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                                                                    Exhibit 99.1

                                  RISK FACTORS

         Certain statements in this Quarterly Report on Form 10-Q and certain
statements made by the Company in other published documents (including, without
limitation, press releases) are forward-looking in nature and, as such,
constitute "forward-looking statements" under the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, but are not
limited to, statements about the Company's plans, objectives, expectations and
intentions and other statements contained in this Quarterly Report on Form 10-Q
or elsewhere that are not historical facts. When used in this Quarterly Report
on Form 10-Q or elsewhere, the words "expects," "anticipates," "intends,"
"plans," "believes," "seeks" and "estimates" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements. These factors consist
primarily of the risks identified below.


As a company with a limited operating history in a new and rapidly changing
industry, it is difficult to predict our future growth and operating results.

Our limited operating history makes predicting our future growth and operating
results difficult. We were incorporated in Delaware in 1997 and began our first
commercial service in April 1998. Our management team and other employees have
worked at ITXC for only a short period of time. Potential purchasers of our
stock should consider the risks and uncertainties that an early stage company
like ours will face in the new and rapidly evolving market for Internet-voice
services. We have not proven that we can:

     .  increase awareness of our brand and continue to build user loyalty;

     .  maintain our current, and develop new, relationships with our affiliates
        (the unrelated third parties that complete voice and fax calls over our
        network) , as well as with our customers;

     .  respond effectively to competitive pressures; and

     .  continue to develop and upgrade our network and technology.

If we cannot accomplish these goals, our business may not succeed.


We have not been profitable and expect future losses.

To date, we have not been profitable. We may never be profitable or, if we
become profitable, we may be unable to sustain profitability. We have incurred
significant losses since inception. We reported net losses of $0.6 million for
the inception period from July 21, 1997 through December
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31, 1997, $7.2 million for the year ended December 31, 1998 and $13.6 million
for the nine months ended September 30, 1999. We expect to continue to incur
significant losses for the foreseeable future. As of September 30, 1999, our
accumulated deficit was $21.5 million. Our revenue may not grow or may not even
continue at the current level.


The growth of ITXC.net depends upon the growth of the Internet, which may not
continue.

The growth of ITXC.net depends on continued growth in the use of the Internet
generally and on the growth in the use of the Internet through telephones and
other devices, rather than personal computers. Growth of the Internet may be
inhibited by a number of factors, such as:

       .  quality of infrastructure;

       .  security concerns;

       .  technological failures, such as viruses;

       .  inconsistent quality of service; and

       .  lack of availability of cost-effective, high-speed service.

Even if Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth or its performance or
reliability may decline.


We are growing rapidly and effectively managing our growth may be difficult.

Our business has grown rapidly in terms of customers, employees and the size of
ITXC.net since our inception. This growth has placed a significant strain on our
resources and systems which has resulted in fluctuations in our network
expenses. Our business model depends on continued rapid growth which will put a
further strain on our resources, systems and management. If we are not able to
effectively manage our growth by implementing systems, expanding ITXC.net and
hiring, training and managing employees, our ability to offer our services will
be materially harmed.


Our business may be harmed because we rely on a third-party communications
infrastructure over which we have no control.

Our service could be disrupted, our reputation could be hurt and we could lose
customers, if the quality and maintenance of the third-party communications
infrastructure on which we rely suffers. This infrastructure, including the
Internet, is used to carry our voice traffic between our customers and
affiliates. We have no control over whether the infrastructure on which we rely
will be adequately maintained by these third parties or whether these third
parties are able to upgrade

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or improve their equipment and prevent it from becoming obsolete. If these third
parties fail to maintain, upgrade or improve this equipment, our business may be
materially harmed.


If we cannot maintain relationships with the only vendors of gateway equipment
upon which ITXC.net depends, our network expenses could rise significantly.

