Exhibit 99.1
RISK FACTORS


WE HAVE EXPERIENCED A HISTORY OF LOSSES AND
ANY FUTURE PROFITABILITY IS UNCERTAIN

We have a history of losses and our future profitability is uncertain. We have
never operated at a profit, and have experienced increasing losses and negative
operating cash flow.  We expect that such losses and negative operating cash
flow will continue for at least the next several years as we develop our new
marketing strategy.  As of December 31, 1998, we had an accumulated deficit of
approximately $86,000,000 and there is no assurance that we will ever achieve
profitability or positive operating cash flow.  We have also experienced a
persistent working capital deficiency and expect that we will continue to
incur significant losses and negative operating cash flow in the future.
We are depending upon the successful transition to out recently adopted
strategy of selling prepaid cellular services to meet our working capital
and debt service requirements.  If this transition is not successful, we
will not be able to make required payments on our outstanding
indebtedness and may have to refinance our outstanding indebtedness in
order to repay our obligations of which there can be no assurance.

WE NEED ADDITIONAL FINANCING

The wireless resale industry is highly capital intensive, particularly for
us as a reseller of telecommunications services since substantial costs
are incurred in connection with the acquisition of new subscribers. We
require substantial additional capital to meet past due obligations and to
fully implement our new strategy.  Although we are attempting to negotiate
settlements of our past due obligations, there is no assurance that the
funds made available through the recent restructuring of our loan with
Foothill Credit Corp. and the income from our current subscriber base will
be sufficient.  In view of the substantial reduction in our subscriber
base since November 1998, we will be required to seek additional capital
and may also be required to slow the deployment of our new prepaid
cellular strategy.  We may seek to raise such additional capital from
public or private equity or debt sources but there is no assurance that we
may be able to obtain such additional capital on acceptable terms or at
all.  If we can only raise additional capital through the incurrence of
additional debt, we may become subject to additional or more restrictive
financial covenants.  If additional funds are raised by issuing equity
securities, our stockholders may experience further dilution.  In
addition, such equity securities may have rights, preferences or
privileges senior to those of our Common Stock.  If we are unable to
obtain additional capital on acceptable terms or at all, we will be
required to curtail our planned expansion and/or current operations, which
would materially adversely affect our business, results of operations and
financial condition and our ability to compete.  We also may be compelled
to seek protection under the federal bankruptcy system, either voluntarily
or involuntarily.

WE HAVE RECEIVED A "GOING CONCERN" OPINION FROM OUR ACCOUNTANTS

We have received a "going concern" opinion from our independent
accountants.  Our past growth in subscribers created losses and a working
capital deficiency due to the acquisition costs associated with the high
rate of subscriber acquisition.  We currently require substantial amounts
of capital to fund current operations, the settlement of past due
obligations, and the deployment of our new business strategy.  Due to
recurring losses from operations, an accumulated deficit, stockholders'
deficit, negative working capital, being in default under the terms of
our letters of credit advances, having significant litigation instituted
against us, and our inability to date to obtain sufficient financing to
support current and anticipated levels of operations, our independent
public accountants' audit opinion states that these matters raise
substantial doubt about our ability to continue as a going concern.

WE CANNOT ASSURE YOU THAT WE WILL BE SUCCESSFUL IN THE DEVELOPMENT OF OUR
NEW BUSINESS STRATEGY

We cannot assure you that we can successfully operate our new business
strategy.  If we fail to execute our strategy in a timely or effective
manner, we may be unable to successfully compete in our markets.  Our
business strategy is complex and requires that we successfully complete
many tasks, a number of which must be completed simultaneously including
the following.

- the negotiation of additional reseller agreements on commercially
reasonable terms.

- attract and retain customers.

- attract and retain skilled employees

- expand our sales presence in existing and new markets.

- negotiate settlements of our past due indebtedness.

If we are unable to effectively coordinate the implementation of these
multiple tasks, our business is likely to suffer.

