Key Risks

BulletProof

Business Plans

Touchtop Technologies, Inc.

KEY RISKS

Risk of Defects and Development Delays

TouchTop Technologies may experience schedule overruns in product and software development triggered by factors such as insufficient staffing or the unavailability of development-related software, hardware, components, materials or technologies. Further, when developing new products, the Company's development schedules may be altered as a result of the discovery of software bugs, performance problems, or changes to the product specification in response to customer requirements, market developments, or Company initiated changes. Changes in product specifications may delay completion of documentation, packaging, or testing, which may, in turn, affect the release schedule of the product. When developing complex display devices, the technology market may shift during the development cycle, requiring the Company either to enhance or change a product's specifications to meet a customer's changing needs. These factors may cause a product to enter the market behind schedule, which may adversely affect market acceptance of the product or place it at a disadvantage to a competitor's product that has already gained market share or market acceptance during the delay.

As indicated in the Marketing, R&D and Enterprise sections of this plan, tests on the breadboard design of TouchTop's LEDCD and testing on its alpha version display driver and intelligent driver editing code considerably reduce the risk that development delays will occur.

Management of Growth

TouchTop Technologies anticipates rapid and substantial growth in the number of its employees and the scope of its operations, resulting in increased responsibilities for management and added pressure on the Company's operating and financial systems. To manage growth effectively, TouchTop Technologies will need to continue to improve its operational, financial and management information systems and will need to hire, train, motivate, and manage a growing number of employees. Competition is intense for qualified technical, marketing, and management personnel. There can be no assurance that TouchTop Technologies will be able to achieve or manage any future growth, and its failure to do so could delay product development cycles and marketing efforts or otherwise have a material adverse effect on TouchTop Technologies' business, financial condition, and results of operations.

TouchTop Technologies' founders have participated in a number of successful ventures. They have proven their ability to manage growth and take a product from cradle to grave meeting the demands of rapid growth time and time again.

Touchtop Technologies, Inc.

Competition

Because of the rapid expansion of the information display market, TouchTop Technologies will face competition from existing and new entrants, possibly including TouchTop Technologies' customers. There can be no assurance that the Company's competitors will not develop information display products that may be more effective than TouchTop Technologies' current or future products or that the Company's technologies and products would not be rendered obsolete by such developments.

Many of TouchTop Technologies' current and potential competitors have longer operating histories, greater name recognition, larger installed customer bases, and significantly greater financial, technical, and marketing resources than the Company. As a result, they may be able to adapt more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the promotion and sale of their products than TouchTop Technologies. There can be no assurance that the Company's customers will not perceive the products of such other companies as substitutes for TouchTop Technologies' products.

As with most competitive software offerings, the principal competitive factors affecting the market for information display include effectiveness, scope of product offerings, technical features, ease of use, reliability, customer service and support, name recognition, distribution resources, and cost. Current and potential competitors have established, or may establish in the future, strategic alliances to increase their ability to compete for TouchTop Technologies' prospective customers. Accordingly, it is possible that new competitors or alliances may emerge and rapidly acquire significant market share. Such competition could materially adversely affect the TouchTop Technologies' business, financial condition, and results of operations.

Management believes that this risk is significantly mitigated by the development lifecycle for display technologies. As indicated in previous sections of this plan, all other known viable alternatives to LCD require significant capital expenditures and offer only marginal performance improvements.

Dependence on Key Personnel

TouchTop Technologies' success will depend, to a large extent, upon the performance of its founders and the senior management team and technical, marketing and sales personnel the Company will recruit in the early stages. There is shrewd competition in the software industry to hire and retain qualified personnel, and TouchTop Technologies will actively search for additional qualified personnel as the Company grows. TouchTop Technologies' success will depend upon its ability to retain and hire additional key personnel. The loss of the services of key personnel, or the inability to attract additional qualified personnel, could have a material adverse effect upon the Company's results of operations and product development efforts.

TouchTop Technologies currently plans to put $700,000 "key man" life insurance policies on the lives of each of its founders. As the Company grows, or if directed to do so by interested parties, this coverage will be increased appropriately.

Touchtop Technologies, Inc.

Risk of Errors or Failures; Product Liability Risks

A malfunction or the inadequate design of products produced using TouchTop Technologies' LEDCD technology could result in tort or warranty claims. While the Company will attempt to reduce the risk of such losses through warranty disclaimers and liability limitation clauses in its license agreements, and by maintaining product liability insurance, there can be no assurance that such measures will be effective in limiting TouchTop Technologies' liability for any such damages. The Company currently intends to purchase product liability insurance and it may seek additional insurance coverage as it commences commercialization of its products. There can be no assurance that adequate additional insurance coverage will be available at an acceptable cost, if at all. More importantly, a publicized actual or perceived product defect could adversely affect the market's perception of TouchTop Technologies' products. This could result in a decline in demand for TouchTop Technologies' products, which could have a material adverse effect on the Company's business, financial condition, and results of operations.

Liquidity and Capital Requirements; Dependence on First Round Financing and Cash Flow From Operations

TouchTop Technologies anticipates that its cash flows in from operations and cash generated from first round financing of approximately $2.3 million will be adequate to satisfy its capital requirements based on the plan presented herein. TouchTop Technologies' future capital requirements, however, will depend on many factors, including its ability to successfully market and license its technology. To the extent that the funds generated by this Offering and from TouchTop Technologies' on-going operations are insufficient to fund TouchTop Technologies' future operating requirements, it may be necessary to raise additional funds, through public or private financings. Any equity or debt financings, if available at all, may be on terms that are not favorable to TouchTop Technologies and, in the case of equity financings, could result in dilution to TouchTop Technologies' shareholders. If adequate capital is not available, TouchTop Technologies may be required to curtail its operations significantly.

These risks are not unique to TouchTop Technologies, Inc.. However, the tentative agreement with NEEC to license TouchTop Technologies' LEDCD system significantly reduces this risk. See the "Summary of Significant Forecast Assumptions" and the prospective financial statements for a more thorough presentation of management's intentions and expectations.

Touchtop Technologies, Inc.

International Operations

A core component of TouchTop Technologies' development plan is overseas licensing of its technology. To the extent TouchTop Technologies expands international operations, currency fluctuations could make TouchTop Technologies' contribute to fluctuations in TouchTop Technologies' operating results. Political instability, difficulties in staffing and managing international operations also pose risks to the development of international development efforts. Moreover, the laws of Japan or Korea or the enforcement thereof, may not protect the TouchTop Technologies' products and intellectual property rights to the same extent as the laws of the United States. There can be no assurance that these factors will not have a material adverse effect on TouchTop Technologies' business, financial condition, and results of operations.

The risk of currency fluctuation is mitigated, to a large extent, by the Company's intention to transact business in US dollars.

Key Risks/Time Line 32.