1020017--3/8/2007--INX

related topics

{product, market, service}

{acquisition, growth, future}

{personnel, key, retain}

{debt, indebtedness, cash}

{property, intellectual, protect}

{stock, price, operating}

{operation, international, foreign}

{customer, product, revenue}

{regulation, government, change}

Our success depends upon broad market acceptance of IP telephony. Although our success is generally dependent upon the market acceptance of IP telephony, our success also depends upon a broad market acceptance of Cisco-centric IP telephony. Our business depends on the level of capital spending by enterprises for communications products and services. Our profitability depends on Cisco product pricing and incentive programs. A substantial portion of our customers are based in Texas. Our strategy contemplates rapid geographic expansion, which we may be unable to achieve, and which is subject to numerous uncertainties. We may require additional financing to achieve expansion of our business operations, and failure to obtain financing may prevent us from carrying out our business plan. We require access to significant working capital and vendor credit to fund our day-to-day operations. Our failure to comply with the financial and other covenants under our working capital facility could lead to a termination of the agreement and an acceleration of our outstanding debt. We may be unable to manage our growth effectively, which may harm our business. Our operating results have historically been volatile, and may continue to be volatile, particularly from quarter to quarter. We have many competitors and expect new competitors to enter our market, which could increase price competition and may affect the amount of business available to us and the prices that we can charge for our products and services. Business acquisitions, dispositions or joint ventures entail numerous risks and may disrupt our business, dilute stockholder value or distract management attention. Our international operations, which we plan to expand, will subject us to additional risks that may adversely affect our operating results due to increased costs. If we lose key personnel we may not be able to achieve our objectives. We may not be able to hire and retain highly skilled technical employees, which could affect our ability to compete effectively and could adversely affect our operating results. If we are unable to protect our intellectual property rights, our business may be harmed.

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1020017--3/8/2007--INX_Inc