According to the Company’s FORM 10-Q for the quarterly period ended June 30, 2005, in June 2004, a stipulation for the settlement and release of claims against the issuer defendants, including the Company, was submitted to the court. On February 15, 2005, the court granted preliminary approval of the settlement, subject to the parties’ modification of a proposed bar order relating to potential contribution claims. The settlement is subject to a number of conditions, including the final approval of the court.

As disclosed by the same SEC filing, the Company, two of its current officers, one of its former officers and three underwriters in its initial public offering (“IPO”) were named as defendants in a consolidated shareholder lawsuit in the United States District Court for the Southern District of New York, In re E.piphany, Inc. Initial Public Offering Securities Litigation, 01-CV-6158. This is one of a number of actions coordinated for pretrial purposes as In re Initial Public Offering Securities Litigation, 21 MC 92. Plaintiffs in the coordinated proceeding have brought claims under the federal securities laws against numerous underwriters, companies, and individuals, alleging generally that defendant underwriters engaged in improper and undisclosed activities concerning the allocation of shares in the IPOs of more than 300 companies during the period from late 1998 through 2000. Specifically, among other things, the plaintiffs allege that the prospectus pursuant to which shares of Company common stock were sold in the Company’s IPO contained certain false and misleading statements regarding the practices of the Company’s underwriters with respect to their allocation of shares of common stock in the Company’s IPO to their customers and their receipt of commissions from those customers related to such allocations, and that such statements and omissions caused the Company’s post-IPO stock price to be artificially inflated. The consolidated amended complaint in the Company’s case seeks unspecified damages on behalf of a purported class of purchasers of the Company’s common stock between September 21, 1999 and December 6, 2000. The court has appointed a lead plaintiff for the consolidated action. The underwriter and issuer defendants filed motions to dismiss. These motions were denied as to all the underwriter defendants and the majority of issuer defendants, including the Company. The individual defendants have been dismissed from the action without prejudice pursuant to a tolling agreement.

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) Credit Suisse, Merrill and Robertson Stephens had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Credit Suisse, Merrill and Robertson Stephens allocated to those investors material portions of the restricted number of E.piphany shares issued in connection with the E.piphany IPO; and (ii) Credit Suisse, Merrill and Robertson Stephens had entered into agreements with customers whereby Credit Suisse, Merrill and Robertson Stephens agreed to allocate E.piphany shares to those customers in the E.piphany IPO in exchange for which the customers agreed to purchase additional E.piphany shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings.