**EXHIBIT 99.1****CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS****AND RISK FACTORS**     In passing the Private Securities Litigation Reform Act of 1995(the “Reform Act”), Congress encouraged publiccompanies to make “forward-looking statements” bycreating a safe harbor to protect companies from securities lawliability in connection with forward-looking statements. Weintend to qualify both our written and oral forward-lookingstatements for protection under the Reform Act and any othersimilar safe harbor provisions.     “Forward-looking statements” are defined by the ReformAct. Generally, forward-looking statements include expressedexpectations of future events and the assumptions on which theexpressed expectations are based. The words “believe,”“expect,” “anticipate,” “intend,”“forecast,” “estimate,” “project,”and similar expressions identify forward-looking statements.Such statements may include, but are not limited to, the stateof the electronic payments industry and competition within theindustry; projections regarding specific demand for our productsand services; the commercial feasibility of new products,services and market development initiatives; our ability tosuccessfully penetrate the vertical and geographic markets thatwe have targeted; our ability to reduce our product costs; ourability to transition to a business model that includes morerecurring revenue streams; our ability to timely remediate thematerial weaknesses and significant deficiencies identifiedthrough our internal control evaluation; our future financialperformance and financial condition; the adequacy of our currentfacilities and management systems infrastructure to meet ouroperational needs; the status of our relationship with andcondition of third parties upon whom we rely in the conduct ofour business; the sufficiency of reserves for assets andobligations exposed to revaluation; our ability to successfullyexpand our business; our ability to effectively hedge ourexposure to foreign currency exchange rate fluctuations; ourability to sustain our current income tax structure; the impactof current litigation matters, including the shareholder classactions and the shareholder derivative action, on our business;our ability to fund our projected liquidity need from cash flowfrom operations and our current cash reserves; and future accessto capital on terms that are acceptable, as well as assumptionsrelated to the foregoing. Such forward-looking statements arewithin the meaning of that term in Section 27A of theSecurities Act of 1933, as amended, and Section 21E of theSecurities Exchange Act of 1934, as amended. All forward-lookingstatements are inherently uncertain as they are based on variousexpectations and assumptions concerning future events and theyare subject to numerous known and unknown risks anduncertainties that could cause actual events or result to differmaterially from those projected. Due to those and otheruncertainties and risks, you are urged not to place unduereliance on our written or oral forward-looking statements. Weundertake no obligation to update or revise this CautionaryStatement Regarding Forward-Looking Statements to reflect futuredevelopments. In addition, we undertake no obligation to updateor revise forward-looking statements to reflect changedassumptions, the occurrence of unanticipated events, or changesto future operating results over time.     We provide the following risk factor disclosure in connectionwith our continuing effort to qualify our written and oralforward-looking statements under the safe harbor protection ofthe Reform Act and any other similar safe harbor provisions.Important factors currently known to management that could causeactual results to differ materially from those inforward-looking statements include the disclosures contained inour Annual Report on Form 10-K, Quarterly Reports onForm 10-Q, and Current Reports on Form 8-K, and alsoinclude the following:**RISK FACTORS****Risks Related To Our Business*****We have incurred significant losses in the past and ourresults of operations have and will continue to vary fromquarter to quarter. If our financial performance is not in linewith investor expectations, the price of our common stock willsuffer and our access to future capital may be impaired.***     We had a net loss of $8.7 million for the year endedDecember 31, 2004. Although we had net income of$11.2 million for the year ended December 31, 2003, weincurred a net loss of $61.1 million for the year endedDecember 31, 2002. If the results of our continuing effortsto improve profitability, increase our cash flow and strengthenour balance sheet do not meet or exceed the expectations ofsecurities analysts or investors, the price of our common stockwill suffer.

