Exhibit 99.1


                              SPECTRASCIENCE, Inc.

EXHIBIT 99: FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE THE
COMPANY'S ACTUAL RESULTS TO DIFFER FROM THOSE PROJECTED IN FORWARD-LOOKING
STATEMENTS.

         SPECTRASCIENCE, Inc. (the "Company") desires to take advantage of the
"safe harbor" provisions contained in the Private Securities Litigation Reform
Act of 1995 (the "Act"). Contained in this Form 10-KSB are statements which are
intended as "forward-looking statements" within the meaning of the Act. When
used in this Form 10-KSB, in future filings by the Company with the Securities
and Exchange Commission, in the Company's press releases and in any other
written or oral statements made by the Company, words or phrases such as "may,"
"expects," "will continue," "is anticipated," "management believes," "estimate,"
"projects," "hope" or expressions of a similar nature are intended to identify
forward-looking statements within the meaning of the Act. These 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. These risks and uncertainties include, but are not
limited to, the factors listed under the caption "Risk Factors" below. The
Company wishes to caution readers not to place undue reliance on forward-looking
statements. Readers are advised that the factors listed below may have affected
the Company's performance in the past and could affect future performance. These
factors are in addition to any other cautionary statements, written or oral,
which may be made or referred to in connection with any forward-looking
statements or contained in any subsequent filings by the Company with the
Securities and Exchange Commission. New factors may emerge from time to time,
and it is not possible for the Company to predict all of such factors, nor can
the Company assess the impact of each factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. The
forward-looking statements contained in this exhibit are made as of the date of
this Form 10-KSB, and the Company assumes no obligation to update such
forward-looking statements or to update the reasons why actual results could
differ materially from those anticipated in such forward-looking statements.

                                  RISK FACTORS

         WE HAVE INCURRED SIGNIFICANT OPERATING LOSSES EACH YEAR SINCE OUR
INCEPTION. Our net loss for the year ended December 31, 1999 was $2,179,833. The
net loss for the year ended December 31, 2000 was $2,408,288. Our accumulated
deficit at December 31, 2000 was approximately $51.1 million. Approximately
$16.5 million of the deficit has been incurred since October 1992 when our focus
changed. We received regulatory approval for our Optical Biopsy(TM) System in
November 2000. We also received regulatory approvals to sell in the European
Union in October 2000. Although we expect sales in 2001 we will continue to have
operating losses in 2001.

         SALES OF THE OPTICAL BIOPSY(TM) SYSTEM WILL BE DEPENDENT ON THE
AVAILABILITY OF ADEQUATE REIMBURSEMENT FROM THIRD PARTY PAYORS. Managed care
organizations and medical facilities will seek reimbursement from various
governmental programs and private insurance carriers for charges associated with
providing Optical Biopsy(TM) SystEM related healthcare services. Procedures
using the Optical Biopsy(TM) System are not, and may not ever be approved for
reimbursement by third party payors. Even if they are eligible, the level of
reimbursement may not be adequate. If we fail to obtain adequate third-party
reimbursement it will negatively affect our ability to sell the Optical
Biopsy(TM) System and our business.


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         OUR INDUSTRY IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION. The
healthcare industry in general, and the medical device sector in particular, is
heavily regulated in the areas of licensing, operations, facilities,
environmental protection, and pricing and reimbursement policies. Company
management believes we are currently operating in compliance with applicable
regulations. Company management also believes that the healthcare industry is
constantly changing and we will probably be required to modify our operations
from time to time to stay in compliance. We cannot predict what effect new or
additional legislation or regulation would have on us. Subsequent adoption of
laws or interpretations of existing laws could restrict or otherwise adversely
affect our business.

         THE BUSINESS WE OPERATE IS SUBJECT TO EXTENSIVE FEDERAL, STATE, AND
LOCAL REGULATION. Many federal and state government agencies extensively
regulate the manufacture, packaging, labeling, advertising, promotion,
distribution and sale of our products. The broad language used in the laws that
regulate our business often makes it difficult to remain in strict compliance.
Our failure or inability to comply with applicable laws and governmental
regulations may materially and adversely affect our business.

         WE MAY NOT RECEIVE OR BE ABLE TO MAINTAIN GOVERNMENTAL APPROVALS FOR
OUR PROPOSED PRODUCTS ON A TIMELY BASIS, OR AT ALL. The design, manufacture,
labeling, distribution and marketing of our products is subject to extensive
government regulation in the United States and internationally. The process of
obtaining required regulatory approvals is lengthy, expensive and uncertain.

