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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1998MARCH 31, 1999
COMMISSION FILE NUMBER 0-21202
FIRSTWAVE TECHNOLOGIES, INC.
7372 GEORGIA 58-1588291
(Primary Std. Ind. (State of incorporation) (IRS Employer
Classification Code #) Identification #)
2859 Paces Ferry Road, SuitePACES FERRY ROAD, SUITE 1000
Atlanta, GeorgiaATLANTA, GEORGIA 30339
(Address of principal executive offices)
(770-431-1200)
(Telephone number of registrant)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--------------- --------------------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding as of November 6, 1998:
----------------------------------May 12, 1999:
------------------------------
Common Stock, no par value 5,151,3225,154,819 Shares
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FIRSTWAVE TECHNOLOGIES, INC.
FORM 10-Q
For the quarter ended September 30, 1998
Index
--------------March 31, 1999
INDEX
Page No.
---------------
Part I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet - December 31, 19971998 and September 30, 1998March 31, 1999 3
Consolidated Statement of Operations - For the Three and Nine Months ended
September 30, 1997March 31, 1998 and September 30, 1998March 31, 1999 4
Consolidated Statement of Changes in Shareholders' Equity -
For the NineThree Months Ended September 30, 1998March 31, 1999 5
Consolidated Statement of Cash Flows - For the NineThree Months Ended
September 30, 1997March 31, 1998 and September 30, 1998March 31, 1999 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Part II. Other Information 1211
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PART I. FINANCIAL INFORMATION
ItemITEM 1. Financial StatementsFINANCIAL STATEMENTS
FIRSTWAVE TECHNOLOGIES, INC.
CONSOLIDATED Balance SheetBALANCE SHEET
(in thousands)
DEC 31, SEPT 30,
1997MAR 31,
1998 --------- -----------
(unaudited)
(in thousands)1999
---------------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and marketable securities $ 4,969 $ 2,868cash equivalents $2,245 $2,926
Accounts receivable, less allowance for
doubtful accounts of $703$425 and $495,$632, respectively 3,047 2,9893,146 2,235
Other assets 636 736
------- -------395 307
---------------- --------------
Total current assets 8,652 6,593Current Assets 5,786 5,468
Property and equipment, net 1,938 1,7871,501 1,185
Deferred income tax benefit 2,362 2,3622,621 2,621
Software development costs, net 1,089 712770 972
Intangible assets 245 670
------- -------
$14,286 $12,124
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITYasset 644 595
---------------- --------------
$11,322 $10,841
================ ==============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 868 $ 1,377
Accrued restructuring costs 325 92$1,354 $997
Deferred revenue 1,545 1,1841,581 1,370
Accrued employee compensation
and benefits 614 311284 323
Other accrued liabilities 282 385
------- -------343 280
---------------- -------------
Total current liabilities 3,634 3,349
Common3,562 2,970
Deposit on preferred stock subject to repurchase 300offering 0 1,000
Shareholders' equity 10,352 8,775
------- -------
$14,286 $12,124
======= =======7,760 6,871
---------------- -------------
$11,322 $10,841
================ =============
The accompanying notes are an integral part of these financial statements.
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FIRSTWAVE TECHNOLOGIES, INC.
