**Exhibit99**

** **

**CAUTIONARYSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

 

Zamba Corporation desiresto take advantage of the "safe harbor" provisions of the PrivateSecurities Litigation Reform Act of 1995 and is filing this cautionarystatement in connection with the Reform Act. This Form 10-Q and any otherwritten or oral statements made by or on our behalf may include forward-lookingstatements that reflect our current views with respect to future events andfinancial performance. The words "believe," "expect,""anticipate," "intend," "estimate,""forecast," "project," "could," "may"and other similar expressions identify forward-looking statements.

 

We wish to caution youthat any forward-looking statements made by or on our behalf are subject touncertainties and other factors that could cause such statements to be wrong.Some of these uncertainties and other factors are listed under the caption"Risk Factors" below (many of which we have discussed in prior SECfilings). Though we have attempted to list comprehensively these importantfactors, we wish to caution investors that other factors may prove to beimportant in the future in affecting our operating results. New factors emergefrom time to time, and it is not possible for us to predict all of these factors,nor can we assess the impact each factor or combination of factors may have onour business.

 

You arefurther cautioned not to place undue reliance on those forward-lookingstatements because they speak only of our views as of the date the statementswere made. We undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise. 

 

# **RISK FACTORS**

 

**Ourrevenues have decreased in recent quarters, and we might not be able to reversethe recent declines and grow our business effectively.**

 

Our pastgrowth and recent losses have placed significant demands on our management andother resources.   Our future successwill depend on our ability to reverse the recent declines in revenue and thengrow our business and manage our growth effectively, including by:

 

•      developing andimproving our operational, financial and other internal systems;

 

•      integrating andmanaging acquired businesses, joint ventures and strategic investments;

 

•      training,motivating and managing our employees;

 

•      estimatingfixed-price fees and project timeframes accurately;

 

•      attaining highrates of employee utilization; and

 

•      maintaining project quality and clientsatisfaction.

 

If we are unableto grow our business and manage our growth and projects effectively, thequality of our services, our ability to retain key personnel, and our business,financial condition and results of operations may be materially adverselyaffected.     Additionally, if our financialperformance causes us to violate the covenants in our secured revolving creditfacility with Silicon Valley Bank or adversely affects the amount of oureligible accounts receivable, and we are unable to obtain additional financing,we may not be able to meet our cash requirements beyond January 31, 2002.

 

**We may not realize expected benefits from ourrecent restructuring actions.**

 

In the second quarter of 2001, we madecertain changes to our operations in order to focus on business on coreoperations and improve our operating performance by restructuring andstreamlining our operations.  In therestructuring process, we incurred a restructuring charge of approximately$2.19 million, which includes a $1.173 million charge for facility closing andother leasehold termination costs, $777,000 for severance payments relating toemployee severance payments, $123,000 for other employee-related costs and$115,000 for other related restructuring charges.  In this restructuring, we reduced our employee headcount by 89employees, which represented approximately 28% of our workforce.  Of these 89 employees, 62 employees (orapproximately 70%) were billable consultants and 27 employees (or approximately30%) were non-billable staff.  We cannotpredict whether we will receive expected synergies and improved operatingperformance as a result of these restructuring and streamlining actions.  We also cannot predict whether ourrestructuring and streamlining changes will adversely affect our ability toretain key employees, which, in turn, would adversely affect our business,financial condition and results of operations.

