1014383--3/14/2006--ONYX_SOFTWARE

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We have incurred losses in prior periods, and may not be able to maintain profitability, which could cause a decrease in our stock price. If our corporate strategy and market positioning is unsuccessful, we may not be able to generate revenue and achieve profitability. If we are unable to compete successfully in the highly competitive customer management systems market, our business will fail. The business applications software market sector is consolidating, which may lead to stronger competitors or create questions in the marketplace regarding our status as an independent software vendor. If we do not retain our key employees and management team our ability to execute our business strategy will be limited. Changes in applicable rules regarding equity compensation could require modifications to our equity compensation strategy that may negatively affect our ability to attract and retain employees and adversely affect our operating results. We may be unable to obtain the funding necessary to support the expansion of our business, and any funding we do obtain could dilute our shareholders ownership interest in us. If we are unable to develop and maintain effective long-term relationships with our key partners, or if our key partners fail to perform, our ability to sell our solution will be limited. Economic and business conditions could adversely affect our revenue growth and ability to forecast revenue. Our business is subject to regulations promulgated under the Sarbanes-Oxley Act of 2002 that have resulted in increased operating costs and diversion of management attention. The internal controls implemented under the Sarbanes-Oxley Act of 2002 may not prevent or detect all material weaknesses or significant deficiencies. We may be unable to establish vendor-specific objective evidence of fair value or undelivered transaction elements, which could delay our ability to recognize software license revenue to later periods and thereby adversely affecting our operating results. An unfavorable review of our domestic and international tax returns could adversely affect our operating results. Unauthorized or improper actions of our personnel could adversely impact our operating results and financial statements. Fluctuations in support and service revenue could decrease our total revenue or decrease our gross margins, which could cause a decrease in our stock price. Our solutions may not achieve significant market acceptance. If potential customers do not accept the Onyx product family, our business will fail. We may be unable to efficiently restructure or expand our sales organization, which could harm our ability to expand our business. If our customers cannot successfully implement our products in a timely manner, demand for our solutions will be limited. Rapid changes in technology could render our products obsolete or unmarketable, and we may be unable to introduce new products and services successfully and in a timely manner. If we do not expand our international operations and successfully overcome the risks inherent in international business activities, the growth of our business will be limited. We may not realize the expected benefits of future acquisitions and the integration of these acquisitions, should they occur, may distract our management and disrupt our business. We may be unable to adequately protect our proprietary rights, which may limit our ability to compete effectively. Intellectual property claims and litigation could subject us to significant liability for damages and result in invalidation of our proprietary rights. Our products may suffer from defects or errors, which could result in loss of revenue, delayed or limited market acceptance of our products, increased costs and damage to our reputation. You may be unable to resell your shares at or above the price at which you purchased them, and our stock price may be volatile. Our articles of incorporation, bylaws, rights plans and Washington law contain provisions that could discourage a takeover.

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1014383--3/14/2006--ONYX_SOFTWARE_CORP/WA