1097136--3/21/2008--SENORX

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{product, market, service}

{stock, price, share}

{product, candidate, development}

{stock, price, operating}

{customer, product, revenue}

{control, financial, internal}

{property, intellectual, protect}

{financial, litigation, operation}

{cost, regulation, environmental}

{tax, income, asset}

{provision, law, control}

{personnel, key, retain}

{acquisition, growth, future}

RISKS RELATED TO OUR BUSINESS We have a limited history of operations and a history of net losses, and we may not be able to achieve profitability even if we are able to generate significant revenues. Our success depends upon market adoption of our EnCor system and Contura MLB, without which our results of operations will suffer. Our future success will depend in part upon our ability to successfully commercialize our Contura MLB. We have limited clinical data regarding the safety and efficacy of our products. If future data or clinical experience is negative, we may lose significant market share. We compete against companies that have more established products and greater resources, which may prevent us from achieving significant market penetration or improved operating results. Our ability to compete depends upon our ability to innovate, develop and commercialize new products and product enhancements. Our business strategy is heavily focused on integrated breast centers and other large institutions. Our strategy of providing a broad array of products to the breast care market may be difficult to achieve, given our size and limited resources. We believe that demand for minimally-invasive products for the diagnosis and treatment of breast cancer must grow in order for our business to grow as anticipated. We have limited sales and marketing experience and failure to build and manage our sales force or to market and distribute our products effectively could have a material adverse effect on our results of operations. We are currently and may in the future be subject to costly claims of infringement or misappropriation of the intellectual property rights of others, which could impact our business and harm our operations. If we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which could have a material adverse effect on our business and results of operations. We may be unsuccessful in our long-term goal of expanding our product offerings outside the United States and Canada. We are dependent on sole-source and single-source suppliers for certain of our products and components, thereby exposing us to supply interruptions that could have a material adverse effect on our business. We have limited experience manufacturing certain components of our products in significant quantities, which could adversely impact the rate at which we grow. We rely on third-party manufacturers for certain components, and the loss of any of these manufacturers, or their inability to provide us with an adequate supply of high-quality components, could have a material adverse effect on our business. Changes in coverage and reimbursement for procedures using our products could affect the adoption of our products and our future revenues. Any acquisitions that we make could disrupt our business and have an adverse effect on our financial condition. Our financial controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a public company, could materially harm our stock price and NASDAQ listing. Product liability claims may lead to expensive and time-consuming litigation, substantial damages, increased insurance rates, and may have a material adverse effect on our financial condition. We may be adversely affected by the impact of environmental and safety regulations. Our success will depend on our ability to attract and retain key personnel, particularly members of management and scientific staff. Our ability to use net operating loss carryforwards may be limited. RISKS RELATED TO REGULATORY MATTERS The FDA may find that we do not comply with regulatory requirements and take action against us. If we fail to obtain or maintain necessary FDA clearances or approvals for products, or if clearances or approvals are delayed, we will be unable to commercially distribute and market our products in the United States. Modifications to our devices may require new 510(k) clearances, which may not be obtained. Government regulation imposes significant restrictions and costs on the development and commercialization of our products. RISKS RELATED TO THE SECURITIES MARKETS AND OWNERSHIP OF OUR COMMON STOCK Our common stock has been publicly traded for a short time and an active trading market may not be sustained. If our public guidance or our future operating performance does not meet investor expectations, our stock price could decline. We expect that the price of our common stock will fluctuate substantially. Our directors, executive officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders. A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. Our Amended and Restated Certificate of Incorporation and Bylaws, and Delaware law, contain provisions that could discourage a takeover. We do not intend to pay cash dividends.

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1097136--3/21/2008--SENORX_INC