<PAGE>

                                                                   EXHIBIT 99

     Endocardial Solutions, Inc. (the "Company"), or persons acting on 
behalf of the Company, or outside reviewers retained by the Company making 
statements on behalf of the Company, or underwriters, from time to time make, 
in writing or orally, "forward-looking statements" within the meaning of the 
Private Securities Litigation Reform Act of 1995 (Section 27A of the 
Securities Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended).  When used in conjunction with an 
identified forward-looking statement, this Cautionary Statement is for the 
purpose of qualifying for the "safe harbor" provisions of such sections and 
is intended to be a readily available written document that contains factors 
which could cause results to differ materially from such forward-looking 
statements.  These factors are in addition to any other cautionary 
statements, written or oral, which may be made or referred to in connection 
with any such forward-looking statement.

     The following matters, among others, may have a material adverse effect 
on the business, financial condition, liquidity, results of operations or 
prospects, financial or otherwise, of the Company.  Reference to this 
Cautionary Statement in the context of a forward-looking statement or 
statements shall be deemed to be a statement that any or more of the 
following factors may cause actual results to differ materially from those in 
such forward-looking statement or statements: 

DEPENDENCE ON SUCCESSFUL DEVELOPMENT AND COMMERCIALIZATION OF THE ENSITE SYSTEM

     The Company's future success is entirely dependent upon the successful 
development, commercialization and market acceptance of the EnSite System, 
the development of which is ongoing and the complete efficacy and safety of 
which have not yet been demonstrated. The EnSite System is currently the 
Company's only potential product, and the Company could be required to cease 
operations if the system is not successfully commercialized. The EnSite 
System will require further development, significant additional clinical 
trials and, ultimately, United States and international regulatory approvals 
before it can be marketed in the United States and internationally. There 
can be no assurance that unforeseen problems will not occur in research and 
development, clinical testing, regulatory submissions and approval, product 
manufacturing and commercial scale-up, marketing or product distribution. 
Any such occurrence could materially delay the commercialization of the 
EnSite System or prevent its market introduction entirely. The Company will 
not generate any significant revenue until such time, if ever, as the EnSite 
System is successfully commercialized. There can be no assurance that the 
Company will ever derive substantial revenues from the sale of the EnSite 
System.  

LIMITED CLINICAL TESTING EXPERIENCE; SAFETY AND EFFICACY NOT YET ESTABLISHED

     The Company has conducted only limited clinical trials on patients for 
VT and SVT in the United States and in Europe. The Company has experienced 
complications in its clinical trials, and clinical data obtained to date are 
insufficient to demonstrate the safety and efficacy of the EnSite System 
under applicable United States and international regulatory guidelines. 
Accordingly, the Company believes it will be required to conduct extensive 
clinical testing in the United States in order to support a pre-market 
approval ("PMA") application to the United States Food and Drug 
Administration ("FDA") for marketing approval. Patients selected for clinical 
trials must meet stringent guidelines to undergo testing, and there can be no 
assurance that patients can be enrolled in clinical trials on a timely basis. 
Further, there can be no assurance that any of the Company's products will 
prove to be safe and effective in clinical trials under United States or 
international regulatory guidelines or that the Company will not encounter 
problems in clinical testing that will cause a delay in the commercialization 
of the EnSite System. Moreover, the clinical trials may identify significant 
technical or other obstacles to be overcome prior to obtaining necessary 
regulatory or reimbursement approvals. In addition, the Company's development 
of the EnSite System for diagnosing atrial fibrillation is in its early 
stages.

<PAGE>

The Company has not yet applied for regulatory approval in international 
markets for the use of the EnSite System in diagnosing atrial fibrillation.  
Securing regulatory approval in the United States or in international markets 
for use of the EnSite System in diagnosing atrial fibrillation will require 
extensive clinical trials.  If the EnSite System does not prove to be safe 
and effective in clinical trials, the Company's business, financial condition 
and results of operations will be materially adversely affected.

