920448--6/9/2006--BROADVISION

related topics

{system, service, information}

{product, market, service}

{customer, product, revenue}

{acquisition, growth, future}

{personnel, key, retain}

{cost, operation, labor}

{stock, price, operating}

{property, intellectual, protect}

{control, financial, internal}

{operation, natural, condition}

Our management identified a material weakness in the effectiveness of our internal control over financial reporting as of December 31, 2005 and restated our historical operating results, and we cannot assure you that additional material weaknesses will not be discovered or additional restatements will not be made in the future. Our business currently depends on revenue related to our BroadVision Self-Service Suite, and if the market does not increasingly accept this product and related products and services, our revenue may continue to decline. If we are unable to keep pace with the rapid technological changes in online commerce and communication, our products and services may fail to be competitive. Our sales and product implementation cycles are lengthy and subject to delay, which make it difficult to predict our quarterly results. Because our quarterly operating results are volatile and difficult to predict, our quarterly operating results in one or future periods are likely to fluctuate significantly, which could cause our stock price to decline if we fail to meet the expectations of securities analysts or investors. Because a significant portion of our sales activity occurs at the end of each fiscal quarter, delays in a relatively small number of license transactions could adversely affect our quarterly operating results. We have substantially modified our business and operations and will need to manage and support these changes effectively in order for our business plan to succeed. Modifications to our business and operations may not result in a reduced cost structure as anticipated and may otherwise adversely impact our productivity. We are dependent on direct sales personnel and third-party distribution channels to achieve revenue growth. Failure to maintain relationships with third-party systems integrators could harm our ability to achieve our business plan. We may be unable to manage or grow our international operations and assets, which could impair our overall growth or financial position. Current and potential competitors could make it difficult for us to acquire and retain customers now and in the future. Our success and competitive position will depend on our ability to protect our proprietary technology. A breach of the encryption technology that we use could expose us to liability and harm our reputation, causing a loss of customers. The loss or malfunction of technology licensed from third parties could delay the introduction of our products and services. Our executive officers, key employees and highly skilled technical and managerial personnel are critical to our business, and they may not remain with us in the future. Limitations on the online collection of profile information could impair the effectiveness of our products. We may not have adequate back-up systems, and natural or manmade disasters could damage our operations, reduce our revenue and lead to a loss of customers.

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920448--6/9/2006--BROADVISION_INC