1069469--3/31/2009--GOLDLEAF_FINANCIAL_SOLUTIONS

related topics

{acquisition, growth, future}

{stock, price, share}

{system, service, information}

{competitive, industry, competition}

{control, financial, internal}

{capital, credit, financial}

{regulation, government, change}

{regulation, change, law}

{condition, economic, financial}

{cost, operation, labor}

{personnel, key, retain}

{product, market, service}

{customer, product, revenue}

{provision, law, control}

{property, intellectual, protect}

{tax, income, asset}

{product, liability, claim}

{cost, regulation, environmental}

{stock, price, operating}

Risks Related to Our Business Current economic conditions, including the current market and economic downturns, could negatively affect demand for our products and services. Acquisitions could result in integration difficulties, unexpected expenses, diversion of management's attention and other negative consequences. The loss of our chief executive officer or other key employees could have a material adverse effect on our business. We generate a significant amount of our revenues from our accounts receivable financing solution and our retail inventory management services, and those revenues have declined in recent years. If these trends continue, our financial performance may be materially and adversely affected. Because our business involves the electronic storage and transmission of data, security breaches and computer viruses could expose us to litigation and adversely affect our reputation and revenue. The failure to execute our growth plans may affect our ability to remain a publicly-traded company. Competition, restrictions under our credit facility, market conditions, and other factors may impede our ability to acquire other businesses and may inhibit our growth. If we incur losses, we could experience difficulty meeting our business plan and our stock price could decline. If we are unable to manage our growth, our business and results of operations could be adversely affected. Because we have a long sales and implementation cycle for some of our solutions, we face the risk of not closing sales after expending significant resources, which could materially and adversely affect our business, financial condition, and results of operations. We may not be able to enter into and successfully implement strategic alliances, which could limit our ability to grow our business as we intend. We may be unable to market our products and services successfully to new client financial institutions or to retain current client financial institutions. If we are unable to do so, our business may be materially and adversely affected. We may be unable to compete in our markets, which could cause us not to achieve our growth plans and materially and adversely affect our financial performance. We may be unable to protect our proprietary technology adequately, which may have a material adverse effect on our revenue, our prospects for future growth, and our overall business. If our products or services are found to infringe the proprietary rights of others, we may be required to change our business practices and may also become subject to significant costs and monetary penalties. The failure of our network infrastructure and equipment could have a material adverse effect on our business. We rely on the technological infrastructure of our client financial institutions and their individual customers, and any failure of that infrastructure or a failure to protect that infrastructure from third party attacks could have a material adverse effect on our revenue and our business. Increased fraud committed by small businesses and increased uncollectible accounts of small businesses may adversely affect our accounts receivable financing business. Our business significantly depends on a productive sales force. If we experience a significant increase in our management or employee turnover, we may not be able to achieve our sales plans or maintain our current level of sales. We could be sued for contract or product liability claims that exceed our available insurance coverage, which could have a material adverse effect on our business, financial condition, and results of operations. We may not have adequate capital to support our planned growth, which could significantly impair our ability to add new products or services. If our products and services contain errors, we may lose clients and revenues and be subject to claims for damages. Technological changes may reduce the demand for our products and services or render them obsolete, which would reduce our revenue and income. Examination of our business by regulatory agencies could cause us to incur significant expenses, and failure to remedy any identified deficiency would adversely affect our business. Governmental laws and regulations may adversely affect us by making it more costly and burdensome to conduct our business or operations. Risks Related to Our Industry The operating environment for financial institutions has become increasingly difficult and, as we depend heavily on this industry, this may adversely affect our business and operations. We depend heavily on a single industry and any downturn in that industry would materially and adversely affect our business and operations. Financial institutions are subject to industry consolidation, and we may lose clients with little notice, which could adversely affect our revenues. The banking industry is highly regulated, and changes in banking regulations could negatively affect our business. Risks of Owning Our Common Stock Our stock price is volatile and any investment in our common stock could suffer a decline in value. The failure to raise the market price of our common stock may affect our ability to remain a publicly-traded company. If we are required to restate or reissue our financial statements, the price of our stock may decline significantly. If we fail to maintain adequate internal controls over financial reporting, then our business and operating results could be harmed. Complying with Section 404 of the Sarbanes-Oxley Act of 2002 may strain our resources and distract management. In complying with Section 404 of the Sarbanes-Oxley Act of 2002, we may detect material weaknesses in our internal controls. We do not anticipate paying any dividends on our common stock in the foreseeable future. We may not be able to use the tax benefit from our operating losses. Provisions in our organizational documents and under Tennessee law could delay or prevent a change in control of our company, which could adversely affect the price of our common stock.

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1069469--3/31/2009--GOLDLEAF_FINANCIAL_SOLUTIONS_INC.