EXHIBIT 99.1

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS

In passing the Private Securities Litigation Reform Act of 1995 (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 forward-looking statements. Hypercom Corporation
intends to qualify both its 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 the expressed expectations are based. The words
believe, expect, anticipate, intends, forecast, project, and
similar expressions identify forward-looking statements. Such statements may
include, but not are limited to, projections regarding demand for the Companys
products and the replacement cycle for its existing products, the impact of the
Companys development and manufacturing process on its research and development
costs, the reduction of future research and development expenditures, and the
Companys ability to obtain new financing as well as assumptions related to the
foregoing. Such forward-looking statements are within the meaning of that term
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. 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 result to
differ materially from those projected. Due to those and other uncertainties
and risks, the investment community is urged not to place undue reliance on
written or oral forward-looking statements of Hypercom. Hypercom undertakes no
obligation to update or revise this Cautionary Statement Regarding
Forward-Looking Statements to reflect future developments. In addition,
Hypercom undertakes no 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.

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

RISK FACTORS

LOSSES, LIQUIDITY CONCERNS AND CREDIT AGREEMENTS

The loss from operations for the quarter ended March 31, 2001 increased $9.0
million to $11.8 million compared to a loss of $2.8 million for the same
quarter in the prior year. The increase over the same quarter in the prior
year includes a $7.2 million special direct financing lease
provision to strengthen credit reserves for certain segments of its
lease receivables.
The remaining increase resulted primarily from the decreased
revenue and related gross margin percentage decline when compared to the same
quarter of the prior year. Historically, the first calendar quarter is the
weakest quarter due to the post-Christmas season, and Chinese New Year and
Latin holidays.

The Company has historically financed its operations primarily through cash
generated from operations and from borrowings under a line of credit. The
Company has also used securitization conduits to finance lease receivables
generated by its Golden Eagle Leasing subsidiary.

Due to the Companys continued focus on expense reduction as well as its
emphasis on lowering accounts receivable and inventory levels, the Company
experienced positive cash flow from operations in the quarter ended March 31,
2001 of $8.0 million. The Company used $2.4 million in investing activities.
Long-term debt (most of which was categorized as current at quarter end)
decreased $16.6 million to $83.8 million at March 31, 2001, from $100.4 million
at December 31, 2000. Working capital and cash were $75.7 and $7.2 million at
March 31, 2001, compared to $75.2 and $13.0 million at December 31, 2000,
respectively.

The Company is not in compliance with certain debt covenants under various loan
agreements, including the ratio of funded debt to EBITDA, and a minimum
tangible net worth requirement. Effective April 1, 2001 the Company and its
current lenders reached an extension to a forbearance agreement originally
entered into on December 29, 2000 which provides that its lenders will refrain
from exercising their rights and remedies with respect to identified defaults
through May 15, 2001. The Company will need a further extension to this
forbearance agreement to complete a refinancing.





---



In this regard, the Company is in the process of seeking to refinance its
current lending arrangements and has entered into a commitment letter with an
asset-based lender to replace its principal credit facilities. It is also
seeking various financing sources to finance lease receivables generated by its
Golden Eagle Leasing operation. There can be no assurance that the Company will
obtain an extension of its forbearance agreement or new financing. In such
event, the Companys ability to continue to operate in the ordinary course
would be materially adversely affected.

In the interim, the Company is in the process of accelerating cash generation
through aggressively pursuing collection of trade receivables and reducing
inventories. It has reduced costs by selectively reducing its work force,
closing underperforming offices and curtailing capital expenditures and
research and development. The Company is also reviewing the possible sale of
various assets and operations. Sales or disposals of assets or operations could
result in further material write-downs or charges.

The Companys current financial situation adversely affects its ability to
retain key employees, as well as relationships with customers and vendors.

UNCERTAINTIES RELATING TO GOLDEN EAGLE LEASING

Early in 2000, the Company purchased a microticket leasing operation, Golden
Eagle Leasing. This operation effectively finances terminal and other products
leased by merchants. Golden Eagle Leasing requires substantial cash to fund its
operations. The Companys losses and covenant defaults may impair its ability
to obtain the financing necessary to grow and support Golden Eagles leasing
operations. The Company may be forced to sell Golden Eagle Leasings lease
portfolio or operations. Any disposition of its portfolio or operations could
result in a substantial write off of the Companys investment in Golden Eagle
Leasing.

