Edgar Filing: ILINC COMMUNICATIONS INC

As filed with the Securities and Exchange Commission on March 10, 2005.
Registration No. 333-113380

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ILINC COMMUNICATIONS, INC.
--------------------------

(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
76-0545043
(I.R.S. Employer Identification Number)
2999 NORTH 44TH STREET, SUITE 650
PHOENIX, ARIZONA 85018
(602) 952-1200
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

JAMES M. POWERS, JR.
ILINC COMMUNICATIONS, INC.
2999 NORTH 44TH STREET, SUITE 650
PHOENIX, ARIZONA 85018
(602) 952-1200
(Name, address, including zip code and telephone number, including area code,
of agent for service)

COPIES OF COMMUNICATION TO:
JAMES S. RYAN, III, ESQ.
JACKSON WALKER L.L.P.
901 MAIN STREET, SUITE 6000
DALLAS, TEXAS 75202
(214) 953-6000

Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]

CALCULATION OF REGISTRATION FEE

================================== ===================== ======================== ========================== ======================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Offering Registration
Securities To Be Registered Registered Per Share Price Fee
---------------------------------- --------------------- ------------------------ -------------------------- ----------------------

Common Stock, $0.001 par value 6,037,260 Shares $0.39 $2,354,531.40 $277.13
per share
================================== ===================== ======================== ========================== ======================

ILINC COMMUNICATIONS, INC.

6,037,260 SHARES OF COMMON STOCK

This is an offering of shares of common stock, par value $0.001 per
share, of iLinc Communications, Inc. All of the shares being offered will be
sold from time to time by the selling stockholders identified in this
prospectus. We will not receive any proceeds from the sale of shares by the
selling stockholders. However, upon any exercise of the warrants by payment of
cash, we will receive the exercise price of the warrants. Expenses in connection
with the registration of these shares of common stock under the Securities Act
of 1933, including legal and accounting fees, will be paid by iLinc
Communications, Inc.

Our common stock is quoted on the American Stock Exchange under the
symbol "ILC." On March 9, 2005, the last reported sales price of our common
stock on the American Stock Exchange was $0.40 per share.

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 2 OF THIS PROSPECTUS.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is March 10, 2005.

The information in this prospectus is not complete and may be changed.
The selling stockholders identified in this prospectus may not sell these
securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH DIFFERENT OR
ADDITIONAL INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY
OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.

TABLE OF CONTENTS

PROSPECTUS SUMMARY.............................................................1

COMPANY INFORMATION............................................................1

THE OFFERING...................................................................3

RISK FACTORS...................................................................3

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................7

USE OF PROCEEDS................................................................7

SELLING STOCKHOLDERS...........................................................7

PLAN OF DISTRIBUTION..........................................................16

LEGAL MATTERS.................................................................17

EXPERTS.......................................................................17

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................18

WHERE YOU CAN FIND MORE INFORMATION...........................................19

Page (i)

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU
SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON STOCK. YOU SHOULD CAREFULLY READ
THE ENTIRE PROSPECTUS INCLUDING "RISK FACTORS" BEFORE MAKING AN INVESTMENT
DECISION. UNLESS THE CONTEXT REQUIRES OTHERWISE IN THIS PROSPECTUS, REFERENCES
IN THIS PROSPECTUS TO "ILINC," "WE," "US," "OUR," OR THE "COMPANY" REFER TO
ILINC COMMUNICATIONS, INC.

COMPANY INFORMATION

Headquartered in Phoenix, Arizona, iLinc Communications, Inc. is a
leading provider of Web conferencing, audio conferencing and collaboration
software and services. Our four-product iLinc Suite, led by LearnLinc (which
also includes MeetingLinc, ConferenceLinc, and SupportLinc), is an award winning
virtual classroom, Web conferencing and collaboration suite of software. With
our Web collaboration, conferencing and virtual classroom products, we provide
simple, reliable and cost-effective tools for remote presentations, meetings and
online events. Our software is based on a proprietary architecture and code that
finds its origins as far back as 1994. Versions of the iLinc Suite have been
translated into six languages, and it is currently available in version 7.5. Our
customers may choose from several different pricing options for the iLinc Suite,
and may receive our products on a stand-alone basis or integrated with one or a
number of our other products, depending upon their needs. Uses for our
four-product suite of Web collaboration software include online business
meetings, sales presentations, employee training sessions, product
demonstrations and technical support assistance. We sell our software solutions
to large and medium-sized corporations inside and outside of the Fortune 1000.
We market our products using a direct sales force and a distribution channel
consisting of referral agents, international and national value-added resellers
(VAR's). We allow customers to choose between purchasing a perpetual license or
subscribing to a periodic license of our products, providing for flexibility in
pricing and payment methods.

Our common stock is quoted on the American Stock Exchange under the
symbol "ILC." Our principal executive offices are located at 2999 N. 44th
Street, Suite 650, Phoenix, Arizona 85018. Our main telephone number is
602-952-1200.

OUR BUSINESS

WEB CONFERENCING AND WEB COLLABORATION

The iLinc Suite(TM) is a four product suite of software that addresses
the four most common business collaboration needs.

LearnLinc(TM) is an Internet-based software that is designed for
training and education of remote students. With LearnLinc, instructors and
students can collaborate and learn remotely providing a learning environment
that replicates traditional instructor-led classes. Instructors can create
courses and classes, add varied agenda items, enroll students, deliver live
instruction, and deliver content that includes audio, video, and interactive
multimedia. In combination with TestLinc(TM), LearnLinc permits users to
administer comprehensive tests, organize multiple simultaneous breakout sessions
and record, edit, play back and archive entire sessions for future use.

MeetingLinc(TM) is an online collaboration software designed to
facilitate the sharing of documents, online presentations, graphics and
applications between meeting participants without leaving their desks.
MeetingLinc allows business professionals, government employees, and educators
to communicate through interactive online meetings using voice-over-IP
technology to avoid the expense of travel and long distance charges. MeetingLinc
allows remote participants to: give presentations, demonstrate their products
and services, annotate on virtual whiteboards, edit documents simultaneously,
and take meeting participants on a Web tour. Like all of the Web collaboration
products in the suite, MeetingLinc includes integrated voice and video
conferencing services.

Page 1

ConferenceLinc(TM) is a presentation software designed to deliver the
message in a one-to-many format providing management of Web conferencing events.
ConferenceLinc manages events such as earnings announcements, press briefings,
new product announcements, corporate internal mass communications and external
marketing events. ConferenceLinc is built on the MeetingLinc software platform
and code to combine the best interactive features with an easy to use interface
providing meaningful and measurable results to presenters and participants
alike. ConferenceLinc includes automatic email invitations, "one-click join"
capabilities, online confirmations, update notifications, and customized
attendee registration. With ConferenceLinc, presenters may not only present
content, but may also gain audience feedback using real-time polling, live chat,
question and answer sessions, and post-event assessments. The entire
presentation is easily recordable for viewing offline and review after the show
with the recorder capturing the content and the audio, video, and participant
feedback.

SupportLinc(TM) is an online technical support and customer sales
support software designed to give customer service organizations the ability to
provide remote hands-on support for products, systems, or software applications.
SupportLinc manages the support call volume and enhances the effectiveness of
traditional telephone-based customer support systems. SupportLinc's custom
interface is designed to be simple to use so as to improve the interaction and
level of support for both customers and their technical support agents.

AUDIO CONFERENCING

Through its acquisition of Glyphics Communications in June 2004, the
Company now also delivers audio conferencing solutions that help businesses
provide virtual meetings, corporate events, distance learning programs, and
daily conference calls. Our audio conferencing offering includes a wide array of
services and products that include the following:

o Audio On-Demand (no reservations needed): With pre-established calling
accounts for each user, customers can create or participate in
conference calls with no advance notice, 24/7;

o Reserved Automated: The solution for recurring calls, each participant
has a permanent number and passcode;

o Operator Assisted: For important calls, this service includes an iLinc
conference operator to host, monitor, and coordinate the call; and,

o Online Seminars: Support for online Web presentations with high-quality
audio from iLinc.

Customers may purchase our audio conferencing products and services
without an annual contract commitment on a monthly recurring usage basis, and
often subscribe for a fixed per minute rate.

OTHER PRODUCTS AND SERVICES

In addition to the iLinc Suite of Web conferencing products and
services and our audio conferencing products and services, we offer to our
customers an array of e-Learning and training products and services.

o Technology: We offer training software products that like iLinc,
promote online collaboration with products that integrate with our
LearnLinc software. These include TestLinc - an assessment and quizzing
tool that allows for formal testing and evaluation of students, and
i-Canvas(TM) - a training content development software that allows
non-technical training professionals to create Web-based training
courses without programming. i-Canvas is sold on an individual user
perpetual license basis.

o Services: We also offer custom content development services through a
subcontractor relationship with Interactive Alchemy, an entity which is
primarily comprised of former employees of the Company and which
resides in the Company's corporate office in Phoenix. Custom content
services are bid on a project-by-project basis.

o Content: We also offer a library of online courses focused upon the
training of executives on essential business topics. Our off-the-shelf
online library of content includes an online mini-MBA program
co-developed with the Tuck School of Business at Dartmouth College.
Customers subscribe for a period of time per course, with the license
providing for access over typically one year from the date the students
first access of the course.