ITXC.net is currently configured to use gateway equipment and software which is
primarily manufactured by three vendors, Lucent Technologies, VocalTec
Communications and Cisco Systems. A gateway is a computer server that translates
voice and voice- related signaling back and forth between a traditional
telephone network and a data network. Gateways provided by other vendors are not
currently interoperable with ITXC.net. If we or our affiliates are unable to
maintain satisfactory purchasing terms with Lucent, VocalTec and/or Cisco, we
will have to make significant technological modifications to ITXC.net which
could raise our network expenses significantly and have a material adverse
affect on our business, financial condition, operating results and future
prospects.


Our network may not be able to handle increased traffic and a large number of
simultaneous calls, which could hurt our reputation and result in a loss of
customers.

Our network relies on hardware and software that we or our affiliates have
developed or acquired. We expect that our network traffic and volume of
simultaneous calls will increase significantly. If the hardware and software
used in our network cannot accommodate this additional volume, our reputation
could be damaged and we could lose customers.


Failure to attract and retain affiliates and customers will harm our business.

If we are unable to attract and retain affiliates and customers, the traffic on
ITXC.net may not increase and we may not be able to increase our global reach.
Our ability to attract and retain affiliates and customers will depend on a
number of factors, including:

     .  our ability to reach agreement with telecommunications companies,
        telephony resellers and Internet service providers regarding the terms
        and conditions applicable to our business relationship;

     .  our success in marketing our services to potential new and existing
        affiliates and customers;

     .  pricing by traditional carriers;

     .  the rate at which we are able to deploy our network and services;

     .  our ability to locate qualified foreign affiliates and call termination
        providers;

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     .  consolidation in the telecommunications industry; and

     .  the quality of the customer and technical support we provide.


Our quarterly operating results may fluctuate and could fall below expectations
of investors and industry analysts, resulting in a decline in our stock price.

Our quarterly operating results have varied widely in the past and could
fluctuate significantly in the future. Therefore, stockholders and potential
stockholders should not rely on quarter-to-quarter comparisons for indications
of future performance. Certain factors may influence our quarterly operating
results, including:

         .  the amount and timing of capital expenditures and other costs
            relating to the expansion of ITXC.net;

         .  the introduction of new or enhanced services or changes in pricing
            policies by us or our competitors; and

         .  economic conditions specific to the Internet or all or a portion of
            the technology sector.

If we cannot successfully address these factors, our operating results may fall
below analyst and investor expectations and the price of our common stock could
decline.


A small number of customers account for a substantial portion of our revenues;
the loss of certain significant customers may significantly reduce our revenue.

During 1998, our 10 largest customers accounted for approximately 87% of our
revenue. The loss of certain significant customers may significantly reduce our
revenue. We do not have exclusive arrangements with our customers. As a result,
our significant customers may decrease or discontinue use of our service. For
information regarding the termination of services to certain significant
customers, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Results of Operations - Comparison of the Three and Nine
Months Ended September 30, 1998 and 1999 - Selling, General and Administrative
Expenses."


The lack of interoperability among hardware produced by different vendors may
limit our ability to grow a worldwide, fully interoperable network.

Unless an interoperability standard is widely adopted and used by manufacturers
of gateways and other hardware, ITXC.net's growth will be limited. Our business
model depends on the growth of ITXC.net. Without a widely adopted
interoperability standard, terminators of voice traffic over the Internet will
continue to be required to only accept voice traffic which was originated on
gateways made by the same manufacturer as their terminating gateway. If the
iNOW!

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interoperability initiative or another similar initiative is not widely adopted
and implemented, our network may not grow and our business could be adversely
affected.


Our marketing efforts could be adversely affected if we do not lead the
development of new interoperability standards.

If we do not play a leadership role in the development of new interoperability
standards, the perception that we are an industry leader could be jeopardized.
We achieved that perception, in part, by leading the effort to develop the iNOW!
initiative. A standard for the interoperability of Internet voice services and
products other than iNOW! could emerge without our participation. If that
happens, our marketing efforts could be adversely affected.


Intense price competition and the nature of the calls that we place over
ITXC.net may limit our revenues.

