The Company does not own any optical fibers or conduits. While T-Cubed has announced that it has entered into agreements with third parties to lease or sell fiber optic strands or conduits installed in the railroad corridors to certain third parties, T-Cubed has not yet completed installation of any fiber optic strands or conduits in the corridors. The Settlement Agreement does not impose an obligation on T-Cubed to construct a telecommunications system. Rather, T-Cubed has an obligation to transfer fiber optic strands to the Company if we so elect under the note from T-Cubed only if T-Cubed first installs, obtains possession of, or enters into a binding agreement with a third party to install or obtain possession of, dark fiber optic strands for its own account in conduits that are subject to the Settlement Agreement. Consequently, we can provide no assurance that T-Cubed will ever install, obtain possession of, or enter into a binding agreement with a third party to install or obtain possession of any dark fiber optic strands subject to the Settlement Agreement, which must occur prior to the Company acquiring any dark fiber optic strands. T-Cubed’s decision to proceed with installation of the telecommunications system is beyond the Company’s control. The Company must rely on T-Cubed’s financial and other resources to install and market the telecommunications system.

The Company’s only expectation of acquiring a conduit relates to an option granted to the Company by T-Cubed in the Settlement Agreement to purchase a conduit. This option will become available to the Company on the date T-Cubed first sells or leases a conduit subject to the Settlement Agreement to a third party. We cannot assure you that T-Cubed will ever sell or lease a conduit subject to the Settlement Agreement. It is, therefore, possible that the Company will never have an option to purchase a conduit from T-Cubed. If the Company is unable to purchase a conduit from T-Cubed, it will not own a conduit that can be leased or sold to third parties. In such a circumstance, the Company would not be able to generate any revenue from the sale or leasing of a conduit and your investment in the Company’s membership shares may be adversely affected.

The Company has not yet raised any equity capital or acquired any financing, or commitments for equity capital or financing to fund its operations. The Company anticipates that possible sources of equity capital include investment from individuals, private equity funds and venture capitalists. The Company anticipates that in addition to raising substantial equity capital, the Company will need to acquire substantial credit from commercial lenders to both exercise any option it may have to purchase conduits, and to operate its business.

We cannot assure that the Company will be able to raise any equity capital or acquire any credit, whether on commercially reasonable terms or otherwise. If the Company is unable to acquire the necessary amounts of equity capital and credit, or is unable to acquire the same on favorable terms, the Company may be unable to adequately fund its operations, acquire a conduit, or pursue or operate its intended business of selling or leasing optical fibers and space in optical fiber conduits. The failure of the Company to raise needed equity capital and acquire necessary credit could have an adverse affect on the value of the Company’s membership shares.

The Company’s current officers and directors do not have any experience in operating or managing the Company’s intended business of leasing or selling optical fibers and space in optical fiber conduits. Accordingly, before beginning operations, the Company will be required to seek out and hire competent executive personnel to manage and operate the Company’s business. We cannot assure that the Company will be able to find, hire or afford the services of competent executives with experience in the Company’s intended business. There is a high degree of competition for qualified executives and other management personnel in the Company’s intended business. The Company may, therefore, be unable to attract qualified personnel, or, if able to attract qualified personnel, be unable to afford the competitive wages necessary to hire and retain such personnel. Without qualified, experienced executives and other managers, the Company may be unable to profitably operate its business. If the Company is unable to profitably operate its business, the value of the Company’s membership shares could be adversely affected.

We cannot assure that the strategy of the Company and the settlement class counsel to create corridors with perfected title, other than those involved in the settlement, will succeed. We cannot assure that any of the other lawsuits being prosecuted by the settlement class counsel will be settled on a basis providing for perfected title, or if the lawsuits are not settled, that a judgment favorable to the plaintiffs represented by settlement class counsel will be entered. As a result, we cannot assure that any corridors with perfected title, other than the corridor involved in the settlement, will be available to be combined with the corridors included in the settlement to form a larger network.

Fiber optic systems are currently under construction both locally and nationally. The construction of these networks enables their owners to lease access to their networks to other communications carriers or large corporate or government customers seeking high bandwidth capacity, without these customers having to incur costly expenditures associated with building networks of their own.

Many of our competitors have financial, management and other resources substantially greater than ours, as well as other competitive advantages over us, including established reputations in the communications market.

Various communications carriers already own fiber optic cables as part of their communications networks. Accordingly, each of these carriers could compete directly with us in the market for leasing fiber capacity. Some communications carriers and local cable companies have extensive networks in place that could be upgraded to fiber optic cable, as well as substantial financial and human resources to undertake the requisite construction to equip their networks. To the extent that communications carriers and local cable companies decide to equip their networks with fiber optic cable, they are potential direct competitors provided that these competitors are willing to offer this capacity to all of their customers.

We anticipate that prices for our products and services specifically, and network transmission capacity in general, will continue to decline over the next several years, due primarily to the following:

The telecommunications industry generally is subject to rapid and significant changes in technology that may adversely affect the continued use of fiber optic cable. We cannot assure you that the introduction of new products or the emergence of new technologies will not enable competitors to install competing systems at a lower cost on routes currently targeted by us. Moreover, these potential competitors may be able to expand capacity on existing competitive systems, which could render our network and network services uncompetitive from a cost perspective. We cannot predict the likelihood of these changes and we cannot assure you that any technological changes will not materially and adversely affect our business and operating results.

Although the leasing of dark fiber presently is largely unregulated on the state and federal level, the industry could become a regulated segment of the telecommunications industry. As such, the Company could be faced with the prospect of securing state and federal regulatory approval with a number of agencies. Generally speaking, in order to be certified to provide a form of telecommunications service, a regulated entity must demonstrate that it has the financial, technical, and managerial capability to provide service. National and local laws and regulations governing the provision of telecommunications services may differ significantly among the areas in which the Company will operate. The interpretation and enforcement of such laws and regulations vary and could limit the Company's ability to provide telecommunications services in certain markets. The Company cannot assure you that:

• Future regulatory, judicial and legislative changes will not harm it;
• Domestic or international regulators or third parties will not raise material issues with regard to the Company's compliance with applicable laws and regulations; or
• Other regulatory activities will not harm the Company's business, financial condition and results of operations.

Before the distribution, there was no public market for our membership shares. We do not expect an active public market for our membership shares to develop or be sustained after the distribution. Transfer of the membership shares is subject to substantial restrictions. Our shareholders may not be able to realize any value for their membership shares for an indefinite period of time.

The Company itself will not be subject to federal income tax. Instead, you must report separately on your federal income tax return each year your allocable share of the Company’s income or gain. Because you may be required to include income or gain in your gross income in advance of cash distributions from us, you may be liable for federal income tax in respect of your distributive share of Company income or gain even though cash distributions you receive from the Company are not sufficient to pay the tax. The Company intends to distribute cash to you to cover any tax liability associated with your ownership of an interest in the Company, but there is no assurance that the amount distributed to you will be sufficient to satisfy your actual tax liability in respect of this distributive share of Company income or gain.