Page 2

THE OFFERING

Common stock offered 6,037,260 shares of our common stock are
being offered by this prospectus. All of the
shares offered by this prospectus are being
sold by the selling stockholders.

Use of proceeds We will not receive any proceeds from the
sale of shares of common stock in this
offering. However, upon any exercise for
cash of the warrants described herein, we
will receive the exercise price of the
warrants.

The American Stock Exchange symbol "ILC"

The selling stockholders identified in this prospectus, or their
pledges, donees, transferees or other successors-in-interest, may offer the
shares or interests therein from time to time through public or private
transactions at prevailing market prices, at prices related to prevailing market
prices or at privately negotiated prices.

RISK FACTORS

You should carefully consider the risks described below. The risks and
uncertainties described below are not the only ones we face. If any of the
following risks actually occur, our business, financial condition or results of
operations could be materially and adversely affected. In that case, the trading
price of our common stock could be adversely affected.

WE HAVE A LIMITED OPERATING HISTORY, WHICH MAKES IT DIFFICULT TO
EVALUATE OUR BUSINESS.

We have a limited operating history in the Web conferencing and audio
conferencing business. While the organizations that we have acquired have been
engaged in the their respective business for over five years, we only recently
acquired those assets and have undertaken to integrate their assets into our
operations at varying levels. Over the past 36 months, we have made significant
changes to our product mix and service mix, our growth strategies, our sales and
marketing plans, and other operational matters. As a result, it may be difficult
to evaluate an investment in our company. Given our recent investment in
technology, we cannot be certain that our business model and future operating
performance will yield the results that we intend. In addition, the competitive
and rapidly changing nature of the Web conferencing and audio conferencing
markets makes it difficult for us to predict future results. Our business
strategy may be unsuccessful and we may be unable to address the risks we face.

WE FACE RISKS INHERENT IN INTERNET-RELATED BUSINESSES AND MAY BE
UNSUCCESSFUL IN ADDRESSING THESE RISKS.

We face risks frequently encountered by companies in new and rapidly
evolving markets such as Web conferencing and audio conferencing. We may fail to
adequately address these risks and, as a consequence, our business may suffer.
To address these risks among others, we must successfully introduce and attract
new customers to our products and services; successfully implement our sales and
marketing strategy to generate sufficient sales and revenues to achieve or
sustain operations; foster existing relationships with our existing customers to
provide for continued or recurring business and cash flow; and, successfully
address and establish new products and technologies as new markets develop. We
may not be able to sufficiently access, address and overcome risks inherent in
our business strategy.

Page 3

OUR QUARTERLY OPERATING RESULTS ARE UNCERTAIN AND MAY FLUCTUATE
SIGNIFICANTLY.

Our operating results have varied significantly from quarter to quarter
and are likely to continue to fluctuate as a result of a variety of factors,
many of which we cannot control. Factors that may adversely affect our quarterly
operating results include: the size and timing of product orders; the mix of
revenue from custom services and software products; the market acceptance of our
products and services; our ability to develop and market new products in a
timely manner and the market acceptance of these new products; the timing of
revenues and expenses relating to our product sales; and, the timing of revenue
recognition. Expense levels are based, in part, on expectations as to future
revenue and to a large extent are fixed in the short term. To the extent we are
unable to predict future revenue accurately, we may be unable to adjust spending
in a timely manner to compensate for any unexpected revenue shortfall.

WE HAVE SIGNIFICANT OPERATING LOSSES, HAVE LIMITED FINANCIAL RESOURCES,
AND MAY NOT BECOME PROFITABLE.

We have incurred substantial operating losses and have limited
financial resources at our disposal. We have long-term obligations that we will
not be able to satisfy without additional debt and/or equity capital and/or
ultimately generating profits and cash flows from our Web conferencing and audio
conferencing operations. If we are unable to achieve profitability in the near
future, we will face increasing demands for capital and liquidity. We may not be
successful in raising additional debt or equity capital and may not become
profitable in the short term or not at all. As a result, we may not have
sufficient financial resources to satisfy our obligations as they come due in
the short term.

OUR AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO
CONTINUE AS A GOING CONCERN.

Our consolidated financial statements have been prepared on a basis
which assumes that we will continue as a going concern and which contemplates
the realization of our assets and the satisfaction of our liabilities and
commitments in the normal course of business. We have a significant working
capital deficiency, and have historically suffered substantial recurring losses
and negative cash flows from operations. These factors, among others, and the
limited operating history as a Web conferencing and audio conferencing company
have caused our auditors to conclude in their report that there is doubt as to
our ability to continue as a going concern. Our plans with regard to these
factors include continued development, marketing and licensing of our Web
Conferencing and audio conferencing products and services through both internal
growth and acquisition. Although we continue to pursue these plans, there is no
assurance that we will be successful in obtaining sufficient revenues from our
products and services to provide adequate cash flows to sustain operations. Our
continuation is dependent on our ability to raise additional equity or debt
capital, to increase our web conferencing and audio conferencing revenues, to
generate positive cash flows from operations and to achieve profitability. The
consolidated financial statements do not include any adjustments related to the
recoverability of assets and classification of liabilities that might result
from the outcome of this uncertainty.

LISTING QUALIFICATIONS MAY NOT BE MET.

The American Stock Exchange's continued listing standards require that
the Company maintain stockholder's equity of at least $4.0 million if the
Company has losses from continuing operations and/or net losses in three of its
four most recent fiscal years. While the Company has sustained losses in three
of its four most recent fiscal years it has as of the date of this prospectus
stockholder's equity in excess of the $4.0 million requirement. If in the
future, the Company fails to maintain a sufficient level of stockholder's equity
in compliance with those and other listing standards of the American Stock
Exchange then the Company would be required to submit a plan to the American
Stock Exchange describing how it intended to regain compliance with the
requirements.

DILUTION TO EXISTING STOCKHOLDERS IS LIKELY TO OCCUR UPON ISSUANCE OF
SHARES WE HAVE RESERVED FOR FUTURE ISSUANCE.

On December 31, 2004, 25,578,350 shares of our common stock were
issued, of which 1,432,412 were held in treasury, and 21,066,512 additional
shares of our common stock were reserved for issuance. The issuance of these
additional shares will reduce the percentage ownership of existing stockholders
in the Company. The existence of these reserved shares coupled with other
factors, such as the relatively small public float, could adversely affect
prevailing market prices for our common stock and our ability to raise capital
through an offering of equity securities.

Page 4

THE LOSS OF THE SERVICES OF OUR SENIOR EXECUTIVES AND KEY PERSONNEL
WOULD LIKELY CAUSE OUR BUSINESS TO SUFFER.

Our success depends to a significant degree on the performance of our
senior management team. The loss of any of these individuals could harm our
business. We do not maintain key person life insurance for any officers or key
employees other than on the life of James M. Powers, Jr., our Chairman,
President and CEO, with that policy providing a death benefit to the Company of
$1 million. Our success also depends on the ability to attract, integrate,
motivate and retain additional highly skilled technical, sales and marketing,
and professional services personnel. To the extent we are unable to attract and
retain a sufficient number of additional skilled personnel, our business will
suffer.

OUR INTELLECTUAL PROPERTY MAY BECOME SUBJECT TO LEGAL CHALLENGES,
UNAUTHORIZED USE OR INFRINGEMENT, ANY OF WHICH COULD DIMINISH THE
VALUE OF OUR PRODUCTS AND SERVICES.

Our success depends in large part on our proprietary technology. If we
fail to successfully enforce our intellectual property rights, the value of
these rights, and consequently the value of our products and services to our
customers, could diminish substantially. It may be possible for third parties to
copy or otherwise obtain and use our intellectual property or trade secrets
without our authorization, and it may also be possible for third parties to
independently develop substantially equivalent intellectual property. Currently,
we do not have patent protection in place related to our products and services.
Litigation may be necessary in the future to enforce our intellectual property
rights, to protect trade secrets or to determine the validity and scope of the
proprietary rights of others. While we have not received any notice of any claim
of infringement of any of our intellectual property, from time to time we may
receive notice of claims of infringement of other parties' proprietary rights.
Such claims could result in costly litigation and could divert management and
technical resources. These types of claims could also delay product shipment or
require us to develop non-infringing technology or enter into royalty or
licensing agreements, which agreements, if required, may not be available on
reasonable terms, or at all.