CONSOLIDATED Statement of OperationsSTATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
1997FOR THE THREE MONTHS ENDED
-----------------------------------------
MAR 31, MAR 31,
1998 1997 1998
--------- -------- -------- --------
(In thousands, except per share amounts)1999
------------- -------------
Net Revenuesrevenues
Software $ 921 $ 679 $ 2,831 $ 2,866$1,319 $1,171
Services 1,204 1,575 3,805 3,840889 959
Maintenance 1,254 1,373 3,898 3,9771,303 1,233
Other 131 135 464 427
------ -------- -------- --------
3,510 3,762 10,998 11,110
------ -------- -------- --------99 99
------------- -------------
3,610 3,462
------------- -------------
Cost and Expensesexpenses
Cost of revenues
Software 156 184 354 524167 205
Services 828 1,041 2,756 2,761719 633
Maintenance 364 430 1,296 1,257396 301
Other 131 131 460 41199 95
Sales and marketing 1,368 1,419 3,812 4,4401,699 1,379
Product development 587 519 1,511 1,608525 624
General and administrative 67 893 1,895 2,299
------ -------- -------- --------
3,501 4,617 12,084 13,300
------ -------- -------- --------615 1,079
------------- -------------
4,220 4,316
------------- -------------
Operating income/(loss) 9 (855) (1,086) (2,190)
Interest expense 0 0 (40) 0loss (610) (854)
Interest income 46 39 138 154
------ -------- -------- --------
Income/(loss)54 18
------------- -------------
Loss before income taxes 55 (816) (988) (2,036)(556) (836)
Income tax 0 (10) 0 (80)
------ -------- -------- --------(17) (4)
------------- -------------
Net income/(loss) $ 55 $( 826) $( 988) $( 2,116)
====== ======== ======== ========Loss ($573) ($840)
============= =============
Basic and diluted
net income/(loss)loss per share $ 0.01 $( ($0.11) ($0.16)
$( 0.20) $( 0.41)
====== ======== ======== ========
Weighted============= =============
Basic and diluted weighted
average number of common
and common share equivalents 5,345 5,145 4,956 5,120
====== ======== ======== ========shares outstanding 5,102 5,160
============= =============
The accompanying notes are an integral part of these financial statements.
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FIRSTWAVE TECHNOLOGIES, INC.
CONSOLIDATED Statement of Changes in Shareholders' EquitySTATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, except share data)
(unaudited)
For the Nine Months Ended September 30, 1998FOR THE THREE MONTHS ENDED MARCH 31, 1999
Common Stock Unrealized Accumulated
----------------------- Add'l loss on other
paid-in marketable Comprehensive comprehensive Accumulated
Shares Amount capital securities income/(loss) income deficit TotalCOMMON STOCK
---------------------- ADD'L COMPRE- OTHER
PAID-IN HENSIVE COMPREHENSIVE ACCUMULATED
SHARES AMOUNT CAPITAL LOSS INCOME/(LOSS) DEFICIT TOTAL
---------- ---------- ------- ---------- -------------- --------------------- -------- --------- ---------------- ----------- --------
(In thousands, except share data)---------
Balance at December 31, 1997 5,033,027 $9 $19,329 $(14)1998 5,151,322 $10 $19,813 $0 $0 $(8,972) $10,352$34 ($12,097) $7,760
Employee stock purchase 4,556 0 15 0 0 0 0 15
Stock isssued related to
Netgain acquisition 77,703 0 347 0 0 0 0 347
Exercise of common stock 34,511 0 112 0 0 0 0 112
options
Issuance of stock options 0 0 7 0 0 0 0 7Purchase 1,266 3 3
Comprehensive Lossloss
Net loss 0 0 0 0 (2,116) 0 (2,116) (2,116)(840) (840) (840)
Foreign currency translation adjustment 0 0 0 0 58 58 0 58
-------adj (52) (52) (52)
--------
Comprehensive Loss $(2,058)(892)
--------
---------- -------- -------- --------------- --------- -- ------- ---- ======= --- -------- ---------------
Balance at September 30, 1998 5,149,797 $9 $19,810 $(14) $58 $(11,088) $8,775At March 31, 1999 5,152,588 $10 $19,816 ($18) ($12,937) $6,871
========== ======== ======== =============== ========= == ======= ==== === ======== ===============
The accompanying notes are an integral part of these financial statements.
