<PAGE>

                                                                    Exhibit 99.1

Risk Factors and Cautionary Statements.
--------------------------------------

     When used in this Annual Report on Form 10-K and in future filings by the
Company with the Securities and Exchange Commission (the "Commission"), in the
Company's press releases, letters and reports to stockholders and in oral
statements made by the Company's representatives, the words or phrases "should
result," "are expected to," "targeted," "will continue," "will approximate," "is
anticipated," "estimate," "project" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are necessarily
subject to certain risks and uncertainties, including those discussed below,
that could cause actual results to differ materially from the Company's
historical experience and its present expectations or projections. Caution
should be taken not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The factors listed below could
affect the Company's financial performance and could cause the Company's actual
results for future periods to differ from any opinions or statements expressed
with respect thereto. Such differences could be material and adverse.

     The Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances occurring after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

     Estimates of future financial results are inherently unreliable.

     From time to time, representatives of the Company may make public
predictions or forecasts regarding the Company's future results, including
estimates regarding future revenues, expense levels, earnings or earnings from
operations. Any forecast regarding the Company's future performance reflects
various assumptions. These assumptions are subject to significant uncertainties,
and, as a matter of course, many of them will prove to be incorrect. Further,
the achievement of any forecast depends on numerous factors (including those
described in this discussion), many of which are beyond the Company's control.
As a result, there can be no assurance that the Company's performance will be
consistent with any management forecasts or that the variation from such
forecasts will not be material and adverse. Investors are cautioned not to base
their entire analysis of the Company's business and prospects upon isolated
predictions, but instead are encouraged to utilize the entire available mix of
historical and forward-looking information made available by the Company, and
other information affecting the Company and its products, when evaluating the
Company's prospective results of operations.

     In addition, representatives of the Company may occasionally comment
publicly on the perceived reasonableness of published reports by independent
analysts regarding the Company's projected future performance. Such comments
should not be interpreted as an endorsement or adoption of any given estimate or
range of estimates or the assumptions and methodologies upon which such
estimates are based. Undue reliance should not be placed on any comments
regarding the conformity, or lack thereof, of any independent estimates with the
Company's own present expectations regarding its future results of operations.
The methodologies employed by the Company in arriving at its own internal
projections and the approaches taken by independent analysts in making their
estimates are likely different in many significant respects. Although the
Company may presently perceive a given estimate to be reasonable, changes in the
Company's business, market conditions or the general economic climate may have
varying effects on the results obtained through the use of differing analyses
and assumptions. The Company expressly disclaims any continuing responsibility
to advise analysts or the public markets of its view regarding the current
accuracy of the published estimates of outside analysts. Persons relying on such
estimates should pursue their own independent investigation and analysis of
their accuracy and the reasonableness of the assumptions on which they are
based.
<PAGE>

     Consolidation in the banking industry may adversely affect our ability to
sell our products and services.

     Mergers, acquisitions and personnel changes at financial institutions and
electronic funds transfer networks may adversely affect our business, financial
condition and results of operations. Currently, the banking and EFT industries
are consolidating, causing the number of financial institutions and ATM networks
to decline. This consolidation could cause us to lose:

     o    current and potential customers;

     o    market share if the combined entity determines that it is more
          efficient to develop in-house products and services similar to ours or
          use our competitors' product and services; and

     o    revenue if the combined institution is able to negotiate a greater
          volume discount for, or discontinue the use of, our products and
          services.

For example, one of the larger customers of our electronic transaction
processing business, the STAR Network, has been purchased by one of our
competitors, Concord EFS. Although we have a multi-year processing contract with
STAR, we cannot presently predict the possible long-term impact of this
acquisition on our business with certainty. The loss of STAR as a processing
customer would have an adverse effect on our business

     We have only a limited history with our current business plan.