Our revenues are not solely tied to the number of minutes of calls that are
placed over ITXC.net. Intense competition could reduce the prices that we charge
for our services. In addition, our revenues are affected by the types of calls
placed over ITXC.net. Calls placed over certain routes or to certain termination
points may generate less revenue than calls of a similar duration made over
different routes or to different termination points.


Intense price competition could reduce the demand for our service.

We may not be able to compete successfully in the developing Internet telephony
market. Many of our competitors are larger than us and have substantially
greater financial resources than we do. The market for our services has been
extremely competitive and is expected to be so for the foreseeable future.
Internet protocol and Internet telephony service providers such as AT&T Global
Clearinghouse, GRIC Communications, and iBasis route traffic to destinations
worldwide and compete directly with us. Other Internet telephony service
providers focus on a retail customer base and may in the future compete with us.
In addition, major telecommunications companies, such as AT&T, Deutsche Telekom,
MCI Worldcom and Qwest Communications, have entered or plan to enter the
Internet telephony market.


If we are unable to keep up with rapid technological change in our industry in a
cost-effective manner, our revenues will decrease.

The market we serve, the market for voice services over the Internet, is
characterized by rapid technological developments, evolving industry standards
and customer demands and frequent new services announcements, such as new
hardware and software entrants and releases. In order for us to remain
competitive and continue positive growth of our business and increase the use of
our network, we must respond to these developments quickly and in a
cost-effective manner. If we

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fail to respond in this manner, our technology could become obsolete, our
customers will choose other alternatives to transmit their traffic and our
revenues will decrease.


We may need additional capital in the future to expand ITXC.net and it may not
be available on acceptable terms or at all, which could force us to curtail or
cease our operations.

The development of our business depends on our ability to expand the global
reach of ITXC.net. The net proceeds of our initial public offering and our cash
flow from operations could be insufficient to expand ITXC.net to meet future
customer demands. To date, our cash flow from operations has been insufficient
to cover our expenses and capital needs. We may require significant additional
capital in the future which may not be available on terms acceptable to us or at
all. If we cannot raise adequate capital on acceptable terms, we may be forced
to restrict the growth of ITXC.net, we may not be able to attract new affiliates
and we may have to curtail or cease our operations.


Foreign political and economic instability could harm our ability to maintain a
global presence.

A key component of our business plan is our global network of affiliates. Our
ability to maintain and expand our global reach may be harmed by foreign
political and economic instability. Stockholders and potential stockholders
should consider that the following factors may inhibit our ability to maintain
and expand our global presence:

   .  potentially longer payment cycles outside of the U.S.;

   .  difficulty in collecting accounts receivable from foreign affiliates;

   .  weaknesses in particular foreign economies;

   .  changes in diplomatic and trade relationships;

   .  foreign taxes; and

   .  the economic and administrative burdens of complying with a variety of
      foreign laws, trade standards, tariffs and trade barriers.


Damage to our systems and network could interrupt our service and result in
reduced revenue and harm to our reputation.

Our operations are dependent on our ability to maintain the components of
ITXC.net and our other computer and telecommunications systems in effective
working order. In addition, our

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systems may be damaged by natural disasters, equipment failure or intentional
acts of vandalism. If we fail to safeguard our systems and network and
experience frequent or long system delays or interruptions, we may not be able
to provide our service in a consistent and cost-effective manner--which will
result in reduced revenue and harm to our reputation.


Our proprietary rights may be difficult to protect.

Our efforts to protect our intellectual property rights through patent,
copyright, trademark and trade secret laws in the United States and in other
countries may not prevent misappropriation, and our failure to protect our
proprietary rights could materially adversely affect our business, financial
condition, operating results and future prospects.

A third party could, without authorization, copy or otherwise appropriate our
proprietary network information. Our agreements with employees and others who
participate in development activities could be breached, we may not have
adequate remedies for any breach, and our trade secrets may otherwise become
known or independently developed by competitors.