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FIRSTWAVE TECHNOLOGIES, INC.INC
CONSOLIDATED Statement of Cash FlowsSTATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
For the Nine Months Ended
------------------------------
Sept 30, 1997 Sept 30,FOR THE THREE MONTHS ENDED
----------------------------------------------
MAR 31, 1998 ------------- ------------
(In thousands)MAR 31, 1999
------------------ ------------------
Cash flows provided by/(used in)by operating activities $ 658 $(1,554)415 $ 94
------------------ ------------------
Cash flows from investing activities
Acquisition of Co-cam UKSoftware development costs 0 (246)(344)
Purchases of property and equipment (133) (493)
------- -------(208) (20)
------------------ ------------------
Net cash used in investing activities (133) (739)
------- -------(208) (364)
------------------ ------------------
Cash flows from financing activities
Repayments of borrowings under line of credit (1,975) 0
Repayments of borrowings under notes payable (208) 0
Proceeds from employee stock purchase plan 18 156 3
Proceeds from deposit on preferred stock offering 0 1,000
Exercise of common stock options 40 119
------- -------10 0
------------------ ------------------
Net cash (used in)/provided by financing activities (2,125) 134
------- -------
------- -------
Effect of exchange rate changes16 1,003
------------------ ------------------
Foreign currency translation adjustment 0 58
------- -------
Decrease(52)
------------------ ------------------
Increase in cash (1,600) (2,101)223 681
Cash and marketable securities,cash equivalents, beginning of period 6,947 4,969 ------- -------2,245
------------------ ------------------
Cash and marketable securities,cash equivalents, end of period $ 5,347 $ 2,868
======= =======$5,192 $2,926
================== ==================
Supplemental disclosure of cash flow information
------- -------
Cash paid during the period for interest $ 84 $ 0
======= =======
Cash paid during the period for income taxes $ 017 $ 80
======= =======4
================== ==================
The accompanying notes are an integral part of these financial statements.
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FIRSTWAVE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998MARCH 31, 1999
A. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting only of normal
occurring accruals) considered necessary for a fair presentation have
been included.
B. ACCOUNTING POLICIES
BASIC AND DILUTED NET INCOME/(LOSS)LOSS PER COMMON SHARE
Basic net income/(loss) per common share is presented in accordance
with Financial Accounting Standards 128,"Earnings per Share", which
provides for new accounting principles used in the calculation of
earnings per share and was effective for financial statements for both
interim and annual periods ended after December 15, 1997. The Company
has restated the basic and diluted net income/(loss) per common share
for all periods presented to give effect to FAS 128. Basic net
income/(loss)loss per common share is based on the weighted average
number of shares of common stock outstanding during the period. Stock
options were the only securities issued which would have been included
in the diluted earningsloss per share calculation had they not been
antidilutive.
C. ACQUISITION
On April 30, 1998FOREIGN CURRENCIES
Assets and liabilities recorded in foreign currencies are translated
at the Company acquired its largest international
distributor, Co-cam UK. Based in London, Co-cam UK now operates as
Firstwave UK. The transaction was an asset purchase from PMS Creative
Ltd., a wholly owned subsidiary of Policy Management Systems
Corporation. The purchase price of approximately $426,000 is payable in
cash in four quarterly installments beginning July 31, 1998, after a
payment of approximately $85,000exchange rate on the balance sheet date and the effects of
closing. The excessforeign currency translation adjustments are included as a component
of cost over the estimated fair value of the net assets acquired was
$455,000 (including direct costs of the acquisition of approximately
$180,000) and has been accounted for as goodwill which is being
amortized over five years.
-7-stockholders' equity.
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ITEM 2.
FIRSTWAVE TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - THE THREE MONTHS ENDED SEPTEMBER 30, 1998MARCH 31, 1999 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 1997, AND THE NINE MONTHS ENDED SEPTEMBER
30, 1998 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997.
ThirdMARCH 31, 1998.
First quarter 19981999 yielded total revenues of $3,762,000$3,462,000 and a net loss of
$826,000, in line with$840,000, slightly better than market expectations. These results include the first full
quarter of contribution from Firstwave UK, which was acquiredThe Company's April 30,
1998.
During1998 acquisition of its largest international distributor, Co-cam UK, affects
the quarter and year to date, all revenues were attributed tocomparisons between the Company's Takecontrol line of Unix and client/server products and services.
After one and one-half years of design and development, Netgain Sales, an
enterprise-class sales information system built exclusively with Internet
technologies, was released on September 30, 1998.
