**Exhibit 99.1**
**RISK FACTORS AFFECTING OUR BUSINESS AND FUTURE RESULTS**
      *You should consider carefully each of the following risks and all of the other information inthis Annual Report on**Form 10-K**and the documents incorporated by reference herein. If any of thefollowing risks and uncertainties develop into actual events, our business, financial condition orresults of operations could be materially adversely affected.*
**Risks Related to Our Business**
***We have a history of losses and can offer no assurance that we will maintainour recent profitability.***
      We have incurred annual net losses for the past five years. We incurred net losses of $18.5million, $13.5 million and $17.8 million for the years ended December 31, 2004, 2003 and 2002,respectively. As of December 31, 2004, we had an accumulated deficit of $149.9 million. We havenever declared or paid cash dividends on our Class A common stock and do not currently anticipatepaying any cash dividends on our Class A common stock in the foreseeable future. We expect to incursignificant expenses in the near term, especially due to product development, sales and marketingand administrative expenses. Therefore, we will need to generate significant additional revenue andcontrol costs to achieve and sustain profitability on a quarterly or annual basis. If we are notable to increase revenue or control costs, our operating results and profitability could beadversely affected.
***Our stock price, like that of many technology companies, has been and maycontinue to be volatile.***
      We expect that the market price of our Class A common stock will continue to be volatile. Weare involved in a highly visible, rapidly changing industry and stock prices in our industry andsimilar industries have risen and fallen in response to a variety of factors, including:
 •  announcements of new wireless data communications technologies and newproviders of wireless data communications;  •  acquisitions of, or strategic alliances among, providers of wirelessdata communications;
 

 

 •  changes in recommendations by securities analysts regarding theresults or prospects of providers of wireless data communications;  •  changes in investor perceptions of the acceptance or profitability ofwireless data communications; and  •  other global economic uncertainties.
***If wireless carriers do not continue to provide additional products andservices to their subscribers, our business could be harmed.***
      If wireless carriers limit their product and service offerings or do not purchase additionalproducts containing our applications, our business will be harmed. Wireless carriers faceimplementation and support challenges in introducing Internet-based services via wireless devices,which may slow the rate of adoption or implementation of our products and services. Historically,wireless carriers have been relatively slow to implement complex new services such asInternet-based services. Our future success depends upon a continued increase in the use ofwireless devices to access the Internet and upon the continued development of wireless devices as amedium for the delivery of network-based content and services. We have no control over the pace atwhich wireless carriers implement these new services. The failure of wireless carriers to introduceand support services utilizing our products in a timely and effective manner could reduce sales ofour products and services and seriously harm our business.
***We may fail to support our anticipated growth in operations which could reducedemand for our services and materially adversely affect our revenue.***
      Our business strategy is based on the assumption that the number of customers, the amount ofinformation they want to receive and the number of services we offer will all increase. We mustcontinue to develop and expand our systems and operations to accommodate this growth. The expansionand adaptation of our systems operations requires substantial financial, operational and managementresources. Due to the limited deployment of our services to date, the ability of our systems andoperations to connect and manage a substantially larger number of customers while maintainingsuperior performance is unknown. Any failure on our part to develop and maintain our wireless dataservices as we experience rapid growth could significantly reduce demand for our services andmaterially adversely affect our revenue.
***We could incur substantial costs from product liability claims relating to oursoftware.***
 

 