RISKS OF THE INTERNET AS A MEDIUM FOR COMMERCE

     Use of the Internet by consumers is at a relatively early stage of
development, and market acceptance of the Internet as a medium for commerce is
subject to a high level of uncertainty. Our future success will depend
on our ability to significantly increase revenues, which will require the
development and widespread acceptance of the Internet as a medium for commerce.
There can be no assurance that the Internet will be a successful retailing
channel. The Internet may not prove to be a viable commercial marketplace
because of inadequate development of the necessary infrastructure, such as
reliable network backbones, or complementary services, such as high speed
modems and security procedures for financial transactions. The viability of the
Internet or its viability for commerce may prove uncertain due to delays in the
development and adoption of new standards and protocols (for example, the next
generation Internet Protocol) to handle increased levels of Internet activity or
due to increased government regulation or taxation. If use of the Internet does
not continue to grow, or if the necessary Internet infrastructure or
complementary services are not developed to effectively support growth that may
occur, our e-commerce business could be materially adversely affected. In
addition, the nature of the Internet as an electronic marketplace (which may,
among other things, facilitate competitive entry and comparison shopping) may
render it inherently more competitive than conventional retailing formats.

RAPID TECHNOLOGY CHANGE

     To remain competitive, we must continue to enhance and improve the
responsiveness, functionality and features of its online business. The Internet
and the e-commerce industry are characterized by rapid technological change,
changes in user and customer requirements and preferences, frequent new product
and service introductions embodying new technologies and the emergence of new
industry standards and practices that could render our existing online
bookstore and proprietary technology and systems obsolete.  Our success
will depend, in part, on our ability to license leading technologies useful in
our business, enhance our existing services, develop new services and
technology that address the increasingly sophisticated and varied needs
of our existing and prospective customers and respond to technological
advances and emerging industry standards and practices on a cost-effective
and timely basis. The development of a Web site and other proprietary
technology entails significant technical, financial and business risks.
There can be no assurance that we will successfully implement new
technologies or adapt our online business, proprietary technology
and transaction-processing systems to customer requirements or emerging
industry standards. If we are unable, for technical, legal, financial or other
reasons, to adapt in a timely manner in response to changing market conditions
or customer requirements, our business could be materially adversely affected.

SECURITY RISKS

     Despite our implementation of network security measures, our
infrastructure is potentially vulnerable to computer break-ins and similar
disruptive problems caused by its customers or others. Consumer concern over
Internet security has been, and could continue to be, a barrier to commercial
activities requiring consumers to send their credit card information over the
Internet. Computer viruses, break-ins or other security problems could lead to
misappropriation of proprietary information and interruptions, delays or
cessation in service to our customers. Moreover, until more
comprehensive security technologies are developed, the security and privacy
concerns of existing and potential customers may inhibit the growth of the
Internet as a medium for commerce.

THERE ARE RISKS ASSOCIATED WITH DOMAIN NAMES

    We currently hold various Web domain names relating to our brand,
including the "americomonline.com" domain name. The acquisition and
maintenance of domain names generally is regulated by governmental agencies and
their designees. For example, in the U.S., the National Science Foundation has
appointed Network Solutions, Inc. as the current exclusive registrar for the
".com," ".net" and ".org" generic top-level domains. The regulation of domain
names in the U.S. and in foreign countries is expected to change in the near
future. Such changes in the U.S. are expected to include a transition from the
current system to a system which is controlled by a non-profit corporation and
the creation of additional top-level domains. Requirements for holding domain
names will also be affected. As a result, there can be no assurance that we
will be able to acquire or maintain relevant domain names in all
countries in which it conducts business. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear.  We, therefore, may be unable to prevent
third parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of its trademarks and other proprietary rights. Any
such inability could have a material adverse effect on our business.

