1102901--3/31/2006--Q_COMM_INTERNATIONAL

related topics

{customer, product, revenue}

{stock, price, share}

{cost, operation, labor}

{product, market, service}

{stock, price, operating}

{product, candidate, development}

{system, service, information}

{competitive, industry, competition}

{personnel, key, retain}

{property, intellectual, protect}

{provision, law, control}

{acquisition, growth, future}

We have no history of profitable operations. Continuing losses could exhaust our capital resources and force us to discontinue operations. Control by Management and Certain Major Shareholders Our margins have historically been low, which makes it difficult to achieve profitability. The future success of our business will require a substantial ongoing marketing effort on our part, including expending significant amounts of capital that could otherwise be used to purchase or develop new products. Most of our revenue growth is derived primarily from a single class of product prepaid wireless which makes us particularly vulnerable to changes in consumer preferences and market saturation. Most of our business is placed through a small number of brokers. The loss of any one of these accounts could reduce our revenues. We derive a significant amount of revenue from a single We derive a significant amount of revenue in our business from service contracts signed with merchants to operate our terminals. We currently depend upon a single PIN provider for the majority of our PIN supply. The industry in which we operate is highly competitive, has low barriers to entry and has rapidly changing technology. Increased competition could result in margin erosion, which would make profitability even more difficult to achieve. We depend on brokers and other intermediaries to distribute our POS terminals. We have no control over the prices suppliers charge us for their products. As a result, price increases could have a negative impact on our margins and profitability. If we do not protect our proprietary technology and intellectual property rights against infringement or misappropriation, and defend against third parties assertions that we have infringed on their intellectual party rights, we may lose our competitive position in the markets in which we operate. Retaining certain key personnel may be important to our continued success. If we cannot raise capital at a time when we need to do so, we may not be able to adequately and timely respond to competitive developments. Rapid growth could strain our internal resources, which could lead to a lower quality of customer service, reporting problems and delays in meeting important deadlines. If we do not upgrade our internal systems and controls we may not be able to manage this growth properly. The market price of our common stock has been volatile and may continue to fluctuate significantly because of various factors, some of which are beyond our control. The existence of outstanding options, warrants and convertible securities may preclude us from obtaining additional equity financing. We have a limited number of stockholders and our stock is thinly traded.

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1102901--3/31/2006--Q_COMM_INTERNATIONAL_INC