Background:

The millenium computer bug was originated some forty years ago when the big mainframe computers were built and programmed. At that time, computer memory space (hard drive space) was extremely valuable. Instead of writing a year as 1975, programmers wrote 75, saving two valuable spaces. At the time that the programs were written, no one thought about the consequences of the approaching millennium. Those who did, figured governments and businesses would invest in whole, new computer systems. They could not imagine that their programs would be used in 1999. But indeed, they are. Worse yet, all the old programs are written in archaic languages like Fortran and Cobol which are now interconnected with other programs in a maze of code which is extremely difficult to read.

There are some religious leaders who believe that an apocalyptic nightmare or time of tribulation will occur in the year 2000. Whether this prophecy will come true or not remains a mystery; however, what we do know is that worldwide businesses will spend an estimated 400 to 800 billion dollars on Y2K preparations. The mere threat of disaster will create profound financial implications. More so, individual's expectations and preparations could lead to self-fulfilling prophecies.

Why The Millenium Bug Is A Very Real Problem:
If left unchanged, computers will think the date is 00 on January 1, 2000. Seventy or Eighty years before the programs were even written! All records with date sensitive formulas and applications will be ruined.

The Millenium bug threatens a disruption if not a complete shutdown of essential industries and they will remain down until billions of lines of code are corrected.

While some industry specific problems are highlighted below, the following are common to all: Payrolls, Receivables, Accounting and Scheduling
Problems in one industry can and often will adversely affect all of the others.

Industries Which Could See Major Y2K Problems:

� Defense:
Correcting the Year 2000 code will be the largest project ever undertaken by the Department of Defense. The prevailing fear is that a hostile nation may realize that there is opportunity for a chemical weapons or nuclear attack if there is disruption or corruption of the computer system monitoring such potential threats. The Department of Defense is home to about 30 billion lines of programming. Some of which are embedded in artillery, tanks and air defense systems. Worse, China, Russia and third world nations who are more susceptible to system failures could launch an inadvertent attack. The financial crisis in Russia has given rise to big problems, their budget for year 2000 preparations is ZERO.

� Medical:
This 1.5 trillion-dollar industry is the most ill prepared for Y2K. Most Equipment dates back many years. The threat of negligence and wrongful death cases is propelling this industry into cardiac arrest.

� Utilities:
Electricity is accessed by means of an interconnected grid, this interconnectivity makes the system susceptible to failure if the code is not fixed at every possible site. There is significant belief that many companies in this field will not be prepared.

� Media & Communications:
Telecommunications, cable, Internet and satellite all have extreme exposure. Imagine the potential for hysteria if we went without these for only one day.

� Transportation and Distribution:
Cars have over 50 microprocessors, some are critical, including braking systems and fuel injection and electronic ignitions. Cars more than a few years old are not Y2K compliant. Aside from aircraft malfunction, the FAA admits that they are not prepared to deal with the Y2K bug. Problems have been reported in routing and navigation systems for rail and shipping.

� Banking:
A recent study showed that 38% of IT executives plan on withdrawing their money from banks and investment companies prior to December 31, 1999. The Federal Reserve printed 50 billion dollars in cash for this reason. That is a 33% increase in supply of cash. Many pundits anticipate the fed printing even more money. They will be extending the money supply to protect against a run on banks, creating a massive panic. Most people don't understand the fragility of the banking system. It is entirely based on confidence. When confidence evaporates, like it did from 1929 to 1933, when 4000 banks collapsed, even our system is perilous. Federally mandated reserve requirements state that banks must keep 10% of assets liquid. This means that if depositors take out an aggregate of 10% of their own money, bank resources are depleted. In a normal situation they seek to borrow from other banks at the feed funds rate. What happens when depositors throughout the world demand their money?

Steps Every Organization Must Take
To become compliant, an organization must complete a three-step process; assessment, correction and testing. As of the beginning of 1999 one in three business haven't completed the assessment. stage Many companies optimistically plan to complete their preparations in the last quarter of 1999.....

The Problems Organizations Will Face:

Companies that are at the forefront of Y2K preparations like large banks and insurance companies have found that Y2K expenses have been between 2 and 5 times what they originally budgeted. With so many companies leaving small margin for error, and errors being so prevalent it is unlikely that the majority of firms will meet their deadlines. Especially when you Consider that most preparation will begin late in 1999.

Due to mass influxes of business toward the end of 1999, programming resources will be scarce, further showing the unlikelihood of companies being able to correct all of their "Bugs" on time. Please remember the only news you will hear is good news. No company will promote the fact that they will not be Y2K compliant. Even in early 1999 there is a great demand for programmers that have the necessary skills to correct the corrupted codes. Labor is being prioritized; the problem is too big to be fixed on time, only mission critical operations can now be saved.

If a computer network system is not corrected prior to January 1, 2000, it may be corrupted or shutdown and it will not work until it has been fixed. We recommend that everyone investigate and prepare for the potential outcomes of this event.

Our government and mainstream media have spoken little about the millenium bomb, careful not to incite panic and hysteria. FDIC regulations prohibit banks from disclosing Y2K problems. Logically, as the hour draws nearer and nearer the attention devoted to the prospect of widespread system failures will only increase.