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SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

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FORM 10-Q/A

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED MARCH 31, 2003

COMMISSION FILE NUMBER 0-21202

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FIRSTWAVE TECHNOLOGIES, INC.(Exact name of Registrant as specified in its charter)

|GEORGIA                  |  | 58-1588291                     
|------------------------ |  | -------------------------------
|(State of incorporation) |  | (IRS Employer
Identification #)

2859 Paces Ferry Road, Suite 1000
Atlanta, 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 ý    NO o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act.) YES o    NO ý

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 May 9, 2003Common Stock, no par value

2,629,500 Shares


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FIRSTWAVE® TECHNOLOGIES, INC.

FORM 10-Q

For the quarter ended March 31, 2003

Index

|                                                                                                 |                                                                                                     | Page No.
|------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | --------
|Part I.    Financial Information                                                                 |                                                                                                     |         
|Item 1.    Financial Statements                                                                  |                                                                                                     |         
|                                                                                                 | Consolidated Balance SheetDecember 31, 2002 and March 31, 2003                                     |         
|                                                                                                 | Consolidated Statement of OperationsFor the Three Months Ended March 31, 2002 and March 31, 2003   |         
|                                                                                                 | Consolidated Statement of Changes in Shareholders' EquityFor the Three Months Ended March 31, 2003 |         
|                                                                                                 | Consolidated Statement of Cash FlowsFor the Three Months Ended March 31, 2002 and March 31, 2003   |         
|                                                                                                 | Notes to Consolidated Financial Statements                                                          |         
|Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                     | 14      
|Item 3.    Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                     | 17      
|Item 4.    Controls and Procedures                                                               |                                                                                                     | 18      
|Part II.    Other Information                                                                    |                                                                                                     | 19      

2

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PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

FIRSTWAVE TECHNOLOGIES, INC.        Consolidated Balance Sheet        (in thousands)

|                                     |                                                                                         | Dec 31,
2002 |                           | Mar 31,
2003
|------------------------------------ | --------------------------------------------------------------------------------------- | ------------ | ------------------------- | ------------
|
|ASSETS                               |                                                                                         |              |                           |             
|Current assets:                      |                                                                                         |              |                           |             
|                                     | Cash and cash equivalents                                                               |              | $                         | 3,779       
|                                     | Accounts receivable, less allowance for doubtful accounts of $88 and $388, respectively |              |                           | 2,406       
|                                     | Prepaid expenses and other assets                                                       |              |                           | 664         
|                                     |                                                                                         |              |                           |             
|                                     |                                                                                         |              | Total current assets      |             
|Property and equipment, net          |                                                                                         |              | 738                       |             
|Software development costs, net      |                                                                                         |              | 2,041                     |             
|Intangible assets                    |                                                                                         |              | 0                         |             
|Goodwill                             |                                                                                         |              | 175                       |             
|                                     |                                                                                         |              |                           |             
|                                     |                                                                                         | $            | 9,803                     |             
|                                     |                                                                                         |              |                           |             
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                                                                         |              |                           |             
|Current liabilities:                 |                                                                                         |              |                           |             
|                                     | Accounts payable                                                                        |              | $                         | 909         
|                                     | Deferred revenue                                                                        |              |                           | 812         
|                                     | Accrued employee compensation and benefits                                              |              |                           | 417         
|                                     | Dividends payable                                                                       |              |                           | 42          
|                                     | Other accrued liabilities                                                               |              |                           | 802         
|                                     |                                                                                         |              |                           |             
|                                     |                                                                                         |              | Total current liabilities |             
|Shareholders' equity                 |                                                                                         |              | 6,821                     |             
|                                     |                                                                                         |              |                           |             
|                                     |                                                                                         | $            | 9,803                     |             
|                                     |                                                                                         |              |                           |             

The
accompanying notes are an integral part of these financial statements.

3

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FIRSTWAVE TECHNOLOGIES, INC.        Consolidated Statement of Income        (in thousands, except per share amounts)        (unaudited)

|                                             |                            | For the Three Months Ended |      
|-------------------------------------------- | -------------------------- | -------------------------- | -----
|
|Net Revenues                                 |                            |                            |      
|                                             | Software                   |                            | $    
|                                             | Services                   |                            |      
|                                             | Maintenance                |                            |      
|                                             | Other                      |                            |      
|                                             |                            |                            |      
|                                             |                            |                            | 4,056
|                                             |                            |                            |      
|Cost and Expenses                            |                            |                            |      
|                                             | Cost of revenues           |                            |      
|                                             |                            | Software                   |      
|                                             |                            | Services                   |      
|                                             |                            | Maintenance                |      
|                                             |                            | Other                      |      
|                                             | Sales and marketing        |                            |      
|                                             | Product development        |                            |      
|                                             | General and administrative |                            |      
|                                             |                            |                            |      
|                                             |                            |                            | 3,028
|                                             |                            |                            |      
|                                             |                            | Operating income           |      
|Interest income                              |                            |                            | 4    
|                                             |                            |                            |      
|Income before income taxes                   |                            |                            | 1,032
|                                             | Income taxes               |                            |      
|                                             |                            |                            |      
|Net income                                   |                            | $                          | 1,032
|                                             |                            |                            |      
|Dividends on preferred stock                 |                            |                            | (66  
|                                             |                            |                            |      
|Net income applicable to common shareholders |                            | $                          | 966  
|                                             |                            |                            |      
|Basic:                                       |                            |                            |      
|                                             | Earnings per share         |                            | $    
|                                             |                            |                            |      
|                                             | Weighted average shares    |                            |      
|                                             |                            |                            |      
|Diluted:                                     |                            |                            |      
|                                             | Earnings per share         |                            | $    
|                                             |                            |                            |      
|                                             | Weighted average shares    |                            |      
|                                             |                            |                            |      