     Our business model is still new and developing. In April 1999, we began the
process of combining five of Deluxe's former operating units into an integrated
electronic debit payment business. The businesses we combined were Deluxe
Electronic Payment Systems, Inc., DebitBureauSM, ChexSystems, Inc., Deposit
Payment Protection Systems, Inc. and an electronic check conversion company that
was acquired in February 1999. Deluxe Electronic Payment Systems, Inc. and the
electronic check conversion company primarily process debit transactions. The
other companies maintain databases that help financial institutions and
retailers to determine whether to open a new checking or savings account for or
accept a check from a consumer. We combined these businesses in order to couple
our risk management products with our transaction processing capabilities in an
effort to create more products and services than the businesses would have
created as independent operating units. In January 2000, we decided to combine
our professional services business with our electronic payments business because
the addition of the information technology expertise of this business would
enhance our ability to develop, customize, install and maintain our products. We
may not be able to realize the anticipated strategic and other benefits of these
combinations in a timely manner, or at all. Our management has been and will
continue to be required to devote substantial attention to the process of
integrating our operations, technologies and personnel and consolidating our
infrastructure. The diversion of management's attention and any difficulties
encountered during the transition could have an adverse impact on our on-going
business activities and limit our growth.

     Our government services business has not been profitable and Deluxe's
indemnification may not be adequate.

     Our government services business contributed operating losses of
approximately $106,000 during 2000, $6.6 million in 1999 and $47.7 million in
1998. These amounts include losses we recognized in 2000, 1999 and 1998 that
represent probable future losses from unprofitable long-term service contracts
and the write-off of assets associated with this business. The losses on the
long-term service contracts result from the revenues from the contracts being
lower than expected and the expenses to service the contract being higher than
anticipated. The assets associated with the government services business were
written off because this business has a negative overall cash flow and its
assets have no resale value.

     Deluxe has agreed to indemnify us for future losses arising from any
litigation based on the conduct of the business prior to our initial public
offering and future losses on identified loss contracts in excess of our $29.2
million loss contract reserves as of April 30, 2000. This indemnification
obligation does not apply to



                                        2
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losses contemplated by the existing reserve and is subject to a $14.6 million
limit. In addition, Deluxe's indemnification does not apply to any contract that
was not in a loss position as of April 30, 2000 and so if any of these
profitable contracts were to become unprofitable, no indemnification would be
available. Our loss contract reserves are based on estimates of the future
performance of identified contracts, and the estimated results may not be
realized. As a result, we may incur losses beyond our current reserves and
Deluxe's indemnification. For example, a continuing strong economy, which could
further reduce the number of welfare recipients below our current expectations,
could increase our projected future losses. These excess losses would be
recognized in future periods and decrease our earnings for those future periods.

     We face intense competition in all areas of our business, and if we do not
compete effectively, our business will be harmed.

     We face intense competition from a number of companies. Further, we expect
that competition will intensify as the movement towards increasing consolidation
within the financial services industry continues. Many of our competitors have
significantly greater financial, technical and marketing resources, greater name
recognition and a larger installed customer base than we do.

     In the electronic payment management market, our principal competitors
include:

     o    third party network and credit card processors, including First Data,
          Equifax, Total System Services, Electronic Data Systems, Concord EFS
          and Alliance Data Systems;

     o    financial institutions that have developed internal processing
          capabilities or services similar to ours, including Bank of America,
          M&I Data and Fifth Third National Bank;

     o    electronic data interchange and cash management providers, including
          Fiserv, CheckFree, Metavante, EDS and Fundtech;

     o    electronic bill payment providers, including CheckFree, EDS,
          MasterCard, Spectrum and Visa;

     o    electronic funds transfer software providers, including Transaction
          Systems Architects, SLMsoft, Oasis, Mosaic and PaySys; and

     o    national information database companies and other content providers,
          including Equifax, Experian and Trans Union.

     In the market for electronic transaction processing, the principal factors
on which we compete are price and service levels. The future growth of our
revenues in this market is dependent upon securing an increasing volume of
transactions. If we cannot control our transaction processing expenses, we may
not remain price competitive and our revenues will be adversely affected.

