1050122--3/15/2007--1_800_CONTACTS

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Risks Relating to Our Business ClearLab continues to incur substantial losses and requires ongoing cash investment from the U.S. Retail business. We may not be able to separate ClearLab from the U.S. Retail business on favorable terms. We may continue to incur significant additional expense to support ClearLab. Our business is dependent upon suppliers of contact lenses. We have no control over the manufacturing and quality of the contact lenses we sell in the United States. We will continue to experience order cancellations due to the prescription verification requirements of the FCLCA. We may continue to incur significant legal and professional fees. We are subject to numerous regulatory risks. It is possible that the FDA could consider certain of the contact lenses we sell to be misbranded or adulterated. A portion of our sales may be found to violate applicable state laws and regulations concerning the delivery and sale of contact lenses. Our manufacturing facilities and products are subject to stringent regulation by various foreign jurisdictions in which our products are manufactured and/or sold. Consumer acceptance of our manufactured products may not meet our expectations. We may not be able to establish a sufficient network of eye care practitioners to provide contact lens eye exams to our customers who have expired contact lens prescriptions. Our quarterly results are likely to vary based upon the level of sales and marketing activity in any particular quarter. The retail sale of contact lenses is highly competitive and certain of our competitors are large, national optical chains that have greater resources than we do. The demand for contact lenses could be substantially reduced if alternative technologies to permanently correct vision gain in popularity. Increases in the cost of shipping, postage or credit card processing could harm our business. Our business could be harmed if we are required to collect state sales tax on the sale of all products. We face an inherent risk of exposure to product liability claims in the event that the products we manufacture or sell allegedly cause personal injury. We conduct our retail operations through a single distribution facility. We are subject to certain risks associated with our foreign operations that could harm our revenues and profitability. Currency exchange rate fluctuations could have an adverse effect on our financial results. We may be required to reduce the carrying value of our goodwill, long-lived and definite-lived assets if events and circumstances indicate the remaining balance of these assets may not be recoverable. Our intellectual property rights may be challenged, and we do not have any property rights in the 1-800 CONTACTS telephone number or the Internet addresses. We may not be able to complete our milestones and obligations in a timely manner under our Japanese license agreement and may not receive the amount of license fees and royalties that we presently anticipate under that agreement. Risks Relating to the Internet We are dependent on our telephone, Internet and management information systems for the sale and distribution of contact lenses. Our success is dependent, in part, on continued use of the Internet. Online security breaches could harm our business. Government regulation and legal uncertainties relating to the Internet and online commerce could negatively impact our business operations. Changing technology could adversely affect the operation of our website. Risks Related to Our Common Stock The price of our Common Stock has been volatile and could continue to fluctuate in the future. The trading activity in our common stock is relatively limited due to the limited size of our public float.

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1050122--3/15/2007--1_800_CONTACTS_INC