EXHIBIT 99.2

                              CAUTIONARY STATEMENT

      The statements contained in this Form 10-K include forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 ("PSLRA"). When used in this Form 10-K and in future filings by the Company
with the Securities and Exchange Commission, in the Company's press releases,
presentations to stockholders, securities analysts or investors, or in oral
statements made by or with the approval of an executive officer of the Company,
the words or phrases "believes," "may," "will likely result," "estimates,"
"projects," "anticipates," "expects" or similar expressions and variations
thereof are intended to identify such forward-looking statements. Any
forward-looking statement involves risks and uncertainties that may have a
material adverse effect on the business, results of operations, financial
condition or prospects, financial or other, of the Company and may cause the
Company's actual results to differ materially from historical results or the
results discussed in the forward-looking statements.

      The following discussions contain cautionary statements regarding the
Company's business that investors and others should carefully consider. This
discussion is intended to take advantage of the "safe harbor" provisions of the
PSLRA. In making these cautionary statements, the Company is not undertaking to
address or update each factor in future filings or communications regarding the
Company's business or results.

SEC / U.S. ATTORNEY INVESTIGATION

      In August 1999, the Company, through its outside counsel, contacted the
Division of Enforcement of the Securities and Exchange Commission ("SEC") to
advise it of certain matters related to the Company's restatement of earnings
for interim periods of fiscal 1999. Subsequent thereto, the SEC requested the
voluntary production of certain documents and the Company provided the SEC with
the requested materials. On August 17, 2000 and April 30, 2003, the SEC served
subpoenas upon the Company, pursuant to a formal order of investigation,
requiring the production of certain documents. Additionally, the Company has
been informed that since January 2002 the SEC and/or the United States
Attorney's Office for the Southern District of New York have contacted and/or
served subpoenas upon certain individuals, including current and former officers
and employees of the Company, and a current Director, in connection with these
matters. On June 13, 2002, the Company was advised by counsel to David Schick,
the Company's Chief Executive Officer, that the United States Attorney's Office
for the Southern District of New York had notified such counsel that Mr. Schick
was a target of the United States Attorney's investigation of this matter. On
June 11, 2003, the Company and its chief executive officer, David Schick,
received notifications from the staff of the SEC of their intention to recommend
that the SEC authorize civil enforcement actions against them. The contemplated
actions would allege violations of federal securities law relating to the
Company's publicly filed financial statements, including those for the first
three quarters of the Company's fiscal year ended March 31, 1999, restatements
of which were filed in March 2000. In connection with the contemplated actions,
the staff would ask for authority to seek injunctive relief, civil penalties and
a bar against Mr. Schick from serving as an officer or director of a public
company. See Item 3 - "Legal Proceedings." Pursuant to its By-Laws, the Company
has paid the legal fees incurred by current and former Officers and employees,
and a current Director, in connection with these matters. The Company cannot
predict the potential outcome of these matters. If the outcome of these matters
is not favorable with respect to the Company and/or Mr. Schick, it could have a
material adverse effect upon the Company. Moreover, regardless of the outcome of
these matters, the Company could be forced to expend significant amounts of
money in legal fees.

DEPENDENCE ON PRODUCTS

      The Company's revenues are primarily generated from sales of its
CDR(R)system and, to a lesser extent, other products, including the CDRCam(R),
CDRPan(TM) and accuDEXA(R). There can be no assurance that any of these devices,
or any of the products which the Company sells or may sell in the future, will
not be rendered obsolete or inferior as a result of technological change,
changing customer needs, new product introductions or other developments, each
of which would have a material adverse effect on the Company. There can be no
assurance that the Company's competitors will not succeed in developing or
marketing technologies and/or products that are superior to and/or more
commercially attractive than the Company's. The Company's success will depend in
part on its ability to

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improve and enhance its products in a timely manner. There can be no assurance
that the Company will be able to do so. The failure to enhance any of the
Company's products in a timely manner could have a material adverse effect on
the Company.

