809012--9/27/2007--HOST_AMERICA

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In addition to risk and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and our company could materially impact our future performance and results. We have provided below a list of these risks factors that should be reviewed when considering our business and securities. These are not all the risks we face, and other factors currently considered immaterial or unknown to us may impact our future operations. We have a history of losses and our future profitability on a quarterly or annual basis is uncertain, which could have a harmful effect on our business and the value of our common stock. Our independent registered public accounting firm have indicated substantial doubt about our ability to continue as a going concern. If we are unable to successfully implement our business plan and secure equity financing, we may be unable to continue as a going concern. Material weaknesses or deficiencies in our internal controls over financial reporting could harm stockholder and bus ness confidence in our financial reporting, our ability to obtain financing or other aspects of our business. Material weaknesses or deficiencies in our internal controls over financial reporting could harm stockholder and bus ness confidence in our financial reporting, our ability to obtain financing or other aspects of our business. We will require additional capital to implement our business plan, and, if additional capital is not available, we may have to curtail or cease operations. We are subject to pending litigation, which could have a material adverse effect and impact on our liquidity, financial condition and operating results, on the trading price of our securities and on our ability to access the capital markets. Material adverse legal judgments, fines, penalties or settlements could adversely affect our financial health and prevent us from fulfilling our obligations under our outstanding indebtedness. Our senior management team is required to devote significant attention to matters arising from the current litigation. As such, our management is unable to devote the majority of their time to implementing our business plan. Because our share price has been volatile, we may be the target of additional securities litigation, which is costly and time-consuming to defend. Effective control by current officers and directors and significant sales of shares by officers and directors could have a negative impact on share price. The Board of Directors has identified the asset sales as the most suitable method to meet our expected/scheduled liquidity needs. The sale of all of our assets related to our food service business will mean that future revenues will be solely dependent on our energy conservation division. Our future success will depend to a large extent on the success of our energy conservation product. Our energy conservation segment competes in the energy conservation industry with companies that have more financial resources than we have and there can be no assurance that our products will compete successfully. Upon the closing of the proposed sale of our food service business, we will be required to make substantial payments to our creditors. We will require additional capital to implement our business plan, and if additional capital is not available, we may have to curtail or cease all or part of our operations. Additionally, future fundraising efforts will dilute current shareholder ownership interest in the Company. If our shareholders do not approve the proposed sale of our food service business and if those sales are not consummated, we may not be able to maintain our current level of operations. The consummation of the proposed sale of our food service business is subject to a number of conditions that must be satisfied. We may be required to reduce or eliminate some or all of our sales and marketing efforts or research and development activities if we fail to obtain additional funding that may be required to satisfy future capital needs. Any decrease in capital spending by our potential end user customers could have a material adverse effect on our business and results of operations. Any failure to obtain and sustain market acceptance of our product could have a material adverse effect on our plan for growth and on our business and results of operations. Any changes in government regulations may adversely affect consumer demand for our products. Our energy management division has a limited operating history upon which to evaluate its potential for future success. Due to our limited operating history, it is difficult to forecast the future success of our energy management division. Our energy services segment has incurred significant operating losses since inception and may not achieve or sustain profitability in the future. The energy services segment s failure to achieve profitability could result in our failure to continue as a going concern. Our energy services segment currently experiences volatility in its cash flows and is subject to an extended sales cycle in connection with the bidding process, purchasing of materials and the installation and testing of electrical systems. This business cycle could lead to significant operating losses for the foreseeable future. Patents and other proprietary rights provide uncertain protection of our proprietary information and our inability to protect a patent or other proprietary right may harm our business. We currently have limited trademark or patent protection with respect to the energy conservation product developed. Our failure to protect our proprietary rights could result in substantial operating losses and the failure to effectively pursue our energy conservation business plan. Successful infringement claims by third parties could result in substantial damages, lost product sales and the loss of important proprietary rights. Our energy conservation segment faces an inherent risk of exposure to product liability claims in the event that the use of its products results in injury. Product liability claims that fall outside of our insurance coverage would further contribute to our negative cash flows. Our energy conservation segment faces an inherent risk of exposure to product liability claims in the event that the use of its products results in injury. Negative publicity related to a product liability claim could lead to the loss of customers and corresponding revenues. Our energy management division does not have any long-term agreements with its customers and its future success is dependent on repeat business and obtaining new customers. The energy management industry and products designed to maximize energy efficiency are subject to rapidly changing customer demands and preferences in light of rapid technological advances. We will face substantial losses should our products not meet the demands of customers. The energy management industry is highly competitive. Our failure to effectively compete in the industry could result in operating losses and the inability to continue as a going concern. There is limited reliable, comprehensive data available regarding the size of the energy management industry and the historic and future expected growth of such industry. We may be unable to implement our business plan, which is based on available data, resulting in operating losses and the potential inability to continue as a going concern. A decrease in electric retail rates could lessen demand for our energy conservation product. Failure to effectively market our energy conservation product could impair our ability to sell large quantities of our product. We depend upon our key personnel and may experience difficulty attracting and retaining key employees. The failure to retain existing management or the failure to hire new talent as needed could result in our inability to profitably and professionally run our energy management division. Any future fundraising efforts will dilute current shareholder ownership interests. Any investor who purchases our securities could face future dilution as we pursue future equity fundraising. Our common stock currently trades on the OTCBB trading platform, which could result in limited liquidity for any investor purchasing our securities. Our common stock is considered penny stock, which may make selling the common stock difficult. We do not plan to pay cash dividends to holders of common stock. Investors must rely on appreciation of our securities as the sole method to realize a gain on their investment. Historically, our stock price has been volatile, which may make it more difficult to resell shares at prices that are attractive

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809012--9/27/2007--HOST_AMERICA_CORP