Microforum Inc. (ticker: MCF.TO, exchange: Toronto Stock Exchange)
News Release - 12-Jan-2000

Microforum continues record performance with 44% third quarter revenue increase over prior year

Toronto, Ontario, Canada January 12, 2000
Microforum Inc. (TSE:MCF) reported revenues of $13,079,417 for its third fiscal quarter (FY2000) ended November 30, 1999, representing an increase of 44% from the same period of the previous year and a 20% increase over the second quarter ended August 31, 1999. The Company attributed 8% of the quarter over quarter revenue growth to the acquisition of Frameworks Communications Inc. and Two Door Communications Inc. Professional services gross margins from the Company's Internet and Multimedia segments were 70%, versus 71% in the second quarter, 58% in the first quarter and 39% in the same period last year. The Company's EBITDA for the third quarter of $1,233,529 increased 453% over the preceding quarter and improved significantly from a loss of ($2,727,534) in the same period of the previous year. The Company reported net income of $98,729 during the third quarter compared to a net loss per share of ($3,082,568) for the same period last year.

Third Quarter November 30
1999 1998
Revenue $13,079,417 $9,059,212
EBITDA $1,233,529 ($2,727,534)
Net income (loss) $98,729 ($3,082,568)
Basic EPS $0.01 ($0.18)
Nine Months to November 30
1999 1998
Revenue $33,677,860 $22,374,449
EBITDA $1,634,262 ($2,706,976)
Net loss ($249,432) ($3,390,257)
Basic EPS ($0.01) ($0.20)
Issued and outstanding shares 33,994,050 17,733,996

During the third quarter, total headcount grew to 301 employees, up from 264 at the end of second fiscal quarter and up significantly from 227 at the end of the same period a year ago. Headcount for the Internet and Multimedia segment grew to 139 employees, up from 116 at the end of the second fiscal quarter and up significantly from 55 at the end of the equivalent nine month period of the previous year. These figures include the recent acquisitions of Frameworks Communications Inc. and Two Door Communications Inc. both of which were completed in December 1999, which contributed an additional 30 employees, 18 of which were in the Internet and Multimedia segment.

On November 8, 1999, the Company's registration statement with the Securities and Exchange Commission (SEC) in the United States was declared effective. On November 9, 1999, the Company opened a production office in San Francisco, CA to initially serve its existing client Petopia.com and as base to expand its sales efforts in the U.S. As a result of the acquisition of Frameworks Communications Inc., the Company also has a sales office located in Chicago, IL.

Subsequent to the end of the third quarter, the Company announced the acquisitions of Frameworks Communications Inc. on December 8, 1999 and Two Door Communications Inc. on December 20, 1999. On December 8, 1999, the Company announced that it has entered into a letter of intent to acquire Relational Solutions Incorporated.

During the third quarter, Microforum secured new contracts with clients such as Petopia.com, Dumex Medical, Micro Modelling Associates (MMA), ValueVision as well as a digital interactive CD-ROM based production contract with Bombardier. Subsequent to the end of the third quarter, the Company announced an e-commerce contract with Chapters Online.

"We are pleased with this quarter's results and in particular the increase in revenue and EBITDA figures," said Howard Pearl, President and CEO of Microforum. "We are continuing to execute according to our business plan by increasing our revenues through strategic acquisitions and internal growth. Additionally, we are seeing our Internet based revenues contribute an increasing percentage of overall revenues as we move forward."

About Microforum
Microforum Inc. (www.microforum.com) is a leading North American professional services firm providing a broad range of electronic commerce, Internet strategy and database services. Microforum is publicly traded on the Toronto Stock Exchange under the symbol "MCF" and is headquartered in Toronto, with offices in San Francisco, CA and Chicago, IL.