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                                                                      EXHIBIT 99

                              CAUTIONARY STATEMENT

         Forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "PSLRA") are included in our Form 10-K. The
words or phrases "believes," "may," "will," "expects," "should," "continue,"
"anticipates," "intends," "will likely result," "estimates," "projects" or
similar expressions identify forward-looking statements in our Form 10-K and in
our future filings with the Securities and Exchange Commission, in our press
releases, in our presentations to securities analysts or investors, and in oral
statements made by or approved by an executive officer of Endocardial Solutions,
Inc. Forward-looking statements involve risks and uncertainties that may
materially and adversely affect our business, results of operation, financial
condition or prospects, and may cause our actual results to differ materially
from historical results or the results discussed in the forward-looking
statements.

         You should consider carefully the following cautionary statements if
you own our common stock or are planning to buy our common stock. We intend to
take advantage of the "safe harbor" provisions of the PSLRA by providing this
discussion. We are not undertaking to address or update each factor in future
filings or communications regarding our business or results except to the extent
required by law.

OUR SUCCESS DEPENDS ON THE COMMERCIALIZATION AND MARKET ACCEPTANCE OF THE ENSITE
SYSTEM

         The EnSite System is currently our only potential product, and our
success depends entirely on the successful commercialization and market
acceptance of the EnSite System. Problems in the following areas could
materially impact the commercialization of the EnSite System:

         o        research and development,
         o        clinical testing,
         o        regulatory submissions and approval,
         o        product manufacturing and commercial scale-up,
         o        marketing, or
         o        product distribution.

We began to generate revenue from the EnSite System in the second quarter of
1998. We cannot assure you that we will ever derive substantial revenues from
the sale of the EnSite System.

OUR PRODUCTS ARE SUBJECT TO REGULATORY APPROVAL BEFORE THEY MAY BE MARKETED IN
THE U.S. AND ABROAD, WHICH WE MAY NOT OBTAIN FOR ALL CHAMBERS OF THE HEART

         The manufacture and sale of medical devices, including the EnSite
System, are subject to extensive regulation in the United States, principally by
the U.S. Food and Drug Administration and corresponding state agencies, and in
other countries. In the United States, human diagnostic devices are regulated
under the federal Food, Drug and Cosmetic Act, and are subject to clinical
testing mandated by the FDA before they will give clearance for marketing. The
Food, Drug and Cosmetic Act provides two basic review procedures, including a
shortened submission procedure under Section 510(k) whereby the manufacturer
notifies the FDA of its intent to market the product and attempts to establish
that the product to be marketed is substantially equivalent to another
FDA-cleared product. If a device fails to qualify for the 510(k) procedure, the
manufacturer must file a premarket approval application, which typically
involves more clinical testing and a significantly longer FDA review process.
During the third and fourth quarters of 1998, we submitted to the FDA two
premarket notification applications under Section 510(k) containing the results
of our left ventricular and right atrium multi-center clinical trials. The FDA
cleared the EnSite System for use in the right atrium of the heart in April
1999. Following discussions with the FDA, in March 1999, we announced that our
FDA application for left ventricular use of the EnSite System would be submitted
as a premarket approval application because the FDA did not find, based on
initial clinical data, substantial equivalence with other devices used in the
ventricles of the heart. We have submitted portions of our premarket approval
application that have been approved by the FDA. However, we may not be able to
file a complete premarket approval application with the FDA until we complete
more clinical trials, but we have not yet


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undertaken another clinical study for left ventricular use. We are still in
discussions with the FDA regarding the extent of additional clinical trials that
may be required and the best approach to obtain market approval for left
ventricular use. In the meantime, we received FDA approval in January 2001 to
conduct a left atrium multi-center clinical trial that we expect to start in the
second quarter of 2001.

         Sales of medical devices outside of the United States are subject to
international regulatory requirements that vary from country to country, and
approval for sale internationally may take more or less time than that required
for FDA approval. Prior to clearance for marketing in Europe, the EnSite System
must also meet regulatory standards outlined in several directives administered
by the European Union. In order to affix a CE Mark to the EnSite System,
allowing it to be marketed in Europe, we must follow the conformity assessment
procedures applicable to our product classification and submit a declaration of
conformity. We have obtained CE Mark certification for the EnSite catheter and
for the EnSite 3000 clinical workstation for use in the right atrium and left
ventricle of the heart, allowing us to sell our products in member countries of
the European Union. We may encounter significant costs and requests for
additional information in continuing our efforts to obtain regulatory approvals
in other countries, which could substantially delay or preclude us from
marketing our products internationally.

