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EXHIBIT 99.1
  TRIPATH
    IMAGING, INC.
  FACTORS
    AFFECTING FUTURE OPERATING RESULTS
  February
    2006
 (dollar amounts in thousands)
          RISKS
    RELATED TO OUR BUSINESS
  Our
    molecular diagnostic reagents and imaging systems are at an
    early stage of development and we cannot assure the successful
    development or the commercial success of these
    products.
  ,
  
    clinical research shows our products to be ineffective;
    they do not receive necessary regulatory approvals or otherwise
    meet regulatory requirements; or
    are less effective than current or alternative oncology
    diagnostic methods.




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Our
    products are subject to FDA review, approval and regulation and
    which may prevent us from commercializing any of our products
    currently in development.
      
    failure of the product in pre-clinical studies;
    insufficient clinical trial data to support the safety or
    effectiveness of the product; or
    unanticipated delays or significant unanticipated costs in our
    efforts to secure FDA approval.    
    FDA regulations require submission and approval of a pre-market
    approval application supplement for certain changes to a product
    if the changes affect the safety and effectiveness of the
    product;
    even if we obtain FDA approval of our pre-market approval
    applications, that approval may still not allow us to make some
    of the specific claims for which we sought FDA approval; and
    any FDA approval may include significant limitations on the
    indicated uses for which we may market our products, such as
    warnings, precautions or contraindications, requests for
    post-market studies, or additional regulatory requirements.     2




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Our
    products are subject to review, approval and regulation by
    foreign regulatory agencies which may prevent us from
    commercializing any of our products currently in
    development.
    In Vitro
    Government
    regulation imposes significant restrictions and costs on the
    development and commercialization of our products.
    
    fines or other civil penalties;
    the refusal of the FDA to approve further pre-market approval or
    510(k) applications;
    suspension or withdrawal of our FDA approvals or clearances;
    product recalls;
    customer notification, or orders for repair, replacement or
    refunds;
    operating restrictions, including total or partial suspension of
    production, distribution, sales and marketing of our products;
    customer notification, or orders for repair, replacement, or
    refunds;
    injunctions; or
    product seizures; and
    criminal prosecution of us, our officers or our employees.   3




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If we are
    unable to keep up with technological change, our products or
    services may become obsolete.
    
    technological advances by current or future competitors;
    the introduction and market acceptance of competitors
    products; or
    the introduction and market acceptance of new diagnostic methods
    and/or
    treatments for cancer.    
    possess greater financial, marketing, sales, distribution and
    technological resources;
    have more experience in research and development, clinical
    trials, regulatory matters, customer support, manufacturing and
    marketing;
    have received third-party payor reimbursement for their
    products; or
    they may collaborate or merge with other competitors in our
    industry and leverage their combined intellectual property and
    resources against us.      We depend
    on a limited number of products and these products may never
    gain greater market acceptance.
     4




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
    their potential clinical advantages, including their impact on
    patient management, impact on patient outcome, impact on the
    costs of patient care, and cost benefit and effectiveness
    relative to alternative diagnostic methods;
    product features that facilitate their adoption by laboratories,
    including accuracy, reproducibility and other indicators of
    analytical performance, all-in cost, including our material
    charges to the laboratory as well as the laboratorys labor
    and overhead costs related to the adoption of our products,
    impact on laboratory organization and staffing, processing speed
    and reliability, convenience, complexity of result
    interpretation, and cost effectiveness relative to alternative
    diagnostic methods;
    our ability to design and execute clinical trials whose results
    demonstrate the clinical value of our products, provide us a
    basis for communicating the clinical value of our products and
    translate into market opportunity;
    our ability to compete with similar or superior products
    developed by our competitors;
    our ability to build and maintain, or access through third
    parties, a capable sales force; and
    qualification of our products for third party medical insurance
    coverage and reimbursement.    We have a
    history of operating losses and an accumulated deficit and we
    may not remain profitable.
    
    research and development activities;
    sales and marketing activities, including the cost and effect of
    promotional discounts, sales, and marketing programs and
    strategies; and
    regulatory issues, including activities in connection with
    pre-market approval and 510(k) applications to the FDA.    
    receipt of regulatory approvals or clearances for future
    products in a timely manner;
    successful marketing of our products in the United States and
    abroad;
    the extent to which our products gain market acceptance;
    ability to manufacture our products at an acceptable cost and
    with acceptable quality; 5