      Our agreements with customers may require us to indemnify customers for our own acts ofnegligence and non-performance. Product liability and other forms of insuranceare expensive and may not be available in the future. We cannot be sure that we will be able tomaintain or obtain insurance coverage at acceptable costs or in sufficient amounts or that ourinsurer may not disclaim coverage as to a future claim. A product liability or similar claim mayadversely affect our business, operating results or financial condition.
***Our operating results could be adversely affected by any interruption of ourdata delivery services or system failure.***
      Our E9-1-1, market data, enterprise mobility and mobile asset delivery and logisticsoperations depend on our ability to maintain our computer and telecommunications equipment andsystems in effective working order, and to protect our systems against damage from fire, naturaldisaster, power loss, telecommunications failure, sabotage, unauthorized access to our system orsimilar events. Although all of our mission-critical systems and equipment are designed withbuilt-in redundancy and security, any unanticipated interruption or delay in our operations couldhave a material adverse effect on our business, financial condition and results of operations.
      Furthermore, any addition or expansion of our facilities to increase capacity could increaseour exposure to natural or other disasters. Our property and business interruption insurance maynot be adequate to compensate us for any losses that may occur in the event of a system failure ora breach of security. Furthermore, insurance may not be available to us at all or, if available,may not be available to us on commercially reasonable terms.
***Because we rely on a few key customers, our revenue may decline if we fail toretain those customers.***
      To date, the largest customers for our product and service offerings in terms of revenuegenerated have been Hutchison 3G, Verizon Wireless, and the U.S. government. For the fiscal yearsended December 31, 2004, 2003, and 2002, customers that accounted for 10% or more of total revenuewere Verizon Wireless and the U.S. Government. For the year ended December 31, 2002, Hutchison 3Galso accounted for 10% or more of total revenue. We expect to generate a significant portion ofour total revenue from these customers for the foreseeable future. For the year ended December 31,2004, the largest customers for our service bureau offering were Verizon Wireless, US Cellular andCingular, the largest customers for our Government segment were various U.S. government agencies,the largest customers for our Enterprise segment were Merrill Lynch, Goldman Sachs, Bank ofAmerica, Office Depot and Corporate Express. To date, the attrition rate for enterprise customersfrom the businesses that we acquired in connection with the acquisition of Aether’s EMS divisionhas been approximately 10% due to technology changes, but we have not
 

 

experienced any unanticipatedcustomer attrition in the segment. Our growth depends on maintaining relationships with theseimportant customers and on developing othercustomers and distribution channels. The loss of any of the customers discussed in this paragraphwould have a material adverse impact on our business.
***Because our business may not generate sufficient cash to fund operations, wemay not be able to continue to grow our business if we are unable to obtainadditional capital when needed.***
      We believe that our cash and cash equivalents, and the funds anticipated to be generated fromoperations will be sufficient to finance our operations for at least the next twelve months.Although, we currently believe that we have sufficient capital resources to meet our anticipatedworking capital and capital expenditures requirements beyond the next twelve months, unanticipatedevents and opportunities may make it necessary for us to return to the public markets or establishnew credit facilities or raise capital in private transactions in order to meet our capitalrequirements. We cannot assure you that we will be able to raise additional capital in the futureon terms acceptable to us, or at all.
***Variations in quarterly operating results due to factors such as changes indemand for our products and changes in our mix of revenues may cause our ClassA common stock price to decline.***
      Our quarterly revenue and operating results are difficult to predict and are likely tofluctuate from quarter-to-quarter. For example, our former Network Solutions segment (currently,our Government segment) revenue in 2002 and 2003 was higher in the second half of the year, but waslower in the second half of 2004. In addition, we generally derive a significant portion ofwireless carrier license revenue in our Commercial Applications segment from initial license fees.The initial license fees that we receive in a particular quarter may vary significantly. As theseprojects begin and end, quarterly results may vary. We therefore believe that quarter-to-quartercomparisons of our operating results may not be a good indication of our future performance, andyou should not rely on them to predict our future performance or the future performance of ourClass A common stock. Our quarterly revenues, expenses and operating results could varysignificantly from quarter-to-quarter. If our operating results in future quarters fall below theexpectations of market analysts and investors, the market price of our stock will fall.
      Additional factors that have either caused our results to fluctuate in the past or that arelikely to affect it in the future include:
 •  changes in our relationships with Lucent, the U.S. government or other customers;
 

 

 •  timing of introduction of new products and services;  •  changes in pricing policies and product offerings by us or our competitors;  •  costs associated with advertising, marketing and promotional efforts to acquirenew customers;  •  capital expenditures and other costs and expenses related to improving ourbusiness, expanding operations and adapting to new technologies and changes inconsumer preferences; and  •  our lengthy and unpredictable sales cycle.
***Because our product offerings are sold internationally, we are subject to risksof conducting business in foreign countries.***
      Wireless carriers in Europe, Asia, Australia, Africa and Central and South America havepurchased our products. In addition, a significant portion of the revenue historically generated byour Enterprise business has typically been generated outside the United States. We believe ourrevenue will be increasingly dependent on business in foreign countries, and we will be subject tothe social, political and economic risks of conducting business in foreign countries, including:
 •  inability to adapt our products and services to local businesspractices, customs and mobile user preferences;  •  costs of adapting our product and service offerings for foreign markets;  •  inability to locate qualified local employees, partners and suppliers;  •  reduced protection of intellectual property rights;  •  the potential burdens of complying with a variety of U.S. and foreignlaws, trade standards and regulatory requirements, including theregulation of wireless communications and the Internet and uncertaintyregarding liability for information retrieved and replicated in foreigncountries;  •  general geopolitical risks, such as political and economic instabilityand changes in diplomatic and trade relations; and  •  unpredictable fluctuations in currency exchange rates.
 