         Marketing approvals, if granted for some but not all chambers of the
heart, may require us to limit the indicated use of our EnSite System. FDA
enforcement policy strictly prohibits the marketing of approved medical devices
for unapproved uses. Product approvals could be withdrawn for failure to comply
with regulatory standards or the occurrence of unforeseen problems following the
initial marketing. We will be required to follow FDA regulations regarding Good
Manufacturing Practices and similar regulations in other countries, which
include testing, control, and documentation requirements. Ongoing compliance
with Good Manufacturing Practices and other applicable regulatory requirements
will be monitored through periodic inspections by federal and state agencies,
including the FDA, and by comparable agencies in other countries. If we fail to
comply with applicable regulatory requirements, we could be subjected to warning
letters, fines, injunctions, civil penalties, recall or seizure of products,
total or partial suspension of production, refusal of the government to grant
premarket approval, withdrawal of approvals and criminal prosecution.

         We cannot assure you that we will be able to obtain the necessary
regulatory approvals on a timely basis or at all. Delays in receipt of or
failure to receive the approvals, the loss of previously obtained approvals, or
failure to comply with existing or future regulatory requirements could
materially limit our ability to market the EnSite System and generate
substantial revenue from additional sales of EnSite catheters.

CLINICAL TESTING OF OUR PRODUCTS MAY NOT BE COMPLETED TIMELY OR PROVE OUR
PRODUCTS TO BE SAFE AND EFFECTIVE IN ALL CHAMBERS OF THE HEART

         We have conducted clinical trials on patients for ventricular
tachycardia and supraventricular tachycardia in the United States and in Europe.
In 1999, we received approval from the U.S. Food and Drug Administration to
market the EnSite System in the U.S. for use in the right atrium of the heart,
but, pending further discussions with the FDA, we believe we will be required to
conduct more clinical testing in the United States in order to support a
premarket approval application to the FDA for marketing approval for use of the
EnSite System in the left ventricle of the heart. In January 2001, we received
FDA approval to also conduct a left atrium multi-center clinical trial that we
expect to start in the second quarter of 2001. Patients selected for clinical
trials must meet stringent guidelines to undergo testing, and we cannot assure
you that patients can be enrolled in clinical trials on a timely basis. Further,
we cannot assure you that use of our EnSite System will prove to be safe and
effective in clinical trials under United States or international regulatory
guidelines for all chambers of the heart. As to be expected when performing
delicate and invasive procedures involving the heart, we have at times
experienced complications in our clinical trials. The clinical procedures
employing the EnSite System for diagnosis are often combined with other
diagnostic catheters and procedures to treat the arrhythmia, and complications
arising from such procedures are often pooled together because of the difficulty
of determining which procedure is the true cause of any adverse event. Major
complications, as defined by the FDA, that we have experienced during clinical
trials requiring surgical repair and/or blood transfusion include: cardiac
perforation (a puncture of the heart wall); myocardial infarction (heart
attack); and hematoma (localized swelling resulting from a broken blood vessel).
Additional clinical trials may identify significant technical or other obstacles
to be overcome prior to obtaining approvals. If the EnSite System does not prove
to be safe and effective in clinical trials involving other chambers of the
heart, our ability to market


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the EnSite System and generate substantial revenue from additional sales of
EnSite catheters may be materially limited.

OUR ENSITE SYSTEM DIAGNOSES ARRHYTHMIAS, BUT WE DEPEND ON OTHER COMPANIES TO
DEVELOP PRODUCTS TO TREAT ARRHYTHMIAS THAT WILL INCREASE THE USEFULNESS OF OUR
PRODUCT

