1163848--3/3/2006--INTRALASE

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{product, liability, claim}

{product, market, service}

{property, intellectual, protect}

{acquisition, growth, future}

{regulation, change, law}

{competitive, industry, competition}

{customer, product, revenue}

{condition, economic, financial}

{personnel, key, retain}

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Risks Related to our Industry Our success depends upon the continued acceptance of LASIK surgery. Weak or uncertain economic conditions could adversely affect demand for our product offering. Changes in U.S. federal tax laws governing the ability of potential LASIK patients to use pre-tax dollars to pay for LASIK surgery could adversely affect demand for our product offering. Risks Related to our Business We are subject to extensive government regulation, and a failure to comply may increase our costs and prevent us from selling our product offering. LASIK surgeons must continue to adopt our product offering as an attractive alternative to the microkeratome for creating the corneal flap. Presently unknown side effects related to the use of our laser could emerge in the future. Patients must continue to be willing to pay for LASIK surgery using our product offering despite it being more expensive than LASIK surgery with the microkeratome. We may not be able to compete successfully against our current and future competitors. Measures we take to ensure collection of per procedure charges may be inadequate. Product liability suits brought against us could result in expensive and time-consuming litigation, payment of substantial damages and an increase in our insurance rates. Our inability to adequately protect our intellectual property could allow our competitors and others to produce products based on our intellectual property rights, which could substantially impair our ability to compete. We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from selling our product offering, require us to obtain licenses from third parties, require us to develop non-infringing alternatives and/or subject us to substantial monetary damages and injunctive relief. We depend on certain single-source suppliers and manufacturers for key components of our laser, and the loss of any of these suppliers or manufacturers, or their inability to supply us with an adequate supply of materials, could harm our business. Our failure to manage our rapid growth may strain the capabilities of our managers, operations and facilities. We plan to expand further into markets outside the United States, which subjects us to additional business and regulatory risks. Our success is tied to a single product offering. All of our operations are conducted at a single location. Any disruption at our existing or at a new facility could increase our expenses. A loss of key executives or failure to attract qualified personnel could limit our growth and adversely affect our business. Our new products or applications may not be commercially viable. If we choose to acquire new or complementary businesses, products or technologies instead of developing them ourselves, we may be unable to complete those acquisitions or to successfully integrate them in a cost-effective and non-disruptive manner. We have a history of net losses and may not maintain profitability. Changes to our accounting for stock options will adversely affect our earnings and may adversely affect stock price. We may incur increased costs as a result of recently enacted and proposed changes in laws and regulations.

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1163848--3/3/2006--INTRALASE_CORP