DEPENDENCE ON EXCLUSIVE NORTH AMERICAN DISTRIBUTOR

      Since May 1, 2000, the Company has marketed and distributed its
CDR(R)product line in the United States and Canada exclusively through Patterson
Dental Company. During fiscal 2003, 2002 and 2001, Patterson Dental Company was
the single largest contributor to the Company's revenues. The Company
anticipates that Patterson Dental will continue to be the single largest
contributor to the Company's revenues in the coming fiscal year. While the
Distributorship Agreement between the Company and Patterson Dental provided for
a minimum purchase quota during its initial three-year term, Patterson did not
meet such quota. At the current time, there no longer is any minimum purchase
quota in effect. There can be no assurance that Patterson will purchase any
specified minimum quantity of products from the Company or that it will continue
to purchase any product at all from the Company. If Patterson fails to purchase
a significant volume of product from the Company, it could have a material
adverse effect on the Company.

DEPENDENCE ON THIRD-PARTY DISTRIBUTORS OUTSIDE OF NORTH AMERICA

      Outside of North America, the Company distributes its CDR(R) product line
through third-party independent distributors. Historically, a limited number of
distributors have accounted for a significant portion of the Company's revenues.
In general, these distributors could discontinue marketing the Company's
products with little or no notice. Certain of the Company's distributors also
could market products which compete with the Company's products. The loss of or
significant reduction in sales volume of one or more of the Company's
distributors could have a material adverse effect on the Company.

PAST OPERATING LOSSES

      The Company had net income of $12.0million and $3.1 million in fiscal 2003
and fiscal 2002, respectively, but incurred net losses of $1.6 million in fiscal
2001. The Company has an accumulated deficit of $27.7 million at March 31, 2003.
In response to the losses incurred in fiscal 2001, 2000 and 1999, management
implemented certain corrective actions and took steps to improve operations and
provide for adequate resources to fund the Company's operating, capital and
financing needs. In view of these matters, management believes the Company has
the ability to meet its financing requirements on a continuing basis. However,
if the Company's fiscal 2004 planned cash flow projections are not met,
management could consider the reduction of certain discretionary expenses and
sale of certain assets. In the event that these plans are not sufficient and
credit facilities are not available to the Company, or if the Company's capital
needs are greater than anticipated, the Company's ability to operate could be
adversely affected.

DEPENDENCE UPON KEY PERSONNEL

      The success of the Company is dependent, in part, upon its ability to hire
and retain management, sales, technical, research and other personnel who are in
high demand and are often subject to competing employment opportunities. The
inability of the Company to hire or retain key management, sales, technical,
research or other personnel could have a material adverse effect on the Company.
At the current time, three of the Company's key employees, its Chief Executive
Officer, President & COO, and Executive Vice-President, are employed pursuant to
employment agreements with the Company. There can be no assurance that these
individuals or any of the Company's other employees will continue to be active
with the Company. The Company maintains and is the named insured party under a
$1,000,000 life insurance policy on David Schick, the Chief Executive Officer of
the Company. There is no assurance that such insurance can be maintained or will
be adequate to meet the Company's future needs.

LITIGATION AND INSURANCE

      The Company may be a party to a variety of legal actions, such as
employment and employment discrimination-related suits, employee benefit claims,
breach of contract actions, tort claims, shareholder suits, including securities
fraud, governmental investigations and intellectual property related litigation.
In addition, because of the nature of its business, the Company is subject to a
variety of legal actions relating to its business operations. Recent court
decisions and legislative activity may increase the

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Company's exposure for any of these types of claims. In some cases, substantial
punitive damages may be sought. The Company currently has insurance coverage for
some of these potential liabilities. Other potential liabilities may not be
covered by insurance, insurers may dispute coverage, or the amount of insurance
may not be sufficient to cover the damages awarded. In addition, certain types
of damages, such as punitive damages, may not be covered by insurance and
insurance coverage for all or certain forms of liability may become unavailable
or prohibitively expensive in the future.

