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                                                                    EXHIBIT 99.1

             IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

                                    June 1997

         From time to time, Spacetec IMC through its management may make
forward-looking public statements, such as statements concerning then expected
future revenues or earnings or concerning projected plans, performance, product
development and commercialization as well as other estimates relating to future
operations. Forward-looking statements may be in reports filed under the
Securities Exchange Act of 1934, as amended, in press releases or in oral
statements made with the approval of an authorized executive officer. The words
or phrases "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are intended to
identify "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933,
as enacted by the Private Securities Litigation Reform Act of 1995.

         The Company wishes to caution readers not to place undue reliance on
these forward-looking statements which speak only as of the date on which they
are made. In addition, the Company wishes to advise readers that the factors
listed below, as well as other factors not currently identified by management,
could affect the Company's financial or other performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods or events in any
current statement.

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

         In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company is hereby filing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements of the Company made by or on behalf of the Company.

         Reliance on 3D Graphical Interface Market. The Company's future success
will continue to depend on sales of its hardware and software products designed
to be used with 3D graphical user interfaces. The Company's ability to increase
sales of its products depends in part on the continued growth of the development
of products incorporating a 3D graphical interface. There can be no assurance
that the market for such user interfaces will continue to grow or that the
Company will be able to respond effectively to the evolving requirements of such
market.

         Rapid Technological Change; Dependence on New Product Development. The
electronics industry in general, and the markets for the Company's products in
particular, are characterized by rapidly changing technology, evolving industry
standards, frequent new product introductions, short product life cycles and
significant competition. The introduction of products embodying new technologies
and the emergence of new industry standards present opportunities for current
and potential competitors of the Company to gain market share and can quickly
render the Company's products less attractive or obsolete and unmarketable. In
order to keep pace with this rapidly changing market environment, the Company
must continually develop and incorporate into its products new technological
advances and features desired by the marketplace at acceptable prices. The
successful development and commercialization of new products involves many
risks, including the identification of new product opportunities, the timely
completion of the development process, the control and recoupment of development
and production costs and acceptance by customers of the Company's products.
There can be no assurance that the Company will be successful in identifying,
developing, manufacturing and marketing new products in a timely and cost
effective manner, that 

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the Company's products will be accepted in the marketplace, or that products or
technologies developed by others will not render the Company's products or
technologies uncompetitive.

         Reliance on Large Customers. The Company had two customers representing
24.3% and 9.8% of revenues for the fiscal year ended March 31, 1996 and two
customers representing 17.0% and 14.8% of revenues for the fiscal year ended
March 31, 1997. The Company expects that these customers will continue to
represent a significant percentage of its revenues for the foreseeable future,
although it expects that sales to them will generally decline as a percentage of
total revenues. None of these customers is obligated to purchase any specific
amount of the Company's products. There can be no assurance that the Company
will be able to retain any of these companies as customers or, in the event of a
reduction or loss of business with any such customer, that the Company could
establish other satisfactory relationships for sales of its products. Purchases
by these customers are governed by the terms of purchase orders submitted to the
Company and by written agreements covering other terms of the sale, including
pricing, shipping, quality and warranty. Generally, a customer has the right to
cancel or modify quantities and deliveries, without cost, subject to notice
requirements. In the event of a cancellation or rescheduling of orders by any
customer, the Company may not be able to replace such orders with other sales.
The occurrence of any such events could have a material adverse effect on the
Company's operating results.

         Reliance on Third-Party Distribution Channels. While the Company
currently markets and sells a significant portion of its products directly to
end-users, the Company expects that the portion of its product sales through
third- party distribution channels, including original equipment manufacturers
("OEMs"), value added resellers ("VARs"), system integrators and distributors,
will increase as its products gain market acceptance. Such OEMs and VARs are not
under the control of the Company. Although these customers in turn sell to a
wide variety of end-users, the Company is subject not only to the risk that its
customers will discontinue selling and marketing its products, but also to the
risk that the end-users supplied by the Company's customers will alter their
preferences in a manner that has a material adverse effect on the Company's
operations. There can be no assurance that the Company will be able to retain
its current resellers or expand its distribution channels by entering into
arrangements with new resellers.

         Consumer Marketplace. The Company commenced retail shipments of its
SpaceOrb 360 during the fiscal year ended March 31, 1997 into the consumer
market. Retail distribution channel sales require significantly greater
marketing and sales expenditures and post-sale support costs. Penetration of
this market is dependent to a significant extent on building relationships with
distributors and retailers. An increasing number of vendors compete for access
to these distributors and retailers, which generally offer products of several
different companies, including products competitive with the Company's products.
The Company anticipates that it will commit substantial resources to increase
penetration of this distribution channel. In the future, the Company intends to
reach the consumer marketplace through three channels strategies: (i) retail
sell-through, (ii) sales of turnkey product or core components to OEMs, and
(iii) technology licensing and component sales to producers of hardware
platforms, such as console game systems and PCs. There can be no assurance that
the Company will be successful in implementing any of these marketing strategies
in the consumer marketplace or in launching any new products into these markets,
or that any negotiations with leading manufacturers, OEMs or distributors in
this marketplace will be successfully completed on terms favorable to the
Company.

