##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file
    number: 1-31949
 INX Inc.
 (Exact name of Registrant as
    specified in its charter)
  Delaware(State of
    Incorporation)

76-0515249(I.R.S. Employer
    Identification No.)6401 Southwest Freeway
    Houston, TX(Address of principal
    executive offices)

77074(Zip
    code)   Registrants telephone number:
    (713) 795-2000
  Securities registered pursuant to section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, par value $0.01

Nasdaq Global MarketWarrants to purchase common stock

Nasdaq Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 





INX Inc.
    and SubsidiariesFORM 10-K
    For the Year Ended December 31, 2008
    TABLE OF CONTENTS
   
 PagePART IItem 1


Business


3Item 1A


Risk Factors


15Item 2


Properties


25Item 3


Legal Proceedings


26Item 4


Submission of Matters to a Vote of Security
    Holders


26PART IIItem 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


26Item 6


Selected Financial Data


30Item 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


31Item 7A


Quantitative and Qualitative Disclosures About
    Market Risk


50Item 8


Financial Statements and Supplementary Data


51Item 9


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


83Item 9A(T)


Controls and Procedures


83Item 9B


Other Information


84PART IIIItem 10


Directors, Executive Officers, and Corporate
    Governance


84Item 11


Executive Compensation


84Item 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


84Item 13


Certain Relationships and Related Transactions,
    and Director Independence


84Item 14


Principal Accountant Fees and Services


84PART IVItem 15


Exhibits and Financial Statement Schedules


85SIGNATURES


86INDEX TO EXHIBITSEX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2EX-99.1    Form 10-K
 2




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PART I  Item 1.
    Business  Special
    Notice Regarding Forward-Looking Statements
      General
         3




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set-up
             4




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Industry
  Network
    Infrastructure
           5




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IP-enabled
        
    The trend towards virtualization of the data center is creating
    new security complexities. While virtualization actually
    improves security in some respects, it also introduces new
    security risks and the complexity of security solutions.
    The ease with which attacks can be initiated through freely
    available tools. These attacks are as likely to come from inside
    the network as they are from the Internet.
    The increased number of users utilizing laptops and other mobile
    devices that may become infected while outside the controls of
    the network further complicates security issues once mobile
    users reconnect within the network, behind the firewall.
    In order to support mobile users, organizations are deploying
    more and more wireless solutions that create another network
    access point easily compromised by malicious users if not
    secured properly.
    While more difficult to exploit than wireless networks, unused
    network ports that are not properly secured are another
    potential network access point available to zealous hackers that
    are able to physically connect to such ports.
    Many organizations want to grant limited access to guests,
    consultants, and others while protecting their critical
    infrastructure from these less trusted users.
    There is an increasing trend towards criminal activity via
    network attacks; it is no longer an issue of only
    industrial espionage or vandalism.
    As security needs increase, the complexity of security solutions
    increases, requiring well designed solutions.
    Many organizations have policies driven by regulatory and
    compliance requirements (such as HIPPA and Sarbanes-Oxley) that
    dictate enhanced security stances.   6




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Unified
    Communications
  set-up e-mail,
    
    data communication between computers and servers was performed
    using LAN/WAN IP network infrastructure, including the Internet; 7




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
    telephone/voice communication was conducted using traditional
    circuit-switched PBX systems and the PSTN; and
    video communications have often been accomplished using
    stand-alone video conferencing systems using either multiple
    circuit-switched telephone lines over the PSTN or using data
    network communications.      
    elimination of redundant traditional telephone line circuits and
    cabling systems as internal voice communications move to the
    enterprises
    IP-based
    network cabling system;
    reduced cost resulting from consolidation of PSTN circuits to a
    central location so that all external communications to and from
    the enterprise occur through fewer or only one point of
    interface to the PSTN, commonly referred to as circuit
    consolidation;
    more efficient support of telephone and data functions by a
    single support organization rather than multiple service
    providers and in-house support departments;
    simplified administration and lower costs for moves, adds and
    changes of the telephone system because an IP telephony handset
    can be moved or changed within an enterprise without rewiring
    the PBX or re-programming the telephone number as is required in
    a conventional PBX system; and
    elimination or reduction of long distance toll charges as
    enterprises operating a converged solution move their internal
    voice communications to the fixed-cost data network that often
    already exists between the enterprises remote facilities.    e-mail,
     8




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Data
    Center
         9




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Our
    Business
  IP-based IP-based
 10




---



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best-in-class
  Products
      Services
    Professional
    Services
      Managed
    Services
    IP-based
 11




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Competition
             12




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The
    Geographic Markets We Currently Serve
    
    Los Angeles, California
    Sacramento, California
    Glastonbury, Connecticut
    Boise, Idaho
    Boston, Massachusetts
    Albuquerque, New Mexico
    Oklahoma City, Oklahoma
    Eugene, Oregon
    Portland Oregon
    Austin, Texas
    Dallas, Texas
    El Paso, Texas
    Houston, Texas
    San Antonio, Texas
    Seattle, Washington
    Washington, DC    Our Plans
    for Geographic Expansion
    start-up
   13




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Customers
  and/or
  Sales and
    Marketing
    Supply
    and Distribution
    Management
    Information Systems
    Employees
    Seasonality
  and/or
 14




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Certain
    Milestones in Our Corporate Development
        I-Sector
  General
    Information
  (713) 795-2000. Form 10-K, Form 10-Q, Form 8-K http://www.INXI.com, 1-800-SEC-0330.
  Item 1A.
    Risk
    Factors  Global
    market and economic conditions, including those related to the
    credit markets, may adversely affect our business and results of
    operations.
   15




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We have a
    history of losses and may continue to incur losses.
    Our
    goodwill and intangible assets may become impaired.
    Our
    success depends upon maintaining our relationship with Cisco and
    other key vendors.
   16




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Our
    success depends upon broad market acceptance of IP
    telephony.
    
    quality of infrastructure;
    security concerns;
    equipment, software or other technology failures;
    government regulation;
    inconsistent quality of service;
    poor voice quality over IP networks; and
    lack of availability of cost-effective, high-speed network
    capacity.    Although
    our success is generally dependent upon the market acceptance of
    IP telephony, our success also depends upon a broad market
    acceptance of Cisco-centric IP telephony.
    Our
    success depends upon broad market acceptance of virtualization
    technology, and in particular the virtualization technology of
    VMware.
   17




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Our
    business depends on the level of capital spending by enterprises
    for the technology infrastructure products and services we
    offer.
    Our
    profitability depends on Cisco product pricing and incentive
    programs.
    A
    significant portion of our customers are based in
    Texas.
    Our
    strategy contemplates geographic expansion, which we may be
    unable to achieve and which is subject to numerous
    uncertainties.
   18




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We may
    require financing to achieve expansion of our business
    operations, and failure to obtain financing may prevent us from
    carrying out our business plan.
    We
    require access to significant working capital and vendor credit
    to fund our day-to-day operations. Our failure to comply with
    the financial and other covenants under our working capital
    facility could lead to a termination of the agreement and an
    acceleration of our outstanding debt.
  and/or
  We may be
    unable to manage our growth effectively, which may harm our
    business.
    Our
    operating results have historically been volatile, and may
    continue to be volatile, particularly from quarter to
    quarter.
    
    volume and timing of orders received during the quarter;
    amount and timing of supplier incentives received in any
    particular quarter, which can vary substantially;
    gross margin fluctuations associated with the mix of products
    sold;
    general economic conditions;
    patterns of capital spending by enterprises for communications
    products;
    the timing of new product announcements and releases; 19




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
    pricing pressures;
    the cost and effect of acquisitions;
    the amount and timing of sales incentives we may receive from
    our suppliers, particularly Cisco;
    the availability and cost of products and components from our
    suppliers; and
    credit availability.    We have
    many competitors and expect new competitors to enter our market,
    which could increase price competition and may affect the amount
    of business available to us and the prices that we can charge
    for our products and services.
      
    develop and expand their products and services more quickly;
    adapt faster to new or emerging technologies and changing
    customer needs;
    take advantage of acquisitions and other opportunities more
    readily;
    negotiate more favorable agreements with vendors;
    devote greater resources to marketing and selling their
    products; and
    address customer service issues more effectively.  and/or
  Business
    acquisitions, dispositions or joint ventures entail numerous
    risks and may disrupt our business, dilute stockholder value or
    distract management attention.
  and/or
  
    unanticipated costs and liabilities;
    difficulty of integrating the operations, products and personnel
    of the acquired business;
    difficulty retaining key personnel of the acquired business; 20




