708818--6/8/2007--QUALITY_SYSTEMS

related topics

{product, market, service}

{financial, litigation, operation}

{system, service, information}

{stock, price, operating}

{regulation, government, change}

{acquisition, growth, future}

{stock, price, share}

{regulation, change, law}

{control, financial, internal}

{personnel, key, retain}

{property, intellectual, protect}

{condition, economic, financial}

We face significant, evolving competition which, if we fail to properly address, could adversely affect our business, results of operations, financial condition and price of our stock. The unpredictability of our quarterly operating results may cause the price of our common stock to fluctuate or decline. Our common stock price has been volatile, which could result in substantial losses for investors purchasing shares of our common stock and in litigation against us. Two of our directors are significant shareholders, which makes it possible for them to have significant influence over the outcome of all matters submitted to our shareholders for approval and which influence may be alleged to conflict with our interests and the interests of our other shareholders. If our principal products and our new product development fail to meet the needs of our clients, we may fail to realize future growth. If the emerging technologies and platforms of Microsoft and others upon which we build our products do not gain or continue to maintain broad market acceptance, or if we fail to develop and introduce in a timely manner new products and services compatible with such emerging technologies, we may not be able to compete effectively and our ability to generate revenue will suffer. We face the possibility of subscription pricing, which may force us to adjust our sales, marketing and pricing strategies. Many of our competitors have greater resources than we do. In order to compete successfully, we must keep pace with our competitors in anticipating and responding to the rapid changes involving the industry in which we operate, or our business, results of operations and financial condition may be adversely affected. We face the possibility of claims based upon our website, which may cause us expense and management distraction . We face risk and/or the possibility of claims from activities related to strategic partners, which could be expensive and time-consuming, divert personnel and other resources from our business and result in adverse publicity that could harm our business . We may engage in future acquisitions, which may be expensive and time consuming and from which we may not realize anticipated benefits. We face the risks and uncertainties that are associated with litigation against us, which may adversely impact our marketing, distract management and have a negative impact upon our business, results of operations and financial condition. Because we believe that proprietary rights are material to our success, misappropriation of these rights could adversely affect our financial condition. We are dependent on our license rights and other services from third parties, which may cause us to discontinue, delay or reduce product shipments . We face the possibility of damages resulting from internal and external security breaches, and viruses . We are subject to the development and maintenance of the Internet infrastructure, which is not within our control, and which may diminish Internet usage and availability as well as access to our website . Our failure to manage growth could harm our business, results of operations and financial condition. Our operations are dependent upon our key personnel. If such personnel were to leave unexpectedly, we may not be able to execute our business plan. Our products may be subject to product liability legal claims, which could have an adverse effect on our business, results of operations and financial condition. We are subject to the effect of payor and provider conduct which we cannot control and accordingly, there is no assurance that revenues for our services will continue at historic levels . There is significant uncertainty in the healthcare industry in which we operate, and we are subject to the possibility of changing government regulation, which may adversely impact our business, financial condition and results of operations. If our products fail to comply with evolving government and industry standards and regulations, we may have difficulty selling our products. We are subject to changes in and interpretations of financial accounting matters that govern the measurement of our performance, one or more of which could adversely affect our business, financial condition, cash flows, revenue and results of operations . If material weaknesses in our internal controls are identified by ourselves or our independent auditors, our per share price may be adversely affected. Continuing worldwide political and economic uncertainties may adversely affect our revenue and profitability . Our future policy concerning stock splits is uncertain . Our future policy concerning the payment of dividends is uncertain, which could adversely affect the price of our stock.

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708818--6/8/2007--QUALITY_SYSTEMS_INC