The
accompanying notes are an integral part of these financial statements.

4

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FIRSTWAVE TECHNOLOGIES, INC.        Consolidated Statement of Changes in Shareholders' Equity        (In thousands, except share data)        (unaudited)        For the
Three Months Ended March 31, 2003

|                                                 |  | Common Stock |  | Preferred Stock |    |  |        |   |   | Accumulated
Other
Comprehensive
Loss |   |   |        |  |  
|------------------------------------------------ |  | ------------ |  | --------------- | -- |  | ------ | - | - | ------------------------------------ | - | - | ------ |  | -
|
|
|Balance at December 31, 2002                     |  | 2,328,713    |  | $               | 12 |  | 29,020 |   | $ | 2,483                                |   | $ | 22,950 |  | $
|Exercise of common stock options                 |  | 15,579       |  |                 |    |  |        |   |   |                                      |   |   | 59     |  |  
|Employee stock purchases                         |  | 0            |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Shares issued for Connect Care acquisition       |  | 200,000      |  |                 | 0  |  |        |   |   |                                      |   |   | 2,630  |  |  
|Conversion of Series C Preferred Stock to Common |  | 83,333       |  |                 |    |  | (2,000 | ) |   | (150                                 | ) |   | 150    |  |  
|Dividends                                        |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Comprehensive income:                            |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Net income                                       |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Foreign currency translation adjustment          |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|                                                 |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Accumulated comprehensive loss                   |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|                                                 |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|                                                 |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  
|Balance at March 31, 2003                        |  | 2,627,625    |  | $               | 12 |  | 27,020 |   | $ | 2,333                                |   | $ | 25,789 |  |  
|                                                 |  |              |  |                 |    |  |        |   |   |                                      |   |   |        |  |  

The accompanying notes are an integral part of these financial statements.

5

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FIRSTWAVE TECHNOLOGIES, INC.        Consolidated Statement of Cash Flows        (in thousands)        (unaudited)

|                                                 |                                         | For the Three Months Ended                          |      
|------------------------------------------------ | --------------------------------------- | --------------------------------------------------- | -----
|
|Cash flows provided by operating activities      |                                         | $                                                   | 682  
|                                                 |                                         |                                                     |      
|Cash flows from investing activities             |                                         |                                                     |      
|                                                 | Software development costs              |                                                     |      
|                                                 | Purchases of property and equipment     |                                                     |      
|                                                 | Acquisition of Connect-Care             |                                                     |      
|                                                 |                                         |                                                     |      
|                                                 |                                         | Net cash used in investing activities               |      
|                                                 |                                         |                                                     |      
|Cash flows from financing activities             |                                         |                                                     |      
|                                                 | Proceeds from issuance of common stock  |                                                     |      
|                                                 | Payment of dividends on preferred stock |                                                     |      
|                                                 |                                         |                                                     |      
|                                                 |                                         | Net cash provided by/(used in) financing activities |      
|                                                 |                                         |                                                     |      
|Foreign currency translation adjustment          |                                         |                                                     | 40   
|                                                 |                                         |                                                     |      
|Increase/(decrease) in cash and cash equivalents |                                         |                                                     | 410  
|Cash and cash equivalents, beginning of period   |                                         |                                                     | 1,860
|                                                 |                                         |                                                     |      
|Cash and cash equivalents, end of period         |                                         | $                                                   | 2,270
|                                                 |                                         |                                                     |      
|Supplemental disclosure of cash flow information |                                         |                                                     |      
|                                                 | Cash paid for income taxes              |                                                     | $    
|                                                 |                                         |                                                     |      
|                                                 | Cash paid for interest                  |                                                     | $    
|                                                 |                                         |                                                     |      

The
accompanying notes are an integral part of these financial statements.