COMPETITION IN THE WEB CONFERENCING AND AUDIO CONFERENCING SERVICES
MARKET IS INTENSE AND WE MAY BE UNABLE TO COMPETE SUCCESSFULLY,
PARTICULARLY AS A RESULT OF RECENT ANNOUNCEMENTS FROM LARGE SOFTWARE
COMPANIES.

The markets for Web conferencing and audio conferencing products and
services are relatively new, rapidly evolving and intensely competitive.
Competition in our market will continue to intensify and may force us to reduce
our prices, or cause us to experience reduced sales and margins, loss of market
share and reduced acceptance of our services. Many of our competitors have
larger and more established customer bases, longer operating histories, greater
name recognition, broader service offerings, more employees and significantly
greater financial, technical, marketing, public relations and distribution
resources than we do. We expect that we will face new competition as others
enter our market to develop Web conferencing and audio conferencing services.
These current and future competitors may also offer or develop products or
services that perform better than ours. In addition, acquisitions or strategic
partnerships involving our current and potential competitors could harm us in a
number of ways.

FUTURE REGULATIONS COULD BE ENACTED THAT EITHER DIRECTLY RESTRICT OUR
BUSINESS OR INDIRECTLY IMPACT OUR BUSINESS BY LIMITING THE GROWTH OF
INTERNET-BASED BUSINESS AND SERVICES.

As commercial use of the Internet increases, federal, state and foreign
agencies could enact laws or adopt regulations covering issues such as user
privacy, content and taxation of products and services. If enacted, such laws or
regulations could limit the market for our products and services. Although they
might not apply to our business directly, we expect that laws or rules
regulating personal and consumer information could indirectly affect our
business. It is possible that such legislation or regulation could expose us to
liability which could limit the growth of our Web conferencing and audio
conferencing products and services. Such legislation or regulation could dampen
the growth in overall Web conferencing usage and decrease the Internet's
acceptance as a medium of communications and commerce.

Page 5

WE DEPEND LARGELY ON ONE-TIME SALES TO GROW REVENUES.

While audio conferencing provides a more recurring revenue base, a high
percentage of our revenue is attributable to one-time purchases by our customers
rather than long term recurring web conferencing ASP type contracts. As a
result, our inability to continue to obtain new agreements and sales may result
in lower than expected revenue, and therefore, harm our ability to achieve or
sustain operations or profitability on a consistent basis, which could also
cause our stock price to decline. Further, because we face competition from
larger better-capitalized companies, we could face increased downward pricing
pressure that could cause a decrease in our gross margins.

OUR OPERATING RESULTS MAY SUFFER IF WE FAIL TO DEVELOP AND FOSTER OUR
VALUE ADDED RESELLER OR DISTRIBUTION RELATIONSHIPS.

We have an existing channel and distribution network that is intended
to provide growing revenues and contribute to our high margin software sales.
These distribution partners are not obligated to distribute our services at any
particular minimum level. As a result, we cannot accurately predict the amount
of revenue we will derive from our distribution partners in the future. The
inability of our distribution partners to sell our products to their customers
and increase their distribution of our products could result in significant
reductions in our revenue, and therefore, harm our ability to achieve or sustain
profitability on a consistent basis.

SALES IN FOREIGN JURISDICTIONS BY US AND OUR INTERNATIONAL DISTRIBUTOR
NETWORK MAY CAUSE COSTS THAT ARE NOT ANTICIPATED.

We continue to expand internationally through our value added reseller
network and OEM partners. We have limited experience in international operations
and may not be able to compete effectively in international markets. We face
certain risks inherent in conducting business internationally, such as:

o our inability to establish and maintain effective distribution
channels and partners;
o the varying technology standards from country to country;
o our inability to effectively protect our intellectual property
rights or the code to our software;
o our inexperience with inconsistent regulations and unexpected
changes in regulatory requirements in foreign jurisdictions;
o language and cultural differences;
o fluctuations in currency exchange rates;
o our inability to effectively collect accounts receivable; or
o our inability to manage sales and other taxes imposed by foreign
jurisdictions.

IF WE FAIL TO OFFER COMPETITIVE PRICING, WE MAY NOT BE ABLE TO ATTRACT
AND RETAIN CUSTOMERS.

Because the Web conferencing market is relatively new and
still evolving, the prices for these services are subject to rapid and frequent
changes. In many cases, businesses provide their services at significantly
reduced rates, for free or on a trial basis in order to win customers. Due to
competitive factors and the rapidly changing marketplace, we may be required to
significantly reduce our pricing structure, which would negatively affect our
revenue, margins and our ability to achieve or sustain profitability on a
consistent basis. We have an existing channel and distribution network that is
intended to provide growing revenues and contribute to our high margin software
sales. These distribution partners are not obligated to distribute our services
at any particular minimum level. As a result, we cannot accurately predict the
amount of revenue we will derive from our distribution partners in the future.
Our inability of our distribution partners to sell our products to their
customers and increase their distribution of our products could result in
significant reductions in our revenue, and therefore, harm our ability to
achieve or sustain profitability on a consistent basis.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this prospectus constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Any such forward-looking statements involve risk and
uncertainties that could cause actual results to differ materially from any
future results described within the forward-looking statements. Factors that
could contribute to such differences include, the rate of acceptance of our
products and services by customers, and changes in the Web conferencing and
audio conferencing market in general, use of the Internet, the acceptance of new
products, our need for working capital, the result of pending litigation, the
competition we face from larger and more well capitalized competitors and other
matters more fully disclosed in this prospectus, the Company's annual report on
Form 10-K and other reports filed with the Securities and Exchange Commission.
The forward-looking information provided herein represents the Company's
estimates as of the date of this prospectus, and subsequent events and
developments may cause the Company's estimates to change. The Company
specifically disclaims any obligation to update the forward-looking information
in the future. Therefore, this forward-looking information should not be relied
upon as representing the Company's estimates of its future financial performance
as of any date subsequent to the date of this prospectus.

USE OF PROCEEDS

All of the common stock offered under this prospectus is being sold by
the selling stockholders identified in this prospectus. We will not receive any
of the proceeds from the sale of the common stock.

Certain of the shares covered by this prospectus are, prior to their
resale pursuant to this prospectus, issuable upon exercise of warrants. Upon any
exercise of warrants by payment of cash, we will receive the exercise price of
those exercised warrants.

We have, therefore, outstanding warrants whose underlying common stock
is covered by this prospectus that would provide cash in the amount of $154,995
to us if all of the warrants were exercised at the various prices as reflected
in the following table:

----------------------- ------------------- ----------------------
NUMBER OF SHARES PROCEEDS PROVIDED
OF COMMON STOCK EXERCISE PRICE TO COMPANY
UNDERLYING WARRANTS PER SHARE UPON EXERCISE
----------------------- ------------------- ----------------------
163,455 $0.78 $127,495
----------------------- ------------------- ----------------------
50,000 $0.55 $27,500
----------------------- ------------------- ----------------------

To the extent we receive cash upon any exercise of the warrants, we
expect to use that cash for general corporate purposes.

SELLING STOCKHOLDERS

The shares of common stock being sold by the selling stockholders
consist of:

o 1,634,550 shares of our common stock issued in a private placement
offering in April of 2004. The Company completed a private
placement offering with gross proceeds of $4.25 million that
provided the Company $3.8 million of net proceeds. Under the terms
of this offering, we issued $3,187,500 in unsecured senior notes
and 1,634,550 shares of Common Stock of the Company. The senior
notes are unsecured, non-convertible, and the purchasers received
no associated warrants. The senior notes bear interest at a rate
of 10% per annum and accrued interest is due and payable on a
quarterly basis beginning July 15, 2004, with principal due at
maturity on July 15, 2007. The senior notes are redeemable by the
Company at 100% of the principal value at any time after July 15,
2005. The senior notes are unsecured obligations of the Company
but are senior in right of payment to all existing and future
indebtedness of the Company. The placement agent received a
commission equal to 10% of the gross proceeds and a warrant for
the purchase of 163,455 shares of our common stock at an exercise
price equal to $0.78 per share.