** **

**Therecent sale of the customer relationship management products developed byClarify could have a significant adverse impact on our business.**

 

A substantial portion of our revenue has beenderived from implementation and customization of the customer relationshipmanagement (“CRM”) products developed by Clarify, which until recently was abusiness unit of Nortel Networks, Inc. On October 2, 2001, Nortel Networks sold Clarify to Amdocs Limited.  We are currently unsure about Amdocs’ plansfor the Clarify suite of products. Amdocs focuses its other products on a limited number of industries,particularly communications and IP service providers.   If Amdocs decides to limit the Clarify products to suchindustries, the scope of clients to which we could provide services for Clarifyproducts could be limited, and we would need to quickly increase the portion ofour revenues that are derived from providing services for competitive oralternative CRM products, such as Siebel, PeopleSoft, Oracle, SAP andKana.  To do so, we would need toretrain our Clarify service personnel, which could affect our utilizationbecause consultants may not be able to work on billable projects whileundergoing training.  Training programsmay also require us to incur expenses if we have to obtain the trainingservices externally from the software developer or hire independent contractorsto conduct internal training.  If wefail in any of these respects, this failure could have a material adverseeffect on our business, financial condition and results of operations.  

 

**The services we sellmay not attract customers or meet their demands due to the risks that we face.**

 

We focus on selling system integrationservices to clients in a small number of markets, such as sales forceautomation, contact centers, marketing and analytics, field service and contentand commerce.   We sell these services throughour direct sales force.  Although webelieve that specializing in these services will increase our market presence,customer base and profitability, we may fail to obtain customers, effectivelydeliver services or meet customer demands in one or more of these markets.  Our services are based upon third partysoftware applications that are purchased by our clients directly from the thirdparty developer.  We must remaincontinually vigilant to changes in market preference for these third partydevelopers, and strive to maintain good relationships with the providers whoseproducts are currently being purchased as well as develop good relationshipswith developers of new products. Developing relationships with the developers of new products may cause conflictswith the existing products for which we provide services.  

** **

**The technology consulting industry is rapidlychanging and evolving, and we may not be able to adjust our mix of services tomeet the needs of the market.**

 

The technology consulting industry is rapidlychanging, and our future growth will be dependent in part on our ability tosuccessfully develop and commercially introduce new services for thismarket.  The growth in the market fortechnology consulting services is also dependent on the use of technologyconsultants by our current and prospective customers.  The recent downturn in the economy in general and the technologysector in particular has affected our customers’ ability to engage technologyconsultants for CRM services, which has affected our business as well as othersin the CRM industry.  In addition, thetechnology consulting industry in general presents several risks, many of whichare outside of our control.  As themarket changes, we may need to redefine our company, which is a complex,time-consuming and expensive process. It could involve changing strategies, changing management and employees,redefining the types of services we offer, and focusing on new markets andcustomers.  We could spend considerableamounts of money and commit resources, but ultimately receive little or noreturn on our investment.  Customers may not be receptive, andcompetitors may already be established in the new markets, making it difficultfor us to gain a sustainable market share or acquire new customers.

 

**Demand for our CRM services may decrease ifwe are unable to anticipate and adapt to rapidly changing technology. **

 

The CRM industry and the technologies used inour CRM solutions are characterized by rapid technological change.  We expect to derive a substantial portion ofour revenues from providing solutions that are based upon leading technologiesthat are capable of adapting to future technologies.  As a result, our successwill depend on our ability to offer services that keep pace with continuingchanges in technology, evolving industry standards and changing clientpreferences.  Wemay not be successful in addressing future developments on a timely basis.  Our failure to keep pacewith the latest technological developments would have a material adverse effecton our business, financial condition and results of operations.

 

In addition, the development of new servicesoften requires long-term forecasting of market trends, development andimplementation of new technologies and processes, and a substantial capitalcommitment.  We may experiencedifficulties that could delay or prevent the successful design, development,introduction or marketing of new solutions. In addition, these new solutions must meet the requirements of ourcurrent and prospective customers and must achieve market acceptance.  If we fail to anticipate or respond on acost-effective and timely basis to technological developments, changes inindustry standards or customer requirements, or if we have any significantdelays in developing or introducing new services, our business, financialcondition and results of operations could be materially adversely affected.