     Competition for our decision support and risk management products is based
primarily on the quantity and quality of the data available to us for this
purpose and, to a somewhat lesser degree, price. Our competitive position in
these markets could be harmed if our competitors were able to compile different
data sources and analytical capabilities that proved to be more effective than
our products. In addition, competitive pressure on our check verification
business is increasing and may require us to make significant investments to
maintain our customer base and acquire new customers.

     In addition to our current competitors, we expect substantial competition
from established and new companies. We cannot assure you that we will be able to
compete effectively against current and future competitors. Increased
competition could result in price reductions, reduced gross margins or loss of
market share.


                                       3
<PAGE>

     We may not sustain profitability.

     We had net losses of $8.2 million in 1999, $14.6 million in 1998 and $34.1
million in 1997, and, although we had net income of $4.6 million for the year
ended December 31, 2000, we may not maintain profitability. Our ability to
maintain profitable operations will depend on growth in electronic debit
payments, our ability to attract new clients, the continued market acceptance of
our products and services and our ability to control further losses on
government services contracts.

     We are substantially dependent upon continued growth in the market for
electronic debit payment services.

     If the electronic debit payments market does not grow or grows more slowly
than expected, our business will suffer. Several factors could inhibit the
acceptance and growth of electronic debit payments, including:

     o    these types of payments are relatively new alternatives to the more
          familiar cash, check and credit card payment options. Consumers and
          businesses may be unwilling to change their established payment
          preferences and adopt these new forms of payment as quickly as we
          expect; and

     o    consumers may be concerned that these newer payment options are not as
          safe or reliable as more traditional payment methods. Consumers may
          also believe that these payment technologies offer a lower level of
          privacy.

     Our ATM deployment initiative may not be successful.

     In September 2000, we entered into a new ATM deployment agreement with a
limited liability company in which we hold a 24% interest. Under this agreement,
we have assumed responsibility for ATM placement strategies and the expansion of
the limited liability company's former ATM base and the limited liability
company is responsible for managing and servicing the ATM base in exchange for a
monthly fee determined by reference to the number of ATMs under management. Our
revenues under this contract are received from the fees paid by consumers
utilizing the machines and interchange fees paid by their banks. Although this
contract is expected to generate significant revenue growth in 2001, if we are
not successful in deploying the ATM base in high volume locations, we will not
generate sufficient fee income to offset the costs associated with the
management of the ATMs. In addition, if the agreement is not extended beyond its
initial one-year term, the revenues derived from this contract would not
continue into future periods.

     Currently, this business operates at a slight loss and this situation is
expected to continue for the immediate future. Improvement in the future will
depend upon our ability to efficiently manage the deployment of the ATMs and to
generate additional revenues from the installed ATM base. This is a relatively
new business and so no assurance can be given that we will be successful in
these efforts. In addition, the expansion of the installed base of ATMs may
require the application of increased amounts of cash to keep the machines
appropriately supplied with cash for withdrawal by consumers.

     If we experience system failures, the products and services we provide to
our customers could be delayed or interrupted, which would harm our business and
reputation and result in the loss of customers.

     Our ability to provide reliable service largely depends on the efficient
and uninterrupted operations of our computer network systems and data centers.
Any significant interruptions could severely harm our business and reputation
and result in a loss of customers. Our systems and operations could be exposed
to damage or interruption from fire, natural disaster, power loss,
telecommunications failure, unauthorized entry and computer viruses. Although we
have taken steps to prevent a system failure, we cannot be certain that our
measures will be successful and that we will not experience system failures.
Further, our property


                                       4
<PAGE>

and business interruption insurance may not be adequate to compensate us for all
losses or failures that may occur.

     If we fail to develop and introduce new and enhanced products and services,
we will not be able to compete effectively and our ability to generate revenues
will suffer.

     Our success will depend in part on our ability to continue to develop and
introduce new and enhanced electronic debit payment products and services that
keep pace with competitive introductions, technological changes and changing
customer preferences. If we fail to anticipate or respond adequately to new
developments, we may lose opportunities for business with both current and
potential customers.

     Legislation relating to consumer privacy protection could harm our ability
to collect and use data, increase our operating costs or otherwise harm our
business.

