INTRODUCTION

HELM CAPITAL GROUP, INC. ("Helm" or the "Company") is principally engaged in the financial services business through a wholly-owned subsidiary. Helm also maintains investments in several other entities described below.

Formed in 1997, MEZZANINE FINANCIAL CORP. ("Mezzanine"), a Delaware corporation and a wholly-owned subsidiary of Helm, is engaged in the business of making collateralized loans to ses.

In addition, a 14.9% owned affiliate and a public company, INTERSYSTEMS, INC. (together with its wholly-owned subsidiaries, hereinafter "ISI") (AMEX:II), designs, manufactures, sells and leases various agricultural and industrial products primarily used in handling, cleaning and weighing of grain products and for sampling the quality and grade of various industrial and agricultural products through a subsidiary, INTERSYSTEMS, INC., a Nebraska corporation, and provides custom resin compounding services for thermoplastic resin producers through a subsidiary, CHEMTRUSION, INC.

Through a 19.4% ownership in CORE CAPITAL, INC. ("CCI"), a privately-held Delaware corporation, the Company is engaged in the business of providing credit and credit-related services to small and mid-market business enterprises primarily through the factoring of accounts receivables and through initiating revolving lines of credit and term loans which are secured by the assets of the borrower.

The Company also maintains a $204,000 limited partnership interest in THE MEZZANINE FINANCIAL FUND, L.P. (the "Fund"), a Delaware limited partnership which makes collateralized loans to companies in a manner similar to Mezzanine Financial Corp.

Helm maintains an 18% interest in TELETRAK ENVIRONMENTAL SYSTEMS, INC. (OTC Bulletin Board:TAES). See "Recent Developments."

RECENT DEVELOPMENTS

In November 1998, the Company and its majority owned subsidiary, Teletrak Advanced Technology Systems, Inc. (OTC Bulletin Board:TATS), completed the previously announced merger of Teletrak with Advanced Environmental Systems, Inc. ("AES") of Webster, Massachusetts. Under the transaction, AES became a wholly owned subsidiary of Teletrak, and the AES stockholders received shares of Teletrak common stock in exchange for their AES stock. Immediately prior to the transaction, Teletrak effected a reverse stock split and recapitalization, and changed its name to Teletrak Environmental Systems, Inc. The 7.5 million common shares outstanding immediately following the transaction are traded on the NASD Electronic Bulletin Board under the symbol TAES.

AES, a privately held company, specializes in the manufacture, distribution and licensing of industrial "mucking pumps" and related equipment. The design of these pumps, based upon jet pump technology, makes this equipment a highly effective portable tool for the removal of granular wet or dry materials (including sludge, scale and slurries) -- particularly for environmental cleanup of hazardous matter such as asbestos and lead. The motive power, compressed air or pressurized liquid, provides operating flexibility for hopper loading, vacuum cleaning and submersible application, as well as the ability to collect and transport materials over long

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distances. With no moving parts, the AES pump is designed to be virtually maintenance free and to require no skilled labor to operate.

More than 1,000 pumps are in use today in a wide range of industries, including power plants, steel mills and foundries, oil refineries, chemical and petrochemical plants, food processing facilities, shipyards and marine vessel operators and water treatment plants.

Teletrak had been an inactive public company since 1993 as management sought an appropriate merger partner. It had no employees or facilities. Immediately after the merger, Helm became a minority stockholder with approximately 1,353,000 shares, or 18%, of the outstanding common stock and retained two seats on Teletrak's seven member board of directors. Teletrak Environmental Systems, Inc. is located in Webster, Massachusetts. Helm wrote off its investment in Teletrak prior to 1996. On March 31, 1999, the average of the bid and ask prices of Teletrak common stock on the OTB Bulletin Board was $.50.

RESULTS OF OPERATIONS

The Company realized a net loss of $194,000 in 1998. These results are compared to net income of $2,613,000 in 1997, which was attributable principally to a gain on the sale of Interpak Terminals, Inc. ("Interpak"), historically the Company's principal operating subsidiary.

The Company is a Delaware corporation with its principal offices at 537 Steamboat Road, Greenwich, Connecticut 06830. Its telephone number is (203) 629-1400. Set forth below is a discussion of the principal subsidiary, affiliates and investments of Helm Capital Group, Inc.

MEZZANINE FINANCIAL CORP.

With the completion of the 1997 sale of Interpak Terminals, Inc. ("Interpak"), historically the Company's principal operating subsidiary, the Company was positioned to bring its primary business activity into the financial services area. Mezzanine Financial Corp. ("Mezzanine"), based in Spring Lake, New Jersey, was organized in 1997 as a wholly-owned subsidiary of the Company to provide capital in high yield "mezzanine" debt situations of small and mid-market companies and to provide asset-based lending directly to or in participation with other commercial lenders to such sector.

