1093434--3/15/2006--AETHER_HOLDINGS

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1. Increases in prepayment rate adversely affect us. 2. An increase in interest rates adversely affects the book value of our MBS. 3. If we are unable to renew or obtain additional sufficient funding on favorable terms or at all, we could incur losses. 4. Our cash balances and cash flows may become limited relative to our cash needs and our borrowings could force us to sell assets under adverse market conditions. 5. Limitations on our ability to raise additional capital through sales of shares of our capital stock may restrict our ability to address liquidity needs through stock issuances and may limit our ability to expand our MBS portfolio by raising additional capital through such stock offerings. 6. We may change our investment policies and guidelines without stockholder approval 7. Competition may increase and negatively impact our business 8. Defaults on the mortgage loans underlying our MBS may reduce the value of our investment portfolio and harm our results of operations 9. A prolonged economic slow-down, a lengthy or severe recession or declining real estate values could harm our operations 10. Differences in timing of interest rate adjustments on our acquired securities and on our borrowings adversely affect our MBS business and the returns on the portion of our cash we invest in MBS. 11. Interest rate caps could reduce the returns from our business 12. Hedging against interest rate exposure could adversely affect performance of our portfolio of MBS 13. We are dependent on FBR to assist us in managing the portfolio of MBS 14. The manager of our MBS portfolio, FBR, may have a conflict of interest 15. FBR s past performance or the performance of other companies that invest in MBS may not be indicative of how our MBS portfolio will perform 16. Changes in our business strategy may adversely affect out MBS portfolio and near term earnings. 1. Loss of Investment Company Act exemption would adversely affect us 2. We may not be able to realize value from our tax loss carryforwards 3. We may not be able to use our tax loss carryforwards because we may not generate taxable income 4. The IRS could challenge the amount of our tax loss carryforwards 5. We expect to be subject to the alternative minimum tax and our net loss carryforwards would not offset that tax in its entirety 6. The IRS may seek to impose the accumulated earnings tax on some or all of the taxable income we retain 7. Possible changes in legislation could negatively affect our investments 8. Limits on ownership of our common stock could have an adverse consequence to you and could limit your opportunity to receive a premium on our stock 1. We may be required to indemnify the purchasers of our EMS, Transportation and Mobile Government businesses. 1. Our success in identifying and implementing strategic alternatives may impact our business. 2. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses

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1093434--3/15/2006--AETHER_HOLDINGS_INC