884847--3/21/2006--MATRITECH

related topics

{product, candidate, development}

{product, liability, claim}

{property, intellectual, protect}

{stock, price, share}

{personnel, key, retain}

{debt, indebtedness, cash}

{customer, product, revenue}

{cost, regulation, environmental}

{operation, international, foreign}

{regulation, change, law}

{capital, credit, financial}

We may not be able to meet our payment obligations on our outstanding debt if we are required to make these payments in cash. We may not be able to repay our outstanding debt in stock or raise additional capital through the sale of equity or convertible securities unless we receive stockholder approval of an increase in our authorized common stock. We have granted a security interest in our NMP22 product line to purchasers of our Secured Convertible Notes which restricts our operation of this product line and could result in the loss of all assets related to this product line if we default on our obligations. We may fail to meet the standards for continued listing of our shares of common stock on the American Stock Exchange or for listing of such shares on another national exchange. Direct sales to physicians may result in higher accounts receivable and longer collection cycles which may negatively affect our financial condition. If we are unable to manufacture or otherwise obtain the product volumes we need, we may be unable to achieve profitability. If we lose the services of our suppliers or assemblers, we may be unable to meet commitments to our customers and our results of operations would suffer. We may need to stop selling our NMP22 BladderChek Tests if we cannot obtain necessary licenses or waivers to use lateral flow technology, and we may need to stop selling other products if third parties assert infringement claims against us. We will not be able to significantly increase revenue or achieve profitability unless we increase the number of urologists using our BladderChek Test, increase the per-urologist usage of the test and/or successfully penetrate markets other than urologists. Our inability to develop and commercialize additional products may adversely affect our ability to achieve profitability. We compete with other methods of diagnosing cancer that are in existence or may be successfully developed by others and our products may not prevail. Low reimbursement rates could limit the per-unit revenues for our products and make it uneconomical to sell or distribute them, and limitations on the medical circumstances for which reimbursement is provided could reduce the potential market for our products. We and our distributors are subject to extensive government regulation which adds to the cost and complexity of our business, may result in unexpected delays and difficulties, may impose severe penalties for violations and may prevent the ultimate sale or distribution of our products in certain countries. We may be unable to establish and maintain relationships with key distributors in jurisdictions where we do not have a direct sales force. We have no demonstrated success in developing cellular analysis systems and any future success in this area will be highly dependent upon Sysmex. We have no demonstrated success in developing Proprietary Laboratory Procedures as a profitable service business and any future success will be dependent upon satisfaction and approval of our clinical lab partners. We may incur substantially greater costs and delays than we currently expect in the development process. The research results we obtain in the laboratory frequently cannot be replicated in clinical trials. Successful technical development of our products does not guarantee successful commercialization. If our intellectual property is not adequately protected, we could lose our ability to compete in the marketplace. If we are unable to recruit and retain key management, scientific and sales personnel, our business would be negatively affected. The operations of our European subsidiary involve currency exchange rate variability and other risks that could negatively affect our results of operations. If we are sued for product-related liabilities, the cost could be prohibitive to us. If the products we distribute which are made by other companies become unavailable or do not meet quality standards, we may lose revenues and may face liability claims. Our activities involve the use of hazardous materials, and we may be held liable for any accidental injury from these hazardous materials. Market volatility and fluctuations in our stock price and trading volume may cause sudden decreases in the value of an investment in our common stock.

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884847--3/21/2006--MATRITECH_INC/DE/