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                                                                    EXHIBIT 99.1

                              CAUTIONARY STATEMENTS

     From time to time, Hines Horticulture, Inc. may publish, verbally or in
written form, forward-looking statements relating to such matters as anticipated
financial or operational performance, business prospects and similar matters. In
fact, this Form 10-Q (or any other periodic reporting documents required by the
Exchange Act) may contain forward-looking statements reflecting our current
views concerning potential future events or developments. Our actual results
could differ materially from those discussed in these statements. Factors that
could contribute to these differences include those discussed below and
elsewhere in this Form 10-Q. The cautionary statements discussed below and made
elsewhere in this Form 10-Q should be read as being applicable to all
forward-looking statements wherever they appear. Our operations are subject to a
variety of risks and uncertainties and the following risk factors are not to be
considered a definitive list of all risks associated with our operations and
should be read in conjunction with the risks and uncertainties contained in our
other filings with the Securities and Exchange Commission. The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. These Cautionary Statements are being made pursuant
to the provisions of the Private Securities Litigation Reform Act and with the
intention of obtaining the benefits of the "safe harbor" provisions of the Act.
We caution investors that any forward-looking statements made by us are not
guarantees of future performance and that a variety of factors, including those
discussed below, could cause our actual results and experience to differ
materially from the anticipated results or other expectations expressed in our
forward-looking statements. The risks and uncertainties which may affect the
operations, performance and results of our business are described in more detail
below. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the statement was
made.

OUR PRODUCTION OF PLANTS MAY BE ADVERSELY AFFECTED BY A NUMBER OF AGRICULTURAL
FACTORS BEYOND OUR CONTROL.

     Our production of plants may be adversely affected by a number of
agricultural risks, including disease, pests, freezing conditions, snow, drought
or other inclement weather, and improper use of pesticides or herbicides. These
factors could cause production difficulties which could damage or reduce our
inventory, resulting in sales, profit and operating cash flow declines, which
could be material.

INCREASES IN WATER PRICES OR INSUFFICIENT AVAILABILITY OF WATER COULD ADVERSELY
AFFECT OUR PLANT PRODUCTION, RESULTING IN REDUCED SALES AND PROFITABILITY.

     Plant production depends upon the availability of water. Our nurseries
receive their water from a variety of sources, including on-site wells, creeks,
reservoirs and holding ponds, municipal water districts and irrigation water
supplied to local districts by facilities owned and operated by the United
States acting through the Department of Interior Bureau of Reclamation. The loss
or reduction of access to water at any of our nurseries could have a material
adverse effect on our business, results from operations and operating cash
flows. In addition, increases in our costs for water could adversely impact our
profitability and operating cash flows.

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     Our nursery in Arizona receives its water from on-site wells. Under
Arizona's Groundwater Management Act, these wells have been issued
"grandfathered non-irrigation water" permits, which limit the amount of
groundwater we can use. The availability of water depends on the groundwater
aquifer, which at this time, we believe is adequate to supply our needs for this
nursery as it is currently operated.

     Our Northern California and Oregon nurseries rely primarily on surface
water supplies and, therefore, may experience fluctuations in available water
supplies and serious reductions in their supplies of surface water in the event
of prolonged droughts. If such reductions occur, those nurseries would have to
rely on backup water supplies which are more costly than surface water supplies.

     The use and price of water supplied by facilities owned and operated by the
Bureau of Reclamation, including availability of subsidized water rates, is
governed by federal reclamation laws and regulations. Such water is used at our
Northern California nursery and is the source of a substantial majority of the
water for our Oregon nursery. While we believe we are in material compliance
with applicable regulations and maintain a compliance program, there can be no
assurance that changes in law will not reduce availability or increase the price
of reclamation water to us. Any such change could have a material adverse effect
on our business, financial position, results of operations and operating cash
flows.

