1142596--3/2/2009--NUVASIVE

related topics

{product, liability, claim}

{acquisition, growth, future}

{product, market, service}

{product, candidate, development}

{property, intellectual, protect}

{stock, price, operating}

{stock, price, share}

{condition, economic, financial}

{control, financial, internal}

{investment, property, distribution}

{customer, product, revenue}

We are in a highly competitive market segment and face competition from large, well-established medical device manufacturers as well as new market entrants. To be commercially successful, we must convince spine surgeons that our products are an attractive alternative to existing surgical treatments of spine disorders. Our future success depends on our ability to timely develop and introduce new products or product enhancements that will be accepted by the market. If our acquisitions are unsuccessful, our business may be harmed. Our reliance on single source suppliers could limit our ability to meet demand for our products in a timely manner or within our budget. We are dependent on the services of Alexis V. Lukianov and Keith Valentine, and the loss of either of them could harm our business. If we fail to properly manage our anticipated growth, our business could suffer. If clinical trials of our current or future product candidates do not produce results necessary to support regulatory approval in the United States, we will be unable to commercialize these products. If we fail to obtain, or experience significant delays in obtaining, FDA clearances or approvals for our future products or product enhancements, our ability to commercially distribute and market our products could suffer. The safety of our products is not yet supported by long-term clinical data and our products may therefore prove to be less safe and effective than initially thought. If we or our suppliers fail to comply with the FDA s quality system regulations, the manufacture of our products could be delayed and we may be subject to an enforcement action by the FDA. Risks Related to Our Financial Results and Need for Financing We have always incurred losses and have incurred significant total operating losses since our inception, and we cannot assure you that we will achieve profitability or that, if profitability is achieved, that we will be able to sustain profitability. The recent financial crisis and general slowdown of the economy may adversely affect our liquidity and the liquidity of our customers. Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain. We may not be able to sublease our former headquarters or receive rental income on any such sublease to cover our lease obligations. Upon the achievement of certain milestones related to our acquisitions, we may be required to make payments which may affect our liquidity and our financial results. Risks Related to Our Intellectual Property and Potential Litigation We are currently involved in a patent litigation action involving Medtronic and, if we do not prevail in this action, we could be liable for past damages and might be prevented from making, using, selling, offering to sell, importing or exporting certain of our products. Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain. If we become subject to product liability claims, we may be required to pay damages that exceed our insurance coverage. Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of regulations governing interactions between us and healthcare providers, could be time consuming and costly. We or our suppliers may be the subject of claims for non-compliance with FDA regulations in connection with the processing or distribution of allograft products. Risks Related to the Securities Markets and Ownership of Our Common Stock We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors to sell their shares.

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1142596--3/2/2009--NUVASIVE_INC