WE ARE DEPENDENT UPON STRATEGIC ALLIANCES

     We rely on certain strategic alliances to attract users to our online
e-commerce site.  We are attempting to enter into strategic alliances to
attract users from numerous other Web sites or online service providers.
We believe that such alliances result in increased traffic
to our online business.  Our ability to generate revenues from
e-commerce may depend on the increased traffic, purchases, advertising and
sponsorships that we expect to generate through such strategic
alliances. There can be no assurance that these alliances will be maintained
beyond their initial terms or that additional third-party alliances will be
available to us on acceptable commercial terms or at all. The inability
to enter into new, and to maintain any one or more of its existing, significant
strategic alliances could have a material adverse effect on our business.

WE ARE DEPENDENT ON MAJOR CHANNELS OF DISTRIBUTION FOR THE
ACQUISITION OF OUR SUBSCRIBERS

We were dependent on RadioShack to obtain subscribers.  In October 1998,
RadioShack terminated its agreement with us.  At that time, approximately
78% of our subscriber base resulted from sales at RadioShack stores.
Following termination, we lost a substantial part of our subscriber base,
thereby substantially reducing our cash flow.  We are not presently
adding new subscribers until we deploy our new prepaid business strategy.

In the future, a material component of our growth strategy will be the
development of relationships with new channels of distribution to sell
our prepaid wireless services.  As a result, our successful growth will
be dependent in large part on the efforts of third parties whose efforts
growth, whose efforts will depend on their own financial, competitive,
marketing and strategic considerations.  Such considerations include the
relative advantages of alternate products being offered by competitors.
There can be no assurance that these channels of distribution will devote
sufficient time, attention and energy to the marketing of our wireless
services.

WE ARE DEPENDENT ON WIRELESS CARRIERS TO SUPPLY THE SERVICES PROVIDED TO
OUR CUSTOMERS

We are totally dependent upon facilities-based cellular telephone and
paging service providers for the supply of services to be resold to our
subscribers as well as for the information as to usage needed by us to
bill customers.  Because of a lack of capital, we have not paid some of
our carriers within the time period required under our agreements with
the carriers and have been adversely affected by carriers who have failed
to renew existing agreements with us.  We would also be adversely
affected if the carriers failed to renegotiate an agreement to allow us
to activate new subscribers, failed to provide adequate service or
billing information or if they experienced financial, technical or
regulatory difficulties, or if future demand for service exceeds current
service capabilities.  Further, an increase in the wholesale rates
charged by the carriers would force us to either increase the rates we
charge to subscribers, which could adversely affect our ability to
attract new, and retain existing, subscribers, or accept lower operating
margins, which would adversely affect our results of operations.

OUR MARKET IS HIGHLY COMPETITIVE, AND WE MAY NOT BE ABLE TO COMPETE
EFFECTIVELY; MANY OF OUR COMPETITORS HAVE GREATER RESOURCES AND MORE
EXPERIENCE.

     We operate in a highly competitive environment. We have no
significant market share in any market in which we operate. We will face
substantial and growing competition from a variety of cellular and paging
services providers.  The number of competitors who have entered the
market have increased as a result of regulatory changes and industry
consolidation.  Many of our competitors are larger and better capitalized
than we are. Also, many of our competitors have long standing
relationships with their customers and greater name recognition. See
"Business--Competition."

THE FAILURE OF OUR INFORMATION SYSTEMS TO PRODUCE ACCURATE AND PROMPT
BILLING AND TO PROCESS CUSTOMER ORDERS COULD MATERIALLY ADVERSELY AFFECT
OUR BUSINESS.

     The accurate and prompt billing of our customers is essential to our
operations and future profitability. The implementation of our new
prepaid and e-commerce strategy will place additional demands on our
information systems. We cannot assure you that our information systems
will perform how we expect. Also, if our business grows as we plan, we
cannot assure you that our billing and management systems will be
sufficient to provide us with accurate and efficient billing and other
necessary processing capabilities. We may not identify all of our
information and processing needs (including issues related to the Year
2000) and may not upgrade our information systems as needed. Either of
these could materially adversely affect our business, results of
operations and financial condition.