     The reclamation regulations govern who may hold an interest in irrigation
lands. Under the reclamation regulations, persons having a direct or indirect
beneficial economic interest in us will be treated as "indirect holders" of
irrigation land owned by us in proportion to their beneficial interest in us. If
any holder of our common stock (whether directly or indirectly through a
broker-dealer or otherwise) is ineligible under applicable reclamation
regulations to hold an indirect interest in our irrigation land, we may not be
eligible to receive reclamation water on this land. Generally, the eligibility
requirement of the reclamation regulations would be satisfied by a person:

     o    who is a citizen of the United States or an entity established under
          federal or state law or a person who is a citizen of or an entity
          established under the laws of certain foreign countries (including
          Canada and Mexico and members of the Organization for Economic
          Cooperation and Development); and

     o    whose ownership, direct and indirect, of other land which is qualified
          to receive water from a reclamation project, when added to such
          person's attributed indirect ownership of irrigation land owned by us,
          does not exceed certain maximum acreage limitations (generally, 960
          acres for individuals and 640 acres for entities).

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     While our restated certificate of incorporation contains provisions
intended to prohibit ineligible holders of irrigation land from owning our
common stock, such provisions may not be effective in protecting our right to
continue to use reclamation water.

WE FACE RISKS ASSOCIATED WITH SUDDEN OAK DEATH ("SOD"). QUARANTINES OF OUR
PRODUCTS OR OTHER ACTIONS BY FEDERAL AND STATE REGULATORY AUTHORITIES IN
RESPONSE TO SUDDEN OAK DEATH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS AND RESULTS OF OPERATIONS.

     SOD is caused by a fungus-like pathogen recently identified by scientists
in California and named Phytophthora ramorum ("P. ramorum"). Since its
appearance in 1995, P. ramorum has killed thousands of coast live oak, black
oak, tanoak and Shreve oak in Northern California. P. ramorum can also infect
the leaves and branches of other plants referred to as SOD host plants.
Currently, 59 plant varieties grown by commercial nurseries have been identified
as SOD hosts.

     In February 2004, as part of the SOD National Nursery Survey, the United
States Department of Agriculture ("USDA") encouraged all states to conduct a
survey of nurseries that ship SOD host plants interstate. Accordingly, the
California Department of Food & Agriculture ("CDFA") and the USDA conducted
joint tests at nurseries located throughout California, which tests included our
Irvine, Vacaville, Winters, and Fallbrook facilities. On March 9, 2004, two
nurseries in California, which we do not own or operate, tested positive for P.
ramorum. As a result of these findings certain states declared a quarantine on
all plant material coming from California and several others imposed a
quarantine on SOD host and associated host plants only. We grow five out of the
59 species known to be SOD host and associated host plants as specified by the
California Department of Agriculture.

     On March 19, 2004, we took the precautionary measure of voluntarily
suspending the shipment of all SOD host plants grown in our California
facilities pending the results of the joint CDFA and USDA testing of our
facilities. On March 26, 2004, we were notified by the CDFA that all of our
California growing facilities had tested negative for P. ramorum. As a result of
these findings, the CDFA and the USDA issued compliance agreements with our
Fallbrook and Irvine facilities, allowing us to ship host and associated host
plants, if we meet, and continue to meet, certain inspection requirements. Our
Northern California facilities, Vacaville and Winters, have been located in a P.
ramorum regulated county and have continued to operate under the terms of a
previous compliance agreement with the CDFA and USDA. Their compliance agreement
requires that potential SOD host plants be inspected and tested monthly during
the growing season for the presence of P. ramorum. To date, our two northern
facilities have tested as SOD free places of production

     On March 26, 2004, the USDA's Animal and Plant Health Inspection Service
announced that it will regulate the interstate movement of SOD host and
associated host plants from all California nurseries. This new measure prohibits
an estimated 1,500 California nurseries from shipping plants susceptible to P.
ramorum until those nurseries can be inspected and are found to be free of the
pathogen. The USDA will also launch a national survey to determine if P. ramorum
is causing disease symptoms on hosts and associated hosts in other parts of the
country.

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     All of our California nurseries have tested negative for P. ramorum.
However, if in the future we do test positive for P. ramorum, our products could
be subject to quarantine by federal and state regulatory authorities. If this
were to occur, we could experience a significant loss of sales and may be
required to write-off inventory, which would have a material adverse effect on
our business, results from operations, and operating cash flows. Regulatory
authorities could also enact restrictive regulations on soil media containing
redwood sawdust, a known carrier of P. ramorum, requiring us to modify our
current growing procedures as well as develop alternatives to using it. If these
restrictions are enacted, we may be unable to successfully develop a cost
effective alternative to using redwood sawdust, which could also adversely
affect our business, results of operations and operating cash flows.

