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                                  Exhibit 99

                         Cautionary Factors Under the
               Private Securities Litigation Reform Act of 1995

LaserMaster desires to take advantage of the new "safe harbor" provisions
contained in the Private Securities Litigation Reform Act of 1995 (the "Act").
Contained in this Form 10-K are statements which are intended as "forward-
looking statements" within the meaning of the Act. The words or phrases
"expects", "will continue", "is anticipated", "management believes", "estimate",
"projects", "hope" or expressions of a similar nature denote forward-looking
statements. Those statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical results or from
those results presently anticipated or projected. The Company wishes to caution
readers not to place undue reliance on forward-looking statements. Readers
should also be advised that the factors listed below have affected the Company's
performance in the past and could affect future performance. Those factors
include, but are not limited to, the risk that a product may not ship when
expected or may contain technical difficulties; uncertain demand for new or
existing products; the impact of competitor's advertising, products or pricing;
availability or reliability of component parts, including sole source parts;
manufacturing limitations; availability of sources of financing; economic
developments, both domestically and internationally; new accounting standards;
and, the impact of the initiation, defense and resolution of litigation.

Other factors include the following:
 
Cash Needs. Although the Company has a credit agreement with a commercial
finance company that has adequately financed its cash requirements in the past,
net operating losses in fiscal 1996 and fiscal 1997 and manufacturing and
inventory requirements for current and new printer engines have resulted in a
need for additional financing. In September 1996, projected cash requirements in
excess of available sources required the issuance of private placements of
common stock and warrants to purchase common stock in the Company. There can be
no assurances that cash availability under the credit agreement will be
adequate, or that other sources of financing would be available to the Company
on favorable terms, or at all, if the Company's operations are further affected
by declining revenue from a lack of sales or significant returns of existing
products, introduction difficulties with new product lines, or by market
conditions in general. In addition, there can be no assurance that the Company
can achieve profitability on a quarterly or annual basis in the future.

The Company's Senior Debt Agreement includes financial covenants which the
Company must meet. The financial performance of the Company in the period the
Agreement has been in place has made it necessary for the Company to renegotiate
the financial covenants prior to being declared in violation of the covenants by
GE. If future financial performance does not improve and the Company is unable
to renegotiate its loan covenants at that time, it could be forced to seek
replacement financing at prices which may not be favorable to the Company. If
adequate sources of financing are not available, the Company may be required to
sell certain product lines or technologies on less than favorable terms.

Product Development and Technological Change. The pre-press and wide-format
color printing industries are highly competitive and are characterized by
frequent technological advances and new product introductions and enhancements.
Accordingly, the Company believes that its future success depends upon its
ability to enhance current products, to develop and introduce new and superior
products on a timely basis and at acceptable pricing, to respond to evolving
customer requirements, and to design and build products which achieve general
market acceptance. Any quality, durability or reliability problems with existing
or new

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products, regardless of materiality, or any other actual or perceived problems
with the Company's products could have a material adverse effect on market
acceptance of such new products. Any quality problems with components could
result in "epidemic" failures of the products in the field causing return and
refund requests that would likely have a material effect on the financial
results of the Company and future sales potential. There can be no assurance
that such problems or perceived problems will not arise with respect to any
existing products or that even in the absence of such problems, the Company's
products will achieve market acceptance. In addition, the market anticipation or
the announcement of new products and technologies, whether offered by the
Company or its competitors, could cause customers to defer purchases of the
Company's existing products, which could have a material adverse effect on the
Company's business and financial condition.

The Company is currently undertaking a number of development projects and
introduced a new family of printers, the DisplayMaker HiRes 8-Color series,
during September 1997. Although the Company has had successes introducing new
products, some products have experienced limited market acceptance, the
introductions of some products have been delayed, and the quality and
reliability reputation of certain products may unfavorably affect new products.
There can be no assurance that the Company will be successful with the new
DisplayMaker series or future product introductions, that future market
introductions will be timely and competitive, that future products will be
priced appropriately, or that future products will achieve market acceptance.
The Company's inability to achieve market acceptance, for technological or other
reasons, could have a material adverse effect on the Company's financial
condition.

The Company is aware of intermittent customer issues with the performance and
formulation of certain inks used in the Company's printers. The Company is
taking steps to address the ink issues. However, failure to address ink
functionality issues, or some other failure of the product to perform as
expected by the customer may result in customer requests for compensatory
supplies or other requests which could have a material adverse effect on the
Company's financial performance.

