844143--2/3/2010--JOE'S_JEANS

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{product, market, service}

{customer, product, revenue}

{stock, price, operating}

{stock, price, share}

{condition, economic, financial}

{investment, property, distribution}

{operation, natural, condition}

{acquisition, growth, future}

{debt, indebtedness, cash}

{operation, international, foreign}

{loan, real, estate}

{cost, regulation, environmental}

{personnel, key, retain}

{property, intellectual, protect}

{system, service, information}

Our success will depend on our success in increasing sales, opening and operating our retail stores and expanding our product offerings. Leasing real estate exposes us to possible liabilities and losses. Our business may be negatively impacted as a result of the current uncertainty in the United States economy. If we cannot meet the Nasdaq Capital Market maintenance requirements and Nasdaq rules, Nasdaq may delist our common stock, which could negatively affect the price of the common stock and your ability to dispose of or obtain accurate quotations as to the market price of our common stock. We face risks associated with constantly changing fashion trends, including consumer's response to our Joe's brand. Our business could be negatively impacted by a change in consumer demand for denim in the marketplace. We face intense competition in the denim industry. A portion of our net sales and gross profit is derived from a small number of large customers. Our business could be negatively impacted by the financial health of our retail customers. Our business could suffer as a result of a manufacturer's inability to produce our goods on time and to our specifications or if we need to replace manufacturers. Increases in the price of raw materials or their reduced availability could increase our cost of goods and decrease our profitability. We are dependent on our relationships with our vendors. In order to effectively manage growth, we are dependent on our financing arrangements and our cash flow from operations. Most of our tangible assets are pledged under our agreements with CIT. We may be unable to repay our debt associated with our agreement to purchase a property to be used as corporate headquarters, warehouse and distribution center. We may be unable to effectively manage our growth related to providing internal warehouse and distribution services. As a result, our business could be adversely affected. As a result of our completion of the merger with JD Holdings and the issuance of 14,000,000 shares of our common stock, Mr. Dahan may be able to exert significant influence and control over us as a result of his percentage of stock ownership, position as an executive officer and membership on our Board of Directors. Our future success depends on our ability to attract and retain talented personnel and retain our key employees, including our chief executive officer and creative director. In the event we seek additional capital through equity or debt offerings, our existing stockholders may be diluted or we may be unable to find additional capital on terms favorable to us and our stockholders. Our common stock price is volatile and may decrease. Our directors and management beneficially own a large percentage of our common stock. The seasonal nature of our business makes management more difficult, severely reduces cash flow and liquidity during parts of the year and could force us to curtail our operations. If an independent manufacturer of ours fails to use acceptable labor practices, our business could suffer. Our trademark and other intellectual property rights may not be adequately protected outside the United States and some of our products are targets of counterfeiting. Our ability to conduct business in international markets may be affected by legal, regulatory, political and economic risks.

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844143--2/3/2010--JOE'S_JEANS_INC.