6

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FIRSTWAVE TECHNOLOGIES, INC.        Notes to Consolidated Financial Statements        March 31, 2003

A.    Basis of Presentation

Firstwave Technologies,Inc. is a global software innovator that provides strategic, web-based customer relationship management (CRM) solutions that
automate and optimize the way companies win, maintain and grow customer relationships. The Firstwave product line consists of the Firstwave CRM Product Suite; Takecontrol®
and Firstwave for Unix. The Firstwave CRM Product Suite consists of the following four products: Firstwave eCRM, Firstwave CRM 10, Firstwave CORE IDE and Firstwave for Technology. Both eCRM and CRM 10
are web-based applications, the former being built with COM+ technology and the latter with .NET technology. The CORE IDE is the toolset supporting CRM 10. The Firstwave for Technology
products were acquired in the Connect-Care acquisition, and are client-server based. In addition to the Firstwave CRM Product Suite, Firstwave also supports
Takecontrol®, a client-server based product and Firstwave for Unix.

The
accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the
United States and should be read in conjunction with the consolidated financial statements contained in the Company's Form 10-K/A for the period ended December 31, 2002. In
the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements have been included.

The
consolidated financial statements include the accounts of Firstwave Technologies, Inc. and its wholly owned subsidiaries, Connect-Care Inc. and Firstwave
Technologies UK, Ltd. All intercompany transactions and balances have been eliminated in consolidation.

B.    Accounting Policies



The Company is subject to credit risk primarily due to its trade receivables. The Company has credit risk due to the high concentration of trade receivables
through Firstwave UK, whose customer, Electronic Data Services, Ltd, represented 72% of the Company's total revenues for first quarter 2003 and 59% of the Company's total Accounts Receivable
outstanding at March 31, 2003. If this customer decreases its purchasing of the Company's software and services, revenues would significantly decrease if not replaced with other customer
accounts



Revenue from software product sales is recognized upon shipment of the product when the Company has a signed contract, the fees are fixed and determinable, no
significant obligations remain and collection of the resulting receivable is probable. The Company accrues for estimated warranty costs at the time it recognizes license revenue. Services revenue is
recognized as services are performed. Maintenance revenue is recognized ratably over the period of coverage.

The
Company has arrangements with customers that provide for the delivery of multiple elements, including software licenses, and services. The Company allocates and recognizes revenue
related to each of the multiple elements based on vendor specific objective evidence of the fair value of each element. Vendor specific objective evidence is based on standard pricing for each of the
elements in

7

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our
multiple element arrangements. Revenue associated with the various elements of multiple element arrangements is based on such vendor-specific objective evidence as the price charged for each
element is the same as when the element would be sold separately from any other element. Pricing does not vary by customer or by duration, or by requirements of the arrangement.

International
revenues are primarily generated by Firstwave UK and independent distributors who offer licenses of the Company's products in specific geographic areas. Under the terms of
the Company's international distributor agreements, international distributors collect license fees and maintenance revenues on behalf of the Company, and remit 50% to 60% of standard license fees and
maintenance revenues they produce. The Company recognizes international sales at the gross license amount, with the amount paid to the distributors reflected as a selling expense. The Company's
international maintenance fees are reflected as maintenance revenues, with the amount retained by distributors shown as a cost of maintenance revenue. There were no revenues derived from international
distributors during the first quarter of 2003.

Revenues
from nonmonetary exchanges are recorded at the fair value of the products and services provided or received, whichever is more clearly evident. There were no nonmonetary
exchanges during the first quarter of 2003.

Advanced
billings for services and maintenance contracts are recorded as deferred revenue on the Company's balance sheet, with revenue recognized as the services are performed and on a
pro-rata basis for maintenance.

The
Company provides an allowance for doubtful accounts based on management's estimate of receivables that will be uncollectible. The estimate is based on historical
charge-off activity and current account status.



Capitalized software development costs consist principally of salaries, contract services, and certain other expenses related to development and modifications of
software products capitalized in accordance with the provisions of FAS 86, "Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed." Capitalization of such costs
begins only upon establishment of technological feasibility as defined in FAS 86 and ends when the resulting product is available for sale. The Company evaluates the establishment of technological
feasibility based on the existence of a working model of the software product. Capitalized costs may include costs related to product enhancements resulting in new features and increased functionality
as well as writing the code in a new programming language. In this case, as the version enhancements are built on an already detailed design under an existing source code, technological feasibility is
established early for each version. All costs incurred to establish the technological feasibility of software products are classified as research and development and are expensed as incurred.

The
Company evaluates the realizability of unamortized capitalized software costs at each balance sheet date. Software development costs which are capitalized are subsequently reported
at the lower of unamortized cost or net realizable value. If the unamortized capitalized software cost exceeds the net realizable value of the asset, the amount would be written off accordingly. The
net realizable value of the capitalized software development costs is the estimated future gross revenues of the software product reduced by the estimated future costs of completing and disposing of
that product. Amortization of capitalized software costs is provided at the greater of the ratio of current product

8

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revenue
to the total of current and anticipated product revenue or on a straight-line basis over the estimated economic life of the software, which is not more than three years. It is
possible that those estimates of anticipated product revenues, the remaining estimated economic life of the product, or both could be reduced due to changing technologies. The amortization of software
development costs is presented as a cost of software revenue in the Company's financial statements.