 
     Further, given the variability of our revenues, our quarterlyfinancial results have fluctuated significantly in the past andare likely to do so in the future. Accordingly, we believe thatperiod-to-period comparisons of our results of operations may bemisleading and not indicative of future performance. If ourquarterly financial results fall below the expectations ofsecurities analysts or investors, the price of our common stockmay suffer.     Quarterly revenue and operating results can vary depending on anumber of factors, including: •     variations in product mix, timing and size of fulfilled orders    as a result of customer deferral of purchases and/or delays in    the delivery of our products and services;  •     accomplishment of certain performance parameters embedded in our    service level agreements;  •     the market’s demand for new product offerings;  •     delays in the delivery of our products and services;  •     product returns;  •     incremental costs incurred as a result of product quality and/or    performance issues;  •     write-off of doubtful accounts receivable;  •     inventory obsolescence;  •     variations in operating expenses, including research and    development, selling, and general and administrative expenses;  •     restructuring activities;  •     foreign currency exchange rate fluctuations;  •     availability and cost of financing;  •     variations in income tax as a function of income recognition by    tax jurisdiction; and  •     industry and economic conditions, including competition,    industry standards, product certification requirements, trade    restrictions and other regulations.***The loss of one or more of our key customers couldsignificantly reduce our revenues and profits.***     We have derived, and believe that we may continue to derive, asignificant portion of our revenues from a limited number oflarge customers. For the fiscal year ended December 31,2004, our two largest customers accounted for 17.3% of ourrevenue, and our five largest customers accounted for 27% of ourrevenue. Our customers may buy less of our products or servicesdepending on their own technological developments, end-userdemand for our products and internal budget cycles. A majorcustomer in one year may not purchase any of our products orservices in another year, which may negatively affect ourfinancial performance.***Our products may contain defects that may be difficult oreven impossible to correct. Product defects could result in lostsales, additional costs and customer erosion.***     We offer technically complex products which, when firstintroduced or released in new versions, may contain software orhardware defects that are difficult to detect and correct. Theexistence of defects and delays in correcting them could resultin negative consequences, including the following: •     delays in shipping products;  •     cancellation of orders;  •     additional warranty expense;  •     delays in the collection of receivables;  •     product returns;
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 •     additional claims against us;  •     the loss of market acceptance of our products; and  •     diversion of R&D resources from new product development.     Even though we test all of our products, defects may continue tobe identified after products are shipped. In past periods, wehave experienced various issues in connection with productlaunches, including the need to rework certain products andstabilize product designs. Correcting defects can be atime-consuming and difficult task. Software errors may takeseveral months to correct, and hardware errors may take evenlonger.***We may accumulate excess or obsolete inventory that couldresult in unanticipated price reductions and write downs andadversely affect our financial results.***     Managing the proper inventory levels for components and finishedproducts is challenging. In formulating our product offerings,we have focused our efforts on providing to our customersproducts with greater capability and functionality, whichrequires us to develop and incorporate the most currenttechnologies in our products. This approach tends to increasethe risk of obsolescence for products and components we hold ininventory and may compound the difficulties posed by otherfactors that affect our inventory levels, including thefollowing: •     the need to maintain significant inventory of components that    are in limited supply;  •     buying components in bulk for the best pricing;  •     responding to the unpredictable demand for products;  •     responding to customer requests for short lead-time delivery    schedules;  •     failure of customers to take delivery of ordered    products; and  •     product returns.     If we accumulate excess or obsolete inventory, price reductionsand inventory write-downs may result, which could adverselyaffect our results of operation and financial condition.***If we are unable to adequately protect our proprietarytechnology, our competitors may develop products substantiallysimilar to our products and use similar technologies, which mayresult in the loss of customers.***     We rely on patent, copyright, trademark and trade secret laws,as well as confidentiality, licensing and other contractualarrangements, to establish and protect the proprietary aspectsof our products. Our efforts may result in only limitedprotection, and our competitors may develop, market and sellproducts substantially equivalent to our products, or utilizetechnologies similar to those used by us. If we are unable toadequately protect our proprietary technology, these thirdparties may be able to compete more effectively against us,which could result in the loss of customers and adversely affectour business.***Our products and other proprietary rights may infringe onthe proprietary rights of third parties, which may expose us tolitigation.***     Although we believe that our products do not infringe on anythird party’s patents, from time to time we have becomeinvolved in claims and litigation involving patents orproprietary rights. Patent and proprietary rights litigationentails substantial legal and other costs, and divert theattention our management resources. There can be no assurancethat we will have the necessary financial resources toappropriately defend or prosecute our rights in connection withany such litigation.
