Excerpt from the Company's Annual Report on Form 10-KSB for the fiscal year
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ended March 31, 1999.
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Certain Trends and Uncertainties

    In addition to the other information contained in this Annual Report on Form
10-KSB, the following factors should be considered carefully.

             RISKS RELATING TO THE COMPANY'S CORPORATE STRUCTURE AND
                               FINANCIAL RESOURCES

Need for Additional Funds

    The  Company  raised $5 million as of April 6, 1999,  and  otherwise  has no
capital  resources.  The Company  intends to use this  capital to  finalize  its
development of the Client Hardware,  to install ServerSystems to run the TVEmail
network,  to complete the GUI, to perform  marketing  studies and to produce the
pilot  production  runs for  TVEmail.  The  Company  expects  to  complete  such
endeavors in the third  quarter of fiscal 2000 and believes  that the $5 million
will satisfy its cash  requirements to do so. However,  in order for the Company
to begin  mass  production  of the  Client  Hardware  or to  initiate  sales and
marketing  efforts relating to the TVEmail service,  the Company  anticipates it
will have to raise  substantial  additional  funds.  The Company intends to seek
additional funding through public or private financings,  which may include debt
or  equity  financings.  Adequate  funds for these  purposes,  whether  obtained
through financial markets or collaborative or other  arrangements with corporate
partners or from other  sources,  may not be  available  when needed or on terms
acceptable to the Company. Insufficient funds may require the Company: to delay,
scale back or  eliminate  some or all of its  research  and product  development
programs;  to license third parties to  commercialize  products or  technologies
that the Company would  otherwise  seek to develop  itself;  to sell itself to a
third party; to cease operations; or to declare bankruptcy.

    If the  Company  raises  additional  funds  through  the  issuance  of  debt
securities,  the  holders  of the  debt  securities  will  have a  claim  to the
Company's assets that will be prior to any claim of the  stockholders.  Interest
on any debt securities could increase the Company's costs and negatively  impact
its  operating  results.  If the Company  raises  additional  funds  through the
issuance of preferred  stock, the terms of such preferred stock may provide that
the holders of such  preferred  stock are entitled to receive  dividends  and/or
distributions   upon   liquidation   prior  to  the  holders  of  Common  Stock.
Furthermore,  any such preferred stock may have class voting rights,  conversion
features and/or antidilution protections of which the Common Stock does not have
the benefit.  If the Company  raises  additional  funds  through the issuance of
Common Stock or securities  convertible  into or exchangeable  for Common Stock,
the  percentage  ownership  of the  Company's  then-existing  stockholders  will
decrease. In addition, any such convertible or exchangeable  securities may have
rights,  preferences  and privileges more favorable to the holders than those of
the Common Stock.



                                      - 8 -

<PAGE>

Lack of Operational Continuity

    Because of the Company's Bankruptcy,  the nature of the Revival and the plan
of  reorganization  approved by the Company's  shareholders,  there has not been
continuity in the Company's  operations.  As a result,  relevant  records may be
unavailable to management and this may adversely affect the Company's ability to
document its prior operations and corporate proceedings.

Subordination of Common Stock to Preferred Stock; Risk of Dilution;
Anti-Dilution Adjustments.

    In the event of the  liquidation,  dissolution or winding up of the Company,
the Common Stock is expressly  subordinate to the $5 million preference of the 5
million  outstanding  shares of  Preferred  Stock.  The  conversion  rate of the
Preferred Stock is subject to adjustment,  among other things, upon issuances of
Common Stock or securities  convertible  into Common Stock or rights to purchase
Common Stock that have not been  expressly  approved in writing by a majority in
interest of the holders of Preferred Stock or their elected representatives.  As
of June 30, 1999, each share of Preferred  Stock is convertible  into 1 share of
Common Stock.

Concentration of Ownership and Control.

