744962--9/28/2007--NUTRITION_21

related topics

{stock, price, share}

{customer, product, revenue}

{property, intellectual, protect}

{control, financial, internal}

{product, liability, claim}

{acquisition, growth, future}

{system, service, information}

{condition, economic, financial}

{personnel, key, retain}

{competitive, industry, competition}

{product, market, service}

{product, candidate, development}

{regulation, change, law}

We have not been profitable for the last six fiscal years. We may use significant cash in our operations and may need to raise additional funds As a part of our business strategy, we have made and may continue to make acquisitions. These acquisitions could disrupt our operations and harm our operating results. Because a significant portion our sales is to a small number of retail customers, we are dependent to a large degree upon these customers and their ability to successfully sell our products. A significant amount of marketing expenditures is required in order to generate sales of our products, and we cannot be certain if our marketing initiatives will be successful or if we will be able to raise these funds. We rely on a limited number of products for the majority of our sales and any reduction in the demand for or availability of these products would have an adverse effect on our sales. We rely on outside suppliers to formulate, manufacture and package our products. Because we do not have long-term agreements with any of our suppliers other than our manufacturer in Iceland, our business could be disrupted if our relationship with a supplier is terminated or curtailed, or if a supplier suffers financial difficulties or otherwise fails to supply us on a timely basis and at favorable prices. The failure of third party call center operators to effectively handle customer calls could adversely affect our business. Several researchers have questioned the safety of chromium picolinate, and we may be liable for damages if our products are proven to have harmful side effects. If we are unable to retain key personnel, our ability to manage our business effectively and continue our growth could be negatively impacted. We have no proprietary rights in products that we import from Iceland If we do not timely take action to overcome the effect of the expiration of our patent rights, or if we do not enforce our patent rights, or are unsuccessful enforcing our patent rights, we will face increased competition. If we fail to protect our trademarks, then our ability to compete could be negatively affected, which would harm our financial condition and operating results. We are highly dependent upon consumers perception of the safety and quality of our products as well as similar products distributed by other companies in our industry, and adverse publicity and negative public perception regarding particular ingredients or products or our industry in general could limit our ability to increase revenue and grow our business. Changes in consumer preferences and discretionary spending could negatively impact our operating results. We face intense competition from competitors that are larger, more established and possess greater resources than we do, and if we are unable to compete effectively, we may be unable to grow our market share in order to become profitable. Our product sales may decline due to the introduction by others of products that have competitive advantages. Our products are subject to government regulation, which could limit or prevent the sale of our products. U.S. government regulation currently affects the sale of our products We are subject to a Federal Trade Commission consent agreement that may adversely affect our business. The market price for our common stock may be particularly volatile, and our stockholders may be unable to resell their shares at a profit. The limited liquidity for our common stock could affect an investor s ability to sell our shares at a satisfactory price. If we are unable to maintain a Nasdaq listing for our securities the liquidity of our stock will be reduced and investors may be unable to sell them, or may be able to sell them only at reduced prices. Failure to remediate the material weaknesses in our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

Full 10-K form ▸

744962--9/28/2007--NUTRITION_21_INC