During the quarter ended March 31, 2001, the Companys Equipment Leasing
segment recorded an incremental charge to strengthen credit reserves
for certain segments of its lease receivables in
the amount of $7.2 million in addition to its normal provision. This charge represents managements estimate of
potential loan losses that exceed its historical rate of loan losses.

RELIANCE ON CERTAIN HYPERCOM POS SYSTEMS CUSTOMERS

Many Hypercom POS Systems sales result from large purchases by a few large
organizations. As of March 31, 2001, two customers represented 48% or $78.9
million of the Companys total backlog of $163 million.

Hypercom typically enters into one-year purchase agreements with its larger
customers. These agreements generally provide for minimum purchase commitments
and do not require the customers to buy POS products from Hypercom exclusively.
Serious negative impacts could result if any of the larger POS customers
delayed or stopped buying from Hypercom. Hypercom expects to continue to rely
on a limited number of customers in any given period for a significant part of
its net revenue.

Further, customer demand can be adversely affected by many factors including
the following:



| |  | Budgetary constraints;                                            
|- |  | ------------------------------------------------------------------
| 
| |  | Changes in the customers competitive environment;                
| 
| |  | Customer involvement in mergers or other strategic alignments;    
| 
| |  | Price increases by Hypercom or its competitors;                   
| 
| |  | Personnel changes;                                                
| 
| |  | The number, timing, and significance of new and enhanced products;
| 
| |  | The ability of Hypercom to market new and enhanced products; and  
| 
| |  | General economic factors.                                         

Hypercom cannot be assured that its important customers will continue to buy
its products at historical or any particular level.

PRODUCT DEFECTS
Hypercom offers technically complex products. When they are first introduced or
released in new versions, they may contain software or hardware defects that
are difficult to detect and correct. Even though Hypercom and customers test
all these products, it is likely that such errors will continue to be
identified after products are shipped. In recent periods, the Company has
experienced various issues in connection with product launches, including the
need to rework these products and stabilize product designs. These issues have
resulted in sales delays and delays in the collection of receivables, which has
exacerbated the Companys cash position.





---



Correcting defects can be a time-consuming or impossible task. Software errors
may take several months to correct, and hardware errors may take even longer.
The existence of defects and delays in correcting them could result in negative
consequences including:



| |  | Delays in shipping products;                        
|- |  | ----------------------------------------------------
| 
| |  | Loss of market acceptance for Hypercom products;    
| 
| |  | Additional warranty expenses;                       
| 
| |  | Diversion of resources from product development; and
| 
| |  | Loss of credibility with distributors and customers.

Because Hypercoms POS products are used to process payment transactions, the
security features of such products are important. In general, these products
are designed to comply with industry practices relating to transaction
security. Failure of the security features could adversely affect the marketing
of Hypercom products. Any violation of its product warranties resulting from
security breaches could result in claims against Hypercom.

DIFFICULTY IN FORECASTING NET REVENUE

Hypercoms net revenue in any period is difficult to forecast. Some of the
factors affecting net revenue include the timing of product purchases and the
length of the sales cycle for Hypercoms products.

Hypercom POS Systems and its customers enter into purchase agreements that
generally have a one-year term and minimum purchase commitments. However,
customers are not required to make purchases at any particular times during the
term of the agreement or to purchase products exclusively from Hypercom.
Because the timing of product purchases in any given period is at the
customers exclusive discretion and control, net revenue for POS products is
difficult to forecast.

It is also difficult to forecast net revenue in certain international markets
where large orders for complete systems occur more frequently than in the U.S.
Due to the significant cost of buying complete systems, the international sales
cycle is long and difficult to predict.

Hypercom Network Systems operates with little backlog and, as a result, net
revenue in any quarter is substantially dependent on the orders booked and
shipped in that quarter. The highly technical nature of these sales generally
results in a sales cycle that ranges from 12 to 18 months.

SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS

Hypercoms operating results vary from quarter to quarter. If sales and
shipments in any quarter do not meet expectations, quarterly results may be
adversely affected. Any unexpected decline in the growth of the net revenue
without a quick reduction in the growth of operating expenses could have a
serious negative effect on operating results and financial condition. Hypercom
cannot be sure that it will meet profitability objectives for a quarter if
sales fall or the gross margin is reduced.