Effective for 2002, the Company adopted FAS 148, "Accounting for Stock-Based CompensationTransition and Disclosure", and it did not have a
material impact on the consolidated financial statements. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations and to elect the disclosure option of FAS 123, "Accounting for Stock-Based
Compensation." Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an
employee must pay to acquire the stock.

The
Company has adopted the disclosure only provisions of FAS 123, "Accounting for Stock-Based Compensation." The following table illustrates the effect on net income and net
income per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee awards.

Quarter Ended
March 312002

2003Net income as reported

$
966

$
724Stock based employee compensation, net of related tax effects included in net income as reported





Stock based employee compensation, net of related tax effects under the fair value based method


11


129Net income as adjusted

$
955

$
595Earnings per share:Basicas reported

$
.46

$
.30Basicas adjusted

$
.45

$
.24Dilutedas reported

$
..33

$
..24Dilutedas adjusted

$
.33

$
.20


The
variance in the compensation expense between first quarter 2002 compared to first quarter 2003 is primarily the result of options that were cancelled during the first quarter of 2002
related to a Stock Exchange Program. On March 19, 2002 the Company completed a Stock Exchange Program that offered each of its directors and employees who held options under the Option Plan
with an exercise price of greater than $10.00 the opportunity to surrender those options for cancellation in exchange for new options to be granted no sooner than six months and one day after
cancellation. The options

9

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cancelled
in March 2002 under this program totaled 81,684. The Company granted 81,684 new options on September 20, 2002.

There
is no tax benefit included in the stock-based employee compensation expense determined under the fair-value-based method for the three months ended March 31,
2003 and March 31, 2002, as the Company established a full valuation allowance for its net deferred tax assets.



Basic net income per common share is based on the weighted average number of shares of common stock outstanding during the period. Stock options and convertible
preferred stock are included in the diluted earnings per share calculation when they are not antidilutive. Net income applicable to common shareholders includes a charge for dividends related to the
Company's outstanding preferred stock.

Shown
below is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income from continuing operations.

|                                        |  | For Quarter Ended March 31, 2003
|--------------------------------------- |  | --------------------------------
|
|Net income                              |  | 779                             
|Less: Preferred Stock Dividends         |  | (55                             
|                                        |  |                                 
|Basic EPS                               |  |                                 
|Income available to common shareholders |  | 724                             
|Effect of Dilutive Securities           |  |                                 
|Warrants                                |  |                                 
|Convertible Preferred Stock             |  | 55                              
|Stock Options                           |  |                                 
|                                        |  |                                 
|                                        |  | 55                              
|Diluted EPS                             |  |                                 
|Income available to common shareholders |  | 779                             

|                                        |  | For Quarter Ended March 31, 2002
|--------------------------------------- |  | --------------------------------
|
|Net income                              |  | 1,032                           
|Less: Preferred Stock Dividends         |  | (66                             
|                                        |  |                                 
|Basic EPS                               |  |                                 
|Income available to common shareholders |  | 966                             
|Effect of Dilutive Securities           |  |                                 
|Warrants                                |  |                                 
|Convertible Preferred Stock             |  | 66                              
|Stock Options                           |  |                                 
|                                        |  |                                 
|                                        |  | 66                              
|Diluted EPS                             |  |                                 
|Income available to common shareholders |  | 1,032                           

10

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The financial statements of the Company's international subsidiary are translated into U.S. dollars at current exchange rates, except for revenues and expenses,
which are translated at average exchange rates during each reporting period. Currency transaction gains or losses, which are included in the results of operations, are insignificant for all periods
presented. Net exchange gains or losses resulting from the translation of assets and liabilities are included as a component of accumulated other comprehensive income in shareholders' equity.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.



The Company evaluates impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may
not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss would be recognized. Measurement of an impairment loss
for long-lived assets would be based on the fair value of the asset.



Management believes that it has only a single segment consisting of software sales with related services and support. The information presented in the
consolidated statement of operations reflects the revenues and costs associated with this segment that management uses to make operating decisions and assess performance.

C.    Borrowings

The Company has no outstanding long-term debt.

D.    Acquisition

On March 3, 2003, Firstwave Technologies, Inc. ("Firstwave"), a Georgia corporation, acquired Connect-Care, Inc.
("Connect-Care"), a Georgia corporation that provides customer relationship management (CRM) software solutions for software companies. Connect-Care was acquired pursuant to a
Merger Agreement dated March 3, 2003 (the "Merger Agreement") by and among Firstwave, CC Subsidiary, Inc., a wholly-owned subsidiary of Firstwave ("Merger Sub"),
Connect-Care, and certain shareholders of Connect-Care. Pursuant to the Merger Agreement, Merger Sub merged with and into Connect-Care, and
Connect-Care, which was the surviving corporation in the Merger, became a wholly-owned subsidiary of Firstwave, the results of Connect-Care's operations have been included in the Company's
financial statements since March 3, 2003.