     On April 22, 2004, as an accommodation to several concerned states, the
USDA issued an amended order again restricting the movement of nursery plants
from California and a change in testing protocols for compliance requirements.
The amended order prohibits the interstate movement of any listed SOD regulated
host plants and associated host plants from any commercial nursery in the
non-quarantined areas of California until each nursery has been inspected and
shows no evidence of SOD infestation. Pursuant to the guidelines of the amended
order, our Irvine and Fallbrook facilities will, however, need to be retested
and recertified to meet the revised compliance requirements. We believe the
newly amended regulatory restrictions do not pose an appreciable threat to our
shipping practices or sales at this time, or the foreseeable spring shipping
season. SOD continues to be a significant issue for our company and industry; we
will continue to monitor the situation closely while actively engaging state and
national officials to adopt and implement the revised order.

     On September 20, 2004 the Company announced that its Forest Grove, Oregon
facility had suspended the shipment of all plant material known capable of
carrying P. ramorum as a result of receiving notification from the USDA that a
routine inspection had resulted in a positive detection of the pathogen. Since
this discovery, the Company has been in communication with various state
agriculture departments, as well as the USDA, and has followed applicable
protocols and participated in inspections in various states identified to have
received plants which are capable of being SOD hosts and associated host plants
from Hines Oregon during the past twelve months. Retail store locations in 46
states have been identified as having received SOD capable host and associated
host plants from our Oregon facility. Total net sales from our Oregon facility
of SOD capable host and associated host plants, represented less than 1.0% of
the Company's net sales for the past twelve months. The Company is actively
cooperating with the appropriate federal and state governmental agencies and
retailers to minimize any impact these inspections and quarantines may have on
Hines and its customers.


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BECAUSE OUR BUSINESS IS HIGHLY SEASONAL, OUR REVENUES, CASH FLOWS FROM
OPERATIONS AND OPERATING RESULTS MAY FLUCTUATE ON A SEASONAL AND QUARTERLY
BASIS.

     Our business is highly seasonal. The seasonal nature of our operations
results in a significant increase in our working capital during the growing and
selling cycles. As a result, operating activities during the first and fourth
quarters use significant amounts of cash, and in contrast, operating activities
for the second and third quarters generate substantial cash as we ship inventory
and collect accounts receivable. We have experienced, and expect to continue to
experience, significant variability in net sales, operating cash flows and net
income on a quarterly basis. One significant factor contributing to this
variability is weather, particularly on weekends during the peak gardening
season in the second quarter. Unfavorable weather conditions during the peak
gardening season could have a material adverse effect on our net sales, cash
flows from operations and operating income.

         Other factors that may contribute to this variability include:

     o    shifts in demand for live plant products;

     o    changes in product mix, service levels and pricing by us and our
          competitors;

     o    period-to-period changes in holidays;

     o    the economic stability of our retail customers; and

     o    our relationship with each of our retail customers.

BECAUSE WE DEPEND ON A CORE GROUP OF SIGNIFICANT CUSTOMERS, OUR SALES, CASH
FLOWS FROM OPERATIONS AND RESULTS OF OPERATIONS MAY BE NEGATIVELY AFFECTED IF
OUR KEY CUSTOMERS REDUCE THE AMOUNT OF PRODUCTS THEY PURCHASE FROM US.

     Our top ten customers together accounted for approximately 78% of our net
sales in 2003. Our largest customer, The Home Depot, accounted for approximately
47% of our 2003 net sales. We expect that a small number of customers will
continue to account for a substantial portion of our net sales for the
foreseeable future. We do not have long-term contracts with any of our retail
customers, and they may not continue to purchase our products.

     The loss of, or a significant adverse change in, our relationship with The
Home Depot or any other major customer could have a material adverse effect on
us. The loss of, or a reduction in orders from, any significant retail
customers, losses arising from retail customers' disputes regarding shipments,
fees, merchandise condition or related matters, or our inability to collect
accounts receivable from any major retail customer could have a material adverse
effect on us. In addition, revenue from customers that have accounted for
significant revenue in past periods, individually or as a group, may not
continue, or if continued, may not reach or exceed historical levels in any
period.