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***A disruption in the manufacturing capabilities of ourthird-party manufacturers or suppliers would negatively impactour ability to meet customer demands.***     We rely on third-party manufacturers to manufacture and assembleour products. We also depend upon third-party suppliers todeliver components that are free from defects, competitive infunctionality and cost, and in compliance with ourspecifications and delivery schedules. Since we generally do notmaintain large inventories of our products or components, anytermination of, or significant disruption in, our relationshipwith our third-party manufacturers or suppliers may prevent usfrom filling customer orders in a timely manner.     We have occasionally experienced, and may in the futureexperience, delays in delivery of products and delivery ofproducts of inferior quality from third-party manufacturers.Although alternate manufacturers and suppliers are generallyavailable to produce our products and product components, thenumber of manufacturers or suppliers of some of our products andcomponents is limited, and qualifying a replacement manufactureror supplier could take several months. In addition, our use ofthird-party manufacturers reduces our direct control overproduct quality, manufacturing timing, yields and costs.Disruption of the manufacture or supply of our products andcomponents, or a third-party manufacturer’s orsupplier’s failure to remain competitive in functionality,quality or price, could delay or interrupt our ability tomanufacture or deliver our products to customers on a timelybasis, which would have a material adverse effect on ourbusiness and financial performance.***International operations pose additional challenges andrisks that if not properly managed could adversely affect ourfinancial results.***     For the year ended December 31, 2004, we derivedapproximately 68% of our total revenues outside of the UnitedStates, principally in Latin America and Europe. We expect thatinternational sales will continue to account for a significantpercentage of our net income in the foreseeable future.Accordingly, we face numerous risks associated with conductinginternational operations, any of which could negatively affectour results of operations and financial condition. These risksinclude the following: •     changes in foreign country regulatory requirements;  •     various import/export restrictions and the availability of    required import/export licenses;  •     imposition of foreign tariffs and other trade barriers;  •     political and economic instability;  •     foreign currency exchange rate fluctuations;  •     extended payment terms and the ability to collect accounts    receivable;  •     the ability to repatriate funds; and  •     availability of qualified and affordable staff with which to    manage our foreign operations.     Additionally, we are subject to the Foreign Corrupt PracticesAct, which may place us at a competitive disadvantage to foreigncompanies that are not subject to similar regulations.***We sell our POS products directly to end-user merchants inthe United Kingdom under sales-type leases that are subject togovernmental regulation and involve a risk of default that, ifexcessive, could result in a substantial write-off of the valueof that lease portfolio and impair our profitability.***     Our subsidiary in the United Kingdom (UK) sells POSequipment directly to end-user merchants under capital leasearrangements intended to be accounted for as sales-type leases.The customer base of this leasing business is characterized byhigher incidences of delinquencies and defaults and isdistinctly different from our predominant customer base of largedomestic and international financial institutions, electronicpayment processors, independent sales organizations,distributors and resellers. We maintain an allowance forestimated uncollectible sales-type lease receivables at anamount that we believe is sufficient to provide adequate