LACK OF REGULATORY APPROVAL

     The manufacture and sale of medical devices, including the EnSite 
System, are subject to extensive ongoing regulation by numerous governmental 
authorities in the United States, principally the FDA and corresponding state 
agencies, and in other countries.  In the United States, the Company's 
products are regulated as medical devices and are subject to the FDA's 
premarket approval requirements, which have not been satisfied.  Securing FDA 
approvals requires the submission of extensive clinical data and supporting 
information to the FDA.  Although the EnSite System has been used in limited 
clinical trials in the United States on patients suffering from VT, under an 
IDE approved by the FDA, the Company cannot file with the FDA a PMA 
application to market the EnSite System for diagnosing VT in the United 
States until more extensive clinical trials are completed.  The process of 
obtaining FDA and other required regulatory approvals is lengthy, expensive 
and uncertain and frequently requires from one to several years from the date 
of FDA filing, if premarket approval is obtained at all.  In addition, the 
use of the EnSite System to diagnose SVT is in the initial stages of clinical 
development. Though the Company has received an IDE approval from the FDA to 
pursue clinical testing of the EnSite System for endocardial mapping in the 
atrium in the United States, significant additional testing will be required 
to support a subsequent 510(k) premarket notification. 

     Sales of medical devices outside of the United States are subject to 
international regulatory requirements that vary from country to country.  The 
time required to obtain approval for sale internationally may be longer or 
shorter than that required for FDA approval, and the requirements may differ. 
 After mid-1998, the Company will be required to obtain the certifications 
necessary to enable the CE Mark to be affixed to the Company's products in 
order to sell its products in member countries of the European Union.  The 
Company has obtained CE certification for the EnSite catheter and for the 
EnSite 3000 clinical workstation.  In addition, significant costs and 
requests for additional information may be encountered by the Company in its 
efforts to obtain regulatory approvals.  Any such events could substantially 
delay or preclude the Company from marketing its products internationally.   

     Regulatory approvals, if granted, may include significant limitations on 
the indicated uses for which the product may be marketed.  In addition, to 
obtain such approvals, the FDA and certain foreign regulatory authorities may 
impose numerous other requirements with which medical device manufacturers 
must comply.  FDA enforcement policy strictly prohibits the marketing of 
approved medical devices for unapproved uses.  In addition, product approvals 
could be withdrawn for failure to comply with regulatory standards or the 
occurrence of unforeseen problems following the initial marketing.  The 
Company will be required to adhere to applicable FDA regulations regarding 
Good Manufacturing Practices ("GMP") and similar regulations in other 
countries, which include testing, control, and documentation requirements.  
Ongoing compliance with GMP 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.  Failure to 
comply with applicable regulatory requirements, including the marketing of 
products for unapproved uses, could result in, among other things, 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 for devices, withdrawal of approvals and criminal 
prosecution.  Changes in existing regulations or adoption of new governmental 
regulations or policies could prevent or delay regulatory approval of the 
Company's products.  Certain material changes to medical devices also are 
subject to FDA review and approval.   

<PAGE>

     There can be no assurance that the Company will be able to obtain PMA 
approval for the EnSite System for use in diagnosing VT or 510(k) approval 
for SVT or other necessary regulatory approvals on a timely basis or at all.  
Delays in receipt of or failure to receive such approvals, the loss of 
previously obtained approvals, or failure to comply with existing or future 
regulatory requirements would have a material adverse effect on the Company's 
business, financial condition and results of operations.

