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                                                                    EXHIBIT 99.1

                        SAFE HARBOR COMPLIANCE STATEMENT
                         FOR FORWARD-LOOKING STATEMENTS

         In passing the Private Securities Litigation Reform Act of 1995, or the
Reform Act, Congress encouraged public companies to make "forward-looking
statements" by creating a safe harbor to protect companies from securities law
liability in connection with these statements. We intend to qualify both our
written and oral forward-looking statements for protection under the Reform Act
and any other similar safe harbor provisions.

         "Forward-looking statements" are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which these expectations are based. All forward-looking
statements are inherently uncertain as they are based on various expectations
and assumptions concerning future events and they are subject to numerous known
and unknown risks and uncertainties that could cause actual events or results to
differ materially from those projected. Due to those uncertainties and risks,
the investment community is urged not to place undue reliance on our written or
oral forward-looking statements. We do not undertake any obligation to update or
revise this Safe Harbor Compliance Statement for Forward-Looking Statements to
reflect future developments. In addition, we do not undertake any obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating results over
time. This Statement supersedes the Safe Harbor Statement filed as Exhibit 99.1
to our Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.

         We provide the following risk factor disclosure in connection with our
continuing effort to qualify our written and oral forward-looking statements for
the safe harbor protection of the Reform Act and any other similar safe harbor
provisions. Important factors currently known to our management that could cause
actual results to differ materially from those in forward-looking statements
include the disclosures contained in the Annual Report on Form 10-K to which
this statement is appended as an exhibit and also include the following:

OUR OPERATING RESULTS COULD FLUCTUATE, CAUSING OUR STOCK PRICE TO FALL.

         Although we have been able to grow our revenue and operating income
(before special charges) in the past, we cannot assure that we will be able to
continue to grow our revenue and operating income at historical levels or that
fluctuations in revenue or operating income growth will not occur in future
periods. The following factors could impact the future rate of growth in revenue
or operating income:

         -        the management time and effort currently anticipated in
                  connection with the integration of recently acquired
                  businesses and the implementation of enterprise resource
                  planning systems;
         -        the discontinuance of historical or acquired lines of business
                  or products and a slow down in the rate of growth of AS/400
                  EDI sales; and
         -        our success in developing electronic commerce products and
                  services acceptable to the market.

         In addition, if our quarterly revenue or operating results fall below
the expectations of investors or public market analysts, the price of our common
stock could fall substantially. Our quarterly operating results have in the past
and may in the future vary or decrease significantly depending on factors over
which we have limited or no control, such as:

         -        revenue from software sales;
         -        the timing of new product and service announcements;
         -        changes in pricing policies by us and our competitors;
         -        market acceptance of new and enhanced versions of our
                  products;
         -        conversion of customers to Year 2000 ready solutions;
         -        the size and timing of significant orders;
         -        changes in operating expenses, strategy or personnel;
         -        government regulation;




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         -        the introduction of alternative technologies; and
         -        the effect of acquisitions.

         We are currently upgrading our enterprise resource planning systems.
Our management believes that the successful installation and implementation of
these systems are prerequisites to our success. Any significant delay in the
installation or failure in the implementation of one or more of these systems
could have a material adverse effect on our business and financial results. We
have experienced losses in the past, and at September 30, 1998, we had an
accumulated deficit of approximately $81.8 million. We operate with virtually no
software product order backlog because our software products typically are
shipped shortly after orders are received. As a result, revenues in any quarter
are substantially dependent on the quantity of purchases of services requested
and product orders received in that quarter. Quarterly revenues also are
difficult to forecast because the market for electronic commerce is rapidly
evolving, and our revenues in any period may be significantly affected by the
announcements and product offerings of our competitors as well as alternative
technologies. Our IVAS product is more complex and expensive compared to our
other electronic commerce and Internet products introduced to date, and will
generally involve significant investment decisions by prospective customers.
Accordingly, we expect that in selling our IVAS product, we will encounter risks
typical of companies that rely on large dollar purchase decisions, including the
reluctance of purchasers to commit to major investments in new products and
protracted sales cycles, both of which add to the difficulty of predicting
future revenues and may result in quarterly fluctuations. Our expense levels are
based, in part, on our expectations as to future revenues. If revenue levels are
below expectations, we may be unable or unwilling to reduce expenses
proportionately and operating results are likely to be adversely affected. As a
result, we believe that period-to-period comparisons of our results of
operations are not necessarily meaningful and should not be relied upon as
indications of future performance. Due to all of the foregoing factors, it is
likely that in some future quarter or quarters our operating results will be
below the expectations of public market analysts and investors.