DEPENDENCE ON DEVELOPING AND MARKETING NEW PRODUCTS AND ENHANCEMENTS TO EXISTING
PRODUCTS

      The Company intends to develop and/or is currently developing new products
and enhancements to existing products. There can be no assurance that the
Company will initiate, continue with and/or succeed in efforts to develop or
enhance such products. The Company expects to file 510(k) applications with the
FDA in connection with its future products and certain of its future product
enhancements. There can be no assurance that the Company will file applications
for or obtain regulatory approval from the FDA, either in the form of a
pre-market clearance or a 510(k) clearance, for any of its future products, or
that in order to obtain FDA clearance, the Company will not be required to
submit additional data or meet additional FDA requirements that may
substantially delay the application process and result in substantial additional
expense. Moreover, such pre-marketing clearance, if obtained, may be subject to
conditions on marketing or manufacturing which could impede the Company's
ability to manufacture and/or market its products. While the Company is engaged
in research and development to develop new products, there can be no assurance
that the Company will be successful in such endeavors. There can be no assurance
that any products to be developed by the Company will be approved by or receive
marketing clearance from applicable domestic and/or international governmental
or regulatory authorities. If the Company is unable to develop, obtain
regulatory approval for and market new products and enhancements to existing
products, it will have a material adverse effect on the Company.

RAPID AND SIGNIFICANT TECHNOLOGICAL CHANGE

      The market for the Company's products is characterized by rapid and
significant technological change, evolving industry standards and new product
introductions. The Company's products require significant planning, design,
development and testing which require significant capital commitments and
investment by the Company. There can be no assurance that the Company's products
or proprietary technologies will not become uncompetitive or obsolete as a
result of technological change, evolving industry standards or new product
introductions or that the Company will be able to generate any economic return
on its investment in product development. If the Company's products or
technologies become uncompetitive or obsolete, it would have a material adverse
effect on the Company.

INTENSE COMPETITION

      Competition relating to the Company's current products is intense and
includes various companies, both within and outside of the United States. The
Company anticipates that competition for its future products will also be
intense and include various companies, both within and outside of the United
States. The Company's competitors and potential competitors include large
companies with substantially greater financial, sales and marketing, and
technical resources, larger and more experienced research and development
staffs, more extensive physical facilities and substantially greater experience
in obtaining regulatory approvals and in marketing products than the Company. In
addition, there can be no assurance that the Company's competitors are not
currently developing, or will not attempt to develop, technologies and products
that are more effective than those being developed by the Company or that would
otherwise render the Company's existing and new technology and products obsolete
or uncompetitive. No assurance can be given that the Company will be able to
compete successfully. The inability of the Company to compete successfully or
the development by the Company's competitors of technology and products that are
more effective than those being developed by the Company would have a material
adverse effect on the Company.

DEPENDENCE ON KEY SUPPLIERS; VOLATILITY OF SEMICONDUCTOR MARKET

      The Company relies on key suppliers for various critical components. The
Company procures certain components, including the substantial majority of the
sensor chips used in the Company's manufacturing process, from outside sources
which are sole suppliers. The availability and price of these components may be
subject to change due to

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interruptions in production, changing market conditions and other events.
Furthermore, availability may be adversely impacted if the Company fails to make
timely payments to its key suppliers. There can be no assurance that the Company
would be able to enter into purchase arrangements with other suppliers, or that
if the Company were to do so, such suppliers would be able to deliver such
components at an acceptable price or in a timely manner, if at all. If the
Company were unable to develop reasonably-priced alternative sources in a timely
manner, or if the Company encountered delays or other difficulties in the supply
of such products and other materials from third parties, there could be a
material adverse effect on the Company. In past years, semiconductors have been
subject to significant price fluctuations. While the Company has, in the past,
attempted to mitigate the effects of such potential fluctuations, there can be
no assurance that the Company will continue to do so or that it will be able to
successfully mitigate the effect of future price increases on its results of
operations and financial condition.

