1315320--4/15/2009--InfoLogix

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{stock, price, share}

{debt, indebtedness, cash}

{acquisition, growth, future}

{customer, product, revenue}

{system, service, information}

{personnel, key, retain}

{control, financial, internal}

{stock, price, operating}

{property, intellectual, protect}

{interest, director, officer}

{competitive, industry, competition}

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{condition, economic, financial}

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Risk Relating to Our Ability to Continue as a Going Concern Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern. Risks Relating to Our Indebtedness We have violated certain financial covenants to our senior credit facility and while we are in discussions to amend the facility, including a waiver of those violations, there can be no assurance that we will obtain any such amendment or waiver. We require significant cash flows to satisfy our debt obligations and earn out payment obligations and do not currently have sufficient cash flow or financing alternatives to meet those obligations. We will need additional financing to fund our operations and finance our growth; we may be unable to obtain financing on terms acceptable to us. The covenants in our credit facility may restrict our operations, which could inhibit our growth strategy and have a negative effect on our results of operations. Our indebtedness could adversely impact our financial condition. Risks Relating to our Business and Industry We have incurred losses in the past and our ability to operate profitably in the future is uncertain. Our revenues and profitability may be adversely affected by deterioration in economic, business or industry conditions. Increasing our profitability and managing our growth are necessary to achieve our strategic objectives. We may engage in acquisitions that could disrupt our business, could be difficult to integrate with our existing operations, cause dilution to our stockholders and harm our business, operating results and financial condition, or we may be unable to find suitable acquisition candidates consistent with our strategic objectives. We depend on retaining our existing senior management team and recruiting and retaining additional senior managers in order to be successful, and the loss of or failure to recruit key executives could materially and adversely affect our business. We are dependent on our allied customers and key industry relationships. We depend on third-party suppliers and manufacturers to manufacture our infrastructure products. If these third parties experience any delay, disruption or quality control problems in their operations, or cease manufacturing our products, we could lose market share and revenues, and our reputation may be harmed. If we are unable to provide our third-party suppliers and manufacturers with an accurate and timely forecast of our component and material requirements, we may experience delays in the manufacturing of our products and the costs of our products may increase. Our industry is highly competitive, and competitive pressures from existing and new companies may have a material adverse effect on our business, revenues, growth rates, market share, and profitability. If we fail to continue to introduce new products and services that achieve sufficient market acceptance on a timely basis, we will not be able to compete effectively and we will be unable to increase or maintain revenues and profitability. If we are unsuccessful in expanding our professional services, we may fail to achieve our objectives. Any failure in our ability to offer high-quality support and other services could have a material adverse effect on our sales and results of operations. The success of our business depends on the continuing development, maintenance and operation of our information technology systems. If we fail to maintain and upgrade our information technology systems to meet the demands of our customers and protect our information technology systems against risks that we cannot control, our business may be adversely affected. If we are unable to protect our intellectual property rights or if third parties assert we are in violation of their intellectual property rights, we could be prevented from selling our products, the time and attention of management could be diverted from operating our business and our ability to attract new customers and retain current customers could be hampered, any of which could have a material adverse effect on our business, financial condition and results of operations. We rely upon third parties for technology that is critical to our products, and if we are unable to continue to use this technology and future technology our ability to offer competitive products could be harmed and our costs of production could increase. Our products are complex and may contain undetected and unexpected defects, errors or failures. Because we often sell our products on a purchase order basis, we are subject to uncertainties and variability in demand from our customers. Our products are subject to certain government regulations and noncompliance with, or a change in, those regulations could have a material adverse effect on our business, financial condition, and results of operations. Our growth objectives may depend on our ability to manage successfully potential international expansion. Armed hostilities, terrorism, natural disasters, or public health issues could harm our business. Our directors and executive officers beneficially own a substantial number of shares of our common stock, which give them significant control over certain major decisions. Risks Relating to our Common Stock Our stock may be delisted from the NASDAQ Capital Market if the closing bid price for our common stock is not maintained at $1.00 per share or higher. Applicable SEC rules governing the trading of "penny stocks" may limit the liquidity of our common stock which may affect its trading price. The market price of our common stock may continue to be highly volatile and continue to be subject to wide fluctuations. If a substantial number of our shares of common stock are sold in a short period of time, the market price of our shares of common stock could decline significantly. There may be a limited public market for our securities. We do not expect to pay dividends for the foreseeable future. Failure to achieve and maintain effective internal controls could have a material adverse effect on our business, operating results and stock price. Provisions in our organizational documents and under Delaware law may delay or prevent attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us.

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1315320--4/15/2009--InfoLogix_Inc