12239--3/31/2006--SPHERIX

related topics

{stock, price, share}

{product, candidate, development}

{stock, price, operating}

{system, service, information}

{regulation, government, change}

{provision, law, control}

{control, financial, internal}

{personnel, key, retain}

{competitive, industry, competition}

{property, intellectual, protect}

{acquisition, growth, future}

RISKS RELATED TO OUR BUSINESS WE CONTINUE TO BE DEPENDENT ON OUR INFORMATION SERVICES DIVISION FOR NEARLY ALL OF OUR REVENUE OUR LARGEST INFORMATION SERVICES CONTRACT COULD BE AWARDED TO A COMPETITOR. OUR INFORMATION SERVICES BUSINESS COULD BE ADVERSELY AFFECTED BY SIGNIFICANT CHANGES IN THE CONTRACTING OR FISCAL POLICIES OF THE U.S. FEDERAL GOVERNMENT. OUR INFORMATION SERVICES BUSINESS IS RELIANT ON TECHNOLOGY. ROYALTIES FROM TAGATOSE SALES ARE UNCERTAIN. WE HAVE NOT YET SUCCESSFULLY COMMERCIALIZED NATURLOSE. OTHER BIOTECH PRODUCTS ARE STILL IN THE DEVELOPMENT STAGE. DEVELOPMENT OF ANY BIOTECH PRODUCTS WILL DEPEND ON OBTAINING FDA AND FOREIGN REGULATORY APPROVALS. OUR SUCCESS WILL DEPEND, IN PART, ON OUR ABILITY TO OBTAIN AND MAINTAIN PATENT PROTECTION FOR OUR PRODUCTS. WE HAVE SUSTAINED LOSSES IN THE PAST AND WE MAY SUSTAIN LOSSES IN THE FUTURE. WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING THAT WE WILL NEED. WE MAY NOT BE ABLE TO RETAIN OUR KEY EXECUTIVES AND PERSONNEL. WE FACE INTENSE COMPETITION BY COMPETITORS IN BOTH DIVISIONS. RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK THE PRICE OF SPHERIX S COMMON STOCK HAS BEEN HIGHLY VOLATILE DUE TO SEVERAL FACTORS WHICH WILL CONTINUE TO EFFECT THE PRICE OF OUR STOCK. CORNELL CAPITAL PARTNERS WILL PAY LESS THAN THE MARKET PRICE AND WILL HAVE AN INCENTIVE TO SELL ITS SHARES, WHICH MAY CAUSE OUR STOCK PRICE TO DECLINE. NEW SHAREHOLDERS WILL EXPERIENCE SIGNIFICANT DILUTION FROM OUR SALE OF SHARES UNDER THE SEDA. OUR COMMON STOCK WILL BE DELISTED FROM NASDAQ NATIONAL MARKET SYSTEM IF WE FAIL TO COMPLY WITH CONTINUED LISTING STANDARDS. DIVIDENDS ON OUR COMMON STOCK ARE NOT LIKELY. BECAUSE OF THE RIGHTS AGREEMENT AND ANTI-TAKEOVER PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS, A THIRD PARTY MAY BE DISCOURAGED FROM MAKING A TAKEOVER OFFER WHICH COULD BE BENEFICIAL TO OUR STOCKHOLDERS. INSIDERS OWN A SIGNIFICANT PORTION OF OUR COMMON STOCK, WHICH COULD LIMIT OUR STOCKHOLDERS ABILITY TO INFLUENCE THE OUTCOME OF KEY TRANSACTIONS WE EXPERIENCE QUARTERLY VARIATIONS IN OUR OPERATING RESULTS.

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12239--3/31/2006--SPHERIX_INC