Hypercoms operating results are subject to various uncertainties, including
the following:



| |  | Type, timing, and size of orders and shipments for major customers;
|- |  | -------------------------------------------------------------------
| 
| |  | Variations in product mix and cost;                                
| 
| |  | Manufacturing or production difficulties;                          
| 
| |  | Availability of financing;                                         
| 
| |  | Industry and economic conditions;                                  
| 
| |  | Competitive pressures;                                             
| 
| |  | Overhead costs;                                                    
| 
| |  | Obsolescence of inventory;                                         
| 
| |  | Nonrecurring charges; and                                          
| 
| |  | Additions to reserves.                                             





---



SEASONALITY

Hypercom continues to experience some degree of seasonality. For this reason,
net revenue and results of operations tend to be stronger from July to December
reflecting:



| |  | Increased POS purchases to satisfy increased retail demand during the holiday
season;                                             
|- |  | ----------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Incentive programs VISA and MasterCard offer from July to December to
encourage merchants to offer card-based payment systems; and
| 
| |  | Allocation of customers capital budgets by the end of March with volume
shipments beginning in July.                             

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY
FLUCTUATIONS

Hypercoms international sales account for a significant percentage of its net
revenue. For the quarter ended March 31, 2001 and 2000, such international
sales were 48% and 54% of total net revenues, respectively. Hypercom expects
that international sales will continue to account for a significant percentage
of its net revenue in the foreseeable future. Accordingly, Hypercom is subject
to risks associated with international operations. Examples of these risks
include:

 Management of a multinational organization,

 Fluctuations in currency exchange rates;

 Compliance with local laws;

 Regulatory and product certification requirements;

 Changes in international laws and requirements;

 Tariffs and other trade barriers;

 Import and export controls;

 Restrictions on the repatriation of funds;

 Inflationary conditions;

 Staffing, employment, and severance issues;

 Political instability and economic downturns, which include the impact of
revenue generated from Hypercoms shipments into Asia or other
international markets, including Latin America;

 War or other hostilities;

 Expropriation or nationalization of assets;

 Overlap of tax structures;

 Renegotiations or nullification of contracts; and

 Longer payment cycles.

In some countries these risks and other factors that relate to doing business
abroad may have negative effects on Hypercom. Hypercom takes steps such as
hedging to partially offset changes in currency exchange rates. However, there
is no assurance that such strategies enable Hypercom to avoid losses due to
changes in the exchange rate. In addition, the inability to effectively manage
these and other risks could have a serious negative effect on Hypercoms
business or financial condition.

UNCERTAINTY OF PROFITABILITY FOR ePicNetz

Hypercom established ePicNetz in 2000 as the Companys application service
provider (ASP) unit to support the ePic corporate initiatives. ePic lets
merchants support a range of internet-based functions via Hypercoms
comprehensive internet-based retail countertop commerce and information
systems, called ePOS-infocommerce () or ePic. ePicNetz services are
currently offered in two packages. The basic merchant service package has
electronic receipt capture, an e-mail product, and an idle screen feature,
which allows the merchant, bank or processor to take advantage of time on the
terminal and project ads at the point of sale. The other package seeks to join
the e-commerce world with the physical point of sale. The Company has expended
substantial sums in developing the software that drives ePic and in
establishing the ASP. Although adoptions by merchants appears promising, there
can be no assurance that ePicNetz will be successful or profitable.

INDUSTRY AND TECHNOLOGY CHANGES; DEPENDENCE ON DEVELOPMENT AND MARKET
ACCEPTANCE OF NEW PRODUCTS

Hypercom believes that the following factors are creating major changes in the
POS industry:



| |  | Lower-cost products;                            
|- |  | ------------------------------------------------
| 
| |  | Greater functionality at the point of sale;     
| 
| |  | Faster and more accurate transaction processing;
| 
| |  | Improvements in security features; and          





---





| |  | Emerging technologies and payment programs.
|- |  | -------------------------------------------

In addition, the enterprise networking industry is characterized by rapid
changes in technology and numerous new product introductions. Hypercoms
success, particularly in the enterprise networking industry, will depend to a
large degree upon its continued ability to offer new products and enhancements
to its existing products to meet changing market and industry requirements. New
products and technologies may have an effect on the sales of existing products
and technologies. There can be no assurance that the introduction of new
products and technologies will not have a material adverse affect on Hypercoms
business and financial condition.