Page 7

o 163,455 shares of our common stock issuable upon exercise of
warrants issued to the placement agent in connection with the
April 2004 private placement offering. The warrants are
exercisable for shares of common stock at an exercise price equal
of $0.78 per share at any time from and after March 19, 2004
through the third anniversary of the date of the Warrant, March
19, 2007.

o 3,524,194 shares of our common stock originally issued as
consideration to the stockholders of Glyphics Communications, Inc.
in June 2004 under the terms of an asset purchase and plan of
reorganization between us and Glyphics Communications, Inc.

o 665,061 shares of common stock issued to Preston A. Zuckerman, a
former board member and officer of ours, pursuant to debt
conversion agreements in March, April and June of 2004. The debt
was incurred pursuant to the June 2001 acquisition of Learn-Edge,
Inc. of which Mr. Zuckerman was a major investor and officer and
the debt converted aggregated $692,271.50.

o 50,000 shares of our common stock issuable upon exercise of
warrants issued to John Rhodes, III pursuant to a Note
Modification and Settlement Agreement with us dated December 8,
2004 which was entered into for the purpose of extending terms on
debt assumed by us under the terms of an asset purchase and plan
of reorganization between us and the stockholders of Glyphics
Communications, Inc. The warrants are exercisable for shares of
Common Stock at an exercise price equal of $0.55 per share at any
time from and after January 3, 2005 through the second anniversary
of the date of the Warrant, January 3, 2007.

SELLING STOCKHOLDER TABLE - BENEFICIAL OWNERSHIP AND SHARES OFFERED FOR SALE

As of December 31, 2004, we had 25,578,350 shares of our common stock
issued and 24,145,938 shares of our common stock outstanding. Assuming the
complete exercise of the warrants referenced herein, we would have 24,359,393
shares of common stock outstanding. The following table sets forth the name and
relationship with us, if any, of the selling stockholders and (1) the number of
shares of common stock beneficially owned by each of the selling stockholders as
of December 31, 2004, (2) the maximum number of shares of common stock which may
be offered for the account of each of the selling stockholders under this
prospectus and (3) the amount and percentage of common stock that would be owned
by each of the selling stockholders after completion of the offering, assuming a
sale of all of the common stock which may be offered hereunder. The information
set forth below is based upon written documentation submitted to us by the
selling stockholders. Except as otherwise noted below, none of the selling
stockholders has, within the past three years, had any position, office or other
material relationship with us.

SHARES PERCENTAGE
SHARES BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED BEFORE SHARES OWNED AFTER OWNED AFTER
SHAREHOLDER NAME OFFERING (1) OFFERED OFFERING OFFERING (2)
-----------------------------------------------------------------------------------------------------------------------------------

Anthony Silverman 269,777 76,920 192,857 *
R/O IRA DCG & T TTEE (3)

Arthur M. Clifford
Martha D. Clifford TTEES
Clifford Revocable Trust DTD 10/13/94 (4) 19,230 19,230 0 *

Arthur Norris TTEE
Survivors Trust DTD 8/17/1998 (5) 9,615 9,615 0 *

Bonnie Rost 19,230 19,230 0 *

Bryant Pickering TTEE
Veech Trust DTD 6/7/93
Principal Account (6) 76,920 76,920 0 *

Burton P. Freireich
Ursula G. Freireich G P
B & U Freireich LTD Partnership (7) 76,920 76,920 0 *

Burton S. Kruglick TTEE
Burton S. Kruglick Trust DTD 7/28/82 (8) 9,615 9,615 0 *

Page 8

Catherine Dubois Chase
Special Account 9,615 9,615 0 *

Conner Properties
A Partnership (9) 15,615 9,615 6,000 *

D. Louis Travisano
Yvonne A. Travisano TTEES
Travisano Family Trust DTD 7/23/96 (10) 9,615 9,615 0 *

D. Ronald Yagoda 19,230 19,230 0 *

Dan Kuchta 9,615 9,615 0 *

David F. Peachin 9,615 9,615 0 *

David M. Brennan & Bridget J. Brennan JTTEN 19,230 19,230 0 *

David Nebel
Maria Borella TTEES
David Nebel & Maria Borella
Trust DTD 11/6/98 (11) 19,230 19,230 0 *

Debar N. Koning
R/O IRA DCG & T TTEE (12) 9,615 9,615 0 *

Debra Freireich Kipp 9,615 9,615 0 *

Derwood E. Bammann TTEE
Bammann Children's Rev Trust I DTD 8/31/98 (13) 9,615 9,615 0 *

Don E. Lovell TTEE Don E. Lovell Charitable Trust DTD
09/28/01 (68) 9,615 9,615 0 *

Donald D. Barkdoll
Margaret D. Barkdoll 9,615 9,615 0 *

Dorothy A. White TTEE
Dorothy A. White Trust DTD 11/1/90 (14) 9,615 9,615 0 *

Douglas Linney 9,615 9,615 0 *

Edward B. Vallone, II (15) 50,864 40,864 10,000 *

Elizabeth A. Bunn 9,615 9,615 0 *

Elizabeth M. Krofchik 9,615 9,615 0 *

Floyd D. Smith TTEE
F D Smith Family TR # 2 DTD 11/15/76 (16) 28,845 28,845 0 *

Francis W. Farmer, Jr.
IRA DCG & T TTEE (17) 9,615 9,615 0 *

G H Ventures LLLP
An AZ Limited Liability Limited Partnership
Jack M. & Louise Gumbin GP (18) 9,615 9,615 0 *

Gary Moulton (19) 1,229,944 1,229,944 0 *

H. Holden Smith TTEE
H. Holden Smith Trust DTD 11/27/95 (20) 19,230 19,230 0 *

Helen R. Smith 76,920 76,920 0 *

J. Lynton Allred
Joyce E. Allred TTEE
J Lynton & Joyce E. Allred
Living Trust DTD 6/21/95 (21) 19,230 19,230 0 *

James A. Rodolph
Nancy Rodolph 19,230 19,230 0 *

James Peter Kleinegger
Betty L N Kleinegger TTEES
James & Betty Kleinegger Rev Trust
Amended 8/4/00 (22) 9,615 9,615 0 *

James W. Nace
R/O IRA DCG & T TTEE (23) 19,230 19,230 0 *

Page 9

Joanne Bowles TTEE
Joanne Bowles
Family Trust DTD 11/05/98 (24) 9,615 9,615 0 *

John A. Logan
Alice Y. Logan TTEES
Logan Family Trust DTD 3/24/93 (25) 19,230 19,230 0 *

John Cotton
IRA DCG & T TTEE (26) 19,230 19,230 0 *

John Rhodes Family Limited Partnership (27) 1,326,859 1,326,859 0 *

John T Bunn III 19,230 19,230 0 *

Karen A Gish
Sole & Separate (28) 9,615 9,615 0 *

Kathleen Meredith Madison
SEP IRA DCG & T TTEE
C/O DAN MADISON & CO INC (29) 9,615 9,615 0 *

Katsinam Partners, LP
An AZ Limited Partnership
CNTG LLC GP (30) 238,460 38,460 200,000 *

Keith C. Kleist 9,615 9,615 0 *

Keith C. Kleist
R/O IRA DCG & T TTEE (31) 9,615 9,615 0 *

Kent Petzold (32) 38,460 38,460 0 *

Kuhl Family Holdings LLP
Kuhl Family Trust DTD 5/10/95 GP (33) 9,615 9,615 0 *

L. Michael Howell 15,384 15,384 0 *

Larry Landry 9,615 9,615 0 *

Larry P Staley
Kathy Staley
Comm Prop
c/o PHS&G (34) 9,615 9,615 0 *

Larry P. Staley
Mary Ruth Staley TTEE
Staley Family Tr A 7/7/03 (35) 9,615 9,615 0 *

Larry P. Staley
R/O IRA DCG & T TTEE
C/O PHS&G (36) 9,615 9,615 0 *

Larry P. Staley
Theresa Staley
Comm Prop Investment Account
c/o PHS&G (37) 9,615 9,615 0 *

Leonard R. Judd
R/O IRA DCG & T TTEE (38) 9,615 9,615 0 *

Leonard R. Judd
SEP IRA DCG & T TTEE (39) 9,615 9,615 0 *

Lincoln Trust Company
Trustee FBO Jerry Karnell (40) 38,460 38,460 0 *

Linda Jean Barkdoll
IRA DCG & T TTEE (41) 28,845 28,845 0 *

Linda Jean Barkdoll
Phillip L. Barkdoll TTEE
The Barkdoll Family TR DTD 2/5/90 (42) 48,075 48,075 0 *

Loretta Martin White TTEE
Loretta Martin White
Family Trust DTD 4/20/89 (43) 38,460 38,460 0 *

Marc Summers
IRA DCG & T TTEE (44) 23,076 23,076 0 *

Martin B. Reiss
Rochelle S. Reiss TTEE
Martin B. Reiss DO PC PSP DTD 12/1/94 (45) 9,615 9,615 0 *

Page 10

Michael Boilini 38,460 38,460 0 *

Michael J. Ernemann 9,615 9,615 0 *

Michael J. Kates
IRA DCG & T TTEE (46) 9,615 9,615 0 *

Michael Jon Ernemann
SEP IRA DCG & T TTEE (47) 19,230 19,230 0 *

Michael Joseph Pollak
Geraldine Pollak TTEE
Pollak Rev Liv Trust DTD 11/30/88 (48) 9,615 9,615 0 *

