1276591--3/28/2007--HANSEN_MEDICAL

related topics

{product, liability, claim}

{product, candidate, development}

{stock, price, operating}

{property, intellectual, protect}

{regulation, government, change}

{stock, price, share}

{product, market, service}

{customer, product, revenue}

{regulation, change, law}

{provision, law, control}

{cost, regulation, environmental}

{control, financial, internal}

{operation, international, foreign}

{personnel, key, retain}

{operation, natural, condition}

{gas, price, oil}

Even if our products receive regulatory clearance for heart mapping, if physicians and hospitals are not convinced that our products are a safe and effective alternative to existing technologies used in atrial fibrillation and other cardiac ablation procedures, we may not be commercially successful. If our Sensei system and disposable Artisan control catheters receive regulatory clearances for commercialization, we expect to derive substantially all of our revenues from their sales. If hospitals do not purchase our system, we may not generate sufficient revenues to continue our operations. We have incurred substantial losses since inception and anticipate that we will incur continued losses for the foreseeable future. We do not currently have sales, marketing and distribution experience and capabilities, which could impair our ability to achieve profitability. We have limited experience in manufacturing and assembling our products and may encounter problems at our manufacturing facilities or otherwise experience manufacturing delays that could result in lost revenue. We may incur significant liability if it is determined that we are promoting off-label use of our products in violation of federal and state regulations in the United States or elsewhere. The training required for physicians to use our Sensei system could reduce the market acceptance of our system and reduce our revenue. Because our markets are highly competitive, customers may choose to purchase our competitors products, which would result in reduced revenue and harm our financial results. We will likely experience extended and variable sales cycles, which could cause significant variability in our results of operations for any given quarter. The use of our products could result in product liability claims that could be expensive, divert management s attention and harm our reputation and business. We may be unable to complete the development and commercialization of our existing products under development or other products without additional funding. Our reliance on third-party manufacturers and on suppliers, and in one case, a single-source supplier, could harm our ability to meet demand for our products in a timely manner or within budget. Our products and related technologies can be applied in different applications, and we may fail to focus on the most profitable areas. If we fail to obtain or acquire imaging and visualization technology, or collaborate with a strategic partner to provide such technology on terms favorable to us, or at all, our Sensei system may not be able to gain market acceptance and our business may be harmed. Software defects may be discovered in our products. Our costs could substantially increase if we receive a significant number of warranty claims. Hospitals or physicians may be unable to obtain coverage or reimbursement from third-party payors for procedures using our Sensei system, which could affect the adoption or use of our Sensei system and may cause our revenues to decline. We may lose our key personnel or fail to attract and retain additional personnel. If we do not effectively manage our growth, we may be unable to successfully develop, market and sell our products. We intend to sell our Sensei system internationally and are subject to various risks relating to such international activities which could adversely affect our international sales and operating performance. Our business may be harmed by a natural disaster, terrorist attacks or other unanticipated problems. We may be liable for contamination or other harm caused by materials that we handle, and changes in environmental regulations could cause us to incur additional expense. Changes to existing accounting pronouncements or taxation rules or practices may affect how we conduct our business and affect our reported results of operations. Risks Related to Our Intellectual Property If we are unable to protect the intellectual property contained in our products from use by third parties, our ability to compete in the market will be harmed. Third parties may assert that we are infringing their intellectual property rights. We may not be able to maintain or obtain all the licenses from third parties necessary for the use of our Sensei system, which may cause our revenues to decline. The medical device industry is characterized by patent litigation and we could become subject to litigation that could be costly, result in the diversion of management s attention, require us to pay damages and discontinue selling our products. We may be subject to damages resulting from claims that our employees or we have wrongfully used or disclosed alleged trade secrets of their former employers. Additional Risks Related to Regulatory Matters If we fail to comply with the extensive government regulations relating to our business, we may be subject to fines, injunctions and other penalties that could harm our business. If we fail to obtain regulatory clearances in other countries for products under development, we will not be able to commercialize these products in those countries. We may fail to comply with continuing postmarket regulatory requirements of the FDA and other authorities and become subject to substantial penalties, or marketing experience may show that our device is unsafe, forcing us to recall or withdraw it permanently from the market. Our suppliers or we may fail to comply with the QSR and California Department of Health Services requirements, which could hurt our ability to commercially distribute and sell our products and may subject us to fines, injunctions, and penalties. If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. The application of state certificate of need regulations and compliance with federal and state licensing requirements could substantially limit our ability to sell our products and grow our business. Risks Related to Ownership of Our Common Stock We expect that the price of our common stock will fluctuate substantially, possibly resulting in class action securities litigation. Securities analysts may not initiate or continue coverage for our common stock or may issue negative reports, and this may have a negative impact on the market price of our common stock. Our principal stockholders, directors and management own a large percentage of our voting stock, which allows them to exercise significant influence over matters subject to stockholder approval. We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our common stock. Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders.

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1276591--3/28/2007--HANSEN_MEDICAL_INC