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
    difficulty retaining customers of the acquired businesses;
    difficulties in managing the financial and strategic position of
    acquired or developed products, services and technologies;
    difficulties in maintaining customer relationships, in
    particular where a substantial portion of the targets
    sales were derived from products that compete with products that
    we currently offer;
    the diversion of managements attention from the core
    business;
    inability to maintain uniform standards, controls, policies and
    procedures; and
    damage to relationships with acquired employees and customers as
    a result of integration of the acquired business.    Our
    international operations, which we plan to expand, will subject
    us to additional risks that may adversely affect our operating
    results due to increased costs.
    
    unexpected changes in regulatory requirements and
    telecommunication standards;
    tariffs and other trade barriers;
    risk of loss in currency exchange transactions;
    exchange controls or other currency restrictions;
    difficulty in collecting receivables;
    difficulty in staffing and managing foreign operations;
    the need to customize marketing and products;
    inadequate protection of intellectual property in countries
    outside the United States;
    adverse tax consequences; and
    political and economic instability.    If we
    lose key personnel we may not be able to achieve our
    objectives.
   21




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We may
    not be able to hire and retain highly skilled technical
    employees, which could affect our ability to compete effectively
    and could adversely affect our operating results.
    
    hire more employees with experience developing and providing
    technology infrastructure products and services;
    retrain our current personnel to sell and support the technology
    infrastructure solutions that we intend to market in the
    future; and
    retain personnel to service our products.    If we are
    unable to protect our intellectual property rights, our business
    may be harmed.
    We may be
    found to infringe on third-party intellectual property
    rights.
  and/or
 22




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Costs of
    compliance with the Sarbanes-Oxley Act of 2002 and the related
    SEC regulations may harm our results of operations.
    Changes
    in accounting standards and subjective assumptions, estimates
    and judgments by management related to complex accounting
    matters could significantly affect our financial
    results.
    Failure
    of our internal control over financial reporting could limit our
    ability to report our financial results accurately and
    timely.
    We rely
    extensively on computer systems to process transactions,
    summarize results and manage our business. Disruptions in both
    our primary and secondary
    (back-up)
    systems could harm our ability to run our business.
  back-up and/or back-up back-up
  Natural
    disasters could unfavorably affect our financial
    performance.
   23




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Over 20%
    of our stock is controlled by our chairman and chief executive
    officer, who has the ability to substantially influence the
    election of directors and other matters submitted to
    stockholders.
    Our stock
    price may be subject to substantial volatility, and the value of
    your investment may decline.
      
    announcements of new products or services by us or our
    competitors; current events affecting the political, economic
    and social situation in the United States and other countries
    where we operate;
    trends in our industry and the markets in which we operate;
    changes in financial estimates and recommendations by securities
    analysts;
    acquisitions and financings by us or our competitors;
    the gain or loss of a significant customer;
    quarterly variations in operating results;
    the operating and stock price performance of other companies
    that investors may consider to be comparable; and
    purchases or sales of blocks of our securities.   24




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Future
    issuances of common stock and hedging activities may depress the
    trading price of our common stock.
    Provisions
    in our certificate of incorporation, bylaws, charter documents
    and Delaware law could discourage a change in control, or an
    acquisition of us by a third party, even if the acquisition
    would be favorable to you, thereby and adversely affect existing
    stockholders
      We do not
    expect to pay dividends in the foreseeable future, and
    accordingly you must rely on stock appreciation for any return
    on your investment
    Item 2.
    Properties    
    Los Angeles, California
    Sacramento, California
    Glastonbury, Connecticut
    Boise, Idaho
    Boston, Massachusetts
    Canton, Massachusetts
    Albuquerque, New Mexico
    Oklahoma City, Oklahoma
    Eugene, Oregon
    Portland Oregon
    Austin, Texas
    Dallas, Texas
    El Paso, Texas
    Houston, Texas
    San Antonio, Texas
    Seattle, Washington
    Washington, DC  25




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    Common
    Stock
    High


Low2007First Quarter

$
10.30


$
7.55Second Quarter

$
12.39


$
8.97Third Quarter

$
14.44


$
8.81Fourth Quarter

$
15.28


$
9.752008First Quarter

$
11.01


$
6.82Second Quarter

$
13.25


$
6.92Third Quarter

$
10.22


$
6.67Fourth Quarter

$
7.09


$
4.20  26




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##### Table of Contents



Warrants
    High


Low2007First Quarter

$
2.74


$
1.41Second Quarter

$
3.40


$
2.37Third Quarter

$
3.23


$
1.90Fourth Quarter

$
3.99


$
0.952008First Quarter

$
1.30


$
0.46Second Quarter

$
2.78


$
0.45Third Quarter

$
2.40


$
1.01Fourth Quarter

$
1.04


$
0.02     Dividend
    Policy
    Equity
    Compensation Plan Information
    
    the number of shares of our common stock issuable upon exercise
    of outstanding options, warrants and rights, separately
    identified by those granted under equity incentive plans
    approved by our shareholders and those granted under plans,
    including individual compensation contracts, not approved by our
    shareholders (column A),
    the weighted average exercise price of such options, warrants
    and rights, also as separately identified (column B), and the
    number of shares remaining available for future issuance under
    such plans, other than those shares issuable upon exercise of
    outstanding options, warrants and rights (column C).  Column A


Column B


Column CNumber of SharesNumber of Shares





Remaining Availableto be Issued


Weighted Average


for Future IssuanceUpon Exercise of


Exercise Price of


Under Equity CompensationOutstanding Options,


Outstanding Options


Plans (Excluding SharesWarrants and Rights


Warrants and Rights


Reflected in Column A)Equity incentive plans approved by shareholders


1,714,576


$
4.61



133,780Equity incentive plans not approved by shareholders










Totals


1,714,576


$
4.61



133,780    27




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Stock
    Performance Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    AMONG INX INC.,
    THE NASDAQ COMPOSITE INDEX AND THE RUSSELL 2000 INDEX
  
  *
    
    $100 invested on 12/31/03 in stock & index-including
    reinvestment of dividends.    ASSUMED
    INVESTMENT WITH REINVESTMENT OF DIVIDENDS
  12/03



3/04



6/04



9/04



12/04



3/05



6/05INX INC.



100.00




55.17




51.98




44.64




48.79




33.42




51.02NASDAQ STOCK MARKET (U.S.)



100.00




100.18




103.16




96.49




110.08




101.53




104.08RUSSELL 2000



100.00




106.26




106.76




103.71




118.33




112.01




116.85   9/05



12/05



3/06



6/06



9/06



12/06



3/07INX INC.



30.61




35.40




39.54




38.27




41.77




50.13




64.99NASDAQ STOCK MARKET (U.S.)



109.76




112.88




120.64




112.68




117.54




126.51




127.08RUSSELL 2000



122.33




123.72




140.96




133.88




134.47




146.44




149.29   6/07



9/07



12/07



3/08



6/08



9/08



12/08INX INC.



57.53




92.09




66.65




50.06




66.65




43.37




27.42NASDAQ STOCK MARKET (U.S.)



