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                                   EXHIBIT 99

     CAUTIONARY FACTORS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT

Diametrics Medical, Inc. (the "Company") desires to take advantage of the new
"safe harbor" provisions contained in the Private Securities Litigation Reform
Act of 1995 (the "Act").  Contained in this Form 10-Q are statements which are
intended as "forward-looking statements" within the meaning of the Act.  The
words or phrases "expects," "will continue," "is anticipated," "management
believes," "estimate," "projects," "hope" or expressions of a similar nature
denote forward-looking statements.  Those statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or from those results presently anticipated or
projected.  The Company wishes to caution readers not to place undue reliance on
forward-looking statements.  Readers should be advised that the factors listed
below have affected the Company's performance in the past and could affect
future performance.  Those factors include, but are not limited to, the lack of,
or slow rate of, market acceptance of the Company's products; the impact of
competitors' products and pricing; the effect of changes in customer demands;
the risk there will be technical difficulties in production; the inability of
the Company to attract and retain skilled employees in the product development
and manufacturing areas.

Other factors include the following:

EARLY STAGE OF COMMERCIALIZATION; LIMITED RELEVANT OPERATING HISTORY

The Company was founded in 1990 and until recently has been engaged primarily in
the research, development and testing of, and the development of manufacturing
capabilities for, the IRMA(R) (Immediate Response Mobile Analysis) System.  The
Company began marketing the IRMA System on a national basis in the third quarter
of 1994 and on an international basis in 1995.  There is no assurance that the
Company will be successful in transitioning to commercial operations, including
commercial-scale manufacturing.  Additionally, the Company has limited operating
history upon which an evaluation of its prospects can be made.  Such prospects
must be considered in light of the risks, expenses and difficulties frequently
encountered in establishing a new business in the evolving, heavily-regulated
medical device industry, which is characterized by an increasing number of
entrants, intense competition and a high failure rate.

ABSENCE OF PROFITABILITY; ANTICIPATED FUTURE LOSSES

The Company has only recently begun to generate revenues from sales of the IRMA
System and has incurred net operating losses since its inception.  Net losses
for the years ended December 31, 1993, 1994 and 1995 and the nine months ended
September 30, 1996 were approximately $13,819,000, $12,455,000, $23,046,000 and
$17,097,000, respectively.  The Company had an accumulated deficit of
approximately $73,541,000 at September 30, 1996.  The Company expects to incur
substantial net operating losses at least through 1998.  There is no assurance
that the Company will ever generate substantial revenues or achieve
profitability.

NEW TECHNOLOGY; UNCERTAIN MARKET ACCEPTANCE

The Company's success is dependent upon acceptance of the IRMA System by the
medical community as reliable, accurate and cost-effective. Because the IRMA
System is a point-of-care blood testing device, the IRMA System represents a new
practice in the testing of blood analytes.  Critical or stat blood testing is
currently performed primarily by central and stat laboratories of hospitals or
by independent commercial laboratories, rather than at the point-of-care.
Although professional awareness of point-of-care blood testing is increasing,
most acute care hospitals have already installed costly benchtop blood testing
instruments for use in their central and stat laboratories and may be reluctant
to change standard operating procedures for performing blood testing or incur
additional capital expenditures for new blood analysis equipment.  In addition,
the limited number of tests that can be performed on the IRMA System may cause
certain hospitals not to consider the IRMA System.  The Company is unable to
predict how quickly, if at all, the IRMA System will be accepted by members of
the medical community or, if accepted, the number of tests that will be
performed using the IRMA System. Therefore, the Company is unable to provide any
assurance as to sales volume of the IRMA Analyzer or the related sales volume of
IRMA cartridges.
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FUTURE ADDITIONAL CAPITAL REQUIREMENTS

The Company expects that its existing capital resources, current and future
lease financing arrangements and strategic alliances will enable the Company to
maintain its current and planned operations through the first quarter of 1997.
Nonetheless, the Company's capital requirements depend on numerous factors,
including the rate of market acceptance of the Company's products, the level of
resources devoted to expanding the Company's marketing organization and
manufacturing capabilities, the Company's research and development activities,
the availability of lease financing for capital acquisitions and other factors.
The timing and amount of such capital requirements cannot accurately be
predicted.  If capital requirements vary materially from those currently
planned, the Company will require additional capital at an earlier time.  The
Company has no commitments for any additional financing, and no assurance exists
that any such commitments can be obtained on favorable terms, if at all.  Any
additional equity financings may be dilutive to shareholders, and debt
financing, if available, may involve restrictive covenants.  The Company is also
pursuing corporate strategic alliances.   Such alliances may require the Company
to relinquish rights to certain of its technologies, products or marketing
territories.