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WE FACE INTENSE COMPETITION, AND OUR INABILITY TO COMPETE EFFECTIVELY FOR ANY
REASON COULD ADVERSELY AFFECT OUR BUSINESS.

     Our competition varies by region, each of which is highly competitive.
Although many of our largest customers are national retailers, buying decisions
are generally made locally by our customers. We compete primarily on the basis
of breadth of product mix, consistency of product quality, product availability,
customer service and price. We generally face competition from several local
companies and usually from one or two regional companies in each of our current
markets. Competition in our existing markets may also increase considerably in
the future. Some of our competitors may have greater market share in a
particular region or market, less debt, greater pricing flexibility or superior
marketing or financial resources. Increased competition could result in lower
profit margins, substantial pricing pressure, reduced market share and lower
operating cash flows. Price competition, together with other forms of
competition, could have a material adverse effect on our business, financial
position, results of operations and operating cash flows.

OUR NURSERY FACILITY IN IRVINE, CALIFORNIA IS ENTIRELY ON LEASED LAND AND WE DO
NOT EXPECT THE LEASES TO BE EXTENDED BEYOND THEIR CURRENT TERMS.

     Our 542-acre nursery facility and headquarters in Irvine, California are
entirely on leased land. We recently entered into an amended lease agreement for
this facility in which 63 new acres were added and the lease expiration schedule
was changed. Under the amended lease agreement, the lease on 114 acres expires
on June 30, 2006, the lease on 140 acres expires on December 31, 2006, and the
lease on the remaining 288 acres expires on December 31, 2010. We do not expect
these leases to be extended beyond their current terms. For the 254 acres that
will expire in 2006, we are developing plans to transition a majority of the
production to our Allendale, California facility and the remaining production to
the parcel recently added to our facility in Irvine. For the 288 acres that will
expire at the end of 2010, we will be required to establish new production
facilities or transition production to existing facilities. We may incur
substantial costs in connection with the establishment of these new production
facilities or the transition of production to existing facilities.

     We may not be successful in executing our transition plan or establishing
suitable replacement production facilities. If we are unsuccessful in these
efforts, our net sales, cash flows and operating income could be materially
adversely affected. In addition, when we vacate 254 acres in 2006, we currently
estimate that we will incur approximately $223,000 of removal and remediation
costs. We may incur significant expenses beyond what we have forecasted if
additional remedial action is required. Significant costs in excess of our
estimates could have a material adverse effect on us.


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WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL LAWS AND REGULATIONS THAT GOVERN, AND
IMPOSE LIABILITY, FOR OUR ACTIVITIES AND OPERATIONS. IF WE DO NOT COMPLY WITH
THESE LAWS AND REGULATIONS, OUR BUSINESS COULD BE MATERIALLY AND ADVERSELY
AFFECTED.

     We are subject to federal, state and local laws and regulations that
govern, and impose liability for, our activities and operations which may have
adverse environmental effects, such as discharges to air and water, as well as
handling and disposal practices for hazardous substances and other wastes. Some
of our nursery operations are conducted near residential developments, which
could increase our exposure to liability for the environmental effects of our
operations. Our operations have resulted, or may result, in noncompliance with
or liability for cleanup under these laws. In addition, the presence of
hazardous substances on our properties, or the failure to properly remediate any
resulting contamination may adversely affect our ability to sell, lease or
operate our properties or to borrow using them as collateral. In some cases, our
liability may not be limited to the value of the property or its improvements.
We cannot assure you that these matters, or any similar matters that may arise
in the future, will not have a material adverse effect on us.

     Certain of our operations and activities, such as water runoff from our
production facilities and the use of certain pesticides, are subject to
regulation by the United States Environmental Protection Agency and similar
state and local agencies. These agencies may regulate or prohibit the use of
such products, procedures or operations, thereby affecting our operations and
profitability. In addition, we must comply with a broad range of environmental
laws and regulations. Additional or more stringent environmental laws and
regulations may be enacted in the future and such changes could have a material
adverse effect on us.

WE ARE SUBJECT TO FEDERAL AND STATE "FAIR TRADE" LAWS AND WEIGHTS AND MEASURES
REGULATIONS THAT GOVERN AND IMPOSE LIABILITY FOR IMPROPERLY MARKETING, LABELING
OR ADVERTISING PLANT CONTAINER SIZE. IF WE DO NOT COMPLY WITH THESE LAWS AND
REGULATIONS, OUR BUSINESS COULD BE MATERIALLY AND ADVERSELY AFFECTED.

