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DIFFICULTY OF STRICT COMPLIANCE WITH GOVERNMENT REGULATIONS. The processing, formulation, packaging, labeling and advertising of our products are subject to governmental regulation.

We cannot assure you that we will market any products successfully, operate profitably in the future, or that we will not require significant additional financing in order to accomplish our business plan. WE WILL NEED RELIEF FROM OUR OBLIGATIONS TO PAY OUR SECURED CREDITOR IN THE NEAR TERM AND WE MAY NEED ADDITIONAL FINANCING TO MAINTAIN AND EXPAND OUR BUSINESS, AND SUCH FINANCING MAY NOT BE AVAILABLE ON FAVORABLE TERMS, IF AT ALL. We have historically financed our operations through working capital provided from operations, loans and the private placement of equity and debt securities. In fiscal year 2000, we raised the gross amount of approximately 8. 1 million through a private placement of our securities.

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