1071411--4/2/2007--FUSION_TELECOMMUNICATIONS_INTERNATIONAL

related topics

{system, service, information}

{product, market, service}

{acquisition, growth, future}

{competitive, industry, competition}

{stock, price, share}

{stock, price, operating}

{control, financial, internal}

{property, intellectual, protect}

{regulation, change, law}

{operation, international, foreign}

{cost, contract, operation}

{product, candidate, development}

We have a history of operating losses and, prior to our IPO, a 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. If we are unable to manage our growth or implement our expansion strategy, we may increase our costs without maximizing our revenues. The success of our planned expansion is dependent upon market developments and traffic patterns, which will lead us to make expenditures that may not result in increased revenues. We may be unable to adapt to rapid technology trends and evolving industry standards, which could lead to our products becoming obsolete. We are pursuing new lines of business, and introducing new services. In some cases, the technology for these services and/or the market for those services are untested. There can be no assurance of our ability to introduce future services on a timely basis or our ability to derive significant revenues from them. Our new services are dependent upon multiple service platforms, network elements, and back-office systems, as well as the successful integration of these items. There can be no assurance of the success of this development and integration. There can be no assurance that the planned migration of existing VoIP service customers onto our new infrastructure will be successful. If our information and processing systems for billing and client service are not properly implemented, it could harm our ability to bill and provide services effectively. If we do not operate our Softswitch technology effectively, many of the potential benefits of the new technology may not be realized. We may be impacted by current litigation regarding patent infringement. Breaches in our network security systems may hurt our ability to deliver services and our reputation, and result in liability. Our growth is dependent upon our ability to build new distribution relationships, and to bring on new customers, of which there can be no assurance. Our entry into new markets will rely upon our ability to obtain licenses to operate in those countries, and our ability to establish good working relationships with postal telephone and telegraph companies in order to interconnect to the telephone networks. There can be no assurance of our ability to accomplish either. 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 postal telephone and telegraph companies who may hinder our operations in certain markets. If we are unable to develop and maintain successful relationships with our joint venture partners, we could fail in an important market. Service interruptions 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. The success of our business depends on the acceptance of the Internet in emerging markets that may be slowed by limited bandwidth, high bandwidth costs, and other technical obstacles. Additional taxation and the regulation 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. Risks Related to our Common Stock Voting Control by Principal Stockholders We Do Not Intend to Pay Dividends on Common Stock.

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1071411--4/2/2007--FUSION_TELECOMMUNICATIONS_INTERNATIONAL_INC