In
exchange for all outstanding shares of Connect-Care stock, Firstwave issued 200,000 shares of Firstwave common stock to the shareholders of Connect-Care and
granted such shareholders certain

11

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registration
rights. Additional consideration of $300,000 in cash may be payable if certain revenue goals, as set forth in Section 3.1 of the Merger Agreement, are attained. Such amount would
be paid on or prior to the earlier of (i) the date Firstwave files its Annual Report on Form 10-K with respect to the fiscal year ending December 31, 2003 or
(ii) March 31, 2004.

The
$300,000 earn-out provision of the merger agreement with Connect-Care makes this payment contingent upon the attainment of certain total revenues, including
license revenues and associated maintenance revenues that would be recognized according to SOP 97-2, during 2003 from March through December. Such earn-out is contingent
consideration based upon future financial performance. Such revenue attainment is offset by any net accounts receivable shown as of February 28, 2003, not collected by December 31, 2003.
If the revenue targets are realized, the $300,000 will be paid in full. If the revenue targets are partially realized, then the payout is payable ratably. If the revenue target is met, the payout will
be accounted for on Firstwave's financial statements as an increase to the purchase price of the acquisition and an increase to intangible assets.

The
Company is accounting for the $300,000 as contingent consideration in accordance with paragraphs 25 through 28 of SFAS 141. Because the amount, if any, of contingent
consideration was not determinable at the acquisition date, no amount for the contingency will be recorded in the Company's financial statements until the contingency is resolved, or the consideration
is issued or becomes issuable. The Company expects that, should any amount of contingent consideration be issuable, such amount would result in an additional element of the cost of acquiring
Connect-Care.

An
analysis of each material asset acquired and each material liability assumed from the acquisition of Connect-Care was completed to ensure accuracy of fair value. All line
items represented fair value because of each item's short-term nature. The Company evaluated each asset and liability and the timing in which assets would be received and liabilities would
be settled and determined that these amounts represented their fair values.

The
following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition.

Current Assets

$
771,660Property and Equip

$
29,504Intangible Assets

$
3,376,061Goodwill

$
Total assets acquired

$
4,177,225Current liabilities

$
(1,423,086
)Net assets acquired

$
2,754,139


Of
the $3,376,061 of acquired intangible assets, $300,000 was assigned as an estimated net realizable amount to the Connect-Care technology and $3,076,061 was assigned as an
estimated value for customer relationships based on potential future revenues that may be derived from such customer relationships. Both of these intangible assets will be evaluated for impairment in
accordance with FAS No. 142 "Goodwill and Other Intangible Assets".

12

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The following table summarizes the comprehensive purchase price, including net liabilities assumed and estimated costs to complete the acquisition.

Purchase price

$
2,630,000

200,000 shares at $13.15Net liabilities assumed

$
621,922Estimated cost of acquisition

$
124,139Comprehensive purchase price

$
3,376,061


These assets have been determined to be indefinite life intangible assets for which an amortization period and useful life has not yet been determined.

The primary objective of the Connect-Care acquisition was to acquire the customer relationships of the customer base of Connect-Care and, to a lesser degree, to
acquire utilization of Connect-Care technology. Accordingly, a significant portion of the



purchase price has been allocated to these intangible assets. Of the $3,376,061 purchase price, $300,000 was assigned as an estimated net realizable amount to the indefinite life intangible asset
Connect-Care technology and $3,076,061 was assigned as an estimated value to the indefinite life intangible asset Connect-Care customer relationships. The
Connect-Care technology asset consists of the source code for the ConnectCare 7 version of the product. We believe we will continue to derive revenue from licensing this product to new
customers. The customer relationship asset represents the existing customer base of Connect-Care which we believe will continue to contribute revenue from the purchase of additional
licenses of the Connect-Care product, purchase of additional service engagements, and renewals of annual maintenance agreements. We also expect that some of the existing active customers
or former customers may transition to the Firstwave eCRM product. Both of these assets are determined to have an indefinite life due to the expectation that they have the ability to generate revenue
and cashflow for a period which has not yet been determined. Accordingly, they will be evaluated for impairment in accordance with FAS No. 142 "Goodwill and Other Intangible Assets". There are
no legal, regulatory, or contractual provisions that would limit the useful lives of these two assets. We consider such matters as demand, competition, and economic factors in evaluating the point at
which an indefinite life asset becomes a definite life asset, and consider these matters in performing impairment evaluations.

The following presents the unaudited pro forma consolidated results of operations as if the acquisition had occurred as of January 1, 2002.

Quarter EndingMarch 31,
2002

March 31,
2003Revenues

$
4,478

$
4,628Net income

$
758

$
357Earnings Per ShareBasic

$
0.33

$
0.14Diluted

$
0.25

$
0.12


13

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Item 2.

FIRSTWAVE TECHNOLOGIES, INC.