Michael T. Bloxam
R/O IRA DCG & T TTEE (49) 9,615 9,615 0 *

Paul Keniston & Brigitte Keniston TTEE
Keniston Family Rev Trust DTD 6/2/97 (50) 19,230 19,230 0 *

Peacock Hislop Staley & Given
Profit Sharing Plan & Tr # 4
DTD 1/1/90 FBO Larry Staley (51) 9,615 9,615 0 *

Peter F. Salomon TTEE
Peter F. Salomon Rev Liv Trust DTD 3/5/97
As Amended (52) 9,615 9,615 0 *

Peacock Hislop Staley & Given, Inc. (53) 122,591 122,591 0 *

Preston Zuckerman (54) 1,141,347 665,061 476,286 *

Randy S. Murray 9,615 9,615 0 *

Robert Greening
Gayland Ayn Nance TTEES
Greening GST Non-Exempt
Marital Trust DTD 9/23/2000 (55) 38,460 38,460 0 *

Robert J. Dahlin
R/O IRA DCG & T TTEE (56) 19,230 19,230 0 *

Robert L. Walker 19,230 19,230 0 *

Robmar LLC (57) 38,460 38,460 0 *

Ronald Kelley
R/O IRA DCG & T TTEE (58) 9,615 9,615 0 *

Stephen A. McConnell 19,230 19,230 0 *

Suzanne Gail Farmer
IRA DCG & T TTEE (59) 9,615 9,615 0 *

Suzanne Propstra TTEE Suzanne Propstra DTD 12/17/90 (60) 76,920 76,920 0 *

Suzanne R. Ross
R/O IRA DCG & T TTEE (61) 19,230 19,230 0 *

Tad Richards (62) 511,713 511,713 0 *

Terry Hartman
Carol Hartman 9,615 9,615 0 *

Terry W. Dreisewerd 29,615 9,615 20,000 *

Theodore G. Dodenhoff
R/O IRA DCG & T TTEE (63) 9,615 9,615 0 *

Thomas E. Bowles 38,460 38,460 0 *

Thomas R Hislop
c/o Peacock Hislop Staley & Given (64) 9,615 9,615 0 *

Toshizo Watanabe (65) 455,678 455,678 0 *

W T Linney J L Linney
United Sovereign Tr Co TTEES
Linney Family Trust DTD 6/5/96 (66) 9,615 9,615 0 *

John D. Rhodes III (67) 50,000 50,000 0 *
===================================================================================================================================
TOTALS: 6,942,403 6,037,260 905,143
===================================================================================================================================

Page 11

*Denotes less than 1% of the outstanding shares of common stock.

1. Each person named above has the sole investment and voting power with respect
to all shares of common stock shown as beneficially owned by the person, except
as otherwise indicated below. Under applicable SEC rules, a person is deemed the
"beneficial owner" of a security with regard to which the person directly or
indirectly, has or shares (a) the voting power, which includes the power to vote
or direct the voting of the security, or (b) the investment power, which
includes the power to dispose, or direct the disposition, of the security, in
each case irrespective of the person's economic interest in the security. Under
these SEC rules, a person is deemed to beneficially own securities which the
person has the right to acquire within 60 days through the exercise of any
option or warrant or through the conversion of another security.

2. In determining the percent of voting stock owned by a person after this
offering (a) the numerator is the number of shares of common stock beneficially
owned by the person, including shares the beneficial ownership of which may be
acquired within 60 days upon the exercise of options or warrants or conversion
of convertible securities, and (b) the denominator is the total of (i) the
24,359,393 shares of common stock that would be outstanding after the offering
assuming the complete exercise of the warrants referenced herein. Neither the
numerator nor the denominator includes shares which may be issued upon the
exercise of any other options or warrants or the conversion of any other
convertible securities.

3. Includes 76,920 shares of our common stock held by the Anthony Silverman R/O
IRA DCG & T TTEE. Anthony Silverman and Richard Bourke are the trustees that
exercise the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

4. Includes 19,230 shares of our common stock held by the Arthur M. Clifford and
Martha D. Clifford TTEES, Clifford Revocable Trust DTD 10/13/94. Arthur M.
Clifford is the trustee that exercise the sole voting and/or dispositive powers
with regard to our common stock owned by the trust.

5. Includes 9,615 shares of our common stock held by the Arthur Norris TTEE,
Survivors Trust DTD 8/17/1998. Arthur Norris is the trustee that exercises the
sole voting and/or dispositive powers with regard to our common stock owned by
the trust.

6. Includes 76,920 shares of our common stock held by Bryant Pickering TTEE,
Veech Trust DTD 6/7/93, Principal Account. Bryant Pickering is the trustee that
exercises the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

7. Includes 76,920 shares of our common stock held by Burton P. Freireich and
Ursula G. Freireich G PB & U Freireich LTD Partnership. Burton P. Freireich and
Ursula G. Freireich are the partners that exercise the sole voting and/or
dispositive powers with regard to our common stock owned by the partnership.

8. Includes 9,615 shares of our common stock held by Burton S. Kruglick TTEE
Burton S. Kruglick Trust DTD 7/28/82. Burton S. Kruglick is the trustee that
exercises the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

9. Includes 9,615 shares of our common stock held by Conner Properties A
Partnership. Pat Conner and Frances Conner are the partners that exercise the
sole voting and/or dispositive powers with regard to our common stock owned by
the partnership.

10. Includes 9,615 shares of our common stock held by D. Louis Travisano and
Yvonne A. Travisano TTEES, Travisano Family Trust DTD 7/23/96. D. Louis
Travisano and Yvonne A. Travisano are the trustees that exercise the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

11. Includes 19,230 shares of our common stock held by David Nebel and Maria
Borella TTEES, David Nebel & Maria BorellaTrust DTD 11/6/98. David Nebel and
Maria Borella are the trustees that exercise the sole voting and/or dispositive
powers with regard to our common stock owned by the trust.

12. Includes 9,615 shares of our common stock held by Debar N. Koning R/O IRA
DCG & T TTEE. Debar N. Koning is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

Page 12

13. Includes 9,615 shares of our common stock held by Derwood E. Bammann TTEE,
Bammann Children's Rev Trust I DTD 8/31/98. Derwood E. Bammann is the trustee
that exercises the sole voting and/or dispositive powers with regard to our
common stock owned by the trust.

14. Includes 9,615 shares of our common stock held by Dorothy A. White TTEE,
Dorothy A. White Trust DTD 11/1/90. Dorothy A. White is the trustee that
exercises the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

15. Includes a warrant to purchase 40,864 shares of our common stock held by
Edward B. Vallone, II. Mr. Vallone is a broker/dealer at Peacock, Hislop, Staley
& Given, Inc., the placement agent for the Company's March 2004 private
placement offering, and received this warrant in compensation for services
provided pursuant to the Placement Agency Agreement.

16. Includes 28,845 shares of our common stock held by Floyd D. Smith TTEE, F D
Smith Family TR # 2 DTD 11/15/76. Floyd D. Smith and Phoebe Ann Smith are the
trustees that exercise the sole voting and/or dispositive powers with regard to
our common stock owned by the trust.

17. Includes 9,615 shares of our common stock held by Francis W. Farmer, Jr. IRA
DCG & T TTEE. Francis W. Farmer, Jr. is the trustee that exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
trust.

18. Includes 9,615 shares of our common stock held by G H Ventures LLLP, An AZ
Limited Liability Limited Partnership, Jack M. & Louise Gumbin GP. Jack M.
Gumbin exercises the sole voting and/or dispositive powers with regard to our
common stock owned by the partnership.

19. Includes 1,229,944 shares of our common stock held by Gary Moulton. Mr.
Moulton received shares pursuant to the Asset Purchase Agreement and Plan of
Reorganization by and between the Company and Glyphics Communications, Inc.
effective June 1, 2004. Mr. Moulton is a former Glyphics Communications
shareholder and officer and is currently Vice President of Audio Communications
with the Company.

20. Includes 19,230 shares of our common stock held by H. Holden Smith TTEE, H.
Holden Smith Trust DTD 11/27/95. H. Holden Smith is the trustee that exercises
the sole voting and/or dispositive powers with regard to our common stock owned
by the trust.

21. Includes 19,230 shares of our common stock held by J. Lynton Allred and
Joyce E. Allred TTEE, J Lynton & Joyce E. Allred Living Trust DTD 6/21/95. J.
Lynton Allred and Joyce E. Allred are the trustees that exercise the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

22. Includes 9,615 shares of our common stock held by James Peter Kleinegger and
Betty L N Kleinegger TTEES, James & Betty Kleinegger Rev Trust Amended 8/4/00.
James Peter Kleinegger and Betty L Kleinegger are the trustees that exercise the
sole voting and/or dispositive powers with regard to our common stock owned by
the trust.