HIGHLY COMPETITIVE MARKETS; RISK OF TECHNOLOGICAL OBSOLESCENCE

The medical technology industry is characterized by rapidly evolving technology
and intense competition.  The Company is aware of one other commercially
available hand-held point-of-care blood analysis system, which is manufactured
and marketed by i-STAT Corporation ("i-STAT").  The Company expects that
manufacturers of central and stat laboratory testing equipment will also compete
to maintain their revenues and market share.  Many of the companies in the
medical technology industry and manufacturers of central and stat laboratory
equipment have substantially greater capital resources, research and development
staffs and facilities than the Company.  Such entities have developed, may be
developing or could in the future attempt to develop additional products
competitive with the IRMA System. Many of these companies also have
substantially greater experience than the Company in research and development,
obtaining regulatory approvals, manufacturing, and sales and marketing, and may
therefore represent significant competition for the Company.  There can be no
assurance that the Company's competitors will not succeed in developing or
marketing technologies and products that are more effective or less expensive
than those developed or marketed by the Company or that would render the
Company's technology and products obsolete or noncompetitive.  Although the
Company believes that its products may offer certain technological advantages
over its competitors' currently-marketed products, earlier entrants in the
market in a therapeutic area often obtain and maintain significant market share
relative to later entrants.  In the future, the Company may experience
competitive pricing pressures that may adversely affect unit prices and sales
levels.

LIMITED MANUFACTURING EXPERIENCE

The Company must manufacture the IRMA System in compliance with regulatory
requirements, in sufficient quantities and on a timely basis, while maintaining
product quality and acceptable manufacturing costs.  The IRMA System consists of
two principal components: the portable, microprocessor-based IRMA Analyzer and
the disposable IRMA cartridge.  The Company has limited experience producing the
IRMA cartridge for testing blood gases in large commercial quantities, and has
only recently begun to produce the cartridge for testing electrolytes.  Although
the Company believes that, based on its manufacturing experience to date, it
will be able to achieve and maintain product accuracy and reliability when
producing IRMA cartridges in the quantities required for profitable operations,
on a timely basis and at an acceptable cost, there can be no assurance that it
will be able to do so.  The IRMA Analyzer is manufactured for the Company by an
outside vendor, and there can be no assurance that such vendor will be able to
provide the Company with a sufficient number of IRMA Analyzers to meet the
Company's needs.

DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY

The Company's success will depend in part on its ability to obtain patent
protection for products and processes, to preserve its trade secrets and to
operate without infringing the proprietary rights of third parties.  The
validity and breadth of claims covered in medical technology patents involves
complex legal and factual questions and, therefore, may be highly uncertain.  No
assurance can be given that 
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any patents under pending patent applications or any future patent applications
will be issued, that the scope of any patent protection will exclude competitors
or provide competitive advantages to the Company, that any of the Company's
patents will be held valid if subsequently challenged or that others will not
claim rights in or ownership to the patents and other proprietary rights held by
the Company. Furthermore, there can be no assurance that others have not
developed or will not develop similar products, duplicate any of the Company's
products or, if patents are issued to the Company, design around such patents.
In addition, whether or not the Company's patents are issued, others may hold or
receive patents which contain claims having a scope that covers products
developed by the Company. The Company also relies upon unpatented trade secrets
to protect its proprietary technology, and no assurance can be given that others
will not independently develop or otherwise acquire substantially equivalent
techniques or otherwise gain access to the Company's proprietary technology or
disclose such technology or that the Company can ultimately protect meaningful
rights to such unpatented proprietary technology.

RISK OF PATENT LITIGATION

There has been substantial litigation regarding patent and other intellectual
property rights in the medical device industry.  Litigation, which could result
in substantial cost to and diversion of effort by the Company, may be necessary
to enforce patents issued to the Company, to protect trade secrets or know-how
owned by the Company, to defend the Company against claimed infringement of the
rights of others or to determine the ownership, scope or validity of the
proprietary rights of the Company and others.  An adverse determination in any
such litigation could subject the Company to significant liabilities to third
parties, could require the Company to seek licenses from third parties and could
prevent the Company from manufacturing, selling or using its products, any of
which could have a material adverse effect on the Company's business, financial
condition and results of operations.  The Company is not currently a party to
any patent litigation.