         We have developed the EnSite System to diagnose arrhythmias and assist
electrophysiologists in determining treatment options. Current treatments for
arrhythmias include therapeutic drugs, implantable defibrillators or pacemakers,
surgery and catheter ablation. We believe that the EnSite System will enable
increased use of catheter ablation for treating complex arrhythmias which, in
turn, could increase the volume of use of our EnSite System. Catheter ablation
is a procedure in which a physician inserts a catheter through a vein in the
groin or neck and advances it into the heart. While in contact with the internal
wall of the heart, a high radio frequency is applied through the tip of the
catheter to deaden the heart tissue at the site causing the arrhythmia. Our
EnSite System enables electrophysiologists to pinpoint the spot to be ablated
and guide the catheter to that spot. Because ablation treatment is relatively
new, the long-term effects of ablation on patients are unknown. As a result, the
long term success of ablation therapy in treating arrhythmias may not be known
for several years. Catheter ablation devices require approval by the FDA, and we
cannot assure you that a catheter ablation market will develop. Moreover, we
cannot assure you that the EnSite System will prove useful in diagnosing
arrhythmias for treatment by catheter ablation products. We are not in the
process of developing a catheter for ablation treatment and are entirely
dependent upon other medical device companies to develop those devices. If a
market for treating arrhythmias by catheter ablation does not develop, our
ability to market the EnSite System and generate substantial revenue from
additional sales of EnSite catheters may be limited.

OUR PRODUCTS MAY BE UNABLE TO DIAGNOSE OR ASSIST THE TREATMENT OF ATRIAL
FIBRILLATION

         In addition to assisting the diagnosis of complex arrhythmias such as
atrial tachycardia and ventricular tachycardia, we intend to apply the EnSite
System to the diagnosis of atrial fibrillation. Atrial fibrillation is the most
common type of sustained arrhythmia, and the ability to diagnose atrial
fibrillation could lead to a significant market opportunity for Endocardial
Solutions. However, we have conducted only limited clinical studies of our
technology on patients suffering from atrial fibrillation. Although possible to
originate in the right atrium, medical research has shown that atrial
fibrillation most often originates in the left atrium. In January 2001, we
received FDA approval to use the EnSite System in the left atrium in a
multi-center clinical study for diagnosing arrythmias including atrial
fibrillation. We may, however, be unable to successfully extend our technology
to the mapping of atrial fibrillation or obtain regulatory approval to market
any products developed using the technology to map atrial fibrillation. We have
made, and expect to continue to make, research and development expenditures to
extend the application of the technology to the diagnosis of atrial
fibrillation. We cannot assure you that we will realize any benefit from these
expenditures.

         Atrial fibrillation is a complex disease and the subject of continuing
research. The therapies presently available for atrial fibrillation are in the
developmental stage with no proven effectiveness. Even if we are successful in
extending our technology to provide products that are capable of diagnosing
atrial fibrillation, we cannot assure you that treatments for atrial
fibrillation will exist that will require the diagnostic capabilities of any of
our products. As a result, a commercial market may never develop for any product
we develop for the diagnosis of atrial fibrillation. We have no present
intention to develop any medical devices on our own for the treatment of atrial
fibrillation.

OUR PRODUCTS MAY NOT SUCCEED IN THE MARKET

         The commercial success of the EnSite System ultimately depends upon the
number of diagnostic procedures performed by electrophysiologists using the
system. Our system may not gain any significant degree of market acceptance
among electrophysiologists, patients, health care insurers and managed care
providers. Electrophysiologists and other physicians may elect not to recommend
diagnostic procedures for any number of reasons, including safety and efficacy,
the availability of alternative procedures and treatment options, or inadequate
levels of reimbursement. Broad use of the EnSite System will require
time-consuming training of electrophysiologists, which could also adversely
affect market acceptance.


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<PAGE>

WE FACE SIGNIFICANT INDUSTRY COMPETITION

         The cardiac medical device market is highly competitive, and the EnSite
System is a new technology that must compete with more established devices.
Certain of our competitors are developing new approaches and new products for
diagnosing arrhythmias, including mapping systems that use single or
multiple-point catheters that physically must come in contact with the heart
wall in order to record electrical activity. Certain of our competitors have
integrated product lines that include products for both diagnosis and ablation
treatment, which may afford them opportunities for product bundling and other
marketing advantages. Many of our competitors have an established presence in
the field of electrophysiology and established relationships with
electrophysiology labs. Many of our competitors have substantially greater
financial and other resources than we do, including larger research and
development staffs and more experience and capabilities in conducting research
and development activities, testing products in clinical trials, obtaining
regulatory approvals, and manufacturing, marketing and distributing products.
Some of our competitors may achieve patent protection, regulatory approval or
product commercialization more quickly than us, which may decrease our ability
to compete.