136.04




141.77




138.13




118.70




119.92




106.41




80.47RUSSELL 2000



155.88




151.06




144.15




129.88




130.64




129.18




95.44  28




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##### Table of Contents



Form 10-K
  Issuer
    Purchases of Equity Securities
    Total Number of


Approximate DollarShares Purchased


Amount of SharesTotal Number


Average


as Part of Publicly


That May yet beof Shares


Price Paid


Announced Plans


Purchased Under thePeriod

Purchased


per Share


or Programs


Plans or ProgramsOctober 1 to October 31, 2008


86,739


$
6.32



86,739


$
892November 1 to November 30, 2008


60,465



5.26



60,465



572December 1 to December 31, 2008


54,729



4.85



54,729



2,000Total


201,933


$
5.61



201,933   Rule 10b-18
   29




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Item 6.
    Selected
    Financial Data    Year Ended December 31,2008(1)


2007(1)


2006(1)


2005(1)


2004Operating Data:Revenue:Products

$
213,125


$
180,311


$
135,317


$
94,570


$
65,207Services


46,032



27,656



20,696



12,749



6,280Total

$
259,157


$
207,967


$
156,013


$
107,319


$
71,487Net income (loss) from continuing operations

$
(12,675
)

$
3,652


$
1,511


$
(4,917
)

$
1,110Net income (loss) per share from continuing operations:Basic

$
(1.55
)

$
0.52


$
0.24


$
(0.86
)

$
0.24Diluted

$
(1.55
)

$
0.45


$
0.21


$
(0.86
)

$
0.23Income (loss) from discontinued operations, net of tax(2)

$
37


$
83


$
(316
)

$
(2,967
)

$
420Net income (loss)

$
(12,638
)

$
3,735


$
1,195


$
(7,884
)

$
1,530Balance Sheet Data:Total assets

$
87,294


$
84,241


$
62,520


$
41,645


$
41,139Interest bearing borrowings under Credit Facility






6,000



4,350



2,464



8,122Long-term debt (including current portion) from continuing
    operations


331



200



259



243



36No cash dividends were declared or paid during the five years
    ended December 31, 2008     (1)
    
    The Access Flow, Inc., NetTeks, and VocalMash acquisitions were
    completed and initially reported in 2008, the Select, Inc.
    acquisition was completed and initially reported in 2007, the
    Datatran Network Systems acquisition was initially reported in
    2006, and the Network Architects and InfoGroup Northwest
    acquisitions were initially reported in 2005. The 2006, 2007 and
    2008 acquisitions are discussed further in Note 3 to
    consolidated financial statements in Part II, Item 8.(2)
    
    The Stratasoft and Valerent subsidiaries were discontinued in
    2005 as discussed further in Note 5 to consolidated
    financial statements in Part II, Item 8. 30




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Please read the following discussion of our financial
    condition and results of operations together with
    Item 6. Selected Financial Data and our
    consolidated financial statements and the notes to those
    statements included elsewhere in this report. The following
    discussion and analysis contains forward-looking statements that
    involve risks and uncertainties. Our actual results may differ
    materially from those anticipated in these forward-looking
    statements as a result of certain factors, including, but not
    limited to, those set forth under Item 1A. Risk
    Factors and elsewhere in this report.
  General
          
    the mix of large, competitively bid sales transactions as
    compared to smaller, less competitive transactions;
    the mix of new customer transactions, which tend to be more
    competitively bid by us, as compared to transactions with
    existing customers, which tend to be somewhat less
    competitive; and
    the mix of products sold, with certain newer, advanced product
    categories generating higher gross margin than other, more
    traditional products.    
    the utilization of our technical engineering resources used to
    perform our professional services;
    the amount of managed support and hosting services as compared
    to the cost of operating our managed services support center and
    hosting operations, which costs are somewhat fixed;
    the mix between the different types of service. 31




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case-by-case
      Strategy
   32




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
    Aligning ourselves with the leading manufacturers of technology
    infrastructure products of the type we provide. To this end,
    Cisco has always been our primary supplier for network routing
    and switching and IP telephony products that we offer, and we
    align ourselves with what we believe to be the best of
    breed manufacturer in each area of technology or specific
    product in order to provide our customers with the best
    technology available.
    Promoting our managed support and hosting services to generate
    increased recurring services revenues and improve gross margin
    on service revenue.
    Increasing the gross revenues from our higher gross margin
    services offerings, as compared to product sales that typically
    produce relatively lower gross margins.
    Opening new branch offices in new markets.
    Expanding geographically by acquiring complementary businesses
    and by opening new offices.
    Marketing to larger customers as we become more of a
    national level provider of technology infrastructure
    solutions.  work-in-progress
     33




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Registered
    Direct Offering
    Acquisitions.
  Access
    Flow, Inc.
       34




---



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NetTeks
    Technology Consultants, Inc.
        VocalMash
      Select,
    Inc.
   35




---



##### Table of Contents



Results
    of Operations
  Overview
  Sources of Revenue.
  E-Rate
   36




---



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Gross Profit and Gross Profit Margin.
      Selling, General and Administrative
    Expenses.
 37




---



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Impairment Charge.
    Tax Loss Carryforward.
  Deferred Tax Assets.
 38




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##### Table of Contents



Period Comparisons.
  Year Ended December 31,2008


2007


2006Amount


%


Amount


%


Amount


%Revenue:Products

$
213,125



82.2


$
180,311



86.7


$
135,317



86.7Services


46,032



17.8



27,656



13.3



20,696



13.3Total revenue


259,157



100.0



207,967



100.0



156,013



100.0Gross profit:Products


37,881



17.8



31,747



17.6



25,132



18.6Services


13,276



28.8



7,900



28.6



5,365



25.9Total gross profit


51,157



19.7



39,647



19.1



30,497



19.5Selling, general and administrative expenses


48,734



18.8



36,152



17.4



28,710



18.4Impairment charge


13,071



5.0















Operating (loss) income


(10,648
)


(4.1
)


3,495



1.7



1,787



1.1Interest and other expense, net


16







79







232



0.1Income tax expense (benefit)


2,011



(0.8
)


(236
)


(0.1
)


44



Net (loss) income from continuing operations


(12,675
)


(4.9
)


3,652



1.8



1,511



1.0Income (loss) from discontinued operations, net of taxes


37







83







(316
)


(0.2
)Net (loss) income

$
(12,638
)


(4.9
)

$
3,735



1.8


$
1,195



0.8   Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
  Total Revenue.
  Gross Profit.
  Selling, General and Administrative
    Expenses.
 39




---



##### Table of Contents



Impairment Charge.
  Operating (Loss) Income.
  Interest and Other Expense, net.
  Income Tax Expense (Benefit).
  Income from Discontinued Operations, net of
    tax.
  Net (Loss) Income.
  Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
  Total Revenue.
  Gross Profit.
 40




---



##### Table of Contents



Selling, General and Administrative
    Expenses.
  Operating Income.
  Interest and Other Income (Expense),
    net.
  Income Tax Expense (Benefit).
  Income (Loss) from Discontinued Operations, net of
    tax.
  Net Income.
 41




---



##### Table of Contents



Quarterly
    Results
    2008


2007Fourth


Third


Second


First


Fourth


Third


Second


FirstQuarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter


QuarterRevenue:Products

$
51,628


$
59,576


$
51,430


$
50,491


$
48,621


$
45,222


$
46,918


$
39,550Services


11,953



12,366



12,561



9,152



7,978



6,776



6,809



6,093Total revenue

$
63,581


$
71,942


$
63,991


$
59,643


$
56,599


$
51,998


$
53,727


$
45,643Gross profit:Products

$
8,841


$
10,067


$
9,766


$
9,207


$
8,753


$
7,887


$
7,889


$
7,218Services


3,091



3,259



3,986



2,940



2,789



1,666



2,156



1,289Total gross profit


11,932



13,326



13,752



12,147



11,542



9,553



10,045



8,507Selling, general and administrative expenses


13,934



12,545



11,871



10,384



10,395



8,543



9,042



8,172Impairment charge


13,071



























Operating income (loss)


(15,073
)


781



1,881



1,763



1,147



1,010



1,003



335Interest and other (income) expense, net


(49
)


(106
)


98



73



79



17



(41
)


24Income tax expense (benefit)


178



470



680



683



(257
)


7



7



7Net income (loss) from continuing operations


(15,202
)


417



1,103



1,007



1,325



986



1,037



304Income (loss) from discontinued operations, net of taxes


14



9



10



4



(14
)


38



(3
)


62Net income (loss)

$
(15,188
)

$
426


$
1,113


$
1,011


$
1,311


$
1,024


$
1,034


$
366Income (loss) from continuing operations per share:Basic

$
(1.75
)

$
0.05


$
0.15


$
0.13


$
0.18


$
0.14


$
0.15


$
0.04Diluted

$
(1.75
)

$
0.05


$
0.13


$
0.12


$
0.16


$
0.12


$
0.13


$
0.04Net income (loss) per share:Basic

$
(1.75
)

$
0.05


$
0.15


$
0.13


$
0.17


$
0.14


$
0.15


$
0.05Diluted

$
(1.75
)

$
0.05


$
0.13


$
0.12


$
0.16


$
0.13


$
0.13


$
0.05Shares used in computing net income (loss) per share:Basic


8,655,761



8,746,691



7,579,303



7,550,904



7,499,620



7,081,511



6,862,538



6,662,839Diluted


8,655,761



9,338,353



8,281,715



8,242,191



8,408,437



8,037,221



7,817,371



7,729,681      42




---



##### Table of Contents



Critical
    Accounting Policies
  Revenue
    Recognition
    Products revenue
  No. 99-19, EITF 99-19,
    Software No. 97-2,
  Technical support services revenue
 43