         In the United States, medical devices are assigned to one of three
classes depending on the controls the FDA deems necessary to ensure the safety
and effectiveness of the device. The Optical Biopsy(TM) System is a Class III
device, which is the most strict classification. In addition to adhering to
general controls to which all medical devices are subject, and special controls
such as performance standards, post-market surveillance and patient registries,
a Class III device must receive pre-marketing approval to ensure its safety and
effectiveness. Any new products or applications we develop may require
governmental approval. There can be no assurance that we will receive the
necessary governmental approvals on a timely basis, or at all.

         We received FDA approval in November 2000 and European Union approval
in October 2000 for the Optical Biopsy(TM) System for use during endoscopy of
the colon. The European Union is similar to the FDA in that even after approval
to market, both agencies will audit the Company to insure ongoing regulatory
compliance. All of our manufacturing, operations, sales and marketing activities
are monitored for compliance and will be regularly audited now that we have
marketing approval.

         Any failure to maintain regulatory compliance, or obtain necessary
governmental approvals for new products or applications would adversely affect
our business and could materially affect our financial condition.

         REGULATORY REQUIREMENTS COULD DELAY THE INTRODUCTION OF OUR PRODUCT
INTO FOREIGN MARKETS OR LIMIT OUR MARKETING SCOPE. Sales of medical devices are
subject to regulatory requirements that vary from country to country. We may not
be able to obtain necessary foreign regulatory approvals. It may also be very
costly to obtain or maintain non-U.S. regulatory approvals. We obtained ISO 9001
certification and CE Mark authorization in the year 2000. Both of these
approvals are necessary before sales of our product can commence in the European
Union. Regulatory activities necessary to make sales in other locations have not
begun. If we do not maintain ISO 9001 certification, or do not obtain necessary
foreign regulatory approvals it may negatively affect our ability to market our
product in foreign markets and could adversely affect our business.


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         OUR FUTURE IS HIGHLY DEPENDENT ON OUR ABILITY TO SUCCESSFULLY DEVELOP
AND COMMERCIALIZE THE OPTICAL BIOPSY(TM) SYSTEM, OUR ONLY FULLY DEVELOPED
PRODUCT. Even though we are developing new products in addition to the Optical
Biopsy(TM) System, it is possible our efforts may not be successful or that we
may not be able to commercialize products we succeed in developing. If we do not
successfully commercialize our only fully developed product, we may not be able
to raise additional funds in the future and it may have a material adverse
effect on our financial condition and results of operations.

         THE ENDOSCOPY MARKET MAY NOT ACCEPT OUR PRODUCT. We believe that
physician acceptance of procedures performed using the Optical Biopsy(TM) System
will be essential for its market acceptance. There can be no assurance that
physicians, medical providers or the medical community in general will accept
and utilize our product even though it may be safe and effective. Failure of any
of our products to achieve market acceptance could have a material adverse
effect on our business and financial condition.

         WE MAY HAVE PROBLEMS MANAGING GROWTH AS WE EXPAND OUR OPERATIONS. As we
commercialize the Optical Biopsy(TM) System and develop additional products, we
expect to expand operations in all areas. We will have to implement or improve
operational, financial and management systems, as well as expand and manage our
workforce. If we fail to manage the growth properly, our systems, personnel,
procedures or controls may not be designed, implemented or improved in a timely
and cost-effective manner. If our resources cannot support future operations,
growth may be limited and there may be a material adverse effect on our
business, financial condition and results of operations.

         OUR LIMITED SALES AND MARKETING RESOURCES COULD PREVENT US FROM
EFFECTIVELY MARKETING OUR PRODUCTS. We have very limited internal marketing and
sales resources and personnel. In order to market the Optical Biopsy(TM) System
and any other products we may develop, we will have to develop distribution
capabilities and a marketing and sales force with technical expertise. We may
not be able to establish sales and distribution capabilities, obtain
distribution agreements on commercially reasonable terms, or gain market
acceptance for our products. We may also have difficulty in recruiting and
retaining skilled marketing and sales personnel. Our marketing and sales efforts
may not be successful. If we cannot effectively market our products it will have
a material adverse effect on our business, financial condition and results of
operations.

         WE WILL NEED TO ENTER INTO STRATEGIC PARTNERSHIPS AND RELATIONSHIPS
WITH DISTRIBUTORS TO MARKET AND DISTRIBUTE OUR PRODUCTS. We intend to sell our
products through strategic partners and distributors. Our future success will
depend, in part, on our ability to enter into agreements that will be beneficial
to us. The prospects for relationships with strategic partners and distributors
will depend on the interest of the other party in the specific product(s)
involved. It will also depend on their ability and willingness to perform in the
role we contemplate for them. We may have limited or no control over the
resources that any particular strategic partner or distributor devotes to its
relationship with us. We may not be able to locate qualified parties that we can
enter into strategic partner or distributor relationships with. If we are not
successful in developing these types of relationships, or if the relationships
do not prove successful, our business, financial condition and results of
operations could be materially adversely affected.