         If the Company is successful in penetrating this sales channel, the
Company believes that its gross margins would decrease due to the anticipated
prices for the Company's products in the retail market, where the Company
believes it must price its products below certain levels to penetrate this
market, and anticipated cost of revenues in the retail market. The Company
further anticipates that its results from sales to retail channels will be
significantly affected by seasonality due primarily to the increased demand for
3D game and entertainment applications and related products during the year-end
holiday buying season. Retail distributors typically expect that they will be
permitted to return inventory to the Company for credit against other purchases
on negotiated terms. In addition, the Company anticipates that retail
distributors will require price protection clauses in agreements with 

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the Company pursuant to which the Company will be obligated to grant credits if
the Company reduces selling prices on products previously purchased by the
distributor. Moreover, to the extent the Company generates significant sales to
retail distribution channels relative to its sales to OEMs, there is a greater
risk of increased product returns and warranty claims. The Company has
established reserves for product returns and warranty claims based on its
previous experiences and future expectations. If the Company is successful in
penetrating retail distribution channels, there can be no assurance that these
reserves will be adequate or that product returns and warranty claims and price
protection adjustments will not have a material adverse effect on future
operating results.

         Competition. The market for computer products is intensely competitive
and rapidly changing. The Company's products currently compete against
established products and no assurance can be given that the Company's products
will not be rendered obsolete by technological advances of others. The Company
expects that competition from existing competitors will increase and that new
competitors will enter the 3D motion control market. Many of the existing and
potential competitors have experienced management, larger technical staffs, more
established and larger marketing and sales organizations, better developed
distribution systems and significantly greater financial resources than the
Company. The Company anticipates that its competitors will ultimately develop
hardware products based on technology that does not infringe on the patent
rights of the Company, which may provide capabilities similar or superior to
those of the Company's products. Increased competition could result in price
reductions and loss of market share for the Company. There can be no assurance
that the Company will be able to compete successfully or that competition will
not have a material adverse effect on the Company's business, operating results
and financial condition.

         Expansion of Operations and Management of Growth. The Company has
recently experienced a period of rapid growth and has added new personnel in
various areas of its business. Due to the level of technical and management
expertise necessary to support growth, the Company must recruit and retain
highly qualified and well- trained personnel. The number of available persons
with the requisite skills to serve in these positions may be limited, and it may
become increasingly difficult for the Company to hire such personnel over time.
The Company's expansion may also significantly strain operational, management,
financial and other resources. To manage growth effectively, the Company must
continue to enhance its systems and controls and successfully expand, train and
manage its employee base. There can be no assurance that the Company will be
able to manage this expansion effectively, including providing a satisfactory
level of customer service and technical support under the stresses exerted by
continued growth. There can be no assurance that the Company will be able to
recruit, train and retain sufficient additional customer service employees to
improve its service and satisfactorily respond to the support requests of an
increased customer base. Any failure to manage the Company's future growth
properly could have a material adverse effect on the Company's operating
results.

         Limited Operating History; Variability of Quarterly Operating Results.
The Company was incorporated in April 1991 and began commercial shipments of its
products in June 1991. During this time, the Company has experienced
fluctuations in quarterly operating results due to factors such as competition,
variations in customer demand, changes in average selling prices due to volume
discounts, entering new markets and international operations, changes in the mix
of products sold, unforeseen production difficulties and the introduction of new
products. The Company anticipates that its increased sales in the consumer
marketplace will likely result in increasing seasonality of its revenues,
reflecting consumer purchasing patterns. In view of the Company's significant
growth in the past fiscal years, the Company believes that period-to-period
comparisons of its financial results are not necessarily meaningful and should
not be relied upon as an indication of future performance. There can be no
assurance that revenue growth or profitable operations can be sustained on a
quarterly or annual basis in the future.

         Patents and Proprietary Technology. The Company's success is heavily
dependent upon its proprietary hardware and software technology. The Company
relies on a combination of patent, trade 

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secret, copyright and trademark law, software license agreements, non-disclosure
agreements, and technical measures to protect its rights pertaining to its
products. Such protection may not preclude competitors from developing products
with features similar to the Company's products. The Company's success will
depend in part on its ability to obtain and defend United States and foreign
patent protection for its products and preserve its trade secrets. There can be
no assurance that the Company's issued patents, or any future patents, will
provide the Company with significant protection against competitive products or
otherwise be commercially valuable. Moreover, there can be no assurance that any
patents issued to or licensed by the Company will not be infringed upon by
others. In the case of infringement of the Company's technologies, there can be
no assurance that the Company would be able to afford the expense of any
litigation that may be necessary to enforce its proprietary rights.