---



##### Table of Contents



Revenue for fixed and flat fee services contracts
  Other service revenue
  Arrangements with multiple deliverables No. 00-21, (EITF 00-21),
    
    The customer is required to pay the product billing in its
    entirety independent of any services performed.
    The product has value to the customer on a standalone basis and
    pricing is comparable whether sold with or without services.
    The product is standard equipment not significantly altered by
    installation.
    Installation of the product can be performed by many other
    companies.
    Although there is a general right of return relative to
    delivered product, delivery of the undelivered items is
    considered probable and is substantially in our control.  EITF 00-21.
   44




---



##### Table of Contents



Vendor
    Incentive Recognition
    Share-Based
    Compensation Expense
     45




---



##### Table of Contents



2008


2007


2006Expected volatility


61.1
%


60.3
%


63.1
%Expected term (in years)


6.5



6.5



6.3Risk-free interest rate


2.8
%


4.4
%


4.7
%Expected dividend yield


0
%


0
%


0
%       Goodwill
    Step 1.
  Step 2.
  Impairment
    of Long-Lived Assets
    Liquidity
    and Capital Resources
  Sources
    of Liquidity
   46




---



##### Table of Contents



Form S-3 and/or
  Accounts Receivable.
  Inventory.
  Accounts Payable.
  Credit Facility.
  
    The Agreement provides a discretionary line of credit up to a
    maximum aggregate amount of $60,000 to purchase inventory from
    CPC approved vendors.
    The Agreement provides a working capital revolving line of
    credit under the above line of credit with an aggregate
    outstanding sublimit of $10,000.
    The working capital revolving line of credit incurs interest
    payable monthly at the rate of prime plus 0.5%.
    The Agreement contains customary covenants regarding maintenance
    of insurance coverage, maintenance of and reporting collateral,
    and submission of financial statements. The Agreement also
    contains covenants measured as of the end of each calendar
    quarter covering required maintenance of minimum current ratio,
    tangible net worth, working capital, and total liabilities to
    tangible net worth ratio (all as defined in the Agreement, as
    amended).
    The credit facility is collateralized by substantially all
    assets of the Company. 47




---



##### Table of Contents




    The term of the Agreement is for one year, with automatic
    renewals for one year periods, except as otherwise provided
    under the Agreement.    
    $10,000 maximum aggregate commitment for acquisitions.
    Advances under the Acquisition Facility are not to exceed 80% of
    purchase price or six times adjusted EBITDA, as defined in the
    Amendment, for the twelve months immediately preceding the
    acquisition closing date.
    Interest is payable at the rate of prime plus 2%.
    An acquisition commitment fee of 1% of the advance amount is
    payable with one-eighth paid at closing and seven-eighths paid
    with each loan funding.
    Repayment of each advance under the Acquisition Facility is
    interest only for first year then amortizing for 36 to
    48 months, to be determined for each advance, with no
    penalty to prepay any principal balance. The loan will also be
    reduced annually by an amount equal to 25% of excess cash flow,
    as defined in the Amendment, beginning December 31, 2008.
    CPC may negotiate with the Company to revise existing financial
    covenants in conjunction with each advance as required.
    Termination date of the senior credit facility was extended to
    August 1, 2009, subject to automatic renewal as defined in
    the Amendment.    Total Credit Facility

$
60,000Borrowing base limitation


(16,873
)Total borrowing capacity


43,127Less interest-bearing borrowings


Less non-interest bearing advances


(40,002
)Total unused availability

$
3,125     60-day 30-day 60-day 30-day
      
    maintain Minimum Tangible Net Worth of $8.0 million;
    maintain a maximum Debt to Tangible Net Worth ratio of 7.0 to 1; 48




---



##### Table of Contents




    maintain Minimum Working Capital of not less than
    $6.5 million; and
    maintain a Current Ratio of not less than 1.10 to 1.0.    Cash Flows.
  Operating Activities.
  Investing Activities.
  Financing Activities.
  Recent
    Accounting Pronouncements
  EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1). EITF 03-6-1 EITF 03-6-1 EITF 03-6-1
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets Business Combinations,
  Business Combinations
 49




---



##### Table of Contents



Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  Fair Value
    Measurements SFAS No. 157-2 (FSP 157-2) FSP 157-2 FSP 157-2. SFAS No. 157-1, Accounting for Leases SFAS No. 157-3
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest
    Rate Risk
   50




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  INX INC.
    AND SUBSIDIARIES
  INDEX TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
    AND FINANCIAL STATEMENT SCHEDULE
  PageReport of Independent Registered Public
    Accounting Firm


52Consolidated Balance Sheets at December 31,
    2008 and 2007


53Consolidated Statements of Operations for the
    years ended December 31, 2008, 2007 and 2006


54Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2008, 2007 and
    2006


55Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


56Notes to Consolidated Financial Statements


58Schedule II Valuation and Qualifying
    Accounts


82   51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    52




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
 CONSOLIDATED
    BALANCE SHEETS  December 31,2008


2007(In thousands, except share and par value amounts)ASSETSCurrent Assets:Cash and cash equivalents

$
10,937


$
9,340Accounts receivable  trade, net of allowance of $735
    and $470


52,866



45,128Inventory, net


2,406



1,439Deferred income taxes






2,100Other current assets


1,275



2,062Total current assets


67,484



60,069Property and equipment, net of accumulated depreciation of
    $5,429 and $3,728


5,207



4,421Goodwill


12,751



16,603Intangible assets, net of accumulated amortization of $2,346 and
    $1,592


1,852



3,148Total assets

$
87,294


$
84,241LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Notes payable

$
91


$
6,200Current portion of capital lease obligations


77



Accounts payable


45,172



37,233Accrued payroll and related costs


4,258



3,788Accrued expenses


2,615



1,575Other current liabilities


1,072



1,440Total current liabilities


53,285



50,236Long-term liabilities:Long-term portion of capital lease obligations


163



Deferred income taxes






1,565Other long-term liabilities


250



413Total long-term liabilities


413



1,978Commitments and ContingenciesStockholders Equity:Preferred stock, $.01 par value, 5,000,000 shares
    authorized, no shares issued






Common stock, $.01 par value, 15,000,000 shares
    authorized, 8,709,304 and 7,548,892 issued


87



75Additional paid-in capital


50,692



36,497Accumulated deficit


(17,183
)


(4,545
)Total stockholders equity


33,596



32,027Total liabilities and stockholders equity

$
87,294


$
84,241    53




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2008


2007


2006(In thousands, except share andper share amounts)Revenue:Products

$
213,125


$
180,311


$
135,317Services


46,032



27,656



20,696Total revenue


259,157



207,967



156,013Cost of goods and services:Products


175,244



148,564



110,185Services


32,756



19,756



15,331Total cost of goods and services


208,000



168,320



125,516Gross profit


51,157



39,647



30,497Selling, general and administrative expenses


48,734



36,152



28,710Impairment charge


13,071







Operating (loss) income


(10,648
)


3,495



1,787Interest expense


(330
)


(354
)


(273
)Interest income


357



286



42Other expense, net


(43
)


(11
)


(1
)(Loss) income from continuing operations before income taxes


(10,664
)


3,416



1,555Income tax expense (benefit)


2,011



(236
)


44Net (loss) income from continuing operations


(12,675
)


3,652



1,511(Loss) income from discontinued operations, net of taxes


37



83



(316
)Net (loss) income

$
(12,638
)

$
3,735


$
1,195Net (loss) income per share:Basic:Net (loss) income from continuing operations before minority
    interest

$
(1.55
)

$
0.52


$
0.24(Loss) income from discontinued operations, net of taxes






0.01



(0.05
)Net (loss) income per share

$
(1.55
)

$
0.53


$
0.19Diluted:Net (loss) income from continuing operations before minority
    interest

$
(1.55
)

$
0.45


$
0.21(Loss) income from discontinued operations, net of taxes






0.02



(0.05
)Net (loss) income per share

$
(1.55
)

$
0.47


$
0.16Shares used in computing net income (loss) per share:Basic


8,133,165



7,026,623



6,318,674Diluted


8,133,165



8,027,286



7,293,737    54




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  $.01 Par Value


AdditionalCommon Stock


Paid-In


AccumulatedShares


Amount


Capital


Deficit


Total(In thousands except share amounts)Balance at December 31, 2005


5,975,626


$
60


$
27,546


$
(9,600
)

