1092492--3/25/2010--AXESSTEL

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{product, market, service}

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{product, candidate, development}

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{competitive, industry, competition}

{personnel, key, retain}

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If we cannot return to and sustain profitable operations, we will need to raise additional capital to continue our operations, which may not be available on commercially reasonable terms, or at all, and which may dilute your investment. The impact of the current economic climate and tight financing markets have impacted consumer demand for our products, our customer s ability to finance new networks, and our ability to secure financing to support the manufacture and sale of our products. We purchase products from our manufacturers on a purchase order basis and they are not obligated to accept any purchase order on the terms we request or at all. We rely on a small number of customers for substantially all of our revenues and the loss of one or more of these customers would seriously harm our business. We have recently transitioned our product development efforts to focus on collaborative design with third parties, and may face additional risks related to our reliance on third party designers and manufacturers. Our auditors have expressed substantial doubt regarding our ability to continue as a going concern. If we are unable to continue as a going concern, we may be required to substantially revise our business plan or cease operations. We depend in substantial part on the adoption and acceptance of fixed wireless telecommunications in developing countries and regions to create demand for our products. Our international sales and operations subject us to various risks associated with, among other things, foreign laws, policies, economies and exchange rate fluctuations. We depend on our distributor relationships to provide letters of credit to support our sales of products to customers in Venezuela, which accounted for 18% of our revenues in 2009. We expect to experience competitive pricing pressure for our products, which may impair our revenue growth, gross margins and ability to sustain profitability. We expect our operating results to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline. Our customers are primarily telephone operators in developing countries, which may create difficulties in the collection of our accounts receivable. We depend on third party manufacturers to produce all of our products. We may experience delays in manufacturing and our costs may increase if we are unable to accurately forecast all of our needs. A substantial portion of the products we sell are sold on a purchase order basis. Although these purchase orders are generally not cancelable, customers may decide to delay or cancel orders, which could negatively impact our revenues. If we do not compete effectively in the fixed wireless telecommunications market, our revenues and market share will decline. We may not be able to compete effectively against larger and better capitalized competitors. We will need to develop new products and features to meet rapidly evolving industry standards and the changing needs of our customers in order to be successful. From time to time we evaluate potential acquisitions which, if consummated, may subject us to additional risks and uncertainties, and may result in substantial dilution to our stockholders. For most of our products, we rely upon a license and chipsets from Qualcomm Incorporated for CDMA technology that is critical to our products. We may experience long sales cycles for our products. We must expand our customer base in order to grow our business. Any failure to maintain sales through agents and other third-party resellers, distributors and manufacturers of complementary technologies could harm our business. If we are unable to attract and retain key personnel necessary to operate our business, our ability to develop and market our products successfully could be harmed. Our competitive position could be seriously damaged and we may incur substantial expenses if we become party to lawsuits alleging that our products infringe the intellectual property rights of others. Failure to adequately protect our trademark rights could cause us to lose market share and cause our sales to decline. We may face litigation that could significantly damage our business and financial condition. Our failure to predict and comply with evolving wireless industry standards, including 3G standards, could reduce our ability to introduce and sell new products. We may not be able to develop products that comply with applicable government regulations. Our common stock is quoted on the OTC Bulletin Board, which may be detrimental to investors. Our common stock is subject to penny stock rules. Nevada law and provisions in our charter documents may delay or prevent a potential takeover bid that would be beneficial to common stockholders.

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1092492--3/25/2010--AXESSTEL_INC