Management's Discussion and Analysis of
Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Financial Statements and Notes thereto of the Company presented in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 2002. This section contains forward-looking statements that reflect management's expectations,
estimates, and projections for future periods. These statements may be identified by the use of forward-looking words such as "may", "will", "believe", "anticipate", "estimate", "expect", "projects",
or "intends". Actual events and results may differ from the results anticipated by the forward-looking statements. Factors that might cause such differences include, but are not limited to, those
items discussed under the caption "Certain Factors Affecting Forward-Looking Statements" presented in the Company's Annual Report on Form 10-K/A for the year ended
December 31, 2002.

Overview

Firstwave Technologies,Inc. is a global software innovator that provides strategic, web-based customer relationship management (CRM) solutions that
automate and optimize the way companies win, maintain and grow customer relationships. The Firstwave product line consists of the Firstwave CRM Product Suite; Takecontrol® and Firstwave
for Unix. The Firstwave CRM Product Suite consists of the following four products: Firstwave eCRM, Firstwave CRM 10, Firstwave CORE IDE and Firstwave for Technology. Both eCRM and CRM 10 are
web-based applications, the former being built with COM+ technology and the latter with .NET technology. The CORE IDE is the toolset supporting CRM 10. The Firstwave for Technology
products were acquired in the Connect-Care acquisition, and are client-server based. In addition to the Firstwave CRM Product Suite, Firstwave also supports
Takecontrol®, a client-server based product and Firstwave for Unix.

Results of Operations

During the first quarter of 2003 we reported our sixth consecutive quarter of profitability. Total revenues increased 5.5% from $4,056,000 in the first quarter of
2002 to $4,281,000 in the first quarter of 2003. Software revenues increased 120.7% from $728,000 in the first quarter of 2002 to $1,607,000 in the first quarter of 2003 primarily due to a large
software license contract related to our relationship with a leading global services company, Electronic Data Services, Ltd. Our software revenues are significantly dependent upon the timing of
closing of license agreements. During the first quarter of 2003, we had a major concentration of software and services revenue derived from our relationship with Electronic Data Services, Ltd.
which contributed 71.9% of our total revenue for the quarter. If this party decreases its purchasing of our software and services, our revenues would significantly decrease if not replaced with other
customer accounts. We are aggressively pursuing strategies to transition our revenue stream away from dependency on a few large customers to a more diverse customer base. Our recent acquisition of
Connect-Care assists in diversifying our customer base.

Services
revenues decreased 25.6% from $2,875,000 in the first quarter of 2002 to $2,140,000 in the first quarter of 2003. During the first quarter of 2002 we had a very large services
engagement with Electronic Data Services, Ltd. While we continued our services engagement with Electronic Data Services, Ltd during the first quarter of 2003, the scale of the services
decreased compared to the services performed during first quarter 2002. Our services revenues are subject to fluctuations based on variations of the length of and number of active service engagements
in a given quarter.

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Maintenance
revenues increased 18.1% from $448,000 in the first quarter of 2002 to $529,000 in the first quarter of 2003. The increase is due to additional revenues associated with the
CRM product line and with the addition of maintenance revenues from the Connect-Care acquisition. Maintenance revenues are the result of renewal agreements from previous software license
sales as well as new license agreements.

The Connect-Care acquisition brings a customer base to Firstwave with recurring maintenance revenues and the potential for software license upgrades and additional services
engagements. The classification of revenues generated from Connect-Care's business are generally the same as for Firstwave. These revenues will be recognized in accordance with SOP 97-2
and in the same manner as previously recognized on Connect-Care's financial statements. In addition, the nature of the costs associated with these revenues is similar to the nature of Firstwave's
costs of revenues (i.e., labor associated with performing the services and maintenance work) and we do not anticipate price increases. There are no materials or inventory to consider with respect to
cost of revenues.

Cost
of software revenues decreased 10.2% from $323,000 in the first quarter of 2002 to $290,000 in the first quarter of 2003. The decrease is primarily due to lower amortization of
capitalized software as a result of previously capitalized versions of the software being fully amortized. We expect the cost of software to increase during the remainder of 2003 as we begin to
amortize the latest version of the product currently in development. Cost of software revenues include amortization of capitalized software costs, costs of third party software, media costs, and
documentation materials. Amortization of capitalized software represented 70.5% of total cost of software revenue during the first quarter of 2003 compared to 99.3% during first quarter 2002.

Cost
of revenues for services increased 20.0% from $794,000 in the first quarter of 2002 to $953,000 in the first quarter of 2003 primarily due to increases in payroll, outside
consultants, and travel. Cost of revenues for services as a percentage of services revenues increased from 27.6% in the first quarter of 2002 to 44.5% in the first quarter of 2003 due to higher
personnel costs relative to services revenue. Cost of revenues for maintenance decreased 13.5% from $163,000 in the first quarter of 2002 to $141,000 in the first quarter of 2003 primarily due to
lower royalty costs consistent with decreased maintenance revenues generated by international distributors.

