, it may beeasier for competitors to sell products similar to ours in countries where we do not havemeaningful patent protection. This could result in a loss of potential sales.We may initiate claims or litigation against third parties in the future for infringement ofour proprietary rights or to determine the scope and validity of our proprietary rights or theproprietary rights of competitors. These claims could result in costly litigation and divert theefforts of our technical and management personnel. As a result, our operating results could sufferand our financial condition could be harmed.**We may not address successfully the problems encountered in connection with any potential futureacquisitions.**We expect to continue to consider opportunities to acquire or make investments in othertechnologies, products and businesses that could enhance our capabilities, complement our currentproducts or expand the breadth of our markets or customer base. We have limited experience inacquiring other businesses and technologies. Potential and completed acquisitions and strategicinvestments involve numerous risks, including: **•** problems assimilating the purchased technologies, products or business operations;  **•** problems maintaining uniform standards, procedures, controls and policies;  **•** unanticipated costs associated with the acquisition;  **•** diversion of management’s attention from our core business;  **•** adverse effects on existing business relationships with suppliers and customers;  **•** risks associated with entering new markets in which we have no or limited prior experience; and  **•** potential loss of key employees of acquired businesses.If we fail to properly evaluate and execute acquisitions and strategic investments, ourmanagement team may be distracted from our day-to-day operations, our business may be disrupted andour operating results may suffer. In addition, if we finance acquisitions by issuing equity orconvertible debt securities, our stockholders would be diluted.**Delaware law and our charter documents may inhibit a potential takeover bid that would bebeneficial to common stockholders.**Delaware law and our certificate of incorporation may inhibit potential acquisitionbids for Telular common stock at a price greater than the market price of the common stock. We aresubject to the anti-takeover provisions of the Delaware General Corporation Law, which could delay,deter or prevent a change of control of Telular or make this type of transaction more difficult.In addition, our board of directors does not need the approval of common stockholders to issueshares of preferred stock having rights that could significantly weaken the voting power of thecommon stockholders and, as a result, make a change of control more difficult.**Sales of common stock issuable on the exercise of outstanding and contemplated options and warrantsmay depress the price of the common stock.**As of September 30, 2007, there were options granted to employees and directors topurchase 1,590,073 shares of the Company’s common stock. Options to purchase 817,848 of theseshares were exercisable at that time. The exercise prices for the exercisable options range from$1.95 to $16.45 per share, with a weighted average exercise price of $5.96. Options to purchase theremaining 772,225 shares will become exercisable over the next two years. The exercise prices forthe options that are not yet exercisable have a weighted average exercise price of $3.12.
 
 

 
In connection with a credit facility with Wells Fargo Bank (“Wells”) that matured onDecember 31, 2002, we issued to Wells warrants to purchase 50,000 shares of common stock at anexercise price of $16.29 per share. In connection with the private placement of 2,650,000 sharesto certain shareholders on September 2, 2005, we issued warrants to purchase 1,324,996 shares ofthe Company’s common stock at an exercise price of $4.50 per share and an additional 1,324,996shares at an exercise price of $5.00 per share. Finally, in connection with entering into atwo-year Loan and Security Agreement and a Non-Recourse Receivable Purchase Agreement with SiliconValley Bank (“SVB”) on June 27, 2006, we issued warrants to purchase 320,856 of the Company’scommon stock at an exercise price of $1.87 per share. In the future we may issue additional sharesof common stock, convertible securities, options and warrants.The issuance of shares of common stock issuable upon the exercise of options orwarrants could cause substantial dilution to holders of common stock. It also could negativelyaffect the terms on which we could obtain equity financing.Subsequent to September 30, 2007, SVB exercised 320,856 warrants in a cash-less transactionfor 218,641 shares of the Company’s Common Stock. Additionally, certain shareholders, in connectionwith the September 2, 2005 private placement, exercised warrants for 176,567 shares of the Company’s Common Stock.**Certain former holders of our 5% Series A Convertible Preferred Stock believe that we did not issuethem enough common stock on conversion of their preferred stock.**Under the terms of our 5% Series A Convertible Preferred Stock, on October 18, 1999,all of the 11,350 outstanding shares of preferred stock automatically were converted intoapproximately 2.1 million shares of common stock at the minimum conversion price of $8.00 percommon share specified in the terms. In Form SC-13G filings with the Securities and ExchangeCommission in October and December 1999, certain of the previous holders noted that, based upontheir interpretation of Mandatory Conversion formula, the holders were entitled to an aggregate ofapproximately 4.2 million additional shares. We do not agree with this interpretation, and we havenotified these holders of our position. If we were required to issue these shares it would causesubstantial dilution to our stockholders.