23. Includes 19,230 shares of our common stock held by James W. Nace, R/O IRA
DCG & T TTEE. James W. Nace is the trustee that exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

24. Includes 9,615 shares of our common stock held by Joanne Bowles TTEE, Joanne
Bowles Family Trust DTD 11/05/98. Joanne Bowles is the trustee that exercises
the sole voting and/or dispositive powers with regard to our common stock owned
by the trust.

25. Includes 19,230 shares of our common stock held by John A. Logan and Alice
Y. Logan TTEES, Logan Family Trust DTD 3/24/93. John A. Logan is the trustee
that exercise the sole voting and/or dispositive powers with regard to our
common stock owned by the trust.

26. Includes 19,230 shares of our common stock held by John Cotton IRA DCG & T
TTEE. John C. Cotton is the trustee that exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

Page 13

27. Includes 1,326,859 shares of our common stock held by the John Rhodes Family
Limited Partnership. The partnership received shares pursuant to the Asset
Purchase Agreement and Plan of Reorganization by and between the Company and
Glyphics Communications, Inc. effective June 1, 2004. Mr. John D. Rhodes, III is
a former Glyphics shareholder and chairman and exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the partnership

28. Includes 9,615 shares of our common stock held by Karen A Gish Sole &
Separate. Karen A Gish exercises the sole voting and/or dispositive powers with
regard to our common stock.

29. Includes 9,615 shares of our common stock held by Kathleen Meredith Madison
SEP IRA DCG & T TTEE, C/O DAN MADISON & CO INC. Kathleen Meredith Madison is the
trustee that exercises the sole voting and/or dispositive powers with regard to
our common stock owned by the trust.

30. Includes 38,460 shares of our common stock held by the Katsinam Partners,
LP, An AZ Limited Partnership, CNTG LLC GP. Richard Bourke exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
partnership.

31. Includes 9,615 shares of our common stock held by Keith C. Kleist R/O IRA
DCG & T TTEE. Keith C. Kleist is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

32. Includes 38,460 shares of our common stock held by Kent Petzold, a current
board member of the Company. Mr. Petzold received the shares pursuant to his
investment in the Company's March 2004 private placement offering.

33. Includes 9,615 shares of our common stock held by Kuhl Family Holdings LLP,
Kuhl Family Trust DTD 5/10/95 GP. Wayne E. Kuhl is the trustee that exercises
the sole voting and/or dispositive powers with regard to our common stock owned
by the trust.

34. Includes 9,615 shares of our common stock held by Larry P Staley Kathy
Staley Comm Prop c/o PHS&G. Mr. Staley is a broker/dealer and partner of
Peacock, Hislop, Staley & Given, Inc., the placement agent for the Company's
March 2004 private placement offering. Larry P. Staley and Theresa Staley
exercise the sole voting and/or dispositive powers with regard to our common
stock.

35. Includes 9,615 shares of our common stock held by Larry P. Staley Mary Ruth
Staley TTEE, Staley Family Tr A 7/7/03. Mr. Staley is a broker/dealer and
partner of Peacock, Hislop, Staley & Given, Inc., the placement agent for the
Company's March 2004 private placement offering. Larry P. Staley and Mary Ruth
Staley are the trustees that exercise the sole voting and/or dispositive powers
with regard to our common stock owned by the trust.

36. Includes 9,615 shares of our common stock held by Larry P. Staley R/O IRA
DCG & T TTEEC/O PHS&G. Mr. Staley is a broker/dealer and partner of Peacock,
Hislop, Staley & Given, Inc., the placement agent for the Company's March 2004
private placement offering. Larry P. Staley is the trustee that exercises the
sole voting and/or dispositive powers with regard to our common stock owned by
the trust.

37. Includes 9,615 shares of our common stock held by Larry P. Staley Theresa
Staley Comm Prop Investment Account c/o PHS&G. Mr. Staley is a broker/dealer and
partner of Peacock, Hislop, Staley & Given, Inc., the placement agent for the
Company's March 2004 private placement offering. Larry P. Staley and Theresa
Staley exercise the sole voting and/or dispositive powers with regard to our
common stock.

38. Includes 9,615 shares of our common stock held by Leonard R. Judd R/O IRA
DCG & T TTEE. Leonard R. Judd is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

39. Includes 9,615 shares of our common stock held by Leonard R. Judd SEP IRA
DCG & T TTEE. Leonard R. Judd is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

40. Includes 38,460 shares of our common stock held by Lincoln Trust Company
Trustee FBO Jerry Karnell. Mr. Karnell is a dealer/broker and employee of
Peacock, Hislop, Staley & Given, Inc., the placement agent for the Company's
March 2004 private placement offering. Lincoln Trust Company is the trustee that
exercises the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

Page 14

41. Includes 28,845 shares of our common stock held by Linda Jean Barkdoll IRA
DCG & T TTEE. Linda Jean Barkdoll is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

42. Includes 48,075 shares of our common stock held by Linda Jean Barkdoll
Phillip L. Barkdoll TTEE, The Barkdoll Family TR DTD 2/5/90. Phillip L. Barkdoll
is the trustee that exercises the sole voting and/or dispositive powers with
regard to our common stock owned by the trust.

43. Includes 38,460 shares of our common stock held by Loretta Martin White TTEE
Loretta Martin White Family Trust DTD 4/20/89. Loretta Martin White is the
trustee that exercises the sole voting and/or dispositive powers with regard to
our common stock owned by the trust.

44. Includes 23,076 shares of our common stock held by Marc Summers IRA DCG & T
TTEE. Mr. Summers is broker/dealer at Peacock, Hislop, Staley & Given, Inc., the
placement agent for the Company's March 2004 private placement offering. Marc
Summers is the trustee that exercises the sole voting and/or dispositive powers
with regard to our common stock owned by the trust.

45. Includes 9,615 shares of our common stock held by Martin B. Reiss Rochelle
S. Reiss TTEE, Martin B. Reiss DO PC PSP DTD 12/1/94. Martin B. Reiss and
Rochelle S. Reiss are the trustees that exercise the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

46. Includes 9,615 shares of our common stock held by Michael J. Kates, IRA DCG
& T TTEE. Michael J. Kates is the trustee that exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

47. Includes 19,230 shares of our common stock held by Michael Jon Ernemann, SEP
IRA DCG & T TTEE. Michael J. Ernemann is the trustee that exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
trust.

48. Includes 9,615 shares of our common stock held by Michael Joseph Pollak
Geraldine Pollak TTEE, Pollak Rev Liv Trust DTD 11/30/88. Michael Joseph Pollak
and Geraldine Pollak are the trustees that exercise the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

49. Includes 9,615 shares of our common stock held by Michael T. Bloxam, R/O IRA
DCG & T TTEE. Michael T. Bloxam is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

50. Includes 19,230 shares of our common stock held by Paul Keniston & Brigitte
Keniston TTEE, Keniston Family Rev Trust DTD 6/2/97. Paul Keniston and Brigitte
Keniston are the trustees that exercise the sole voting and/or dispositive
powers with regard to our common stock owned by the trust.

51. Includes 9,615 shares of our common stock held by Peacock Hislop Staley &
Given Profit Sharing Plan & Tr # 4DTD 1/1/90 FBO Larry Staley. Mr. Staley is a
broker/dealer and partner of Peacock, Hislop, Staley & Given, Inc., the
placement agent for the Company's March 2004 private placement offering. Larry
Staley is the trustee that exercises the sole voting and/or dispositive powers
with regard to our common stock owned by the trust.

52. Includes 9,615 shares of our common stock held by Peter F. Salomon TTEE,
Peter F. Salomon Rev Liv Trust DTD 3/5/97 As Amended. Peter F. Salomon is the
trustee that exercises the sole voting and/or dispositive powers with regard to
our common stock owned by the trust.

53. Includes a warrant to purchase 122,591 shares of our common stock held by
Peacock, Hislop Staley & Given, Inc. Peacock, Hislop, Staley & Given, Inc., the
placement agent for the Company's March 2004 private placement offering,
received this warrant in compensation for services provided pursuant to the
Placement Agency Agreement. Thomas L. Thomas, Thomas R. Hislop and David W.
Miller exercise the sole voting and/or dispositive powers with regard to our
common stock represented by the warrant.

54. Includes 665,061 shares of our common stock held by Preston Zuckerman, a
former Company board member and officer. Mr. Zuckerman acquired the shares as a
result of debt conversion agreements in 2004 pertaining to notes held by him as
a former stockholder and officer of Learning-Edge, Inc. pursuant to the October
1, 2001 Plan of Reorganization and Agreement of Merger by and among the Company,
Edge Acquisition Subsidiary, Inc., Learning-Edge, Inc. and the Stockholders of
Learning-Edge, Inc.

