1106645--8/19/2009--DEBT_RESOLVE

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{regulation, change, law}

{property, intellectual, protect}

{financial, litigation, operation}

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Cautionary Statements and Risk Factors Risks Related to Our Business Our independent registered public accounting firm s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern. We have a limited operating history at the Internet business on which to evaluate our potential for executing our business strategy. This makes it difficult to evaluate our future prospects and the risk of success or failure of our business. We have experienced significant and continuing losses from operations. In fiscal years 2007 and 2008, we have incurred total net losses from continuing operations for these two years of $15,866,472. If such losses continue, we may not be able to continue our operations. If we are unable to retain current DebtResolve system clients and attract new clients, or if our clients do not actively submit defaulted consumer debt accounts on our DebtResolve system or successfully promote access to the website, we will not be able to generate revenues or continue our DebtResolve system business. We may be unable to meet our future liquidity requirements. We may fail to successfully integrate acquisitions and reduce our operating expenses. If we are unable to implement our marketing program or if we are unable to build positive brand awareness for our company and our services, demand for our services will be limited, and we will not be able to grow our client base and generate revenues. We may not be able to protect the intellectual property rights upon which our business relies, including our licensed patents, trademarks, domain name, proprietary technology and confidential information, which could result in our inability to utilize our technology platform, licensed patents or domain name, without which we may not be able to provide our services. In the future, we may be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and which could limit our ability to use certain technologies in the future and thereby result in loss of clients and revenue. The intellectual property rights that we license from our co-founders are limited in industry scope, and it is possible these limits could constrain the expansion of our business. Potential conflicts of interest exist with respect to the intellectual property rights that we license from our co-founders, and it is possible our interests and their interests may diverge. If we cannot compete against competitors that enter our market, demand for our services will be limited, which would likely result in our inability to continue our business. We are dependent upon maintaining and expanding our computer and communications systems. Failure to do so could result in interruptions and failures of our services. This could have an adverse effect on our operations which would make our services less attractive to consumers, and therefore subject us to a loss of revenue as a result of a possible loss of creditor clients. James D. Burchetta possesses specialized knowledge about our business, and we would be adversely impacted if he were to become unavailable to us. In addition, we could issue blank check preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their voting rights, and provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable. Risks Related to Our Industry The ability of our DebtResolve system clients to recover and enforce defaulted consumer debt may be limited under federal, state, local and foreign laws, which would negatively impact our revenues. For all of our businesses, government regulation and legal uncertainties regarding consumer credit and debt collection practices may require us to incur significant expenses in complying with any new regulations. We face potential liability that arises from our handling and storage of personal consumer information concerning disputed claims and other privacy concerns. Government regulation and legal uncertainties regarding the Internet may require us to incur significant expenses in complying with any new regulations. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses, which as a smaller public company may be disproportionately high. Our industry is highly competitive, and we may be unable to continue to compete successfully with businesses that may have greater resources than we have. We are subject to ongoing risks of litigation, including individual and class actions under consumer credit, collections, employment, securities and other laws. We may not be able to hire and retain enough sufficiently trained employees to support our operations, and/or we may experience high rates of personnel turnover. We may not be able to successfully anticipate, invest in or adopt technological advances within our industry. We may not be able to anticipate, manage or adopt technological advances within our industry, which could result in our services becoming obsolete and no longer in demand. Risks Related to the Economy A poor performance by the economy may adversely impact our business.

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1106645--8/19/2009--DEBT_RESOLVE_INC