Developing new products and technologies is a complex, uncertain process
requiring innovation and accurate anticipation of technological and market
trends. Hypercom cannot provide complete assurance of its ability to
successfully:



| |  | Identify, develop, or manufacture new products and technologies;
|- |  | ----------------------------------------------------------------
| 
| |  | Market or support these new products and technologies;          
| 
| |  | Control delays in introducing new products;                     
| 
| |  | Gain market acceptance for the new products and technologies;   
| 
| |  | Respond to technological changes and new industry standards; and
| 
| |  | Respond to competitors announcements of new products.          

The inability to respond effectively to any of these challenges may have a
negative impact on Hypercoms business and financial success. Hypercom may
suffer other business and financial losses if it is successful in marketing new
products and responding to competitive and industry changes. When changes to
the product line are announced, Hypercom will be challenged to:



| |  | Manage possible shortened life cycles for existing products;
|- |  | ------------------------------------------------------------
| 
| |  | Continue to sell existing products; and                     
| 
| |  | Prevent customers from returning existing products.         

EXCESS OR OBSOLETE INVENTORY

Managing Hypercoms inventory of components and finished products is a complex
task. Hypercom must avoid maintaining excess inventory as a result of:



| |  | The need to maintain significant inventory of components that are in limited
supply;
|- |  | ------------------------------------------------------------------------------------
| 
| |  | Buying components in bulk for the best pricing;                                     
| 
| |  | Responding to the unpredictable demand for products;                                
| 
| |  | Responding to customer requests for quick delivery schedules; and                   
| 
| |  | Products made obsolete by new product offerings.                                    

If Hypercom accumulates excess or obsolete inventory, price reductions and
inventory write-downs may result. Such a situation could adversely affect
Hypercoms business and financial condition.

DEPENDENCE ON CURRENT MANAGEMENT AND KEY PERSONNEL

George Wallner, Chris Alexander, Jairo Gonzalez and Jonathon Killmer are
instrumental in Hypercoms development, growth, and operations. Hypercom has an
employment agreement with Mr. Gonzalez; however, it does not have employment
agreements with George Wallner, Chris Alexander, Jonathon Killmer, or any other
member of senior management. Although Hypercom has no plans to enter into
employment agreements with other executive officers or key employees, Hypercom
may review the value of such employment agreements in the future.

Hypercom is the beneficiary of key-man life insurance in the amount of $1.0
million on George Wallner. The loss of any of the key executives of Hypercom
could have a negative effect on Hypercoms business and financial condition.

Hypercoms continued growth and operations also depend on the continued service
of other key employees and the hiring of qualified new employees. Competition
for highly skilled business, technical, marketing, and other staff is intense.
In addition, competing for skilled employees may result in increased
compensation costs. If Hypercom is not successful in retaining and hiring
qualified staff, negative effects on its business and financial condition may
result.





---



COMPETITION

Hypercom is active in very competitive markets. Among the main competitive
factors are the following:



| |  | Product quality;  
|- |  | ------------------
| 
| |  | Reliability;      
| 
| |  | Performance;      
| 
| |  | Functionality;    
| 
| |  | Pricing;          
| 
| |  | Certification; and
| 
| |  | Upgradeability.   

Hypercoms main competition in the electronic payment industry is VeriFone,
Inc. In 1997, Hewlett-Packard Company acquired VeriFone, Inc. Enterprise
networking competitors include Cisco Systems, Inc., 3Com Corporation, and
Motorola Information Systems Group. Some competitors have significantly greater
financial and technical resources, better name recognition, and a larger
customer base than Hypercom and may be able to respond more quickly to market
changes than Hypercom.

Hypercom faces additional competitive challenges in foreign countries. These
factors include the following:



| |  | Preferences for national vendors;                               
|- |  | ----------------------------------------------------------------
| 
| |  | Difficulties in obtaining necessary certifications; and         
| 
| |  | Difficulties in meeting the requirements of government policies.

These competitive challenges may result in price discounts or other concessions
and in sales lost to competitors. As a result, Hypercoms business and
financial condition could suffer. In addition, Hypercom cannot be certain of
its ability to compete successfully in the future.

