23019--3/16/2006--COMPUTER_HORIZONS

related topics

{regulation, government, change}

{property, intellectual, protect}

{system, service, information}

{customer, product, revenue}

{product, market, service}

{stock, price, operating}

{provision, law, control}

{personnel, key, retain}

{operation, international, foreign}

{condition, economic, financial}

{competitive, industry, competition}

Our operating results have varied, and are likely to continue to vary significantly. This may result in volatility in the market price of our common stock. The current trend of companies moving technology jobs and projects offshore has caused and could continue to cause revenues to decline. The failure to be successful in retaining existing and future highly-skilled technical personnel and attracting a sufficient number of IT professionals and project managers could adversely affect our business. We derive a significant portion of revenues from a limited number of large clients and the loss of any large client could have an adverse effect on our business. Changes in Federal government programs and requirements, or budgetary changes affecting Federal government spending in agencies specific to us, or changes in fiscal policies or available funding, may adversely affect our results of operations. Projects performed by RGII are subject to Defense Contract Audit Agency audits and compliance with government cost accounting standards. The results of such audits may result in adjustments to RGII s reported financial results. We face competition from a number of existing competitors, as well as potential new competitors, which could result in loss of market share and adversely affect business. The introduction of competitive IT solutions embodying new technologies and the emergence of new industry standards may render our existing IT solutions or underlying technologies obsolete or unmarketable which could have an adverse effect on its business. Some of our services are offered on a fixed-price basis. The failure to estimate accurately the resources and time required for a project or failure to complete our contractual obligations within the time frame committed could have an adverse effect on our business. Our international operations subject us to additional risks that can adversely affect operating results. If we fail to protect our intellectual property rights, competitors may be able to use our technology and this could weaken our competitive position, reduce revenue and increase costs. Third parties could assert that our services infringe their intellectual property rights, which, if successful, could adversely affect our business. In the event of a failure in a client s computer system, a claim for substantial damages may be made against us regardless of our responsibility for the failure, which if successful, could adversely affect our business. As a provider of staffing services, there are risks associated with placing employees (and independent contractors) at clients businesses, which could result in costly and time-consuming litigation. We have adopted anti-takeover defenses that could make it difficult for another company to acquire control of us or limit the price investors might be willing to pay for our stock.

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23019--3/16/2006--COMPUTER_HORIZONS_CORP