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protection against losses in our sales-type lease portfolio. Ourallowance is determined principally on the basis of historicalloss experience and management’s assessment of the creditquality of the sales-type lease customer base. The value of thislease portfolio and the profitability of this leasing activitycould be substantially impaired if our existing lease lossreserves prove inadequate or future leases we originateexperience a default rate greater than that for which weestablished reserves at the time of inception. This businessactivity is also subject to governmental regulation. Our failureto comply with such regulation could adversely affect ourability to enforce the sales-type leases, which could negativelyimpact our results of operation and financial condition. Certainof the leases in our UK lease portfolio are accounted for asoperating leases. These leases are subject to differentaccounting treatment and do not have the same risk because thelease payments are recognized as earned and not all at theinitiation of the lease as is the case with sales-type leases.***Fluctuations in currency exchange rates may adverselyaffect our financial results.***     A substantial part of our business consists of sales made tointernational customers. A portion of revenues and expensesrelated to our international operations are denominated incurrencies other than the U.S. dollar. We cannot assure youthat adverse currency exchange rate fluctuations will not have amaterial impact in the future. In addition, our balance sheetreflects non-U.S. dollar denominated assets and liabilitieswhich can be adversely affected by fluctuations in currencyexchange rates. Prior to 2002, we did not hedge our exposure tothese fluctuations. More recently, we have entered into foreigncurrency forward contracts intended to hedge our exposure toadverse fluctuations in exchange rates. Nevertheless, thesehedging arrangements may not always be effective, particularlyin the event of imprecise forecasts of non-U.S. denominatedassets and liabilities. Accordingly, if there is an adversemovement in exchange rates, we might suffer significant losses.In the year ended December 31, 2004, we incurred foreigncurrency expense of $3.2 million net of foreign currencytransaction gains or losses.***Adverse resolution of litigation may adversely affect ourbusiness or financial results .***     We are party to litigation in the normal course of our business.Litigation can be expensive, lengthy and disruptive to normalbusiness operations. Moreover, the results of complex legalproceedings are difficult to predict. An unfavorable resolutionof a particular lawsuit could have a material adverse effect onour business, operating results, or financial condition. Foradditional information regarding certain of the lawsuits inwhich we are involved, see Item 3, “LegalProceedings,” contained in Part I of our most recentAnnual Report on Form 10-K.***Litigation Arising Out of the Restatement of OurConsolidated Financial Statements Could Seriously Harm OurBusiness.***     Beginning in February, 2005, a number of purported shareholderclass action complaints were filed in the United States DistrictCourt, District of Arizona, against us and certain of ourexecutive officers, all purporting to be brought on behalf of aclass of purchasers of our common stock in the period fromApril 30, 2004 to February 3, 2005. The complaintsallege that we, and certain of our executive management,violated the Securities Exchange Act of 1934 based on ourFebruary 2005 announcement that certain leases in the UnitedKingdom had been incorrectly accounted for as sales-type leases,rather than operating leases. As a result of this accountingerror, we determined that we would restate our financialstatements for the first three quarters of 2004. In March 2005,a shareholder’s derivative action was filed in the UnitedStates District Court, District of Arizona against us andcertain of our executive officers and our board of directorsalleging breach of fiduciary duties. We intend to vigorouslydefend these actions.     Litigating existing and potential securities class actions andshareholder derivative actions relating to the restatement ofour consolidated financial statements will likely requiresignificant attention and resources of management and,regardless of the outcome, result in significant legal expenses.In the case of the securities class actions, if our defenseswere ultimately unsuccessful, or if we were unable to achieve afavorable settlement, we could be liable for large damagesawards that could seriously harm our business, results ofoperations and financial condition.
