948850--3/2/2010--COMSYS_IT_PARTNERS

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Risks that May Impact Future Operating Results Pending Completion of the Offer and the Merger or if the Offer and the Merger are not Consummated Any economic downturn, or the perception that such a downturn is possible, may cause our revenues to decline and may adversely affect our results of operations, cash flows and financial condition. Our dependence on large customers and the risks we assume under our contracts with them could have a material adverse effect on our revenues and results of operations. Our profitability will suffer if we are not able to maintain sufficient levels of billable hours and bill rates and control our costs or if we are unable to pass bill rate decreases to our consultants. We compete in a highly competitive market with limited barriers to entry and significant pricing pressures. There can be no assurance that we will continue to successfully compete. We may be unable to attract and retain qualified billable consultants, which could have an adverse effect on our business, financial condition and results of operations. We depend on key personnel, and the loss of the services of one or more of our senior management or a significant portion of our local management personnel could weaken our management team and our ability to deliver quality services and could adversely affect our business. Our failure to shift more of our business into the IT solutions area could adversely impact our growth rate and profitability. We may suffer losses due to the conduct of our employees or our clients employees during staffing assignments. Additional government regulation and rising health care and unemployment insurance costs and taxes, including increased state and local taxes, could have a material adverse effect on our business, operating results and financial condition. Due to inherent limitations, there can be no assurance that our system of disclosure and internal controls and procedures will be successful in preventing all errors and fraud, or in making all material information known in a timely manner to management. Our strategic decision not to pursue a broad-based offshore strategy may adversely impact our revenue growth and profitability. We have substantial intangible assets, have incurred significant impairment charges in the past and may incur further charges if there are significant adverse changes to our operating results, outlook or market conditions. Adverse results in tax audits could require significant cash expenditures or expose us to unforeseen liabilities. We may be subject to lawsuits and claims, which could have a material adverse effect on our financial condition and results of operations. Concentration of services in metropolitan areas may adversely affect our revenues in the event of extraordinary events. We depend on the proper functioning of our information systems. Risks Related to our Indebtedness We have substantial debt obligations that could restrict our operations and adversely affect our business and financial condition. We will require a significant amount of cash to service our indebtedness and satisfy our other liquidity needs. Our ability to generate cash depends on many factors beyond our control. Restrictive financing covenants limit the discretion of our management and may inhibit our operating flexibility. If we default on our obligations to pay our indebtedness, or fail to comply with the covenants and restrictions contained in the agreements governing our indebtedness, our financial condition may be adversely affected by the consequences of any such default. Other Risks Related to Investment in Our Common Stock Shares of our common stock have been thinly traded in the past and the prices at which our common stock will trade in the future could fluctuate significantly. Ownership of our common stock is concentrated among a small number of major stockholders that have the ability to exercise significant control over us, and whose interests may differ from the interests of other stockholders. Concentrated ownership of large blocks of our common stock may affect the value of shares held by others and our ability to access public equity markets. Future sales of shares may adversely affect the market price of our shares. The market price and marketability of our shares may from time to time be significantly affected by numerous factors beyond our control, which may adversely affect our ability to raise capital through future equity financings or our ability to use equity in acquisitions. We do not intend to pay cash dividends on our common stock in the foreseeable future, and therefore only appreciation of the price of our common stock will provide a return to our stockholders. Our certificate of incorporation contains certain provisions that could discourage an acquisition or change of control of COMSYS.

Full 10-K form ▸

948850--3/2/2010--COMSYS_IT_PARTNERS_INC