Total revenues increased 7.2% from $3,510,000 in the third quarter of 1997 to
$3,762,000 in the thirdfirst quarter of 1998 primarily due to increased services and maintenance revenues.the first quarter of
1999. During the thirdfirst quarter of 1998 total revenueCo-cam UK operated as an independent
international distributor. However, during the first quarter of 1999, these
operations are included in the consolidated financial statements as a wholly
owned subsidiary, Firstwave UK.
Total revenues decreased 4.1% from Firstwave UK was $1,537,000 representing 40.9%$3,610,000 in the first quarter of total revenue. Year1998 to
date,
total revenues increased slightly from $10,998,000$3,462,000 in 1997 to $11,110,000 in
1998. Whilethe first quarter of 1999. Total software revenues decreased
26.3%11.2% from $921,000$1,319,000 in the thirdfirst quarter of 19971998 to $679,000$1,171,000 in the same
period of 1998 due to lower1999. The first quarter's revenues reflect increased sales of
domestic software license revenue, year to date,revenues, while international software license
revenues remained consistent at $2,866,000 in
1998 compared to $2,831,000 in 1997.decreased. The Company's quarter-to-quarter revenues are significantly
dependent upon the timing of the closing of license agreements.
Revenues from international license sales increased 94.3%decreased 35.7 % from $264,000$1,210,000 in
the thirdfirst quarter of 19971998 to $513,000$778,000 in the corresponding quarter of 1998. Year to
date, revenues from1999 as a
result of lower sales by international licenses increased 47.2% from $1,544,000 in
1997 to $2,273,000 in 1998.distributors. As a percentage of total
revenues, international license revenues increaseddecreased from 7.5%33.5% in the third quarter of 1997 to 13.6% in
thirdfirst
quarter of 1998 to 22.5% in first quarter of 1999. During the first quarter of
1999, revenue generated from sales in the United Kingdom and year to date increased as a percentageAustralia each
exceeded 10% of total revenues from 14.0% in 1997 to 20.5% in 1998.revenue.
Services revenues increased 30.8%7.9% from $1,204,000$889,000 in the third quarter of 1997
to $1,575,000 in the thirdfirst quarter of 1998 primarily as a resultto
$959,000 in the first quarter of 1999 due to the addition of services revenues
fromgenerated by Firstwave UK. Year to date, services revenues
increased slightly from $3,805,000 in 1997 to $3,840,000 in 1998.
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Maintenance revenues increased 9.5%decreased 5.4% from $1,254,000$1,303,000
in the third quarter of 1997
to $1,373,000 in third quarter of 1998. Year to date, maintenance revenues
increased 2.0% from $3,898,000 in 1997 compared to $3,977,000 in 1998. The
current release, Takecontrol '98 has been well received and development of
Takecontrol '99 is nearing completion.
Other revenues remained consistent at $135,000 in the thirdfirst quarter of 1998 compared to $131,000$1,233,000 in the thirdfirst quarter of 1997. Year to date, other revenues
decreased 8.0% from $464,000 in 1997 to $427,000 in 1998. These changes are1999 due to
changes in reimbursable travel charges.cancellations of domestic maintenance agreements.
Cost of software revenues increased 18.0%22.8% from $156,000$167,000 in the thirdfirst quarter of
19971998 to $184,000$205,000 in the thirdfirst quarter of 1998. Year to date, cost of software
revenues increased 48.0% from $354,000 in 1997 to $524,000 in 1998. These
increases are a1999. The increase is the result of
an increase in third party softwareincreased amortization expense due to the increased capitalization of costs
associated with the Netgain product line and an increase in amortization of capitalized
software. For the first nine months of the year, amortization of capitalizedincreased third party software
increased from $293,000 in 1997 to $377,000 in 1998. This increase
resulted from the Company's release of Take Control '97, a major upgrade, in
late February 1997 which allowed only seven months of amortization year to date
at September 1997 compared to nine months of amortization year to date at
September 1998.costs. Cost of software revenues include amortization of capitalized software,
costs of third party software,
amortization of capitalized software costs and costs of packaging and documentation
materials and related media costs.
