73822--3/30/2006--STRATEGIC_DISTRIBUTION

related topics

{customer, product, revenue}

{system, service, information}

{product, market, service}

{condition, economic, financial}

{personnel, key, retain}

{competitive, industry, competition}

{cost, operation, labor}

{interest, director, officer}

{operation, international, foreign}

Certain Factors Affecting Forward Looking Statements Our industry is very competitive and we cannot assure you that we will be able to compete successfully against all of our competitors. We have a high concentration of risk with regards to revenues, inventories and receivables attributable to a few customers. We continue to focus on growth opportunities but cannot guarantee that the market will accept the new modified offerings. We do experience some seasonality in our business with regards to revenues from one institutional customer. Although we operate under formal contracts with all our customers, we do run the risk of contract termination for causes beyond our control. Our deliverables to customers are highly dependent upon the smooth functioning of our systems. Our ability to sell services outside the United States is highly dependent upon laws and policies in these countries. Our ability to operate efficiently is dependent on our reaction to economic changes. Our ability to grow our infrastructure is highly dependent upon hiring and retaining key personnel. Our continued focus to grow the margin and income is contingent on the control of operating costs and general and administrative expenses. We rely on certain information to make customer credit decisions.

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73822--3/30/2006--STRATEGIC_DISTRIBUTION_INC