The Company capitalized Mezzanine with $1,550,000 of cash proceeds from the sale of Interpak in exchange for the issuance by Mezzanine of a like principal amount of 9 1/2% Senior Convertible Notes due December 31, 2001 (the "Notes"). In an effort to reduce the Company's debt, the Notes were issued to the holders of the Company's 12% Subordinated Debentures due August 31, 1999 in exchange for the retirement of the Company's 12% Debentures pursuant to an exchange offer commenced by the Company in October 1997. One half of the outstanding principal amount of the Notes are convertible into shares of the Company's common stock at $1.25 per share, and one half of the outstanding principal amount of the Notes are convertible into shares of ISI common stock at $2.75 per share. The Company, which has guaranteed the payment of the Notes, has listed and as of December 31, 1998 has reserved for issuance 600,000 shares of its common stock and approximately 273,000 shares of the Company's ISI common stock for issuance upon conversion of the Notes. As of December 31, 1998, $100,000 of the Notes had been converted, leaving $1,450,000 principal amount of Notes outstanding.

As of March 31, 1999, Mezzanine had two loan participations outstanding in the aggregate amount of $1,377,000, one with a rate of return of 22% per annum and the other with a rate of return of 15% per annum.

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INVESTMENTS

INTERSYSTEMS, INC.

InterSystems, Inc.., based in Houston, Texas, was originally organized under the laws of the state of Delaware in 1984. ISI's two principal lines of business today consist of the operations of its wholly-owned subsidiary, INTERSYSTEMS, INC., a Nebraska corporation ("InterSystems Nebraska"), which designs, manufactures and sells specialized materials handling equipment, and the custom resin compounding operations conducted by its wholly-owned subsidiary, CHEMTRUSION, INC. ("Chemtrusion"). For each of the two years ended December 31, 1998 and 1997, approximately 66% and 60%, respectively, of ISI's revenues were attributable to the business of InterSystems Nebraska and approximately 34% and 40%, respectively, of ISI's revenues were attributable to the business of Chemtrusion.

ISI had revenues from continuing operations of $33,322,000, and $27,008,000, respectively, for the years ended December 31, 1998 and 1997. For the year ended December 31, 1998, ISI reported a net profit from continuing operations and a net profit for the year of $443,000, as compared to a net profit from continuing operations of $419,000 and a net profit $569,000 for the year ended December 31, 1997. The net profit for the year ended December 31, 1997 included a $150,000 gain from discontinued operations.

As of December 31, 1998, the Company held 1,182,177 shares, or approximately 14.9%, of the outstanding of common stock of ISI, of which 600,000 shares were pledged as collateral for a loan to a bank and an additional 273,000 shares were reserved for issuance to the holders of the Mezzanine Financial Corp. 9 1/2% Series B Senior Convertible Notes due December 31, 2001 upon exercise of conversion rights. Directors or officers of the Company comprise five of the seven members of the ISI board of directors.

InterSystems Nebraska designs, manufactures, sells and leases equipment for sampling, conveying, elevating, weighing and cleaning a wide variety of products for the industrial and agricultural sectors of the economy, including the following industries: grain and animal feed, fertilizer, petrochemical, milling, plastics, chemical, pharmaceutical, food, minerals and paper and pulp. The equipment that InterSystems Nebraska designs and manufactures includes automatic samplers, mechanical truck and rail probes, conveyors, bucket elevators, screeners and bulk weighing systems.

InterSystems Nebraska's products are designed and manufactured at its two Omaha facilities with a combined area of 70,000 square feet, of which approximately 60,000 square feet are dedicated to manufacturing operations. The subsidiary utilizes advanced robotics, integrated software and automated production systems in its manufacturing processes, and has invested in a CNC turret punch, computerized machining and fabrication equipment and automatic welding equipment. In addition, engineering utilizes a Computer Aided Design (CAD) system.

Chemtrusion provides the value-added service of custom compounding thermoplastic resins for resin producers. Custom resin compounding involves the combining of a resin with various additives such as pigments, impact modifiers, mineral fillers or stabilizers to customize the product to a particular end use. The end use may require color, opaqueness, toughness, stiffness, flame or chemical retardance characteristics or other specified qualities not available in standard thermoplastic resins. These compounds are used extensively in consumer products, packaging materials, automotive parts, and in the electrical, agricultural and office equipment industries. A variety of compounds are manufactured by Chemtrusion, including mineral and glass filled polyolefins, specialty resin alloys and additive concentrates.