Cost of revenues for services increased 25.7%decreased 12.0% from $828,000$719,000 in the third quarter
of 1997 to $1,041,000 in the thirdfirst
quarter of 1998 to $633,000 in the first quarter of 1999 due to increasesdecreases in
the
number of service personneldomestic payroll and
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related costs associated withpartially offset by an increase in payroll related to the
addition of Firstwave UK.
These increases are consistent with the increase in services
revenues provided by Firstwave UK. Year to date, cost of revenues for services
remained consistent at $2,761,000 in 1998 compared to $2,756,000 in 1997. Cost of revenues for maintenance increased 18.1%decreased 24.0% from $364,000$396,000 in the thirdfirst
quarter of 19971998 to $430,000$301,000 in the thirdfirst quarter of 19981999. The decrease is
primarily due to a decrease in international maintenance costs from the
acquisition of Firstwave UK. Previously, while operating as a distributor, a
portion of the maintenance revenue was retained by the distributor and recorded
as a cost of maintenance by the Company. Now as a wholly owned subsidiary, the
full amount of the maintenance revenue is retained by the Company. This
decrease in maintenance costs was partially offset by increases in payroll and
related costs due to the addition of Firstwave UK. Year to date, cost of revenues for maintenance decreased 3.0% from
$1,296,000 in 1997 to $1,257,000 in 1998.
Cost of other revenues remained constant at $131,000 in the third quarter of
1998; and, year to date, decreased 10.7% from $460,000 in 1997 to $411,000 in
1998. These variances are due to fluctuations in reimbursable travel charges
consistent with the changes in other revenue.
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Sales and marketing expense increased 3.7%decreased 18.8% from $1,368,000$1,699,000 in the thirdfirst
quarter of 19971998 to $1,419,000$1,379,000 in the thirdfirst quarter of 1998. Year to date, sales1999. The decrease was a
result of decreases in commissions associated with the decrease in
international license revenue and decreases in marketing expense increased 16.5% from $3,812,000 in 1997 to $4,440,000 in 1998.
The increases areexpenses related to increased marketing materials and advertising
expenses associated with
the new corporate identity and name change from Brock International, Inc. to
Firstwave Technologies, Inc. as well as marketing
expenses related towhich occurred during the launchfirst quarter of Netgain.1998.
The Company's product innovation and development expenditures decreased 11.6%increased 18.9%
from $587,000$525,000 in the thirdfirst quarter of 19971998 to $519,000$624,000 in the thirdfirst quarter of
1998.1999. The decreaseincrease is due to decreasedincreased payroll costs and contract services
expense related to athe increased development project duringefforts on the thirdNetgain(TM)
Enterprise and TakeControl(R)Today products. During the first quarter 1997 that did not recurof 1999,
$344,000 in 1998,
offset by increases related to Netgain product development. Year to date,
product innovation and development expenditures increased 6.4% from $1,511,000software costs were capitalized. No capitalization occurred in 1997 to $1,608,000 in 1998 due to increased resources dedicated to Netgain
product development. Development resources totaled 14 employees at September 30,
1997 compared to 23 employees at September 30,the
first quarter of 1998.
General and administrative expenses increased 1232.8%75.4% from $67,000$615,000 in the thirdfirst
quarter of 19971998 to $893,000$1,079,000 in the thirdfirst quarter of 1998. Year1999. The increase is
attributed to date, general
and administrative expenses increased 21.3% from $1,895,000 in 1997 to
$2,299,000 in 1998. The increases are primarily due to a favorable settlement of
a legal dispute that resulted in a one-time credit to general and administration
expense of $603,000 during the third quarter of 1997 offset by the addition of Firstwave UK administrative personnel, the costs
during 1998.
The above factors combined to result in net income of $55,000 inassociated with maintaining the third
quarter of 1997 compared to a net loss of $826,000 in the third quarter of 1998,London office, and net income per share of $.01increased provisions for the third quarter of 1997 compared to a net
loss per share of $.16 for the third quarter of 1998. Year to date, net loss
increased 114.2% from $988,000 in 1997 compared to $2,116,000 in 1998. Year to
date, net loss per share increased 105.0% from $0.20 per share in 1997 to $0.41
per share in 1998.