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***We are dependent on current management and key personnel.The loss of certain of these individuals could cause materialharm to the operation and future prospects of ourbusiness.***     Christopher Alexander, our Chairman, President and ChiefExecutive Officer, and John W. Smolak, our Executive VicePresident and Chief Financial and Administrative Officer, areinstrumental in our continuing development and operations. Theloss of either of these key executives could have a materialadverse effect on the operation and future prospects of ourbusiness. We also believe our future success will depend largelyupon our ability to attract and retain highly-skilled hardwareand software engineers, managerial, and sales and marketingpersonnel. We compete against numerous companies, includinglarger, more established companies, for our personnel. We do notknow if we will be successful in attracting or retaining skilledpersonnel. Further, the loss of certain key employees or ourinability to attract and retain other qualified employees couldnegatively affect our financial performance.***We have in the past and may in the future makeacquisitions and strategic investments, which will involvenumerous risks. We may not be able to address these riskswithout substantial expense, delay or other operational orfinancial problems.***     We may acquire or make substantial investments in relatedbusinesses, technologies, products or services in the future.These acquisitions or investments involve various risks, such as: •     the inability to assimilate the technologies, operations and    personnel of the acquired business;  •     the potential disruption of our existing business, including the    diversion of management attention and the redeployment of    additional resources;  •     the loss of key employees of an acquired business; and  •     the inability to obtain the desired strategic and financial    benefits from the acquisition or investment.     Future acquisitions and investments could also result insubstantial cash expenditures, potentially dilutive issuance ofour equity securities, our incurring of additional debt andcontingent liabilities, and amortization expenses related toother intangible assets that could adversely affect ourbusiness, operating results and financial condition.***Force Majeure events, such as terrorist attacks, otheracts of violence or war, and health epidemics may affect themarkets in which our common stock trades, our ability to operateand our financial results.***     Domestic and international terrorist attacks, wars and regionalconflicts may cause instability in the global financial markets,and contribute to downward pressure on securities prices ofUnited States publicly traded companies, such as us. Futureterrorist attacks or armed conflicts, and epidemics, such asSARS, could result in economic, political and otheruncertainties that could adversely affect our revenues andoperating results, and further depress securities prices,including the price of our common stock. Such events may disruptthe global insurance and reinsurance industries, and adverselyaffect our ability to obtain or renew certain insurancepolicies, and may result in significantly increased costs ofmaintaining insurance coverage. Further, we may not be able toobtain insurance coverage at historical or acceptable levels forall of our facilities. Future terrorist attacks, armed conflictsand epidemics could affect our domestic and international sales,disrupt our supply chain and impair our ability to produce anddeliver our products. Such events could directly impact ourphysical facilities or those of our suppliers or customers inthe United States and elsewhere. Our primary facilities includeadministrative, sales and R&D facilities in the UnitedStates, and manufacturing facilities in China. Acts ofterrorism, wars and epidemics may make transportation of oursupplies and products more difficult or cost prohibitive.**Risks Related To The Industry*****The markets in which we compete are highly competitive,maturing, and subject to price erosion.***     The markets in which we operate are maturing and highlycompetitive. Increased competition from manufacturers ordistributors of products similar to or competitive with ours, orfrom service providers that
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provide services similar to our services, could result in pricereductions, extended terms, free services, lower margins andloss of market share.     We expect to continue to experience significant and increasinglevels of competition in the future. With respect to our POSpayment system products, we compete primarily on the basis ofease-of-use, product performance, price, features, quality, theavailability of application software programs, the number ofthird-party network host and telecommunication systemcertifications we have obtained for our products and applicationprograms, rapid development, release and delivery of softwareproducts and customer support and responsiveness. Softwareproducts compete on the basis of functionality, scalability,quality and support. •     In the POS terminal market, our global competitors are Ingenico,    a publicly-held, French company, VeriFone, Inc., a    privately-held U.S. company, and Lipman, a publicly-held    Israeli company. According to Frost & Sullivan, the top    four manufacturers (Hypercom, VeriFone, Ingenico and Lipman)    accounted for approximately 70% of POS terminals shipped in    2003, while 40 other manufacturers accounted for the remaining    30%. In any particular market, we may also find ourselves in    competition with participants that compete on either a regional    or local country basis, within certain market segments or with a    limited range of products and services.  •     In the multi-lane POS market, we offer terminals designed    specifically for the multi-lane retailer environment. Our    multi-lane terminals compete with integrated electronic cash    register/ POS terminal products from companies such as Symbol    and HHP.     We often face additional competitive factors in foreigncountries, including but not limited to preferences for nationalvendors, difficulties in obtaining required certifications,conformity with local government policies and trade practices,and compliance with the Foreign Corrupt Practices Act. Some ofour competitors and potential competitors are more established,benefit from greater name recognition and have significantlygreater resources than we do. Moreover, there are limitedbarriers to entry that could keep our competitors fromdeveloping products or services and technology similar to ours,or from selling competing products or services in our markets.Further, there can be no assurance that we will be able to lowerour product costs to effectively compete in these markets.***We are subject to industry and technology changes and aredependent on development and market acceptance of new products.If we are unable to adequately respond to these changes and tomarket demands in a timely manner, our business will not besuccessful.***     The industry in which we operate is characterized by rapidchanges in technology and numerous new product introductions.Our success depends to a large degree upon our continued abilityto offer new products and enhancements to our existing productsto meet changing market requirements, including conformity withimposed standards. The introduction of new products andtechnologies by third parties could have an adverse effect onthe sales of our existing products and technologies. We cannotbe certain of our ability to successfully: •     identify, develop, or manufacture new products and technologies    in a cost effective manner;  •     market or support these new products and technologies on a    timely basis;  •     eliminate defects in new products;  •     gain market acceptance for the new products and    technologies; or  •     respond to technological changes, new industry standards, and    announcements of new products by competitors.     Developing new products and technologies is a complex, uncertainprocess requiring innovation and accurate anticipation oftechnological and market trends. When changes to the productline are announced, we will be challenged to manage possibleshortened life cycles for existing products, continue to sellexisting products and prevent customers from returning existingproducts. Our inability to respond effectively to any of thesechallenges may have a material adverse effect on our businessand financial success.
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***We are subject to extensive industry standards andgovernment regulations. Our failure to properly comply withthese standards and regulations could adversely affect ourproduction and sales.***     Our product sales are subject to a substantial and complex arrayof industry driven standards and governmental regulation, bothdomestic and foreign, including: •     industry standards imposed by EuroPay International, Mastercard    International, VISA International, and others;  •     certification standards required for connection to some public    telecommunications networks;  •     Federal Communications Commission regulations;  •     Underwriters Laboratories’ regulations; and  •     certification standards set by domestic processors.     Our failure to properly comply with these standards andregulations could result in lost product sales, significantcosts associated with required remedial measures or productionstoppages, any of which could have a material adverse effect onour business and financial performance.**Risks Related To Our Common Stock*****Our stock price has been and may continue to bevolatile.***     The market price of our common stock has been, and is likely tocontinue to be, volatile. When we or our competitors announcenew products, services, or customer orders, change pricingpolicies, experience quarterly fluctuations in operatingresults, announce strategic relationships, acquisitions ordispositions, change earnings estimates, fail to maintaineffective internal controls, restate financial results, incurlitigation, experience government regulatory actions or sufferfrom generally adverse economic conditions, our stock price isoften affected. Recently, companies similar to ours haveexperienced extreme price fluctuations, often for reasonsunrelated to their performance. The volatility of our stockprice may be accentuated during periods of low volume trading ofour stock.***We have identified material weaknesses in our internalcontrols over financial reporting which will take time toremediate.