This is overall good for your first Flash game. I would suggest more features, such as a difficulty selection (Player can choose AI to be easy or hard), more attacks, easier fireballs (Or remove it), story mode, challenge mode, and better backgrounds (Nice to see the two sticks actually fighting in a ring or bar rather than on lined paper). You can also try adding more audio rather than have the same old loop playing over and over everywhere. On top of that, very good job on this. I hope to see a sequel.
Good graphics (There's blood)
Has great potential
Easy single-player controls
Making fireball, although possible, is too hard
AI is too hard
Background (Try adding some detailed background and give the fight a feeling as though it were being held in a ring or a bar, or on the street)
Music is repetitive
Great job! Just a few more tweaks and the game will be much more enjoyable.
P.S. It is possible to beat the AI. Try crouching and using strong kicks. Rather than you charging at your opponent, let him come and kick him out. I actually beat him that way.