The Company is dependent on a sole source supplier for the printheads for the
PressMate-FS. The Company has experienced availability and quality consistency
issues from this supplier. If the Company is unable to resolve the availability
and quality issues, the Company's production and product quality requirements
will be adversely affected.

Various potential actions by any of the Company's competitors, especially those
with a substantial market presence, could have a material adverse effect on the
Company's business, financial condition and results of operations. Such actions
may include reduction of product price, increased promotion, announcement or
accelerated introduction of new or enhanced products, product giveaways, product
bundling or other competitive actions. Additionally, a competitor's entry into
the wide-format market in such ways as to compete more directly and effectively
with the Company's products could adversely affect operational results.

Competition. The computer printer industry is intensely competitive and rapidly
changing. Some of the Company's existing competitors, as well as a number of
potential new competitors, have longer operating histories, greater technical
resources, more established and larger sales and marketing organizations,
greater name recognition, larger customer bases and significantly greater
financial resources than the Company, which may result in a competitive
advantage. Suppliers of wide-format print engines and systems compete on the
basis of print quality, color, print time, print size, product features,
including ease of use, service, and price. Competitive product sales practices
such as price reductions, increased promotion, product giveaways and bundling,
or announcement or accelerated introduction of new or enhanced products could
have a material adverse effect on the sales and financial condition of the
Company. New product introductions and changes in pricing structure by
competitors have had, and can be expected to continue to have, a significant
impact on the demand for the Company's products. In particular, the high-
resolution laser printer market in which the

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Company's plain-paper typesetters compete has become increasingly competitive as
the resolution of commodity laser printers sold for general purpose business
printing, such as those manufactured by Hewlett-Packard, has improved. The
Company anticipates decreasing demand for its products in this market and
decreasing revenue from sales of plain-paper typesetting products. It is
possible that the Company's sales of certain products will compete with, or
displace sales of, other products sold by the Company.

The Company's PressMate(TM)-FS, DisplayMaker Express, DesignWinder and
DisplayMaker HiRes 8-Color series products are based on relatively new
technology, are complex and must be reliable and durable to achieve market
acceptance and enhance revenue opportunities. Development and production of new,
complex technologies and products often have associated difficulties and delays.
Consequently, customers may experience unanticipated reliability and durability
problems that arise only as the product is subjected to extended use over a
prolonged period of time. There can be no assurance that the Company has
completely resolved operational problems that have occurred in the past or that
the Company will successfully resolve any future problems in the manufacture or
operation of the Company's existing printers or any new product. Failure by the
Company to resolve manufacturing or operational problems with its existing
printers or any new product in a timely manner could have a material adverse
effect on the Company's business, financial condition and results of operations.

Also, it is possible the companies that supply the Company with consumable
products such as ink and media will compete with the Company by selling directly
to users or sell to competitors who may offer the products to the users.
Additionally, OEM private label ink products that may be used in the Company's
own products may compete with ColorSpan products. Further, a number of
competitors have introduced consumables which they allege to be compatible with
the Company's products and have priced the consumables below the ColorSpan-
branded consumables. Although the Company believes that its Big Color products
possess certain advantages over the competitors' products, the increased
competition has impacted sales volumes and margins and may continue to impact
volumes and margins in the future. The Company has generally competed in these
markets by introducing technologically advanced products that create new market
demand and products which offer optimum performance characteristics. There can
be no assurance that the Company will be able to continue to innovate to the
extent necessary to maintain a competitive advantage in these markets or that
other competitors will not achieve sufficient product performance to achieve
customer satisfaction with their products offering better pricing or other
competitive features.

Dependence on Component Availability and Costs. Certain components used in the
Company's current and planned products, including printer marking engines and
other printer components, are currently available from sole sources, and certain
other components are available from only a limited number of sources. The
Company has in the past experienced delays as a result of the failure of certain
suppliers to meet requested delivery schedules and standards of product
performance and quality. In addition, recent losses from operations of the
Company have restricted cash availability and the ability to keep supplier debt
current or within the established credit limits. The requirement to bring
certain component suppliers' debt obligations current, or other restrictions in
credit terms of such component suppliers, could result in an inability to
manufacture certain product lines and thereby adversely affect the financial
performance of the Company. The Company's inability to obtain sufficient supply
of components, or to develop alternative sources, could result in delays in
product introductions, interruptions in product shipments, the need to redesign
products to accommodate substitute components or the need to substitute
alternative components which may not have the same performance capabilities, any
of which could have a material adverse effect on the Company's operating
results. A portion of the total manufacturing cost of the Company's typesetting
and Big Color products is represented by certain components, particularly
dynamic random access memory chips ("DRAMs"), the prices of which have
fluctuated significantly in recent years. Significant increases or

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decreases in the price or reductions in the availability of DRAMs or other
components, could have a material affect on the Company's operating results.