    Under  the  terms of the  Reorganization  Agreement,  dated  April 5,  1999,
between and among the Company,  Navis and the  stockholders  of Navis,  promptly
after  compliance with Section 14(f) of the Exchange Act, the Board shall have a
meeting  at which all of the  then-directors  shall  resign  and shall  elect as
members of the Company's  Board such  individuals as the former  stockholders of
Navis  shall  designate  to the  Company  in  writing.  The  right of the  Navis
stockholders  to  so  designate  Board  members  is  expressly  subject  to  the
provisions of a Purchase and Sale Agreement between the Company and Friedlander,
dated April 6, 1999 (the  "Friedlander  Agreement"),  which  provides  that: (A)
until the  sooner of (i) the fifth  anniversary  of the date of the  Friedlander
Agreement and (ii) such time as Friedlander is the beneficial owner of less than
10% of the issued and outstanding voting securities of the Company,  Friedlander
shall be entitled to appoint two members of the Board; and (B) the Company shall
promptly  take such  action as may be  required  to amend its By-laws to provide
that,  for so long as  Friedlander  has a right to  appoint  two  members of the
Board,  the total  number of members  constituting  the entire  Board  shall not
exceed seven. Furthermore,  Mr. Varsames and Friedlander each hold a substantial
portion of the  Company's  voting  securities.  Accordingly,  Mr.  Varsames  and
Friedlander  each  have the  ability  to exert  significant  influence  over the
election of the Company's Board of Directors and other matters  submitted to the
Company's  stockholders  for  approval.  These  arrangements  may  discourage or
prevent any proposed  takeover of the Company,  including  transactions in which
stockholders  might  otherwise  receive a premium for their shares over the then
current market prices. See also "Certain Trends and Uncertainties--Anti-Takeover
Provisions  and  Delaware Law May Have Adverse  Effects on the  Company's  Stock
Price" below.

The Company's Anti-Takeover Provisions and Delaware Law May Have Adverse Effects
on the Market Price of the Common Stock.

    There are  provisions in the Company's  certificate  of  incorporation,  its
bylaws and Delaware law that make it more  difficult for a third party to obtain
control of the Company,  even if doing so would be  beneficial to the holders of
Common Stock.  These  anti-takeover  provisions,  which could depress the market
price of the Common Stock,  include:  (a) the division of the Board of Directors
into three classes so that only one-third of our directors are elected each year
and are elected for terms of three years;  and (b) the authority of the Board of
Directors to amend or repeal  bylaws  without the consent or vote of the holders
of Common Stock.

Volatility of Stock Price; Market Overhang from Outstanding Convertible
Securities and Warrants.

    The market  price of the  Company's  Common  Stock,  like that of the common
stock of many other technology companies, has been highly volatile and may be so
in the future.  In the past,  companies that have experienced  volatility in the
market  price of their  stock  have been  subject  to  securities  class  action
litigation. If the Company were subject to a securities class action lawsuit, it
could result in  substantial  costs and a  significant  diversion of  resources,
including management time and attention.


                                      - 9 -

<PAGE>

    No  predictions  can be made of the effect that future  market  sales of the
shares of Common Stock  underlying  the  Preferred  Stock and  Warrants,  or the
availability  of such  securities for sale, will have on the market price of the
Common  Stock  prevailing  from time to time.  Sales of  substantial  amounts of
Common Stock,  or the perception  that such sales might occur,  could  adversely
affect prevailing market prices.

The Market For the Common Stock May Be Illiquid.

    The Common Stock is currently  trading on the NASD Over the Counter Bulletin
Board.  The trading  market for the Common  Stock may be "thin" and  "illiquid",
which can result in increased  volatility  in the trading  prices for the Common
Stock. See "Certain Trends and  Uncertainties--The  Company's Stock Price May Be
Extremely Volatile." There can be no assurance that an active trading market for
the Common Stock will  develop or be  sustained.  If there is no active  trading
market for the Common Stock, holders may not be able to resell their shares at a
satisfactory price, if at all. The prices at which the Common Stock may trade in
the future cannot be predicted and will be determined by the market.

Dividends.

    The Company  does not  anticipate  paying any cash  dividends  on its Common
Stock in the foreseeable  future.  The Company  currently  intends to retain its
earnings, if any, for the development of its business.

Need for and Dependence on Qualified Personnel.

    The Company's success is highly dependent on the hiring and retention of key
personnel  and  technical  staff.  The loss of key  personnel  or the failure to
recruit necessary  additional  personnel or both could impede the achievement of
development objectives.  There is intense competition for qualified personnel in
the areas of the Company's  activities,  and there can be no assurance  that the
Company will be able to attract and retain the qualified personnel necessary for
the  development  of its  business.  Many  of  the  Company's  competitors  have
significantly greater financial and other resources than it does and may be able
to offer more  lucrative  compensation  packages which include stock options and
other stock-based compensation and higher-profile  employment opportunities than
the Company can.

The Company's Certificate of Incorporation Provides Officer and Director
Indemnification and Limits Their Liability.