     Existing and new laws and regulations relating to consumer privacy
protection could harm our ability to collect and use consumer data, increase our
operating costs or otherwise harm our business. We collect personal data about
consumers for use in our decision support and risk management products. The
information we collect includes names and addresses, social security numbers,
drivers license numbers, checking and savings account numbers and payment
history records such as account closures and returned checks. Due to the
increasing public concern over consumer privacy rights, Congress and state
legislatures have adopted and are considering adopting laws and regulations
restricting the purchase, sale and sharing of personal information about
consumers. For example, some states have restricted the sale of motor vehicle
records, including drivers license lists, and some states refuse to disclose
this information at all.

     The new federal financial modernization law, known as the
Gramm-Leach-Bliley Act, imposes significant new consumer information privacy
requirements on any entity engaged in the business of providing financial
services, including entities that provide services to financial institutions.
Federal agencies, such as the Comptroller of the Currency and the Federal Trade
Commission, have issued regulations to implement these requirements. The Act
requires covered companies to develop and implement policies to protect the
security and confidentiality of consumers' nonpublic personal information and to
disclose those policies to consumers before a customer relationship is
established and annually thereafter. In addition, the Act requires covered
companies to give an opt-out notice to consumers before sharing consumer
information with third parties. The opt-out notice requirement in the Act is
subject to several exceptions for credit reporting and fraud prevention
purposes. Although we believe these exceptions apply to our business, government
agencies could interpret their regulations in a manner that could expand the
scope of the Act in ways which could adversely affect our business. In addition,
even if the regulations do not affect us directly, uncertainty over the scope of
the regulations could make financial institutions unwilling to share
consumer-related information with us.

     The Act does not prohibit state legislation or regulations that are more
restrictive on our collection and use of data. More restrictive legislation or
regulations have been introduced in the past and could be introduced in the
future in Congress and the states. For example, in the past legislation has been
proposed which would require consumers to opt in to any plan which would allow
their nonpublic personal information to be disclosed. We are unable to predict
whether more restrictive legislation or regulations will be adopted in the
future. Any future legislation or regulations could have a negative impact on
our business.

     If the security of our databases is compromised, our reputation could
suffer and customers may not be willing to use our products and services.

     If the security of our databases is compromised, our business could be
materially adversely affected. In our electronic payments business, we collect
personal consumer data, such as names and addresses, social security numbers,
drivers license numbers, checking and savings account numbers and payment
history records. Unauthorized access to our database could result in the theft
or publication of personal confidential information and the deletion or
modification of personal records or otherwise cause interruptions in our
operations. These concerns about security are increased when we transmit
information over the Internet. A security or privacy breach may:


                                       5
<PAGE>

     o    deter customers from using our products and services;

     o    harm our reputation;

     o    expose us to liability;

     o    increase our operating expenses to remediate problems caused by the
          breach; and

     o    decrease market acceptance of electronic commerce transactions in
          general.

     We are dependent on Deluxe for a significant portion of our revenue.

     In 2000, net sales to Deluxe represented 14.2% of our total net revenues.
Deluxe has established minimum spending targets of $43 million per year through
March 31, 2005 for software development, maintenance and support services from
our professional services business. We will also provide Deluxe with business
process outsourcing services during this period. The loss of Deluxe as a
customer or a material reduction in the amount of services it orders from us
would materially adversely affect our future results of operations and financial
condition.

     The success of our strategy to expand our Internet delivery channels
depends on product development efforts and increased adoption by businesses and
consumers of the Internet as a means for commerce.

     We believe that the Internet will become an increasingly important means by
which consumers and businesses buy and sell products and services. Accordingly,
developing the means to process debit-based Internet transactions is an
important factor in our ability to increase sales of our electronic payment
services. In order to be successful with this initiative, we must develop
efficient ways for participants in Internet-based transactions to send and
receive debit payments with a minimum level of risk or inconvenience. We cannot
assure you that our Internet applications will be widely accepted in the market.
In addition, the success of our Internet strategy depends on the continued
growth and use of the Internet as a means of commerce. If commerce over the
Internet does not become more accepted and widespread, our business and results
of operations could suffer.