 

      Any of the foregoing risks could have a material adverse effect on our business by divertingtime and money toward addressing them or by reducing or eliminating sales in such foreigncountries.
***We derive a significant portion of our revenue from sales to various agenciesof the U.S. government which has special rights unlike other customers andexposes us to additional risks that could have a material adverse effect on ourbusiness, financial condition and operating results.***
      Sales to various agencies of the U.S. government accounted for approximately 27.4% of ourtotal revenue for the fiscal year ended December 31, 2004, all of which was attributable to ourGovernment segment. Our ability to earn revenue from sales to the U.S. government can be affectedby numerous factors outside of our control including:
 •  *The U.S. government may terminate the contracts it has with us.*All ofthe contracts we have with the U.S. government are, by their terms,subject to termination by the U.S. government either for itsconvenience or in the event of a default by us. In the event oftermination of a contract by the U.S. government, we may have littleor no recourse.  •  *Our contracts with the U.S. government may be terminated due toCongress failing to appropriate funds.*Our U.S. government contractsare conditioned upon the continuing availability of Congressionalappropriations. Congress usually appropriates funds for a givenprogram on a fiscal-year basis even though contract performance maytake more than one year. Any failure by Congress to appropriate fundsto any program that we participate in could materially delay orterminate the program and have a material adverse effect on ourbusiness.  •  *We are subject to procurement and other related laws and regulationswhich carry significant penalties for non-compliance.*We are subjectto extensive and complex U.S. government procurement laws andregulations. Failure to comply with these laws and regulations andwith laws governing the export of controlled products and commodities,and any significant violations of any other federal law, could subjectus to potential contract termination, civil and criminal penalties,and under certain circumstances, suspension and debarment from futureU.S. government contracts.
      Additionally, the U.S. government may audit and review our costs and performance on theircontracts, as well as our accounting and general practices. The costs and prices under thesecontracts may be subject to adjustment based upon the results of any audits. Future audits may harmour business.
 

 

***We may no longer be able to bid for corporate contracts as a minority-ownedbusiness enterprise.***
      From 1989 until June 1998, we participated as a minority-owned business enterprise in theSection 8(a) Business Development Program under the U.S. SmallBusiness Act. We currently continue to perform under some federal government contracts awarded tous prior to June 1998. If corporate enterprises no longer consider us a minority-owned business, itmay be more difficult for us to compete and our business could be harmed. Additionally, Maurice B.Tosé, our President, Chief Executive Officer and Chairman of the Board, could, without seekinganyone else’s approval, transfer voting control of our Class A common stock to a third party. Sucha transfer could also cause us to lose our status as a minority-owned business among corporateenterprises.
***Because several of our competitors have significantly greater resources thanus, we could lose customers and market share.***
      Our business is highly competitive. Several of our competitors are substantially larger thanwe are and have greater financial, technical and marketing resources than we do. In particular,larger competitors have certain advantages over us which could cause us to lose customers andimpede our ability to attract new customers, including: larger bases of financial, technical,marketing, personnel and other resources; more established relationships with wireless carriers;more funds to deploy products and services; and the ability to lower prices of competitive productsand services because they are selling larger volumes.
      The widespread adoption of open industry standards such as the Wireless Access Protocolspecifications may make it easier for new market entrants and existing competitors to introduceproducts that compete with our software products. Because our commercial applications segment ispart of an emerging market, we cannot identify or predict which new competitors may enter themobile location services industry in the future. With time and capital, it would be possible forcompetitors to replicate any of our products and service offerings or develop alternative products.Additionally, the wireless communications industry continues to experience significantconsolidation which may make it more difficult for smaller companies, like us, us to compete. Ourcompetitors include application developers, telecommunications equipment vendors, locationdetermination technology vendors and information technology consultants, and may includetraditional Internet portals and Internet infrastructure software companies. We expect that we willcompete primarily on the basis of price, time to market, functionality, quality and breadth ofproduct and service offerings.
      The Enterprise business that we acquired from Aether in January 2004 has developed softwareusing standard industry development tools. Many of its agreements with wireless carriers, wirelesshandheld device manufacturers and data providers are non-exclusive. Competitors could develop anduse the same products and services in
 

