1
                       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


   2

                          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
- 2 - 3 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. - 3 - 4 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. -4-4 5 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. -5-5 6 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. -6-6 7 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. 7 8 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. -8- 9 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 8 9 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. -9- 10UK personnel. 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. -10- 11bad 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. 9 10 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. 10 1211 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) -12-. 11 1312 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 -13-12