     We may be required to expend significant sums to protect our trademarks.

     In May 1999, we filed a trademark infringement lawsuit seeking to prevent
Citizens Advisers, Inc. from using the "E FUND" mark and efund.com Internet
domain. This action and any future litigation could be costly and time
consuming. If we are unsuccessful in preventing Citizens from using our name for
confusingly similar products, our business could be harmed because customers and
potential customers are confused about the origin of goods and services offered
by Citizens and ourselves and wrongfully attribute any dissatisfaction with
Citizens' services to us. Further, if we are not successful in this lawsuit or
our current settlement discussions are not successful, we may not be able to
obtain a registered federal trademark for the eFunds mark, which could restrict
our ability to protect our name and reputation from infringement by others.

     We may experience software defects, development delays and installation
difficulties, which would harm our business and reputation and expose us to
potential liability.

     Our services and products are based on sophisticated software and computing
systems and we often encounter delays when developing new products and services.
Further, the software underlying our products and services has occasionally
contained and may in the future contain undetected errors or defects when first
introduced or when new versions are released. In addition, we may experience
difficulties in installing or integrating our products and technologies on
platforms used by our customers or in new environments, such as the Internet.
Defects in our software products, errors or delays in the processing of
electronic transactions or other difficulties could result in:


                                       6
<PAGE>

     o    delay in market acceptance;

     o    additional development costs;

     o    diversion of technical and other resources;

     o    loss of customers;

     o    negative publicity; or

     o    exposure to liability claims.

     Although we attempt to limit our potential liability for warranty claims
through disclaimers and limitation-of-liability provisions in our license and
client agreements, we cannot be certain that these measures will be successful
in limiting our liability.

     We depend on the continued services of our key officers.

     Our future success depends upon the continued services of a number of key
officers, including John Blanchard, our Chairman and Chief Executive Officer,
Paul Bristow, our Executive Vice President and Chief Financial Officer, and Dr.
Nikhil Sinha, our Executive Vice President, Business Enterprise Group. The loss
of the technical knowledge and industry expertise of any of these officers could
seriously harm our business.

     Our attempts to expand by means of acquisitions and strategic alliances may
not be successful.

     Tax requirements related to the Spin-Off will restrict our ability to
complete significant acquisitions through the issuance of our common stock.
Further, our ability to expand in this manner involves many risks, including:

     o    the operations, technology and personnel of any acquired companies may
          be difficult to integrate;

     o    the allocation of resources to consummate these transactions may
          disrupt our business;

     o    acquired businesses may not achieve anticipated revenues, earnings or
          cash flow;

     o    strategic alliances may not be successful or we may not realize
          anticipated benefits in a timely manner, or at all; and

     o    our relationships with existing customers and business partners may be
          weakened or terminated as a result of these transactions.

     There are a number of risks associated with our international sales and
operations that could harm our business.

     Because we currently sell some of our products and services in Europe,
Australia and South and Latin America, our business is subject to risks
associated with doing business internationally. Also, we may not be successful
in selling our services outside of the United States. In 2000, we generated
approximately 6.2% of our net sales outside of the United States. Our future
results could be harmed by a variety of factors, including:

     o    changes in foreign currency exchange rates;

     o    changes in a specific country's or region's political and economic
          conditions, particularly in emerging markets;


                                       7
<PAGE>

     o    potentially unfavorable tax rules;

     o    tariffs, duties and other trade barriers;

     o    reduced protection for intellectual property rights;

     o    challenges in managing widespread operations;

     o    changes in foreign laws and regulatory requirements or in foreign
          policy; and

     o    varying business practices in foreign countries.

     Conditions in India could adversely affect our operations.

     We maintain software development and business process management facilities
in India. Political and economic conditions in India could adversely affect our
operations.

     The Company's Indian software development and business process management
operations qualify for tax incentives associated with businesses which operate
within designated geographic locations. Such incentives generally provide us
with a complete exemption from Indian tax on business income generated from
these operations and phase out through the end of 2008. We cannot assure you
that these tax benefits will be continued in the future at their current levels
or at all. If these tax benefits were reduced or eliminated, our taxes in future
periods would likely increase.