RELIANCE ON PATENTS AND PROPRIETARY TECHNOLOGY; RISK OF PATENT INFRINGEMENT

      The Company currently has issued patents and patent applications as
described in Item 1 - "Business," of this Form 10-K. There can be no assurance
that any of the Company's patents, any of the patents of which the Company is a
licensee or any patents which may issue to the Company or which the Company may
license in the future, will provide the Company with a competitive advantage or
afford the Company protection against infringement by others, or that the
patents will not be successfully challenged or circumvented by third parties,
including competitors of the Company.

      The Company is the exclusive sub-licensee for use in medical radiography
applications of certain patents, patent applications and other know-how
(collectively, the "Intellectual Property") related to complementary metal oxide
semiconductor ("CMOS") active pixel sensor technology (the "APS Technology"),
which was developed by the California Institute of Technology and licensed to
Photobit Corp. from which the Company obtained its sub-license. Photobit was
subsequently acquired by Micron Technology, Inc., which continues to sublicense
the CMOS Intellectual Property to the Company. The Company's exclusive rights to
such technology are subject to government rights to use, noncommercial
educational and research rights to use by California Institute of Technology and
the Jet Propulsion Laboratory, and the right of a third party to obtain a
nonexclusive license from the California Institute of Technology with respect to
such technology. The Company believes that, as of the date of this filing,
except for such third party's exercise of its right to obtain a nonexclusive
license to use APS Technology in a field other than medical radiography, none of
the foregoing parties have given notice of their exercise of any of their
respective rights to the APS Technology. There can be no assurance that this
will continue to be the case, and any such exercise could have a material
adverse effect on the Company. Additionally, the agreement between the Company
and Photobit Corp. required, among other things, that the Company use all
commercially reasonable efforts to timely introduce improve and market and
distribute licensed products in various fields. The Company has not introduced
licensed products in certain of these fields, and there can be no assurance that
the Company will do so in the future or that the Company will comply with its
obligations under its agreement with Photobit Corp. Any such failure to
introduce licensed products or comply with its obligations could have a material
adverse effect on the Company.

      The Company is also the owner of certain trade secrets, which it seeks to
protect by, among other things, entering into non-disclosure, confidentiality,
non-solicitation and non-competition agreements. However, there can be no
assurance that the duties imposed by these agreements, such as the duty to
maintain confidentiality and the duty not to compete, will not be breached, or
that such breaches will not have a material adverse effect on the Company.

      There also can be no assurance that the technology practiced by the
Company will not infringe upon the patents of others. In the event that any
future infringement claim against the Company is successful, there would be no
assurance that the Company would be able to negotiate with the patent holder for
a license, in which case the Company could be prevented from practicing the
subject matter claimed by the subject patent. In addition, there can be no
assurance that the Company would be able to redesign its products to avoid
infringement. The inability of the Company to practice the subject matter of
patents claimed by others or to redesign its products to avoid infringement
could have a material adverse effect on the Company.

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NASDAQ DELISTING

      The Company's Common Stock was delisted from the Nasdaq National Market,
effective at the close of business on September 15, 1999. From that date through
January 29, 2002, the Company's stock traded in the over-the-counter market, as
reported on the "pink sheets" published by Pink Sheets LLC (formerly known as
National Quotation Bureau LLC). Commencing January 30, 2002, the Company's stock
has been quoted on the Over-The-Counter Bulletin Board. The Nasdaq delisting
could have a material adverse effect upon the Company in a number of ways,
including its ability to raise additional capital, and could have a negative
effect upon the trading price of the Company's Common Stock. There can be no
assurance that the Company's Common Stock will be relisted on the Nasdaq
National Market at any future date or that such stock will be listed on any
market system.

DILUTIVE EFFECT OF GREYSTONE TRANSACTION

      The Company entered into agreements with Greystone Funding Corporation and
a prior lender which assigned its interest to Greystone whereby Greystone, its
designees and such assignor, were issued Warrants to purchase an aggregate of
5,650,000 shares of the Company's Common Stock. If Greystone exercises such
Warrants or a portion thereof, it will have a significant dilutive effect on the
percentage of shares held by the Company's current shareholders.