 

**Competition in the technology consultingindustry is intense, and many of our competitors have substantially greaterresources and name recognition than we do.**

 

The CRM consulting and systems integrationindustry is highly competitive and served by numerous national, regional andlocal firms.  The CRM market includesparticipants from a variety of market segments, including consulting andsystems integration firms, contract programming companies, application softwarefirms and their professional services groups, and e-business solutionproviders.  Our primary competitors canbe classified into three groups:

 

•      large systems integrators (e.g.,Accenture, PricewaterhouseCoopers, IBM, EDS); 

 

•      eServices companies (e.g., Sapient,Scient); and 

 

•      CRM consulting companies (e.g., E-Loyalty,One).

 

We also face competition from service organizations within potentialclients.  Some of these competitors,particularly large systems integrators, may have a pre-existing relationshipwith many of our potential customers, either through non-CRM services that theyprovide to such customers or, in the case of large management consulting firms,through audit or other non-audit services those management consulting firmsprovide to our current or potential clients. We differ from nearly all of our competitors by our exclusive focus onCRM services.  

 

In addition to facing a large number ofpotential competitors, many of our competitors also have certain advantagesover us, including:

 

•      better name recognition; 

 

•      a broader range of products andservices;  

 

•      greater sales, marketing, distribution andtechnical capabilities;

 

•      significantlygreater revenues and financial resources; and

 

•      establishedmarket positions.

 

We may not be able to compete effectivelywith these companies.  In addition,competitors with greater financial resources may be able to respond morequickly to new or emerging technologies and changes in customer requirementsthat may render our services obsolete or make it more difficult for us tocompete with these companies.  Inaddition, the recent economic downturn has put downward pressure on pricing,and competitors with greater economic resources may be more willing to performservices under reduced prices, which could negatively affect our ability toobtain and retain customers, particularly if customers decide to differentiateamong vendors on the basis of price.  Wecannot predict whether we will be able to compete successfully with ourexisting and new services or with current and future competitors.   In addition, we believe that technologicalchange will continue to cause rapid evolution in the competitiveenvironment.  The full scope and natureof these changes are difficult to predict at this time, but increasedcompetition could lead to reduced gross margins and diminished market share,which could have a material adverse effect on our business, financial conditionand results of operations.

 

**Changes in the general economy and thetechnology sector could affect the demand for the type of services we provide.**

 

The unexpected economic slowdown has caused our prospective clients todefer their CRM implementations.  Inrecent quarters, our operating results have been adversely affected by aslowdown in the technology sector, which has reduced the spending of ourcurrent and potential customers on CRM services and solutions.  Future changes in the economy, including theimpact of any acts of terrorism, or general economic or political conditionsthat affect the general buying habits of our current or prospective customers,could continue to cause customers to defer or decide against implementing orupgrading their CRM systems.  If theeconomic conditions in the United States and globally do not improve, or if weexperience a further worsening in the global economic slowdown, the market forCRM services could continue to decrease, which would have a material adverseeffect on our business, financial condition and results of operations. 

 

**Weneed to attract and retain quality employees in order to develop and expand ourbusiness.**

 

Our businessis labor-intensive and requires highly skilled employees.   Most of ourconsultants possess extensive expertise in information technology, strategy,project management, sales and marketing.  To continue to serve ourclient base, we must continue to recruit and retain qualified personnel withexpertise in each of these areas. Although we and many otherconsulting businesses have reduced our workforces in the past several months, intense competition still exists forcertain employees who have specialized skills or significant experience inbusiness and technology consulting.  We compete for such personnel with managementconsulting firms, software firms and other businesses.  Many of these entities have substantiallygreater financial and other resources than we do.   In addition, the Internet has createdmany opportunities for people with the skills we seek to form their owncompanies or join startup companies, and these opportunities frequently offerthe potential for significant future financial gain through equity incentivesthat we cannot match.  In the past, wehave had difficulty recruiting a sufficient number of qualified personnel toserve existing and new clients.  If wefail to recruit and retain a sufficient number of qualified personnel in thefuture, our ability to expand our client base or services could be impaired andour business, financial condition and results of operations could be adverselyaffected.

