Risks and Uncertainties

12 Months Ended

Nov. 30, 2011

Notes to Financial Statements

Risks and Uncertainties

10. Risks and Uncertainties

The Company has created a proprietary IP telephony network and has transitioned from a reseller of traditional wireline telephone services into a facilities-based broadband service provider to take advantage of the network cost savings that are inherent in an IP network. Although the IP telephony business continues to grow, the Company faces strong competition. The Company has built its IP telephony business with significantly less financial resources than many of its competitors. The survival of the business is currently dependent upon the success of the IP operations. Future results of operations involve a number of risks and uncertainties. Factors that could affect future operating results and cash flows and cause actual results to vary materially from historical results include, but are not limited to:

·        The availability of additional funds to successfully pursue our business plan;

·        The cooperation of our lender who has not demanded repayment of our debt that was due in October  2010;

·        Our ability to market our services to current and new customers and generate customer demand for our   products and services in the geographical areas in which we operate;

·         The cooperation of industry service partners that have signed agreements with us;

·         The impact of changes the Federal Communications Commission or State Public Service Commissions may   make to existing telecommunication laws and regulations, including laws dealing with Internet telephony;

·         The ability to comply with provisions of our financing agreements;

·         The highly competitive nature of our industry;

·         The acceptance of telephone calls over the Internet by mainstream consumers;

·         Our ability to retain key personnel;

·         Our ability to maintain adequate customer care and manage our churn rate;

·         Our ability to maintain, attract and integrate internal management, technical information and management   information systems;

·         The impact of adverse tax or regulatory rulings or actions affecting our operations, including the   imposition of taxes, fees and penalties;

·         Our ability to manage rapid growth while maintaining adequate controls and procedures;

·         The availability and maintenance of suitable vendor relationships, in a timely manner, at reasonable cost;

·         The decrease in telecommunications prices to consumers;

·         General economic conditions.