         WE PURCHASE SOME RAW MATERIALS AND KEY COMPONENTS OF OUR PRODUCTS FROM
SOLE, SINGLE OR LIMITED SOURCES OF SUPPLY. For some of these components, there
are few alternative sources of supply. We may not be able to renew the existing
agreement under which we purchase our Optical Biopsy Forceps. If we need to
establish additional or replacement


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suppliers for the forceps, laser light source or spectrophotometer used in the
Optical Biopsy(TM) System, it could be costly and time consuming. If any of our
suppliers fail to provide an adequate supply of components in a timely manner or
we cannot locate qualified alternative suppliers for materials and components at
reasonable expense, it could adversely affect our business and financial
condition. Any delays or shortages could have a material adverse effect on our
business and financial condition, especially as we scale up our manufacturing
activities in support of sales.

         WE HAVE NO EXPERIENCE IN MANUFACTURING OUR PRODUCTS IN COMMERCIAL
QUANTITIES. To be financially successful we must manufacture our product in
accordance with regulatory requirements, in commercial quantities, at
appropriate quality levels, and at acceptable costs. We may not be able to
establish or maintain reliable, high-volume manufacturing capacity at
commercially reasonable costs. We will need to develop the necessary expertise
to establish large-scale manufacturing capabilities. Manufacturers often
encounter difficulties in scaling up production of new products, including
problems involving production yields, quality control, component supply
shortages, lack of qualified personnel, compliance with applicable regulations,
and the need for further regulatory approval of new manufacturing processes. We
believe our current facility is adequate to support our commercial assembly and
manufacturing activities for the next several years. Our inability to establish
and maintain large-scale manufacturing capabilities could have a material
adverse effect on our business and financial condition.

         THE MEDICAL DEVICE INDUSTRY IS HIGHLY COMPETITIVE. We are not aware of
any direct competitors using an endoscopic optical biopsy system to detect and
differentiate between healthy and pre-cancerous or cancerous tissues in the
gastrointestinal tract. However, there can be no assurance that we will be the
first to market such a system or to market such a system effectively. We believe
that our competitors are primarily development stage companies in the process of
developing spectroscopic technology for early cancer detection. Many of our
competitors and potential competitors are larger and have greater financial,
personnel, manufacturing, distribution, marketing and other resources than we
do. Competition from these companies may materially and adversely affect our
business.

         OUR BUSINESS IS DEPENDENT UPON THE DEVELOPMENT OF NEW PRODUCTS. Rapid
innovation and technological change characterize the medical device industry.
Because of this, the life cycle of any particular product is short. Therefore,
how quickly we can develop products, gain regulatory approval and reimbursement
acceptance and supply commercial quantities of the product to the market are
important competitive factors. New discoveries and developments with respect to
the diagnostic treatment of cancer, or alternative diagnostic systems could
render our products obsolete.

         WE RELY ON PATENTS, COPYRIGHTS, TRADE SECRETS AND CONTRACTS TO PROTECT
OUR PROPRIETARY RIGHTS. Our success depends partly on our ability to maintain
patent protection for our products and processes, to preserve our trade secrets
and to operate without infringing on the proprietary rights of third parties.
The patent and trade secret positions of medical device companies often involve
complex and evolving legal and factual questions. The laws of some foreign
countries do not protect our intellectual property rights to the same extent
that the laws of the United States do. We have several allowed and pending
patents covering different aspects of the Optical Biopsy(TM) System. We can
provide no assurances that any patent we apply for will be issued. Furthermore,
there are no assurances that any issued patents will not be challenged,
invalidated, or circumvented, or that the rights granted will provide any
competitive advantage. For the Optical Biopsy(TM) System, we currently own
exclusive rights to a total of five issued, allowed and pending U.S. patents and
applications, and four pending international patent applications. We are the
exclusive licensee of one allowed U.S. application and one other international
patent application.