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Chemtrusion provides custom compounding services using four twin screw extruders, various blenders and other equipment at its Houston facility which contains four production lines with a total annualized capacity 46 million pounds. Chemtrusion also operates a dedicated compounding services facility for Mytex Polymers ("Mytex"), a Delaware general partnership of Mitsubishi Chemical America and Exxon Chemical Company, a division of Exxon Corporation, located in Jeffersonville, Indiana. This plant, which has recently been expanded, now contains six production lines with an annual capacity of 75 million pounds of product. At the Mytex facility, Chemtrusion produces an array of polypropylene-based compounds exclusively for Mytex using raw materials and specifications provided by Mytex. Mytex is a leading supplier of engineered polypropylene to the auto manufacturing industry. Chemtrusion is paid a monthly management fee for its operation of the plant, which covers most operating expenses of the plant and construction financing debt service, and which provides significant net profits to Chemtrusion.

The initial term of the Mytex agreement, which commenced in 1997, is five years, and Mytex has the option to renew the agreement for two additional five year terms. The agreement may be terminated by either party upon the default of the other, except that certain defaults require notice and an opportunity to cure. Termination of the agreement triggers purchase rights on behalf of Mytex and put rights on behalf of Chemtrusion with respect to the facility as specified in the Mytex agreement.

CORE CAPITAL, INC.

Since 1992, Core Capital, Inc. ("CCI"), a privately-held Delaware corporation based in Spring Lake, New Jersey, has been engaged in the business of providing credit and credit-related services to small and mid-market business enterprises. Credit is extended primarily through providing factoring services which involve the outright purchase of accounts receivable and through initiating revolving lines of credit and term loans that are secured by the assets of the borrower. Credit-related services involve limited billing functions and collections of accounts receivable generated in the normal course of business together with the management of information and office functions related thereto. CCI provides its financial accommodations either directly or through its wholly-owned subsidiary, MediFin, Inc. It maintains a processing center located in Tampa, Florida. The financial accommodations provided by CCI are an important source of financing to enterprises that are unable to obtain traditional commercial bank or asset-based financing.

In providing its factoring services, CCI purchases accounts receivable from its customers at a discount, with the discounted amount representing income to CCI. On revolving loans of credit, CCI's income is generated through an interest charge on monies advanced, together with a collateral management fee. In addition to providing factoring and revolving credit facilities, CCI also provides collecting and limited billing services related to accounts receivable generated in the normal course of an account's business. CCI charges various fees for the different services it performs in this segment of its business.

The Company presently owns 418,483 shares, representing approximately 19.4%, of the common stock of CCI. For the year ended December 31, 1998, CCI is expected to report a loss from operations of approximately $1,922,000, as compared to a loss of approximately $1,053,000 for the year ended December 31, 1997. CCI's operating loss for the year, which includes a $750,000 provision for bad debts incurred by prior management, is the result of its need for additional capital to expand its portfolio of loans, thereby increasing revenue to cover the fixed expenses associated with this type of business. The Company does not expect to earn significant revenues from this investment in the future and carries its investment in CCI at $2,000.

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THE MEZZANINE FINANCIAL FUND, L.P.

The Company presently holds a $204,000, or 6%, limited partnership interest in the Mezzanine Financial Fund, L.P., a Delaware limited partnership (the "Fund"). The Fund was formed to provide capital in high yield "mezzanine" debt situations of small and mid-market companies and to provide asset-based lending directly to or in participation with other commercial lenders. A total of $3,400,000 of limited partnership interests have been sold and are outstanding, including a $200,000 contribution from the Fund's general partner. In addition, the Fund received additional capital of $1,000,000 in the form of year to year notes that were issued by the Fund. As of December 31, 1998, the Fund had financial accomodations outstanding in the aggregate amount of approximately $5,494,000 to 18 entities. The Fund has been profitable for each of its eight years of operation.

Pursuant to the terms of the limited partnership agreement under which the Fund was organized, the Fund by its terms terminated on December 31, 1998. Fund management has obtained limited partner approval of a one year extension of the term of the Fund in order to pursue an orderly liquidation of the outstanding loans to enable the Fund to return the original limited partnership investments to the limited partners. Directors of Helm control the general partner of the Fund.

EMPLOYEES

THE COMPANY. The Company has 5 employees, 4 of whom serve in executive capacities and 1 who serves principally in administrative capacities.

MEZZANINE FINANCIAL CORP., together with the Fund, currently employs 2 full-time and one part-time persons, one of whom serves in an executive capacity and 2 who serve principally in administrative capacities.

The Company believes it and its subsidiary have good relations with their employees.