IF WE CANNOT INTEGRATE ACQUIRED COMPANIES WITH OUR BUSINESS, OUR PROFITABILITY
MAY BE ADVERSELY AFFECTED.

         We have completed a number of acquisitions in the past two fiscal years
and may complete additional acquisitions of complementary businesses in the
future. Our most recent acquisitions include the Materials Management Division
of MACTEC, Inc.; EDIWorks! L.L.C.; Premenos Technology Corp., or Premenos; Atlas
Products International, Limited and its affiliate; Acquion, Inc., or Acquion;
SupplyTech, Inc. and its affiliated entities, or SupplyTech; and the minority
interests of Harbinger NET Services, LLC, or HNS. Our completed acquisitions
present a number of risks and challenges, including:

         -        the integration of the software products of the acquired
                  companies into our current suite of products; 
         -        the integration of the sales forces of acquired companies into
                  our existing sales operations;
         -        the coordination of customer support services;
         -        the conversion of acquired companies into a uniform
                  infrastructure;
         -        the integration of international operations of acquired
                  companies with our international affiliates; and
         -        the diversion of our management's attention from other
                  business concerns.

         We cannot assure that we can successfully assimilate our operations and
integrate our software products with recently-acquired operations, software
products and technologies or that we will be successful in repositioning our
products on a timely basis to achieve market acceptance. Any adverse
developments associated with our integration efforts could have a material
adverse effect on our business and financial results.

         We cannot ensure that we will be able to continue to identify suitable
acquisition candidates available for sale at reasonable prices, consummate any
acquisition or successfully integrate any acquired business into our operations.
Operational and software integration problems may arise if we undertake future
acquisitions of complementary products, technologies or businesses. Future
acquisitions may also result in:

         -        potentially dilutive issuances of equity securities;
         -        the incurrence of additional debt;
         -        the write-off of in-process product development and
                  capitalized product costs;



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         -        integration costs; and
         -        the amortization of expenses related to goodwill and other
                  intangible assets.

         Future acquisitions may involve numerous additional risks, including
difficulties in the assimilation of the operations, products and personnel of
the acquired company, differing company cultures, the diversion of management's
attention from other business concerns, risks of entering markets in which we
have little or no direct prior experience and the potential loss of key
employees of the acquired company. The occurrence of any of these risks could
materially affect our business and financial results. Although we have cash
resources of approximately $75 million at March 26, 1999, to the extent we
desire to finance a future acquisition, we cannot assure that we will be able to
secure financing for such a transaction on reasonable terms or at all. See "We
must successfully manage our growth."


WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST OTHER COMPANIES.

         The electronic commerce, network services and products businesses are
intensely competitive, and we have many competitors with substantially greater
financial, marketing, personnel and technological resources than we have. We may
not be able to compete successfully against current and future competitors, and
competitive pressures faced by us could hurt our business and financial results.
Other companies offer products and services that may be considered by customers
to be acceptable alternatives to our products and services. Certain companies
also operate private computer networks for transacting business with their
trading partners, and we expect other companies to offer products and services
competitive with our Templar, Express and IVAS products and services. We expect
that other companies may develop and implement similar computer-to-computer
networks, some of which may be "public" networks such as ours and others may be
"private," providing services only to a specific group of trading partners,
thereby reducing our ability to increase sales of our network services. In
addition, several companies offer PC-based, midrange NT and UNIX, and mainframe
and Internet computer software products which compete with our software
products. Advanced operating systems and applications software from Microsoft
and other vendors also may offer electronic commerce functions that limit our
ability to sell our software products.

