**Exhibit99.01**

 

**CAUTIONARYSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

 

Zamba Corporation desires to take advantage of the“safe harbor” provisions of the Private Securities Litigation Reform Act of1995 and is filing this cautionary statement in connection with the reform act.This Quarterly Report on Form 10-Q and any other written or oralstatements made by or on our behalf may include forward-looking statements thatreflect our current views with respect to future events and future financial performance.The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,”“project,” “could,” “may,” and the negatives of such words, and other similarexpressions identify forward-looking statements.

 

We wish to caution you that any forward-lookingstatements made by us or on our behalf are subject to uncertainties and otherfactors that could cause such statements to be wrong. Some of theseuncertainties and other factors are listed under the caption “Risk Factors”below (many of which we have discussed in prior SEC filings).  Although we have attempted to listcomprehensively these important factors, we also wish to caution investors thatother factors may prove to be important in the future in affecting ouroperating results.  New factors emergefrom time to time, and it is not possible for us to predict all of thesefactors, nor can we assess the impact each factor or combination of factors mayhave on our business.

 

You are further cautioned not to place undue relianceon those forward-looking statements because they speak only of our views as ofthe date the statements were made. We undertake no obligation to publiclyupdate or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.

 

**RISKFACTORS**

 

**If we do not grow our revenues enoughto remain profitable, we will have to obtain other financing to continueoperations.**

 

Although we significantly reduced our cost structureduring 2002 and recorded net income of $2,061,000 in the first quarter of 2003,this amount included a gain on sale of investment of $1,853,000 and anextraordinary gain from debt extinguishment of $198,000.  If we had not realized these gains, our netincome would have been $10,000 in the first quarter of 2003.  Over the last four quarters, our revenueshave been nearly flat, only increasing from $2.5 million to $2.8 million.  To fund our operations over this period, wehave received approximately $9.4 million from private sales of our common stockand shares of our holdings of Series A Preferred Stock in NextNet Wireless,Inc.   We have also supported ouroperations by borrowing funds under our banking relationship with SiliconValley Bank, which, since July 29, 2002, has been in the form of an AccountsReceivable Purchase Agreement.

 

If we are unable to maintain profitability, we mayhave to sell additional shares of our NextNet Series A Preferred Stock, borrowadditional amounts from Silicon Valley Bank under our Accounts ReceivablePurchase Agreement, or find additional financing.  There is no assurance that we will be able to find additionalpurchasers for the NextNet Series A Preferred Stock we own or that such saleswill be on advantageous terms.  Thenumber of potential purchasers of our NextNet holdings is quite limited, formany reasons, including the fact that investors have not been generallyinterested in telecommunications products companies over the past few years.

 

Under our Accounts Receivable Purchase Agreement withSilicon Valley Bank, which expires July 29, 2003, Silicon Valley Bank advancesus amounts up to 80% of the invoice value for eligible accounts receivable, toa maximum accounts receivable balance of $2.5 million.  Silicon Valley Bank can reject any or all ofthe invoices we submit, which could cause us to be dependent upon thetimeliness of our collections from our clients.  If we are unable to grow our revenues, manage our growth andprojects effectively, or obtain additional financing, we may realize a materialadverse effect in the quality of our

 

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services and products, our ability to retain key personnel, and ourbusiness, financial condition and results of operations.

 

**We could be classified as aninadvertent investment company.**

 

Our holdings of NextNet may constitute investmentsecurities under the Investment Company Act of 1940.  We will suffer adverse consequences if we are deemed to be aninvestment company under the Investment Company Act of 1940.  A company may be deemed to be an investmentcompany if it owns investment securities with a value exceeding 40% of itstotal assets, subject to certain exclusions. We have not held ourselves out as an investment company, but if we wereto be deemed an investment company, we would become subject to registration andregulation as an investment company under the Investment Company Act of1940.  If we failed to register, wewould be prohibited from engaging in business or issuing our securities andmight be subject to civil and criminal penalties for noncompliance.  In addition, certain of our contracts mightbe voidable, and a court-appointed receiver could take control of our companyand liquidate our business.  If weregistered as an investment company, we would be subject to restrictionsregarding our operations, investments, capital structure, governance andreporting of our results of operations, among other things, and our ability tooperate as we have in the past would be adversely affected.