         In addition to seeking patent protection, in some cases the Company may
rely on contractual arrangements or trade secrets to protect its proprietary
technology. There can be no assurance that trade secrets will be developed and
maintained, that secrecy obligations will be honored, or that others will not
independently develop similar or superior technology. Disputes as to the
ownership of such information may arise if consultants, key employees, or other
third parties apply technological information independently developed by them or
by others to Company projects, and such disputes may not be resolved in favor of
the Company. Due to the importance of patent and trade secret protections and
the competitive nature of its industry, the Company may also be subject to
claims that its technologies infringe on the proprietary rights of other
companies. There can be no assurance that such claims will not arise, that the
Company will have sufficient resources to pursue any resulting litigation to a
final judgment, or that the Company will prevail in such litigation.

         Dependence on Suppliers. The Company relies on outside suppliers for
substantially all of its parts, components and manufacturing supplies. The
microprocessor currently used in the manufacture of one of the Company's
hardware products is obtained from a single source supplier. The disruption or
termination of the supply of microprocessors from this source would have a
material adverse effect on the Company's operations and could cause delays in
the delivery of such products. Further, even with respect to "off- the-shelf"
components which are available from a large number of suppliers, there can be no
assurance that the Company's suppliers will continue to meet all of the
Company's needs on a timely basis.

         Dependence on Contract Manufacturers, Including Overseas Manufacturers.
The Company has and will continue to rely on outside vendors to manufacture
hardware devices among the Company's products. Although the Company's hardware
devices are relatively simple devices to manufacture, and the Company has not
encountered any delays in obtaining adequate products from its outside
contracting organizations, there can be no assurance that delays incurred or
quality problems caused by any of the contract manufacturing organizations will
not have a material adverse effect on the Company's ability to fill customer
orders. In 1996, the Company entered into a manufacturing contract with a entity
located in the People's Republic of China. The Company's reliance on outside
manufacturers involves several risks, including a potential inability to obtain
an adequate supply of required products, and reduced control over the price,
timeliness of delivery, reliability and quality of finished products. Certain of
the Company's contract manufacturers have relatively limited financial and other
resources. Any inability to obtain timely deliveries of products and services
having acceptable qualities or any other circumstance that would require the
Company to seek alternative sources of contract manufacturing services or to
manufacture its own hardware devices internally, could delay the Company's
ability to ship its products. Any such delay could damage relationships with
customers and such delay could have a material adverse effect on the Company.

         The use of a foreign manufacturer, most significantly in a country with
an emerging commercial base, subjects the Company to additional risks, including
unexpected changes in regulatory requirements and tariffs and difficulties in
communications with such foreign entity. Finally, the laws of certain countries
do not protect the Company's products and intellectual property 

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rights to the same extent as do the laws of the United States. There can be no
assurance that these factors will not have a material adverse effect on the
Company. Finally, to the extent that such foreign manufacturer fails to perform
in accordance with its contract with the Company or to the extent the Company
has other claims against such manufacture, it may be difficult to enforce such
claims in the Peoples Republic of China.

         Attraction and Retention of Key Employees. The Company is dependent on
the principal members of its management, including Dennis Gain, President and
Chief Executive Officer, John Hilton, Senior Vice President and Chief Technology
Officer, Hardware, and James Wick, Senior Vice President and Chief Technology
Officer, Software. The loss of the services of one or more key employees could
have a material adverse effect on the Company. The Company believes that its
future success will be affected by its ability to attract and retain skilled
technical, managerial and marketing personnel. Although the Company has not
experienced difficulty to date, there can be no assurance that the Company will
be successful in attracting or retaining the personnel it requires to continue
to grow and operate profitably. The Company maintains life insurance on the
lives of Messrs. Gain, Hilton and Wick in the amounts of $2,250,000, $500,000
and $500,000, respectively. 

         Future Capital Needs. The Company's capital requirements will depend on
many factors, including the rate at which the Company can develop its products,
the market acceptance of such products, the levels of promotion and advertising
required to launch such products and attain a competitive position in the
marketplace, the response of competitors to the products based on the Company's
technology, and capital necessary for potential acquisitions. Changes in
technology or a growth of sales beyond currently established capabilities will
also require further investment. To the extent that internally generated funds
are insufficient to fund the Company's operating requirements, it may be
necessary for the Company to seek additional funding through public or private
financing. There can be no assurance that additional financing will be available
on acceptable terms or at all. If additional funds are raised by issuing equity
securities, further dilution to the existing stockholders may result. If
adequate funds are not available, the Company's business would be materially
adversely affected, and, as a result, the Company may be required to curtail its
operations significantly.

         Risks Associated with International Operations. International sales
accounted for 26.0% and 35.8% of revenues for the fiscal years ended March 31,
1997 and 1996 respectively, and the Company expects that international sales
will continue to represent a significant portion of its net sales. While most of
the Company's international sales are U.S. dollar-denominated, decreases in the
value of foreign currencies relative to the U.S. dollar could make the Company's
products less price competitive. International sales and operations may also be
materially adversely affected by the imposition of government controls, export
license requirements, restrictions on the export of critical technology,
political and economic instability, trade restrictions, changes in tariffs and
taxes, difficulties in staffing and managing international operations and
general economic conditions. Any inability to meet foreign regulatory approvals
on a timely basis could have a material adverse effect on the Company's
operating results. In addition, the Company's business may be affected by lower
sales levels which typically occur during the summer months in Europe and other
parts of the world.

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