1130166--3/23/2006--XCYTE_THERAPIES

related topics

{stock, price, share}

{control, financial, internal}

{stock, price, operating}

{provision, law, control}

{property, intellectual, protect}

{personnel, key, retain}

{product, liability, claim}

Important Factors That May Affect Our Business, Results of Operations and Stock Price Risks Related to the Stock Purchase Failure to complete the Stock Purchase may result in Xcyte paying a termination fee to Cyclacel and could harm Xcyte s common stock price and future business and operations. The Stock Purchase may be completed even though material adverse changes may result from the announcement of the Stock Purchase, industry-wide changes and other causes. If adverse changes occur but Xcyte must still complete the Stock Purchase, Xcyte s stock price may suffer. This in turn may reduce the value of the Stock Purchase to the stockholders of Xcyte. Xcyte stockholders may not realize a benefit from the Stock Purchase commensurate with the ownership dilution they will experience in connection with the Stock Purchase. Failure to complete the Stock Purchase may result in the liquidation of the Company and the common stock may have no value. Risks related to Xcyte s Business. The attempted development of products using Xcyte s Xcellerate Technology was Xcyte s only potential product line. Xcyte may not be able to retain existing personnel. Xcyte expects to continue to incur substantial losses and may never achieve profitability. Xcyte may be unable to maintain its listing on Nasdaq, which could cause Xcyte s stock price to fall and decrease the liquidity of its stock. Xcyte may have limited ability to pay cash dividends on the convertible preferred stock. There are risks inherent in Xcyte s past business operations that may subject it to potential product liability suits and other claims, which may require it to engage in expensive and time-consuming litigation or pay substantial damages. If Xcyte s principal stockholders, executive officers and directors choose to act together, they may be able to control its management and operations, acting in their best interests and not necessarily those of other stockholders. Xcyte will soon be required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 regarding internal control attestation and any inability to do so may negatively impact the report on its financial statements. Xcyte s common and convertible preferred stock may experience extreme price and volume fluctuations, which could lead to costly litigation for Xcyte and make an investment in Xcyte less appealing. Xcyte s certificate of incorporation and bylaws and certain provisions of Delaware law may delay or prevent a change in Xcyte s management and make it more difficult for a third party to acquire Xcyte. The future sale of Xcyte s common and convertible preferred stock, and future issuances of Xcyte common stock upon conversion of its convertible preferred stock and upon the payment of make-whole dividends, if any, could negatively affect Xcyte s stock price. If Xcyte exchanges the convertible preferred stock for debentures, the exchange will be taxable but Xcyte will not provide any cash to pay any tax liability that any convertible preferred stockholder may incur. If Xcyte automatically converts the convertible preferred stock, there is a substantial risk of fluctuation in the price of Xcyte common stock from the date it elects to automatically convert to the conversion date. Xcyte does not intend to pay cash dividends on its common stock in the foreseeable future.

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1130166--3/23/2006--XCYTE_THERAPIES_INC