OUR PRODUCTS MAY BECOME OBSOLETE IF WE ARE UNABLE TO ANTICIPATE AND ADAPT TO
RAPIDLY CHANGING TECHNOLOGY

         The medical device industry is subject to rapid technological
innovation and, consequently, the life cycle of any particular product is short.
Alternative diagnostic systems or other discoveries and developments with
respect to mapping arrhythmias may render our products obsolete. Furthermore,
the greater financial and other resources of many of our competitors may permit
them to respond more rapidly than us to technological advances. If we fail to
demonstrate the safety, benefit, efficacy and cost effectiveness of our products
as compared to those of our competitors, or if we fail to develop new
technologies and products before our competitors, our ability to market our
products and generate substantial revenues may be limited.

WE DEPEND ON OUR PATENTS AND PROPRIETARY TECHNOLOGY, WHICH WE MAY NOT BE ABLE TO
PROTECT

         Our success will depend in part on our ability to obtain patent
protection for our products and processes, to preserve our trade secrets and to
operate without infringing the intellectual property rights of others. The
patent positions of medical device companies are uncertain and involve complex
and evolving legal and factual questions. We cannot assure you that any of our
pending or future patent applications will result in issued patents, that any
current or future patents will not be challenged, invalidated or circumvented,
that the scope of any of our patents will exclude competitors or that the patent
rights granted to us will provide us any competitive advantage. We may discover
that our technology infringes patents or other rights owned by others, and we
cannot be certain that we were the first to make the inventions covered by each
of our issued patents and our pending patent applications, or that we were the
first to file patent applications for such inventions. In addition, we cannot
assure you that our competitors will not seek to apply for and obtain patents
that will prevent, limit or interfere with our ability to make, use or sell our
products either in the United States or in international markets. Further, the
laws of certain foreign countries may not protect our intellectual property
rights to the same extent as do the laws of the United States.

         In addition to patents, we rely on trade secrets and proprietary
knowledge that we seek to protect, in part, through confidentiality agreements
with employees, consultants and others. We cannot assure you that our
proprietary information or confidentiality agreements will not be breached, that
we will have adequate remedies for any breach, or that our trade secrets will
not otherwise become known to or independently developed by competitors.

WE MAY FACE INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS WHICH WOULD BE COSTLY TO
RESOLVE

         There has been substantial litigation regarding patent and other
intellectual property rights in the medical device industry and our competitors
may resort to intellectual property litigation as a means of competition.
Intellectual property litigation is complex and expensive and the outcome is
difficult to predict. We cannot assure you that we will not become subject to
patent infringement claims or litigation, or interference proceedings declared
by the United States Patent and Trademark Office to determine the priority of
inventions. Litigation or regulatory proceedings may also be necessary to
enforce our patent or other intellectual property rights. We may not always have
the financial resources to assert patent infringement suits or to defend
ourselves from claims. An adverse result in any litigation could subject us to
liabilities to, or require us to seek licenses from or pay royalties to, others
that


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may be substantial. Furthermore, we cannot assure you that the necessary
licenses would be available to us on satisfactory terms, if at all.

WE HAVE LIMITED MANUFACTURING EXPERIENCE NECESSARY FOR HIGH-VOLUME MANUFACTURING
CAPACITY

         We have limited experience manufacturing our products in the volumes
that will be necessary for us to achieve significant commercial sales, and we
cannot assure you that reliable, high-volume manufacturing capacity can be
established or maintained at commercially reasonable costs. We may need to
expend significant capital resources and develop the necessary expertise to
establish large-scale manufacturing capabilities. We may encounter the following
difficulties in scaling up production of our products:

         o        problems involving production yields,
         o        quality control and assurance,
         o        component supply shortages,
         o        shortages of qualified personnel,
         o        compliance with U.S. and foreign regulations, or
         o        the need for further U.S. or foreign regulatory approval of
                  new manufacturing processes.

         Our manufacturing facilities will be periodically inspected by United
States and foreign regulatory authorities. In order to manufacture products for
sale in the United States, our operations must undergo "Good Manufacturing
Practices" compliance inspections conducted by the U.S. Food and Drug
Administration. We passed inspection of our facility and manufacturing processes
by the FDA in the third quarter of 1999. We will also be required to comply with
ISO 9001 and CE Mark standards in order to continue to sell our products in
Europe. We received ISO 9001 certification for our catheter and quality system
in August 1997 and ISO 9001 certification for the clinical workstation in
November 1998. We received a CE Mark for each of the EnSite catheter and the
clinical workstation in the first quarter of 1998. If we fail to comply with
Good Manufacturing Practices or ISO 9001 and CE Mark standards in future audits,
we may be required to modify our manufacturing policies and procedures. In
addition, we may be required to stop all or part of our operations until we can
demonstrate that appropriate steps have been taken to comply with the
regulations.