The Company is dependent on a sole source supplier for the printheads and hot
melt ink used in DisplayMaker Express. The Company has experienced availability
and quality issues with this supplier that have affected shipping schedules and
customer satisfaction and have negatively impacted operating results in the
past. While the Company has taken strong corrective measures in dealing with
this supplier, there can be no assurance that this supplier will be able to meet
the Company's production requirements in the future or that the quality of on-
going product supply will be acceptable.

The Company sells consumable print media and inks for use with its Big Color
product line, and film used with the PressMate-FS. The Company depends on the
availability of consumable products to support its installed base of print
engines. There is no assurance that the suppliers of these consumables will
continue to offer their products to the Company, or that the consumable products
will continue to be available to the company at the same quarterly, pricing and
terms. The unavailability of consumable products or negative changes in quality
could adversely impact the market acceptance of the Company's new and existing
products, and may adversely affect sales of consumables.

Uncertainty Regarding Development of Wide-Format Market; Uncertainty Regarding
Market Acceptance of New Products. The Wide-Format market is relatively new and
evolving. The Company's future financial performance will depend in large part
on the continued growth of this market and the continuation of present, Wide-
Format printing trends such as use and customization of large-format
advertisements, use of color, transferring of color images onto a variety of
substrates, point-of-purchase printing, in-house graphics design and production
and the demand for limited printing runs of less than 200 copies. The failure of
the Wide-Format market to achieve anticipated growth levels or a substantial
change in Wide-Format printing customer preferences could have a material
adverse effect on the Company's business, financial condition and results of
operations. Additionally, in a new market, customer preferences can change
rapidly and new technology can quickly render existing technology obsolete.
Failure by the Company to respond effectively to changes in the Wide-Format
market, to develop or acquire new technology or to successfully conform to
industry standards could have a material adverse effect on the business and
financial condition and results of operations of the Company.

The Company's products currently target the high-performance production segment
of the Wide-Format printing market. The future success of the Company will
likely depend on its ability to develop and market new products that provide
superior performance at acceptable prices within this segment. In addition, the
Company's future success will likely depend on the Company's ability to
successfully introduce lower-cost products aimed at a broader segment of the
Wide-Format market. Any quality, durability or reliability problems with such
new products, regardless of materiality, or any other actual or perceived
problems with new Company products, could have a material adverse effect on
market acceptance of such products. There can be no assurance that such problems
or perceived problems will not arise, or that even in the absence of such
problems, new Company products will receive market acceptance. In addition, the
announcement by the Company of new products and technologies could cause
customers to defer purchases of the Company's existing products, which could
have a material adverse effect on the Company's business, financial condition
and results of operations.

Returns Reserves. The Company has established reserves for the return of
merchandise. The amount of the returns reserve is based on historical data
regarding returns of products. For new products there may be insufficient
information to accurately predict return rate and therefore the required reserve
may not be sufficient. Additionally, there is no assurance that there will not
be an unknown or unanticipated problem with

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a product or any component thereof, or a defect or shortage of repair components
or the consumable media or inks that are needed to use the product which could
cause the actual returns to exceed the reserves. Returns of a product which
exceed reserves could have an adverse effect on the financial operations and
results of the Company.

Fluctuations in Quarterly Operating Results. The Company's quarterly results of
operations have fluctuated and are expected to continue to fluctuate
significantly. These fluctuations have been caused by various factors,
including, but not limited to: the timing of new product announcements; product
introductions and price reductions by the Company and its competitors; the
availability and cost of key components and materials for the Company's
products; fluctuations and availability in customer financing; the relative
percentages of sales of consumables and printer architectures; risks related to
international sales and trade; and general economic conditions. In addition, the
Company's operating results are influenced by the seasonal buying patterns of
its customers, which have in the past generally resulted in reduced revenues and
earnings during the Company's first fiscal quarter. Further, the Company's
customers typically order products on an as-needed basis, and virtually all of
the Company's sales in any given quarter result from orders received in that
quarter. Certain products require significant capital expenditures, causing some
customers to delay their purchasing decision. Delays in purchases of low-volume,
high-cost printers may cause significant fluctuations in the sales volume for a
given period. Also, the Company's manufacturing plans, sales staffing levels and
marketing expenditures are primarily based on sales forecasts. Accordingly,
deviations from these sales forecasts may cause significant fluctuations in
operating results from quarter to quarter and may result in unanticipated
quarterly earnings shortfalls or losses. Historically, a large percentage of
orders have been received and shipped near the end of each month. If anticipated
sales and shipments do not occur, expenditure and inventory levels may be
disproportionately high and operating results could be adversely affected.