IF WE DO NOT RECEIVE TIMELY AND ACCURATE CALL DATA RECORDS FROM OUR
SUPPLIERS, OUR BILLING AND COLLECTION ACTIVITIES COULD BE ADVERSELY
AFFECTED.

     Our billing and collection activities are dependent upon our
suppliers providing us accurate call data records. If we do not receive
accurate call data records in a timely manner, our business, results of
operations and financial condition could be materially adversely
affected. In addition, we pay our suppliers according to our calculation
of the charges based upon invoices and computer tape records provided by
these suppliers. Disputes may arise between us and our suppliers because
these records may not always reflect current rates and volumes. If we do
not pay disputed amounts, a supplier may consider us to be in arrears in
our payments until the amount in dispute is resolved. We cannot assure
you that disputes with suppliers will not arise or that such disputes
will be resolved in our favor.

OUR ABILITY TO SERVE OUR CUSTOMERS DEPENDS UPON THE RELIABILITY OF THE
NETWORKS, SERVICES AND EQUIPMENT OF THIRD PARTY PROVIDERS.

     We depend entirely upon facilities-based carriers to provide both
cellular and paging services to our customers.  We cannot be sure that
third party cellular and paging services will be available when needed or
upon acceptable terms.

     Although we can exercise direct control of the customer care and
support we provide, all of the cellular and paging services we offer are
provided by others. These services are subject to physical damage, power
loss, capacity limitations, software defects, breaches of security and
other factors which may cause interruptions in service or reduced
capacity for our customers. These problems, although not within our
control, could adversely affect customer confidence and damage our
reputation. Either of these could have a material adverse effect on our
business, results of operations and financial condition.

OUR OPERATING RESULTS HAVE BEEN ADVERSELY AFFECTED BY INCREASES IN
CUSTOMER ATTRITION RATES.

     We cannot assure you that our customers will continue to purchase
cellular and paging services from us.  Because of the termination of the
RadioShack agreement and our lack of capital, we have been compelled to
reduce our customer service staff which has been one of the factors in
causing an attrition in our customer base.  In addition, since November
1998, we have devoted our principal efforts to obtaining additional
financing and the development of our new business strategy.  We could
lose customers as a result of national advertising campaigns,
telemarketing programs and customer incentives provided by major
competitors as well as for other reasons not in our control. Increases in
our customer attrition rates have had a material adverse effect on our
business, results of operations and financial condition.

IF WE FAIL TO MANAGE OUR GROWTH, OUR BUSINESS COULD BE IMPAIRED.

     We are pursuing a business plan that if successful will result in
rapid growth and expansion of our operations.  This rapid growth would
place significant additional demands upon our current management and
other resources. Our success will depend on our ability to manage our
growth. To accomplish this we will have to train, motivate and manage an
increasing number of employees. We will also need to continually enhance
our information systems. Our failure to manage growth effectively could
have a material adverse effect on our business, results of operations and
financial condition.

OUR SUCCESS WILL DEPEND ON A LIMITED NUMBER OF KEY PERSONNEL WHO COULD BE
DIFFICULT TO REPLACE AS WELL AS ON OUR ABILITY TO HIRE OTHER SKILLED
PERSONNEL.

     We believe that our continued success will depend upon the abilities
and continued efforts of our management, particularly members of our
senior management team. The loss of the services of any of these
individuals could have a material adverse effect on our business, results
of operations and financial condition. Our success will also depend upon
our ability to identify, hire and retain additional highly skilled sales,
service and technical personnel. Demand for qualified personnel with
telecommunications experience is high and competition for their services
is intense. We cannot be sure that we will be able to attract and retain
the additional employees we need to implement our business strategy. Our
inability to hire and retain such personnel could have a material adverse
effect on our business, results of operations and financial condition.

