If any of the Group's partners or customers, or the Group itself, were to breach applicable regulations, the Group may incur substantial additional costs to remedy the breach and ensure future compliance with the regulatory requirements in order to avoid breaching the agreement with that partner or customer. The failure of a third party properly to comply with their contractual duties or regulatory obligations could have an adverse effect on the Group's ability to generate profits as well as its ability to source premium products. Further, any action taken by a third party that is detrimental to the Group's reputation could have a negative impact on the Group's ability to register its trademarks and other forms of Intellectual Property protection, and/or market and sell its products.

8.          Reputational risk

EDX's reputation is central to its future success in terms of the products and services it provides, the relationships it currently has and intends to develop in the future with distributors, partners and customers, the way in which it conducts its business and the financial results which it achieves. The Group may face reputational risk arising from a number of factors, including failure to deal appropriately with legal and regulatory requirements, ethical practices, fraud, privacy, record-keeping and other trading practices, as well as market risks inherent in the Group's business.

The failure, or allegations or perceptions of failure, of the Group to deal appropriately with legal and regulatory requirements, privacy, record-keeping, sales and trading practices or its failure to meet the expectations of the press and the general public, as well as its customers, suppliers, employees, shareholders and other business partners may have a material adverse effect on the Enlarged Group's reputation, business, results of operations, financial condition and future prospects.

9.          Additional financing

The Group expects to incur significant costs in connection with development, commercialisation and Intellectual Property protection of its products and technology. The Group's financing requirements depend on numerous factors, including the rate of market acceptance of its products, its ability to attract distributors and customers and other factors that may be outside of the Group's control. The Group may require additional financing in the medium to long term, whether from equity or debt sources, to finance working capital requirements or to finance its growth through future stages of development.

Any additional share issue may have a dilutive effect on Shareholders, particularly if they are unable to, or choose not to, subscribe by taking advantage of rights of pre-emption that may be available. Debt funding may require the lender to take security over the assets of the Group, which may be exercised if the Group were to be unable to comply with the terms of the relevant debt facility agreement. Failure to obtain adequate future financing on acceptable terms, if at all, could cause the Group to delay, reduce or abandon its development programmes or hinder commercialisation of its product portfolio and could have a material adverse effect on the Group's business.

10.        Counterparty risk

There is a risk that parties with whom the Enlarged Group trades or has business relationships may become insolvent, in which case this could have an adverse impact on the Group's business, revenue, financial condition, profitability, results, prospects and/or future operations. This risk may be higher where the counterparty is located or registered outside the United Kingdom, as the costs of enforcing the Group's rights to payment or performance may be higher than would be the case in the United Kingdom.

11.        Competition

The life sciences market has become more competitive. Established categories are becoming crowded as they mature and there has been a significant increase in smaller companies who are entering the industry. Even though the Existing Directors and Proposed Directors believe that the Enlarged Group has a competitive advantage in this space, the Enlarged Group may face competition from organisations which have greater capital resources. This could hinder the Enlarged Group's ability to compete successfully in the market. In addition, the Directors anticipate that the Enlarged Group will face increased competition in the future as new companies enter the market and alternative products, strategies and technologies become available. Increased competition from new and existing companies, including as a result of their aggressive pricing, may have a material adverse effect on the Enlarged Group's financial results. If the Enlarged Group's business model is successful it may be replicated by other organisations, some of which may have greater resources than the Enlarged Group.