     We are subject to federal and state weights and measures regulations that
govern and impose liability for improperly labeling or advertising our plant
container sizes. It is common in our industry, at the wholesale and retail
levels, to market, label, and advertise container grown nursery stock with
varying types of measurements, such as imperial volume or diameter of container.
These measurements, although consistent with industry practice, may not
represent the exact size of the actual product. If the Federal Trade Commission
or any state regulator determines that our current marketing, labeling, or
advertising is in violation of "fair trade" laws or weights and measures
regulations in their jurisdiction, we may incur significant costs to become
compliant, be forced to terminate further shipments of inventory into certain
jurisdictions, be fined, or otherwise suffer a material adverse affect on our
business.


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CHANGES IN LOCAL ZONING LAWS MAY ADVERSELY AFFECT OUR BUSINESS.

     We are subject to local zoning laws regulating the use of our owned and
leased property. Some of our facilities are located in areas experiencing rapid
development and growth, which typically are characterized by changes in existing
zoning. Changes in local zoning laws could require us to establish new
production facilities or transition production to other facilities, which could
have a material adverse effect on our cash flows, financial position and results
of operations.

COMPLIANCE WITH, AND CHANGES TO LABOR LAWS, PARTICULARLY THOSE CONCERNING
SEASONAL WORKERS, COULD SIGNIFICANTLY INCREASE OUR COSTS.

     The production of our plants is labor intensive. We are subject to the Fair
Labor Standards Act as well as various federal, state and local regulations that
govern matters such as minimum wage requirements, overtime and working
conditions, including, but not limited, to federal and state health and worker
safety rules and regulations. A large number of our seasonal employees are paid
at or slightly above the applicable minimum wage level and, accordingly, changes
in minimum wage laws could materially increase our costs. Non-U.S. nationals
comprise a large portion of our seasonal employee workforce and changes to U.S.
immigration policies that restrict the ability of immigrant workers to obtain
employment in the United States and which may contribute to shortages of
available seasonal labor could increase our costs. Non-compliance with
applicable regulations or modifications to existing regulations may increase
costs of compliance, require a termination of certain activities, result in
fines or loss of a portion of our labor force or otherwise have a material
adverse impact on our business and results of operations.

OUR TRANSPORTATION COSTS ARE SIGNIFICANT AND WE DEPEND ON INDEPENDENT
CONTRACTORS FOR TRUCKING SERVICES TO SHIP LARGE QUANTITIES OF OUR PRODUCTS AND
INCREASES IN TRANSPORTATION COSTS, CHANGES IN AVAILABLE TRUCKING CAPACITY AND
OTHER CHANGES AFFECTING SUCH CARRIERS, AS WELL AS INTERRUPTIONS IN SERVICE OR
WORK STOPPAGES, COULD ADVERSELY IMPACT OUR RESULTS OF OPERATIONS.

     We rely extensively on the services of agents and independent contractors
to provide trucking services to us. Transportation costs accounted for
approximately 21% of our net sales in 2003. Our ability to ship our products,
particularly during our peak shipping seasons, could be adversely impacted by
shortages in available trucking capacity, changes by carriers and transportation
companies in policies and practices, such as scheduling, pricing, payment terms
and frequency of service, or increases in the cost of fuel, taxes and labor, and
other factors not within our control. We compete with other companies who ship
perishable goods for available trucking capacity and, accordingly, reductions in
capacity or shortages of the agents and independent contractors who provide
trucking services to us could potentially adversely impact our sales.
Significant increases in transportation costs could have a material adverse
effect on our business, particularly if we are not able to pass on such price
increases to our customers in the form of higher prices for our products.
Material interruptions in service or stoppages in transportation, whether caused
by strike or otherwise, could adversely impact our business, results of
operations, financial position and operating cash flows.