$
18,006Cumulative effect of correction of accounting for professional
    fees as provided under SAB 108














125



125Balance at January 1, 2006


5,975,626



60



27,546



(9,475
)


18,131Exercise of common stock options and other


332,859



3



610







613Issuance of shares for Datatran acquisition


73,108



1



514







515Issuance of shares as additional purchase price consideration
    for Network Architects acquisition


97,413



1



570







571Issuance of shares as additional purchase price consideration
    for InfoGroup Northwest acquisition


122,544



1



750







751Issuance of warrants










128







128Common stock grant to employee


1,520







10







10Share-based compensation expense related to employee stock
    options and employee restricted stock grants










470







470Net income














1,195



1,195Balance at December 31, 2006


6,603,070



66



30,598



(8,280
)


22,384Exercise of common stock options


591,011



6



1,443







1,449Issuance of vested restricted common stock


4,928















Issuance of shares as additional purchase price consideration
    for Datatran acquisition


25,253







250







250Issuance of shares as additional purchase price consideration
    for Network Architects, Corp. acquisition


75,000



1



676







677Issuance of shares as purchase price consideration for Select,
    Inc. acquisition


243,556



2



2,580







2,582Share-based compensation expense related to employee stock
    options and employee restricted stock grants










645







645Share-based compensation expense related to directors
    stock grants


9,072







90







90Excess tax benefit from stock option exercises










160







160Issuance of warrants










86







86Purchase and retirement of treasury stock resulting from grantee
    election to fund payroll taxes out of restricted stock grant


(1,198
)






(13
)






(13
)Repurchase and retirement of common stock


(1,800
)






(18
)






(18
)Net income














3,735



3,735Balance at December 31, 2007


7,548,892



75



36,497



(4,545
)


32,027Issuance of common stock, net of issuance costs


900,000



9



8,742







8,751Exercise of common stock options


151,624



2



829







831Issuance of vested restricted common stock


50,265















Issuance of shares as additional purchase price consideration
    for Network Architects, Corp. acquisition


75,000



1



740







741Issuance of shares as purchase price consideration and broker
    fees for Access Flow, Inc. acquisition


274,627



3



3,583







3,586Issuance of shares as purchase price consideration for NetTeks
    Technology Consultants, Inc. acquisition


30,770







163







163Issuance of shares as purchase price consideration for VocalMash
    acquisition


60,000



1



292







293Share-based compensation expense related to employee stock
    options and employee restricted stock grants










1,372







1,372Share-based compensation expense related to directors
    stock grants


7,443







90







90Share-based compensation expense related to Employee Stock
    Purchase Plan










193







193Issuance of common stock under the Employee Stock Purchase Plan


77,600



1



343







344Excess tax benefit from stock option exercises










1,107







1,107Issuance of common stock grant


6,000







26







26Exercise of warrants


3,155















Purchase and retirement of treasury stock resulting from grantee
    election to fund payroll taxes out of restricted stock grant


(9,868
)






(56
)






(56
)Repurchase and retirement of common stock


(466,204
)


(5
)


(3,229
)






(3,234
)Net loss














(12,638
)


(12,638
)Balance at December 31, 2008


8,709,304


$
87


$
50,692


$
(17,183
)

$
33,596    55




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
(12,638
)

$
3,735


$
1,195Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:(Income) loss from discontinued operations


(37
)


(111
)


316Depreciation and amortization


2,667



1,659



1,178Impairment charge


13,071







Deferred income tax expense (benefit)


535



(535
)


Share-based compensation expense for employee stock options,
    restricted stock grants, and Employee Stock Purchase Plan


1,565



653



415Bad debt expense


541



268



63Issuance of warrants






86



Issuance of stock grant


116



90



10Loss on retirement of assets


43



12



9Tax expense (benefit) from discontinued operations


19



28



Changes in assets and liabilities that provided (used) cash:Accounts receivable, net


(8,279
)


2,733



(17,584
)Inventory


(953
)


156



(1,053
)Other current assets


758



130



(1,206
)Other assets










21Accounts payable


7,939



1,653



14,981Accrued expenses


1,458



(152
)


837Other current and long-term liabilities


(502
)


(408
)


792Net cash provided by (used in) continuing operations


6,303



9,997



(26
)Net operating activities from discontinued operations


18



28



(684
)Net cash provided by (used in) operating activities


6,321



10,025



(710
)CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures, net of acquisitions


(2,260
)


(1,591
)


(1,921
)Acquisition of Access Flow, Inc.


(2,550
)






Acquisition of NetTeks Technology Consultants, Inc.


(1,440
)






Acquisition of Select, Inc., net of $2,864 cash acquired


153



(3,375
)


Acquisition of Datatran Network Systems






(250
)


(1,000
)Acquisition of InfoGroup Northwest, Inc.










(751
)Acquisition of Network Architects, Corp.










(394
)Proceeds of sale of fixed assets


1



3



Transaction costs paid for acquisitions


(225
)


(386
)


(32
)Net cash used in investing activities of continuing operations


(6,321
)


(5,599
)


(4,098
)Net investing activities of discontinued operations






15



1,492Net cash used in investing activities


(6,321
)


(5,584
)


(2,606
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of common stock


8,751







Proceeds from issuance of common stock for purchases under
    Employee Stock Purchase Plan


344







(Payments) borrowings under acquisition credit facility


(6,000
)


6,000



Borrowings (payments) of short-term interest bearing credit
    facility, net






(4,350
)


1,886Proceeds from exercise of stock options


831



1,449



613Excess tax benefits from stock option exercises


1,107



160



Proceeds from other short-term borrowings


460



472



407Payments of other short-term borrowings


(601
)


(531
)


(391
)Debt issuance costs paid






(65
)


Purchase of treasury stock resulting from grantee election


(61
)


(13
)


Purchase of common stock


(3,234
)


(18
)


Net cash provided by financing activities of continuing
    operations


1,597



3,104



2,515Net financing activities of discontinued operations










(1
)Net cash provided by financing activities


1,597



3,104



2,514NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


1,597



7,545



(802
)CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


9,340



1,795



2,597CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
10,937


$
9,340


$
1,795    56




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest

$
256


$
272


$
219Cash paid for income taxes

$
156


$
16


$
14SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES:Acquisition of Access Flow, Inc.:Fair value of assets acquired

$
6,582


$



$
Common stock issued


(3,586
)






Capital lease obligation assumed


(272
)






Transaction costs accrued


(16
)






Acquisition of NetTeks Technology Consultants, Inc.:Fair value of assets acquired


1,654







Common stock issued


(163
)






Acquisition of VocalMash:Fair value of assets acquired


293







Common stock issued


(293
)






Acquisition of Select, Inc.:Fair value of assets acquired






6,807



Common stock issued






(2,582
)


Noncompete agreement liability






(450
)


Transaction costs accrued






(50
)


Acquisition of Datatran Network Systems:Fair value of assets acquired






500



1,515Common stock issued






(250
)


(515
)Acquisition of Network Architects, Corp.:Fair value of assets acquired


741



677



965Common stock issued


(741
)


(677
)


(571
)Acquisition of InfoGroup Northwest, Inc.:Fair value of assets acquired










1,502Common stock issued










(751
)Obligation under software license agreement:Fair value of asset acquired










775Obligation incurred










(775
)Issuance of warrants in connection with sale of Stratasoft,
    Inc.










