1145460--3/16/2006--INVERNESS_MEDICAL_INNOVATIONS

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{debt, indebtedness, cash}

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{product, candidate, development}

{acquisition, growth, future}

{operation, international, foreign}

{product, market, service}

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Our business has substantial indebtedness, which could, among other things, make it more difficult for us to satisfy our debt obligations, require us to use a large portion of our cash flow from operations to repay and service our debt or otherwise create liquidity problems, limit our flexibility to adjust to market conditions, place us at a competitive disadvantage and expose us to interest rate fluctuations. We have entered into agreements governing our indebtedness that subject us to various restrictions that may limit our ability to pursue business opportunities. Our senior credit facilities contain certain financial covenants that we may not satisfy which, if not satisfied, could result in the acceleration of the amounts due under our credit facilities and the limitation of our ability to borrow additional funds in the future. A default under any of our agreements governing our indebtedness could result in a default and acceleration of indebtedness under other agreements. We may not be able to satisfy our debt obligations upon a change of control, which could limit our opportunity to enter into a change of control transaction. Our acquisitions may not be profitable, and the integration of these businesses may be costly and difficult and may cause disruption to our business. If we choose to acquire or invest in new and complementary businesses, products or technologies instead of developing them ourselves, such acquisitions or investments could disrupt our business and, depending on how we finance these acquisitions or investments, could result in the use of significant amounts of cash. If goodwill and/or other intangible assets that we have recorded in connection with our acquisitions of other businesses become impaired, we could have to take significant charges against earnings. We could experience significant manufacturing delays, disruptions to our ongoing research and development and increased production costs if Unilever is unable to successfully assign or sublease to us the lease for the multi-purpose facility that we currently use in Bedford, England. We may experience manufacturing problems or delays, which could result in decreased revenues or increased costs. We may experience difficulties that may delay or prevent our development, introduction or marketing of new or enhanced products. Our failure to meet strict regulatory requirements could require us to pay fines, incur other costs or even close our facilities. If we deliver products with defects, our credibility may be harmed, market acceptance of our products may decrease and we may be exposed to liability in excess of our product liability insurance coverage. Our sales of branded nutritional supplements have been trending downward since 1998 due to the maturity of the market segments they serve and the age of that product line and we may experience further declines in sales of those products. Our sales of specific vitamins and nutritional supplements could be negatively impacted by media attention or other news developments that challenge the safety and effectiveness of those specific vitamins and nutritional supplements. We could suffer monetary damages, incur substantial costs or be prevented from using technologies important to our products as a result of legal proceedings. The profitability of our consumer products businesses may suffer if we are unable to establish and maintain close working relationships with our customers. The profitability of our consumer products businesses may suffer if Pfizer Inc. is unable to successfully market and sell its e.p.t pregnancy tests. Because sales of our private label nutritional supplements are generally made at low margins, the profitability of these products may suffer significantly as a result of relatively small increases in raw material or other manufacturing costs. Our financial condition or results of operations may be adversely affected by international business risks. Because our business relies heavily on foreign operations and revenues, changes in foreign currency exchange rates and our ability to convert currencies may negatively affect our financial condition and results of operations. Intense competition could reduce our market share or limit our ability to increase market share, which could impair the sales of our products and harm our financial performance. The rights we rely upon to protect the intellectual property underlying our products may not be adequate, which could enable third parties to use our technology and would reduce our ability to compete in the market. Claims by other companies that our products infringe on their proprietary rights could adversely affect our ability to sell our products and increase our costs. We have initiated, and may need to further initiate, lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive and, if we lose, could cause us to lose some of our intellectual property rights, which would reduce our ability to compete in the market. In December 2005, we learned that the Securities and Exchange Commission, or the SEC, had issued a formal order of investigation in connection with the previously disclosed revenue recognition matter at one of our diagnostic divisions. We cannot predict what the outcome of this investigation will be. Non-competition obligations and other restrictions will limit our ability to take full advantage of our management team, the technology we own or license and our research and development capabilities. Our operating results may fluctuate due to various factors and as a result period-to-period comparisons of our results of operations will not necessarily be meaningful. Period-to-period comparisons of our operating results may not be meaningful due to our acquisitions. Our stock price may fluctuate significantly and stockholders who buy or sell our common stock may lose all or part of the value of their investment, depending on the price of our common stock from time to time. Anti-takeover provisions in our organizational documents and Delaware law may limit the ability of our stockholders to control our policies and effect a change of control of our company and prevent attempts by our stockholders to replace or remove our current management, which may not be in your best interests. Because we do not intend to pay dividends on our common stock, you will benefit from an investment in our common stock only if it appreciates in value.

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1145460--3/16/2006--INVERNESS_MEDICAL_INNOVATIONS_INC