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
    introduction of alternative technologies by our competitors;
    the timing and volume of system placements;
    the timing of certain non-cash sales discounts relating to
    warrants held by Quest, which depend upon the achievement of
    certain sales-based milestones;
    availability of reimbursement from third-party payors, and the
    extent of coverage;
    ability to establish internal financial controls and other
    infrastructure necessary to support large-scale commercial
    operations; and
    the impacts of the provisions of SFAS 123(R) and the
    ultimate realization of our income tax loss carryforwards on our
    financial results.    We cannot
    be certain of our future capital needs and additional financing
    may not be available when we need it.
  and/or
      
    our ability to maintain profitability;
    the timing and costs of product introductions;
    the extent of our ongoing research and development programs,
    including those at TriPath Oncology;
    the progress and scope of clinical trials;
    the timing and costs required to receive both United States and
    foreign governmental approvals for new products in development;
    the extent to which our products gain market acceptance;
    demand for and sales of our PrepStain and FocalPoint systems for
    cervical cancer screening and of FocalPoint GS in the United
    States, if and when it gains FDA approval;
    the resources required to further develop our marketing and
    sales capabilities domestically and internationally, and the
    success of those efforts;
    the resources required to expand manufacturing capacity;
    the costs of training laboratory personnel to become proficient
    with the use of our products; and
    the cost of filing, prosecuting, defending and enforcing patent
    claims and other intellectual property rights. 6




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Our
    future financing arrangements may impact the value of your
    investment or may impact our rights to our intellectual
    property.
    If our
    corporate relationships are unsuccessful, our earnings growth
    will be limited.
    We have
    limited manufacturing experience and capacity and we may not be
    able to establish sufficient manufacturing capability and
    capacity, either of which could have a material adverse effect
    on our business.
    
    in a timely manner;
    at a cost or in quantities necessary to make them commercially
    viable;
    in conformance with quality system requirements; or
    in a manner which otherwise ensures our products quality.   7




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We may
    not be able to manufacture our products in a timely or cost
    effective manner because we depend on single and limited source
    suppliers for our products components.
      If we do
    not successfully expand our marketing and sales resources, we
    may not be able to maintain profitability.
      
    obtain required regulatory approvals;
    successfully demonstrate the cost-effectiveness and
    clinical-effectiveness of our products;
    further develop our direct sales capabilities; and
    establish arrangements with contract sales organizations,
    distributors and marketing partners.    We may
    have difficulty managing the expansion of our operations, and
    failure to do so will harm our business.
   8




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We depend
    on patents, copyrights, licenses and other proprietary rights to
    grow our business and we may not be able to adequately protect
    all of our proprietary rights.
        
    any patent applications that we file may not ultimately issue as
    patents;
    patents we obtain may not be broad enough to protect our
    proprietary rights;
    the claims allowed in any of our existing or future patents may
    not provide competitive advantages for our products;
    competitors may challenge or circumvent our patents or pending
    applications; and 9




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
    in certain foreign countries, protection of our patent and other
    intellectual property may be unavailable or very limited.      
    enforce our patents;
    protect our trade secrets or know-how;
    defend ourselves against claims that we infringe the rights of
    others; or
    determine the scope and validity of the patents or intellectual
    property rights of others.  Form 10-K Form 10-Q Form 8-K
      The risk
    of third-party claims of infringement against us is high because
    our industry depends on patents and other proprietary
    rights.
    
    we cannot be sure that our products or technologies do not
    infringe patents of competitors that may be granted in the
    future pursuant to pending patent applications;
    we cannot be sure that our products do not infringe any existing
    patents or proprietary rights of third parties; and
    we cannot be sure that a court would rule that our products do
    not infringe any existing third-party patents or that a court
    would not invalidate any existing patents in our favor.    
    prevented from selling our products;
    required to pay damages; 10




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
    required to obtain licenses from the owners of the
    patents; or
    required to redesign our products.      We face
    special risks related to international sales and operations
    because we have limited experience in conducting our business in
    other countries.
    Our stock
    price is highly volatile and the value of your investment will
    likely fluctuate.
    
    failure to successfully implement aspects of our growth strategy;
    failure to achieve revenue and profitability results expected
    among those in the investment community;
    failure to meet research and development goals related to our
    products and services;
    technological innovations by our competitors or introductions of
    competing technologies;
    investor perception of the biotechnology and medical device
    industry; and
    general technology or biotechnology trends.   11




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Sales of
    a substantial number of shares of our common stock could cause
    the market price of our common stock to decline.
      Our
    significant stockholders have the ability to influence
    significant decisions regarding our future.
    RISKS
    RELATED TO OUR INDUSTRY
  We may be
    unable to attain or maintain the required compliance with
    regulations governing manufacturing of medical diagnostic
    devices.
    If we
    fail to obtain adequate levels of third-party reimbursement for
    our products, the commercial success of our products will be
    significantly limited.
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
    the level of demand for our products by physicians;
    the payors determination that our products are an
    improvement over the conventional Pap smear process; and
    the payors determination that our products are safe and
    effective, medically necessary, appropriate for specific patient
    populations, and cost effective.      We can
    only sell our products to a limited number of
    customers.
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
    educate clinicians, laboratorians and other health care
    providers on, and convince them of, the clinical benefits and
    cost-effectiveness of our products; and
    demonstrate to clinicians, laboratorians and other health care
    providers that adequate levels of third-party payor
    reimbursement will be available for our products.    We are at
    risk of product liability claims and may be unable to maintain
    adequate insurance against such liabilities.
    Our
    success depends on our ability to retain our key
    personnel.
   14