1113784--3/3/2009--CARDIONET

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Risks related to our business and industry We have a history of net losses and may not be able to sustain profitability. Our business is dependent upon physicians prescribing our services; if we fail to obtain those prescriptions, our revenues could fail to grow and could decrease. We and the physicians with whom we work are dependent upon reimbursement for the fees associated with our services; the absence or inadequacy of reimbursement would cause our revenues to fail to grow or decrease. We may experience difficulty in obtaining reimbursement for our services from commercial payors that consider our technology to be experimental and investigational, which would adversely affect our revenues and operating results. Reimbursement by Medicare is highly regulated and subject to change; our failure to comply with applicable regulations, could decrease our revenues and may subject us to penalties or have an adverse impact on our business. A reduction in the published reimbursement rates could negatively impact our business and our operating results. A reduction in sales of our services or a loss of one or more of our key commercial payors would adversely affect our business and operating results. Consolidation of commercial payors could result in payors eliminating coverage of MCOT services or reduced reimbursement rates for MCOT. Our acquisition of other companies or technologies in the future could prove difficult to integrate and may disrupt our business and harm our operating results and prospects. If we are unable to manage our expected growth, our revenues and operating results may be adversely affected. If we do not have enough MCOT monitors or sensors or experience delays in manufacturing, we may be unable to fill prescriptions in a timely manner, physicians may elect not to prescribe MCOT, and our revenues and growth prospects could be harmed. Interruptions or delays in telecommunications systems or in the data services provided to us by QUALCOMM or the loss of our wireless or data services could impair the delivery of MCOT services. If our competitors are able to develop or market monitoring solutions that are more effective, or gain greater acceptance in the marketplace, than any solutions we develop, our commercial opportunities will be reduced or eliminated. If we need to raise additional funding in the future, we may be unable to raise such capital when needed, or at all, and the terms of such capital may be adverse to our stockholders. If we or our suppliers fail to achieve or maintain regulatory approval of these manufacturing facilities, our growth could be limited and our business could be harmed. Our dependence on a limited number of suppliers may prevent us from delivering our devices on a timely basis. We could be subject to medical liability or product liability claims which may not be covered by insurance and which would adversely affect our business and results of operations. If we do not obtain and maintain adequate protection for our intellectual property, the value of our technology and devices may be adversely affected. Our ability to market our services may be impaired by the intellectual property rights of third parties. Our business operations could be significantly disrupted if we fail to properly integrate our management team. If we fail to obtain and maintain necessary FDA clearances, our business will be adversely affected. Enforcement of federal and state laws regarding privacy and security of patient information may adversely affect our business, financial condition or operations. We may be subject, directly or indirectly, to federal and state health care fraud and abuse laws and regulations and, if we are unable to fully comply with such laws, could face substantial penalties. The operation of our call centers and monitoring facilities is subject to rules and regulations governing IDTFs and state licensure requirements; failure to comply with these rules could prevent us from receiving reimbursement from Medicare and some commercial payors. We may be subject to federal and state false claims laws which impose substantial penalties. Changes in the regulatory environment may constrain or require us to restructure our operations, which may harm our revenues and operating results. Changes in the health care industry or tort reform could reduce the number of arrhythmia monitoring solutions ordered by physicians, which could result in a decline in the demand for our solutions, pricing pressure and decreased revenues. A write-off of the value of our goodwill or intangible assets could adversely affect our results of operations. We have a concentration of risk related to the accounts receivable from one customer. Failure to fully collect outstanding balances from this customer, or a combination of other customers, may adversely affect our results of operations. Tax requirements and audits could impact our results of operations. Our annual operating results and stock price may be volatile or may decline regardless of our operating performance. Future sales of our common stock may depress our stock price. Anti-takeover provisions in our charter documents and Delaware law might deter acquisition bids for us that our stockholders might consider favorable. If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. We do not expect to pay any cash dividends for the foreseeable future. The global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.

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1113784--3/3/2009--CARDIONET_INC