WE DEPEND ON A FEW SUPPLIERS FOR KEY COMPONENTS OF OUR PRODUCTS

         We purchase components for the EnSite System from a variety of vendors.
While it is our goal to be able to have multiple sources to procure these
components, in some cases it is not economically practical to do so. While we do
have some components that we currently obtain from a single source, such as the
computer and monitor from Silicon Graphics, we are aware of alternate supply
sources that could provide such components with minimal modification to the
EnSite System. Additionally, we practice supply chain management and maintain
safety stocks of components with minimal modification to the EnSite System. We
currently have agreements in place with key vendors to manage component
availability. Despite our efforts to mitigate this risk, if our vendors are
unable to provide an adequate supply of components in a timely manner, or if we
are unable to locate qualified alternate vendors for components at a reasonable
cost, the availability of our products to our customers and our ability to
generate substantial revenues could be materially limited.

OUR SALES AND MARKETING EFFORTS MAY NOT BE SUCCESSFUL

         We have limited experience marketing the EnSite System. We cannot
assure you that we will be able to maintain a suitable sales force or enter into
or maintain satisfactory marketing arrangements with others. Our sales and
marketing efforts may not be successful.

WE WILL NEED TO CAREFULLY MANAGE OUR EXPANDING OPERATIONS IN ORDER TO ACHIEVE
SUSTAINABLE GROWTH

         In order to achieve increased sales levels, complete clinical trials,
prepare additional products for clinical trials, and develop future products, we
believe that we will be required to expand our operations, particularly in the
areas of research and development, manufacturing, quality assurance and sales
and marketing. As we expand our operations in these areas, the expansion will
likely result in new and increased responsibilities for management. To


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accommodate any growth and compete effectively, we must implement and improve
our information systems, procedures, and controls, and expand, train, motivate
and manage our work force. Our future success will depend significantly on the
ability of our current and future management to operate effectively. We cannot
assure you that our personnel, systems, procedures and controls will be adequate
to support our future operations.

INTERNATIONAL OPERATIONS WILL EXPOSE US TO ADDITIONAL RISKS

         We plan to market the EnSite System through distributors in
international markets, once we receive the required foreign regulatory
approvals. We have entered into a distribution agreement granting Medtronic
exclusive distribution rights for the EnSite System in Europe and certain rights
for distribution in other regions outside of the United States. We have
distribution arrangements with five distributors in other international markets,
and currently retain all distribution rights in the United States. We cannot
assure you that international distributors for our products will devote adequate
resources to selling our products.

         Changes in overseas economic conditions, currency exchange rates,
foreign tax laws or tariffs or other trade regulations could materially and
adversely affect on our ability to market our products internationally. Our
business is also expected to subject us and our representatives, agents and
distributors to laws and regulations of the foreign jurisdictions in which we
operate or our products are sold. We may depend on foreign distributors and
agents for compliance and adherence to foreign laws and regulations.

OUR SUCCESS MAY DEPEND ON THE ABILITY OF HEALTH CARE PROVIDERS TO ACHIEVE
ADEQUATE LEVELS OF THIRD-PARTY REIMBURSEMENT

         Sales of our products will depend largely on the availability of
adequate reimbursement for arrhythmia diagnostic procedures from third-party
payors, such as government and private insurance plans, health maintenance
organizations and preferred provider organizations. In the United States, our
products will be purchased primarily by health care providers such as doctors
and hospitals who will then seek to be reimbursed for the health care services
provided to their patients. Specific to Medicare, the EnSite procedure is
currently reimbursable under both inpatient and outpatient procedure scenarios.
For inpatient procedures, the EnSite procedure will most typically be reimbursed
under Diagnosis Related Group 112. For outpatient procedures, the EnSite
catheter is eligible for separate reimbursement in addition to the hospital's
Ambulatory Payment Classification for cardiac mapping. Third-party payors are
increasingly challenging the pricing of medical products and procedures they
consider unnecessary, inappropriate, not cost-effective, experimental or used
for a non-approved indication. Even if a procedure is eligible for
reimbursement, the level of reimbursement may not be adequate to enable us to
achieve or maintain market acceptance of our products or maintain price levels
that exceed our costs of developing and manufacturing our products.

