1450390--4/7/2010--MULTISYS_LANGUAGE_SOLUTIONS

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{control, financial, internal}

{customer, product, revenue}

{product, market, service}

{stock, price, share}

{stock, price, operating}

{acquisition, growth, future}

{property, intellectual, protect}

{personnel, key, retain}

{product, candidate, development}

{cost, contract, operation}

{competitive, industry, competition}

{operation, natural, condition}

{operation, international, foreign}

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{cost, regulation, environmental}

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RELATED TO OUR COMPANY AND OUR INDUSTRY We are dependent upon one third-party manufacturer and marketing company, over whom we have very limited control. Through marketing initiatives with Xiamen, our strategic business partner in China, our target consumer market may not be receptive to the software, the cost of the product may be prohibitive and Chinese consumers may not purchase our language education software programs. The Exclusive Sellers Agreement that has been assigned to us could terminate after five years and not be renewed. Potential customers may not be willing to pay the retail price for our products. Distributors and dealers may not continue to carry our products if we fail to meet their standards. We may be unable to establish new distributors or dealers in the balance of our marketing territory if our performance with those channels during our initial launch does not demonstrate a level of opportunity consistent with their standards. As a result of our limited operating history, we may not be able to correctly estimate our future operating expenses, which could lead to cash shortfalls. We are a development stage company, have earned minimal revenues, and have incurred net loss and accumulated deficit during the development stage. There is no guarantee that we will ever earn a profit. If we are unable to obtain financing in the amounts and on terms and dates acceptable to us, we may not be able to expand or continue our operations and development and so may be forced to scale back or cease operations or discontinue our business. You could lose your entire investment. Our company was recently formed, and we have not proven that we can generate a profit. If we fail to generate significant income and achieve profitability, investment in our securities may be worthless. We rely on our management and will be harmed if any or all of them leave. We may find it very difficult or impossible to find suitable employees in the future or to find third party consultants to assist us. Our officers and directors own a large percentage of our voting stock, smaller shareholders will have minimal influence over shareholder decisions. There are many competitors in our market and we may not be able to effectively compete against them. RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL If we are unable to obtain additional capital, we may have to curtail or cease operations. We have no operating history that makes an evaluation of our business difficult. We have a new and unproven business model, a new technology and may not generate sufficient revenues for our business to survive or be successful. Because of our limited resources and the speculative nature of our business, there is substantial doubt as to our ability to operate as a going concern. We have no operating history and expect to incur losses in the future. Our future operating results are likely to be volatile and may cause our equity value to fluctuate. We are subject to all of the risks and uncertainties associated with marketing new products in China, all of which may have an adverse impact on our business and results of operations. Current or future government regulations may add to our operating costs. If we fail to attract end users, distributors or professional sales personnel for our products, it will have an adverse impact on our business. If we do not effectively educate end users on the benefits of language education software being sold by the company, we will not have sufficient demand for our products. Delivery of our products may be interrupted due to natural disasters or other causes. RISKS RELATED TO OUR STOCK There is not now, and there may not ever be, an active market for our common stock. If our stock trades at a relatively small volume, shareholders may not be able to sell their shares without depressing the market price of the shares. Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations and the NASD s sales practice requirements, which may limit a stockholder's ability to buy and sell our stock. We have incurred increased costs as a result of being a public company. RISKS RELATED TO OUR INTELLECTUAL PROPERTY The intellectual property rights related to the educational language software products are valuable, and our inability to protect them could reduce the value of our products, services and brand.

Full 10-K form ▸

1450390--4/7/2010--MULTISYS_LANGUAGE_SOLUTIONS_INC