UNCERTAINTY OF AVAILABILITY OF TREATMENTS EMPLOYING ENSITE SYSTEM

     The Company has developed its EnSite System to diagnose VT and assist 
electrophysiologists in selecting among treatment options.  Current 
treatments for VT include drugs, implantable defibrillators, surgery and, 
potentially, catheter ablation.  The Company believes that the EnSite System 
will enable increased use of catheter ablation for treating complex VT.  
Because ablation treatment for VT is a relatively new and to date an untested 
treatment, the long term effects of ablation on patients are unknown.  As a 
result, the long term success of ablation therapy in treating VT will not be 
known for several years.  To date, no medical devices for treating VT 
patients in the United States through catheter ablation have been approved by 
the FDA.  Such catheter ablation devices require PMA approval by the FDA, and 
there can be no assurance that any such device will be approved by the FDA, 
or that any FDA approval will be granted in the near future.  Accordingly, 
there can be no assurance that the catheter ablation market will develop in 
the near term or ever.  Moreover, even if medical devices for catheter 
ablation are approved by the FDA, there can be no assurance that the market 
for treating VT through catheter ablation will develop or that the EnSite 
System will prove useful in diagnosing VT for treatment by catheter ablation 
products approved by the FDA.  The Company is not in the process of 
developing a catheter for ablation treatment and is entirely dependent upon 
other medical device companies for the development of such devices.  If the 
medical devices for treating ventricular tachycardia through catheter 
ablation are not approved by the FDA or, even with such approval, if a market 
for treating ventricular tachycardia by catheter ablation does not develop, 
the business, financial condition and results of operations of the Company 
would be materially adversely affected.

UNCERTAINTY OF MARKET ACCEPTANCE; TRAINING OF PHYSICIANS REQUIRED

     The commercial success of the EnSite System is dependent upon the number 
of diagnostic procedures performed by electrophysiologists using the system.  
There can be no assurance that the Company's EnSite System will gain any 
significant degree of market acceptance among electrophysiologists, patients 
and health care insurers and managed care providers. Electrophysiologists 
will not recommend that diagnostic procedures be performed using the 
Company's products until such time, if at all, as clinical data demonstrate 
the safety and efficacy of such procedures as compared to other diagnostic 
procedures currently available or under development.  Even if the clinical 
safety and efficacy of procedures using the EnSite System is established, 
electrophysiologists and other physicians may elect not to recommend the 
procedures for any number of other reasons, including inadequate levels of 
reimbursement.  Broad use of the EnSite System will require training of 
electrophysiologists, and the time required to complete such training could 
adversely affect market acceptance.  Failure of the Company's products to 
achieve significant market acceptance would have a material adverse effect on 
the Company's business, financial condition and results of operations.

UNCERTAINTY OF ABILITY TO DIAGNOSE AND TREAT ATRIAL FLUTTER AND TACHYCARDIA

     The Company intends to apply the EnSite System to the diagnosis of 
atrial flutter and tachycardia; however, the Company has conducted only 
limited clinical studies of its technology on patients suffering from atrial 
flutter and tachycardia.  Although the Company has received an IDE from to 
the FDA for a multi-center clinical study of the EnSite System in diagnosing 
atrial flutter and tachycardia, to date the Company has conducted only 
limited clinical trials on patients for atrial flutter and tachycardia, and 
there can be no assurance that the Company will be able to successfully 
extend its technology to the 

<PAGE>

mapping of atrial flutter and tachycardia or obtain regulatory approval to 
test and market any products developed using such technology to map atrial 
flutter and tachycardia.  In addition, the Company has made and expects to 
continue to make significant research and development expenditures in 
extending its technology to the diagnosis of atrial flutter and tachycardia.  
There can be no assurance that the Company will realize any benefit from 
these expenditures. 

     Atrial flutter and tachycardia is a complex disease and the subject of 
continuing research.  The therapies presently available for atrial flutter 
and tachycardia are in the developmental stage with no proven effectiveness. 
Even if the Company is successful in extending its technology to provide 
products that are capable of diagnosing atrial flutter and tachycardia, there 
can be no assurance that treatments for atrial flutter and tachycardia will 
exist that will require the diagnostic capabilities of any products developed 
by the Company.  As a result, there can be no assurance that a commercial 
market will ever develop for any product developed by the Company for the 
diagnosis of atrial flutter and tachycardia.  The Company is not currently 
engaged and has no present intention to engage in researching or developing 
any medical devices for the treatment of atrial flutter and tachycardia.