DEPENDENCE ON CERTAIN SUPPLIERS AND THIRD-PARTY DISTRIBUTORS

Hypercom contracts with an independent manufacturer to build networking
products. It is also dependent on sole-source suppliers for microprocessors,
some integrated circuits, and other electronic components. Other components are
available from only a limited number of suppliers. Other than as a result of
its own recent financial constraints, Hypercom has generally been able to
obtain adequate supplies of these products. However, in the future if Hypercom
could not secure enough products or develop alternate sources, product
introductions or shipments could be delayed. Significant delays could have a
serious negative effect on Hypercoms business and financial condition.

Hypercom markets and distributes its products to end-users through third-party
distributors. Third-party distributors are a prime channel for distribution in
some international markets. In the U.S. they are becoming more important,
especially for the enterprise networking products. Therefore, the ability to
market and distribute products depends significantly on Hypercoms relationship
with third-party distributors.

The performance and financial condition of distributors could have a negative
impact on Hypercoms business and financial condition if:



| |  | Hypercoms relationships with them were to deteriorate;                   
|- |  | --------------------------------------------------------------------------
| 
| |  | They could not perform as expected or pay Hypercom; or                    
| 
| |  | Local laws prevented Hypercom from using distributors that perform poorly.

IMPACT OF INDUSTRY REGULATION AND STANDARDS

Before sales are completed in the United States, Hypercoms products must:



| |  | Meet industry standards as imposed by VISA, MasterCard, and others; 
|- |  | --------------------------------------------------------------------
| 
| |  | Be certified to connect to some public telecommunications networks; 
| 
| |  | Comply with Federal Communications Commission (FCC) regulations; and
| 
| |  | Comply with Underwriters Laboratories regulations.                 

Similarly, before completing sales in foreign countries, Hypercoms products
must comply with:



| |  | Local telecommunications standards;                 
|- |  | ----------------------------------------------------
| 
| |  | Recommendations of quasi-regulatory authorities; and





---





| |  | Recommendations of standards-setting committees.
|- |  | ------------------------------------------------

In addition, public carriers require that equipment connected to their networks
comply with their own standards. These standards in part reflect their
currently installed equipment. Some public carriers have equipment that does
not fully meet current industry standards. Hypercom must address this issue in
designing enterprise-networking products.

Although Hypercom believes its products currently meet all applicable industry
standards, it has no assurance that its products will comply with future
standards. Negative impacts to Hypercoms business and financial condition
could result in the future if Hypercom cannot:



| |  | Obtain needed regulatory approvals or certifications;      
|- |  | -----------------------------------------------------------
| 
| |  | Retain domestic or foreign approvals or certifications; and
| 
| |  | Meet new industry standards.                               

In addition, carriers set the tariffs that govern rates for public
telecommunications services, including their features and capacity. These
services are subject to regulatory approval. Changes in the tariffs could have
a serious negative effect on Hypercoms business and financial condition.

Hypercom must comply with state, federal, and international laws governing such
areas as:



| |  | Occupational health and safety;                                 
|- |  | ----------------------------------------------------------------
| 
| |  | Minimum wages;                                                  
| 
| |  | Work hours and overtime;                                        
| 
| |  | Retirement and profit-sharing plans and severance payments; and 
| 
| |  | The use, storage, handling, and disposal of dangerous chemicals.

Failure to comply with requirements could impose additional costs on Hypercom.
Such failure could also require Hypercom to stop some activities or otherwise
have a serious negative effect on Hypercoms business and financial condition.

DEPENDENCE ON PROPRIETARY TECHNOLOGY

Hypercom seeks to establish and protect the proprietary aspects of its products
by relying on patent, copyright, trademark, and trade secret laws. It also
relies on confidentiality, licensing, and other contractual arrangements, all
of which may provide only limited protection. Although Hypercom tries to
protect its proprietary rights, unauthorized third parties may be able to copy
some portions of or to reverse engineer products to obtain technology that
Hypercom regards as proprietary.

In addition, the laws of certain countries do not protect Hypercoms
proprietary rights to the same extent as U.S. laws. Accordingly, Hypercom may
not be able to protect its proprietary technology against unauthorized copying
or use, which could adversely affect Hypercoms competitive position.

Hypercom has applied for patents and trademarks that may not be granted. If
they are granted, the patents may not cover all claims Hypercom is trying to
protect. Further, a challenge could find any Company patent or trademark
invalid and unenforceable.