         The EnSite catheter is being sold at a premium compared to existing
single point catheters used in current diagnostic or mapping procedures. In
addition, an initial capital outlay will be required for the EnSite clinical
workstation. Assuming no increase in the level of reimbursement for
cardiovascular procedures utilizing our products, we will be required to justify
the relative increased cost of using the EnSite System. This will require us to
demonstrate the enhanced benefits of the EnSite System to health care providers
and payors in terms of such factors as enhanced patient procedural efficiencies,
reduced radiation exposure and improved patient outcomes. This may require us to
conduct post-marketing clinical studies, which may be costly, lengthy, and may
not provide the cost justification results we are seeking. Without adequate
support from third-party payors, the market for our products may be severely
limited.

         Some medical devices purchased by hospitals are currently reimbursed
under Medicare separately from medical procedure payments. Recent federal
Medicare legislation has called for these devices to be reimbursed on a
prospective payment system. The prospective payment system was created to
minimize the complexity of reimbursing services on a hospital's cost-to-charge
ratio by creating specific codes for outpatient procedures that would be based
on pre-existing diagnosis and procedure codes. However, the system was created
based on data collected through December 1996 and does not reflect some of the
newer technologies, and the increased costs, for items such as the EnSite
catheter. In order to recognize these new technologies, the Healthcare Financing
Administration created a separate coding system to allow for additional,
separate reimbursement for these new technologies until 2002, at which time the
payment levels for procedures are expected to incorporate the costs of


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these newer medical devices. If hospitals fail to properly code and submit a
request for separate reimbursement, Medicare will not recognize that the
procedure payment levels are inadequate to cover the higher cost of the EnSite
catheter, thereby affecting the hospital's ability to achieve adequate
reimbursement. Additionally, there can be no assurance that the movement to a
prospective payment system will not cause hospitals to reduce their expenditure
payments for devices such as the EnSite system.

         Moreover, we are unable to predict what additional legislation or
regulation, if any, relating to the health care industry or third-party coverage
and reimbursement may be enacted in the future, or what effect such legislation
or regulation would have on us. Reforms may include mandated basic health care
benefits, limitations on the growth of private health insurance premiums and
Medicare and Medicaid spending, greater reliance on prospective payment systems,
the creation of large insurance purchasing groups and fundamental changes to the
health care delivery system. We anticipate that Congress and state legislatures
will continue to review and assess alternative health care delivery systems and
payment methodologies. We cannot predict whether any reform proposals will be
adopted or what impact they may have on us.

         Reimbursement systems in international markets vary significantly by
country and by region within some countries. Many international markets have
government managed health care systems that control reimbursement for new
devices and procedures. In most international markets, there are private
insurance systems as well as government managed systems. We cannot assure you
that reimbursement for our products will be available in international markets
under either government or private reimbursement systems.

OUR PRODUCTS MAY EXPOSE US TO COSTLY LITIGATION

         We may be exposed to product liability claims if a patient is adversely
affected by our products. We currently carry product liability insurance
covering our clinical trial operations with an aggregate limit of $5 million. We
cannot assure you that our existing insurance coverage limits are adequate to
cover any liabilities we might incur in connection with the distribution of our
products. Although we obtained product liability insurance coverage in
connection with the commercialization of the EnSite System, insurance may not
continue to be available on commercially reasonable terms. In addition,
insurance might not adequately cover any product liability claim.

WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT FUTURE LOSSES

         We have generated limited revenue and have sustained significant
operating losses each year since our inception. We expect our losses to continue
at least through first quarter of 2002. We may never generate substantial
operating revenues or achieve profitability. Our ability to generate revenues
from operations and make a profit depends upon successful development,
regulatory approval, manufacturing and commercialization of the EnSite System
and our successful transition from a research and development company to a
manufacturing and sales company.

WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS

         We may require substantial funds to meet our working capital
requirements for sales and marketing, continued research and development,
testing, regulatory approval and manufacturing of our EnSite System. In order to
meet our funding needs, we may be required to raise additional funds through
public or private financings, including the sale of equity or debt. Any
additional equity financings may dilute current stockholders, and debt
financing, if available, may involve restrictive covenants. Adequate funds for
our operations, whether from financial markets or from other sources, may not be
available when needed on attractive terms, if at all. Insufficient funds may
require us to delay, scale back or eliminate some or all of our plans for
growth.

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