**Exhibit 99.1**

 

**FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATION**

 

ENShas incurred and may in the future incur substantial losses.

 

ENS,which is currently 94% owned by the Company, generated income from operationsof $1,617,014 in its most recent fiscal year, ended September 30, 2004, and webelieve its profitable operations will continue in 2005.  ENS incurred net losses in most years frominception through fiscal year ended September 30, 2001, which reflected net lossesfrom operations of ($860,752).  ENScontinues to invest in infrastructure development, applications development andsales and marketing in order to ramp up its revenue growth.  We believe improved operating efficiencieswill continue to lead to better results of operations in the near future;however, ENS may incur net operating losses and negative cash flows in thefuture as a result of unforeseen events as discussed below.

 

Thebusiness of providing electronic healthcare transaction processing is difficultto evaluate.

 

Itis difficult to evaluate ENS’ businesses and prospects, and our business modelis still emerging.  Our operating resultshave been and may in the future be affected by numerous factors, many of whichare outside of our control, including, but not limited to:

• market acceptance of and demand for ENS’services

• our ability to continue to develop ENS’services

• competition

• capacity constraints and dependencies oncomputer infrastructure

• operating expenses relating to strategicpartnerships

• usage of the Internet

• economic conditions affecting the healthcareor Internet industries

• general economic conditions

 

Managingour growth may strain our administrative and technical resources.

 

ENScontinued to streamline operations further while continuing to grow.  This restructuring and added stability willallow for continued rapid growth with minimal incremental 

 

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fixedcosts.  Anticipated growth places asignificant strain on managerial, operational, technical and other resources,which strain is expected to continue.  Ifwe are unable to respond to and manage this anticipated growth, then thequality of ENS’ services and results of operations could be materiallyadversely affected.

 

Needto expand ENS’ suite of applications and service offerings.

 

Inaddition to its full-cycle suite of healthcare transaction processing softwareand services, we currently offer a number of Internet-based applicationsplatforms.  We are introducing and mustcontinue to introduce new applications and services, improve the functionalityof existing services and successfully launch these services in a timely mannerin order to attract and retain customers. We rely on a combination of internaldevelopment, strategic relationships, licensing and acquisitions to developthese applications and services.  EachENS application, regardless of how it was developed, must be integrated andcustomized to operate with existing customer legacy computer systems and ourplatform.

 

ENSwill be dependent on strategic relationships to generate certain revenues.

 

Ourability to generate revenues will suffer if we cannot establish and maintainstrategic relationships.  We believe thatthese relationships will provide additional customers and will generateacceptance of our platform, applications and services.  Although we have established severalshort-term strategic relationships, we have not entered into agreements for anymajor long-term strategic partnerships, and there is no assurance we can do soon favorable terms.

 

Revenuesare concentrated in a few customers.

 

Infiscal 2004, we received significant revenues from Benesight and its affiliatesHarrington Benefits and Fiserv, which together accounted for approximately 31%,39% and 42%, respectively, of ENS’ operational revenue for the fiscal yearsended September 30, 2002, 2003 and 2004. Lifeguard, which accounted for 11% of total revenues during fiscal 2002,was conserved under receivership during fiscal 2002 by The California StateDepartment of Managed Health Care Operations (DMCO), which ordered Lifeguard towind down its membership by December 31, 2002. Benesight and its affiliates, which operate under a multi-year agreementexpiring in November 2006, will account for a significant portion of revenuesin 2005.  There

 

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canbe no assurance the agreement will be renewed. Loss of this customer’s business could have an adverse effect on ENS’results of operations.

 

Performanceproblems with ENS’ systems could damage our business.

 

Wecould be harmed if ENS or its customers experience system delays, failures orloss of data. ENS currently processes substantially all customer transactionsand data at its own facilities.  AlthoughENS has redundant systems, contingency plans and dual facilities for disasterrecovery, not all emergencies can be fully covered, such as if both facilitiesare not functioning.  The occurrence of amajor catastrophic event or other system failure at any of such facilitiescould interrupt data processing or result in the loss of stored data.  While ENS has general liability insurance thatwe believe is adequate, including coverage for errors and omissions, ENS maynot be able to maintain this insurance on reasonable terms in the future.  In addition, the insurance may not besufficient to cover large claims, and the insurer could deny coverage onclaims.  If ENS is liable for anuninsured or underinsured claim or if premiums increase significantly, ENS’financial condition and results of operations could be materially harmed.

 

Ourbusiness will be harmed if we are unsuccessful in responding to rapidtechnology changes in the healthcare market.

 

Thehealthcare information exchange and transaction processing markets arerelatively new and evolving markets.  Thepace of change in our markets is rapid and there are frequent new product introductionsand evolving industry standards.  We maybe unsuccessful in responding to technological developments and changingcustomer needs.  In addition, ourapplication and service offerings may become obsolete due to the adoption ofnew technologies or standards.

 

Ourinternet platform infrastructure and scalability may not withstand increaseduse.

 

Thoughsteadily increasing, to date we have processed a limited number and variety oftransactions over internet platforms. Similarly, a limited number of healthcare participants use theseplatforms.  Though designed as scalable,our systems may not accommodate increased use while maintaining acceptableoverall performance. We must continue to expand and adapt 

 

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networkinfrastructure to accommodate anticipated additional users, increasedtransaction volumes and changing customer requirements.  This expansion and adaptation will beexpensive and will divert attention from other activities.

