874733--9/13/2007--MEDIWARE_INFORMATION_SYSTEMS

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This Annual Report on Form 10-K contains forward-looking statements. Our revenue will be adversely affected after June 2007 by the loss of revenue derived from the sunset of the legacy blood management products. The changing members of our senior management team create special risks for us. If we do not manage the personnel changes associated with our business unit consolidation effectively, our financial performance could be harmed. Our future growth depends in large part on customer acceptance of our MediMAR and MediCOE products. Our United Kingdom business is subject to risks that are different from our other businesses Our proprietary information could be misappropriated, and we may be subjected to costly third party intellectual property claims Termination of licenses or modifications of third party software licenses we rely upon could adversely affect our products If we are unable to enhance our relationships with our third party resellers, our ability to market products may be adversely affected Our newest product offerings rely on third-party products. Hospital networks reduce our sales opportunities and may reduce profitability Significant competition may reduce our profit margin Our strategy includes licensing Best of Suite products to customers, which requires customer acceptance of our products and strategy Our ability to generate revenue could suffer if we do not continue to update and improve our existing products and services and develop new ones Our business may be adversely affected by changing technology that may render our technology obsolete We may pursue strategic acquisitions, investments, and relationships and may not be able to successfully manage our operations if we fail to successfully integrate such acquired businesses and technologies, which could adversely affect our operating results. Research and development is costly and may not produce successful new products Developing new products would be difficult and take longer without the expertise of software engineers and third party consultants to develop our products Our decision to no longer invest in the growth of the perioperative management products could alienate certain customers. New and changing government regulation creates compliance challenges. Increasing government regulation may increase costs and reduce profitability Recent regulations relating to patient confidentiality may increase costs and reduce profitability Our business is subject to the risk of product-related liabilities System errors may delay product acceptance and adversely affect our operations and profitability Government contracting frequently requires less favorable terms. Our operating results can fluctuate due to irregular system sales Our stock price may be volatile due largely as a result of relatively low trading volume.

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874733--9/13/2007--MEDIWARE_INFORMATION_SYSTEMS_INC