         We believe that the continuing acceptance of electronic commerce will
attract new competitors, including software applications, operating systems and
systems integration companies that may bundle electronic commerce solutions with
their offerings, and alternative technologies that may be more sophisticated and
cost effective than our products and services. Competitive companies may offer
certain electronic commerce products or services, such as communications
software, network transactional services or consulting, at no charge or a deeply
discounted charge, in order to obtain the sale of other products or services.
Since our agreements with our network subscribers generally are terminable upon
30 days' notice, we do not have the contractual right to prevent our customers
from changing to a competing network. See "We must continue to advance our
technology and comply with industry requirements to remain competitive."

         Companies that currently offer products and/or services that compete
with various of our products and services include, among others, IBM, Inc.,
AT&T, Computer Associates International, Inc., EDS, General Electric Information
Systems, QRS, Inc., Sterling Commerce, Inc., Aspect Development, Inc., TSI
International, Inc., Ariba Technologies, Inc. and a joint venture between
British Telecommunications Plc and MCI Communications Corporation; as well as
the internal programming staffs of various businesses engaging in electronic
commerce.

THERE ARE MANY RISKS ASSOCIATED WITH THE EMERGENCE OF ELECTRONIC COMMERCE OVER
THE INTERNET.

         The Internet provides an alternative means of providing electronic
commerce to business trading partners. The market for Internet software and
services is both emerging and highly competitive, ranging from small companies
with limited resources to large companies with substantially greater financial,
technical and marketing resources than ours. In addition to our Internet-related
products and services, several of our existing competitors have introduced their
own Internet electronic commerce products and services. Moreover, new
competitors, which may include telephone companies and media companies, are
likely to increase the provision of business-to-business data transmission
services using the Internet. We cannot assure that the Internet will become an
accepted method of 



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electronic commerce. We cannot assure that Templar end user software and IVAS
products, which enable electronic commerce over the Internet, will be accepted
in the Internet market or will be competitive with other products based on
evolving technologies. If the Internet becomes an accepted method of electronic
commerce, we could lose network customers from our VAN, which would reduce
recurring revenue from network services and have a material adverse effect on
our business and financial condition. Even if customers choose our Internet
solutions, the revenue gained from the sale of these solutions may not offset
the loss of revenue from the sale of our traditional EDI solutions.

         The use of our Internet electronic commerce products and services will
depend in large part upon the continued development of the infrastructure for
providing Internet access and services. Use of the Internet for
business-to-business electronic commerce services raises numerous issues that
greatly impact the development of this market. These issues include reliability,
data security and data integrity, timely transmission, and pricing of products
and services. Because global commerce and online exchange of information on the
Internet is new and evolving, it is difficult to predict with any assurance
whether the Internet will prove to be a viable commercial marketplace. The
Internet has experienced, and is expected to continue to experience, substantial
growth in the number of users and the amount of traffic. We cannot assure that
the Internet will continue to be able to support the demands placed on it by
this continued growth. In addition, the Internet could lose its viability due to
delays in the adoption of new standards and protocols to handle increased levels
of Internet activity, or due to increased governmental regulation or the
imposition of fees or taxes for its use. We cannot assure that the
infrastructure or complementary services necessary to make the Internet a viable
commercial marketplace will be developed, or, if developed, that the Internet
will become a viable commercial marketplace for products and services such as
those offered by us. If the necessary infrastructure or complementary services
or facilities are not developed, or if the Internet does not become a viable
commercial marketplace, our business and financial results will be materially
adversely affected.

WE MUST SUCCESSFULLY MANAGE OUR GROWTH.

