1071411--3/25/2010--FUSION_TELECOMMUNICATIONS_INTERNATIONAL

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{system, service, information}

{stock, price, share}

{product, market, service}

{acquisition, growth, future}

{competitive, industry, competition}

{stock, price, operating}

{customer, product, revenue}

{provision, law, control}

{cost, contract, operation}

{interest, director, officer}

{property, intellectual, protect}

{regulation, change, law}

{operation, international, foreign}

{capital, credit, financial}

Risks Related to Our Business We have a history of operating losses, working capital deficit, and Stockholders deficit. There can be no assurance that we will ever achieve profitability or have sufficient funds to execute our business strategy. Our business is capital intensive, and we do not currently generate sufficient revenues to offset our operating expenses. If we are unable to obtain additional funding, as and when required, we may have to significantly curtail or possibly terminate our operations. If we are unable to manage our growth or implement our expansion strategy, we may increase our costs without increasing our revenues. We may be unable to adapt to rapid technology trends and evolving industry standards, which could lead to our products becoming obsolete. Some of our services are dependent upon multiple service platforms, network elements, and back-office systems that are reliant on third party providers. We may be impacted by litigation regarding patent infringement to which we were not a party. Breaches in our network security systems may hurt our ability to deliver services and our reputation, and result in liability. Our revenue growth is dependent upon our ability to build new distribution relationships, and to bring on new customers, of which there can be no assurance. The communications services industry is highly competitive and we may be unable to compete effectively. Industry consolidation could make it more difficult for us to compete. Our ability to provide services is often dependent on our suppliers and other service providers who may not prove to be effective. We rely on third party equipment suppliers who may not be able to provide us the equipment necessary to deliver the services that we seek to provide. We rely on the cooperation of other international carriers and/or postal telephone and telegraph companies (PTTs), who may not always cooperate with us in our attempts to serve a specific country or market. Service interruptions due to disputes could result in a loss of revenues and harm our reputation. Because we do business on an international level, we are subject to an increased risk of tariffs, sanctions and other uncertainties that may hurt our revenues. Additional taxation and government regulations of the communications industry may slow our growth, resulting in decreased demand for our products and services and increased costs of doing business. In addition to new regulations being adopted, existing laws may be applied to the Internet, which could hamper our growth. A large percentage of our current revenues are related to a small group of customers and loss of any of those customers could negatively impact our revenues. Risks Related to our Common Stock One stockholder may be deemed to control us through its stock ownership and its interests may differ from other stockholders . We are not likely to pay cash dividends on our Common Stock in the foreseeable future. Our Common Stock is subject to price volatility unrelated to our operations. Our Common Stock may be subject to the Penny Stock rules of the Commission, which will make transactions in our Common Stock cumbersome and may reduce the value of an investment in our Common Stock. The elimination of monetary liability against our directors, officers and employees under our certificate of incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers and employees. The issuance of our Common Stock upon the exercise of options or warrants or the conversion of outstanding convertible securities may cause significant dilution to our stockholders and may have an adverse impact on the market price of our Common Stock. We could use preferred stock to fund operations or resist takeovers, and the issuance of Preferred Stock may cause additional dilution.

Full 10-K form ▸

1071411--3/25/2010--FUSION_TELECOMMUNICATIONS_INTERNATIONAL_INC