 

**Ouroperating results may fluctuate significantly fromquarter-to-quarter.**

 

A highpercentage of our operating expenses, particularly personnel and related costs,depreciation, office rent and occupancy costs, are fixed in advance of anyparticular quarter.   Asa result, unanticipated variations in the number, or progress towardcompletion, of our projects may cause significant variations in operatingresults in any particular quarter and could result in losses for thatquarter.   Ournet revenue and operating results may fluctuate significantly due to a numberof other factors, some of which are outside our control.  These factors may include:

 

•      the loss of key personnel and otheremployees;

 

•      any fluctuations in market demand for ourservices, consultant hiring and utilization;

 

•      the contractual terms and timing ofcompletion of projects;

 

•      any delays incurred in connection withprojects;

 

•      the accuracy of our estimates of resourcesrequired to complete projects;

 

•      any uncertainties or changes in our salescycle;

 

•      the adequacy of provisions for losses;

 

•      the costs of obtaining or losing customersand accounts;

 

•      an increase in competition and pricingpressures;

 

•      any changes in our or our competitors’ business strategies, pricing and billing policies;

 

•      the time and expense of consummating anacquisition; and

 

•      the costs of integrating acquiredoperations.

 

One or more ofthe foregoing factors may cause our operating expenses to be disproportionatelyhigh during any given period.  Based onthe preceding factors, we may experience a shortfall in revenue or earnings orotherwise fail to meet public market expectations, which could materiallyadversely affect our business, financial condition or results of operations.

** **

**Ourrevenues are difficult to predict because they are generated on aproject-by-project basis**. 

 

We derive ourrevenues primarily from fees for services generated on a project-by-projectbasis.   Theseprojects vary in size and scope.   Therefore, a client that accounts for a significant portionof our revenues in a given period may not generate a similar amount ofrevenues, if any, in subsequent periods.  In addition, after we complete a project, we haveno assurance that the client will retain us in the future.

 

We also have clients who may terminatetheir agreements with us, whether time-and-materials or fixed-fee based,without any prior written notice.   Clients may terminate projects before completion.   If our clients terminateexisting agreements, our business, financial condition and results ofoperations could suffer material harm.

 

**Theloss of a significant client could impact our operations.**

 

We derive asubstantial part of our revenues from a small number of clients.   During the first ninemonths of 2001, 73% of our revenues came from our top ten customers and 50%came from our top five customers. During the first nine months of 2001, three clients – Best BuyCorporation (12%), Nortel Networks (11%) and Hitachi Data Systems (11%) – eachcomprised more than 10% of our revenues. The loss of one or more of these clients could materially adversely affectour business, financial condition and results of operations.  Our services often involve theimplementation of complex information systems that are critical to our clients'operations.  Our failure to meet clientexpectations in the performance of our services may damage our reputation andadversely affect our ability to attract and retain clients.  If a client is not satisfied with ourservices, we will generally spend additional human and other resources at ourown expense to ensure client satisfaction. Such expenditures will typically result in a lower margin on suchengagements and could materially adversely affect our business, financialcondition and results of operations.

 

**We could be subject to liabilityclaims.**

 

In the courseof providing services, we may recommend the use of softwareand hardware products developed by third parties.  These productsmay not perform as expected or may contain defects.  If this occurs, our reputation could be damaged, and we could besubject to liability.   We attempt to limit our exposure to potential liabilityclaims.  Such limitations may not beeffective.  A successful liability claimbrought against us may adversely affect our reputation and could have amaterial adverse effect on our business, financial condition and results ofoperations.  Our inability to obtain newclients or large-scale implementation and integration projects could materiallyand adversely affect the growth of our business.

