879465--10/12/2007--DYNTEK

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{stock, price, share}

{control, financial, internal}

{stock, price, operating}

{acquisition, growth, future}

{personnel, key, retain}

{debt, indebtedness, cash}

{product, market, service}

{financial, litigation, operation}

{operation, natural, condition}

{customer, product, revenue}

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{regulation, change, law}

{competitive, industry, competition}

Risks Related to Our Business We will need additional capital in the future, or we will need to scale back operations. We have a history of operating losses and may not be able to achieve long-term profitability. We may not be able to compete successfully in the IT and services markets. We may not be able to identify, acquire or integrate new businesses, which could adversely impact our business. Our product margins are subject to competitive pricing pressures. We depend on a small number of vendors to supply the IT products that we sell and the loss of, or a material change in, our business relationship with a major supplier could adversely affect our business, financial condition and results of operation. We may not be able to attract and retain professional staff necessary for existing and future projects. Our success depends in large part upon the continued services of a number of significant employees, the loss of which could adversely affect our business, financial condition and results of operation. We depend on contracts with government agencies, which, if terminated or reduced, would have a material adverse effect on our business. Our revenue and operating results may fluctuate in the future. We may face litigation in the ordinary course of business, which could result in substantial expenses. War and terrorist activities could adversely affect our business. The level of our indebtedness could adversely affect our financial condition. We may be unable to generate sufficient cash flow to service our debt obligations. We may not be able to implement Section 404 of the Sarbanes-Oxley Act on a timely basis. We may experience difficulties with our financial systems, controls and operations that could harm our financial condition and results of operations Risks Related to our Stock A volatile public market for our common stock may impair liquidity and/or return on investment. Trading in our stock over the last 12 months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. You may experience dilution in ownership of our shares from the exercise or conversion of options, warrants and convertible securities. Lloyd I. Miller, III beneficially owns a majority of our outstanding common stock, which may enable him to control many significant stockholder matters and corporate actions and may prevent a change in control that would otherwise be beneficial to other stockholders. We currently do not intend to pay dividends on our common stock and, consequently, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates. It is possible that we may have violated Section 5 of the Securities Act.

Full 10-K form ▸

879465--10/12/2007--DYNTEK_INC