1069258--9/11/2007--WIRELESS_FACILITIES

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{financial, litigation, operation}

{acquisition, growth, future}

{cost, contract, operation}

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Risks Related to Our Business The matters relating to our internal review of our stock option granting practices and the restatement of our financial statements have exposed us to civil litigation claims, regulatory proceedings and government proceedings which could burden the Company and have a material adverse effect on us. We have not been in compliance with The Nasdaq Stock Market s continued listing requirements and remain subject to the risk of our stock being delisted from The Nasdaq Global Select Market, which would have a material adverse effect on us and our stockholders. The process of restating our financial statements, making the associated disclosures, and complying with SEC requirements are subject to uncertainty and evolving requirements. A number of our current and former executive officers and directors have been named as parties to several derivative action lawsuits arising from our internal option review, and there is a possibility of additional lawsuits, all of which could require significant management time and attention and result in significant legal expenses. Ongoing government inquiries relating to our past stock option practices may be time consuming and expensive and could result in injunctions, fines and penalties that may have a material adverse effect on our financial condition and results of operations. We face intense competition from many competitors that have greater resources than we do, which could result in price reductions, reduced profitability or loss of market share. Our quarterly operating results may fluctuate significantly as a result of factors outside of our control, which could cause the market price of our common stock to decline. Our business could be adversely affected by changes in budgetary priorities of the Federal Government. Our contracts with the Federal Government may be terminated or adversely modified prior to completion, which could adversely affect our business. If we fail to establish and maintain important relationships with government entities and agencies, our ability to successfully bid for new business may be adversely affected. Failure to maintain strong relationships with other government contractors could result in a decline in our revenue. We cannot guarantee that our contracts will result in actual revenue. Loss of our GSA contracts or GWACs would impair our ability to attract new business. If we fail to attract and retain skilled employees or employees with the necessary security clearances, we might not be able to perform under our contracts or win new business. Our failure to maintain appropriate staffing levels could adversely affect our business. If our subcontractors fail to perform their contractual obligations, our performance and reputation as a prime contractor and our ability to obtain future business could suffer. If we experience systems or service failure, our reputation could be harmed and our clients could assert claims against us for damages or refunds. Security breaches in sensitive federal government systems could result in the loss of clients and negative publicity. Our employees may engage in misconduct or other improper activities, which could cause us to lose contracts. We may not be successful in identifying acquisition candidates and if we undertake acquisitions, they could increase our costs or liabilities and impair our revenue and operating results. The loss of any member of our senior management could impair our relationships with federal government clients and disrupt the management of our business. If we are unable to manage our growth, our business could be adversely affected. Our margins and operating results may suffer if we experience unfavorable changes in the proportion of cost-plus-fee or fixed-price contracts in our total contract mix. Our cash flow and profitability could be reduced if expenditures are incurred prior to the final receipt of a contract. We may be harmed by intellectual property infringement claims and our failure to protect our intellectual property could enable competitors to market products and services with similar features. A preference for minority-owned, small and small disadvantaged businesses could impact our ability to be a prime contractor on certain governmental procurements. We derive a significant portion of our revenues from a limited number of customers. If our customers do not receive sufficient financing or fail to pay us for services performed, our business may be harmed. Our business is dependent upon our ability to keep pace with the latest technological changes. Failure to properly manage projects may result in costs or claims. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. We may need additional capital in the future to fund the growth of our business, and financing may not be available. Litigation may harm our business or otherwise distract our management. Disclosure of trade secrets could aid our competitors. Our stock price may be volatile, which may result in lawsuits against us and our officers and directors. Our charter documents and Delaware law may deter potential acquirers and may depress our stock price. The non-federal business arena in which we operate has relatively low barriers to entry and increased competition could result in margin erosion, which would make profitability even more difficult to sustain. If our non-federal customers do not invest in security systems and other new in-building technologies such as wireless local area networks and/or IP-based networks, our business will suffer. We may incur goodwill impairment charges in our reporting entities which could harm our profitability. Risks Related to Our Industry Our revenue and operating profits could be adversely affected by significant changes in the contracting or fiscal policies of the federal government. Many of our federal government clients spend their procurement budgets through multiple award contracts under which we are required to compete for post-award orders or for which we may not be eligible to compete and could limit our ability to win new contracts and grow revenue. Our failure to comply with complex procurement laws and regulations could cause us to lose business and subject us to a variety of penalties. The federal government may revise its procurement or other practices in a manner adverse to us. We derive significant revenue from contracts awarded through a competitive procurement process, which may require significant upfront bid and proposal costs that could negatively affect our operating results. Unfavorable federal government audit results could subject us to a variety of penalties and sanctions, and could harm our reputation and relationships with our clients and impair our ability to win new contracts. Changes in interest rates could adversely affect the profitability of the Company.

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1069258--9/11/2007--WIRELESS_FACILITIES_INC