867840--9/26/2008--PRECISION_OPTICS_CORPORATION

related topics

{stock, price, share}

{customer, product, revenue}

{property, intellectual, protect}

{personnel, key, retain}

{product, candidate, development}

{stock, price, operating}

{interest, director, officer}

{product, liability, claim}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{gas, price, oil}

RISKS RELATED TO OUR BUSINESS Our quarterly financial results depend on a large number of factors and therefore may vary quarter to quarter, As a result, we cannot predict with a high degree of certainty our operating results in any particular fiscal quarter. Our independent auditors have issued a going concern opinion and, if we do not generate enough cash from operations to sustain our business, we may have to liquidate assets or curtail our operations. Our existing and future debt obligations could impair our liquidity and financial condition. We rely on a small number of customers and cannot be certain they will consistently purchase our products in the future. We rely heavily upon the talents of our Chief Executive Officer and Chief Scientific Officer, the loss of whom could severely damage our business. We must continue to be able to attract employees with the scientific and technical skills that our business requires and if we are unable to attract and retain such individuals, our business could be severely damaged. We have a number of large, well-financed competitors who have research and marketing capabilities that are superior to ours. We are subject to a high degree of regulatory oversight and we cannot be certain that we will continue to receive the necessary regulatory approvals. We face risks inherent in product development and production under fixed price purchase orders and we cannot be sure that these purchase orders will be profitable over time. Third parties may infringe on our patents and as a result, we could incur significant expense in protecting our patents or not have sufficient resources to protect them. Third parties may claim that we have infringed on their patents and as a result, we could be prohibited from using all or part of any technology used in our products. We depend on the availability of certain key supplies and services that are available from only a few sources; if we experience difficulty with a supplier, we may have difficulty finding alternative sources of supply. Our customers may claim that the products we sold them were defective and if our insurance is not sufficient to cover a claim, we would be liable for the excess. We would be liable if our business operations harmed the environment and a failure to maintain compliance with environmental laws could severely damage our business. RISKS RELATED TO OUR STOCK Trading in our common stock is limited and the price of our common stock may be subject to substantial volatility. Penny stock rules may make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and sell our securities. We are contractually obligated to issue shares in the future, diluting your interest in us.

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867840--9/26/2008--PRECISION_OPTICS_CORPORATION_INC