    The  Company  may  have to  spend  significant  resources  indemnifying  its
officers  and  directors  or paying for  damages  caused by their  conduct.  The
Delaware  General   Corporation  Law  provides  for  broad   indemnification  by
corporations  of their  officers  and  directors  and permits a  corporation  to
exculpate  its  directors  from  liability  for  their  actions.  The  Company's
certificate of incorporation  implements this indemnification and exculpation to
the fullest extent  permitted under this law as it currently exists or as it may
be amended in the future.  Consequently,  except as  otherwise  provided by law,
none of the Company's  officers or directors will be liable to the Company or to
its stockholders for monetary damages resulting from conduct in such capacities.

           RISKS RELATING TO THE COMPANY'S OPERATIONS AND TECHNOLOGIES

Limited Operating History; Recent Shift in Business Strategy.

    Immediately  prior to the Company's  acquisition  of Navis on April 5, 1999,
the Company had no business  operations.  Navis  itself was founded in June 1996
and, since then, has supplied infrared protocol and advanced input devices to NC
manufacturers,  and has provided contract  engineering and consulting  services.
However,  Navis' revenues from operations  never exceeded  $703,000 in any given
year.  In 1998,  Navis  shifted its business  emphasis to focus  entirely on the
development  of  the  TVEmail  service  but  has  yet  to  launch  such  service
commercially  or to receive  any revenue  from such  service.  As a result,  the
Company  has only a limited  operating  history  and there is little  historical
information  on which to evaluate  its  business and  prospects.  The  Company's
revenue,  if any, for the  foreseeable  future is almost  entirely  dependent on
successfully  bringing  its  TVEmail  service  to  market  and on the  number of
customers,  if any,  who  subscribe  to the  TVEmail  service.  There  can be no
assurance  that  the  Company  will be  successful  in  implementing  any of its
business strategies.

    Once the basic TVEmail service is marketed,  if ever, the Company intends to
attempt  to  expand  its   operations  by   developing   and  marketing  new  or
complementary  services or systems.  However, there can be no assurance that the
Company will be able to do so effectively.  Although the Company  believes that,
in the  future,  it will be able to use the  TVEmail  service as a  platform  to
provide  e-mail  and  certain  additional  services,  there can be no  assurance
thereof.

                                     - 10 -

<PAGE>

The Company Depends on its Intellectual Property, Which May Be Difficult and
Costly to Protect.

    The Company's  intellectual property consists of proprietary or confidential
information  that is not  currently  subject  to  patent,  trademark  or similar
protection.  Although the Company has applied for trademark  protection  for the
eNote and  TVEmail  names,  the  Company  may not be able to secure  significant
protection for these trademarks.  If the Company's  competitors or others adopt
product  or  service  names  similar  to eNote or  TVEmail,  it may  impede  the
Company's  ability to build brand  identity  and customer  loyalty.  The Company
relies  primarily  on secrecy to protect  technology,  especially  where  patent
protection is not believed to be appropriate or obtainable.  No assurance can be
given  that  others  will not  independently  develop  substantially  equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade  secrets,  or that the Company can  effectively  protect its rights to its
unpatented trade secrets.

    The validity,  enforceability and scope of protection of certain proprietary
rights in  internet-related  businesses  are  uncertain and still  evolving.  If
unauthorized  third  parties  are  able to copy  the  Company's  service  or its
business  model or to use its  confidential  information  to  develop  competing
services,  the Company may lose  customers and its business  could  suffer.  The
Company may not be able to effectively police unauthorized use of its technology
because such  policing is difficult and  expensive.  In  particular,  the global
nature of the internet makes it difficult to control the ultimate destination or
security of software or other data transmitted.  Furthermore,  the laws of other
countries may not adequately protect the Company's intellectual property.

    The Company's business  activities and the TVEmail service may infringe upon
the  proprietary  rights of  others.  In  addition,  other  parties  may  assert
infringement  claims  against the  Company.  Any such  claims and any  resulting
litigation  could subject the Company to  significant  liability for damages and
could also result in invalidation of its proprietary  rights.  The Company could
be  required  to  enter  into  costly  and  burdensome   royalty  and  licensing
agreements.  These  agreements  may not be available on terms  acceptable to the
Company,  or may not be  available  at all.  The  Company  may also need to file
lawsuits to defend the validity of its  intellectual  property  rights and trade
secrets,  or to determine  the validity and scope of the  proprietary  rights of
others. Litigation is expensive and time-consuming and could divert management's
attention away from the Company's business.

Technology Licensed From Third Parties.

