1096620--10/14/2008--ADVANCED_MEDICAL_INSTITUTE

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{product, liability, claim}

{operation, international, foreign}

{property, intellectual, protect}

{product, market, service}

{stock, price, share}

{personnel, key, retain}

{acquisition, growth, future}

{regulation, government, change}

{capital, credit, financial}

{cost, operation, labor}

{regulation, change, law}

{investment, property, distribution}

{cost, regulation, environmental}

{stock, price, operating}

Risks Related to our Business Our business may be adversely affected by competition in the market for the treatment of sexual dysfunction. An inability to respond quickly and effectively to new trends could adversely impact our competitive position. Increases in staffing costs could adversely affect our business. Increases in advertising expenses and/or decreases in the effectiveness of our advertising could result in higher expenses with no corresponding increase in revenue. Increases in cost for pharmaceutical compounds and other chemicals could adversely affect our business. We are subject to risks associated with joint ventures and third party agreements. We may be subject to product liability claims, which could negatively impact our profitability. We have limited business liability insurance coverage. We have and may in the future experience negative results from our plans for expansion. We may be adversely affected should certain patents expire or if our intellectual property becomes widely available. Our products require regulatory approval. We may have future capital needs for which we will need to access additional financing. Additional financing could dilute our current stockholders equity interests. We may not be able to retain our key management or contractors. Risks related to our common stock Our stock price is highly volatile. Our common stock is subject to the penny stock rules. Efforts to comply with recently enacted changes in securities laws and regulations have required substantial financial and personnel resources, and we still may fail to comply. Risks associated with doing business in Australia and other foreign countries We are subject to the risks associated with doing business in Australia and Asia. We are subject to risks associated with the domicile, place of incorporation and place of residence of AMI Australia and our directors and officers. We may experience an impact due to Australian, New Zealand, Chinese or United Kingdom regulation of the pharmaceutical and/or medical services industry. We may experience a risk of revenue reduction due to a saturation of the Australian market. Potential intellectual property claim may adversely affect expansion into North America. Fluctuations in currency exchange rates may adversely affect the demand for our services by increasing the price of our services in the currency of the countries in which the services are marketed. We are subject to a risk that our current patent applications may not be granted. We are subject to risks associated with our method of patient consultation. We may experience risks due to dispensing medication through prescriptions written by our doctors after our over-the-phone consultations. Our current business model may not be profitable in international markets. We may not achieve the widespread brand recognition necessary to succeed outside of Australia. Regulations in international markets relating to advertising could adversely affect our business. Regulations in international markets relating to pharmaceuticals could adversely affect our business. Inability to hire experienced and capable employees or executives in non-Australian markets could adversely affect our business in such markets.

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1096620--10/14/2008--ADVANCED_MEDICAL_INSTITUTE_INC.