896778--3/16/2006--CONCEPTUS

related topics

{product, liability, claim}

{property, intellectual, protect}

{product, candidate, development}

{regulation, change, law}

{product, market, service}

{acquisition, growth, future}

{personnel, key, retain}

{control, financial, internal}

{customer, product, revenue}

{stock, price, operating}

{capital, credit, financial}

We have a limited history of operation with the Essure system and have incurred significant operating losses since inception. We expect to incur significant operating losses for the foreseeable future and we may never achieve or maintain profitability. We are presently a one-product company and if our product fails to gain market acceptance, our business will suffer. Our future liquidity and capital requirements are uncertain. If the effectiveness and safety of our product are not supported by long-term data, we may not achieve market acceptance and we could be subject to liability. Our agreements and contracts entered into with partners and other third parties may not be successful. Our advertising campaigns may not be successful. We depend on our contract manufacturer to supply our commercial product requirements and we may experience disruption in supply if they are not in compliance with FDA and other health authority regulations or if our manufacturer's business fails to succeed. Government or third party reimbursement for the Essure procedure may not be available or may be inadequate, which would limit our future product revenues and delay or prevent our profitability. We may not maintain regulatory approvals for the Essure system, our only product, which would delay or prevent us from generating product revenues, and would harm our business and force us to curtail or cease operations. Our intellectual property rights may not provide meaningful commercial protection for our product, which could enable third parties to use our technology, or very similar technology, and could impair our ability to compete in the market. If we cannot operate our business without infringing third-party intellectual property rights, our prospects will suffer. We have been, and may be in the future, a party to patent litigation, which could be expensive and divert our management's attention. If we fail to manage any expansion, our business could be impaired. Our third-party manufacturer and we will depend upon third party and single source suppliers for raw materials and finished goods and we do not have forward contracts with many of these suppliers. Health care reform may limit our return on our product. We may be exposed to product liability claims, and we have only limited insurance coverage. We may not be able to attract and retain additional key management, sales and marketing and technical personnel or we may lose existing key management, sales and marketing or technical personnel, which may delay our development and marketing efforts. We face intense competition, and if we are unable to compete effectively, demand for the Essure system may be reduced. Our future quarterly results may fluctuate. Changes in stock option accounting rules may adversely impact our reported operating results prepared in accordance with generally accepted accounting principles, our stock price and our competitiveness in the employee marketplace. Future changes in financial accounting standards or practices or existing taxation rules or practices may cause adverse unexpected revenue fluctuations and affect our reported results of operations.

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896778--3/16/2006--CONCEPTUS_INC