768710--3/15/2007--RELIV_INTERNATIONAL

related topics

{product, market, service}

{regulation, change, law}

{stock, price, share}

{stock, price, operating}

{customer, product, revenue}

{property, intellectual, protect}

{system, service, information}

{condition, economic, financial}

{operation, natural, condition}

{personnel, key, retain}

{cost, regulation, environmental}

{financial, litigation, operation}

Risks Related to Our Business As a company that distributes products through a network marketing system, we experience constant turnover among our distributors. Our failure to establish and maintain distributor relationships for any reason could negatively impact sales of our products and harm our financial condition and operating results. Due to the high level of competition in our industry, we might fail to increase our distributor base, which could negatively impact sales of our products. Since we cannot exert the same level of influence or control over our independent distributors as we could were they our own employees, our distributors could fail to comply with our distributor Policies and Procedures, which could result in claims against us that could harm our financial condition and operating results. If we fail to further penetrate and expand our business in existing markets, then the growth in sales of our products, along with our operating results, could be negatively impacted. Failure to expand into, or to succeed in, new international markets will limit our ability to grow sales of our products. 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. The failure to introduce or to gain distributor and market acceptance of new products could have a negative effect on our business. Since we conduct all of our manufacturing operations at one facility, any interruption in our ability to operate could have a material adverse effect on our financial condition and operating results. We may incur material product liability claims, which could increase our costs and harm our financial condition and operating results. We rely on independent third parties for the ingredients used in our products. If these third parties fail to reliably supply ingredients to us at required levels, then our financial condition and operating results could be harmed. We depend on the integrity and reliability of our information technology infrastructure, and any related inadequacies may result in substantial interruptions to our business. 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. If our intellectual property is not adequate to provide us with a competitive advantage or to prevent competitors from replicating our products, or if we infringe the intellectual property rights of others, then our financial condition and operating results would be harmed. If we lose the services of members of our senior management team or fail to attract and retain qualified scientific or production personnel, then our financial condition and operating results would be harmed. We may be held responsible for certain taxes relating to our distributors, which could harm our financial condition and operating results. Risks Related to Our Industry The nutritional products industry is highly competitive. Adverse publicity associated with our products, ingredients or network marketing program, or those of similar companies, could harm our financial condition and operating results. We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints, both domestically and abroad, and our or our distributors failure to comply with these restraints could lead to the imposition of significant penalties or claims, which could harm our financial condition and operating results. Our network marketing program could be found not to be in compliance with current or newly adopted laws or regulations in one or more markets, which could prevent us from conducting our business in these markets and harm our financial condition and operating results. Changes in consumer preferences and discretionary spending could negatively impact our operating results. Risks Related to Ownership of Our Common Stock The trading price of our common shares is likely to be volatile. Our Chief Executive Officer, together with his family members and affiliates, controls a substantial portion of our combined stockholder voting power, and his interests may be different from yours. Limited daily trading volume of our common stock may contribute to its price volatility. Future sales of shares by existing stockholders, including management stockholders, could cause our stock price to decline. We may issue preferred stock in the future, with rights senior to our common stock.

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768710--3/15/2007--RELIV_INTERNATIONAL_INC