The Company is actively developing a number of distributors, licensing and OEM
opportunities and has signed agreements, as of November 13, 1996, with Mobile
Planet, a U.S. based distributor, and Pocket Power, an Italian distributor; OEM
agreements with Thin Spin Holdings LLC and with Sanyo Information Systems UK
Ltd. The Company continues to progress with additional licensing and OEM
opportunities, which management believes could have a positive impact on future
operations. Due to the Company's high manufacturing overhead, the Company
expects to report gross losses until product sales and/or margins improve
sufficiently to cover the overhead. The Company's strategies to produce positive
margins includes increasing the volume of existing products and adding new
products, such as the recently introduced Mobile Office, reducing manufacturing

In November 1996, the Company entered into an OEM contract with
Sanyo Information Systems U.K. Ltd. (extended into the rest of Europe with Sanyo
Buro-Electronic Europa) (collectively "Sanyo"). In May 1998, due to changes
affecting portable digital recorders, the Company discontinued production and
supply under the Sanyo agreement