Exhibit 99.1

Cautionary  Statement   Identifying  Important  Factors  that  Could  Cause  the
Company's  Actual  Results to Differ  from those  Projected  in Forward  Looking
Statements

The  following  factors  could  affect  The  Source  Company's  actual  results,
including its  commission  revenues,  merchandising  revenues,  expenses and net
income, and could cause them to differ from any forward-looking  statements made
by or on behalf of the Company:

o    Competition among providers of many of the Company's products and services,
     particularly  the  processing  of  incentive   payment  claims,  is  highly
     competitive.  The Company recognizes  approximately 50 direct  competitors,
     all of which are closely held private  companies.  Competitors  may develop
     new or different service programs which are perceived by customers to be of
     similar or superior  quality at the same or lower prices than the Company's
     services.  Such  innovations  could  materially  and  adversely  affect the
     Company's  sales.  Moreover,  many of the  services  offered by the Company
     could be performed directly by its retail customers or otherwise offered or
     performed in the future by publishers, distributors or other organizations.
     Although,  at present,  the Company  believes that it will  experience only
     limited competition from such sources,  the Company believes that potential
     competitors,  particularly  distributors,  may be devoting resources to the
     development of such services, which if successfully developed, could have a
     material adverse effect on the Company's business.

o    The Company is currently  experiencing  a period of rapid sales growth that
     has  placed,  and could  continue  to place,  a  significant  strain on the
     Company's  capital and human resources.  [Moreover,  the Company intends to
     continue to pursue its  expansion  strategy  which may  include  additional
     acquisitions of companies  which offer products and services  compatible to
     those of the Company.  The Company  maintains broad discretion to engage in
     virtually  any  business  transaction  in  virtually  any  manner  it deems
     appropriate. There can be no assurance that the Company's sales growth will
     continue  or  that  the  Company  will be able  to  adequately  manage  its
     expansion or integrate  any business  which it may acquire,  the failure of
     either of which could have a material adverse effect on the Company.

o    Substantially   all  of  the  Company's   revenues  are  derived  from  the
     commissions  earned in connection  with the  collection of payments owed to
     the Company's  retailer  clients from magazine  publishers  under  programs
     designed by publishers to provide  magazine  retailers with an incentive to
     increase single copy magazine sales. Although these incentive programs have
     been offered as part of the publishers' overall marketing strategy for more
     than 20 years, the incentive programs are governed by short-term  contracts
     and,  accordingly,  magazine publishers are under no long-term  contractual
     obligation  to continue  the  incentive  programs in their  present form or
     otherwise.  There can be no assurance  that  magazine  publishers  will not
     discontinue  or  significantly  modify the incentive  programs to which the
     Company's  services  relate in a manner  which is not  compatible  with the
     Company's services.
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o    The trading of the Company's  securities on the Nasdaq  SmallCap  Market is
     conditioned  on the Company  meeting  certain  asset,  capital and surplus,
     earnings  and stock price tests.  If the Company  fails any of these tests,
     the Common  Stock may be  delisted  from  trading  on the  Nasdaq  SmallCap
     Market.  The effects of delisting include the limited release of the market
     prices of the  Company's  securities  and more limited news coverage of the
     Company.  Delisting  may  restrict  investors'  interest  in the  Company's
     securities  and materially  adversely  affect the trading market and prices
     for such  securities  and the Company's  ability to issue  securities or to
     secure financing.  In addition to the risk of volatility of stock prices in
     general,  and possible delisting,  low price stocks are subject to risks of
     additional federal and state regulatory requirements and the potential loss
     of  effective  trading  markets.  In  particular,  if the Common Stock were
     delisted from trading on the Nasdaq  SmallCap  Market and the trading price
     of the Common  Stock was less than $5.00 per share,  the Common Stock could
     be subject to Rule 15g-9  under the  Securities  Exchange  Act of 1934,  as
     amended,  which, among other things,  requires that brokers/dealers satisfy
     special  sales  practice  requirements,   including  making  individualized
     written  suitability  determinations  and receiving a  purchaser's  written
     consent prior to any transaction. If the Company's securities were delisted
     and the  trading  price  was less  than  $5.00  per  share,  the  Company's
     securities   could  also  be  deemed  penny  stocks  under  the  Securities
     Enforcement  and  Penny  Stock  Reform  Act of  1990  which  would  require
     additional   disclosure  in   connection   with  trades  in  the  Company's
     securities,  including the delivery of a disclosure schedule explaining the
     nature and risk of the penny stock market. Such requirements could severely
     limit  the  liquidity  of the  Company's  securities  and  the  ability  of
     stockholders to sell their securities in the secondary market.

o    The   Company's   executive   officers  and  directors   beneficially   own
     approximately  65% of the outstanding  shares of Common Stock. As a result,
     those shareholders have voting control of the Company and are able to elect
     all of the  Company's  directors and determine the vote on any matter being
     voted on by the  Company's  shareholders,  including  any merger,  sales of
     assets or other change of control of the Company. The Company's Articles of
     Incorporation  and  Bylaws  do not  provide  for  cumulative  voting in the
     election of directors.

o    The  Company's  success  depends  on its  ability  to  attract  and  retain
     qualified  managerial  and  technical   personnel.   Competition  for  such
     personnel  is keen and there can be no  assurance  that the Company will be
     able to attract and retain the personnel necessary for the full development
     of this business.  Although the Company believes that the loss of no single
     executive or employee will have a material  adverse  effect on the Company,
     the  Company  relies  on a  number  of key  individuals  for its  continued
     success,  and the loss of such individuals could result in material adverse
     effects on the Company's operations.