***     We conducted an evaluation of the effectiveness of internalcontrol over financial reporting as of December 31, 2004.Based on this evaluation and the material weaknesses describedbelow, our management concluded that as of December 31,2004, our internal control over financial reporting is noteffective. The first material weakness was identified as aresult of insufficient controls over the contract administrationand accounting for certain leases that were incorrectlyaccounted for as sales-type leases, rather than operatingleases. As a result of this material weakness in internalcontrol, management concluded that our previously reportedquarterly revenues and operating profits had been overstated andthat previously issued financial statements for each of thefirst three quarters of 2004 should be restated. The secondmaterial weakness was identified as a result of the year-endfinancial statement close procedures whereby we and ourindependent registered public accounting firm identified anumber of adjustments. We have concluded that controls relatedto our analysis, evaluation, and review of our 2004 financialinformation gave rise to these adjustments and resulted in amaterial weakness. These specific deficiencies consisted of: •     an inappropriate level of review of certain significant    financial statement accounts requiring a higher degree of    judgment and estimates;  •     insufficient analysis, documentation, review, and oversight of    the financial statements of certain foreign subsidiaries during    consolidation; and  •     insufficient staffing of the accounting and financial reporting    function.     In aggregate, these control deficiencies result in a more thanremote likelihood that a material misstatement to our annual orinterim consolidated financial statements could occur and not beprevented or
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detected in a timely manner. We are implementing remedialmeasures in response to the material weakness and significantdeficiencies identified through our internal controlsevaluation. These remedial measures include additionalpersonnel, organizational changes to improve supervision, andincreased training for finance and accounting personnel. We arein the process of determining when we will be able to fullyremediate and presently anticipate that we will report in ourquarterly report on Form 10-Q for the first quarter of 2005that a material weakness in internal control over financialreporting continues to exist.***We are subject to anti-takeover effects of certain charterand bylaw provisions and Delaware law.***     We have provisions in our certificate of incorporation andbylaws which: •     make it more difficult for a third party to acquire control of    us, and discourage a third party from attempting to acquire    control of us;  •     may limit the price some investors are willing to pay for our    common stock;  •     enable us to issue preferred stock without a vote of our    stockholders or other stockholder action;  •     provide for a classified Board of Directors and regulate    nominations for the Board of Directors;  •     make it more difficult for stockholders to take certain    corporate actions; and  •     may delay or prevent a change of control.     These and other provisions of our charter documents, as well ascertain provisions of Delaware law, could delay or make moredifficult certain types of transactions involving a change ofcontrol of Hypercom or our management. As a result, the price ofour common stock may be adversely affected.***Our stock price could be affected because a substantialnumber of shares of our common stock will be available for salein the future.***     As of March 4, 2005, we had 52,461,177 shares of ourcommon stock outstanding, all of which have been listed fortrading according to the rules of the New York Stock Exchange.We also had outstanding, as of March 4, 2005, options andwarrants to acquire an additional 7,483,129 shares of ourcommon stock. All of the shares underlying the outstandingoptions and warrants have been registered for resale. Futurepublic sales of our common stock, or the availability of suchshares for sale, including the shares subject to outstandingoptions and warrants, could adversely affect the prevailingmarket price of our common stock and impair our ability to raisecapital through the sale of additional equity securities.***We do not plan to pay any dividends on our commonstock.***     We do not anticipate paying any dividends on our common stockfor the foreseeable future.**Risks Related To Our Indebtedness*****Although our current indebtedness is limited, we may berequired to incur additional debt to meet the future capitalrequirements of our business. Should we be required to incuradditional debt, the restrictions imposed by the terms of ourdebt could adversely affect our financial condition and ourability to respond to changes in our business.***     If we incur additional debt, we may be subject to the followingrisks: •     our vulnerability to adverse economic conditions and competitive    pressures may be heightened;  •     our flexibility in planning for, or reacting to, changes in our    business and industry may be limited;  •     we may be sensitive to fluctuations in interest rates if any of    our debt obligations are subject to variable interest    rates; and  •     our ability to obtain additional financing in the future for    working capital, capital expenditures, acquisitions, general    corporate purposes or other purposes may be impaired.
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     We cannot assure you that our leverage and such restrictionswill not materially and adversely affect our ability to financeour future operations or capital needs or to engage in otherbusiness activities. In addition, we cannot assure you thatadditional financing will be available when required or, ifavailable, will be on terms satisfactory to us.
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