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         We also rely on proprietary technology that is not patented. There can
be no assurances that others will not independently develop substantially
equivalent proprietary information and techniques, or gain access to or disclose
our proprietary technology. We may not be able to protect our rights in the
unpatented proprietary technology. SPECTRASCIENCE policy requires each employee,
consultant or advisor to execute a confidentiality agreement upon the
commencement of a business relationship with us. These agreements generally
provide that all inventions conceived by the individual during the term of the
relationship are the exclusive property of SPECTRASCIENCE and shall be kept
confidential. There can be no assurance that these agreements will protect our
proprietary information in the event of unauthorized use or disclosure of such
information, or that if they do provide a meaningful level of protection, we
will have the financial resources necessary to enforce our proprietary rights.
Any loss of patent protection or know-how for our products could adversely
affect our business.

         THERE IS A HIGH RISK OF INTELLECTUAL PROPERTY LITIGATION WITHIN THE
MEDICAL DEVICE INDUSTRY. We could incur substantial expense in defending or
enforcing our intellectual property rights. In addition to being costly, the
litigation process is time consuming and would divert our limited resources.
There can be no assurances that we will have the financial or other resources
necessary to enforce our patent rights against our competitors, many of which
have substantial resources. We could also incur substantial expense in defending
ourselves against third parties with respect to patent or other intellectual
property right infringement claims. There can be no assurances that we could
successfully defend ourselves against these claims. If unsuccessful, we may have
to modify or refrain from selling our products, or enter into royalty
agreements. It is common to settle infringement claims through licensing or
similar arrangements, but the associated costs could be substantial and could
include ongoing royalties. We may not be able to obtain necessary licenses on
satisfactory terms or at all. An adverse determination in any intellectual
property litigation could have a material adverse effect on our business and
financial condition.

         WE HAVE A LICENSING AGREEMENT, WHICH IF TERMINATED WOULD ADVERSELY
AFFECT OUR BUSINESS. We currently have a licensing arrangement with The
Massachusetts General Hospital giving us an exclusive license to an issued
patent for the Optical Biopsy(TM) System forceps and fiber. This license is
exclusive through the life of the licensed patents and has customary diligence
requirements for commercially reasonable best efforts to introduce products.
Both of the licensing agreements are subject to termination for failure to pay
fees or other material breach.

         We can provide no assurance that this license agreement will remain in
force or provide the proprietary rights that we require to develop and
commercialize our products. We could encounter significant delays in product
introduction if we had to design around the proprietary rights granted in these
licensing agreements, and we can provide no assurance that we would even be able
to design around them. Even if we were able to design around their proprietary
rights, our business could be adversely affected.

         OUR SUCCESS IS HIGHLY DEPENDENT ON THE RETENTION OF PRINCIPAL MEMBERS
OF OUR MANAGEMENT AND SCIENTIFIC STAFF AND THE RECRUITMENT OF ADDITIONAL
QUALIFIED PERSONNEL. We are dependent to a significant extent on the services of
our Chairman and Chief Executive Officer, Chester E. Sievert, Jr., and Scott
Anderson, our Vice President of Sales and Marketing. There is intense
competition from other companies, research and academic institutions and other
organizations for qualified personnel with the same skills we require. There can
be no assurance that we will be successful in hiring or retaining qualified
personnel. The loss of key personnel or the inability to hire or retain
qualified personnel could have a material adverse effect on our business and
financial condition. We do not currently maintain key man life insurance on any
of our officers.


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         WE MAY NEED ADDITIONAL CAPITAL RESOURCES. We cannot adequately predict
the timing and amount of such capital requirements. When we may need additional
financing, and our ability to raise additional financing depends on many
factors. Some of these factors are:

         *  the progress of our research and development,
         *  the scope and results of any clinical trials,
         *  the extent to which the Optical Biopsy(TM) System and other products
            gain market acceptance,
         *  actions relating to regulatory and reimbursement matters,
         *  the effect of competitive products,
         *  the cost and effect of future marketing programs,
         *  the resources we devote to manufacturing and developing our
            products, and
         *  general economic conditions and various other factors.

         We can provide no assurances that we will not require additional
funding or that if we do, it will be available on terms satisfactory to us or at
all. We may be required to seek additional funds through debt or equity
financing, arrangements with corporate partners or from other sources. If we do
not have sufficient shares of common stock available out of our treasury to
raise capital through the placement of common stock, shareholder approval may be
required to make additional shares of common stock available. Our shareholders
may not approve an increase in our authorized shares of common stock. Your
control and ownership could be substantially diluted if we issue additional
equity securities. We may have to cut back operations or give significant
technology or market rights to strategic partners if we cannot obtain additional
financing when needed. If we need financing and fail to obtain it on terms
satisfactory to us, it could have a material adverse effect on our business and
financial condition.