 

competition with us. With time and capital, it would bepossible for competitors to replicate our services.
      These competitors could include wireless network carriers, mobile and/or wireless softwarecompanies, wireless data services providers and wireless systems integrators and database vendors.As discussed above, many of our potential competitors havesignificantly greater resources than we do. Furthermore, competitors may develop a differentapproach to marketing the services we provide in which subscribers may not be required to pay forthe information provided by our services. Competition could reduce our market share or force us tolower prices to unprofitable levels.
***While we characterize a significant portion of our revenue as being “recurring”there is no guarantee that we will actually achieve this revenue.***
      A significant portion of our revenue is generated from long-term customer contracts that paycertain fees on a month-to-month basis. While we currently believe that these revenue streams willcontinue, renegotiation of the contract terms or non-renewal of material contracts could cause ourrecurring revenues to be lower than expected and any growth depends on maintaining relationshipswith these important customers and on developing other customers and distribution channels.
***The loss of key personnel or any inability to attract and retain additionalpersonnel could harm our business.***
      Our future success will depend in large part on our ability to hire and retain a sufficientnumber of qualified personnel, particularly in sales and marketing and research and development. Ifwe are unable to do so, our business would be harmed. Our future success also depends upon thecontinued service of our executive officers and other key sales, engineering and technical staff.The loss of the services of our executive officers and other key personnel would harm ouroperations. We maintain key person life insurance on certain of our executive officers. We would beharmed if one or more of our officers or key employees decided to join a competitor or if we failto attract qualified personnel. Our ability to attract qualified personnel may be adverselyaffected by a decline in the price of our Class A common stock. In the event of a decline in theprice of our Class A common stock, the retention value of stock options will decline and ouremployees may choose not to remain with us, which could harm our business.
**Risks Related to Our Recent Acquisitions**
***Our purchase of Kivera, the EMS business unit and any future acquisitions ofcompanies or technologies could prove difficult to integrate, disrupt ourbusiness, dilute stockholder value or adversely affect operating results or themarket price of our Class A common stock.***
 

 

      On September 20, 2004, we purchased the assets of Kivera, and, in January 2004, we purchasedthe EMS business unit. In the future, we may acquire or make investments in other companies,services and technologies. We expect that our recent purchase of Kivera, our Enterprise segmentand any acquisitions, strategic alliances or investments we may pursue in the future will have acontinuing, significant impact onour business, financial condition and operating results. The value of the companies or assets thatwe acquire or invest in may be less than the amount we paid if there is a decline of their positionin the respective markets they serve or a decline in general of the markets they serve. If we failto properly evaluate and execute acquisitions and investments, our business and prospects may beseriously harmed. To successfully complete an acquisition, we must:
 •  properly evaluate the technology;  •  accurately forecast the financial impact of the transaction, includingaccounting charges and transaction expenses;  •  integrate and retain personnel;  •  combine potentially different corporate cultures; and  •  effectively integrate products and services, and research anddevelopment, sales and marketing and support operations.
      If we fail to do any of these, we may suffer losses, our management may be distracted fromday-to-day operations and the market price of our Class A common stock may be materially adverselyaffected. In addition, if we consummate future acquisitions using our equity securities orconvertible debt, existing stockholders may be diluted which could have a material adverse effecton the market price of our Class A common stock.
      In addition, the companies and business units we have acquired or invested in or may acquireor invest in are subject to each of the business risks we describe in this section, and if theyincur any of these risks the businesses may not be as valuable as the amount we paid. Further, wecannot guarantee that we will realize the benefits or strategic objectives we are seeking to obtainby acquiring or investing in these companies.
***One of the suppliers of wireless services to our Enterprise business has beensued for patent infringement which raises uncertainty regarding its ability tocontinue to supply us with these services.***
      Research In Motion Limited (“RIM”), which supplies our Enterprise business with hardware andwireless services that are in turn packaged with other services and resold, is engaged in legalproceedings with NTP Inc. which alleges that certain RIM
 