DEPENDENCE ON MANAGEMENT AND OTHER KEY PERSONNEL

The success of the Company and of its business strategy is dependent in large
part on the ability of the Company to attract and retain key management and
operating personnel.  Such individuals are in high demand and are often subject
to competing offers.  In particular, the Company's success will depend on its
ability to retain the services of its executive officers.  In addition, the
Company will have an ongoing need to expand its management personnel and support
staff.  The loss of the services of one or more members of the management group
or the inability to hire additional personnel as needed may have an adverse
effect on the Company.

UNCERTAINTY OF GOVERNMENT HEALTH CARE POLICY AND FUTURE REIMBURSEMENT

The willingness of hospitals to purchase the IRMA System may depend on the
extent to which hospitals limit capital expenditures due to cost reimbursement
regulations, including regulations promulgated by the Health Care Financing
Administration ("HCFA"), and general uncertainty relating to government health
care policy.  In addition, sales volumes and prices of the Company's products in
certain markets will be dependent in part on the level of availability of
reimbursement to hospitals for blood analysis from third-party payors, such as
government and private insurance plans, health maintenance organizations and
preferred provider organizations.  There can be no assurance that current
reimbursement amounts, if any, will not be decreased in the future, and that any
such decrease will not reduce the demand for or the price of the Company's
products.  Any health care reform measures adopted by the federal government
could adversely affect the price of medical devices in the United States or the
amount of reimbursement available, and consequently could be adverse to the
Company.  No prediction can be made as to the outcome of any reform initiatives
or their impact on the Company.

GOVERNMENT REGULATION AND NEW PRODUCT DEVELOPMENT

Human diagnostic products are subject, prior to clearance for marketing, to
rigorous pre-clinical and clinical testing mandated by the United States Food
and Drug Administration (the "FDA") and comparable agencies in other countries
and, to a lesser extent, by state regulatory authorities.  The Company has
obtained premarket notification clearances under Section 510(k)
("Section 501(k)") of the Food, Drug and Cosmetic Act (the "FDC Act") to market
the IRMA System to test blood gases, 
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electrolytes and hematocrit in whole blood in hospital laboratories and at the
point of care. A 510(k) clearance is subject to continual review and later
discovery of previously unknown problems may result in restrictions on the
product's marketing or withdrawal of the product from the market. The Company's
long-term business strategy includes development of IRMA cartridges containing
sensors for performing additional blood chemistry tests, and any such additional
tests will be subject to the same regulatory process. No assurance can be given
that the Company will be able to develop such additional products or uses on a
timely basis, if at all, or that the necessary clearances for such products and
uses will be obtained by the Company on a timely basis or at all, or that the
Company will not be subjected to a more extensive prefiling testing and FDA
approval process. The Company also plans to market the IRMA System in several
foreign markets. Requirements pertaining to the IRMA System vary widely from
country to country, ranging from simple product registrations to detailed
submissions such as those required by the FDA. No regulatory clearances have yet
been obtained in any other countries and there is no assurance that any will be
received. Manufacturing facilities are also subject to FDA inspection on a
periodic basis and the Company and its contract manufacturers must demonstrate
compliance with current Good Manufacturing Practices ("GMP") promulgated by the
FDA. The Company will be required to expend time, resources and effort in the
areas of production and quality control to ensure full technical compliance. If
violations of the applicable regulations are noted during FDA inspections of the
Company's manufacturing facilities or the manufacturing facilities of its
contract manufacturers, the continued marketing of the Company's products may be
adversely affected.

