1007330--3/23/2007--PRG_SCHULTZ_INTERNATIONAL

related topics

{regulation, government, change}

{product, liability, claim}

{debt, indebtedness, cash}

{tax, income, asset}

{investment, property, distribution}

{stock, price, share}

{personnel, key, retain}

{property, intellectual, protect}

{control, financial, internal}

{provision, law, control}

{operation, international, foreign}

{stock, price, operating}

{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 to date, have not generated material revenues from this business. 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 in the U.S. is rapidly declining. Our U.S. commercial accounts payable 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. Proposed legislation by the European Union, if enacted as currently drafted, will have a materially adverse impact on Meridian s operations. Meridian may be required to repay grants received from the Industrial Development Authority. Our revenues from certain clients and VAT authorities may change markedly from year to year. The ownership change that occurred as a result of the exchange offer limits our ability to use our net operating losses. We may not be allowed to deduct interest with respect to our senior convertible notes issued in the exchange offer. 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 client internal recovery audit departments. We have previously reported material weaknesses in our internal control over financial reporting, and any unidentified material weaknesses could cause us to fail to meet our SEC and other reporting requirements. 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 senior credit facility place restrictions on us, which create risks of default and reduce our flexibility. Our substantial leverage could materially adversely impact our financial health. Our stock price has been and may continue to be volatile.

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1007330--3/23/2007--PRG_SCHULTZ_INTERNATIONAL_INC