827156--10/10/2006--ZILA

related topics

{product, liability, claim}

{customer, product, revenue}

{property, intellectual, protect}

{cost, operation, labor}

{personnel, key, retain}

{condition, economic, financial}

{capital, credit, financial}

{provision, law, control}

{stock, price, operating}

{cost, contract, operation}

{product, candidate, development}

{stock, price, share}

The sale of the Nutraceuticals Business Unit reduced our revenue by approximately 76%. We may fail to realize the anticipated cost savings, revenue enhancements, product focus, or other benefits expected from our recent disposition of the Nutraceuticals Business Unit and any subsequent acquisition. We have incurred substantial expenses and committed valuable time related to the recent disposition of our Nutraceuticals Business Unit and our ability to successfully execute our business plan is dependent on our ability to obtain adequate financing. We are dependent on a few key products and our growth is dependent on the development of new products. Our proprietary rights may prove difficult to enforce. We have historically been, and will probably be in the future, dependent on a few key customers. We are dependent on our senior management and other key personnel. We and our products are subject to regulatory oversight that could substantially interfere with our ability to do business. We are at risk with respect to product liability claims. We face significant competition that could adversely affect our results of operation and financial condition. If the use of our technology is determined to infringe on the intellectual property rights of others, our business could be harmed. We require certain raw materials for our manufacturing processes that may only be acquired through limited sources. If we are unable to obtain adequate funds on acceptable terms, we may not be able to develop and market our present and potential products. We have, in the past, received minor deficiencies from regulatory agencies related to our manufacturing facilities. Trends, Risks and Uncertainties Related to Our Capital Stock Financing arrangements or other corporate events could dilute existing ownership. In the past, we have experienced volatility in the market price of our common stock and we may experience such volatility in the future. Our Board of Directors may take actions which could dilute current equity ownership or prevent or delay a change in our control.

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827156--10/10/2006--ZILA_INC