Page 15

55. Includes 38,460 shares of our common stock held by Robert Greening Gayland
Ayn Nance TTEES, Greening GST Non-Exempt Marital Trust DTD 9/23/2000. Robert
Greening is the trustee that exercises the sole voting and/or dispositive powers
with regard to our common stock owned by the trust.

56. Includes 19,230 shares of our common stock held by Robert J. Dahlin R/O IRA
DCG & T TTEE. Robert J. Dahlin is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

57. Includes 38,460 shares of our common stock held by Robmar LLC. Robert L.
Ward exercises the sole voting and/or dispositive powers with regard to our
common stock owned by the LLC.

58. Includes 9,615 shares of our common stock held by Ronald Kelley R/O IRA DCG
& T TTEE. Ronald B. Kelley is the trustee that exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

59. Includes 9,615 shares of our common stock held by Suzanne Gail Farmer IRA
DCG & T TTEE. Suzanne Gail Farmer is the trustee that that exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
trust.

60. Includes 76,920 shares of our common stock held by Suzanne Propstra TTEE
Suzanne Propstra Trust DTD 12/17/90. Suzanne P. Propstra exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
trust.

61. Includes 19,230 shares of our common stock held by Suzanne R. Ross R/O IRA
DCG & T TTEE. Suzanne R. Ross is the trustee that exercises the sole voting
and/or dispositive powers with regard to our common stock owned by the trust.

62. Includes 511,713 shares of our common stock held by Tad Richards. Mr.
Richards received shares pursuant to the Asset Purchase Agreement and Plan of
Reorganization by and between the Company and Glyphics Communications, Inc.
effective June 1, 2004. Mr. Richards is a former Glyphics shareholder and
officer and was a Vice President of Channel Sales with the Company.

63. Includes 9,615 shares of our common stock held by Theodore G. Dodenhoff R/O
IRA DCG & T TTEE. Theodore G. Dodenhoff is the trustee that exercises the sole
voting and/or dispositive powers with regard to our common stock owned by the
trust.

64. Includes 9,615 shares of our common stock held by Thomas R Hislop c/o
Peacock Hislop Staley & Given. Mr. Hislop is a broker/dealer and owner of
Peacock, Hislop, Staley & Given, Inc., the placement agent for the Company's
March 2004 private placement offering.

65. Includes 455,678 shares of our common stock held by Toshizo Watanabe. Mr.
Watanable was a Glyphics shareholder and received his shares pursuant to the
Asset Purchase Agreement and Plan of Reorganization by and between the Company.

66. Includes 9,615 shares of our common stock held by W T Linney J L Linney
United Sovereign Tr Co TTEES, Linney Family Trust DTD 6/5/96. Warren Linney and
Joan Linney are the trustees that that exercises the sole voting and/or
dispositive powers with regard to our common stock owned by the trust.

67. Includes shares issuable upon exercise of a warrant to purchase 50,000
shares of our common stock held by John D. Rhodes III pursuant to a Note
Modification and Settlement Agreement with the Company dated December 8, 2004.

68. Includes 9,615 shares of our common stock held by Don E. Lovell, TTEE, Don
E. Lovell Charitable Trust DTD 09/28/01. Don E. Lovell is the trustee that
exercises the sole voting and/or dispositive powers with regard to our common
stock owned by the trust.

PLAN OF DISTRIBUTION

The shares of our common stock offered by this prospectus may be sold
by the selling stockholders or their transferees from time to time in: (i)
transactions in the over-the-counter market, the American Stock Exchange, or on
one or more exchanges; (ii) privately negotiated transactions; (iii)
underwritten offerings; or (iv) a combination of these methods of sale. The
selling stockholders may sell the shares of our common stock at: (i) fixed
prices which may be changed; (ii) market prices prevailing at the time of sale;
(iii) prices related to prevailing market prices; or (iv) privately negotiated
prices.

Page 16

DIRECT SALES, AGENTS, DEALERS AND UNDERWRITERS

The selling stockholders or their transferees may effect transactions
by selling the shares of common stock either directly to purchasers; or to or
through agents, dealers or underwriters designated from time to time. Agents,
dealers or underwriters may receive compensation in the form of underwriting
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom they act as agent or to whom they sell as
principals, or both. The selling stockholders and any agents, dealers or
underwriters that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any discount or commission received by them and any profit on the resale of
shares as principal might be deemed to be underwriting discounts or commissions
under the Securities Act.

SUPPLEMENTS

To the extent required, we will set forth in a supplement to this
prospectus filed with the SEC the number of shares to be sold, the purchase
price and public offering price, any new selling stockholders (who will be
limited to stockholders who acquire shares after the date of this prospectus
from persons named as selling stockholders in this prospectus), the name or
names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offering.

STATE SECURITIES LAW

Under the securities laws of some states, the selling stockholders may
only sell the shares in those states through registered or licensed brokers or
dealers. In addition, in some states the selling stockholders may not sell the
shares unless they have been registered or qualified for sale in that state or
an exemption from registration or qualification is available and is satisfied.

EXPENSES AND INDEMNIFICATION

We will not receive any of the proceeds from the sale of the shares of
common stock sold by the selling stockholders and we will bear all expenses
related to the registration of this offering. However, we will not pay for any
underwriting commissions, fees or discounts, if any. We have agreed to indemnify
certain of the selling stockholders against certain civil liabilities, including
certain liabilities which may arise under the Securities Act.

LEGAL MATTERS

The validity of the issuance of the shares of common stock offered by
this prospectus will be passed upon for us by Jackson Walker L.L.P.

EXPERTS

The consolidated financial statements as of and for the years ended
March 31, 2003 and March 31, 2004, are incorporated by reference in this
prospectus by reference to the Annual Report on Form 10-K for the years ending
March 31, 2003 and March 31, 2004. Our consolidated financial statements as of
and for the years ended March 31, 2003 and March 31, 2004 incorporated by
reference in this prospectus have been audited by BDO Seidman, LLP, an
independent registered public accounting firm, to the extent set forth in their
reports (which contain an explanatory paragraph relating to the Company's
ability to continue as a going concern, as described in Note 2 to the
consolidated financial statements) and are incorporated herein in reliance upon
such reports given on the authority of said firm as experts in auditing and
accounting.

The consolidated financial statements as of March 31, 2002 and the
period ended March 31, 2002 incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended March 31, 2002 have been so
incorporated in reliance on the report (which contains an explanatory paragraph
relating to the Company's ability to continue as a going concern as described in
Note 2 to the consolidated financial statements) of PricewaterhouseCoopers LLP,
an independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.

Page 17

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" some of the documents
that we file with it into this prospectus, which means incorporated documents
are considered part of this prospectus. Therefore, we can disclose important
information to you by referring you to those documents, and that information
that we file with the SEC will automatically updates and supersedes this
incorporated information.

The following documents, which have been filed with the Commission by
the Company, are incorporated herein by reference and made a part hereof:

o our Annual Report on Form 10-K for the year ended March 31, 2004,
filed with the SEC on June 29, 2004;

o our Current Report on Form 8-K, filed with the SEC on July 23,
2004;

o our Current Report on Form 8-K/A, filed with the SEC on August 13,
2004;

o our Current Report on Form 8-K, filed with the SEC on August 16,
2004;

o our Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2004, filed with the SEC on August 16, 2004;

o our Current Report on Form 8-K, filed with the SEC on September
14, 2004;

o our Current Report on Form 8-K, filed with the SEC on September
23, 2004;

o our Notification of Late Filing on Form 12B-25, filed with the SEC
on November 16, 2004;

o our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2004, filed with the SEC on November 18, 2004;

o our Current Report on Form 8-K, filed with the SEC on December 20,
2004;

o our Current Report on Form 8-K/A, fled with the SEC on January 11,
2005;

o our Current Report on Form 10-Q/A, filed with the SEC on January
11, 2005;

o our Current Report on Form 8-K, filed with the SEC on February 9,
2005;

o our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2004, filed with the SEC on February 10, 2005;

o our Current Report on Form 8-K, filed with the SEC on February 18,
2005; and

o our Current Report Form 8-K filed with the SEC on March 2, 2005.

All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering of the Common Stock to be made
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.

Page 18

The Company will provide, without charge, to each person to whom a copy
of this prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the information that this prospectus
incorporates). Written or telephone requests for such documents should be
directed to: James L. Dunn, Jr., Senior Vice President & General Counsel, 2999
N. 44th Street, Suite 650, Phoenix, AZ 85018, Telephone: (602) 952-1200, Email:
jdunn@ilinc.com.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document that we file
at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. Our SEC filings are also available to
the public at the Company's Web site at http://www.ilinc.com and the SEC's Web
site at http://www.sec.gov.

