1274563--3/17/2008--HELICOS_BIOSCIENCES

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RISKS RELATED TO OUR BUSINESS Although we have shipped one Helicos Genetic Analysis System to our first customer, we may not be able to successfully scale the manufacturing process necessary to build and test multiple Helicos Genetic Analysis Systems on a full commercial basis, in which event our business would be materially harmed. We have a history of operating losses, expect to continue to incur substantial losses, and might never achieve or maintain profitability. If our technology fails to achieve and sustain sufficient market acceptance, we will not generate expected revenue. We have limited experience in selling and marketing and, as a result, may be unable to successfully commercialize our Helicos Genetic Analysis System. If we are unable to timely establish manufacturing capacity by ourselves or with partners, commercialization of our products would be delayed, which could result in lost revenues and harm our business. Future product sales will depend, in part, on research and development spending levels of academic, clinical and governmental research institutions and pharmaceutical, biotechnology and agriculture companies, and any reduction in such spending levels could limit our ability to sell our product. If the suppliers we rely on fail to supply the materials we use in the manufacturing of our products, we would be unable to satisfy product demand, which would negatively affect our business. Our inability to continually enhance our product performance, including our planned improvements to the Helicos Genetic Analysis System, to keep pace with rapidly changing technology and customer requirements, would adversely affect our ability to compete effectively. We operate in a highly competitive industry and if we are not able to compete effectively, our business and operating results will likely be harmed. Failure to manage our rapid growth effectively would harm our business. Our business would be harmed if we are not successful in entering into large contracts for the sale and installation of our Helicos Genetic Analysis Systems. We expect that our sales cycle will be lengthy and unpredictable, which will make it difficult for us to forecast revenue and increase the magnitude of quarterly fluctuations in our operating results. Our customers may purchase replacements for the reagents and disposable supplies that are a part of our Helicos Genetic Analysis System from third parties or discover a method that allows them to use less than the expected amounts of such products, which would materially and adversely affect our revenues. If we are unable to recruit and retain key executives and scientists, we may be unable to achieve our goals. Ethical, legal and social concerns surrounding the use of genetic information could reduce demand for our technology. Our products could in the future be subject to regulation by the U.S. Food and Drug Administration or other regulatory agencies, which could increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations. Our products could have unknown defects or errors, which may give rise to claims against us or divert application of our resources from other purposes. We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. We may need to raise additional funding, which may not be available on favorable terms, if at all, or without dilution to our stockholders. If we do not raise any necessary funds, we may need to cut back or terminate some or all aspects of our operations which would materially adversely affect our business prospects. We use hazardous chemicals and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly. Because we are subject to existing and potential additional governmental regulation, we may become subject to burdens on our operations, and the markets for our products may be narrowed. If we make acquisitions in the future, we may encounter a range of problems that could harm our business. RISKS RELATED TO OUR INTELLECTUAL PROPERTY Our failure to establish a strong intellectual property position and enforce our intellectual property rights against others would enable competitors to develop similar or alternative technologies. We may be involved in lawsuits to protect or enforce our patents and proprietary rights and to determine the scope and validity of others' proprietary rights, which could result in substantial costs and diversion of resources. We depend upon our ability to license technologies, and the failure to license or otherwise acquire necessary technologies could harm our ability to commercialize our products or defend our intellectual property position. We may be the subject of costly and time-consuming lawsuits brought by third parties for alleged infringement of their proprietary rights, which could limit our ability to use certain technologies in the future, force us to redesign or discontinue our products, or pay royalties to continue to sell our products. The measures that we use to protect the security of our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection for, and thereby diminish the value of, such intellectual property and other rights. RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK Our directors and management will exercise significant control over our company, which will limit your ability to influence corporate matters. The market price of our common stock may be volatile, which could result in substantial losses for our stockholders and subject us to securities class action litigation. If equity research analysts do not publish research reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price of our common stock could decline. A significant portion of our total outstanding shares may be sold into the public market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well. Provisions in our certificate of incorporation and by-laws or Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock. We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

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1274563--3/17/2008--HELICOS_BIOSCIENCES_CORP