1031029--3/3/2009--STARTEK

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Continuing unfavorable economic conditions could have a material adverse effect on our results of operations and financial condition. If we are unable to renew or replace sources of capital funding on satisfactory terms, potential growth and results of operations may suffer. If the value of our portfolio of investment securities declines, our results of Over 70% of our revenue in the past several years (over 80% in 2008) has been received from our two largest clients. The loss or reduction in business from any of these clients would adversely affect our business and results of operations. We are currently carrying a significant amount of net operating loss carry forwards for tax purposes. If we are not able to generate sufficient future taxable income to offset these losses, our financial results may be adversely affected. Our client base is concentrated in the communications industry, which has recently experienced consolidation trends. As our clients businesses change as a result of merger and acquisition activity, there is no guarantee that the newly formed companies will continue to use our services. Our client base is concentrated in the communications industry and our strategy partially depends on a trend of communications companies continuing to outsource non-core services. If the communications industry suffers a downturn or the trend toward outsourcing reverses, our business will suffer. We have experienced significant management turnover and need to retain key management personnel. If we are not able to hire and retain qualified employees, our ability to service our existing customers and retain new customers will be adversely Our operating costs may increase as a result of higher labor costs. We may need to add specialized sales personnel in order to grow our business. We may have difficulty recruiting candidates for these positions. We face considerable pricing pressure in our business, and if we are not able to continually increase productivity, our gross margins and results of operations may be adversely affected. Our operating results may be adversely affected if we are unable to maximize We and some of our former management employees are the subject of a class action lawsuit. The defense and ultimate outcome of these allegations could negatively affect our future operating results. We generate revenue based on the demand for, and inquiries generated by, our clients products and services. If our clients products and services are not successful or do not generate the anticipated call volumes, our revenue and results of operations will be adversely affected. Our contracts generally do not contain minimum purchase requirements and can generally be terminated by our customers on short notice without penalty. Our existing and potential clients are currently decreasing the number of vendors they are using to outsource their business process services. If we lose more business than we gain as a result of this vendor consolidation, our business and results of operations will be adversely affected. If we do not effectively manage our growth or control costs related to growth, our results of operations will suffer. Failure to implement technological advancements could make our services less Our markets are highly competitive. If we do not compete effectively, we may lose our existing business or fail to gain new business. Our operations in Canada and the Philippines subject us to the risk of currency exchange We face risks inherent in conducting business outside of North America. Our lack of a significant international presence outside of North America may adversely affect our ability to serve existing customers or limit our ability Our largest stockholder has the ability to significantly influence corporate actions. Our stock price has been volatile and may decline significantly and Geopolitical military conditions, including terrorist attacks and other acts of war, may materially and adversely affect the markets in which we operate, and If we experience an interruption to our business, our results of operations may Increases in the cost of telephone and data services or significant interruptions in such services could adversely affect our business. Compliance with SEC rules requiring that we and our independent auditors assess the effectiveness of our internal controls over financial reporting may have adverse consequences. Our quarterly operating results have historically varied, and may not be a good

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1031029--3/3/2009--STARTEK_INC