**Exhibit 99.1**

 

**FORWARD-LOOKING STATEMENTS**

 

This quarterly report onForm 10-Q for the quarter ended June 30, 2010 containsforward-looking statements, which are statements about matters that are nothistorical or current facts. In addition, our management may from time to timemake forward-looking statements orally to analysts, investors, the news mediaand others. Forward-looking statements often include words such as “expects,” “anticipates,”“intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “would,” “should,”“could,” “may” or similar words. Among the forward-looking statements in thisreport are statements relating to:

 

·                  our expectation that adisruption related to our single source suppliers or our primary sterilizationprovider could materially affect and disrupt our ability to manufacture,distribute and supply certain of our products;

 

·                  our expectation that adisruption to our supply sources and an inability to develop alternativesources for such supply would result in a material disruption of our ability tosell certain products for an extended time period and could adversely affectour operations;

 

·                  our belief that our patentsare directed at, among other things, the core technology used in oursoft-tissue surgery systems, including both multi-electrode and singleelectrode configurations of our disposable devices, as well as the use ofCoblation technology in many different surgical procedures;

 

·                  our belief that our issuedpatents are directed at many of the core features of our acquired technologiesfrom Opus, Atlantech, Parallax and ATI;

 

·                  our expectation that ifcoverage or payment policies of third-party payors are revised in light ofincreased efforts to control healthcare spending or otherwise, the amount wemay charge or the demand for our products may decrease;

 

·                  our expectation that eventhough a new medical device may have been approved for commercial distribution,we may find limited demand for the device until reimbursement approval has beenobtained from governmental and private third-party payors;

 

·                  our belief that in theUnited States, healthcare reform legislation proposals will most likely remainfocused on reducing the cost of healthcare and that efforts by private payorsto contain costs through managed care and other methods will continue in thefuture as efforts to reform the healthcare system continue;

 

·                  our belief that we arewell-positioned to respond to changes resulting from the worldwide trend towardcost-containment due to our manufacturing efficiencies and cost controls;

 

·                  our expectation that therepatriation of certain earnings of our foreign operations may result insubstantial U.S. tax cost;

 

·                  our expectation that we mayrequire increased product liability coverage as our products are successfullycommercialized in additional applications;

 

·                  our belief that a successfulproduct liability claim or series of claims brought against us in excess of ourinsurance coverage could have a material adverse effect on our business,financial condition, results of operations and our ability to attract andretain customers for our products;

 

·                  our belief that management’scontinuing evaluation and work to enhance our internal control over financialreporting will require the dedication of additional resources and managementtime and expense;

 

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·                  our belief that if we arenot able to remain current in our filings with the Securities and ExchangeCommission (“SEC”), we will face adverse consequences and restrictions;

 

·                  our expectation that theReview and resulting SEC and U.S. Department of Justice investigations willlikely continue to divert our management’s time and attention and cause us toincur substantial costs and expenses;

 

·                  our expectation that ourability to generate revenue will be harmed if we fail to obtain or maintainregulatory approval in any foreign country in which we plan to market ourproducts;

 

·                  our intention to seekinternational reimbursement approvals;

 

·                  our belief that we mustcontinue to penetrate the market in other orthopedic procedures, expandphysicians’ education with respect to Coblation technology, and continueworking on new product development efforts in order to achieve increasingdisposable device sales over time;

 

·                  our expectation that ourfuture financial performance will depend in part on our ability to develop andmanufacture new products in a cost-effective manner, to introduce theseproducts to the market on a timely basis, and to achieve market acceptance ofthese products;

 

·                  our belief that we will needto continue to improve our financial and managerial controls, reporting systemsand procedures as we continue to grow and expand our business, and ourintention to continue to invest in new technology, make other capitalexpenditures, develop management and operating systems, and, where appropriate,hire, train, supervise and manage employees with expertise to handle theseparticular demands;

 

·                  our expectation thatinternational revenue will remain a significant percentage of total revenue andour belief that we must continue to expand our international sales activitiesto be successful;

 

·                  our expectation that futureinternational revenues and costs will be denominated in foreign currencies;

 

·                  our expectation that ourinternational sales growth will be limited if we are unable to establishappropriate foreign operations, expand international sales channel managementand support organizations, hire additional personnel, develop relationshipswith international sales representatives, and establish relationships withadditional distributors;

 