PRODUCT WARRANTIES

      The Company generally warrants each of its products against defects in
materials and workmanship for a period of one year from the date of shipment
plus any extended warranty period purchased by the customer. The need for
warranty service could have a material adverse effect on the Company by, among
other things, requiring additional expenditures for parts and personnel as well
as damaging the Company's reputation and goodwill.

REGULATORY AND LEGISLATIVE RISKS

      The Company must obtain certain approvals by and marketing clearances from
governmental authorities, including the FDA and similar health authorities in
foreign countries to market and sell its products in those countries. The FDA
regulates the marketing, manufacturing, labeling, packaging, advertising, sale
and distribution of 'medical devices,' as do various foreign authorities in
their respective jurisdictions. The FDA enforces additional regulations
regarding the safety of equipment utilizing x-rays. Various states also impose
similar regulations. The Company's CDR(R) system is currently regulated by such
authorities and certain of the Company's new products will require approval by
or marketing clearance from various governmental authorities, including the FDA.
In addition, various additional requirements are imposed upon the Company to
make it eligible to sell products to the United States Government.

      The FDA review process typically requires extended proceedings pertaining
to the safety and efficacy of new products. A 510(k) application is required in
order to market a new or modified medical device. If specifically required by
the FDA, a pre-market approval ("PMA") may be necessary. Such proceedings, which
must be completed prior to marketing a new medical device, are potentially
expensive and time consuming. They may delay or hinder a product's timely entry
into the marketplace. Moreover, there can be no assurance that the review or
approval process for these products by the FDA or any other applicable
governmental authorities will occur in a timely fashion, if at all, or that
additional regulations will not be adopted or current regulations amended in
such a manner as will adversely affect the Company. The FDA also regulates the
content of advertising and marketing materials relating to medical devices.
Failure to comply with such regulations may result in a delay in obtaining
approval for the marketing of such products or the withdrawal of such approval
if previously obtained. There can be no assurance that the Company's advertising
and marketing materials regarding its products are and will be in compliance
with such regulations. The Company is also subject to other federal, state and
local laws, regulations and recommendations relating to safe working conditions,
laboratory and manufacturing practices. The extent of government regulation that
might result from any future legislation or administrative action cannot be
accurately predicted. Failure to comply with regulatory requirements could have
a material adverse effect on the Company. International sales of the Company's
products are subject to the regulatory agency product registration requirements
of each country in which the Company's products are sold. The regulatory review
process varies from country to country and may in

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some cases require the submission of clinical data. The Company typically relies
on its distributors in foreign countries to obtain the required regulatory
approvals.

          There can be no assurance, however, that any of the foregoing
approvals will be obtained, or that the Company would be able to satisfy any of
the foregoing requirements on a timely basis, if at all. The failure to obtain
any of such approvals or to comply with any of such requirements on a timely
basis could have a material adverse effect on the Company. The Company's
customers operate in the health care industry, which is highly regulated. Both
existing and future governmental regulations could adversely impact the Company.
Additionally, cost-containment efforts by health maintenance organizations may
adversely affect the potential market for the Company's devices.

POTENTIAL FOR PRODUCT RECALL AND PRODUCT LIABILITY CLAIMS

      Products such as those sold by the Company may be subject to recall for
unforeseen reasons. In addition, certain applications, including projected
applications, of the Company's products entail the risk of product liability
claims. Such risks will exist even with respect to those products that have
received, or in the future may receive, regulatory approval for commercial sale.
These claims may be made by consumers, distributors or others. Although the
Company has maintained insurance coverage related to product liability claims,
no assurance can be given that product liability insurance coverage will
continue to be available or, if available, that it can be obtained in sufficient
amounts or at reasonable cost or that it will be sufficient to cover any claims
that may arise. The Company does not maintain any insurance relating to
potential recalls of its products. Costs associated with potential product
recalls or product liability claims could have a material adverse effect on the
Company.

DEPENDENCE ON THIRD-PARTY REIMBURSEMENT

      Third-party payors, including government health administration
authorities, private health care insurers and other organizations regulate the
reimbursement of fees related to certain diagnostic procedures or medical
treatments. Third-party payors are increasingly challenging the price and
cost-effectiveness of medical products and services. While the Company cannot
predict what effect the policies of government entities and other third-party
payors will have on future sales of the Company's products, there can be no
assurance that such policies would not have a material adverse effect on the
Company.

