1411658--5/1/2009--Digitiliti

related topics

{product, market, service}

{stock, price, share}

{acquisition, growth, future}

{system, service, information}

{control, financial, internal}

{debt, indebtedness, cash}

{interest, director, officer}

{cost, contract, operation}

{property, intellectual, protect}

{regulation, change, law}

{customer, product, revenue}

Risks Related to Our Business We have not recorded annual profitable operations since our inception, and continued losses may require us to curtail or terminate our business operations. Our substantial short term debt could adversely affect our financial condition and our ability to continue our present and planned business operations. Our substantial indebtedness could have important adverse consequences on our ability to carry on our present and planned business operations. Despite our current debt position, we may still need to incur substantial additional debt or we will be unable to continue our planned operations. We have deficiencies in our internal controls that could adversely affect our financial statements reporting, which could cause our financial statements to be inaccurate or un-auditable. If we fail to develop new products, or if we incur unexpected expenses or delays in product development, we may lose our competitive position and incur substantial additional losses on our operations or may be required to curtail or terminate our present and planned business operations. Our business may be adversely affected by downturns in the economy that may limit the sale of storage solutions and our present and planned business operations may fail as a result. We depend on our key personnel, and the loss of any would impair our ability to compete and gain any market share in the storage solutions industry that we presently serve and intend to serve. Our intellectual property rights or contractual provisions may not protect us and our products and as a result, our business may fail. We need additional capital to continue or expand our current business operations, and our business operations may prove unsuccessful without additional funding. We face a higher risk of failure and loss of our entire business because we cannot accurately forecast our future revenues and operating results. Our limited resources may make it harder for us to manage growth, and the future of our business model maybe adversely harmed if we are unable to adequately manage this growth. If we do not respond effectively to technological change, our products and services could become obsolete and our business may fail. We face competition for customers that could effectively keep us from being successful in our planned business operations. Our storage systems may fail, and we may be subject to substantial liabilities and could lose a substantial portion of our customer base. Our operating results could be impaired if we become subject to burdensome government regulation and legal uncertainties, all of which would increase our cash requirements and may cause our business to fail. The Internet may fail or providers of these services may increase their costs for these and related services, which could increase our costs and make our services less attractive to customers. Our auditor s Going Concern qualification in our consolidated financial statements might create additional doubt about our ability to stay in business, potentially resulting in total stockholder loss on investment. Multiple acts of God could result in data loss and subject us to substantial liabilities and the loss of our business and customers. Risks Related to Our Common Stock our common stock is penny stock under Securities and Exchange Commission Rules and Regulations, which means there is a very limited trading market for our shares. Due to the substantial instability in our common stock price, you may not be able to sell your shares at a profit or at all, and as a result, any investment in our shares could be totally lost. Our common stock has a limited trading history, and it will be difficult to determine any market trends or prices for our shares where this present limited market is believed to be based primarily on supply and demand. The sale or potential sale of shares of our common stock that may become publicly tradable under Rule 144 in the future will have a severe adverse impact on any market that develops for our common stock , and you may lose your entire investment or be unable to resell any shares in us that you purchase . We presently have a very limited public float in our shares of common stock that can adversely affect the market price.

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1411658--5/1/2009--Digitiliti_Inc