         We have recently experienced significant growth in revenue, operations
and personnel as we have made strategic acquisitions, added subscribers to our
Value Added Network, or VAN, and Internet Value Added Server, or IVAS, and
increased the number of licensees of our software products. This growth could
continue to place a significant strain on our management and operations,
including our sales, marketing, customer support, research and development,
finance and administrative operations. Achieving and maintaining profitability
during a period of expansion will depend, among other things, on our ability to
successfully expand our products, services and markets and to manage our
operations and acquisitions effectively. Difficulties in managing growth,
including difficulties in obtaining and retaining talented management and
product development personnel, especially following an acquisition, could have a
material adverse effect on our business and financial results.

         We recognize revenues for software license fees upon shipment, net of
estimated returns. Customers using our PC products are permitted to return
products after delivery for a specified period, generally 30 days. We generally
have experienced returns of approximately 10% to 20% of the PC product license
fees, and we record revenues after a deduction for estimated returns. Any
material increase in our return experience could have an adverse effect on our
business and financial results.

WE HAVE EXPERIENCED CHARGES THAT RESULTED IN NET LOSSES FOR THE FIRST AND THIRD
QUARTERS OF 1998.

         In the first and third quarters of 1998, we reported approximately
$13.0 million in integration related charges and $14.0 million in integration
and restructuring related charges, respectively. As a result of these charges,
we reported a net loss for each of the first and third quarters of 1998 and have
reported a net loss for the year ended December 31, 1998. Certain of the costs
and expenses incurred in connection with these integration activities and
reflected in such charges included internal expense allocations that may recur
in the future and may result in an increase in some expense categories in our
results of operations in future periods.



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WE MUST CONTINUE TO ADVANCE OUR TECHNOLOGY AND COMPLY WITH INDUSTRY REQUIREMENTS
TO REMAIN COMPETITIVE.

         The electronic commerce industry is characterized by rapid
technological change, frequent new product and service introductions and
evolving industry standards. Our future success will depend in significant part
on our ability to anticipate industry standards, to continue to apply advances
in electronic commerce product and service technologies, to enhance existing
products and services, and to introduce and acquire new products and services on
a timely basis to keep pace with technological developments. We cannot assure
that we will be successful in timely developing, acquiring or marketing new or
enhanced products or services that respond to technological change and evolving
industry standards, and that meet the requirements of the marketplace and
achieve market acceptance. In the past, we have experienced delays in the
commencement of commercial shipments of new products and enhancements, resulting
in delays or losses of product revenues. These delays or failure in the
introduction of new or enhanced products or services, or the failure of such
products or services to achieve market acceptance, could have a material adverse
effect our business and financial results.

THERE ARE MANY RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.

         We believe that our continued growth and profitability will require
expansion of our international operations through our international
subsidiaries, in the United Kingdom, The Netherlands, Germany, Italy, France and
Mexico. This expansion will require financial resources and significant
management attention. Our ability to successfully expand our business
internationally will also depend upon our ability to attract and retain both
talented and qualified managerial, technical and sales personnel and electronic
commerce services customers outside the United States and our ability to
continue to effectively manage our domestic operations while focusing on
international expansion. Certain of our international subsidiaries have
experienced operating losses in their recent histories and some have experienced
significant operating losses in their recent histories. Any inability of our
international subsidiaries to penetrate international markets in a timely and
profitable manner could have a material adverse affect on our business and
financial results.

         During 1998, our growth in revenue has been adversely affected by
management issues associated with our European operations and general softness
in demand in the European markets. Moreover, our ability to successfully
implement our international strategy may require installation and operation of a
value-added network and implementation of our IVAS software in additional
countries, as well as additional improvements to our infrastructure and
management information systems, including our international customer support
systems. In addition, we cannot assure that we will be able to maintain or
increase international market demand for our products or services.