 

products infringed on patents held by NTPInc. This creates uncertainty regarding RIM’s ability to continue to supply our Enterprise businesswith services. RIM’s inability to supply services to our Enterprise business could cause a loss ofrevenue and increase our net losses. RIM is the only producer of the aforementioned hardware andwireless services, and, in the unlikely event that RIM is prohibited from supplying our Enterprisebusiness in the United States or elsewhere as a result of the litigation or otherwise, wewould be unable to operate the business of our Enterprise business as it is currently conducted.
***An interruption in the supply of products and services that we obtain fromthird parties could cause a decline in sales of the services from the newlyacquired our Enterprise business, and products we purchase to avoid shortagesmay become obsolete before we can use them.***
      In designing, developing and supporting the wireless data services of our Enterprise business,we rely on wireless carriers, wireless handheld device manufacturers, content providers, softwareproviders and companies that manage some of our other services such as our internal IT operationsand customer care services. These suppliers may experience difficulty in supplying us products orservices sufficient to meet our needs or they may terminate or fail to renew contracts forsupplying us these products or services on terms we find acceptable. Any significant interruptionin the supply of any of these products or services could cause a decline in sales of our servicesunless and until we are able to replace the functionality provided by these products and services.We also depend on third parties to deliver and support reliable products, enhance our currentproducts, develop new products on a timely and cost-effective basis and respond to emergingindustry standards and other technological changes. In addition, we rely on the ability of ourcontent providers — including Reuters, the New York Stock Exchange, Inc., the Chicago Board ofTrade, the Nasdaq Stock Market, Inc. and the Options Price Reporting Authority — to continue toprovide us with uninterrupted access to the news and financial information we provide to ourcustomers. The failure of third parties to meet these criteria, or their refusal or failure todeliver the information for whatever reason, could materially harm our business.
**Industry Risks**
***Because the wireless data industry is a new and rapidly evolving market, ourproduct and service offerings could become obsolete unless we respondeffectively and on a timely basis to rapid technological changes.***
      The successful execution of our business strategy is contingent upon wireless networkoperators launching and maintaining mobile location services, our ability to create new networksoftware and mobile asset products and adapt our existing network software products to rapidlychanging technologies, industry standards and customer needs. As a result of the complexitiesinherent in our product offerings, new
 

 

technologies may require long development and testingperiods. Additionally, new products may not achieve market acceptance or our competitors coulddevelop alternative technologies that gain broader market acceptance than our products. If we areunable to develop and introduce technologically advanced products that respond to evolving industrystandards and customer needs, or if we are unable to complete thedevelopment and introduction of these products on a timely and cost effective basis, our businesswill suffer.
      New laws and regulations that impact our industry could increase costs or reduce opportunitiesto earn revenue. The wireless carriers that use our product and service offerings are subject toregulation by domestic, and in some cases, foreign, governmental and other agencies. Regulationsthat affect them could increase our costs or reduce our ability to sell our products and services.In addition, there are an increasing number of laws and regulations pertaining to wirelesstelephones and the Internet under consideration in the United States and elsewhere.
      The applicability to the Internet of existing laws governing issues such as intellectualproperty ownership and infringement, copyright, trademark, trade secret, taxation, obscenity,libel, employment and personal privacy is uncertain and developing. Any new legislation orregulation, or the application or interpretation of existing laws, may have a material adverseeffect on our business, results of operations and financial condition. Additionally, modificationsto our business plans or operations to comply with changing regulations or certain actions taken byregulatory authorities might increase our costs of providing our product and service offerings andmaterially adversely effect our financial condition.
***Concerns about personal privacy and commercial solicitation may limit thegrowth of mobile location services and reduce demand for our products andservices.***
      In order for mobile location products and services to function properly, wireless carriersmust locate their subscribers and store information on each subscriber’s location. Although dataregarding the location of the wireless user resides only on the wireless carrier’s systems, usersmay not feel comfortable with the idea that the wireless carrier knows and can track theirlocation. Carriers will need to obtain subscribers’ permission to gather and use the subscribers’personal information, or they may not be able to provide customized mobile location services whichthose subscribers might otherwise desire. If subscribers view mobile location services as anannoyance or a threat to their privacy, that could reduce demand for our products and services andhave an adverse effect on prospective sales.
***Because many providers are not in compliance with current regulatory mandatesand because our industry is undergoing rapid technological and regulatorychange, our future performance is uncertain.***
 

 

