746210--3/27/2008--GLOWPOINT

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{system, service, information}

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{debt, indebtedness, cash}

{financial, litigation, operation}

{customer, product, revenue}

{property, intellectual, protect}

{control, financial, internal}

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{loss, insurance, financial}

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Risks Relating To Our Securities We need future capital to refinance our existing obligations and for working capital. If we are able to raise additional capital, it may dilute our existing stockholders or restrict our ability to operate our business If we are unable to refinance our existing obligations, it would have a material adverse effect on the Company Our consolidated financial statements are prepared assuming we are a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from being unable to raise the necessary additional capital, renegotiate or refinance the Senior Secured Notes, and realize projected operational savings. We have reported weaknesses in our internal controls for financial reporting. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders may not be confident in our financial reporting, which would harm our business and the price of our common stock. We may be required to issue more shares of common stock upon adjustment of the conversion price of our outstanding Series C Preferred Stock and the Senior Secured Notes or the exercise price of our outstanding warrants, resulting in dilution of our existing stockholders. Failure to achieve a minimum EBITDA will increase the interest rate of the Senior Secured Notes, which may result in dilution of our existing stockholders. Sales of substantial amounts of common stock in the public market could reduce the market price of our common stock and make it more difficult for us and our stockholders to sell our equity securities in the future. We do not believe the Series B warrants are exercisable. If our position is challenged and we do not prevail, there will be significant dilution. We do not intend to pay any dividends on our common stock. We expect our future operating results to vary from quarter to quarter, and increase the likelihood that we may fail to meet the expectations of securities analysts and investors at any given time. Our common stock is thinly traded and subject to volatile price fluctuations. We may be subject to litigation resulting from common stock volatility and other factors, which may result in substantial costs and a diversion of our management s attention and resources and could have a negative effect on our business and results of operations. Penny stock regulations may impose certain restrictions on the marketability of our securities. Risks Related to Our Business Our history of substantial net losses may continue indefinitely and may make it difficult to fund our operations. Our success is highly dependent on the evolution of our overall market. Our future plans could be adversely affected if we are unable to attract or retain key personnel. We may have difficulty managing our growth. Our gross revenue may decline significantly due to the planned decline of our ISDN resale business, attributable in part to the cessation of a customer contract. If our actual liability for sales and use taxes and regulatory fees is different from our accrued liability, it could have a material impact on our financial condition. Our failure to obtain or maintain the right to use certain intellectual property may negatively affect our business. We may not be able to protect the rights to our intellectual property We depend upon our network providers and facilities infrastructure. We depend upon suppliers and have limited sources of supply for some services. Our network could fail, which could negatively impact our revenues. Our network depends upon telecommunications carriers who could limit or deny us access to their network or fail to perform, which would have a material adverse effect on our business. We compete in a highly competitive market and many of our competitors have greater financial resources and established relationships with major corporate customers. Our Glowpoint managed video services have limited market awareness. As we expand our Glowpoint network and its use, any system failures or interruptions in our network may cause loss of customers. We may be unable to adequately respond to rapid changes in technology. We incur significant accounting and other control costs that impact our financial condition. Other issues and uncertainties may include:

Full 10-K form ▸

746210--3/27/2008--GLOWPOINT_INC