(128
)    57




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Years Ended December 31, 2008, 2007 and 2006
    (In thousands, except share and per share amounts)
  1.
    Description
    of Business    2.
    Summary
    of Significant Accounting Policies  Basis of Presentation
    Principles of Consolidation
  Cash and Cash Equivalents
  Accounts Receivable
  Inventory first-in
 58




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Property and Equipment
  Goodwill
    Step 1.
  Step 2.
    Intangible Assets
  Impairment of Long-Lived Assets
  Income Taxes
  Use of Estimates
 59




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Revenue Recognition
  Products revenue
  No. 99-19, EITF 99-19,
    Software 97-2,
  Technical support services revenue
  Revenue for fixed and flat fee services contracts
  Other service revenue
 60




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Arrangements with multiple deliverables 00-21, (EITF 00-21),
    
    The customer is required to pay the product billing in its
    entirety independent of any services performed.
    The product has value to the customer on a standalone basis and
    pricing is comparable whether sold with or without services.
    The product is standard equipment not significantly altered by
    installation.
    Installation of the product can be performed by many other
    companies.
    Although there is a general right of return relative to
    delivered product, delivery of the undelivered items is
    considered probable and is substantially in the control of the
    Company.  EITF 00-21.
    No. 06-3,
 61




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Vendor Incentives
  Advertising Costs
  Research and Development Costs
  Share-Based Compensation
    Earnings Per Share
  Fair Value of Financial Instruments
  Recent Accounting Pronouncements EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities
 62




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 03-6-1). EITF 03-6-1 EITF 03-6-1 EITF 03-6-1
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets
    . Business Combinations,
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  Fair Value
    Measurements SFAS No. 157-2 (FSP 157-2) FSP 157-2
 63




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  FSP 157-2. SFAS No. 157-1, Accounting for Leases SFAS No. 157-3
  3.
    Acquisitions    Access
    Flow, Inc.
       64




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   NetTeks
    Technology Consultants, Inc.
        VocalMash
      Select,
    Inc.
     65




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Pro
    Forma Summary (Unaudited)
    Year Ended December 31,2008


2007Revenues

$
275,258


$
257,745Net (loss) income from continuing operations

$
(12,136
)

$
3,682Net (loss) income per share from continuing operations:Basic

$
(1.48
)

$
0.50Diluted

$
(1.48
)

$
0.44Weighted average shares used in calculation:Basic


8,215,756



7,361,250Diluted


8,215,756



8,361,913   Datatran
    Network Systems
     66




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Network
    Architects, Corp.
    Acquisitions
    Summary
    NetTeksTechnology








Datatran


NetworkConsultants,


Access





Network


Architects,VocalMash


Inc.


Flow, Inc.


Select, Inc.


Systems


Corp.Allocated acquisition cost:Intangible assets:Customer relationships, amortized from 2 to 10 years

$



$
513


$
169


$
2,489


$
123


$
151Noncompete agreements, amortized from 3 to 5 years


7



340



556



704



45



91Trademark, amortized from 3 to 5 years






214



319











Strategic relationships, amortized from 3 to 5 years










308











Backlog, amortized from 3 to 5 years






229



131











Cash














2,864







Accounts receivable














5,705







Inventory






9



5



429



25



Property and equipment






134



696



331



38



500Other assets














31



5



4Goodwill


286



218



4,414



4,489



1,841



6,014Accounts payable and other liabilities assumed






(3
)


(272
)


(7,371
)






Net assets acquired


293



1,654



6,326



9,671



2,077



6,760Less: cash acquired














(2,864
)






Net amount paid for acquisition

$
293


$
1,654


$
6,326


$
6,807


$
2,077


$
6,760  67




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4.
    Impairment
    Charge      5.
    Discontinued
    Operations  Telecom
    and Computer Products Divisions
    Stratasoft
    and Valerent Subsidiaries
    
    All outstanding Stratasoft common stock was sold for a purchase
    price of $3,000, which has been or is subject to reduction as
    follows:  
    $800 placed in escrow, which is available to satisfy indemnified
    losses, if any, as defined in the Agreement. Funds placed in
    escrow are excluded from the estimated gain stated above.
    Approximately $778 in indemnified losses, net of interest
    earned, have been paid or presented for payment as of
    December 31, 2008.
    $221 representing a preliminary net working capital adjustment,
    as defined. The final working capital adjustment recorded during
    June 2006 resulted in the further reduction of the sale proceeds
    of $40. 68




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    The Company indemnified the buyer for potential losses as
    defined in the Agreement to a maximum of $1,400, inclusive of
    amounts placed in escrow. Excess funds held in escrow were
    scheduled to be released on January 26, 2008. However,
    certain potential third-party claims remain outstanding,
    including the Schneider Rucinski lawsuit discussed further in
    Note 15. As provided in the Agreement, funds of $22 held in
    escrow at December 31, 2008 will not be released until such
    claims are resolved.  
    The Agreement provided for additional consideration to the
    Company if either of the following conditions were met:
    (1) Stratasoft revenue exceeds $10,000 for any consecutive
    twelve month period within two years of closing or
    (2) Stratasoft is sold by the buyer to another party prior
    to January 26, 2008, for an amount in excess of $15,000.
    Neither condition was met; therefore, no consideration is due
    the Company.    brother-in-law
    Year Ended December 31,2008


2007


2006Revenues:Stratasoft.

$



$



$
268Valerent










4,330Total

$



$



$
4,598Income (loss) from operations of discontinued subsidiaries:Stratasoft.

$



$
12


$
(288
)Valerent






39



(830
)Total






51



(1,118
)Gain on disposal of discontinued operations:Stratasoft.










302Valerent


56



60



31Telecom and Computer Products Divisions










469Cumulative effect of change in accounting method at Stratasoft










Income tax (expense) benefit


(19
)


(28
)


Income (loss) from discontinued operations, net of taxes

$
37


$
83


$
(316
)  69




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2008


2007Other current assets:Notes receivable, current

$



$
29Other current liabilities:Accrued expenses

$
44


$
44Deferred revenue






29Total

$
44


$
73   6.
    Property
    and Equipment    December 31,2008


2007Equipment

$
281


$
348Computer equipment


4,750



3,585Computer software


3,015



2,127Computer equipment under capital lease obligations


229



Furniture and fixtures


1,047



971Leasehold improvements


1,209



1,013Vehicles


105



10510,636



8,149Accumulated depreciation and amortization


(5,429
)


(3,728
)Total

$
5,207


$
4,421     7.
    Intangible
    Assets  December 31, 2008


December 31, 2007


WeightedGross





Gross





AverageCarrying


Accumulated


Carrying


Accumulated


RemainingAmount


Amortization


Amount


Amortization


LifeAmortized intangible assets:Customer lists

$
2,293


$
1,537


$
3,649


$
1,208



2.92Other


1,905



809



1,091



384



2.96Total

$
4,198


$
2,346


$
4,740


$
1,592    70




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2009

$
7182010


5092011


4772012


892013


59Total

$
1,852   8.
    Earnings
    Per Share    Year Ended December 31,2008


2007


2006Numerator for basic and diluted earnings per share:Net (loss) income from continuing operations

$
(12,675
)

$
3,652


$
1,511Income (loss) from discontinued operations, net of taxes


37



83



(316
)Net (loss) income

$
(12,638
)

$
3,735


$
1,195Denominator for basic earnings per share 
    weighted-average shares outstanding


8,133,165



7,026,623



6,318,674Effect of dilutive securities:Shares issuable from assumed conversion of common stock options
    and restricted stock






1,000,662



975,063Denominator for diluted earnings per share 
    weighted-average shares outstanding


8,133,165



8,027,286



7,293,737    71




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   9.
    Notes
    Payable    December 31,2008


2007Revolving acquisition credit facility bearing interest of prime
    plus 2.0%

$



$
6,000Notes payable bearing interest of 4.80% payable monthly due
    September 2009


91



200Total, all due within 12 months

$
91


$
6,200     
    The Agreement provides a discretionary line of credit up to a
    maximum aggregate amount of $60,000 to purchase inventory from
    CPC approved vendors.
    The Agreement provides a working capital revolving line of
    credit under the above line of credit with an aggregate
    outstanding sublimit of $10,000.
    The working capital revolving line of credit incurs interest
    payable monthly at the rate of prime plus 0.5%.
    The Agreement contains customary covenants regarding maintenance
    of insurance coverage, maintenance of and reporting collateral,
    and submission of financial statements. The Agreement also
    contains covenants measured as of the end of each calendar
    quarter covering required maintenance of minimum current ratio,
    tangible net worth, working capital, and total liabilities to
    tangible net worth ratio (all as defined in the Agreement, as
    amended).
    The credit facility is collateralized by substantially all
    assets of the Company.
    The term of the Agreement is for one year, with automatic
    renewals for one year periods, except as otherwise provided
    under the Agreement.    
    $10,000 maximum aggregate commitment for acquisitions.
    Advances under the Acquisition Facility are not to exceed 80% of
    purchase price or six times adjusted EBITDA, as defined in the
    Amendment, for the twelve months immediately preceding the
    acquisition closing date.
    Interest is payable at the rate of prime plus 2%.
    An acquisition commitment fee of 1% of the advance amount is
    payable with one-eighth paid at closing and seven-eighths paid
    with each loan funding.
    Repayment of each advance under the Acquisition Facility is
    interest only for first year then amortizing for 36 to
    48 months, to be determined for each advance, with no
    penalty to prepay any principal balance. The loan will also be
    reduced annually by an amount equal to 25% of excess cash flow,
    as defined in the Amendment, beginning December 31, 2008.
    CPC may negotiate with the Company to revise existing financial
    covenants in conjunction with each advance as required.
    Termination date of the senior credit facility was extended to
    August 1, 2009, subject to automatic renewal as defined in
    the Amendment. 72




