1MAGE Software Inc. statement to shareholders.

ENGLEWOOD, Colo.--(BUSINESS WIRE)--Dec. 27, 1995--The following is a statement by David R. DeYoung, president and chief executive officer of 1MAGE Software Inc. (NASDAQ:ISOL): -0-

To Our Shareholders:

In 1995, we emerged as one of the leading providers of imaging document management systems to the trucking industry. Our customers include US Xpress, Marten Transport, Poole Truck Lines Direct Transit, Highway Transport, PTL Transportation, Lewis Transportation, Silver Eagle, Daylight, Roehl Transport, STAR, GI Trucking, Parker Motor Freight, G&P Trucking and many others. To supplement our efforts in the transportation market we added an indirect sales channel which we expect will increase our transportation imaging sales in 1996. We intend to continue our direct sales efforts to this market and expect our software to become the standard for document image processing. In addition to direct sales, we have formed a joint venture through which we have created ScanUSA(tm), a document scanning service bureau. ScanUSA is now on-line and we expect them to be in full production in 1996 - scanning and transmitting over high-speed communication lines an estimated 1.5 million documents per month to their trucking customers. The combination of successfully providing document imaging solutions to end-users and the results of ScanUSA should further our impact in this market.

During 1995, we expanded sales of our document management system through the marketing channels of Value Added Resellers ("VARs"). Through VARs, we were able to sell into new markets such as healthcare, local government, and manufacturing/distribution. End-users in these industries include: Banner Aerospace, Travis Perkins, AT&T Microelectronics, IP Petroleum, United Technologies, NCS Healthcare, and Professional Hospital Supply. Through the efforts of our business partner in the automotive market, the Reynolds + Reynolds Co., we are also anticipating that 1MAGE(tm) software will become the standard in the automotive dealerships marketplace. It is through the marketing efforts of our VARs that 1MAGE(tm) is now offered in multiple industry segments. Our VAR focus is on the 600 plus software companies and over a million end-users that utilize the same database as 1MAGE(tm). We have signed a Reseller Agreement with VMARK Software Inc. ("VMARK") to market 1MAGE(tm) internationally. Worldwide sales efforts by VMARK include recent opportunities in Asia, South Africa, United Kingdom, Europe and the United States. We are anticipating that the results of these joint efforts will expand in 1996.

Document imaging is an emerging technology. Most of the installations of 1MAGE(tm) are what we consider to be "starter systems." We expect that these "starter system" installations will grow and mature requiring more user and subsequent software licenses, ongoing maintenance, and services during 1996 and beyond. As more VARs and end-users continue to adopt this technology, we are poised to capitalize on this ongoing revenue stream.

On the subject of products, work continues on major product releases for 1996. A new version of 1MAGE(tm) will allow users of Microsoft Windows/NT and Windows 95 access to our document management system. In addition, we are building on our document scanning service offerings and will offer a PC Product, 1MAGENET(tm), to enable small carriers the ability to receive document images via direct dial-up and/or on the Internet. This product offering will expand the availability of services to the majority of the 55,000 trucking companies in the United States.

As we continue to expand through direct and indirect channels, it is our objective to ensure that these relationships and their successes directly improve our financial results.

CONTACT: 1MAGE Software Inc., Englewood

David R. DeYoung, 303/773-1424