1230355--3/13/2009--TRANS1

related topics

{product, liability, claim}

{product, candidate, development}

{stock, price, operating}

{property, intellectual, protect}

{customer, product, revenue}

{regulation, government, change}

{stock, price, share}

{acquisition, growth, future}

{operation, international, foreign}

{condition, economic, financial}

{product, market, service}

{provision, law, control}

{control, financial, internal}

{personnel, key, retain}

The demand for our products and the prices which customers and patients are willing to pay for our products depend upon the ability of our customers to obtain adequate third-party coverage and reimbursement for their purchases of our products. Our future growth depends on increasing physician awareness of our pre-sacral approach and our related products for appropriate treatment, intervention and referral. We have incurred losses since inception and we expect to incur increasing losses for the foreseeable future. We may never achieve or sustain profitability. We are in a highly competitive market segment, which is subject to rapid technological change. If our competitors are better able to develop and market products that are safer, more effective, less costly or otherwise more attractive than any products that we may develop, our ability to generate revenue will be reduced or eliminated. Our failure to continue building effective sales and marketing capabilities for our products could significantly impair our ability to increase sales of our products. Our future success depends on our ability to develop, receive regulatory clearance or approval, and introduce new products or product enhancements that will be accepted by the market in a timely manner. If clinical trials of our current or future product candidates do not produce results necessary to support regulatory clearance or approval in the United States or elsewhere, we will be unable to commercialize these products. Our international operations subject us to certain operating risks, which could adversely impact our net revenues, results of operations and financial condition. The use, misuse or off-label use of our products may harm our image in the marketplace or result in injuries that lead to product liability suits, which could be costly to our business or result in FDA sanctions if we are deemed to have engaged in such promotion. We purchase some of the key components of our products from single suppliers. The loss of these suppliers could prevent or delay shipments of our products or delay our clinical trials or otherwise adversely affect our business. We depend on our officers and other key employees, and if we are not able to retain and motivate them or recruit additional qualified personnel, our business will suffer. If we fail to properly manage our anticipated growth, our business could suffer. If we need additional funding, we may be unable to raise capital when needed, which would force us to delay, reduce, eliminate or abandon our commercialization efforts or product development programs. If we choose to acquire new businesses, products or technologies, we may experience difficulty in the identification or integration of any such acquisition, and our business may suffer. Consolidation in the healthcare industry could lead to demands for price concessions or to the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, financial condition or results of operations. We face the risk of product liability or other claims and may not be able to obtain sufficient insurance coverage, if at all. If our independent contract manufacturers fail to timely deliver to us sufficient quantities of some of our products and components in a timely manner, our operations may be harmed. We operate at a single location. Any disruption in this facility or any inability to ship a sufficient number of our products to meet demand could adversely affect our business and results of operations. Current challenges in the commercial and credit environment may adversely affect our business and financial condition. Our future operating results are difficult to predict and may vary significantly from quarter to quarter, which may negatively impact our stock price in the future. Risks Related to Regulatory Environment If we fail to maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining, FDA clearances or approvals for our future products or product modifications, our ability to commercially distribute and market these products could suffer. Modifications to our marketed products may require new 510(k) clearances or PMA approvals, or may require us to cease marketing or recall the modified products until clearances or approvals are obtained. Clinical trials necessary to support a PMA application will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit. Delays or failures in our clinical trials will prevent us from commercializing any modified or new products and will adversely affect our business, operating results and prospects. If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval for or commercialize our products. Even if our products are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing FDA or other foreign regulatory authority requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market. We may be subject to or otherwise affected by federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, and could face substantial penalties if we are unable to fully comply with such laws. Risks Related to Our Intellectual Property Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain. Any lawsuit, whether initiated by us to enforce our intellectual property rights or by a third party against us alleging infringement, may cause us to expend significant financial and other resources, and may divert our attention from our business and adversely affect our business, operating results and prospects. Risks Related to our Common Stock A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders. If securities or industry analysts do not publish research or reports about our business, if they change their recommendations regarding our stock adversely or if our operating results do not meet their expectations, our stock price and trading volume could decline. Trading in our stock over the last twelve months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. Volatility in the stock price of other companies may contribute to volatility in our stock price. Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that could discourage a takeover.

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1230355--3/13/2009--TRANS1_INC