         International operations are subject to certain inherent risks,
including unexpected changes in regulatory requirements and tariffs, longer
payment cycles, increased difficulties in collecting accounts receivable and
potentially adverse tax consequences. To the extent international sales are
denominated in foreign currencies, gains and losses on the conversion to U.S.
dollars of revenues, operating expenses, accounts receivable and accounts
payable arising from international operations may contribute to fluctuations in
our results of operations. We have not entered into any hedging or other
arrangements for the purpose of guarding against the risk of currency
fluctuation. In addition, sales in Europe and certain other parts of the world
typically are adversely affected in the third calendar quarter of each year
because many customers reduce their business activities in the summer months.

THE INABILITY TO ATTRACT AND MAINTAIN MANAGEMENT AND OTHER PERSONNEL MAY
ADVERSELY AFFECT US.

         Our success is largely dependent upon our executive officers and key
sales and technical personnel, the loss of one or more of whom could have a
material adverse effect on our business and financial results. Our future
success will depend in large part upon our ability to attract and retain
talented and qualified personnel. In particular, we believe that it will be
important for us to hire experienced product development and sales personnel.
Competition in the recruitment of highly-qualified personnel in the computer
software and electronic commerce industries is intense. Our inability of to
locate and retain such personnel may have a material adverse effect on our
business and financial results. We cannot assure that we can retain our key
employees or that we can attract 



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qualified personnel in the future. We currently carry key-person life insurance
policies on the lives of Messrs. Howle and Travers.

YEAR 2000 AND EURO CONVERSION RISKS MAY ADVERSELY AFFECT US.

         It is possible that our currently-installed computer systems, software
products or other business systems, or those of our customers, vendors or
resellers, working either alone or in conjunction with other software or
systems, will not accept input of, store, manipulate and output dates for the
years 2000 and thereafter without error or interruptions. The latest versions of
our products released or to be released are believed to be Year 2000 ready, but
we are still in the process of confirming this. We are also in the process of
determining the extent to which our earlier software products as implemented in
our installed customer base are Year 2000 ready, as well as the impact of any
non-readiness on us and our customers.

         We currently anticipate that any problems resulting from non-ready
products will be addressed through a combination of product modifications as
part of planned product enhancements and migration of customers to functionally
similar products that are Year 2000 ready. Additional efforts are being made to
modify or replace other non-ready software, systems and equipment used by us
internally, including third party software, before the end of 1999. Further, we
are aware of the risk that third parties, including vendors and our customers,
will not adequately address the Year 2000 problem and the resultant potential
adverse impact on our business and financial results. However, we cannot assure
that we will identify all such year 2000 problems in our computer systems or
those of our vendors in advance of their occurrence or that we will be able to
successfully remedy any problems that are discovered.

         We believe that the majority of the compliance effort will be absorbed
with the product and internal systems enhancements planned for 1998 or 1999, and
thus that the Year 2000 problem will not have a material adverse impact on our
business or financial results, although we can make no assurance to that effect.
Regardless of whether our products are Year 2000 ready, we cannot assure that
customers will not assert Year 2000 related claims against us. We believe that
the purchasing patterns of customers and potential customers will be affected by
Year 2000 issues in a variety of ways. Many companies are expending significant
resources to correct or patch their current software systems for Year 2000
compliance. These expenditures may result in reduced funds available to purchase
software products such as those offered by us. Potential customers may also
choose to defer purchasing Year 2000 ready products until they believe it is
absolutely necessary, thus resulting in potentially stalled market sales within
the industry. Conversely, Year 2000 issues may cause other companies to
accelerate purchases, thereby causing an increase in short-term demand and a
consequent decrease in long-term demand for software products. Additionally,
Year 2000 issues could cause a significant number of companies, including
current customers, to reevaluate their current software needs, and as a result
switch to other systems or suppliers. In addition, our failure to identify and
remedy Year 2000 problems could put us at a competitive disadvantage relative to
companies that have corrected such problems. Any of the foregoing, or
combination thereof, could result in a material adverse effect on our business
and financial results.

