1095276--3/31/2009--WHITNEY_INFORMATION_NETWORK

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We received a notice of default on March 27, 2009 from Rich Global relating to alleged events of default by us under our Rich Dad Licensing Agreement and related agreements and if these agreements are terminated it will have a material adverse effect on our financial results. We have a high concentration of sales from our Brand and termination of this relationship would have an adverse impact on our financial results. Our uses of cash are restricted by the licensing agreement with Rich Global, LLC. Any decrease in the popularity of the Brand would have an adverse impact on our financial condition. If we are unable to successfully conclude the litigation, governmental investigations and inquiries pending against us, our business, financial condition, results of operations and growth prospects could be adversely affected. If we do not successfully introduce new programs, products and services, our growth rate and revenue may be reduced. We face significant competition in our markets. Laws and regulations can affect the operations of our business and may limit our ability to operate in certain jurisdictions. Failure to comply with federal and state laws regulating the marketing and sale of proprietary educational courses could significantly reduce the demand for our course offerings. We could have liability or our reputation could be damaged if we do not protect student data or if our information systems are breached. If there is a material change in relationships with our students or in the demand by potential students for our services, it could have a significant impact on our business. The turbulent conditions in the financial and credit markets may affect the availability and cost of capital and may prevent us from obtaining capital to fund growth opportunities. Our results of operations are materially affected by economic conditions including significant price increases, inflation, recession or adverse events related to various industries. Additionally, other changes experienced by our students including the willingness to trade or invest in securities or real estate could influence discretionary spending contributing to uncertainty in our future results of operations. Our ability to offer courses may be affected by natural disaster, strikes and other unpredictable events. Expansion into additional markets outside the United States, if successful, will subject us to additional risks inherent in international operations. The current market price of our common stock significantly exceeds our book value per share and increases the risk that our market price per share may decline in the future. Our former Chairman and Chief Executive Officer, Mr. Whitney, beneficially owns 5,227,300 shares of our common stock which constitutes approximately 44.5% of our outstanding common stock, which means he has the ability to significantly influence any matter requiring stockholder approval or prevent a change of control in our Company. Our Board of Directors, without stockholder approval, may issue preferred stock which could reduce the voting power or rights of our other stockholders and make it more difficult for a third party to acquire a majority of our outstanding voting stock. Our introduction of new senior executives, or the loss of any of our key executive personnel, or high performing instructors, could disrupt our operations and reduce our profitability. We have material weaknesses in our internal control over financial reporting which could adversely affect our ability to report our financial condition and results of operations accurately and on a timely basis.

Full 10-K form ▸

1095276--3/31/2009--WHITNEY_INFORMATION_NETWORK_INC