UNCERTAINTIES ASSOCIATED WITH INTERNATIONAL MARKETS

      In fiscal 2003, 2002 and 2001, sales to customers outside of the United
States were approximately 21%, 25% and 38%, respectively, of the Company's
revenues, and the Company anticipates that international sales will continue to
account for a significant percentage of the Company's revenues. International
revenues are subject to a number of uncertainties, including but not limited to
the following: agreements may be difficult to enforce and receivables difficult
to collect; foreign customers and distributors may have longer payment cycles,
foreign countries may impose additional withholding taxes or otherwise tax the
Company's foreign income, impose tariffs or adopt other restrictions on foreign
trade; fluctuations in exchange rates may affect product demand; United States
export licenses may be difficult to obtain; and intellectual property rights in
foreign countries may be difficult or impossible to enforce. Moreover, many
foreign countries have their own regulatory approval requirements for the sale
of the Company's products. As a result, the Company's introduction of new
products into international markets could be prevented and/or costly and/or
time-consuming, and there can be no assurance that the Company will be able to
obtain the required regulatory approvals on a timely basis, if at all. There can
be no assurance that any of these factors will not have a material adverse
effect on the Company.

CONTROL OF THE COMPANY BY CERTAIN STOCKHOLDERS; CONFLICTS OF INTEREST

      Currently, the executive officers and directors of the Company
collectively beneficially own approximately 43.8% of the outstanding shares of
Common Stock. Accordingly, they may effectively have the ability to elect all or
some of the directors of the Company and determine the outcome of other matters
submitted for the approval of the stockholders. In particular, David B. Schick
and members of his immediate family beneficially own approximately 21.9% of the
outstanding shares of Common Stock and, accordingly, may be able to exert
significant influence over the Company. In addition, Greystone Funding
Corporation and/or its designees may ultimately control up to

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approximately one-third of the Common Stock in the event that they exercise the
warrants which they hold and, accordingly, may be able to exert significant
influence over the Company. A former employee of Greystone is currently serving
as President and Chief Operating Officer of the Company. Accordingly, the
relationship with Greystone involves potential conflicts of interest.

POSSIBLE VOLATILITY OF STOCK PRICE

      The stock market historically has experienced volatility which has
affected the market price of securities of many companies and which may be
unrelated to the operating performance of such companies. The market prices for
securities of medical technology companies have historically been highly
volatile. Future technological innovations or new commercial products, results
of clinical testing, changes in regulation, litigation and public concerns as to
product safety as well as period-to-period fluctuations in financial performance
and fluctuations in securities markets generally could cause the market price of
the Common Stock to fluctuate substantially. These broad market fluctuations may
adversely affect the market price of the Common Stock.

POTENTIALLY SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

      Several factors may significantly affect the Company's revenues, expenses
and results of operations from quarter to quarter, including the timing of new
product introductions by the Company or its competitors, developments regarding
new treatments for osteoporosis, developments in government reimbursement
policies, product mix, the ability to supply products to meet customer demand
and fluctuations in manufacturing costs. In addition, the Company's CDR(R)
products have been subject to seasonal variations at various times in the past.
Consequently, quarterly results of operations may fluctuate. Such fluctuations
in quarterly results of operation could adversely affect the market price of the
Common Stock.

AUTHORIZATION OF PREFERRED STOCK

      The Company's certificate of Incorporation authorizes the issuance of a
series or designation of Preferred Stock with such rights, preferences,
privileges and restrictions as may be determined from time to time by the
Company's Board of Directors. Accordingly, the Board of Directors is empowered,
without the need for shareholder approval, to issue Preferred Stock with
dividend, liquidation, conversion, voting or other rights which could adversely
affect the voting power or other rights of the holders of the Company's Common
Stock. There currently are no shares of Preferred Stock designated or issued.