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##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       10.
    Income
    Taxes    Year Ended December 31,2008


2007


2006Current provision:Federal

$
64


$



$
16State


220



166



28Total current provision


284



166



44Deferred expense (benefit)


1,727



(402
)


Total expense (benefit) from continuing operations


2,011



(236
)


44Total expense (benefit) from discontinued operations


19



28



Total expense (benefit)

$
2,030


$
(208
)

$
44     Year Ended December 31,2008


2007


2006Federal income tax at statutory rate

$
(3,627
)

$
1,162


$
761Impairment of non-deductible goodwill and intangible assets


1,395







Meals and entertainment expenses


100



82



59State taxes, net of federal tax benefit


(5
)


110



19Equity compensation


166







Other


(40
)


43



15Valuation allowance


4,022



(1,633
)


(810
)Total expense (benefit) from continuing operations

$
2,011


$
(236
)

$
44  73




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008


2007Deferred tax assets:Accounts and notes receivable

$
824


$
619Closing and severance costs


85



23Deferred service revenue


269



331Share-based compensation


155



55Accrued liabilities


1,400



1,396Depreciation


45



Amortization of intangibles


1,559



Other


23



17Net operating loss carryforward / tax credit carryforward


64



Total deferred tax assets


4,424



2,441Less: Valuation allowance


(4,022
)


Net deferred tax asset


402



2,441Deferred tax liabilities:Amortization of intangibles






(1,444
)Inventory reserves


(402
)


(286
)Depreciation






(176
)Other






Total deferred tax liabilities


(402
)


(1,906
)Net deferred tax asset (liability)

$



$
535      74




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     11.
    Adoption
    of FASB Interpretation No. 48        12.
    Stockholders
    Equity  Registered
    Direct Offering
    Equity
    Compensation Plans
    1996 Incentive Stock Plan and the 1996 Non-Employee Director
    Stock Option Plan
  2000 Stock Incentive Plan
 75




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Grant-Date
    Fair Value
    2008


2007


2006Expected volatility


61.1
%


60.3
%


63.1
%Expected term (in years)


6.5



6.5



6.3Risk-free interest rate


2.8
%


4.4
%


4.7
%Expected dividend yield


0
%


0
%


0
%     Share-Based
    Compensation Expense
   76




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2008


2007


2006Cost of products and services  services

$
265


$
78


$
57Selling, general and administrative expenses


1,390



665



368Share-based compensation from continuing operations before
    income taxes


1,655



743



425Income tax benefit










Share-based compensation from continuing operations


1,655



743



425Share-based compensation from discontinued operations






(8
)


55Total share-based compensation

$
1,655


$
735


$
480Impact of total share-based compensation on net income per share:Basic

$
(0.20
)

$
(0.10
)

$
(0.08
)Diluted

$
(0.20
)

$
(0.09
)

$
(0.07
)   Option
    Activity
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term (Years)


ValueOptions outstanding at December 31, 2007


1,480,736


$
4.83Granted


12,000



7.64






$
Exercised


(151,624
)


5.48






$
688Canceled


(63,530
)


8.27






$
Options outstanding December 31, 2008


1,277,582


$
4.61



5.49


$
1,768Options exercisable at December 31, 2008


946,782


$
3.22



4.62


$
1,768Options vested and options expected to vest at December 31,
    2008


1,165,424


$
4.35



5.82


$
1,767    77




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Weighted AverageGrant DateNonvested Shares

Shares


Fair ValueNonvested at December 31, 2007


195,509



Granted


332,443


$
8.18Vested


(57,708
)

$
11.17Forfeited


(33,250
)

$
10.00Nonvested at December 31, 2008


436,994


$
9.04     No. FAS 123R-3 No. FAS 123R-3
    Employee
    Stock Purchase Plan
   78




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Capital
    Stock
    Common
    Stock Repurchase Plan
  Rule 10b-18
      Warrants
     79




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   paid-in-capital.
  13.
    Major
    Customers and Geographic Concentrations    14.
    Related
    Party Transactions      
    INX has the sole option to terminate its lease with
    120 days notice for reasons specified in the Amendment. INX
    is not required to pay rent during the 120 day notice
    period.
    INX has the right of first refusal on additional space on the
    second floor of the building.        15.
    Commitments
    and Contingencies  Litigation
 80




---



##### Table of Contents



INX INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Schneider Rucinski
    Enterprises v. Touch Asia Outsourcing Solutions,
    Stratasoft, Inc., INX Inc., et al
  InternetworkExperts, Inc. (INX) v. International
    Business Machines Corporation
    Operating Leases
  Capital Leases
  401(k) Plan
 81




---



##### Table of Contents



Schedule IIValuation and Qualifying Accounts
    For Each of the Three Years Ended December 31, 2008
    (Amounts in Thousands) Balance at


Charges to











Balance atBeginning


Costs and








Other


End ofof Year


Expenses


Write-offs


Recoveries


Changes


YearAccumulated provision deducted from related assets on balance
    sheet Allowance for doubtful accounts:2006

$
161


$
63


$
5


$
80


$



$
2992007


299



268



117







20



4702008


470



541



276











735   Note
 82




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A(T).
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
    Changes
    in Internal Control Over Financial Reporting
    Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rule 13a-15(f)
  Form 10-K
   83




---



##### Table of Contents



Item 9B.
    Other
    Information.   PART III



Certain information required by Part III is omitted from
    this Report on
    Form 10-K
    since we will file a definitive Proxy pursuant to
    Regulation 14A of the Exchange Act (the Proxy
    Statement), not later than 120 days after the end of
    the fiscal year covered by this Report, and certain information
    included in the Proxy Statement is incorporated herein by
    reference. Item 10.
    Directors,
    Executive Officers, and Corporate Governance    http://www.inxi.com.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   84




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules             85




---



##### Table of Contents



SIGNATURES    
  By:
    /s/  JAMES
    H. LONG   Chief Executive Officer
    Signature

Capacity

Date/s/  JAMES
    H. LONGJames
    H. Long

Chief Executive Officer and Chairman of the Board of Directors

March 10, 2009/s/  BRIAN
    FONTANABrian
    Fontana

Vice President and Chief Financial Officer

March 10, 2009/s/  LARRY
    LAWHORNLarry
    Lawhorn

Controller and Chief Accounting Officer

March 10, 2009/s/  DONALD
    R. CHADWICKDonald
    R. Chadwick

Director

March 10, 2009/s/  CARY
    GROSSMANCary
    Grossman

Director

March 10, 2009/s/  JOHN
    B. CARTWRIGHTJohn
    B. Cartwright

Director

March 10, 2009  86




---



##### Table of Contents



EXHIBIT INDEX  ExhibitNo.