Page 19

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses to be paid by us in
connection with the offering described in this registration statement. All
amounts are estimates, except the SEC registration fee.

SEC Registration Fee $ 277.13
Printing Costs $ 5,000.00
Legal Fees and Expenses $ 5,000.00
Accounting Fees and Expenses $15,000.00
----------
TOTAL $25,277.13

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

DELAWARE GENERAL CORPORATION LAW

Section 145(a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in subsections (a) and (b). Such determination shall be made (1) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, even though less than a
quorum or (2) if there are no such directors or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.

Page II-1

Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.

Section 145(f) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.

Section 145(g) of the DGCL provides that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Section 145.

Section 145(j) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such a person.

RESTATED CERTIFICATE OF INCORPORATION

The Restated Certificate of Incorporation of the Company provides that
a director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided for in Section 174 of the DGCL. If the
DGCL is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Company, in
addition to the limitation on personal liability described above, shall be
limited to the fullest extent permitted by the amended DGCL. Further, any repeal
or modification of such provision of the Restated Certificate of Incorporation
by the stockholders of the Company shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Company existing at the time of such repeal or modification.

BYLAWS

The Bylaws of the Company provide that the Company will indemnify any
director or officer of the Company to the full extent permitted by applicable
law, and may, if and to the extent authorized by the Board of Directors, so
indemnify such other persons whom it has the power to indemnify against any
liability, reasonable expense or other matter whatsoever.

INSURANCE

The Company maintains liability insurance for the benefit of its
directors and officers. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers or controlling persons of the Company pursuant to the foregoing
provisions, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act, as amended, and is therefore unenforceable.

ITEM 16. EXHIBITS.

The list of exhibits under the heading EXHIBIT LIST beginning on page
II-6 of this registration statement is incorporated into this Item 16 by
reference.

Page II-2

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act 1933, as amended (the "Securities Act");

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
in securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (Section 230.424(b)
of this chapter) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by
reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

Page II-3

POWER OF ATTORNEY

Each person whose signature appears below authorizes James L. Dunn,
Jr., to execute in the name of each such person who is then an officer or
director of the Company and to file any amendments to this registration
statement, including post-effective amendments, necessary or advisable to enable
the Company (the registrant) to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in respect thereof, in connection with the registration of
the securities which are the subject of this registration statement, which
amendments may make such changes in the registration statement as such attorney
may deem appropriate.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Phoenix, State of Arizona, on March 10, 2005.

ILINC COMMUNICATIONS, INC.

By: /s/ JAMES M. POWERS, JR.
------------------------------------------
James M. Powers, Jr.
Chairman of the Board, President and Chief
Executive Officer

NAME CAPACITY DATE
---- -------- ----

/s/ JAMES M. POWERS, JR. Chairman of the Board, President March 10, 2005
---------------------------- and Chief Executive Officer
James M. Powers, Jr.

/s/ JOHN S. HODGSON Sr. Vice President March 10, 2005
---------------------------- and Chief Financial Officer
John S. Hodgson

/s/ JAMES H. COLLINS Director March 10, 2005
---------------------------
James H. Collins

/s/ KENT PETZOLD Director March 10, 2005
---------------------------
Kent Petzold

/s/ DANIEL T. ROBINSON, JR. Director March 10, 2005
---------------------------
Daniel T. Robinson, Jr.

/s/ CRAIG W. STULL Director March 10, 2005
---------------------------
Craig W. Stull

Page II-4

EXHIBIT LIST

EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------

3.1(1) Restated Certificate of Incorporation of the Company

3.2(1) Bylaws of the Company

3.3(7) Restated Certificate of Incorporation of the Company

3.4(7) Amendment of Bylaws of the Company

3.5(8) Restated Certificate of Incorporation of the Company

3.6(14) Certificate of Designations of Series A Preferred Stock

3.7(15) Certificate of Amendment of Restated Certificate of
Incorporation of the Company

4.1(1) Form of certificate evidencing ownership of Common Stock of
the Company

4.2(1) Form of Registration Rights Agreement for Owners of Founding
Affiliated Practices

4.3(1) Registration Rights Agreement dated September 30, 1997 between
the Company and the stockholders named therein

4.4(2) Form of Stockholders' Agreement for Owners of Affiliated
Practices

4.5(3) Form of Indenture from the Company to U.S. Trust Company of
Texas, N.A., as Trustee relating to the Convertible Debt
Securities

4.6(7) Form of certificate evidencing ownership of Common Stock of
the Company

4.7(8) Form of Convertible Redeemable Subordinated Note

4.8(8) Form of Redeemable Warrant (2002 Private Placement Offering)

4.9(14) Form of Redeemable Warrant (2003 Private Placement Offering)

++5.1 Opinion of Jackson Walker L.L.P.

+10.1(1) The Company's 1997 Stock Compensation Plan

+10.9(7) Employment Agreement dated November 12, 2000 between the
Company and James M. Powers, Jr.

+10.11(7) Employment Agreement dated February 15, 2001 between the
Company and James Dunn, Jr.

10.14(9) Plan of Reorganization and Agreement of Merger by and among
the Company, Edge Acquisition Subsidiary, Inc. and the
Stockholders of Learning-Edge, Inc.

10.15(10) Plan of Reorganization and Agreement of Merger by and among
the Company, TW Acquisition Subsidiary, Inc., ThoughtWare
Technologies, Inc. and the Series B Preferred Stockholder of
ThoughtWare Technologies, Inc.

10.16(11) Asset Purchase Agreement by and among the Company, and Quisic
Corporation. Common Stock Purchase Agreement by and between
the Company, Investor Growth Capital Limited, A Guernsey
Corporation and Investor Group, L.P., A Guernsey Limited
Partnership and Leeds Equity Partners III, L.P.

10.16(12) Asset Purchase Agreement by and among the Company, and
Mentergy, Inc. and its wholly-owned subsidiaries, LearnLinc
Corp and Gilat-Allen Communications, Inc.

Page II-5

10.17(14) Subcontractor Agreement between the Company and Interactive
Alchemy, Inc.

+10.18(17) Employment Agreement dated January 6, 2004 between the Company
and Nathan Cocozza

10.19(17) Note Purchase Agreement dated February 12, 2004

10.20(17) Unit Purchase and Agency Agreement dated April 19, 2004
between the Company and Cerberus Financial, Inc.

10.21(17) Placement Agency Agreement dated March 10, 2004 between the
Company and Peacock, Hislop, Staley, and Given, Inc.

10.22(16) Asset Purchase Agreement and Plan of Reorganization by and
between the Company and Glyphics Communications, Inc.

+10.23(18) Employment Agreement dated June 1, 2004 between the Company
and Gary L. Moulton

+10.24(18) Employment Agreement dated July 19, 2004 between the Company
and John S. Hodgson

14.1(18) Code of Ethics

16(13) Letter re Change in Certifying Accountant

++23.1 Consent of independent auditors, BDO Seidman, LLP, dated March
9, 2005 to the incorporation by reference of their report
dated May 21, 2004 in the Company's annual report on Form 10-K
for the year ended March 31, 2004.

++23.2 Consent of independent auditors, PricewaterhouseCoopers, LLP
dated March 10, 2005 to the incorporation by reference of
their report dated July 11, 2002 in the Company's annual
report on Form 10-K for the year ended March 31, 2004.

--------------------------------------------------------------------------------

(1) Previously filed as an exhibit to the Company's Registration
Statement on Form S-1 (No. 333-37633), and incorporated herein by
reference.
(2) Previously filed as an exhibit to the Company's Registration
Statement on Form S-4 (No. 333-78535), and incorporated herein by
reference.
(3) Previously filed as an exhibit to the Company's Registration
Statement on Form S-4 (No. 333-64665), and incorporated herein by
reference.
(4) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 1998.
(5) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 1998.
(6) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended March 31, 2000.
(7) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended March 31, 2001.
(8) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended March 31, 2002.
(9) Previously filed as an exhibit to the Company's Form 8-K filed
October 16, 2001.
(10) Previously filed as an exhibit to the Company's Form 8-K filed
January 30, 2002
(11) Previously filed as an exhibit to the Company's Form 8-K filed
July 2, 2002.
(12) Previously filed as an exhibit to the Company's Form 8-K filed
December 20, 2002.
(13) Previously filed as an exhibit to the Company's Form 8-K filed
April 3, 2003.
(14) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 2003.

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(15) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended December 31, 2003.
(16) Previously filed as an exhibit to the Company's Form 8-K filed
June 16, 2004.
(17) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended March 31, 2004.
(18) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended June 30, 2004.
+ Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to the requirements of Item 15
of Form 10-K.
++ Furnished herewith as an Exhibit

Page II-7