Acquisitions may disrupt our business and divert the attention of our
management.

Our industry is characterized by growth through acquisitions. To compete
effectively, we may need to make investments in complementary companies,
technologies and assets. Acquisitions could disrupt our ongoing business,
distract the attention of our small number of senior managers and make it
difficult to maintain our network and operational standards, controls and
procedures.

We also may not be able to successfully integrate the services, products and
personnel of any acquisition into our operations. We may be required to incur
debt or issue equity securities, which may be dilutive to stockholders, to pay
for acquisitions. Our acquisitions may not result in any return, or a sufficient
return, on our investment and we may lose all or a substantial portion of our
investment.


Our success is dependent on the continued service of our key management and
technical personnel.

Our future success depends, in part, on the continued service of our key
management and technical personnel, including Tom I. Evslin, John G. Musci, and
Edward B. Jordan, three of our senior executive officers. If any of those
individuals were unable or unwilling to continue in their present positions, our
business, financial condition, operating results and future prospects could be
materially adversely affected. We do not carry key person life insurance on our
personnel, other than Mr. Evslin and Mr. Musci, and only Messrs. Evslin and
Musci have employment agreements.

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We may have difficulty attracting and retaining the skilled employees we need to
execute our growth plan.

From time to time we have experienced, and we expect to continue to experience
in the future, difficulty in hiring and retaining highly skilled employees. Our
future success depends on our ability to attract, retain and motivate highly
skilled employees, particularly engineering and technical personnel. Competition
for employees in our industry is intense. We may not be able to retain our key
employees or attract, assimilate or retain other highly qualified employees in
the future.


Year 2000 compliance efforts and uncorrected errors could interrupt our business
and subject us to claims.

Our year 2000 compliance efforts may involve significant time and expense, and
uncorrected problems could materially and adversely affect our business,
financial condition, results of operations, liquidity and future prospects. We
may face claims based on year 2000 issues arising from the integration of
multiple products, including ours, within an overall system.

In addition, we rely on networks and computer hardware and software, some of
which may not be year 2000 compliant. To the extent our vendors and suppliers
fail to certify that they are year 2000 compliant, we may find it necessary to
terminate our relationships with them. If we terminate these relationships, we
may not be able to find suitable replacement vendors or suppliers on terms
favorable to us, or at all.

We do not currently have a contingency plan to deal with the worst-case scenario
that might occur if technologies we are dependent upon are not year 2000
compliant and fail to operate effectively after the year 2000.


If we are required to purchase the 51% interest of our South American joint
venture that we do not presently own, our stockholders' holdings and the
Company's liquidity could be adversely impacted.

In connection with the formation of our South American joint venture, we entered
into a buyout agreement with the other parties to the joint venture. If we
exercise our right to purchase the interests of these parties under the buyout
agreement, they may elect to receive cash or our common stock. The amount of the
purchase price could be substantial and, if we exercise our rights and these
parties elect to receive cash, the payment of such purchase price could
materially adversely impact our liquidity. If we pay these parties in common
stock, our stockholders may incur substantial dilution. We may not have the
capital necessary to fund a purchase of joint venture interests that we would
otherwise desire to make.

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Future government regulation and legal uncertainties could affect our ability to
provide our services.

Our business, financial condition, operating results and future prospects could
be materially adversely affected if Congress, the Federal Communications
Commission, state regulatory authorities, foreign governments or other bodies
begin to regulate or, in the case of certain foreign governments, prohibit
Internet telephony.

United States. Although our services are not currently actively regulated by the
FCC, aspects of our operations may be subject to state or federal regulation in
the future. Increased regulation of the Internet may slow its growth, and impact
our cost of providing our service over the Internet. In addition, the FCC may in
the future impose surcharges or other regulations upon us which could materially
adversely affect our business, financial condition, operating results and future
prospects.

International. Increased regulation of the Internet and/or Internet telephony
providers or the prohibition of Internet telephony in one or more foreign
countries could materially adversely affect our business, financial condition,
operating results and future prospects.