Description

Filed Herewith or Incorporated by Reference From:3
.1

Amended and Restated Bylaws of the Company

Exhibit 3.1 to Amendment 5 to
    Form S-1,
    Registration
    No. 333-09789,
    filed June 26, 19973
.2

Certificate of Incorporation of the Company

Exhibit 3.2 to Amendment 1 to
    Form S-1,
    Registration
    No. 333-09789,
    filed September 19, 19963
.3

Certificate of Amendment to Certificate of Incorporation of
    Allstar Systems, Inc., dated June 24, 1997

Exhibit 3.4 to Amendment 5 to
    Form S-1,
    Registration
    No. 333-09789,
    filed June 26, 19973
.4

Certificate of Amendment to Certificate of Incorporation of
    Allstar Systems, Inc., dated March 5, 1999

Exhibit 3.3 to
    Form 8-A,
    Registration
    No. 001-31949,
    filed December 29, 20033
.5

Certificate of Amendment to Certificate of Incorporation of
    Allstar Systems, Inc. dated July 10, 2000

Exhibit 3.4 to
    Form 8-A,
    Registration
    No. 001-31949,
    filed December 29, 20033
.6

Certificate of Ownership and Merger

Exhibit 3.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated January 6, 20064
.1

Specimen Common Stock Certificate

Exhibit 4.1 to Amendment 2 to
    Form S-1,
    Registration
    No. 333-09789,
    filed October 3, 199610
.1

Amended & Restated Allstar Systems, Inc. 1996
    Incentive Stock Plan, dated effective July 1, 1997

Exhibit 10.9 to
    Form 10-K
    Registration
    No. 001-31949,
    filed March 12, 200410
.2

Amended & Restated
    I-Sector
    Corp. Stock Incentive Plan, dated effective July 28, 2003

Exhibit 10.10 to
    Form 10-K
    Registration
    No. 001-31949,
    filed March 12, 200410
.3

Amended & Restated Internetwork Experts, Inc., Stock
    Incentive Plan dated effective August 1, 2003

Exhibit 10.11 to
    Form 10-K
    Registration
    No. 001-31949,
    filed March 12, 200410
.4

First Amendment to
    I-Sector
    Corporation Incentive Plan

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated January 4, 200510
.5

Second Amendment to
    I-Sector
    Corporation Incentive Plan, as amended and restated

Exhibit 10.2 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated March 21, 200510
.6

Third Amendment to
    I-Sector
    Corporation Incentive Plan

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated May 17, 200510
.7

Fourth Amendment to
    I-Sector
    Corporate Incentive Plan

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed June 6, 200610
.8

Fifth Amendment to
    I-Sector
    Corporate Incentive Plan

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed May 15, 200710
.9

Sixth Amendment to
    I-Sector
    Corporate Incentive Plan

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed May 13, 200810
.10

INX Inc. 2008 Employee Stock Purchase Plan

Exhibit 10.2 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed May 13, 200810
.11

Form of Employment Agreement by and between the Company and
    certain members of management

Exhibit 10.5 to Amendment 1 to
    Form S-1,
    Registration
    No. 333-09789,
    filed September 19, 199610
.12

Employment Agreement by and between Allstar Systems, Inc. and
    James H. Long, dated August 15, 1996

Exhibit 10.3 to
    Form 10-K
    Registration
    No. 001-31949,
    filed March 12, 2004




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##### Table of Contents



ExhibitNo.

Description

Filed Herewith or Incorporated by Reference From:10
.13

Employment Agreement by and between
    I-Sector
    Corporation and Brian Fontana, dated December 20, 2004

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed December 20, 200410
.14

Confidentiality Agreement by and between
    I-Sector
    Corporation and Brian Fontana, dated December 20, 2004

Exhibit 10.2 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed December 20, 200410
.15

Employment Agreement by and between
    I-Sector
    Corporation and Larry Lawhorn dated April 5, 2005

Exhibit 10.1 to
    Form 10-Q,
    Registration
    No. 001-31949,
    dated August 15, 200510
.16

Form of Change in Control Retention Agreement

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated December 8, 200610
.17

Form of First Amendment to Change in Control Retention Agreement

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated December 21, 200710
.18

Credit Agreement by and among Castle Pines Capital LLC,
    I-Sector
    Corporation, Valerent, Inc., InterNetwork Experts, Inc., and
    Stratasoft, Inc. dated December 27, 2005

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    dated May 4, 200710
.19

Credit Agreement by and among Castle Pines Capital LLC, INX,
    Inc., and Valerent, Inc. dated April 30, 2007

Exhibit 10.1 to
    Form 10-Q,
    Registration
    No. 001-31949,
    dated August 15, 200510
.20

Acquisition Facility Amendment to Amended and Restated Credit
    Agreement by and among Castle Pines Capital LLC, and INX, Inc.
    dated August 1, 2007

Exhibit 10.2 to
    Form 10-Q,
    Registration
    No. 001-31949,
    dated August 6, 200710
.21

Amended and Restated Financial Covenants Amendment to Amended
    and Restated Credit Agreement by and between INX Inc. and Castle
    Pines Capital LLC dated August 31, 2007

Exhibit 10.2 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed September 4, 200710
.22

Amendment and Joinder to Credit Agreement by and among Select,
    Inc. and Castle Pines Capital LLC dated August 31, 2007

Exhibit 10.3 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed September 4, 200710
.23

Amendment to Amended and Restated Credit Agreement by and among
    INX Inc., Select, Inc., and Castle Pines Capital LLC

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed June 4, 200810
.24

Systems Integrator Agreement by and between Cisco Systems, Inc.
    and Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.4 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 12, 200410
.25

Amendment One, dated January 28, 2002 to Systems Integrator
    Agreement by and between Cisco Systems, Inc. and Internetwork
    Experts, Inc., dated November 13, 2001

Exhibit 10.5 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 12, 200410
.26

Amendment Two, dated November 21, 2002 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.6 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 12, 200410
.27

Amendment Three, dated January 20, 2003 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.7 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 12, 2004




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##### Table of Contents



ExhibitNo.

Description

Filed Herewith or Incorporated by Reference From:10
.28

Amendment Four, dated January 16, 2004 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.8 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 12, 200410
.29

Amendment Five, dated January 27, 2005 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.23 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 27, 200610
.30

Amendment Six, dated April 18, 2005 to Systems Integrator
    Agreement by and between Cisco Systems, Inc. and Internetwork
    Experts, Inc., dated November 13, 2001

Exhibit 10.24 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 27, 200610
.31

Amendment Seven, dated March 2, 2006, to Systems Integrator
    Agreement by and between Cisco Systems, Inc. and Internetwork
    Experts, Inc., dated November 13, 2001

Exhibit 10.25 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 27, 200610
.32

Amendment Eight, dated March 20, 2006, to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and INX
    Inc. (formerly Internetwork Experts, Inc.), dated
    November 13, 2001

Exhibit 10.26 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 27, 200610
.33

Amendment Nine, dated November 13, 2006, to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and INX
    Inc. (formerly Internetwork Experts, Inc.), dated
    November 13, 2001

Exhibit 10.30 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 7, 200810
.34

Amendment Ten, dated January 25, 2007 to Systems Integrator
    Agreement by and between Cisco Systems, Inc. and Internetwork
    Experts, Inc., dated November 13, 2001

Exhibit 10.37 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 7, 200810
.35

Amendment Eleven, dated April 10, 2007 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.38 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 7, 200810
.36

Amendment Twelve, dated December 13, 2007 to Systems
    Integrator Agreement by and between Cisco Systems, Inc. and
    Internetwork Experts, Inc., dated November 13, 2001

Exhibit 10.39 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 7, 200810
.37

Amendment dated October 1, 2007, to Systems Integrator
    Agreement by and between Cisco Systems, Inc. and Internetwork
    Experts, Inc., dated November 13, 2001

Exhibit 10.40 to
    Form 10-K,
    Registration
    No. 001-31949,
    dated March 7, 200810
.38

Stock Purchase Agreement by and among The Resource Group
    International Limited and INX Inc. dated January 26, 2006

Exhibit 2.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed January 31, 200610
.39

Stock Purchase Agreement by and among INX Inc., Dana Zahka, and
    All Other Shareholders of Select, Inc. dated August 31, 2007

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed September 4, 200710
.40

Asset Purchase Agreement by and among INX Inc., Access Flow,
    Inc., Steve Kaplan and Gary Lamb dated June 6, 2008

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed June 9, 2008




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##### Table of Contents



ExhibitNo.

Description

Filed Herewith or Incorporated by Reference From:10
.41

Asset Purchase Agreement by and among INX Inc., NetTeks
    Technology Consultants, Inc., Ethan F. Simmons, Matthew J.
    Field, and Michael P. DiCenzo dated November 14, 2008

Exhibit 10.1 to
    Form 8-K,
    Registration
    No. 001-31949,
    filed November 18, 200821
.1

List of Subsidiaries of the Company

Filed herewith23
.1

Consent of Grant Thornton LLP

Filed herewith31
.1

Rule 13a-14(a)/15d-14(a)
    Certification of Chairman and Chief Executive Officer

Filed herewith31
.2

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer

Filed herewith32
.1

Section 1350 Certification of Chief Executive Officer

Filed herewith32
.2

Section 1350 Certification of Chief Financial Officer

Filed herewith99
.1

Report of Independent Registered Public Accounting Firm

Filed herewith