·                  our expectation that we willrequire a significant amount of cash to fund our working capital needs and plannedexpenditures and that our ability to meet these needs will depend on ourability to generate cash from operations and effectively manage our cashbalances;

 

·                  our belief that ourfacilities in the United States and those leased in various countries aroundthe world for sales, marketing and administrative purposes are in goodcondition, well maintained, and are suitable and adequate to carry on ourbusiness;

 

·                  our belief that if one ormore of the material legal proceedings in which we are involved is determinedagainst us, it could have a material adverse effect on our earnings, liquidityand financial condition and our expectation that we will incur legal defensecosts in relation to those proceedings;

 

·                  our expectation thatdisposable device sales and implants will remain the key component of ourproduct sales for the foreseeable future;

 

·                  our expectation that netearnings will be affected by the same trends that impact our revenues, grossmargin and operating margin as well as by other income and expenses, such asinterest expense, and by income tax expense;

 

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·                  our expectation that we willreport foreign currency gains or losses each period due to the changes in thevalue of the euro, British pound, Swedish kroner, Swiss franc, Australian dollarand Costa Rican colon versus the U.S. dollar;

 

·                  our expectation that we willbe able to fully utilize our deferred tax assets;

 

·                  our expectation that we willexperience variations in our results of operations and financial condition tothe extent that the exchange rates for foreign currencies fluctuate against theU.S. dollar;

 

·                  our expectation that we willcontinue to incur legal defense cost in connection with the DOJ and SEC mattersrelated to the Review and restatement;

 

·                  our belief that our tax expensewas, and will continue to be, significantly reduced due to a tax holiday forour Costa Rica manufacturing operations in which we are not subject to CostaRican income tax until January 2016;

 

·                  our belief that ourdisclosure controls and procedures will not be effective at the reasonableassurance level until we are able to consistently file required reports withthe SEC on a timely basis;

 

·                  our intention to continue todesign and implement certain remediation measures to address material weaknessesand enhance our system of internal controls over financial reporting;

 

·                  our belief that theremediation measures identified will remediate the identified controldeficiencies and strengthen our internal control over financial reporting;

 

·                  our expectation thatadditional measures may need to be taken to address control deficiencies orthat we may need to modify or otherwise adjust our remediation measures;

 

·                  our expectation that therevision of our policies and procedures related to mergers and acquisitions,accruals, account reconciliations, accounting reviews and change management hasand will continue to require additional training;

 

·                  our expectation that we willcontinue to enhance our accounting and finance processes to enhance our abilityto assess the accuracy of the consolidated financial statements and whetherbusiness practices are consistent with our stated accounting policies andprocedures;

 

·                  our expectation that we willcontinue to review and assess the sufficiency of our accounting and internalaudit resources;

 

·                  our expectation that theaccount reconciliation process will be maintained prospectively as a tool toevaluate the consistent application of generally accepted accounting principlesin the U.S. throughout our worldwide operations;

 

·                  our expectation that theinternal audit department will implement enhanced risk assessment methodologywhich more actively recruits the input of business unit and functionalleadership, which may require the hiring of additional internal audit staff; and

 

·                  descriptions of assumptionsunderlying or relating to any of the foregoing matters and any other statementscontained in this report that are or may be forward-looking statements.

 

Forward-looking statementsreflect our management’s beliefs, expectations or predictions of futureconditions, events or results based on various assumptions, informationcurrently available to our management and management’s estimates of trends andeconomic factors in the markets in which we are active, as well as our businessplans. They are not guarantees of future performance. By their nature,forward-looking statements are subject to risks and uncertainties. Our actualresults and financial condition may differ, possibly materially, from theanticipated results and financial condition indicated in these forward-lookingstatements. There are a number of factors that could cause actual conditions,events or results to differ materially from those described in theforward-looking statements contained in this report. A discussion of certainfactors that could cause actual conditions, events or results to differmaterially from those expressed in any forward-looking statements appears in “Part II—Item 1A—RiskFactors.”

 

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Readers are cautioned not toplace undue reliance on forward-looking statements in this report or that wemake from time to time, and to consider carefully the factors discussed in “Part II—Item 1A—RiskFactors” in evaluating these forward-looking statements. These forward-lookingstatements are representative only as of the date they are made, and weundertake no obligation to update any forward-looking statement as a result ofnew information, future events or otherwise.

 

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