873044--3/2/2007--RADISYS

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{product, market, service}

{customer, product, revenue}

{personnel, key, retain}

{acquisition, growth, future}

{stock, price, operating}

{tax, income, asset}

{control, financial, internal}

{property, intellectual, protect}

{operation, international, foreign}

{regulation, change, law}

Our projections of future revenues and earnings are highly subjective and may not reflect future results which could cause volatility in the price of our common stock. Not all new design wins ramp into production, and if ramped into production the volumes derived from such projects may not be as significant as we had originally estimated, which could have a substantial negative impact on our anticipated revenues and profitability. Our business depends on the communications networking and commercial systems markets in which demand can be cyclical, and any inability to sell products to these markets or forecast customer demand could have a material adverse effect on our revenues and gross margin. Because of our dependence and our contract manufacturers dependence on a few suppliers, or in some cases one supplier, for some of the components we use, as well as our dependence on a few contract manufacturers to supply a majority of our products, a loss of a supplier, a decline in the quality of these components, a shortage of any of these components, or a loss or degradation in performance of a contract manufacturer could have a material adverse effect on our business or our profitability. The failure to successfully integrate Convedia s business into our operations in the expected time frame, or at all, may adversely affect our future results. We operate in intensely competitive industries, and our failure to respond quickly to technological developments and incorporate new features into our products could have an adverse effect on our ability to compete. Competition in the market for embedded systems is intense, and if we lose our market share, our revenues and profitability could decline. Potential acquisitions and partnerships may be more costly or less profitable than anticipated and may adversely affect the price of our company stock. Our international operations expose us to additional political, economic and regulatory risks not faced by businesses that operate only in the United States. If we are unable to generate sufficient income in the future, we may not be able to fully utilize our net deferred tax assets or support our current levels of goodwill and intangible assets on our balance sheet. Our products for embedded solutions are based on industry standards, which are continually evolving, and any failure to conform to these standards or lack of success of these standards could have a substantial negative impact on our revenues and profitability. In addition, these standards could take longer to be deployed or may not be deployed at all. If we are unable to protect our intellectual property, we may lose a valuable competitive advantage or be forced to incur costly litigation to protect our rights. Changes in stock-based compensation accounting rules have adversely impacted our operating results and may adversely impact our stock price. Decreased effectiveness of share-based payment awards could adversely affect our ability to attract and retain employees. We depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such personnel could seriously harm our business. Our disclosure controls and internal control over financial reporting do not guarantee the absence of error or fraud.

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873044--3/2/2007--RADISYS_CORP