RISK FACTORS


We have had a history of losses which may ultimately compromise our ability to
implement our business plan and continue in operations.

         We have had losses in each year since our inception in 1989, and
continue to have an accumulated deficit which, at September 30, 2005, was $130
million. The net loss for 2004 was $14.8 million, and the net loss for the nine
months ended September 30, 2005 was $19.6 million. To date, our technologies and
products have not produced revenues sufficient to cover operating, research and
development and overhead costs. We also will continue to make expenditures on
research and development and on pursuing patent protection for our intellectual
property. We expect that our revenues in the near term will not bring the
company to profitability. If we are not able to generate sufficient revenues or
we have insufficient capital resources, we will not be able to implement our
business plan and investors will suffer a loss in their investment. This may
result in a change in our business strategies.

We expect to need additional capital in the future, which if we are unable to
raise will result in our not being able to implement our business plan as
currently formulated.

         Because we have had net losses and, to date, have not generated
positive cash flow from operations, we have funded our operating losses from the
sale of equity securities from time to time and the sale of our video division
in 2004. We anticipate that our business plan will continue to require
significant expenditures for research and development, patent protection,
manufacturing, marketing and general operations. Our current capital resources
are expected to sustain operations for at least through the first half of fiscal
year 2006. Thereafter, unless we increase revenues to a level that they cover
operating expenses or we reduce costs, we will require additional capital to
fund these expenses. Financing, if any, may be in the form of loans or
additional sales of equity securities. A loan or the sale of preferred stock may
result in the imposition of operational limitations and other covenants and
payment obligations, any of which may be burdensome to the Company. The sale of
equity securities will result in dilution to the current stockholders'
ownership. The long-term continuation of our business plan is dependent upon the
generation of sufficient revenues from the sale of our products, additional
funding or reducing expenses or a combination of the foregoing. The failure to
generate sufficient revenues, raise capital or reduce expenses could have a
material adverse effect on our ability to achieve our long-term business
objectives.

Our industry is subject to rapid technological changes which if we are unable to
match or surpass, will result in a loss of competitive advantage and market
opportunity.

         Because of the rapid technological development that regularly occurs in
the microelectronics industry, we must continually devote substantial resources
to developing and improving our technology and introducing new product
offerings. For example, in fiscal year 2004, we spent approximately $11.4
million on research and development, and we expect to continue to spend a
significant amount in this area in the future. These efforts and expenditures
are necessary to establish and increase market share and, ultimately, to grow
revenues. If another company offers better products or our product development
lags, a competitive position or market window opportunity may be lost, and
therefore our revenues or revenue potential may be adversely affected.



If our products are not commercially accepted, our developmental investment will
be lost and our future business continuation will be impaired.

         There can be no assurance that our research and development will
produce commercially viable technologies and products. If existing or new
technologies and products are not commercially accepted, the funds expended will
not be recoverable, and our competitive and financial position will be adversely
affected. In addition, perception of our business prospects will be impaired
with an adverse impact on our ability to do business and to attract capital and
employees.

If our patents and intellectual property do not provide us with the anticipated
market protections and competitive position, our business and prospects will be
impaired.

         We rely on our intellectual property, including patents and patent
applications, to provide competitive advantage and protect us from theft of our
intellectual property. We believe that many of our patents are for entirely new
technologies. If the patents are not issued or issued patents are later shown
not to be as broad as currently believed, or are otherwise challenged such that
some or all of the protection is lost, we will suffer adverse effects from the
loss of competitive advantage and our ability to offer unique products and
technologies. In addition, there would be an adverse impact on the Company's
financial condition and business prospects.

If we cannot demonstrate that our technologies and products can compete in the
marketplace and are better than current competitive solutions, then we will not
be able to generate the sales we need to continue our business and our prospects
will be impaired.

         We expect to face competition from chip suppliers such as RF
MicroDevices, Anadigics, Maxim and Conexant, among others. Our technology may
also face competition from other emerging approaches or new technological
advances which are under development and have not yet emerged. If our
technologies and products are not established in the market place as
improvements over current, traditional chip solutions in wireless
communications, our business prospects and financial condition will be adversely
affected.

We obtain critical licensing rights for our products from various licensors,
some of which are single sources, which may put us at risk if they do not
fulfill our requirements or they increase prices that cannot be passed on to our
customers.

         We license certain technologies from various licensors, some of which
are single sources. Because we depend on outside sources for licenses related to
our products, we are at risk that we may not obtain these licenses on a timely
basis or may not obtain them at all. If we are unable to obtain needed licenses,
our business would be disrupted, and we would have to expend some of our
resources to modify our products or find new suppliers and work with them to
develop appropriate components. We are also at risk for increases in prices
imposed by sources over which we have no control. Our inability to obtain
licenses or absorb price increases may have an adverse effect on our own ability
to fulfill orders and on our financial condition.