 

Thoughincreasing in volume, we cannot guarantee that we will be able to generatesignificant internet transaction revenues in the future. We have developedrelationships with service providers to offer healthcare services throughdirect links from its web site to their web sites.  However, there is no established business modelfor the sale of healthcare products or services for the full array oftransaction types over the internet. Since our experience in the sale of services online or in thedevelopment of relationships with providers of such services is limited, wecannot fully predict how quickly customers will adopt this form of commerce orthe compensation that we will receive for enabling these transactions.

 

Wewill face significant competition.

 

Themarket for healthcare information services is intensely competitive, rapidlyevolving and subject to rapid technological change.  Many competitors have greater financial,technical, product development, marketing and other resources than wehave.  These organizations may be betterknown and have more customers than ENS.  Many competitors have also announced orintroduced strategies that will compete with our applications andservices.  See “Business — Competition.”

 

Ourbusiness could be adversely affected as a result of political, regulatory,economic or other changes in the healthcare industry.

 

Thehealthcare industry is highly regulated and is subject to changing political,economic and regulatory influences. These factors affect the purchasing practices and operation ofhealthcare organizations.  Changes incurrent healthcare financing and reimbursement systems could cause us to makeunplanned modifications to applications or services, or result in delays orcancellations of orders or in the revocation of endorsement of our applicationsand services by healthcare participants. Federal and state legislatures have periodically considered programs toreform or amend the U.S. healthcare system at both the federal and statelevel.  These programs may containproposals to increase governmental involvement in healthcare, lowerreimbursement rates or otherwise change the environment in which healthcareindustry participants operate.

 

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Lawsand regulations may be adopted with respect to the Internet or other onlineservices covering issues such as:

• user privacy and patient confidentiality

• pricing

• content

• copyrights and patents

• distribution

Healthcareindustry participants may respond by reducing their investments or postponinginvestment decisions, including investments in our applications and services.We do not know what effect any proposals would have on our business.

 

Ourintellectual property may be subjected to infringement claims or may beinfringed upon.

 

Ourintellectual property is important to our business.  We could be subject to intellectual propertyinfringement claims as the number of competitors grows and the functionality ofapplications overlaps with competitive offerings.  These claims, even if not meritorious, couldbe expensive and divert management’s attention from operations.  If we become liable to third parties forinfringing intellectual property rights, we could be required to pay asubstantial damage award and to develop noninfringing technology, obtain alicense or cease selling the applications that contain the infringingintellectual property.  We may be unableto develop noninfringing technology or obtain a license on commerciallyreasonable terms, or at all.  Inaddition, we may not be able to protect against misappropriation of ourintellectual property.  We have notsought patents or copyright protection for any of our software or relatedtechnology.  Third parties may infringeupon our intellectual property rights. If we do not detect any unauthorized use, we may be unable to enforceour rights.

 

Ourbusiness will be adversely affected if we cannot attract and retain keypersonnel.

 

Futureoperating results will substantially depend on the ability of our officers andkey employees to manage changing business conditions and to implement andimprove technical, administrative, financial control and reporting systems. Weneed to attract, integrate, motivate and retain highly skilled technical peoplecapable of developing, selling and installing complex healthcare informationsystems. We face intense competition for these people.

 

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Anyfuture acquisitions we make of companies or technologies may result indisruption to our business or distraction of our management, due todifficulties in assimilating acquired personnel and operations.

 

Wemay acquire or make investments in complementary businesses, technologies,services or products, or in new areas, if appropriate opportunities arise.  From time to time we engage in discussionsand negotiations with companies regarding our acquiring or investing in suchcompanies’ businesses, products, services or technologies, in the ordinarycourse of our business.  We cannot beassured that we will be able to identify future suitable acquisition orinvestment candidates, or if we do identify suitable candidates, that we willbe able to make such acquisitions or investments on commercially acceptableterms or at all. If we acquire or invest in another company, we could havedifficulty in assimilating that company’s personnel, operations, technology andsoftware. In addition, the key personnel of the acquired company may decide notto work for us. If we make other types of acquisitions, we could havedifficulty in integrating the acquired products, services or technologies intoour operations. These difficulties could disrupt our ongoing business, distractour management and employees, increase our expenses and adversely affect ourresults of operations. Furthermore, we may incur indebtedness or issue equitysecurities to pay for any future acquisitions. The issuance of equitysecurities would be dilutive to our existing stockholders. As of January [  ],2005, we had no agreement to enter into any material investment or acquisitiontransaction.

 

Anyfuture dispositions we make of our assets or businesses may result indisruption to our business. 

 

Wemay also dispose of assets or businesses from time to time. We cannot beassured that we will be able to make such dispositions on commerciallyacceptable terms or at all. As of January [  ], 2005, we had noagreement to enter into any material disposition transaction.  If we sell significant portions of ourbusinesses, we will be obliged to redeploy our assets into acquisitions orfurther development of existing businesses, with all the attendant risks, ordistribute the proceeds, if any, to our stockholders.

 

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