99047--3/17/2008--NYFIX

related topics

{financial, litigation, operation}

{system, service, information}

{condition, economic, financial}

{capital, credit, financial}

{customer, product, revenue}

{regulation, government, change}

{control, financial, internal}

{product, market, service}

{personnel, key, retain}

{tax, income, asset}

{operation, international, foreign}

{debt, indebtedness, cash}

{acquisition, growth, future}

We have been unprofitable in the past and we may not be profitable in the future. If we are required to record an additional impairment charge relating to our goodwill because we are not profitable, and such charge is sufficiently large, the impact on our consolidated financial statements could be material. We have material weaknesses in our internal control over financial reporting, which could adversely affect our ability to report our financial condition and results of operations accurately and on a timely basis. We are highly reliant upon our computer and other electronic systems. A significant power or telecommunications failure, computer virus, software defects, or human error in response to such challenges could cause us and our clients to lose revenue and subject us to liability for client losses. A slowdown in the operations of such services could also materially adversely affect our business and our clients. We depend on a limited number of network equipment, software and telecommunications suppliers and do not have supply contracts. Our inability to obtain necessary network equipment, technical support or other telecommunications services or being forced to pay higher prices for such equipment, support or services could materially adversely affect our business. We are subject to rapid changes in technology which could impact our profitability and our ability to compete effectively. Our clients may develop in-house networks or use network providers other than NYFIX and divert part or all of their data communications from our networks to their networks, which could have a material adverse effect on our business. A decline in subscription and maintenance revenue, our largest source of revenue, or transaction revenue, could have a material adverse effect on our business. We are exposed to clearance, settlement and credit risks that could materially adversely affect our business. Our ability to maintain or expand our brokerage business could be adversely impacted if we do not continue to have third-party assistance to access exchanges and other important trading venues. Our clients may not continue to do business with our broker-dealer subsidiaries if we are unable to maintain certain levels of capital, fail to file our periodic reports in a timely fashion or are the subject of charges resulting from the SEC and U.S. Attorney s Office investigations, and we may not be able to expand into other securities businesses without increased capital. Our clients may not continue to do business with our broker-dealer subsidiaries if we are unable to maintain certain levels of capital, fail to file our periodic reports in a timely fashion or are the subject of charges resulting from the SEC and U.S. Attorney s Office investigations, and we may not be able to expand into other securities businesses without increased capital. Our broker-dealer subsidiaries are at risk if their clients default on their trading obligations. The discontinuation of our Fusion OMS business could negatively impact revenues we generate on other products and services. We might not be able to accommodate increased levels of trading activity and keep current with market data requirements. Our business could be adversely affected by our inability to attract and retain talented employees, including senior management professionals and software developers. Warburg Pincus Private Equity IX LP ( Warburg Pincus ) owns a significant portion of our voting securities and its interests may not be aligned with those of our other stockholders. Warburg Pincus Private Equity IX LP ( Warburg Pincus ) owns a significant portion of our voting securities and its interests may not be aligned with those of our other stockholders. Any acquisitions we make could disrupt our business and seriously harm our financial condition. We may face risks associated with our international expansion that could impair our ability to grow our international revenues. Investigations by the SEC and related events have had, and may continue to have, a material adverse effect on us We are the subject of several legal and administrative proceedings relating to our granting of stock options to certain of our employees, officers and directors. We are unable to predict the outcome of these proceedings and can give no assurances that the outcome of these proceedings will not have a material impact on us or that other proceedings will not be initiated. The securities brokerage industry is subject to extensive government and other regulation. If NYFIX Millennium, NYFIX Securities or NYFIX International fail to comply with these regulations, they may be subject to disciplinary or other action by regulatory organizations. Changes in such regulations could increase our compliance costs. Our failure to meet applicable net capital requirements, or adverse changes in the current net capital requirements, could restrict our business operations.

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99047--3/17/2008--NYFIX_INC