     We face collection risks on some payments.

     A debt collection service we commenced in 2000 exposes us to collection
risks. For a limited number of clients of our check authorization service, we
purchase returned checks at a discounted price to the stated check amount and
assume the collection risk on the checks. We base our discounted purchase price
on the collection history of each client. We plan to introduce a check guarantee
program in 2001 pursuant to which we will purchase certain checks presented at
the point of sale at a discount from their face value and assume the subsequent
risk of collection. If we are unable to collect on checks at the expected rates
or if the payment quality of our portfolio of returned checks deteriorates, we
may incur a loss on the checks we purchase.

     We face termination and compliance risks with respect to our government
contracts.

     All of our government contracts can be terminated at any time, without
cause, by the contracting governmental entity. We realized 10.6% of our net
sales in 2000 pursuant to contracts of this type. If a government contract is so
terminated, the contractor generally is entitled to receive compensation only
for the services provided or costs incurred at the time of termination and a
reasonable profit on the contract work performed prior to the date of
termination. In addition, all of our government contracts require us to comply
with various contract provisions and procurement regulations, and in some cases,
accounting requirements. Violations of some of these provisions could, if not
cured, result in termination of the contract and fines.

     Our government services business could be harmed by cost overruns on
fixed-price contracts.

     In 2000, approximately 10.6% of our net sales were derived from
fixed-price, variable volume contracts of our government services business.
Under these contracts, we agree to perform services for an agreed unit price and
we bear the entire risk of cost overruns and changing volumes. If we do not
successfully manage these project and contract risks or if our original contract
estimates turn out to be inaccurate, we could suffer cost overruns and penalties
and our reputation and results of operations could be harmed. We recorded
charges of $40.9 million and $8.7 million in 1998 and 1999 and we incurred an
additional net $9.7 million charge in the second quarter of 2000 as a result of
these risks. We cannot assure


                                       8
<PAGE>

you that we will not incur additional charges of this type or that the
indemnification Deluxe has agreed to provide us with respect to our existing
contracts will be sufficient.

     We may be unable to protect our intellectual property rights.

     Despite our efforts to protect our intellectual property rights, third
parties may infringe or misappropriate our intellectual property rights, or
otherwise independently develop substantially equivalent products and services.
The loss of intellectual property protection or the inability to secure or
enforce intellectual property protection could harm our business and ability to
compete. We rely on a combination of trademark and copyright laws, trade secret
protection and confidentiality and license agreements to protect our trademarks,
software and know-how. We have also applied for patent protection on some of the
features of our newer products. We may be required to spend significant
resources to protect our trade secrets and monitor and police our intellectual
property rights.

     Third parties may assert infringement claims against us in the future. In
particular, there has been a substantial increase in the issuance of business
process patents for Internet-related business processes, which may have broad
implications for all participants in Internet commerce. Claims for infringement
of these patents are becoming an increasing source of litigation. If we become
subject to an infringement claim, we may be required to modify our products,
services and technologies or obtain a license to permit our continued use of
those rights. We may not be able to do either of these things in a timely manner
or upon reasonable terms and conditions. Failure to do so could seriously harm
our business and operating results. In addition, future litigation relating to
infringement claims could result in substantial costs to us and a diversion of
management resources. Adverse determinations in any litigation or proceeding
could also subject us to significant liabilities and could prevent us from using
some of our products, services or technologies.

     Our historical financial information may not necessarily reflect our
results as a separate company.

     We have only a very limited operating history as an independent company.
The historical financial information we have included in this Annual Report on
Form 10-K has been carved out from Deluxe's consolidated financial statements
and may not necessarily reflect what our results of operations, financial
condition and cash flows would have been had we been a separate, stand-alone
entity during the periods presented. As a result of the IPO and the Spin-Off, we
are now required to provide our own financial, administrative and other
resources to operate as an independent public company and to replace other
services provided by Deluxe to us. As a result, the historical financial
information is not necessarily indicative of what our results of operations,
financial condition and cash flows will be in the future.

