739944--3/10/2009--MEDTOX_SCIENTIFIC

related topics

{product, liability, claim}

{property, intellectual, protect}

{product, market, service}

{competitive, industry, competition}

{regulation, government, change}

{condition, economic, financial}

{customer, product, revenue}

{operation, natural, condition}

{tax, income, asset}

{personnel, key, retain}

{cost, regulation, environmental}

{stock, price, operating}

{financial, litigation, operation}

A substantial portion of our revenue is derived from the provision of laboratory testing services for the identification of drugs-of-abuse, a business that is influenced by general economic conditions. As such, our operating results are subject to volatility. The laboratory services drugs-of-abuse industry is consolidating. With the market forces driving such consolidation tending to favor the larger industry participants, we face an increasing challenge to differentiate ourselves through our technology and value-added services. We are experiencing increased competition in our Product Sales business segment. Such competition may have a negative effect on our business and future financial prospects. Our quarterly operating results may vary. If reimbursement for our services by third party payers is reduced, our net revenues could diminish. We could face significant monetary damages and penalties and/or exclusion from the Medicare and Medicaid programs if we violate health care anti-fraud and abuse laws. If we fail to keep up with technological advancements and fail to develop our products, we may be at a competitive disadvantage and our products may become less attractive or obsolete. Our business and products are subject to stringent laws and regulations and if we are unable to comply, our business may be significantly harmed Our operations might be affected by the occurrence of a natural disaster or other catastrophic event. Our Laboratory Services segment is exposed to liability claims. We may have product liability exposure not covered by insurance. We rely on intellectual property, which we may not be able to protect fully or effectively. If our tests and business processes infringe on the intellectual property rights of others, we could be forced to engage in costly litigation, pay substantial damages or be prohibited from selling certain tests or products. Adverse results in material litigation matters could have a material adverse effect upon our business. If we lose our key personnel or are unable to attract and retain qualified personnel as necessary, our business could be harmed. The current global financial crisis may have significant effects on our customers that would result in material adverse effects on our business, operating results, and stock price. We have goodwill and any future impairment of our goodwill could have a material negative impact on our financial results.

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739944--3/10/2009--MEDTOX_SCIENTIFIC_INC