855612--3/15/2010--ZIX

related topics

{system, service, information}

{condition, economic, financial}

{stock, price, share}

{product, market, service}

{competitive, industry, competition}

{property, intellectual, protect}

{personnel, key, retain}

{acquisition, growth, future}

Our Email Encryption business depends upon customers using email to exchange confidential information, and a significant shift of those messages to other communication channels could impair our growth prospects and negatively affect our business, financial condition and financial results. Public key cryptography technology used in our businesses is subject to technology integrity risks that could reduce demand for our products and services and could negatively affect our business, financial condition and financial results. The growth of our business may require significant investment in systems and infrastructure with no guarantee of revenue, which could impair our profitability and negatively affect our business, financial condition and financial results. We face strong and increasing competition, which could negatively affect our business, financial condition and financial results. Some competitors have advantages that may allow them to compete more effectively than us, which could negatively affect our business, financial condition and financial results. We plan to increasingly rely on third party distributors to help us market our Email Encryption products and services, and our failure to succeed in those relationships could negatively affect our business, financial condition and financial results. Our business substantially depends on market acceptance of our Email Encryption service, and our failure to achieve market penetration could negatively affect our business, financial condition and financial results. Unfavorable economic and political environments could negatively affect our business, financial condition and financial results. Our failure to keep pace with rapid technology changes could have a negative impact on our business, financial condition and financial results. If our products do not work properly, our business, financial condition and financial results could be negatively affected. The infrastructure supporting our Email Encryption business may suffer capacity constraints and business interruptions that could cause us to lose customers, increase our operating costs and could negatively affect our business, financial condition and financial results. Our Email Encryption business depends substantially on our data center facilities, and their unreliability or unavailability for a significant period could cause us to lose customers and could negatively affect our business, financial condition and financial results. Outages or problems with systems and infrastructure supplied by third parties could negatively affect our business, financial condition and financial results. Problems with enforcing our intellectual property rights or using third party intellectual property could negatively affect our business, financial condition and financial results. Our proprietary rights may be difficult to enforce and may offer limited protection of our intellectual property rights against potential infringers. We may have to defend our rights in intellectual property that we use in our services, and we could be found to infringe the intellectual property rights of others, which could be disruptive and expensive to our business. We may face risks from using open source software that could negatively affect our business, financial condition and financial results. We may fail to recruit and retain key personnel, which could impair our ability to meet key objectives. Our usage of personal information, and inadvertent exposure of confidential information, could cause us to violate data privacy laws or lose customers and could negatively affect our business, financial condition and financial results. Governmental restrictions on the sale of our products and services in non-U.S. markets could negatively affect our business, financial condition and financial results. Our financial performance could be erratic and asset impairments could negatively affect our financial condition and financial results. The market price of our securities could be volatile and our securities may decline in value. Exercises of options and warrants for our common stock would dilute the ownership interests of existing shareholders and could negatively affect the value of our securities. Our issuances of additional debt or equity securities could dilute the ownership interests of existing shareholders and could negatively affect the value of our securities.

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855612--3/15/2010--ZIX_CORP