Sales
and marketing expense increased 41.2% from $780,000 in the first quarter of 2002 to $1,101,000 in the first quarter of 2003 primarily as the result of increases in payroll costs,
telemarketing services, and marketing materials. During the remainder of 2003, we anticipate marketing expenses to remain at this level as we continue to engage in a full range of marketing programs
focused on generating qualified leads and market awareness of our products.

The
Company's product innovation and development expenditures, which includes amounts capitalized, increased 848.4% from $128,000 in the first quarter of 2002 to $1,214,000 in the first
quarter of 2003. The increase is primarily related to increased payroll costs and increased use of outside development contractors related to the development of our latest version of the CRM product.
Software development costs capitalized during the three months ended March 31, 2002 and March 31, 2003 were $28,000 and $975,000 respectively. We believe development expenditures will
remain consistent for the next quarter until such time as we release the version currently in development. Going forward, we will continue to improve and enhance the product; however, we anticipate
the development expenditures will be lower during the second half of the year.

General
and administrative expenses decreased 9.3% from $863,000 in the first quarter of 2002 to $783,000 in the first quarter of 2003. During the first quarter of 2002 we had a large
write off of a third party software asset related to a change in the technology used for our internal web-site development. There was no corresponding write off in first quarter of 2003.

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Dividends
on preferred stock decreased 73.7% from $66,000 in the first quarter of 2002 to $55,000 in the first quarter of 2003 due to the conversion of Series C Convertible
Preferred Stock into common stock during 2002 and the first quarter of 2003.

The
above factors combined to result in a 25.1% decrease in net income available to common shareholders from a net income of $966,000 in the first quarter of 2002 to a net income of
$724,000 in the first quarter of 2003, and a net income per basic and diluted share of $0.46 and $0.33 respectively for the first quarter of 2002 compared to a net income per basic and diluted share
of $0.30 and $0.24 respectively, for the first quarter of 2003. At March 31, 2002 the number of basic weighted average shares outstanding was 2,100,000 compared to 2,430,000 at March 31,
2003. The increase in basic weighted average shares outstanding is primarily related to the conversion of Series C Convertible Preferred Shares into approximately 278,000 common shares.

Balance Sheet

Net accounts receivable increased 53.7% from $2,406,000 at December 31, 2002 to $3,698,000 at March 31, 2003 primarily due to outstanding
receivables related to our large UK services engagement and the addition of account receivables related to the Connect-Care acquisition. Property and equipment decreased 4.1% from $738,000
at December 31, 2002 to $708,000 at March 31, 2003, due to year to date depreciation offset by new asset purchases and the addition of Connect-Care fixed assets. Capitalized
software increased 37.8% from $2,041,000 at December 31, 2002 to $2,812,000 at March 31, 2003 due to additional capitalization of $975,000 in development costs net of $204,000 in
amortization. Intangible assets were $3,376,000 at March 31, 2003 related to purchase accounting of the Connect-Care acquisition. Accounts payable increased 102% from $909,000 at
December 31, 2002 to $1,836,000 at March 31, 2003 due to increased expenses during the quarter, the addition of Connect-Care accounts payables and the timing of vendor
payments. Deferred revenue increased 102.3% from $812,000 at December 31, 2002 to $1,643,000 at March 31, 2003 primarily due to the addition of Connect-Care deferred
maintenance and professional services revenues. Accrued employee compensation and benefits increased 52.3% from $417,000 at December 31, 2002 to $635,000 at March 31, 2003 primarily due
to increased commissions payable consistent with increased software license revenue and the addition of Connect-Care accruals related to incentives, commissions, and vacation payable.
Other accrued liabilities decreased 26.1% from $802,000 at December 31, 2002 to $593,000 at March 31, 2003 primarily due to the timing of payment of accrued VAT in the UK.

Liquidity and Capital Resources

As of March 31, 2003, the balance of cash and cash equivalents was $3,557,000 compared to $3,779,000 at December 31, 2002. We have no outstanding
long-term debt.

During
the year 2002, 71.9% of our total revenue was attributed to our relationship with Electronic Data Services Ltd, a leading global services company. During the first quarter
of 2003, this same
relationship accounted for 71.9% of total revenues. If this party decreases its purchasing of our software and services, our revenues and cash position would significantly decrease if not replaced
with other customer accounts.

On
July 30, 2002, Firstwave signed an agreement with Extreme Logic, a leading e-business solutions provider, to provide a.Net-based workflow and scripting
engine and services to enhance our eCRM technology. By licensing this proven technology, we feel the technology risk associated with new development is diminished, we gain a
time-to-market advantage, and the cost to develop is less than building the technology in-house. The license fees paid to Extreme Logic were recorded as an asset on
the Company's balance sheet and are being depreciated over a three-year period. The depreciation associated therewith is recorded as a Product Development expense. The expense amount
reflected on

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the
Income Statement for 2002 was $87,500, and the amount expensed in first quarter 2003 was $43,750. Quarterly depreciation in the amount of $43,750 will continue through September 2005.