Dependence on Consumables Revenues. The Company anticipates it will derive an
increasing component of its revenues and operating income from the sale of ink,
paper, film and other consumables to its customers. To the extent sales of the
Company's consumables are reduced because its customers are unsuccessful in
marketing their own printing services, or customers substitute third-party or
private label consumables for those of the Company, the Company's results of
operations could be adversely affected. Further, although the Company's
consumables are manufactured specifically to operate with its printing products
to produce optimum results, there can be no assurances that other manufacturers
of printing inks and papers will not develop products that can be sold and
compete with the Company's printing products, or that other products will not
produce results which are satisfactory to the customer at a lower cost. The
Company alleges that at least one manufacturer has improperly used the Company's
trade secrets to commence such competition. Although the Company is involved in
legal action against such manufacturer for misappropriation of trade secrets,
there can be no assurances that other manufacturers will not independently and
legitimately develop competing consumable products. In addition, product quality
issues, limitations in the availability of sole source consumables or changes in
credit or trade terms from sole sources could adversely affect the sales of
consumables.

Intellectual Property and Proprietary Rights. The Company's ability to compete
effectively will depend, in part, on its ability to maintain the proprietary
nature of its technologies through patents, copyrights and trade secrets.
Important features of the Company's products are incorporated in proprietary
software, some of which is licensed from others and some of which is owned by
the Company. The Company attempts to protect its proprietary software with a
combination of patents, copyrights, trademarks and trade secrets, employee and
third-party nondisclosure agreements and other methods of protection. Despite
these precautions, it may be possible for unauthorized third parties to copy
certain portions of the Company's products or to reverse-engineer or obtain and
use information that the Company regards as proprietary. Further, the Company's
intellectual property may not be subject to the same level of protection in all
countries where the products are

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sold. There can be no assurance that the measures taken by the Company will be
adequate to protect the intellectual property or that others will not
independently develop or patent products similar or superior to those developed,
patented or planned by the Company, or that others will not be able to design
products which circumvent any patents relied upon by the Company.

The Company has been granted three United States patents for inventions related
to its TurboRes(R) approach to enhancing the vertical resolution of conventional
laser printer engines, three United States patents relating to the Company's Big
Ink Delivery System and three United States patents relating to ThermalRes.
Additional patent applications are pending relating to the Company's TurboRes,
ThermalRes, FastPort, Big Ink Delivery System, oversized A3 printing, high-
resolution imaging and image enhancement and wide-format printing technologies
and techniques. There can be no assurance that patents will be issued from any
of these pending applications. With regard to current patents or patents that
may be issued, there can be no assurance that the claims allowed will be
sufficiently broad to protect the Company's technology or that issued patents
will not be challenged, invalidated or violated, requiring expenditures of cash
to pursue and enforce the Company's rights in the patented technology.
Applications to patent the basic TurboRes, ThermalRes and Big Ink Delivery
System approaches and related technologies have been filed in selected foreign
countries. Patent applications filed in foreign countries are subject to laws,
rules and procedures which differ from those of the United States, and there can
be no assurance that foreign patents will be granted as a result of these
applications. Furthermore, even if these patent applications result in the
issuance of foreign patents, some foreign countries provide significantly less
patent protection than the United States.

Additionally, patent, copyright and trademark protection has not been sought, or
may not be available in all foreign countries. Although the Company has not
received any notices from third parties alleging intellectual or proprietary
property infringement, there can be no assurance that third parties will not
assert infringement claims against the Company in the future or that any such
assertion will not require the Company to expend funds defending such claims or
requiring the Company to enter into royalty arrangements on such terms as may be
available, which may adversely affect financial performance of the company. Any
claim that the Company's current or future products or manufacturing processes
infringes on the proprietary rights of others, with or without merit, could
result in costly litigation which could adversely affect the financial
performance of the company.

