1093546--3/31/2006--STONEPATH_GROUP

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We need additional capital to meet our existing obligations and implement our business strategy. The issuance of additional securities may cause additional dilution to the interests of our existing shareholders. The exercise or conversion of our outstanding options, warrants or other convertible securities or any derivative securities we issue in the future will result in the dilution of our existing shareholders and may create downward pressure on the trading price of our common stock. We are unable to make further acquisitions without the consent of the lender under our domestic credit facility. Our earnings are subject to non-cash charges relating to the amortization of intangibles. If we are unable to profitably manage and integrate the companies we acquire, are unable to acquire additional companies, or are unable to grow our existing operations, we will not achieve our growth and profit objectives. We rely on a small number of large customers, the loss of which would have a negative effect on our results of operations. The risks associated with international operations could adversely affect our operations and ability to grow. Terrorist attacks and other acts of violence or war may affect any market on which our shares trade, the markets in which we operate, our operations and our profitability. We depend on the continued service of certain executive officers. We can not assure you that we will be able to retain these persons. We face intense competition in our industry. Our stock price may be volatile due to factors under, as well as out of, our control. The accounting treatment that we must apply to the warrant and conversion features contained within the terms of our credit facility may result in periodic volatility of our earnings while these features of the facility are outstanding. Our cash flow will be adversely affected in the future once we make use of our consolidated net operating loss carryforward available to offset future taxable income. Because we are a holding company, we depend on receiving distributions from our subsidiaries and we could be harmed if such distributions could not be made in the future. We believe our industry is consolidating and if we cannot gain sufficient market presence, we may not be able to compete successfully against larger global companies. We may be required to incur material expenses in defending or resolving outstanding legal disputes which would adversely affect our results of operations. We have a limited operating history upon which you can evaluate our prospects.

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1093546--3/31/2006--STONEPATH_GROUP_INC