1095276--4/2/2007--WHITNEY_INFORMATION_NETWORK

related topics

{control, financial, internal}

{interest, director, officer}

{condition, economic, financial}

{loan, real, estate}

{regulation, government, change}

{financial, litigation, operation}

{cost, contract, operation}

{personnel, key, retain}

{stock, price, share}

{investment, property, distribution}

{provision, law, control}

{product, market, service}

to determine whether we violated any securities laws in connection with (i) the efficacy or trading success of our financial markets education programs, and, (ii) our acquisition of certain other companies, may result in penalties that could have an adverse affect on us, perhaps materially so. The investigation by the United States Department of Justice in the Eastern District of Virginia in connection with certain of our marketing activities could result in fines or penalties that could have an adverse affect on us. Class action lawsuits filed against us could result in fines or penalties that could have a material affect on our financial results. We have expended significant time and resources to restate our previously submitted Consolidated Financial Statements for years 2001 through 2005. As a result, our business was adversely affected by the time and expense devoted by our staff and management. In addition, our investors may call into question future Consolidated Financial Statements issued by us. We currently have material weaknesses in our internal controls related to our accounting processes and financial records which may result in inaccurate financial reporting, restatements and /or the inability to prevent fraud. Failure to develop a system to evaluate the effectiveness of our internal controls may impact our ability to accurately report our financial results or prevent financial fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which could reduce our ability to obtain subsequent financing, if necessary, as well as reduce the trading price of our common stock. Failure to maintain an effective system of internal controls may impact our ability to accurately report our financial results or prevent financial fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would reduce our ability to obtain subsequent financing, if necessary, as well as reduce the trading price of our common stock. Issues discovered while evaluating the internal controls could result in having to expend significant time and resources to improve our internal controls which if not successful could adversely affect our reputation and /or the investor s perception of us and lead to other issues. Accounting errors could adversely affect our ability to meet our reporting obligations, could result in future restatements and/or cause material weaknesses in our internal control over financial reporting. Inadequate review of our systems and processes could result in accounting errors, inaccurately reported financial results, financial fraud, and an inability to adequately safeguard our assets. As a result, current and potential stockholders could lose confidence in our financial reporting, which would reduce our ability to obtain subsequent financing, if necessary, as well as reduce the trading price of our common stock. Volatility in the real estate or securities markets may reduce interest in our educational courses, thereby reducing our revenue. Failure to comply with federal and/or state laws regulating the marketing and sale of our educational courses could harm our reputation and reduce the demand for our course offerings. Inability to successfully introduce new programs, products and services would negatively impact our revenue growth. 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 Chairman and Chief Executive Officer, Russell A. Whitney and Ingrid Whitney, also an employee, own approximately 44% of our outstanding common stock, which means they have the ability to significantly influence any matter requiring stockholder approval or prevent a change of control in our Company. Outside business ventures of Mr. Whitney could result in conflicts of interest that could negatively impact our ability to attract investors. Our relationship with third party providers who introduce real estate investment opportunities to our students may subject us to liability. The loss of any of our key personnel, especially Mr. Whitney and high performing instructors, could disrupt our operations and reduce our profitability. The loss of Board of Director members has created a non-independent Board and could create a perception of a lack of stability. 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 voters stock.

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1095276--4/2/2007--WHITNEY_INFORMATION_NETWORK_INC