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debts.
BALANCE SHEET
Cash and cash equivalentsNet accounts receivable decreased 42.3%29.0% from $4,969,000$3,146,000 at December 31, 1997,1998,
to $2,868,000$2,235,000 at September 30, 1998, due to investments in product developmentMarch 31, 1999, primarily as a result of future technologies, acquisition coststhe collection of
outstanding receivables. Property and funding of operations of Firstwave
UK. Other assets increased 15.7% due to the acquisition of Co-cam UK. Intangible
assets increased 173.5%equipment, net decreased 21.1% from
$245,000$1,501,000 at December 31, 19971998 to $670,000$1,185,000 at September 30, 1998,March 31, 1999 due to
goodwill resultingdepreciation and write off of some obsolete computer equipment. Capitalized
software increased 26.2% from $770,000 at December 31, 1998 to $972,000 at
March 31, 1999 due to additional capitalization of $344,000 in development
costs during the acquisitionfirst quarter of Co-cam UK
offset by the related1999 net of $142,000 of amortization.
Accounts payable increased 58.6%decreased 26.4% from $868,000$1,354,000 at December 31, 19971998 to
$1,377,000$997,000 at September 30, 1998March 31, 1999 due to the
acquisition of Co-cam UK. Accrued restructuring costs declined 71.7%payments made on outstanding payables.
Deferred revenue decreased 13.3% from $325,000$1,581,000 at December 31, 19971998 to
$92,000$1,370,000 at September 30, 1998.March 31, 1999 due to recognition of first quarter 1999
maintenance revenues related to annual contracts billed in advance at year end.
The remaining
accrualdeposit on preferred stock offering was $1,000,000 at March 31, 1999, which
represents costs associated with non-cancelable leases which will
amortize over the remaining lifereceipt of funds in advance of the leases. Other accrued liabilities
increased 36.5% from $282,000 at December 31, 1997 to $385,000 at September 30,
1998 due to the acquisitionCompany's April 26, 1999
closing of Co-cam UK.its private placement offering of Series A Convertible Preferred
Stock.
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LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998,March 31, 1999, the Company had cash and marketable securitiescash equivalents of $2,868,000$2,926,000 and
believes that its present liquidity position, recent equity infusions and the
available line of credit are sufficient to finance the Company's operations
during 19981999 and 1999. Firstwave UK generated positive cash flow from operations duringbeyond. During the third
quarter.first quarter of 1999, the Company renewed
its $3,000,000 line of credit for another one-year term, which now expires
March 14, 2000. The line of credit bears interest at the prime rate and is
secured by the assets of the Company. As of September 30, 1998,March 31, 1999 there were no
borrowings against the $3,000,000 line of credit,credit.
SUBSEQUENT EVENTS
The Company raised $2 million through the sale of Series A Convertible
Preferred Stock in a private placement offering which carries an expiration date of March 31,closed on April 26, 1999.
The Company's product line is Year 2000 compatible. A reviewCompany received $1 million in March 1999 in advance of Year 2000
compatibility for the Company's internal systems has been completed and revealed
some internal systems are not yet Year 2000 compliant. However, the cost to
comply has been determined to be immaterial.
-11-closing of this
offering.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
The proxy or proxies designated by the Company will have discretionary
authority to vote on any matter properly presented by a shareholder for
consideration at the 1999 Annual Meeting of Shareholders but not
submitted for inclusion in the proxy materials for such meeting unless
notice of the matter is received by the Company at its principal
executive office not later than February 19, 1999 and certain other
conditions of theNot applicable rules of the Securities and Exchange
Commission are satisfied.
Item 6. Exhibits and Reports on formForm 8-K
Exhibit 3.1 Amended and Restated Articles of Incorporation, as amended.
Exhibit 27 - Financial Data Schedule (for SEC use only)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRSTWAVE TECHNOLOGIES, INC.
DATE: November 10, 1998May 12, 1999 /s/ Judith A. Vitale
-----------------------------------------------------------------------------------
Judith A. Vitale
DirectorVice President of Finance and Administration
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