UNCERTAINTY OF ABILITY TO PENETRATE COMPLEX TACHYCARDIA PATIENT POPULATION

     The Company's EnSite System is designed to diagnose patients suffering 
from complex tachycardia.  The Company estimates that a majority of the four 
million patients who suffer from tachycardia have complex forms of this 
disease.  Although the Company believes that the patients who suffer from 
complex tachycardia are potential candidates for diagnosis using the 
Company's EnSite System, there can be no assurance as to the number of 
complex tachycardia patients that will be diagnosed using the Company's 
products due to a number of factors, including patient preferences, the 
health and clinical history of the particular patient, the access of the 
patient to electrophysiology labs employing the EnSite System, the 
availability of alternative diagnostic procedures, the availability of 
treatment options and the expense of the diagnosis using the EnSite System 
vis-a-vis alternative diagnostic procedures.  Failure of the Company's 
products to achieve significant penetration of the population of patients 
suffering from complex tachycardia could have a material adverse effect on 
the Company's business, financial condition and results of operations. 

HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT; EXPECTATION OF FUTURE LOSSES

     The Company has generated limited revenue and has sustained significant 
operating losses each year since its inception.  The Company expects such 
losses to continue at least through 1999.  There can be no assurance that the 
Company will ever generate substantial operating revenues or achieve 
profitability.  The Company's ability to generate revenues from operations 
and achieve profitability is dependent upon successful development, 
regulatory approval, manufacturing and commercialization of the EnSite System 
and the Company's successful transition from a development stage company to a 
manufacturing and sales company.  

SIGNIFICANT COMPETITION; RAPID TECHNOLOGICAL CHANGE

     The cardiac medical device market is highly competitive and 
characterized by rapid innovation and technological change.  The Company's 
EnSite System for the mapping of ventricular tachycardia is a new technology 
that must compete with more established mapping procedures and devices such 
as single-point contact catheters that are currently widely used to map 
tachycardia and which are generally less expensive and, unlike EnSite 
catheters, are generally reused after resterilization.  Single-point contact 
diagnostic catheters have been approved by the FDA for VT mapping.  In 
addition, certain of the Company's competitors are developing new approaches 
and new products for diagnosing ventricular tachycardia and atrial flutter 
and tachycardia for which regulatory approval has not been granted, including 
contact mapping systems using multi-electrode basket contact catheters and 
single-point mapping technologies.  There can be no assurance that any of 
these competitors will not receive required regulatory approval to market 
their products before the Company.  Certain 

<PAGE>

competitors have integrated product lines that include products for both 
diagnosis and ablation treatment, which may afford opportunities for product 
bundling and other marketing advantages. Many of the Company's competitors 
have an established presence in the field of electrophysiology and 
established relationships with electrophysiology labs.  Many of these 
competitors have substantially greater financial and other resources than the 
Company, 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.  There can be no 
assurance that the Company will succeed in developing and marketing 
technologies and products that are more clinically efficacious or cost 
effective than the more established products or the new approaches and 
products developed and marketed by its competitors. Certain of the Company's 
competitors may achieve patent protection, regulatory approval or product 
commercialization more quickly than the Company, which may negatively impact 
the Company's ability to compete.  The failure of the Company to demonstrate 
the safety, benefit, efficacy and cost effectiveness of its products as 
compared to those of its competitors or the failure to develop new 
technologies and products before its competitors would have a material 
adverse effect on business, financial condition and results of operations.   

     The medical device industry is subject to rapid technological innovation 
and, consequently, the life cycle of any particular product is short.  There 
can be no assurance that alternative diagnostic systems or other discoveries 
and developments with respect to mapping tachycardia will not render the 
Company's products obsolete.  Furthermore, the greater financial and other 
resources of many of the Company's competitors may permit such competitors to 
respond more rapidly than the Company to technological advances.

DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY

     The Company's success will depend in part on its ability to obtain 
patent protection for its products and processes, to preserve its trade 
secrets and to operate without infringing the proprietary rights of third 
parties.  The patent positions of medical device companies, including the 
Company, are uncertain and involve complex and evolving legal and factual 
questions.  There can be no assurance that any 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 the Company's patents will exclude competitors or that the rights 
granted thereunder will provide any competitive advantage 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 of the 
patents and other proprietary rights held by the Company.  Furthermore, there 
can be no assurance that others will not independently develop similar 
technologies or duplicate any technology by the Company or that the Company's 
technology will not infringe patents or other rights owned by others.  
Moreover, the Company cannot be certain that it was the first to make the 
inventions covered by each of its issued patents and its pending patent 
applications, or that it was the first to file patent applications for such 
inventions.  In addition, there can be no assurance that competitors, many of 
which have substantial resources and have made substantial investments in 
competing technologies, will not seek to apply for and obtain patents that 
will prevent, limit or interfere with the Company's ability to make, use or 
sell its products either in the United States or in international markets.  
Further, the laws of certain foreign countries may not protect the Company's 
intellectual property rights to the same extent as do the laws of the United 
States.   

