1289863--3/24/2009--SmartPros_Ltd.

related topics
{product, market, service}
{condition, economic, financial}
{acquisition, growth, future}
{personnel, key, retain}
{customer, product, revenue}
{investment, property, distribution}
{property, intellectual, protect}
{stock, price, operating}
CERTAIN RISK FACTORS THAT MAY AFFECT GROWTH AND PROFITABILITY The industry in which we operate is highly competitive and has relatively low barriers to entry. Increased competition could result in margin erosion and loss of market share and brand recognition. Our growth strategy assumes that we will make targeted strategic acquisitions. If we fail to keep up with changes affecting the markets that we serve, we will become less competitive, adversely affecting our financial performance. Our future growth and competitiveness depends on our ability to adapt to new technologies and changes to existing technologies and new applications to meet market demand. Our future success depends on retaining our existing key employees and hiring and assimilating new key employees. The loss of key employees or the inability to attract new key employees could limit our ability to execute our growth strategy, resulting in lost sales and a slower rate of growth. Our sales cycle can be long and unpredictable, which could delay our growth and make it difficult for us to predict earnings. This could lead to stock price volatility. Our strategic relationships are usually short-term, non-exclusive arrangements and our strategic partners may provide the same or similar services to our competitors, diluting any competitive advantage we get from these relationships. We may be unable to protect our intellectual property adequately or cost effectively, which may cause us to lose market share or reduce our prices. If we were deemed an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated and could have an adverse effect on our business. Effects of recession on business.

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