881890--6/14/2010--ABAXIS

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{product, candidate, development}

{product, liability, claim}

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{customer, product, revenue}

{product, market, service}

{tax, income, asset}

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{cost, regulation, environmental}

{control, financial, internal}

{operation, international, foreign}

{operation, natural, condition}

{stock, price, operating}

{property, intellectual, protect}

{regulation, government, change}

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We are not able to predict sales in future quarters and a number of factors affect our periodic results, which makes our quarterly operating results less predictable. We would fail to achieve anticipated revenue if the market does not accept our products. We rely on patents and other proprietary information, the loss of which would negatively affect our business. We must increase sales of our Piccolo and VetScan products or we may not be able to increase profitability. We must continue to develop our sales, marketing and distribution experience in the human diagnostic market or our business will not grow. We must effectively train and integrate the members of our sales team in order to achieve our anticipated revenue or expand our business. We need to successfully manufacture and market additional reagent discs for the human diagnostic market if we are to compete in that market. We rely primarily on distributors to sell our products and we rely on sole distributor arrangements in a number of countries. Our failure to successfully develop and maintain these relationships could adversely affect our business. We depend on limited or sole suppliers for several key components in our products, many of whom we have not entered into contractual relationships with and failure of our suppliers to provide the components to us could harm our business. We may not be able to compete effectively with larger, more established entities or their products, or with future organizations or future products, which could cause our sales to decline. Changes in third-party payor reimbursement regulations can negatively affect our business. We are subject to numerous governmental regulations and regulatory changes are difficult to predict and may be damaging to our business. We have incurred and may continue to incur, in future periods, significant share-based compensation charges which may adversely affect our reported financial results. We depend on key members of our management and scientific staff and, if we fail to retain and recruit qualified individuals, our ability to execute our business strategy and generate sales would be harmed. We may inadvertently produce defective products, which may subject us to significant warranty liabilities or product liability claims and we may have insufficient product liability insurance to pay material uninsured claims. We could fail to achieve anticipated revenue if we experience problems related to the manufacture of our blood chemistry analyzers. We are subject to increasingly complex requirements from recent legislation requiring companies to evaluate internal control over financial reporting. We may need additional funding in the future and these funds may not be available to us. We must comply with strict and potentially costly environmental regulations or we could pay significant fines. Our facilities and manufacturing operations are vulnerable to natural disasters and other unexpected losses. Any such losses or system failures or delays may harm our business. Fluctuations in foreign exchange rates and the possible lack of financial stability in foreign countries could prevent overseas sales growth. Our operating results could be materially affected by unanticipated changes in our tax provisions or exposure to additional income tax liabilities.

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881890--6/14/2010--ABAXIS_INC