RAPID TECHNOLOGICAL CHANGES IN THE TELECOMMUNICATIONS INDUSTRY COULD
RENDER OUR SERVICES OBSOLETE FASTER THAN WE EXPECT OR COULD REQUIRE US TO
SPEND MORE TO DEVELOP OUR NETWORK THAN WE CURRENTLY ANTICIPATE.

     The telecommunications industry is subject to rapid and significant
changes in technology. We cannot predict the effect that changes in
technology will have on our business. Any changes could have a material
adverse effect on our business, operating results and financial
condition. Advances in technology could lead to more entities becoming
facilities-based cellular and paging carriers.  We believe that our long-
term success will increasingly depend on our ability to offer advanced
services and to anticipate or adapt to evolving industry standards. We
cannot be sure that:

 .    we will be able to offer the services our customers require;

 .    our services will not be economically or technically outmoded by
current
     or future competitive technologies;

 .    our information systems will not become obsolete; or

 .    we will have sufficient resources to develop or acquire new
technologies
     or introduce new services that we need to effectively compete.

WE MAY INCUR SIGNIFICANT COSTS AND OUR BUSINESS COULD SUFFER IF OUR
SYSTEMS AND NETWORK, OR THE SYSTEMS OF OUR SUPPLIERS AND VENDORS, DO NOT
PROPERLY PROCESS DATE INFORMATION AFTER DECEMBER 31, 1999.

     Currently, many computer systems and software products are coded to
accept only two digit, rather than four digit, entries in the date code
field. Date- sensitive software or hardware coded in this manner may not
be able to distinguish a year that begins with a "20" instead of a "19,"
and programs that perform arithmetic operations, make comparisons or sort
date fields may not yield correct results with the input of a Year 2000
date. This Year 2000 problem could cause miscalculations or system
failures that could affect our operations.  We cannot assure you that we
have successfully identified all Year 2000 problems with our information
systems. We also cannot assure you that we will be able to implement any
necessary corrective actions in a timely manner. Our failure to
successfully identify and remediate Year 2000 problems in critical
systems could have a material adverse effect on our business, results of
operations and financial condition. Also, if the systems of other
companies that provide us services or with whom our systems interconnect
are not Year 2000 compliant, our business, operating results and
financial condition could be materially adversely affected. The Year 2000
issue is discussed at greater length in "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Year 2000
Compliance."

OUR EXISTING PRINCIPAL STOCKHOLDERS CONTROL A SUBSTANTIAL AMOUNT OF OUR
VOTING SHARES AND WILL BE ABLE TO INFLUENCE ANY MATTER REQUIRING
SHAREHOLDER APPROVAL.

     Our principal stockholders control approximately 89% of our
outstanding voting stock.  Therefore, these shareholders will be able to
influence any matter requiring shareholder approval.

OUR STOCK PRICE IS LIKELY TO BE VOLATILE.

     The trading price of our common stock is likely to be volatile. The
stock market in general, and the market for technology and
telecommunications companies in particular, has experienced extreme
volatility. This volatility has often been unrelated to the operating
performance of particular companies. Other factors that could cause the
market price of our common stock to fluctuate substantially include:

 .    announcements of developments related to our business, or that of
our competitors, our industry group or our customers;

 .    fluctuations in our results of operations;

 .    hiring or departure of key personnel;

 .    a shortfall in our results compared to analysts' expectations and
changes
     in analysts' recommendations or projections;

 .    sales of substantial amounts of our equity securities into the
     marketplace;

 .    regulatory developments affecting the telecommunications industry
or data
     services; and

 .    general conditions in the telecommunications industry or the
economy as a
     whole.

THE MARKET PRICE OF OUR COMMON STOCK COULD BE AFFECTED BY THE SUBSTANTIAL
NUMBER OF SHARES THAT ARE ELIGIBLE FOR FUTURE SALE.

