1121439--3/17/2008--EMAGEON

related topics

{acquisition, growth, future}

{product, market, service}

{personnel, key, retain}

{product, liability, claim}

{stock, price, operating}

{property, intellectual, protect}

{customer, product, revenue}

{regulation, government, change}

{condition, economic, financial}

{interest, director, officer}

{system, service, information}

{investment, property, distribution}

{provision, law, control}

{control, financial, internal}

Our business is subject to the cyclical nature of our industry and changes in economic conditions in general. Adverse changes with respect to these factors may reduce demand for our products, lower our revenues and affect our financial condition. Changes in our primary market for PACS radiology systems have resulted in a significant decline in PACS radiology system sales orders. Our operating results may fluctuate, which makes quarterly results difficult to predict and could cause our stock price to decline or exhibit volatility. Our products are complex and are operated in a wide variety of network configurations, which could result in errors or product failures. We may not be able to respond to changes in our industry, competitive technologies, changes in customer requirements, or evolving industry standards, which would result in reduced revenue and profit margins. If the market for digital medical imaging products and services does not develop as we expect, our business strategy may be ineffective, and we may not be able to grow our business. The recent decline in the market price of our common stock may impede our ability to execute our business plan and create adverse effects on our results of operations and financial condition. One of our largest stockholders has nominated a competing slate of directors for election in conjunction with this year s annual meeting of stockholders. We may not be successful in implementing the expansion of our sales and marketing efforts into new market segments, which may have an adverse impact on our growth strategy. We have incurred substantial operating losses in the past. We may not be able to raise additional capital on acceptable terms to fund our operations and develop product enhancements, which could adversely affect our growth prospects. The loss of Ascension Health or other major customers could materially and adversely affect our results of operations and financial condition because portions of our future revenues are tied to continuing relationships with significant customers. In the future we may undertake additional acquisitions, which could result in integration risks, operating difficulties, dilution, or other adverse financial consequences. We are dependent on our senior executive management, and the loss of any member of senior executive management may prevent us from managing and growing our businesses effectively. We depend on highly specialized personnel, and the loss or failure to identify, hire, motivate, and retain additional highly specialized personnel could adversely affect our ability to grow our business. Changes in our third-party reselling arrangements may affect our revenues and our ability to deliver a complete solution, which may adversely impact our revenue and cause customer dissatisfaction. Our customers depend on third-party reimbursement. A reduction or other change in third-party reimbursements to our customers could negatively affect our business by reducing the demand for our products or adversely impacting our pricing. If we fail to obtain or maintain necessary FDA clearances for our products, if such clearances are delayed, or if our products are subject to FDA recall, we will be unable to distribute and market some of our products. If we fail to comply with other potentially applicable health care regulations, we could face substantial penalties. Product liability claims may require us to pay damages, reduce the demand for our products, and harm our reputation. If we fail to protect our intellectual property rights, our competitors may take advantage of our ideas to compete more effectively with us. Our operating results could suffer if we become subject to a protracted infringement claim or litigation or a significant damage award. Our directors may not be held personally liable for certain actions, which could discourage stockholder suits against them. Delaware law and certain anti-takeover provisions of our corporate documents could delay or prevent a third party from acquiring us or a change in control even if it would benefit our stockholders.

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1121439--3/17/2008--EMAGEON_INC