     There are tax risks associated with the Spin-Off.

     Deluxe has received confirmation from the Internal Revenue Service that,
for U.S. federal income tax purposes, the Spin-Off was generally tax-free to
Deluxe and to its shareholders. This confirmation was premised on a number of
representations and undertakings made by eFunds and Deluxe to the Internal
Revenue Service, including representations with respect to each company's
intention not to engage in certain transactions in the future. The Spin-Off may
be held to be taxable to Deluxe and to its shareholders who received eFunds
shares if the Internal Revenue Service determines that any of the
representations made were incorrect or untrue in any respect, or if any
undertakings made are not complied with. If, notwithstanding the confirmation of
the Internal Revenue Service, the Spin-Off is held to be taxable, both Deluxe
and its shareholders who received eFunds shares could be subject to a material
amount of taxes. We will be liable to Deluxe for any such taxes incurred by
Deluxe to the extent such taxes are attributable to specific actions or failures
to act by us, or to specific transactions involving us following the Spin-Off.
In addition, we will be liable to Deluxe for a portion of any taxes incurred by
Deluxe if the Spin-Off fails to qualify a tax-free as a result of a retroactive
change of law or other reasons unrelated to the action or inaction of either us
or Deluxe.

     Deluxe generally has sole authority to respond to and conduct all tax
proceedings and tax audits relating to our operations prior to the Spin-Off and
to file all related returns on our behalf. The tax sharing


                                       9
<PAGE>

agreement also determines the amount of our liability to, or entitlement to
payment from, Deluxe with regard to taxes and tax refunds for these periods.
This arrangement may result in conflicts between us and Deluxe. Under the
tax-sharing agreement, Deluxe may choose to contest, compromise or settle any
adjustment or deficiency proposed by the relevant taxing authority in a manner
that may be beneficial to Deluxe and detrimental to us.

     Tax limitations on issuance of our shares will restrict our ability to
undertake acquisitions.

     We may be limited in the amount of shares that we can issue because the
issuance of our shares may cause the Spin-Off to be taxable to Deluxe under
Section 355(e) of the Internal Revenue Code. As a result of such possible
adverse tax consequences, we may be restricted in our ability to effect certain
acquisitions or to enter into other transactions that would result in a change
of control of us.

     Provisions in our charter documents and Delaware law and tax considerations
related to the spin-off may delay or prevent a change in control.

     Provisions of our certificate of incorporation and bylaws and Delaware law
may delay or prevent a change in control of the Company that you may consider
favorable. These provisions include the following:

     o    no cumulative voting by stockholders for directors;

     o    a classified board of directors with three-year staggered terms;

     o    the ability of our board to set the size of the board of directors, to
          create new directorships and to fill vacancies;

     o    the ability of our board to issue preferred stock, without stockholder
          approval, with rights and preferences that may be superior to our
          common stock;

     o    the ability of our board to amend the bylaws;

     o    a prohibition of stockholder action by written consent;

     o    advance notice requirements for stockholder proposals and for
          nominating candidates to our board;

     o    restrictions under Delaware law on mergers and other business
          combinations between us and any holder of 15% or more of our
          outstanding common stock; and

     o    a requirement that 66-2/3% of our stockholders and 66-2/3% of our
          directors approve certain corporate transactions, including mergers
          and consolidations, sales of assets or amendments to our certificate
          of incorporation.

In addition we have adopted a stockholder rights plan which discourages the
unauthorized acquisition of 15% or more of our common stock or an unauthorized
exchange or tender offer. Our tax sharing agreement with Deluxe also provides
that we will indemnify Deluxe for any taxes due if the Spin-Off or some of the
related transactions fail to qualify as tax-free because of our actions or
inactions. An acquisition of us by a third party could have such an effect. As a
result, these tax considerations may delay or prevent a third party from
acquiring us in a transaction you may otherwise have considered favorable or
reduce the amount you receive as part of the transaction.


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