1027207--3/9/2007--EPIQ_SYSTEMS

related topics

{system, service, information}

{stock, price, share}

{property, intellectual, protect}

{stock, price, operating}

{acquisition, growth, future}

{regulation, government, change}

{product, market, service}

{personnel, key, retain}

{regulation, change, law}

{condition, economic, financial}

{provision, law, control}

{customer, product, revenue}

We compete with other third party providers primarily on the basis of the technological features and capabilities of our products and services, and we could lose existing customers and fail to attract new business if we do not keep pace with technological changes. We have a limited number of clients and referral sources. Security problems with, or product liability claims arising from, our software products and errors or fraud related to our business processes could cause increased expense for litigation, increased service costs or damage to our reputation. Interruptions or delays in service related to third-party facilities could impair the delivery of our service and harm our business. New releases of our software products may have undetected errors, which could cause litigation claims against us or damage to our reputation. We rely on third-party hardware and software, which could cause errors or failures of our service. Substantially all of our Chapter 7 revenues are collected through a single financial institution, and the termination of that marketing arrangement could cause uncertainty and adversely affect our future Chapter 7 revenue and earnings. Our pricing models for Chapter 7 trustee clients have or are scheduled to have a component of pricing tied to prevailing interest rates, and a significant decline in interest rates would adversely affect our revenues and earnings. We depend upon our key personnel and we may not be able to retain them or to attract, assimilate and retain highly qualified employees in the future. The integration of acquired businesses is time consuming, may distract our management from our other operations, and can be expensive, all of which could reduce or eliminate our expected earnings. Our intellectual property is not protected through patents or formal copyright registration. Therefore, we do not have the full benefit of patent or copyright laws to prevent others from replicating our software. We may be sued by third parties for alleged infringement of their proprietary rights. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses and diversion of management time and attention from operational activities to compliance activities. Our quarterly results have fluctuated in the past and may fluctuate in the future. If they do, our operating results may not meet the expectations of securities analysts or investors. This could cause fluctuations in the market price of our common stock. Our stock price may be volatile even if our quarterly results do not fluctuate significantly. We do not pay cash dividends on our common stock and our common stock may not appreciate in value or even maintain the price at which it was purchased. The use of our common stock to fund acquisitions or to refinance debt incurred for acquisitions could dilute existing shares. In certain circumstances, we may be obligated to pay one of our shareholders the difference between $20.35 per share and any lower price at which that shareholder sells up to 1,228,501 shares of our common stock, which could adversely affect our liquidity or the market price of our common stock. Our articles of incorporation and Missouri law contain provisions that could be used by us to discourage or prevent a takeover of our company.

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1027207--3/9/2007--EPIQ_SYSTEMS_INC