We anticipate selling chips and certain other components to OEMs for which there
may only be a limited number of qualified foundries; therefore if we cannot
secure a foundry relationship for the time and quantity needed, we will not be
able to supply our customers and generate revenues.

         We anticipate that our future revenues will come from products that we
manufacture using the facilities of third party foundries. We believe there are
several such producers available for the production of our products. If,
however, the foundry with which we are working is not able to devote the
manufacturing space and time or is not able to carry our production for us, we
will have to locate another qualified foundry. Locating and changing foundries
may take unexpected amounts of time and likely will cause delays and additional
expenses. An unsuccessful business relationship with a foundry or a change in
foundries also likely will result in our being unable to temporarily supply
customers which might jeopardize the relationship, result in penalties and cause
a loss of revenues.

We believe that we will rely, in large part, on key business and sales
relationships for the successful commercialization of our products, which if not
developed or maintained, will have an adverse impact on achieving market
awareness and acceptance and loss of business opportunity.

         To achieve a wide market awareness and acceptance of our products, as
part of our business strategy, we will attempt to enter into a variety of
business relationships with other companies which will incorporate our
components into their products and/or market products based on our technologies.
Our successful commercialization of our products will depend in part on our
ability to meet obligations under contracts with respect to the products and
related development requirements. The failure of the business relationships will
limit the commercialization of our products which will have an adverse impact on
our business development and our ability to generate revenues and recover
development expenses.

We have limited experience in interfacing with third party foundry partners for
the production of chips to be sold to the OEM market which may result in
production inadequacies, delays and rejection.

         We have limited experience in the interfacing with third party foundry
partners for the production of chips for the OEM market. If there are
manufacturing errors resulting from our inexperience or by the third party
manufacturers, there may be resulting delays while they are corrected. In
addition, using others to manufacture on our behalf exposes us to timing,
quality and delivery risks. The failure to produce adequate numbers of products,
at the quality levels expected by our customers, may result in the loss of
acceptance of our products, or result in excessive returns and possible warranty
claims. These may result in loss of commercialization opportunities as well as
adversely affect revenues and cause additional, unanticipated expenses.

Until we are able to sell product in large enough volumes, our production and
sales expenses per unit will have an adverse impact on gross margins.

         Initially our products offerings may be produced in small quantities
resulting in higher per unit costs to produce. These costs will reduce gross
margins. It is possible that the costs to produce may not be fully recoverable
resulting in write downs of inventory. This will have a negative impact on our
financial condition and results of operations.



We are highly dependent on Mr. Jeffery Parker as our chief executive officer
whose services, if lost, would have an adverse impact on the leadership of the
Company and industry and investor perception about our future.

         Because of Mr. Parker's position in the company and the respect he has
garnered in the industry in which we operate and from the investment community,
the loss of the services of Mr. Parker might be seen as an impediment to the
execution of our business plan. If Mr. Parker were no longer available to the
company, investors may experience an adverse impact on their investment. We do
not currently have an employment agreement with Mr. Parker. We maintain
key-employee life insurance for our benefit on Mr. Parker.

If we are unable to attract highly skilled employees we will not be able to
execute our research and development plans or provide the highly technical
services that our products require.

         Our business is very specialized, and therefore it is dependent on
having skilled and specialized employees to conduct our research and development
activities, operations, marketing and support. The inability to obtain these
kinds of persons will have an adverse impact on our business development because
persons will not obtain the information or services expected in the markets and
may prevent us from successfully implementing our current business plans.

The outstanding options and warrants may affect the market price and liquidity
of the common stock.

         At September 30, 2005, we had 20,901,374 shares of common stock
outstanding and had 6,608,435 exercisable options and warrants for the purchase
of shares of common stock, assuming no terminations or forfeitures of such
options and warrants. On December 31, 2005 and 2006, there will be 6,386,180 and
6,659,262, respectively of the currently outstanding options and warrants
exercisable (assuming no terminations or forfeitures). All of the underlying
common stock of these securities is or will be registered for sale to the holder
or for public resale by the holder. The amount of common stock available for the
sales may have an adverse impact on our ability to raise capital and may affect
the price and liquidity of the common stock in the public market. In addition,
the issuance of these shares of common stock will have a dilutive effect on
current stockholders' ownership.

Provisions in the certificate of the incorporation and by-laws could have
effects that conflict with the interest of stockholders.

         Some provisions in our certificate of incorporation and by-laws could
make it more difficult for a third party to acquire control. For example, the
board of directors has the ability to issue preferred stock without stockholder
approval, and there are pre-notification provisions for director nominations and
submissions of proposals from stockholders to a vote by all the stockholders
under the by-laws. Florida law also has anti-takeover provisions in its
corporate statute.