     There has been substantial litigation regarding patent and other 
intellectual property rights in the medical device industry and competitors 
may resort to intellectual property litigation as a means of competition.  
Intellectual property litigation is complex and expensive and the outcome of 
such litigation is difficult to predict.  There can be no assurance that the 
Company will not become subject to patent infringement claims or litigation 
in a court of law, or interference proceedings declared by the United States 
Patent and Trademark Office to determine the priority of inventions or an 
opposition to a patent grant in a foreign jurisdiction.  Litigation or 
regulatory proceedings, which could result in 

<PAGE>

substantial cost and uncertainty to the Company, may also be necessary to 
enforce patent or other intellectual property rights of the Company or to 
determine the scope and validity of other parties' proprietary rights.  There 
can be no assurance that the Company will have the financial resources to 
assert patent infringement suits or to defend itself from claims of 
invalidity.  An adverse determination in any litigation could subject the 
Company to significant liabilities to third parties, or require the Company 
to seek licenses from or pay royalties to third parties that may be 
substantial.  Furthermore, there can be no assurance that the necessary 
licenses would be available to the Company on satisfactory terms, if at all.  
Accordingly, an adverse determination in a judicial or administrative 
proceeding or failure to obtain necessary licenses could prevent the Company 
from manufacturing, selling or using its proposed products, any of which 
would have a material adverse effect on the Company's business, financial 
condition, results of operations and prospects.   

     In addition to patents, the Company relies on trade secrets and 
proprietary knowledge, which it seeks to protect, in part, through 
confidentiality agreements with employees, consultants and other parties.  In 
particular, the Company relies upon such means to protect the proprietary 
software used in the EnSite System.  There can be no assurance that the 
Company's proprietary information or confidentiality agreements will not be 
breached, that the Company will have adequate remedies for any breach, or 
that the Company's trade secrets will not otherwise become known to or 
independently developed by competitors.

LIMITED MANUFACTURING EXPERIENCE; SCALE-UP RISK

     The Company has only limited experience in manufacturing the EnSite 
catheter and the patient interface unit of the EnSite System.  The Company 
currently manufactures its catheters and patient interface units in limited 
quantities for laboratory and clinical testing and intends to manufacture the 
EnSite catheter for commercial sale.  The Company has no experience 
manufacturing its products in the volumes that will be necessary for the 
Company to achieve significant commercial sales, and there can be no 
assurance that reliable, high-volume manufacturing capacity can be 
established or maintained at commercially reasonable costs.  If the Company 
receives FDA or foreign approval for its products, it will need to expend 
significant capital resources and 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 and assurance, 
component supply shortages, shortages of qualified personnel, compliance with 
FDA and foreign regulations, and the need for further FDA or foreign 
regulatory approval of new manufacturing processes.  Any inability of the 
Company to establish and maintain large-scale manufacturing capabilities 
would have a material adverse effect on the Company's business, financial 
condition and results of operations.       

     The Company's manufacturing facilities will be subject to periodic 
inspection by United States and foreign regulatory authorities.  In order to 
manufacture products for sale in the United States, the Company's operations 
must undergo GMP compliance inspections conducted by the FDA.  To date, the 
Company's facilities and manufacturing processes have not undergone any such 
inspections.  The Company will also be required to comply with ISO 9001 and 
9002 and CE Mark standards in order to sell its products in Europe.  The 
Company received ISO 9001 certification for its catheter and quality system 
in August 1997 and ISO 9002 certification for the clinical workstation and CE 
Mark for the EnSite catheter in January 1998.  Any failure of the Company to 
comply with GMP or ISO 9001 and 9002 and CE Mark standards may result in the 
Company being required to take corrective actions, such as modification of 
its manufacturing policies and procedures.  In addition, the Company may be 
required to cease all or part of its operations for some period of time until 
it can demonstrate that appropriate steps have been taken to comply with GMP 
or ISO 9001 and 9002 and CE Mark regulations.  Although the Company has 
received ISO 9001 and 9002 certification, there can be no assurance that the 
Company will be found in compliance with GMP or ISO 9001 and 9002 and CE Mark 
standards in future audits by regulatory authorities or that the Company will 
not experience difficulties in the course of developing its manufacturing 
capability.  A failure to comply with GMP or ISO 9001 and 9002 and CE Mark 
standards, or to develop its manufacturing capability in compliance with such 
standards, would prohibit the Company from 

