Some of the Group's intellectual property rights are not capable of registration, such cases being embodied in 'know-how', trade secrets or software copyright. Therefore, the Group is reliant on internal processes and systems to protect such rights as far as possible. Whilst the Directors believe that our systems and processes afford adequate protection, there is a risk that they may not prevent misappropriation of the Group's intellectual property. No assurance is given that the Group will be able to acquire or develop products which are capable of being protected, or that any protection gained will be sufficiently broad in scope to exclude competitors from producing similar competing technology.

There can be no guarantee that third parties will not manage to independently develop products with similar functionality as the Group's products without infringing the Group's intellectual property rights, and there can be no guarantee that any such competing products would not have a material adverse effect on prospects of the Group.

4.         Product Development

The Group will primarily engage in product development and validation in order to meet the needs of customers and regulators and will itself conduct limited research. The Group will be involved in complex scientific areas in which the founders and senior team have significant experience delays or failure to produce results are commonplace in this industry.

The majority of the Group's products may require regulatory approvals. If approval is required and is not successful or takes longer than anticipated, there may be an adverse impact on the Group's business, financial condition and results of operations. Clinical validation trials are costly and cannot be guaranteed to be successful.

5.         Business Development and Growth

EDX Medical intends to grow its business through the development and acquisition of new products, Intellectual Property or technologies. However, the Group may be unable to find suitable opportunities on attractive terms, or it may be unable to consummate such opportunities as a result of competition from other prospective acquirers, or due to its inability to finance such acquisitions.

Failure to complete any such acquisitions may have an adverse effect on the Group's business, results of operations, financial condition and future prospects.

Should such acquisitions proceed, there can be no assurance that the benefits from such acquisitions or licensing opportunities will be realised to the extent, or within the time frame, that the Directors may have anticipated.

In addition, these opportunities may involve a number of risks, including the diversion of management's attention to unforeseen difficulties in relation to an acquired product, unanticipated costs and liabilities, the implementation of new operating procedures and disruption of the Group's ongoing business at that point in time.

Any delays or unexpected costs incurred in connection with product acquisitions including significant one-time capital expenditures, may result in dilutive issues of equity securities, increased debt or other contingent liabilities, adverse tax consequences, deferred consideration charges and the recording and later amortisation of amounts related to deferred consideration and certain purchased intangible assets. Any of which items could have an adverse effect on the Group's business, results of operations, financial condition and future prospects.

The Group is negotiating a number of agreements or collaborations with third parties and may also in the future enter into further ventures, partnerships or other collaborative arrangements with third parties. There is a risk that such arrangements may not be commercially successful, and it is possible that the working relationship between the parties may break down, that substantial costs and/or liabilities may be incurred in attempting to deliver the product or service in question, and/or that the arrangement may not yield the returns expected.

There is a risk that parties with which the Group has business relationships, including its partners and those with which it collaborates, may become insolvent or may otherwise become unable or unwilling to fulfil their obligations as part of the arrangement. This could detrimentally affect projects upon which the parties are collaborating and could adversely affect the Group's ability to deliver the products or services in question, which may in turn have a negative impact upon its business, financial position and prospects. It may also result in the Group having to input further capital into the project in order to ensure that delivery of the project remains unaffected. This extra cost could in turn adversely affect the business, revenues and profitability of the Group.