 

**Wemay not be able to protect our intellectual capital.**

 

We rely on acombination of copyright, trade secret and trademark laws, and third partynondisclosure agreements to protect our intellectual property rights.   It may be possiblefor unauthorized third parties to obtain and use information that we regard asproprietary or to develop equivalent implementation methodologiesindependently.  From time to time, thirdparties may assert patent, copyright and other intellectual property claimsagainst us.   Litigation,which could result in substantial cost to us, anddiversion of our resources, may be necessary to enforce patents or our otherintellectual property rights or to defend ourselves against claimedinfringement of the rights of others. If we are found to have infringed the intellectual property rights ofothers, we may be prohibited from using this intellectual property or might be required to license this intellectual property from others.  A successful infringement claim could have amaterial adverse effect on our business, financial condition and results ofoperations. 

 

**Wemay not be able to reuse technology that we develop for specific clients.**

 

A portion ofour business involves the development of technology solutions for specificclient engagements.   Ownershipof these solutions is the subject of negotiation and is frequently assigned tothe client, although we may retain a license for certain uses.   Some clients haveprohibited us from marketing the applications developed for them for specifiedperiods of time or to specified third parties.  Clients maydemand similar or other restrictions in the future.   Issues relating to the ownership of andrights to use solutions can be complicated and disputes may arise that affectour ability to resell or reuse these solutions.   Any limitation on our ability to resellor reuse a solution could require us to incur additional expenses to developnew solutions for future projects.

 

**Ourstock price is volatile.**

 

Technology companies, including Zamba,frequently experience volatility in their common stock prices.  Factors creating such volatility include:

 

•      quarterly fluctuations in results ofoperations and achievement of key business metrics;

 

•      changes in earnings estimates bysecurities analysts;

 

•      announcements of technological innovationsor the introduction of new products or services;

 

•      market reaction to any acquisitions, jointventures or strategic investments announced by us or our competitors; and

 

•      extreme price and volume fluctuations in the general stock market, which have particularlyaffected the market price for many technology companies,(in some cases unrelated to theoperating performance of those companies) and may materially adversely affect the market price of ourcommon stock.

 

 

These factorsmay have a significant adverse impact on the market price of our commonstock.  If revenues or earnings in anyquarter fail to meet the expectations of the investment community, there couldbe an immediate and material adverse impacton our stock price.

 

**We could be delisted from the Nasdaq StockMarket.**

 

Our stock is currently traded on the NasdaqNational Market.  If we no longer meetthe requirements to continue our listing on the Nasdaq National Market, ourmarket value and liquidity of the public float of our common stock maydecrease.  To remain listed on theNasdaq National Market, we must satisfy a number of requirements, including thefollowing:

 

•      ournet tangible assets must be greater than $4,000,000; 

 

•      wemust have a public float of at least 750,000 shares with a minimum market valueof $5,000,000; 

 

•      wemust have at least two market-makers in our stock; 

 

•      wemust have at least 400 holders of our stock; and 

 

•      wemust have a minimum bid price of $1.00 per share.

 

Our common stock is currently trading at less than $1.00 pershare.  Although the Nasdaq Stock Markethas implemented an across-the-board moratorium on the minimum bid and publicfloat requirements for continued listing on Nasdaq until January 2, 2002, therecan be no assurance that our stock will be continued to be listed on the NasdaqNational Market after such date, whether due to a failure to meet the minimumbid price test, the net tangible asset threshold, the market-maker requirementor any of the other continued listing standards described above.  If we become ineligible to trade on theNasdaq National Market, our stock would be traded on a less liquidover-the-counter market.  As a result,investors in our common stock would be less able to sell stock holdings orreceive accurate stock price quotations.  Consequently, the market value of our common stock could decrease.

 

**We do not pay cash dividends on our commonstock.**

 

We currently do not pay any cash dividends onour common stock and do not anticipate paying any cash dividends on our commonstock in the foreseeable future.  We intend to retainfuture earnings, if any, to finance the expansion of our operations and forgeneral corporate purposes.