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WE ARE CURRENTLY IMPLEMENTING A NEW ENTERPRISE RESOURCE PLANNING SOFTWARE
PROGRAM, AND UNEXPECTED DELAYS, EXPENSES OR DISRUPTIONS IN THE IMPLEMENTATION OF
SUCH SOFTWARE PROGRAM COULD DISRUPT OUR BUSINESS OR IMPAIR OUR ABILITY TO
MONITOR OUR OPERATIONS, RESULTING IN A NEGATIVE IMPACT ON OUR OPERATIONS,
FINANCIAL POSITION AND OPERATING CASH FLOWS.

     In five of our nurseries we have implemented a new enterprise resource
planning software program which we utilize for production planning and inventory
purposes. Over time, we intend to continue the implementation of this software
program to our other nursery facilities. Our distribution and sales order
system, however, remains on our prior computer information systems. We may
experience delays, disruptions and unanticipated expenses in implementing,
integrating and operating our management information and reporting systems,
which could disrupt our operations or otherwise impair our ability to monitor
our operations and have a negative impact on our business, results of
operations, financial position and operating cash flows.

OUR RESEARCH AND DEVELOPMENT EFFORTS MAY NOT BE SUCCESSFUL.

     Our success is based, in part, upon our ability to discover and develop new
products that customers will want. As a result, we continue to invest in
research and development in order to enable us to identify and develop new
products to meet consumer demands. Despite investments in this area, our
research and development may not result in the discovery or successful
development of new products that will be accepted by our customers.

OUR CURRENT PRINCIPAL STOCKHOLDERS HAVE SIGNIFICANT INFLUENCE OVER OUR BUSINESS
AND COULD DELAY, DETER OR PREVENT A CHANGE OF CONTROL OR OTHER BUSINESS
COMBINATION.

     Investment partnerships controlled by Madison Dearborn Partners, Inc.
beneficially own approximately 54% of the outstanding common stock of Hines
Horticulture and have sufficient voting power to control, or at the least
significantly influence, the election of directors and the approval of other
actions requiring the approval of our shareholders. In addition, Madison
Dearborn Partners has two of its designees on Hines Horticulture's seven member
board of directors.

OUR BUSINESS WILL SUFFER IF CERTAIN SENIOR EXECUTIVES DISCONTINUE EMPLOYMENT
WITH US OR IF WE ARE UNABLE TO RECRUIT AND RETAIN HIGHLY SKILLED STAFF.

     Our success is largely dependent on the skills, experience and efforts of
our senior management, including Robert A. Ferguson (President and Chief
Executive Officer) and Claudia M. Pieropan (Chief Financial Officer, Secretary
and Treasurer). The loss of services of one or more members of our senior
management could have a material adverse effect on us. We do not maintain
key-person life insurance policies on any members of management. No members of
senior management are bound by non-compete agreements, and if any such members



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were to depart and subsequently compete with us, such competition could have a
material adverse effect on us. Our business also depends on our ability to
continue to recruit, train and retain skilled employees, particularly skilled
growers and sales personnel. The loss of the services of any key personnel, or
our inability to hire new personnel with the requisite skills, could impair our
ability to develop new products or enhance existing products, sell products to
our customers or manage our business effectively.

PRICE INCREASES OF CERTAIN RAW MATERIALS COULD ADVERSELY AFFECT OUR BUSINESS.

     We and our competitors are vulnerable to price increases for raw materials.
For 2003, raw material costs accounted for approximately 19% of net sales. We do
not have long-term contracts with the majority of our raw material suppliers.
Increases in the cost of raw materials essential to our operations, including
seed, plastic, chemicals and fertilizer, would increase our costs of production.
Significant increases in the price of petrochemicals or a scarcity of raw
materials essential to plant propagation could have a material adverse effect on
our business. We may not be able to pass such price increases on to our
customers in the form of higher prices for our products, which could materially
adversely affect our results of operations and operating cash flows.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR BUSINESS AND
PROSPECTS MAY BE HARMED.

     Our success depends in part on proprietary techniques and plant designs.
Although we attempt to protect our proprietary property and processes through a
combination of patents, trade secrets and non-disclosure agreements, these may
be insufficient. Litigation may be necessary to protect our intellectual
property and determine the validity and scope of the proprietary rights of
competitors. Intellectual property litigation could result in substantial costs
and diversion of our management and other resources. If we are unable to
successfully protect our intellectual property rights, our competitors could be
able to market products that compete with our proprietary products without
obtaining a license from us.