784199--2/22/2007--CRYOLIFE

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Risks Relating To Our Business We Have Experienced Operating Losses And Negative Cash Flows, And We Must Continue To Address The Underlying Causes In Order To Operate Profitably And Generate Positive Cash Flows. If We Are Unable To Address The Causes Of Our Operating Losses And Negative Cash Flows, We Will Need To Raise Additional Capital Which May Not Be Available On Acceptable Terms Or At All. Key Growth Strategies Identified As A Result of Our Strategic Review May Not Generate the Anticipated Benefits. The RTI Agreement May Not Generate The Anticipated Benefits. We May Be Unable To Comply with the Covenants Of Our Credit Facility, Which Would Limit Our Borrowing Capacity And Potentially Result In A Default Under The Credit Facility, And Our Credit Facility Limits Our Ability To Issue Additional Debt Or Pay Cash Dividends. There Are Limitations On Our Net Operating Loss Carryforwards. We Are Significantly Dependent On Our Revenues From BioGlue And Are Subject To A Variety Of Risks Affecting This Product. We Continue To Feel The Adverse Impacts Of The FDA Order And Subsequent FDA Activity. Physicians Have Been And May Continue To Be Reluctant To Implant Our Preserved Tissues Or Use Our Other Products. Our Products And The Tissues We Process Allegedly Have Caused And May In The Future Cause Injury To Patients, And We Have Been And May Be Exposed To Product Liability Claims And Additional Regulatory Scrutiny As A Result. We May Be Unable To Address The Concerns Raised By The FDA In Its Form 483 Notices Of Observations. The FDA Has Notified Us Of Its Belief That Marketing Of CryoValve SG And CryoVein SG Require Additional Regulatory Submissions And/Or Approvals. Regulatory Action Outside Of The U.S. Has Affected Our Business In The Past And May Also Affect Our Business In The Future. Our Violation Of Government Regulations Could Result In Loss Of Revenues And Customers As Well As Additional Compliance Expense. We Are The Subject Of An SEC Investigation. Our Existing Insurance Policies May Not Be Sufficient To Cover Our Actual Claims Liability. We May Be Unable To Obtain Adequate Insurance At A Reasonable Cost, If At All. Intense Competition May Affect Our Ability To Operate Profitably. We May Not Be Successful In Obtaining Necessary Clinical Results And Regulatory Approvals For Products And Services In Development, And Our New Products And Services May Not Achieve Market Acceptance. Investments In New Technologies Or Distribution Rights May Not Be Successful. We May Be Unable To Fund Our ACT Technology. SynerGraft Processed Tissues May Not Demonstrate Expected Benefits. If We Are Not Successful In Expanding Our Business Activities In International Markets, We Will Not Be Able To Pursue One Of Our Strategies For Increasing Our Revenues. We Are Dependent On Our Key Personnel. Extensive Government Regulation May Adversely Affect Our Ability To Develop And Sell Products And Services. Uncertainties Related To Patents And Protection Of Proprietary Technology May Adversely Affect The Value Of Our Intellectual Property. Future Health Care Reimbursement Methods And Policies May Affect The Availability, Amount And Timing Of Our Revenues. Rapid Technological Change Could Cause Our Services And Products To Become Obsolete. Risks Related To Our Capital Stock Trading Prices For Our Securities Have Been, And May Continue To Be, Volatile. Anti-Takeover Provisions May Discourage Or Make More Difficult An Attempt To Obtain Control Of CryoLife. We Are Not Likely To Pay Common Stock Dividends In The Foreseeable Future, And We May Not Be Able To Pay Cash Dividends On Our Capital Stock Due To Legal And Contractual Restrictions And Lack Of Liquidity.

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784199--2/22/2007--CRYOLIFE_INC