<PAGE>

manufacturing and distributing its products and therefore have a material 
adverse effect on the Company's business, financial condition and results of 
operations. 

DEPENDENCE ON SOLE OR LIMITED SOURCE SUPPLIERS

     The Company purchases raw materials and certain key components of its 
products, including the computer workstation and certain components for its 
catheter, from sole, single or limited source suppliers.  For certain of 
these components, there are relatively few alternative sources of supply.  
The Company currently has no agreements that would assure delivery of raw 
materials and components from such suppliers.  Establishing additional or 
replacement suppliers for any of the numerous components used in the 
Company's products, if required, may not be accomplished quickly and could 
involve significant additional costs.  The inability of any of the Company's 
suppliers to provide an adequate supply of components in a timely manner, or 
the inability of the Company to locate qualified alternative suppliers for 
materials and components at a reasonable cost, could adversely affect the 
Company's business, financial condition and results of operations.  In the 
event the Company had to replace a single source supplier, such replacement 
would be required to meet GMP and certain other regulatory standards.

NEED TO MANAGE EXPANDING OPERATIONS

     In order to complete clinical trials in progress, prepare additional 
products for clinical trials, and develop future products, the Company 
believes that it will be required to expand its operations, particularly in 
the areas of research and development, manufacturing, quality assurance and 
sales and marketing.  As the Company expands its operations in these areas, 
such expansion will likely result in new and increased responsibilities for 
management personnel.  To accommodate any such growth and compete 
effectively, the Company will be required to implement and improve 
information systems, procedures, and controls, and to expand, train, motivate 
and manage its work force.  The Company's future success will depend to a 
significant extent on the ability of its current and future management 
personnel to operate effectively, both independently and as a group.  There 
can be no assurance that the Company's personnel, systems, procedures and 
controls will be adequate to support the Company's future operations.  Any 
failure to implement and improve the Company's operational, financial and 
management systems or to expand, train, motivate or manage employees as 
required by future growth, if any, would have a material adverse effect on 
the Company's business, financial condition and results of operations. 

LIMITED COMMERCIAL SALES AND MARKETING EXPERIENCE

     The Company has limited experience marketing the EnSite System.  There 
can be no assurance that the Company will be able to build and maintain a 
suitable sales force or enter into or maintain satisfactory marketing 
arrangements with third parties when commercial potential develops, if ever, 
or that its sales and marketing efforts will be successful.

RISKS RELATING TO INTERNATIONAL OPERATIONS

     The Company plans to market the EnSite System through distributors in 
international markets, subject to receipt of required foreign regulatory 
approvals.  Sales in foreign markets are initially expected to be the 
Company's only source of revenue.  In September 1997 the Company signed a 
seven-year distribution agreement (the "Distribution Agreement") with 
Medtronic to market the EnSite System for the electrophysiology markets in 
Europe and Japan.  The initial market release included sites in Germany, 
Italy and the United Kingdom.  Under the terms of the Distribution Agreement, 
Medtronic has been granted exclusive distribution rights for the Company's 
products in Europe and Japan and has been granted certain rights for 
distribution in other regions outside North America.  The Company has no 
distribution arrangements for other international markets, and currently 
retains all distribution rights in North America.  There can be no assurance 
that international distributors for 

<PAGE>

the Company's products will devote adequate resources to selling its 
products. 