EFFECT OF CLINICAL LABORATORY IMPROVEMENT ACT OF 1988

The Company's products are affected by the Clinical Laboratory Improvement
Amendment of 1988 ("CLIA") which has been implemented by the FDA. This law is
intended to assure the quality and reliability of all medical testing in the
United States regardless of where tests are performed.  The regulations require
laboratories performing blood chemistry tests to meet specified standards in the
areas of personnel qualification, administration, participation in proficiency
testing, patient test management, quality control, quality assurance and
inspections.  The regulations have established three levels of regulatory
control based on test complexity -- "waived," "moderate complexity" and "high
complexity." Although the tests performed by the IRMA System have been
categorized as moderate complexity tests, there can be no assurance that they
will continue to be so categorized.  Personnel standards for high complexity
tests are more rigorous than those for moderate complexity tests, requiring that
testing personnel have more education and experience than personnel conducting
moderate complexity tests.  Any recategorization of the tests performed by the
Company's IRMA System as high complexity tests could affect the Company's
ability to successfully market the IRMA System.  As a result of the CLIA
requirements, hospitals may be discouraged from expanding point-of-care testing
and previously unregulated testing markets, including physician office
laboratories and small volume test sites, and may be dissuaded from initiating,
continuing or expanding patient testing.  There can be no assurance that the
CLIA regulations or future administrative interpretations of CLIA or various
state regulations requiring licensed technicians to operate point-of-care
devices will not have a material adverse effect on the Company.

PRODUCT LIABILITY RISK; NO ASSURANCE INSURANCE IS ADEQUATE

The Company faces an inherent business risk of exposure to product liability
claims in the event that the use of its products is alleged to have resulted in
adverse effects to a patient.  Although the Company has not experienced any
product liability claims to date, any such claims could have an adverse impact
on the Company.  The Company maintains a general insurance policy which includes
coverage for product liability claims.  The policy is limited to a maximum of
$1,000,000 per product liability claim and an annual aggregate policy limit of
$2,000,000.  There can be no assurance that liability claims will not exceed the
coverage limits of such policy or that such insurance will continue to be
available on commercially reasonable terms or at all. Consequently, a product
liability claim or other claim with respect to uninsured liabilities or in
excess of insured liabilities could have a material adverse effect on the
Company.

DEPENDENCE ON CONTRACT MANUFACTURERS AND SUPPLIERS

The IRMA Analyzer is manufactured for the Company by a single vendor, generally
from off-the-shelf components.  One component of the IRMA Analyzer is currently
supplied by a single source and 
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manufactured to the Company's specifications. Although the Company believes that
it could find alternative vendors for the IRMA Analyzer (the Company has already
switched manufacturing of the IRMA Analyzer from its original vendor) and for
the single-source component of the IRMA Analyzer, any interruption in supply
could have a material adverse effect on the Company. Materials used in the IRMA
cartridges are purchased from outside suppliers and are readily available from
multiple sources. The Company is developing alternative materials for one of the
components of the IRMA cartridge which it presently obtains from a single
source. Although the Company believes that alternative sources for key
components are available, any interruption in supply of these components could
have a material adverse effect on the Company's ability to manufacture the IRMA
cartridges.

CONTROL BY EXISTING SHAREHOLDERS

As of September 30, 1996, directors, executive officers and principal
shareholders of the Company, and certain of their affiliates, owned beneficially
approximately 37% of the Company's outstanding Common Stock. Accordingly, these
shareholders, individually and as a group, may be able to influence the outcome
of shareholder votes, including votes concerning the election of directors,
adopting or amending provisions in the Company's Articles of Incorporation and
Bylaws and approving certain mergers or other similar transactions, such as
sales of substantially all of the Company's assets. Such control by existing
shareholders could have the effect of delaying, deferring or preventing a change
in control of the Company.

POSSIBLE VOLATILITY OF STOCK PRICE IN THE PUBLIC MARKET

The securities markets have from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies.  The market prices of the common stock of many publicly
traded medical device companies have in the past been, and can in the future be
expected to be, especially volatile.  Announcements of technological innovations
or new products by the Company or its competitors, developments or disputes
concerning patents or proprietary rights, regulatory developments and economic
and other external factors, as well as period-to-period fluctuations in the
Company's financial results, may have a significant impact on the market price
of the Common Stock.  Sales of Common Stock in the public market could adversely
affect prevailing market prices.

POSSIBLE ISSUANCES OF PREFERRED STOCK; ANTI-TAKEOVER EFFECT OF MINNESOTA LAW

The Board of Directors has authority to issue up to 5,000,000 shares of
preferred stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the shareholders.  The rights of the holders of Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future.  The issuance of preferred stock could
have the effect of delaying, deferring or preventing a change in control of the
Company.  In addition, certain provisions of Minnesota law applicable to the
Company could have the effect of discouraging certain attempts to acquire the
Company which could deprive the Company's shareholders of opportunities to sell
their shares of Common Stock at prices higher than prevailing market prices.