884847--3/27/2007--MATRITECH

related topics

{product, candidate, development}

{debt, indebtedness, cash}

{property, intellectual, protect}

{stock, price, share}

{product, liability, claim}

{personnel, key, retain}

{acquisition, growth, future}

{customer, product, revenue}

{control, financial, internal}

{cost, operation, labor}

{operation, international, foreign}

{regulation, change, law}

We expect that we will need to obtain additional capital in the near future in order to continue our operations. We have a history of operating losses, are continuing to lose money and may never be profitable. We expect that we will need to continue to obtain additional capital in the future until we become profitable and, if we are unable to obtain such capital on acceptable terms or at the appropriate time, we may not be able to continue our operations. We may be unable to comply with provisions of our Secured Convertible Notes and could suffer significant consequences in the event of non-compliance. 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 have incurred substantial indebtedness and may be unable to service our debt. We have granted a security interest in our NMP22 product line to the 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. 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. Future equity or convertible debenture financings will result in additional dilution of the ownership interest of our existing investors and may have an adverse impact on the price of our common stock. We will not be able to significantly increase revenue or achieve profitability unless we increase the number of urologists using our NMP22 BladderChek Test, increase the per-urologist usage of our tests and/or successfully penetrate markets other than urologists. Our inability to develop and commercialize additional products may limit our future prospects for our business, sales and profits. 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 compete with other methods of diagnosing cancer that already exist or may be successfully developed by others and our products may not prevail as the method of choice. 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 encounter insurmountable obstacles or incur substantially greater costs and delays than anticipated in the development process. We often face challenges in replicating the research results we obtain in our laboratories in clinical trials and, as a result, we may have difficulty commercializing our products. Successful technical development of our products does not guarantee successful commercialization. We have no demonstrated success in developing cellular analysis systems and any future success in this area will be highly dependent upon Sysmex Corporation. If we do not adequately protect our intellectual property, 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. We may be unable to establish distributor relationships with high revenue potential in jurisdictions where we do not have a direct sales force. The operations of our German subsidiary involve currency exchange rate variability and other risks that could negatively affect our results of operations.

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884847--3/27/2007--MATRITECH_INC/DE/