     Changes in overseas economic conditions, currency exchange rates, 
foreign tax laws or tariffs or other trade regulations could have a material 
adverse effect on the Company's ability to market its products 
internationally and therefore on its business, financial condition and 
results of operations.  The Company's business is also expected to subject it 
and its representatives, agents and distributors to laws and regulations of 
the foreign jurisdictions in which they operate or the Company's products are 
sold. The Company may depend on foreign distributors and agents for 
compliance and adherence to foreign laws and regulations.  The regulation of 
medical devices in a number of such jurisdictions, particularly in the 
European Union, continues to develop and there can be no assurance that new 
laws or regulations will not have an adverse effect on the Company's 
business, financial condition and results of operations. In addition, the 
laws of certain foreign countries do not protect the Company's intellectual 
property rights to the same extent as do the laws of the United States.

DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL

     The success of the Company is dependent in large part upon the ability 
of the Company to attract and retain key management and operating personnel.  
Qualified individuals are in high demand and are often subject to competing 
offers.  In the future, the Company will need to add additional skilled 
personnel in the areas of research and development, sales, marketing and 
manufacturing.  There can be no assurance that the Company will be able to 
attract and retain the qualified personnel needed for its business.  The loss 
of the services of one or more members of the Company's research, 
manufacturing or management group or the inability to hire additional 
personnel as needed would likely have a material adverse effect on the 
Company's business and prospects.   

FUTURE CAPITAL REQUIREMENTS; NO ASSURANCE FUTURE CAPITAL WILL BE AVAILABLE

     The Company may require substantial funds to meet its working capital 
requirements for continued research and development, testing, regulatory 
approval and full-scale commercial introduction of its EnSite System.  In 
order to meet its funding needs, the Company may be required to raise 
additional funds through public or private financings, including the sale of 
equity or debt.  Any additional equity financings may be dilutive to current 
stockholders, and debt financing, if available, may involve restrictive 
covenants.  Adequate funds for the Company's operations, whether from 
financial markets or from other sources, may not be available when needed on 
terms attractive to the Company, if at all.  Insufficient funds may require 
the Company to delay, scale back or eliminate some or all of its programs 
designed to facilitate the commercial introduction of the EnSite System or 
prevent such commercial introduction altogether. 

UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT

     Sales of the Company's proposed products in most markets in the United 
States and internationally will be dependent on availability of adequate 
reimbursement for tachycardia diagnostic procedures from third-party payors, 
such as government and private insurance plans, health maintenance 
organizations and preferred provider organizations.  In the United States, 
the Company's products, if and when approved for commercial sale, would be 
purchased primarily by health care providers which will then seek to be 
reimbursed by various third party payors, such as Medicare, Medicaid and 
other government programs and private insurance plans, for the health care 
services provided to their patients.  Third-party payors reimburse health 
care providers for medical treatment based on a variety of methods, including 
a lump sum prospective payment system based on a diagnosis related group or 
per diem, a blend between the health care provider's reported costs and a fee 
schedule, a payment for all or a portion of charges deemed reasonable and 
customary, or a negotiated per capita fixed payment.  Third-party payors are 
increasingly challenging the pricing of medical products and procedures.  
Even if a procedure is eligible for reimbursement, the level of reimbursement 
may not be adequate.  Additionally, payors may deny reimbursement if they 
determine that the device used in a 

<PAGE>

treatment was unnecessary, inappropriate or not cost-effective, experimental 
or used for a non-approved indication.   

     It is anticipated that the Company's EnSite catheter will be sold at a 
premium in comparison to existing single point catheters used in current 
diagnostic or mapping procedures, in addition to requiring an initial capital 
outlay for the companion clinical workstation.  Existing single point 
catheters, unlike EnSite catheters, are generally reused after sterilization. 
 In addition to establishing the safety and efficacy of the EnSite System, 
and assuming no increase in the level of reimbursement for cardiovascular 
procedures expected to utilize the Company's products, the Company will be 
required to economically justify the relative increased cost of utilizing the 
EnSite System by satisfactorily demonstrating 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.   

     The commercial success of the Company's EnSite System may also be 
affected by the availability of adequate reimbursement for treatments for 
complex VT, including catheter ablation.  To date, catheter ablation has not 
been approved by the FDA for treatment of VT and is not a commonly prescribed 
treatment for VT.  The Company believes that the improved mapping technology 
of the EnSite System may enable catheter ablation for treating complex VT.   