     All of our shares shares will be freely tradeable, under the
Securities Act, subject to compliance with Rule 144 under the Securities
Act.  We cannot be sure what effect, if any, future sales of shares or
the availability of shares for future sale will have on the market price
of the common stock. The market price of our common stock could drop due
to sales of a large number of shares in the market after the offering or
the perception that sales of large numbers of shares could occur. These
factors could also make it more difficult to raise funds through future
offerings of common stock.

WE HAVE ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN ACQUISITION
AND COULD ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK.

     Provisions of our certificate of incorporation and bylaws and the
provisions of Delaware law could make it more difficult for a third party
to acquire control of the company even if a change in control would be
beneficial to our stockholders. These provisions may negatively affect
the price of our common stock and may discourage third parties from
bidding for our company. In addition, our board of directors may issue,
without stockholder approval, shares of preferred stock with terms set by
the board. In addition to delaying or preventing an acquisition, the
issuance of a substantial number of preferred shares could depress the
price of the common stock.

FORWARD LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN.

     Certain statements about us and our industry under the captions
"Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" and
elsewhere in this document are "forward-looking statements." These
forward-looking statements include, but are not limited to, statements
about our plans, objectives, expectations, intentions and assumptions and
other statements in this document that are not historical facts. When
used in this document, the words "estimate," "project," "believe,"
"anticipate," "intend," "plan," "expect" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, including
those described in this "Risk Factors" section, actual results could
differ materially from those expressed or implied by these forward-
looking statements. We caution you not to place undue reliance on these
forward-looking statements. These forward-looking statements speak only
as of the date of this document. We do not undertake any obligation to
publicly release any revisions to these forward-looking statements to
reflect new information, future events or otherwise.

EXPOSURE TO FRAUDULENT USE OF WIRELESS SERVICES

The cellular industry has been subject to telecommunications fraud and,
in particular, "cloning" of legitimate phone numbers leading to the
illegal use of such numbers.  Under our existing agreements with cellular
carriers, access fraud, which results from the unauthorized duplication
of a cellular telephone number, is generally recoverable from the
carrier.  However, subscriber fraud, which occurs when a customer
fraudulently uses another person's identification to become a subscriber
and obtain wireless services, is not recoverable from the carrier.  Due
to the failures of some of our channels of distribution to properly
screen potential subscribers and obtain the required documentation from
them, we have been severely damaged as a result of subscriber fraud.
There can be no assurance that we will not in the future become subject
to increased liability for access fraud or that future liability for
fraud will not have a material adverse effect on our business.

Government Regulation

The resale of interstate and intrastate cellular mobile telephone service
is subject to federal regulation as a commercial mobile radio service, or
CMRS and, as such, to certain aspects of common carrier regulation.
Although the Federal Communications Commission, or FCC, has the authority
to do so, it has to date elected not to regulate rates and the entry of
wireless services providers, and states are precluded, as a matter of
federal law, from regulating the rates or entry of CMRS resellers.
However, we remain subject to the general obligations of all common
carriers, including the requirement to charge just and reasonable rates
and to service all customers in a non-discriminatory manner.  Because
Congress has preempted all state rate and entry regulation CMRS
providers, we are not required to obtain state certification or file
state tariffs in connection with its provision of wireless services.
States, however, retain authority to regulate other terms and conditions
of wireless services.  This has been interpreted to include the ability
of a state public utility commission to act on a complaint regarding an
underlying carrier's alleged discrimination against a cellular reseller.
We also remain subject to state regulations generally affecting
corporations that do business within a state, including a state's
consumer protection laws.

Common carriers are currently required to make their services available
for resale.  However, the FCC has determined to terminate the resale
obligations of cellular, PCS and ESMR providers on November 24, 2002.
The FCC order terminating such resale obligations is currently being
reconsidered by the FCC.  We cannot predict the outcome of the FCC's
reconsideration; however, if the FCC upholds its decision to terminate
the resale obligation of carriers, our business, results of operations
and financial condition could be adversely affected.

