786623--3/27/2008--ADVANCED_VIRAL_RESEARCH

related topics

{product, candidate, development}

{stock, price, share}

{property, intellectual, protect}

{control, financial, internal}

{acquisition, growth, future}

{regulation, change, law}

{product, market, service}

{personnel, key, retain}

{loan, real, estate}

We have never been profitable and may never generate revenue or become profitable which would have a material adverse effect on our business and results of operations and could negatively impact the value of our common stock. If we do not raise additional funds, we will not be able to continue operations or complete the necessary clinical trials to complete development of AVR118 or our other products and will not be able to sell it anywhere. If we obtain additional capital to support our operations, such capital could be expensive or result in dilution to our security holders. All of our product candidates are in research stages. If we are unable to develop and commercialize our product candidates, our business will be adversely affected. We may not obtain the necessary U.S. or worldwide regulatory approvals to commercialize our drug candidates in a timely manner, if at all, which would have a material adverse effect on our business and results of operations. Clinical trials are very expensive, time-consuming and difficult to design and implement and may result in unforeseen costs which may have a material adverse effect on our business and results of operations. If the results of our clinical trials do not support our claims relating to any drug candidate or if serious side effects are identified, the completion of development of such drug candidate may be significantly delayed or we may be forced to abandon development altogether, which will significantly impair our ability to generate product revenues. We have found it difficult to enroll patients in our clinical trials, which has caused significant delays in the completion of such trials and which may cause us to abandon one or more clinical trials. Because our clinical trials depend upon third-party researchers, the results of our clinical trials and such research activities are subject to delays and other risks which are, to a certain extent, beyond our control, which could impair our clinical development programs and our competitive position. If we are ever in a position to commercialize our product candidates, of which there can be no assurance, we have no experience selling, marketing or distributing products and no internal capability to do so. Developments by competitors may render our products or technologies obsolete or non-competitive which would have a material adverse effect on our business and results of operations. If we fail to adequately protect or enforce our intellectual property rights or secure rights to third party patents, the value of our intellectual property rights would diminish and our business, competitive position and results of operations would suffer. We rely on confidentiality agreements that could be breached and may be difficult to enforce which could have a material adverse effect on our business and competitive position. If we infringe the rights of third parties we could be prevented from selling products, forced to pay damages and required to defend against litigation which could result in substantial costs and may have a material adverse effect on our business and results of operations. As a result of our recent acquisition of certain drug products and technologies, we may face integration risks and costs associated with those acquisitions that could negatively impact our business, results from operations and financial condition. We depend upon key employees and consultants in a competitive market for skilled personnel. If we are unable to attract and retain key personnel, it could adversely affect our ability to develop and market our products. Our collaborations with outside scientists and consultants may be subject to restriction and change. RISKS SPECIFIC TO OUR SECURITIES The market for our common stock is highly illiquid. Our stockholders may not be able to resell their shares at or above the purchase price paid by such stockholders, or at all. Our common stock is deemed to be penny stock, which may make it more difficult for investors to sell their shares due to suitability requirements. The exercise of our outstanding convertible securities or issuance of additional shares could have dilutive impact on our stockholders, and a significant negative impact on the market price of our common stock. We will not pay cash dividends and investors may have to sell their shares in order to realize their investment. Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and operating results. In addition, current and potential shareholders could lose confidence in our financial reporting, which could have a material adverse effect on the price of our common stock. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses, divert management s attention from operating our business which could have a material adverse effect on our business.

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786623--3/27/2008--ADVANCED_VIRAL_RESEARCH_CORP