The Company is actively pursuing development of new and unique print solutions
and processes, media and inks. Although the research and development process
involves an analysis of protected proprietary rights in any technology that is
being pursued, there is no assurance that competitors or others will not
interpret any such products or processes developed by the Company as violating
protected intellectual rights and pursue legal action, which could be costly and
may affect the financial performance of the Company. In addition, although the
Company does not have any knowledge of violations of its intellectual property
rights, there can be no assurance that the Company will not be forced to take
action to protect its intellectual property portfolio. Such enforcement activity
could require the expenditure of significant cash resources and could affect the
financial performance of the Company.

Although the Company has not received notices from third parties alleging
infringement claims that the Company believes would have a material adverse
effect on the Company's business, there can be no assurance that third parties
will not claim that the Company's current or future products or manufacturing
processes infringe the proprietary rights of others. Any such claim, with or
without merit, could result in costly litigation or might require the Company to
enter into a royalty or licensing agreements. Such royalty or licensing
agreements, if required, may not be available on terms acceptable to the
Company, or at all, which could have a material adverse effect upon the
Company's business, financial condition and results of operations. If the
Company does not obtain such licenses, it could encounter delays in product
introductions while it attempts

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to design around such patents, or it could find that the development,
manufacture or sale of products requiring such licenses could be enjoined. In
addition, the Company could incur substantial costs in defending itself in suits
brought against the Company on such patents or in bringing suits to protect the
Company's patents against infringement, which could adversely affect the
Company's financial condition or results. If the outcome of any such litigation
is adverse to the Company, the Company's business and financial results could be
adversely affected.

Litigation and Litigation Costs. The Company and three of its officers are
currently subject to various claims in a securities lawsuit relating to a
decline in the market price of the Company's common stock in December 1994.
Although a preliminary settlement has been reached in this case, there can be no
assurance that final approval will be granted and that the Company will not
incur additional substantial costs for this matter.

The Company has instituted action against a competitor for patent infringement,
misappropriation of trade secrets and other causes of action. The competitor had
counter-claimed for false advertising, patent misuse, and unfair competition by
LaserMaster. The counterclaims have been dismissed. Although the Company does
not believe any of its practices violate applicable trade or anti-trust laws,
there is no assurance that claims or actions will not be commenced by customers,
competitors or governmental authorities based on trade or anti-trust claims
which could affect the Company's operations and cash position.

The Company is also engaged in various actions related to transactional matters,
employee matters, customers credit and product quality and/or warranty issues.
Some of these actions include claims against the Company for punitive, exemplary
or multiple damages. An award of punitive damages may not bear a direct
relationship to the actual or compensatory damages claimed from the Company.
Although the Company does not believe there are any actions pending or
threatened against the Company which would have a material adverse impact on the
financial position of the company, there is no assurance that there will not be
an adverse award of multiple punitive or exemplary damages which could adversely
affect the cash position of the Company.

Any litigation which the Company is involved in may have an adverse impact on
the Company's operations and may result in a distraction or diversion of
management's attention, thereby adversely affecting the operations of the
Company.

International Operations. The Company expects that international revenues will
continue to represent a substantial portion of its total revenues. International
operations are subject to various risks, including exposure to currency
fluctuations, political and economic instability, differing economic conditions
and trends, differing trade and business laws, unexpected changes in applicable
laws, rules, regulatory requirements or tariffs, difficulty in staffing and
managing foreign operations, longer customer payment cycles, greater difficulty
in accounts receivable collection, potentially adverse tax consequences and
varying degrees of intellectual property protection. Fluctuations in currency
exchange rates could result in lower sales volume reported in U.S. dollars.
Fluctuations in foreign exchange rates are unpredictable and may be substantial.
From time to time the Company has engaged in limited foreign currency hedging
transactions. There can be no assurance that the Company will be successful if
it engages in such practices to a significant degree in the future.

Dependence on Key Personnel. The Company's success depends to a significant
extent upon certain key personnel, including Mr. Masters, its Chief Executive
Officer and President, and Mr. Lukis, its Chief Engineer. The loss of either of
these individuals, or other key management or technical personnel, could
adversely affect the Company's business. The Company maintains key person life
insurance in the amount of $2,000,000, payable to the Company, on each of Mr.
Masters and Mr. Lukis. In addition, the Company has certain non-compete and
continuation contracts with key personnel. The Company also depends on its
ability to attract and retain highly skilled personnel. Competition for
employees in this market is high and there can

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be no assurance that the Company will be able to attract and retain the
employees needed. In addition, past financial performance of the Company may
limit the ability to hire and retain management professionals.

