1007330--3/12/2008--PRG_SCHULTZ_INTERNATIONAL

related topics

{regulation, government, change}

{tax, income, asset}

{personnel, key, retain}

{property, intellectual, protect}

{debt, indebtedness, cash}

{provision, law, control}

{stock, price, operating}

{operation, international, foreign}

{acquisition, growth, future}

Our strategic business initiatives may not be successful. We have incurred significant costs in establishing the necessary resources to provide services for Medicare audit recovery work and our future Medicare audit revenues will largely depend on our participation in the proposed national expansion of the Medicare recovery program. Recovery auditing of Medicare spending is subject to a number of pressures and uncertainties that could impact our future opportunities and revenues from this business. Our ability to significantly grow our Medicare recovery audit services is largely dependent on the viability and continued success of, and our participation in, the planned expansion of recovery auditing of Medicare spending to all 50 states. We may be unable to protect and maintain the competitive advantage of our proprietary technology and intellectual property rights. Our failure to retain the services of key members of management and highly skilled personnel could adversely impact our continued success. We rely on international operations for a significant portion of our revenues. The market for providing disbursement audit services to commercial clients is declining. Our accounts payable recovery audit services business is subject to price pressure. Generally our client contracts contain provisions under which the client may terminate the agreement prior to the completion of the agreement. Our failure to comply with applicable governmental privacy laws and regulations could substantially impact our business, operations and financial condition. The ownership change that occurred as a result of our 2006 exchange offer limits our ability to use our net operating losses. Certain of our tax positions may be subject to challenge by the Internal Revenue Service and other tax authorities, and if successful, these challenges could increase our future tax liabilities and expense. Future impairment of goodwill, other intangible assets and long-lived assets would reduce our future earnings. We may not be able to continue to compete successfully with other businesses offering recovery audit services, including the internal recovery audit departments of our clients. Our articles of incorporation, bylaws, shareholder rights plan and Georgia law may inhibit a change of control that shareholders may favor. The terms of our credit facility place restrictions on us, which create risks of default and reduce our flexibility. Our stock price has been and may continue to be volatile.

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1007330--3/12/2008--PRG_SCHULTZ_INTERNATIONAL_INC