897078--3/30/2006--FIRSTWAVE_TECHNOLOGIES

related topics

{product, market, service}

{stock, price, share}

{personnel, key, retain}

{system, service, information}

{stock, price, operating}

{condition, economic, financial}

{control, financial, internal}

{property, intellectual, protect}

{customer, product, revenue}

{acquisition, growth, future}

Negative cash flow and the difficulty of raising additional capital may adversely affect our operations and the price of our common stock. We are heavily dependent upon M1 Global s key personnel, expertise in the CRM software market, and future business strategy; the loss of which could affect our ability to successfully grow or maintain our business; and if M1 Global changes its strategy to sell Firstwave products and services, our revenues may be materially harmed. We are reliant upon First Sports expertise in the CRM software market and with our U.K. customers; the loss of which could affect our ability to successfully support our U.K. customers and retain the maintenance revenues associated therewith. We have in the past and may in the future experience significant fluctuations in our operating results and rate of growth, and the price of our common stock may be adversely affected by these fluctuations. Our stock price has been and may continue to be highly volatile. Decreases or delays in our target customers information technology spending and other circumstances that result from poor economic conditions may harm our revenues; if general economic conditions do not improve or if they worsen, our revenues may be materially harmed. The market for our CRM software and services is subject to rapid change stemming from customer requirements and changes in related technologies, including hardware, operating systems and telecommunications; if we fail to improve our products in response to these changes, our sales may decline. To grow our business, we may acquire additional companies, including by issuing shares of our stock, which may subject us to additional risks and may dilute your ownership. Our CRM software products, like most software products of a complex nature, may contain undetected errors; as a result, we could experience delays, additional expenses or lost revenues. Like most providers of complex software, our most valuable asset is an intangible, intellectual property; protection of our proprietary rights can be difficult, complex and expensive; if we are unable to protect our proprietary rights, then our competitive position could be weakened, which may reduce our revenues. Because it is not difficult to enter our industry, we expect increased competition from the introduction of superior products or by pricing pressure from competitors, all of which could harm our business. The terms of our preferred stock include preferences over our common stock and the issuance of additional shares of preferred stock may have a material adverse effect on the market value of our common stock. We are reliant upon certain key personnel for expertise in the CRM software market and in the technical aspects of the CRM software product; the loss of such key personnel could affect our ability to successfully grow our business. The market for CRM software has fluctuated over the past several years, and we are uncertain as to its future; if the market for CRM software does not grow, our revenues may be reduced. Our products can have long sales cycles which make it difficult to plan expenses and forecast results. Because our business involves the electronic transmission and storage of data, privacy and security concerns, particularly related to the use of our software on the internet, may limit the effectiveness of and reduce the demand for our products. The requirements of Section 404 of the Sarbanes-Oxley Act of 2002 require that we undertake an evaluation of our internal controls that may identify internal control weaknesses.

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897078--3/30/2006--FIRSTWAVE_TECHNOLOGIES_INC