STATEMENT OF RISK

      The companies in which Enercorp,  Inc. (the "Company") invests and intends
to  invest,  particularly  in the early  stages  of an  investment,  often  lack
effective  management,  face operating  problems and incur  substantial  losses.
Although the Company endeavors to diversify its investments, its operations have
been  and  continue  to be  subject  to all the  risks  inherent  in  making  an
investment  in and  establishing  new business  enterprises.  These  include the
limited operating  histories of its investee  companies and the possibility that
the Company will be unable to obtain any return of or on its investments.
      Additional  risks of investment in the Company  include the fact that some
of the  Company's  investments  are  valued  based on the  Board  of  Director's
subjective  judgment,  the Company's need to make  follow-on  investments in its
investees  to protect its  positions,  the limited  liquidity  of the  Company's
investments due to legal,  contractual and market  restrictions on resales,  and
the competition which the Company faces from companies with greater  experience,
resources and managerial capabilities than the Company.
      From time to time, the Company issues  information on its  operations,  as
well  as  that  of its  investee  companies.  This  information,  which  is made
available in reliance upon the safe harbor of the Private Securities  Litigation
Reform Act of 1995,  may  contain  forward-looking  statements  relating  to the
Company, its current operations and future prospects,  as well as information on
the current  operations and future  prospects of its investee  companies.  These
conditions  are  difficult  to  predict  and may be beyond  the  control  of the
Company.  The information  statements relating to these operations may therefore
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially  from those  discussed or  projected.  The  statements  issued by the
Company should be read in  conjunction  with the Company's most recent Form 10-K
and other filings with the  Securities and Exchange  Commission,  as well as the
SEC filings of the Company's investees.