         Effective January 1, 1999, eleven of the 15 member countries of the
European Union adopted a single European currency, the euro, as their common
legal currency. Like many companies that operate in Europe, various aspects of
our business will be affected by the conversion to the euro. We are currently
finalizing our evaluation of the effect of the conversion on our products and
systems. The failure to adequately address the euro conversion issues could
affect our ability to offer software and services in the affected countries, as
well as our ability to operate internal systems. While we believe that we can
successfully remediate all related issues, we cannot assure that we will do so
in a timely manner. The failure to do so could have a material adverse effect on
our business and financial results.

WE ARE DEPENDENT UPON OUR ALLIANCE PARTNERS.

         We have various agreements with alliance partners for the distribution
and marketing of certain of our software products. These alliance partners pay
us royalties representing a percentage of fees generated from the sale of
software licensed from us. For the year ended December 31, 1996, revenues from
one of these alliance partners



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were approximately $5.7 million, which equaled the contractual minimum royalty
during 1996. There is no minimum royalty obligation after 1996, and we have
experienced and believe that revenues from this alliance partner will decline in
the future.

WE MAY BE CONFRONTED WITH DEFECTS IN OUR SOFTWARE.

         Software products as complex as those offered by us may contain
undetected errors or failures when first introduced or when new versions are
released. If software errors are discovered after introduction, we could
experience delays or lost revenues during the period required to correct these
errors. We cannot assure that, despite testing by us and by current and
potential customers, errors will not be found in new products or releases after
commencement of commercial shipments. These errors could result in loss of or
delay in market acceptance, additional and unexpected expenses to fund further
product development or to add programming personnel to complete a development
project, and loss of revenue because of the inability to sell the new product on
a timely basis, any one or more of which could have a material adverse effect on
our business and financial results.

WE ARE DEPENDENT ON OUR DATA CENTERS, WHICH COULD BE DESTROYED OR DAMAGED.

         Our network service operations are dependent upon the ability to
protect computer equipment and the information stored in our data centers
against damage that may be caused by fire, power loss, telecommunication or
Internet failures, unauthorized intrusion, computer viruses and disabling
devices and other similar events. Notwithstanding precautions we have taken, we
cannot assure that a fire or other natural disaster, including national,
regional or local telecommunications outages, would not result in a prolonged
outage of our network services. In the event of a disaster, and depending on the
nature of the disaster, it may take from several minutes to several days before
our off-site computer system can become operational for all of our customers,
and use of the alternative off-site computer would result in substantial
additional cost to us. In the event that an outage of our network extends for
more than several hours, we will experience a reduction in revenues by reason of
such outage. In the event that such outage extends for one or more days, we
could potentially lose many of our customers, which would have a material
adverse effect on our business and financial results.

WE ARE DEPENDENT ON CERTAIN LICENSE ARRANGEMENTS WITH THIRD PARTIES.

         We rely on certain technology that we license from third parties and
other products that are integrated with internally developed software and used
in our products to perform key functions or to add important features. We cannot
assure that we will be successful in negotiating third-party technology licenses
on suitable terms or that such licenses will not be terminated in the future.
Moreover, any delay or product problems experienced by such third party
suppliers could result in delays in introduction of our products and services
until equivalent technology, if available, is identified, licensed and
integrated, which could have a material adverse effect on our business and
financial results.

OUR FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS MAY ADVERSELY AFFECT
US.

         We rely primarily on a combination of copyright, patent and trademark
laws, trade secrets, confidentiality procedures and contractual provisions to
protect our proprietary rights. We seek to protect our software, documentation
and other written materials principally under trade secret and copyright laws,
which afford only limited protection. We presently have one patent for an
electronic document interchange test facility and a patent application pending
for an EDI communication system. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy aspects of our products or to
obtain and use information that we regard as proprietary. We cannot assure that
our means of protecting our proprietary rights will be adequate or that our
competitors will not independently develop similar technology. In distributing
many of our products, we rely primarily on "shrink wrap" licenses and
increasingly on "click wrap" licenses that are not signed by licensees and,
therefore, may be unenforceable under the laws of certain jurisdictions. In
addition, we have licensed our products to users and distributors in other
countries, and the laws of some foreign countries do not protect our proprietary
rights to as great an extent as the laws of the United States. We do not believe
that any of our products infringe the proprietary rights of third parties. We
cannot assure, however, that third parties will not claim infringement by us