Our
future capital requirements will depend on many factors, including our ability to maintain positive cash flows, as well as the timing and extent of spending to support product
development efforts and expansion of sales and marketing, and market acceptance of our products. Our future capital needs will be highly dependent upon our ability to control expenses and generate
additional software license revenues, and any projections of future cash needs and cash flows are subject to substantial uncertainty. If we are unable to fund expenses from operations or obtain the
necessary additional capital, we may be required to reduce the scope of planned product development and sales and marketing efforts, as well as reduce the size of current staff, all of which could
have a material adverse effect on our business, financial condition, and our ability to reduce losses or generate profits.

We
have no material commitments for capital expenditures. We do not believe that inflation has historically had a material effect on our Company's results of operations.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to market risk exposures of varying correlations and volatilities, including interest rate risk and foreign exchange rate risk. Currently,
the Company maintains its cash position primarily in money market funds and other bank accounts. The Company does not currently engage in hedging activities or otherwise use derivatives to alter the
interest characteristics of its financial assets. Although a decrease in interest rates could reduce our interest income, at this time management does not believe a change in interest rates will
materially affect the Company's financial position or results of operations.

We
do not have any material credit facilities and, therefore, do not have a significant risk due to potential fluctuations in interest rates for loans at this time. Changes in interest
rates could make it more costly to borrow money in the future and may impede our future acquisition and growth strategies if management determines that the costs associated with borrowing funds are
too high to implement these strategies.

The
results of operations of our wholly owned subsidiary located in Surrey, England are exposed to foreign exchange rate fluctuations as the financial results of this subsidiary are
translated from the local currency to U.S. Dollars upon consolidation. Because of the significance of the operations of this subsidiary to our consolidated operations, as exchange rates vary, net
sales and other operating results, when translated, may differ materially from our prior performance and our expectations. In addition, because of the significance of our overseas operations, we could
also be significantly affected by weak economic conditions in foreign markets that could reduce demand for our products and further negatively impact the results of our operations in a material and
adverse manner. As a result of these market risks, the price of our stock could decline significantly and rapidly.

The
Company manages the risk by monitoring on a regular basis the fluctuations in foreign currency exchange rates as they relate to our UK Subsidiary, and takes action if the foreign
currency exchange rate would result in a material impact to the Company's financial statements upon translation from the local currency, the British pound, to the US Dollar. The action taken in these
instances by the Company is to move the currency from the UK Subsidiary to the Company's headquarters when doing so would be beneficial on the Company's financial statements. The Company does not
engage in any hedging activities. As foreign currency exchange rates vary, the fluctuations in revenues and expenses may materially impact the financial statements upon consolidation. A weaker US
dollar would result in an increase to revenues and expenses upon consolidation, and a stronger US dollar would result in a decrease to revenues and expenses upon consolidation.

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Item 4.    Controls and Procedures

Based on their most recent evaluation, which was completed in consultation with management within 90 days of the filing of this
Form 10-Q, the Company's Chairman and Chief Executive Officer and Chief Financial Officer believe the design and operation of the Company's disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) were effective as of the date of such
evaluation in timely alerting the Company's management to material information required to be included in this Form 10-Q and other Exchange Act filings. There were no significant
changes (including corrective actions with regard to significant deficiencies or material weaknesses) in the Company's internal controls or other factors that could significantly affect these controls
subsequent to the date of the evaluation described above.

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PART II.    OTHER INFORMATION

Item 1.    Legal Proceedings

Not Applicable

Item 2.    Changes in Securities

On March 3, 2003, Firstwave acquired Connect-Care, Inc. This acquisition was accomplished by Connect-Care merging with a
subsidiary of Firstwave, with Connect-Care surviving the merger. In connection with this acquisition and in consideration of the merger, Firstwave issued in the aggregate 200,000 shares of
its no par value common stock to the shareholders of Connect-Care. Firstwave relied upon the exemption set forth in Section 4(2) of the Securities Act for the issuances to the
Connect-Care shareholders based upon the fact that the acquisition was privately negotiated with a small number of sophisticated purchasers who were familiar with the business and
operations of Firstwave.

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

Not Applicable

Item 6.    Exhibits and Reports on form 8-K



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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: June 6, 2003 |  | /s/JUDITH A. VITALEJudith A. Vitale
Chief Financial Officer
(Principal Financial Officer)

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I, Richard T. Brock, Chief Executive Officer of Firstwave Technologies, Inc., certify that:

1.     I have reviewed this quarterly report on Form 10-Q/A of Firstwave Technologies, Inc.;

2.     Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.     The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.     The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: June 6, 2003



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I, Judith A. Vitale, Chief Financial Officer of Firstwave Technologies, Inc., certify that:

1.     I have reviewed this quarterly report on Form 10-Q/A of Firstwave Technologies, Inc.;

2.     Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



5.     The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent function):



6.     The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: June 6, 2003



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