    The Company has entered  into  agreements  with,  and has  licensed  certain
technology from, third parties. The Company has relied on scientific, technical,
commercial  and other data  supplied and  disclosed  by others in entering  into
these agreements and will rely on such data in support of development of certain
products.  Furthermore,  the Company  believes  that it will license  additional
technologies  from third  parties in the  future.  Although  the  Company has no
reason to believe  that this  information  contains  errors of omission or fact,
there can be no  assurance  that  there are no errors of  omission  or fact that
would materially affect the commercial viability of these products.

Rapid Technological Change, Customer Demands and Intense Competition.

    The e-mail service market is characterized  by rapidly changing  technology,
customer demands and intense  competition.  If the Company cannot keep pace with
these changes,  its TVEmail service could become  uncompetitive and its business
could  suffer.  If the Company is not  successful  in  developing  and marketing
enhancements   to  the  TVemail   service  or  new  services   that  respond  to
technological  change  or  customer  demands,  the  Company's  business  may  be
materially and adversely effected.

    The competitive market for e-mail and online service access may limit demand
or pricing for the TVEmail  system.  The Company  expects to experience  intense
competition  from established  online service  providers such as America Online,
Inc., Prodigy Communications  Corporation and Microsoft Corporation's WebTV(TM).
Many companies  provide  e-mail and online  service  access and other  services,
which provide functionality superior to those included in the TVEmail system. As
a result of this  competition,  demand for the TVEmail  system may  suffer,  the
Company may be  restricted  in the  service  rates it can charge for the TVEmail
system and the Company's business, financial condition and results of operations
may be adversely affected.  Many of the Company's competitors have significantly
greater  financial,  technical,  marketing,  distribution,  customer support and
other  resources  than the  Company  does.  Furthermore,  many of the  Company's
competitors have significantly greater experience, better name recognition, more
compelling  content  and  easier  access to  consumers,  advertisers  and online
service providers than the Company does.

                                     - 11 -

<PAGE>

Management of Growth.

    The Company's  ability to implement its business plan  successfully in a new
and   rapidly-evolving   market  will  require  effective  planning  and  growth
management. If the Company cannot manage its anticipated growth effectively, its
business  and  financial  results  may suffer.  The Company  plans to extend its
existing operations substantially, particularly those relating to manufacturing,
sales and marketing and technical support. The Company expects that it will need
to manage and broaden multiple  relationships  with customers,  internet service
providers and other third parties. The Company also expects that it will need to
expand its financial systems,  procedures and controls and will need to augment,
train and manage its workforce,  particularly its information  technology staff.
As a result,  the Company's  management and operating systems may be strained by
any  growth  and  the  Company  may  be  unable  to  timely  complete  necessary
improvements  to its operating  systems,  procedures and controls to support any
future operations.

Capacity Constraints May Impede Revenue Growth and Profitability.

    The  Company  believes  that  satisfactory   performance,   reliability  and
availability of its TVEmail appliances and ServerSystem  infrastructure  will be
critical  to the  Company's  reputation  and  ability to attract  customers  and
maintain adequate customer service levels. Any significant or prolonged capacity
constraints  could delay or prevent  customers from sending or gaining access to
their documents or other data or services.  Such constraints  could decrease the
Company's  ability to acquire and retain  customers and prevent the Company from
achieving  the  necessary  growth in revenue to  achieve  profitability.  If the
amount of traffic increases  substantially and the Company experiences  capacity
constraints,  the  Company may need to spend  significant  amounts to expand and
upgrade its technology and network infrastructure.  Furthermore, the Company may
be unable to  predict  the rate or  timing  of any  increases  in the use of its
services in order to respond in a timely manner.

The Company May Suffer Systems Failures and Business Interruptions Which Would
Harm its Business.

    The  Company's  success  will depend in part on the  efficient  and reliable
operation  of  TVEmail  service  sufficient  to  accommodate  a large  number of
subscribers.  The Company intends to locate its  ServerSystems at multiple sites
with  redundant  functions  in order to  reduce  the  risks of  system  failure,
however,  the  ServerSystems  are  vulnerable  to damage from fire,  power loss,
telecommunications  failures,  break-ins and other events,  which could lead to:
interruptions or delays in the Company's service; loss of data; or the inability
to accept,  transmit and confirm  customer  documents  and data.  The  Company's
business may be  materially  adversely  effected if its service is  interrupted.
Although the Company intends to implement network security measures, its systems
may be vulnerable to computer viruses,  electronic break-ins,  attempts by third
parties  deliberately  to  exceed  the  capacity  of  the  systems  and  similar
disruptions,  any of which could have a material adverse effect on the Company's
business.