     There can be no assurance that adequate levels of reimbursement will be 
available to enable the Company to achieve or maintain market acceptance of 
its products or maintain price levels which exceed the Company's costs of 
developing and manufacturing its products.  In addition, use of the Company's 
products will also depend on the adequacy of third-party reimbursement for 
treatments that would be used in connection with the Company's products, such 
as catheter ablation treatment.  There can be no assurance that adequate 
levels of reimbursement for ablation treatment will be available to support 
the use of the Company's products.  Without adequate support from third-party 
payors, the market for the Company's products may be severely limited.  
Moreover, the Company is 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 the Company.  There is significant 
uncertainty concerning third-party reimbursement of medical devices, and 
there can be no assurance that third-party reimbursement will be available in 
the future for the EnSite System or that any third-party reimbursement that 
is obtained will be adequate.  Any failure to obtain third party 
reimbursement for diagnostic procedures using the Company's products or 
treatment procedures that rely on the Company's products could have a 
material adverse effect on the Company's business, financial condition and 
results of operations.

     The Company expects that there will be continued pressure on 
cost-containment throughout the United States health care system.  Reforms 
may include mandated basic health care benefits, controls on health care 
spending through 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.  The Company 
anticipates that Congress and state legislatures will continue to review and 
assess alternative health care delivery systems and payment methodologies and 
public debate of these issues will likely continue in the future.  Due to 
uncertainties regarding the ultimate features of reform initiatives and their 
enactment and implementation, the Company cannot predict which, if any, of 
such reform proposals will be adopted, when such proposals may be adopted or 
what impact they may have on the Company.

     Reimbursement systems in international markets vary significantly by 
country and by region within some countries, and reimbursement approvals must 
be obtained on a country-by-country basis. Many international markets have 
government managed health care systems that control reimbursement for new 
devices and procedures.  In most markets there are private insurance systems 
as well as government managed systems.  There can be no assurance that 
reimbursement for the Company's products will be available in international 
markets under either government or private reimbursement systems.

<PAGE>
 
     The Company faces an inherent business risk of exposure to product 
liability claims in the event that an electrophysiology patient is adversely 
affected by its products.  The Company currently carries a product liability 
insurance policy covering the Company's clinical trial operations with an 
aggregate limit of $5 million, although there can be no assurance that the 
Company's existing insurance coverage limits are adequate to cover the 
Company from any liabilities it might incur in connection with the 
distribution of its products.  Although the Company expects to obtain product 
liability insurance coverage in connection with the commercialization of the 
EnSite System, there can be no assurance that such insurance will be 
available on commercially reasonable terms, or at all, or that such 
insurance, even if obtained, would adequately cover any product liability 
claim.  A product liability or other claim with respect to uninsured 
liabilities or in excess of insured liabilities could have a material adverse 
effect on the business and prospects of the Company.   

POSSIBLE VOLATILITY OF PRICE

     The trading prices of the Company's Common Stock could be subject to 
wide fluctuations in response to quarter to quarter variations in the 
Company's operating results, announcements by the Company or its competitors 
regarding the results of regulatory approval filings or clinical trials or 
testing, developments or disputes concerning proprietary rights, 
technological innovations or new commercial products, governmental regulatory 
action, third-party reimbursement decisions, general conditions in the 
medical technology industry, or other events or factors, many of which are 
beyond the Company's control.  In addition, the stock market has experienced 
extreme price and volume fluctuations, which have particularly affected the 
market prices of many medical technology companies and which have often been 
unrelated to the operating performance of such companies.   

REGISTRATION RIGHTS

     Certain stockholders, beneficially holding an aggregate of 4,705,603 
shares of Common Stock, have the right, subject to certain conditions, to 
include their shares in future registration statements relating to the 
Company's securities and to cause the Company to register certain Common 
Stock owned by them.

NO DIVIDENDS

     The Company has never paid or declared a dividend on its capital stock 
and does not anticipate doing so for the foreseeable future.