      The Federal Communication Commission, or FCC, has mandated that certain location informationbe provided to operators when they receive an E9-1-1 call. Phase I of the FCC’s 9-1-1 mandaterequired providers to be able to locate wireless E9-1-1 callers within their originating cellsector site and report their callback number by April1998. Phase II of the FCC mandate required providers to be able to pinpoint the location of allE9-1-1 callers within 125 meters in 67% of all cases by October 1, 2001. Although both the Phase Iand Phase II deadlines have passed, many providers are not currently in compliance with eitherphase of the FCC’s mandate. Even so, we believe that many public safety jurisdictions arecontinuing to deploy Phase I technology and when available, we believe they will deploy Phase IItechnology.
      Carriers’ obligations to provide Phase I and Phase II services are subject to request bypublic safety organizations. Due to complex regulatory, funding and political issues many publicsafety organizations have not yet requested this service. As a result, wireless carriers andwireless users may never exhibit sufficient demand for our mobile location services. Technicalfailures, time delays or the significant costs associated with developing or installing improvedlocation technology could slow down or stop the deployment of our mobile location products. Ifdeployment of improved location technology is delayed, stopped or never occurs, market acceptanceof our products and services may be adversely affected.
      In addition, we will rely on third-party providers to manufacture and deploy devices thatdetermine the precise geographic location of wireless users to comply with Phase II of the FCCmandate. The extent and timing of the deployment of our products and services is dependent both onpublic safety requests for such service and wireless carrier’s ability to certify the accuracy ofand deploy the precise location technology. Because we will rely on third-party location technologyinstead of developing the technology ourselves, we have little or no influence over itsimprovement. If the technology never becomes precise enough to satisfy wireless users’ needs or theFCC’s requirements, we may not be able to increase or sustain demand for our products and services,if at all.
***Our E9-1-1 business is dependent on state and local governments.***
      Under the FCC’s mandate, a wireless carrier’s obligation to provide E9-1-1 services isrequired only if state and local governments request the service. As part of a state or localgovernment’s decision to request E9-1-1, they have the authority to develop cost recoverymechanisms. However, cost recovery is no longer a condition to wireless carriers obligations todeploy the service. If state and local governments do not widely request that E9-1-1 services beprovided or we become subject to significant pressures from wireless carriers with respect topricing of E9-1-1 services, our E9-1-1 business would be significantly harmed and future growth ofour business would be significantly reduced.
 

 

***Because the industries which we serve are currently in a cycle ofconsolidation, some of the number of our customers may be reduced which couldresult in a loss of revenue for our business.***
      The telecommunications industry generally is currently undergoing a consolidation phase. Manyof our customers, specifically wireless carrier customers of our Commercial Applications segment,have or may become the target of acquisitions. If the number of our customers is significantlyreduced as a result of this consolidation trend, and the resulting companies do not utilize ourproduct offerings, our financial condition and results of operations could be materially adverselyaffected.
**Technology Risks**
***Because our software may contain defects or errors, our sales could decrease ifthese defects or errors adversely affect our reputation or delays shipments ofour software.***
      The software products that we develop are complex and must meet the stringent technicalrequirements of our customers. We must quickly develop new products and product enhancements tokeep pace with the rapidly changing software and telecommunications markets in which we operate.Software as complex as ours is likely to contain undetected errors or defects, especially whenfirst introduced or when new versions are released. Our software may not be error or defect freeafter delivery to customers, which could damage our reputation, cause revenue losses, result in therejection of our software or services, divert development resources and increase service andwarranty costs, each of which could have a serious harmful effect on us.
***If we are unable to integrate our products with wireless service provider’ssystems we may lose sales to competitors.***
      Our products operate with wireless carriers’ systems, various wireless devices and in the caseof our E9-1-1 offering, with mobile telephone switches and VOIP service provider systems. If we areunable to continue to design our software to operate with these systems and devices, we may losesales to competitors. Mobile telephone switches and wireless devices can be manufactured accordingto many different standards and may have different variations within each standard. Combining ourproducts with each type of switch, device or VOIP system requires a specialized interface andextensive testing. If, as a result of technology enhancements or upgrades to carrier and VOIPprovider systems, our products can no longer operate with such systems, we may no longer be able tosell our products. Further, even if we successfully redesign our products to operate with thesesystems, we may not gain market acceptance before our competitors.
 