Our failure to qualify to do business in a foreign jurisdiction in which we are
required to do so or to comply with foreign laws and regulations could harm our
ability to conduct international operations.

Additionally, it is possible that laws--new or already in existence--may be
applied by the U.S. and/or other countries to transport services provided over
the Internet, including laws governing:

   .  sales and other taxes;

   .  user privacy;

   .  pricing controls;

   .  characteristics and quality of products and services;

   .  consumer protection;

   .  cross-border commerce, including laws that would impose tariffs, duties
      and other import restrictions; and

   .  other claims based on the nature and content of Internet materials,
      including claims of defamation, negligence and the failure to meet
      necessary obligations.

If such laws are applied to our services, our ability to conduct our business
could be materially adversely affected.

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The beneficial ownership of a significant amount of our common stock by our
directors and officers could delay or prevent a change in control of ITXC.

The concentrated beneficial ownership of our common stock could delay or prevent
a change in control of ITXC that might otherwise be beneficial to you.
Immediately after our initial public offering, our executive officers and
directors and their respective affiliates beneficially owned more than 50% of
our outstanding common stock. Accordingly, these stockholders will be able to
exert significant influence over matters requiring approval by our stockholders,
including the election of directors and the approval of mergers or other
business combinations.


We have broad discretion in the use of the proceeds of our initial public
offering and may not use them effectively.

We only specified how our management intends to use $41.7 million of the net
proceeds of our initial public offering. We cannot specify with certainty how
our management will use the remaining net proceeds of the initial public
offering. Our management will have broad discretion in the application of such
proceeds and the timing of the expenditure of all of the net proceeds. If our
management fails to apply those proceeds effectively, we may not be successful
in expanding ITXC.net and growing our business and revenues.


Our certificate of incorporation and bylaws and Delaware law will contain
provisions that could discourage a takeover.

Provisions of our certificate of incorporation and by-laws and Delaware law may
discourage, delay or prevent a merger or acquisition that stockholders and
potential stockholders may consider favorable. These provisions of our
certificate of incorporation and by-laws:

         .  establish a classified board of directors in which only a portion of
            the total number of directors will be elected at each annual
            meeting;

         .  authorize the board to issue preferred stock;

         .  prohibit cumulative voting in the election of directors;

         .  limit the persons who may call special meetings of stockholders;

         .  prohibit stockholder action by written consent; and

         .  establish advance notice requirements for nominations for the
            election of the board of directors or for proposing matters that can
            be acted on by stockholders at stockholder meetings.

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The sale of a substantial number of shares of our common stock after the
offerings may adversely affect our stock price.

A substantial amount of our common stock is held by persons who have agreed not
to sell their shares until 180 days after the initial public offering. After
that time, those holders could decide to sell some or all of their shares.

The market price of our common stock could decline as a result of sales of
substantial amounts of common stock in the public market after our initial
public offering or the perception that substantial sales could occur. These
sales also might make it difficult for us to sell equity securities in the
future at a time when, and at a price which, we deem appropriate.


Stockholders will experience dilution when we issue the additional shares of
common stock that we are permitted or required to issue under options, warrants
and our employee stock purchase plan.

Stockholders and potential stockholders should be aware that we are permitted,
and in some cases obligated, to issue shares of common stock in addition to the
common stock outstanding as of the date hereof. If and when we issue these
shares, the percentage of the common stock owned by existing stockholders will
be diluted.


The stock prices of Internet-related companies such as ours are highly volatile
and could drop unexpectedly resulting in costly litigation and harm to our
business.

Many companies in our industry have been the subject of class action litigation
by investors following periods of volatility in the price of their publicly
traded securities. If the market value of our common stock experiences adverse
fluctuations, and we become the subject of this type of litigation, regardless
of the outcome, we will incur substantial legal costs. In addition, this type of
litigation may strain our resources and divert management attention, causing our
business to suffer.

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