         OUR STOCK IS VOLATILE. The market price of our common stock has from
time to time experienced significant price and volume fluctuations that are
beyond our control and unrelated to our operating performance. Factors that may
have a significant adverse effect on the market price of our securities include,
but are not limited to:

         *  fluctuations in our operating results,
         *  announcements of technological innovations or new diagnostic or
            therapeutic products by SPECTRASCIENCE or our competitors,
         *  government regulations,
         *  developments in patent or other proprietary rights,
         *  public concern as to the safety of products developed by
            SPECTRASCIENCE or others, and
         *  general market or economic conditions.

Additionally, our common stock is thinly traded and trading in a small number of
shares of our securities, whether on the buy or sell side, may result in
significant price movements.

         WE MAY NOT BE ABLE TO GET RELISTED ON THE NASDAQ SMALLCAP MARKET. In
March 1999 our stock was delisted from trading on the Nasdaq SmallCap Market. If
SPECTRASCIENCE raises additional funds in fiscal year 2001 it intends to reapply
for initial listing of its common stock on the Nasdaq SmallCap Market. To
qualify for initial listing our stock must have a minimum bid price of $4.00, we
must meet specific corporate governance requirements, have a minimum of 300
round lot shareholders, and have at least three market makers in our common
stock. In addition, we must (a) have either net tangible assets of more than $4
million, a market capitalization of $50 million or net income of $750,000; (b)
have a public float of 1 million shares; and (c) the market value of the public
float must be more than $5 million. There may be additional subjective criteria
that the Company may be required to meet in order to obtain an initial Nasdaq
SmallCap Market listing. There can be no assurance that SPECTRASCIENCE, Inc.
common stock will be relisted


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on the Nasdaq SmallCap Market or, if relisted, that the stock price will not
drop below $5.00 and be subject to the penny stock rules as described below.

         OUR STOCK IS SUBJECT TO RULES THAT LIMIT YOUR ABILITY TO SELL THE
SHARES OF OUR COMMON STOCK THAT YOU OWN. Our common stock is covered by a
Commission rule that regulates the trading of so-called "penny stocks." Penny
stocks are generally defined as any security not listed on a national securities
exchange or The Nasdaq SmallCap Market, priced at less than $5.00 per share and
offered by an issuer with limited net tangible assets or revenues. There are
additional sales practice requirements imposed on broker-dealers who sell these
securities to persons other than established customers and accredited investors.
Accredited investors are generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 individually or $300,000 jointly with their spouse.
For transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the ability of
broker-dealers to sell our securities or shareholders to sell their shares in
the secondary market may be adversely affected.

         WE FACE AN INHERENT BUSINESS RISK OF EXPOSURE TO PRODUCT LIABILITY
CLAIMS, WHICH COULD MATERIALLY ADVERSELY IMPACT OUR BUSINESS. Clinical trials,
sales, or marketing of any of our products may expose us to liability claims
resulting from the use of our products. These claims might be made directly by
consumers, health care providers or by others selling the products. We currently
maintain a product liability insurance policy with an aggregate and per
occurrence limit of $2,000,000. We can provide no assurance that such limits are
sufficient to protect us in the event of litigation. Moreover, there can be no
assurance that we will be able to maintain such insurance. If we are unable to
maintain insurance under terms acceptable to us, it could prevent or inhibit the
clinical testing or commercialization of products developed by us. Even if a
product liability claim is not successful, the time and expense of defending
against such a claim may adversely affect our business and results of
operations.

         ANTI-TAKEOVER PROVISIONS AVAILABLE TO US COULD DEPRIVE YOU OF AN
OPPORTUNITY TO SELL YOUR SHARES OF COMMON STOCK AT PRICES HIGHER THAN PREVAILING
MARKET PRICES. Certain provisions of Minnesota law are intended to provide
management flexibility to enhance the likelihood of continuity and stability in
the composition of our Board of Directors, in the policies formulated by the
Board, and to discourage an unsolicited takeover if the Board determines that
the takeover is not in the best interests of SPECTRASCIENCE and its
shareholders. These provisions could discourage attempts to acquire us, and not
allow you to sell your shares of common stock at prices that might be higher
than prevailing market prices.

         Our Board of Directors can issue up to 20,000,000 shares of
undesignated preferred stock and determine the price, rights, preferences and
privileges of those shares without any further vote or action by our
shareholders. The rights of holders of any preferred stock that we may issue in
the future may adversely affect your rights as a holder of common stock. At this
time we do not intend to issue any preferred stock, however, if we issued
preferred stock in connection with an acquisition or for other corporate
purposes, it could make it more difficult for a third party to acquire a
majority of our outstanding voting stock.


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