 

Unless an exclusion or safe harbor were available tous, in certain circumstances, we would have to attempt to reduce our investmentsecurities as a percentage of our total assets in order to avoid becomingsubject to the requirements of the Investment Company Act of 1940.  This reduction can be attempted in a numberof ways, including the disposition of investment securities and the acquisitionof non-investment security assets.  Ifwe were required to sell investment securities, we may sell them sooner than weotherwise would, which may require that those securities be sold at asubstantial discount, and we may never realize anticipated benefits from, ormay incur losses on, these investments. Further, if only a portion of the shares of NextNet that we own are soldat a discount, the value of the remaining shares may be adverselyaffected.  Some investments may not besold due to contractual or legal restrictions or the inability to locate asuitable buyer.  Moreover, we may incurtax liabilities when we sell assets.

 

We filed an application on April 14, 2003 with theSecurities and Exchange Commission (“SEC”) to seek an order declaring Zamba tobe engaged in a business other than that of owning or holding securities basedon our historical development, the activities of our officers, directors andemployees, how we represent Zamba’s business, the nature of our assets andsources of our income.  We can give noassurance, however, that the SEC will issue this order.

 

**The market for our stock is subjectto rules and risks relating to low-priced stock.**

 

Our common stock is currently listed for trading onthe NASD Over-The-Counter Bulletin Board and is subject to the “penny stockrules” adopted pursuant to Section 15(g) of the Securities Exchange Act of1934, as amended.  In general, the pennystock rules apply to non-Nasdaq or non-national stock exchange companies whosecommon stock trades at less than $5.00 per share or which have tangible networth of less than $5,000,000 ($2,000,000 if the company has been operating forthree or more years).  Such rulesrequire, among other things, that brokers who trade “penny stock” to personsother than “established customers” complete certain documentation, makesuitability inquiries of investors and provide investors with certaininformation concerning trading in the security, including a risk disclosuredocument, quote information, broker’s commission information and rights andremedies available to investors in penny stocks.  Many brokers have decided not to trade “penny stock” because ofthe requirements of the penny stock rules and, as a result, the number ofbroker-dealers willing to act as market makers in such securities islimited.  The “penny stock rules,”therefore, may have an adverse impact on the market for our common stock andmay affect our ability to attract competitive funding.  Further, because our stock is currentlylisted on the Over-The-Counter Bulletin Board, this means that, among otherthings, our stock is less liquid as compared to when it was listed on theNasdaq stock market.  As a result,investors in our common stock will be less able to sell stock holdings orreceive accurate stock price quotations.

 

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**The loss of a significant clientcould impact our operations.**

 

We derive a substantial part of our revenues from asmall number of clients. During the first quarter of 2003, 96% of our revenuescame from our top ten customers and 77% came from our top five customers.  During the first quarter of 2003, threeclients — Union Bank of California (28%), Symbol Technologies (18%), andBest Buy Corporation (13%) — each comprised more than 10% of our revenues.  The loss of one or more of these clientscould materially adversely affect our business, financial condition and resultsof operations.

 

**There may be a conflict of interestamong Zamba’s directors with regard to our holdings in NextNet Wireless, Inc.**

 

Two of our directors, Joe Costello and Dixon Doll, arealso shareholders and directors of NextNet.  Mr. Costello is Chairman of both companies.  We have sold approximately $7.7 million of NextNet Series A PreferredStock during 2002 and the first quarter of 2003 to fund operations, includingsales of approximately $2.0 million to Mr. Costello and $150,000 to investmententities managed by Dr. Doll. Additionally, another director of Zamba, Sven Wehrwein, has been aconsultant for NextNet.  In their rolesas directors of Zamba and directors or consultants for NextNet, these directorsmay be faced with situations that require them to recuse themselves from votingon matters affecting our company.

 

**We face additional risks that areincidental to our business.**

 

•                  We areexperiencing continued pressure on pricing and margins in the sale of ourservices, which may impair our ability to sustain profitability or positivecash flow.

•                  The markets weface are highly competitive and we may not be able to compete effectively,especially against competitors with greater resources or market identification.

•                  Our business maysuffer unless global economic conditions improve.

•                  The price of ourcommon stock could fluctuate significantly, which may result in losses forinvestors.

•                  Anti-takeovereffects of Delaware law, our Stockholder Rights Plan, and our change in controlseverance arrangements could prevent a change in control of our company.

•                  Our successdepends on our retention of certain key personnel, our ability to hireadditional key personnel and the maintenance of good relations with ouremployees.

 

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