Effective January 1, 1998, a new universal service support system went
into effect to ensure the provision of service to rural, insular and
high-cost areas, to low-income individuals and to eligible schools,
libraries and rural healthcare providers.  Under this system, we are
required to contribute a percentage of our revenues to these universal
service programs.  Although these charges apply equally to all carriers,
to the extent that the charges increase the rates we charge, they could
adversely affect our business.

We expect that there will continue to be numerous changes in federal and
state regulation of the telecommunications industry.  We are unable to
predict the future course of such legislation and regulation, and further
changes in the regulatory framework could have a material adverse effect
on our business, results of operations and financial condition.

INTELLECTUAL PROPERTY RISKS

We rely on copyrights, trade secret protection and non-disclosure
agreements to establish and protect its rights relating to its
proprietary software platform and other technology.  We do not hold any
patents.  Despite our efforts to safeguard and maintain its proprietary
rights, there can be no assurance that it will be successful in doing so,
or that its competitors will not independently develop and/or patent
computer software and hardware that is functionally substantially
equivalent or superior to our Activation Services Network, or ASN system,
which could have a material adverse effect on our business.  We have also
been advised that its use of the service mark and trade name "Ameritel"
and the service mark "Family Link" may infringe on trademarks and service
marks of others in certain states.  Additionally, we are aware that
several other companies are using the name "Ameritel" or similar names,
and that it is unlikely that we can obtain exclusive or even broad
service mark protection for the "Ameritel" name.  There also can be no
assurance that other companies using the "Ameritel" name or a similar
name will not challenge our right to use the "Ameritel" name and will not
seek to enjoin us from using such name.  Accordingly, we are in the
process of exploring whether to seek a new name under which to market its
services; however, a change in name may cause confusion in the
marketplace and may adversely affect our business strategy of developing
a brand name and identity, which in turn may adversely affect our growth,
particularly in the short-term.

CONVERTIBLE PREFERRED STOCK DILUTION

We have approximately $16.6 million of Convertible Preferred Stock
outstanding, which is convertible into shares of Common Stock at a
conversion price equal to the lesser of (i) 85% of the average of the
three lowest closing prices per share of Common Stock for the 25 trading
days immediately preceding the conversion notice and (ii) $6.89 per share
in respect of $5.0 million of Convertible Preferred Stock, $5.85 per
share in respect of an additional $5.0 million of Convertible Preferred
Stock $5.31 per share in respect of an additional $5.0 million of
Convertible Preferred Stock and $5.51 per share with respect to an
additional $4.0 million of Convertible Preferred Stock.  Further, the
conversion price of each series of Convertible Preferred Stock is subject
to reduction if we do not comply with certain covenants within specified
time periods.  Accordingly, a decline in the price of the Common Stock
below the fixed conversion price will result in the issuance of
additional shares of Common Stock and the number of such additional
shares may be material.  In addition, holders of securities having
conversion features similar to those of the Convertible Preferred Stock
tend to  sell their shares immediately upon conversion, which generally
results in a decline in the price of the Common Stock and an increase in
the number of shares issued upon the next conversion.  Accordingly, any
conversion of the Convertible Preferred Stock is likely to increase
substantially the number of shares of Common Stock outstanding, adversely
affect the price of the Common Stock and result in dilution to existing
stockholders.  In addition, under generally accepted accounting
principles a portion of the proceeds from the sale of the Convertible
Preferred Stock was allocated to this beneficial conversion feature, and
this discount is amortized; to the extent conversion occurs prior to the
full amortization of the discount, we will be required to recognize the
remainder of the discount in the period of conversion, which will reduce
earnings in that period.

ABSENCE OF DIVIDENDS

We have not paid and do not anticipate paying any cash dividends on its
Common Stock in the foreseeable future.  We intend to retain our
earnings, if any, for use in our growth and ongoing operations.  In
addition, the terms of the Foothill Credit Facility restrict our ability
to pay dividends on our Common Stock.