 

***Because our systems may be vulnerable to systems failures and security risks,we may incur significant costs to protect against the threat of these problems.***
      We provide for the delivery of information and content to and from wireless devices in aprompt and timely manner. Any systems failure that causes a disruption in our ability to facilitatethe transmission of information to these wireless devices could result in delays in end usersreceiving this information and cause us to lose customers. Our systems could experience suchfailures as a result of unauthorized access by hackers, computer viruses, hardware or softwarefailures, power or telecommunications failures and other accidental or intentional actions whichcould disrupt our systems. We may incur significant costs to prevent such systems disruptions.
      In addition, increasingly our products will be used to create or transmit secure informationand data to and from wireless devices. For example, our software can be used to create privateaddress lists and to provide the precise location of an individual. To protect private informationlike this from security breaches, we may incur significant costs. Further, if a third party wereable to misappropriate our proprietary information or disrupt our operations, we could be subjectto claims, litigation or other potential liabilities that could materially adversely impact ourbusiness.
      The wireless data services provided by our Commercial Applications segment are dependent onreal-time, continuous feeds from Reuters and others. The ability of our subscribers to makesecurities trades, receive sales leads and receive critical business information requires timelyand uninterrupted connections with our wireless network carriers. Any disruption from our satellitefeeds or backup landline feeds could result in delays in our subscribers’ ability to receiveinformation or execute trades. We cannot be sure that our systems will operate appropriately if weexperience a hardware or software failure, intentional disruptions of service by third parties, anact of God or an act of war. A failure in our systems could cause delays in transmitting data, andas a result we may lose customers or face litigation that could involve material costs and distractmanagement from operating our business.
***If mobile equipment manufacturers do not overcome capacity, technology andequipment limitations, we may not be able to sell our products and services.***
      The wireless technology currently in use by most wireless carriers has limited bandwidth,which restricts network capacity to deliver bandwidth-intensive applications like data services toa large number of users. Because of capacity limitations, wireless users may not be able to connectto their network when they wish to, and the connection is likely to be slow, especially whenreceiving data transmissions. Data services also may be more expensive than users are willing topay. To overcome these obstacles, wireless equipment manufacturers will need to develop newtechnology, standards, equipment and devices that are capable of providing higher bandwidthservices at lower cost. We cannot be sure that manufacturers will be able to develop technology andequipment that reliably delivers large quantities of data at a reasonable
 

 

price. If more capacityis not added, a sufficient market for our products and services is not likely to develop or besustained and sales of our products and services would decline and our business would suffer.
***Because the market for most mobile content delivery and mobile locationproducts is new, our future success is uncertain.***
      The market for mobile content delivery and mobile location products and services is new andits potential is uncertain. In order to be successful, we need wireless network operators to launchand maintain mobile location services utilizing our products, and need corporate enterprises andindividuals to purchase and use our mobile content delivery and mobile location products andservices. We cannot be sure that wireless carriers or enterprises will accept our products or thata sufficient number of wireless users will ultimately utilize our products.
***If wireless handsets pose health and safety risks, we may be subject to newregulations and demand for our products and services may decrease.***
      Media reports have suggested that certain radio frequency emissions from wireless handsets maybe linked to various health concerns, including cancer, and may interfere with various electronicmedical devices, including hearing aids and pacemakers. Concerns over radio frequency emissions mayhave the effect of discouraging the use of wireless handsets, which would decrease demand for ourservices. In recent years, the FCC and foreign regulatory agencies have updated the guidelines andmethods they use for evaluating radio frequency emissions from radio equipment, including wirelesshandsets. In addition, interest groups have requested that the FCC investigate claims that wirelesstechnologies pose health concerns and cause interference with airbags, hearing aids and othermedical devices. There also are some safety risks associated with the use of wireless handsetswhile driving. Concerns over these safety risks and the effect of any legislation that may beadopted in response to these risks could limit our ability to market and sell our products andservices.
***If we are unable to protect our intellectual property rights or are sued bythird parties for infringing upon intellectual property rights, we may incursubstantial costs.***
      Our success and competitive position depends in large part upon our ability to develop andmaintain the proprietary aspects of our technology. We also rely on a combination of copyright,trademark, service mark, trade secret laws, confidentiality provisions and various othercontractual provisions to protect our proprietary rights, but these legal means provide onlylimited protection. If we fail to protect our intellectual property, we may be exposed to expensivelitigation or risk jeopardizing our competitive
 

