1002902--10/14/2008--VELOCITY_EXPRESS

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{system, service, information}

{personnel, key, retain}

{control, financial, internal}

{loss, insurance, financial}

{cost, contract, operation}

{customer, product, revenue}

{acquisition, growth, future}

{provision, law, control}

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{competitive, industry, competition}

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{gas, price, oil}

{stock, price, operating}

RISKS RELATED TO OUR BUSINESS We have received an opinion from our independent registered public accounting firm expressing doubt regarding our ability to continue as a going concern Given our history of losses, we cannot predict whether we will be able to achieve or sustain profitability or positive cash flow. If we cannot achieve or sustain profitability or positive cash flow, the market price of our common stock could decline significantly. We may be unable to fund our future capital needs, and we may need additional funds sooner than anticipated. Because we expect to need to refinance our existing debt, we face the risks of either not being able to do so or doing so at higher interest expense. Early termination or non-renewal of contracts could negatively affect our operating results. We are highly dependent upon sales to a few customers. The loss of any of these customers, or any material reduction in the amount of our services they purchase, could materially and adversely affect our business, financial condition, results of operations and cash flows. The industry in which we operate is highly competitive, and competitive pressures from existing and new companies could materially and adversely affect our business, financial condition, results of operations and cash flows. As a time definite logistics company, our ability to service our clients effectively often depends upon factors beyond our control. The operation of our business is dependent on the price and availability of fuel. Continued periods of historically high fuel costs may materially adversely affect our operating results. If we lose any of our executive officers, or are unable to recruit, motivate and retain qualified personnel, our ability to manage our business could be materially and adversely affected. Because we are exposed to litigation stemming from the accidents or other activities of our drivers and messengers, if we were to experience a material increase in the frequency or severity of accidents, liability claims, workers compensation claims, unfavorable resolutions of claims or insurance costs, our business, financial condition, results of operations and cash flows could be materially adversely affected. If the IRS, any state, or any group of drivers were to successfully assert that our independent contractors are in fact our employees, we would be required to pay withholding taxes and extend employee benefits to these persons, and could be required to pay penalties or be subject to other liabilities as a result of incorrectly classifying employees. If we are unable to recruit, motivate and retain qualified delivery personnel, our business, financial condition, results of operations and cash flows could be materially and adversely affected. Our failure to maintain required certificates, permits or licenses, or to comply with applicable laws, ordinances or regulations could result in substantial fines or possible revocation of our authority to conduct certain of our operations. Our reputation will be harmed, and we could lose customers, if the information and telecommunication technologies on which we rely fail to adequately perform. If our goodwill or other intangible assets were to become impaired, our results of operations could be materially and adversely affected. We face trademark infringement and related risks. We may face higher litigation and settlement costs than anticipated. RISKS RELATED TO OUR CAPITAL STRUCTURE We have a substantial amount of debt outstanding and may incur additional indebtedness in the future that could negatively affect our ability to achieve or sustain profitability and compete successfully in our markets. Our senior notes, revolving credit facility, and preferred stock contain restrictive covenants that limit our operating and financial flexibility. Our revolving credit facility, as amended, contains monthly minimum EBITDA and Minimum Driver Pay/Purchased Transportation requirements that may be difficult to attain. If we do not maintain our NASDAQ listing, you may have difficulty trading our securities. Because we are a holding company with no operations, we will not be able to pay interest on our debt or pay dividends unless our subsidiaries transfer funds to us. Our stock price is subject to fluctuation and volatility. Future issuances, or the perception of future issuances, of a substantial amount of our common stock may depress the price of the shares of our common stock. The issuance of additional equity securities in a future financing could trigger the anti-dilution provisions of our outstanding preferred stock and warrants. We do not intend to pay cash dividends on our common stock in the foreseeable future. Our organizational documents and applicable law could limit or delay another party s ability to acquire us and, therefore, could deprive our investors of the opportunity to obtain a takeover premium for their shares. We may be exposed to risks relating to our internal controls and may need to incur significant costs to comply with applicable requirements.

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1002902--10/14/2008--VELOCITY_EXPRESS_CORP