Hypercom products and technologies incorporate some subject matter it believes
is in the public domain or otherwise within the rights of Hypercom to use. Such
products and technologies include some designed and provided by third parties.
These third parties could assert patent or other intellectual property
infringement claims against Hypercom with respect to its products and
technologies.

From time to time, third parties claim that Hypercoms products infringe their
proprietary rights. Hypercom may experience similar claims in the future.
Regardless of its merit, any claim can be time-consuming, result in costly
litigation, and require Hypercom to enter into royalty and licensing
agreements. The terms of these agreements may not be acceptable to Hypercom. If
a claim against Hypercom is successful and Hypercom fails to develop or license
a substitute technology quickly, Hypercom could be adversely affected.

RISKS OF ACQUISITIONS

Hypercom may acquire or make substantial investments in related businesses,
technologies, or products in the future. Any acquisition or investment would
entail various risks including the following:





---





| |  | The difficulty of assimilating the technologies, operations and personnel
of the acquired business, technology or product;   
|- |  | -----------------------------------------------------------------------------------------------------------------------------
| 
| |  | The potential disruption of Hypercoms ongoing business; and                                                                 
| 
| |  | The possible inability of Hypercom to obtain the desired financial and
strategic benefits from the acquisition or investment.

These factors could have a serious negative effect on Hypercoms business and
financial condition. Future acquisitions and investments could also result
in the following:



| |  | Substantial cash expenditures;                                                                                                                                    
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Potentially dilutive issuance of equity securities;                                                                                                               
| 
| |  | The incurring of additional debt and contingent liabilities; and                                                                                                  
| 
| |  | Amortization expenses related to goodwill and other intangible assets
that could adversely affect Hypercoms business, operating results, and
financial condition.

The acquisition of the assets and business of Golden Eagle LLC has consumed and
will continue to consume substantial management attention and resources of
Hypercom, and will require substantial efforts and entail certain risks in the
integration of these operations. There can be no assurance that anticipated
cost savings or synergies will be achieved. In this regard, to date, the
Company has not achieved its expected results from Golden Eagle Leasing and
recorded a $7.2 million reserve related to its finance receivables during the
first quarter of 2001.

Hypercom will be dependent on the retention and performance of these businesses
existing management and employees for the day-to-day management and future
operation results of the business.

VOTING CONTROL BY EXISTING STOCKHOLDERS

George Wallner and Paul Wallner together own 62% of Hypercoms outstanding
Common Stock. Accordingly, the Wallners have the ability to control the affairs
of Hypercom, including the election of all directors to Hypercoms Board of
Directors. They can also, except as otherwise provided by law, approve or
disapprove other matters submitted to a vote of Hypercoms stockholders,
including a merger, consolidation, or sale of assets. This voting control also
may have the effect of delaying or preventing a change in control of Hypercom
and may affect the price investors are willing to pay in the future for shares
of Hypercoms Common Stock.

POTENTIAL VOLATILITY OF STOCK PRICE

In recent years, the stock market has experienced extreme price changes. The
market price of Hypercoms Common Stock has been and may continue to be
affected by various factors such as the following:



| |  | Quarterly variations in Hypercoms operating results;                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------
| 
| |  | Changes in revenue growth rates for specific geographic areas, business
units, products, or Hypercom as a whole;
| 
| |  | Earnings estimates or changes in estimates by market financial analysts;                                        
| 
| |  | Speculation in the press or analyst community;                                                                  
| 
| |  | Announcement of new or enhanced products by Hypercom or its competitors;
and                                    
| 
| |  | General market conditions or market conditions specific to particular
industries.                               

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS AND DELAWARE LAW

Hypercom has provisions in its Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws, which:



| |  | Make it more difficult for a third party to take control of Hypercom;                           
|- |  | ------------------------------------------------------------------------------------------------
| 
| |  | Discourage a third party from attempting to take control of Hypercom or;                        
| 
| |  | Limit the price some investors are willing to pay for shares of
Hypercoms Common Stock;        
| 
| |  | Enable Hypercom to issue Preferred Stock without a vote or other
stockholder action;            
| 
| |  | Provide for a classified Board of Directors and regulate nominations for
the Board of Directors;
| 
| |  | Make it more difficult for stockholders to take certain corporate
actions; and                  
| 
| |  | Delay or prevent a change in control of Hypercom.                                               

In addition, certain provisions of Delaware law applicable to Hypercom could
also delay a merger, tender offer, or proxy contest or make one more difficult.