 

position. Similarly, third parties could claim thatour future products or services infringe upon our intellectual property rights. Claims like thesecould require us to enter into costly royalty arrangements or cause us to lose the right to usecritical technology.
      Our ability to protect our intellectual property rights is also subject to the terms of anyfuture government contracts. We cannot assure you that the federal government will not demandgreater intellectual property rights or restrict our ability to disseminate intellectual property.We are also a member of the Wireless Application Protocol Forum, Ltd. and have agreed to licensesome of our intellectual property to other members on fair and reasonable terms to the extent thatthe license is required to develop non-infringing products.
**Risks Related to Our Capital Structure and Common Stock**
***A majority of our Class A common stock is beneficially owned by a small numberof holders, and those holders could thereby transfer control of us to a thirdparty without anyone else’s approval or prevent a third party from acquiringus.***
      We have two classes of common stock: Class A common stock and Class B common stock. Holders ofClass A common stock generally have the same rights as holders of Class B common stock, except thatholders of Class A common stock have one vote per share while holders of Class B common stock havethree votes per share. As of February 28, 2005, Maurice B. Tosé, our President, Chief ExecutiveOfficer and Chairman of the Board, beneficially owned 8,303,601 shares of our Class B common stockand 1,104,461 shares of our Class A common stock. Therefore, in the aggregate, Mr. Tosébeneficially owned shares representing approximately 48.24% of our total voting power, assuming noconversion or exercise of issued and outstanding convertible or exchangeable securities held by ourother shareholders. Accordingly, on this basis, Mr. Tosé controls us through his ability todetermine the outcome of elections of directors, amend our charter and by-laws and take otheractions requiring stockholder action, including mergers, going private transactions and otherextraordinary transactions. Mr. Tosé could, without seeking anyone else’s approval, transfer votingcontrol of us to a third party. Such a transfer could have a material adverse effect on our stockprice, and our business, operating results and financial condition. Mr. Tosé is also able toprevent a change of control regardless of whether holders of Class A common stock might benefitfinancially from such a transaction.
***Our governing corporate documents contain certain anti-takeover provisions thatcould prevent a change of control that may be favorable to shareholders.***
      We are a Maryland corporation. Anti-takeover provisions of Maryland law and provisionscontained in our charter and by-laws could make it more difficult for a third
 

 

party to acquirecontrol of us, even if a change in control would be beneficial to shareholders. These provisionsinclude the following:
 •  authorization of the board of directors to issue “blank check” preferred stock;  •  prohibition of cumulative voting in the election of directors;  •  our classified board of directors;  •  limitation of the persons who may call special meetings of stockholders; and  •  prohibition on stockholders acting without a meeting other than throughunanimous written consent;  •  supermajority voting requirement on various charter and by-law provisions;  •  establishment of advance notice requirements for nominations for election tothe board of directors or for proposing matters that can be acted on bystockholders at stockholder meetings.
      These provisions could delay, deter or prevent a potential acquirer from attempting to obtaincontrol of us, depriving you of an opportunity to receive a premium for your Class A common stock.These provisions could therefore materially adversely affect the market price of our Class A commonstock.
***Because this report contains forward-looking statements, it may not prove to beaccurate.***
      This report, including the documents we incorporate by reference, contains forward-lookingstatements and information relating to our company. These statements are based upon TCS’ currentexpectations and assumptions that are subject to a number of risks and uncertainties that wouldcause actual results to differ materially from those anticipated. We generally identifyforward-looking statements using words like “believe,” “intend,” “expect,” “may,” “should,” “plan,”“project,” “contemplate,” “anticipate,” or other similar statements. We base these statements onour beliefs as well as assumptions we made using information currently available to us. We do notundertake to update our forward-looking statements or risk factors to reflect future events orcircumstances.
      Statements in this report that are forward-looking include, but are not limited to, thefollowing: (a) the statement about our expectations concerning the continued growth in the use ofwireless communications, the statement concerning our belief in our ability to leverage ourexpertise to provide wireless infrastructure to first responders in the U.S.; (b) the statementconcerning our intent to expand our domestic and international carrier base by capitalizing on ourrelationships with original equipment manufacturers; (c) the
 

 

statement concerning our intent toexpand our integrated package of products and services for wireless carriers and enterprises; (d)the statements regarding our belief as to the sufficiency of our capital resources to meet ouranticipated working capital and capital expenditures for the next twelve months; (e) the statementthat we expect to compete primarily on the basis of the functionality, breadth, time to market,ease ofintegration, price and quality of our products and services; and (f) the statement concerning ourexpectations with regard to research and development expenses.