Environmental. The Company is subject to local and federal laws and regulations
regarding the use, storage and disposition of inks used with the Company's print
products. Although the Company believes it is in compliance with all such laws
and regulations, and the Company is not aware of any notice or complaint
alleging any violation of such laws or regulations, there can be no assurance
that there will not be some accidental contamination, disposal or injury from
the use, storage, or disposition of inks or other materials used in the
Company's operations. In the event of such accident, the Company could be held
liable for any damages that result and any such liability could have a material
adverse effect on the Company's financial condition. In addition, there can be
no assurance that the Company will not be required to comply with environmental
claims, laws, or regulations in the future which could result in significant
costs which could materially adversely affect the Company's financial condition.

Tax Liability. The Company sells its products from its offices in Eden Prairie,
Minnesota and reports sales and income tax liability based on sales occurring at
that location. It is possible that one or more state or local taxing authorities
could determine that there have been taxable transactions occurring within their
jurisdiction and seek recovery of taxes for current and/or past periods. In
addition, it is possible that local, state or federal taxing authorities will
take issue with the reporting or determination of tax liability and seek
additional taxes for current and/or past periods. The Company currently has a
net operating loss ("NOL") carry forward that may be used to offset future
federal taxable income. However, there is no assurance that the NOL will
continue to be available as an offset against future federal taxable income or
that there will be sufficient taxable income to fully utilize the NOL.

Volatility of Stock Price. The trading price of the Company's common stock is
subject to wide fluctuations in response to variations in operating results,
changes in the laws or regulations to which the company may be subject,
announcements of new products or technological innovations by the Company or its
competitors, overall economic conditions and indicators, market conditions
unrelated to Company performance, and general conditions in the industry.
Factors such as quarterly variation in actual or anticipated operating results,
changes in earnings estimates by analysts, and analysts' reactions to Company
statements and actions also contribute to stock price fluctuations. In addition,
the prices of securities of many high technology companies have experienced
significant volatility in recent years for reasons frequently unrelated to the
operating performance of the specific companies. These fluctuations may
materially affect the market price of the Company's common stock.

One time in the past, following fluctuations in the market price of the
Company's stock, a securities action was commenced alleging that the Company and
certain insiders had knowledge of certain material, adverse information about
the Company prior to the time that such information allegedly caused a drop in
the market price of the stock. Because the Company's stock has historically
fluctuated significantly, it is possible that following a significant change in
the market price of the stock another securities action could be commenced
against the Company. Such action, whether commenced by one or more individuals,
or by a class of securities holders, could result in substantial costs and
diversion of management's attention and resources and thereby cause an adverse
effect on the business and financial performance of the Company.

Brand Awareness. The Company has changed the name of its principal operating
subsidiary from LaserMaster Corporation to ColorSpan Corporation. The Company
has significant brand awareness associated with its LaserMaster trade names. If
the market is unable to accept or delays the acceptance of the name change, the
Company's financial performance and sales may be negatively impacted.

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Industry Consolidation. As a growth industry, the wide-format digital printing
market has generated many new entrants into the fragmented market with new
products and new technologies. As the market matures, and the industry's growth
rate slows, companies with technological or manufacturing efficiency advantages
will emerge as the market leaders maintaining or increasing their market share.
Those companies without a marketable advantage will face significant pressure on
revenue growth and gross margins. In order to remain competitive, the smaller
companies may have to seek merger or consolidation opportunities with other
companies.

Technological Advancements. The digital color printing market is rapidly moving
to two distinct technologies for the placement of ink on a substrate: thermal
inkjet cartridges and piezo-electric print heads. Any company without a secure,
economical source of these products will face serious competitive pricing and
margin pressures going forward. The Company currently has a license to
remanufacture specific Hewlett-Packard Corporation 300 dpi inkjet cartridges for
use in its wide-format color printers. Hewlett-Packard has introduced a new
inkjet cartridge with a visual resolution of 600 dpi. In addition, Lexmark is
believed to have developed a 600 dpi inkjet cartridge. Both companies are
competitors in the wide-format color market. Should the market for wide-format
color demand the increased resolution provided by these new products and the
Company be unable to secure adequate supplies at reasonable prices or develop a
reasonably priced substitute from other sources, the Company's sales of printer
engines and the related gross margins could be negatively impacted.

The Company's products target the market for high quality printing output.
Hardware and software technological advances have enhanced actual and perceived
resolution. There is no assurance that other companies will not achieve actual
or apparent resolution with less expensive printers and supplies and therefore
capture the market held by higher cost printers.


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