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with respect to current or future products, and we have agreed to indemnify many
of our customers for the full cost of such claims. We expect that software
product developers will increasingly be subject to infringement claims as the
number of products and competitors in electronic commerce grows and the
functionality of products in different industry segments overlaps. Any such
claims, with or without merit could be time-consuming, result in costly
litigation, cause product shipment delays or require us to enter into royalty or
licensing agreements and indemnify our customers against resulting liability, if
any. Such royalty or licensing agreements, if required, may not be available on
terms acceptable to us or at all, which could have a material adverse effect on
our business and financial results.

WE MAY BE SUBJECT TO CHANGING GOVERNMENTAL REGULATIONS.

         Our network services are transmitted to our customers over dedicated
and public telephone lines. These lines are governed by Federal and state
regulations establishing the rates, terms and conditions for their use. Changes
in the legislative and regulatory environment relating to on-line services, EDI
or the Internet access industry, including regulatory or legislative changes
which directly or indirectly affect telecommunication costs, restrict content or
increase the likelihood of competition from regional telephone companies or
others, could have a material adverse effect on our business and financial
results. The Telecommunications Act of 1996, or the Act, amended the federal
telecommunications laws by lifting restrictions on regional telephone companies
and others competing with us and imposed certain restrictions regarding obscene
and indecent content communicated to minors over the Internet or through
interactive computer services. The Act set in motion certain events that will
lead to the elimination of restrictions on regional telephone companies
providing transport between defined geographic boundaries associated with the
provision of their own information services. This will enable regional telephone
companies to more readily compete with us by packaging information service
offerings with other services and providing them on a wider geographic scale.
While provisions of the Act prohibiting the use of a telecommunications device
or interactive computer service to send or display indecent material to minors
have been held by the U.S. Supreme Court to be unconstitutional, we cannot
assure that future legislative or regulatory efforts to limit use of the
Internet in a manner harmful to us will not be successful. The Clinton
administration has announced an initiative to establish a framework for global
electronic commerce. Also, some countries such as Germany have adopted laws
regulating aspects of the Internet, and there are a number of bills currently
being considered in the United States at the federal and state levels involving
encryption and digital signatures, all of which may impact our business. We
cannot predict the impact, if any, that the Act and future court opinions,
legislation, regulations or regulatory changes in the United States or other
countries may have on our business. Our management believes that we are in
compliance with all material applicable regulations. Our Templar product
incorporates encryption technology that is subject to U.S. export control
regulations. Although both products are currently exportable under licenses
granted by the Commerce Department, government regulation in this area is
subject to frequent change and we cannot assure that these products will remain
exportable.

OUR CHARTER AND BYLAWS MAY INHIBIT A TAKEOVER OF OUR BUSINESS.

         Our Board of Directors has authority to issue up to 20,000,000 shares
of preferred stock and to fix the rights, preferences, privileges and
restrictions, including voting rights, of the preferred stock without further
vote or action by our shareholders. The rights of the holders of our common
stock will be subject to, and may be adversely affected by, the rights of the
holders of any preferred stock that may be issued in the future. While we have
no present intention to issue additional shares of preferred stock, such
issuance, while providing desired flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of our outstanding voting
stock. In addition, our charter and bylaws contain provisions that may
discourage proposals or bids to acquire us. This could limit the price that
certain investors might be willing to pay in the future for shares of our common
stock. Our charter provides for a classified board of directors with three-year,
staggered terms for its members. The classification of the our Board could have
the effect of making it more difficult for a third party to acquire control of
us.



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