Year 2000 Issues Could Impact the Company's Performance.

    Many currently  installed  computer systems and software  products have been
coded to accept or  recognize  only two digit  entries to define the  applicable
year. These systems may erroneously recognize the year 2000 as the year 1900.
This could result in major failures of malfunctions.

    The Company  believes that its  ServerSystems  and Client  Hardware are year
2000 compliant,  and, since the Client Hardware does not interact with any other
systems  controlled  by the customer,  the year 2000  readiness of the Company's
clients should not impact the operation of TVEmail. However, telephony providers
and electronic  bill paying  services with which the TVEmail system may interact
may not become year 2000 compliant in a timely  fashion,  or at all. The failure
of a such  entities  to become year 2000  compliant  could  result in  customers
ceasing use of the TVEmail  service,  the Company  receiving bad  publicity,  or
other factors that may cause material harm to the Company's business.

               RISKS RELATING TO THE INTERNET AND ONLINE COMMERCE

Privacy Concerns May Discourage Customers From Using The Company's Services.

    Concerns over the security of online  transactions  and the privacy of users
may inhibit the growth of the internet as a means of  delivering  documents  and
data.  The Company may need to incur  significant  expenses and use  significant
resources  to protect  against the threat of security  breaches or to  alleviate
problems  caused by such  breaches.  The Company plans to rely on encryption and
authentication   technology  to  provide  secure  transmission  of  confidential
information.  If  the  Company's  security  measures  do  not  prevent  security
breaches,  the Company could suffer operating losses,  damage to its reputation,
litigation  and  possible  liability.  Advances  in computer  capabilities,  new
discoveries in the field of cryptography or other  developments  may result in a
compromise or breach of the Company's encryption

                                     - 12 -

<PAGE>

and  authentication  technology  and  could  enable  an  outside  party to steal
proprietary information or interrupt its operations.

Government Regulation and Legal Uncertainties Relating to the Internet Could
Harm the Company's Business.

    Changes in the regulatory  environment could decrease the Company's revenues
and  increase  its  costs.  The  internet  is largely  unregulated  and the laws
governing the internet remain unsettled, even in areas where there has been some
legislative action. It may take years to determine whether and how existing laws
such as those governing intellectual property, privacy and taxation apply to the
internet. In addition, because of increasing popularity and use of the internet,
any number of laws and  regulations  may be adopted with respect to the internet
or other  online  services  covering  issues  such as: user  privacy;  security;
pricing; content;  copyrights;  distribution;  taxation; and characteristics and
quality  of  services.   Such  regulations  could  impose  additional  costs  or
interdicts  on activities  of the Company,  which could have a material  adverse
effect.

If the Internet Infrastructure Fails, the Company's Business May Suffer.

    The  Company  cannot be certain  that the  infrastructure  or  complementary
services  necessary to maintain the internet as a useful,  convenient  or secure
means of transferring  documents and data will continue to develop. The internet
infrastructure  may not support the demands that growth may place on it, and the
performance  and  reliability  of the internet  may decline,  which could have a
material adverse effect on the Company's business.

The Company Depends on Third-Party Providers of Internet and Telecommunications
Service.

    The Company's  operations  depend on third  parties for internet  access and
telecommunications.  Frequent or prolonged interruptions of these services could
result in significant losses of revenues.  These types of occurrences could also
cause users to perceive the Company's  products as not functioning  properly and
therefore   encourage   them  to  use  other  methods  to  deliver  and  receive
information.  The Company has limited control over these third parties and there
can be no assurance that the Company will be able to maintain relationships with
any of them on acceptable  commercial terms. Nor can there be any assurance that
the quality of services  that they provide  will remain at the levels  needed to
enable the  Company to conduct  its  business  effectively.  Each of these third
parties  has  experienced  outages in the past,  and could  experience  outages,
delays and other  difficulties due to system failures unrelated to the Company's
systems.

Costs of Transmitting Documents and Data Could Increase.

    The  cost of  transmitting  documents  and  data  over  the  internet  could
increase,  and the Company may not be able to increase  its prices to cover such
rising costs. Several  telecommunications  companies have petitioned the Federal
Communications  Commission to regulate internet and on-line service providers in
a manner similar to long distance  telephone  carriers and to impose access fees
on such  providers.  Also,  foreign  laws and  state  tax  laws and  regulations
relating to the provision of services over the internet are still developing. If
individual  states  impose taxes on services  provided  over the  internet,  the
Company's cost of providing our TVEmail services may increase.