<PAGE>

                                                                    Exhibit 99.1

                                  RISK FACTORS

LACK OF PROFITABILITY; POSSIBLE NEED FOR FUTURE FINANCING

The Company recorded net losses of $355,000, $4,717,000 and $3,701,000 for the
years ended June 30, 2003, 2002 and 2001. Charges for unused manufacturing
capacity associated with the Company's hyaluronan production negatively impacted
operating results in fiscal 2003, 2002 and 2001. These charges are a result of
ETHICON's voluntary withdrawal if INTERGEL Solution from the market in 2003 and
the unanticipated delay in receiving INTERGEL Solution marketing approval in the
U.S. from the FDA in 2002 and 2001. Marketing and sales expenses for the oral
restorative products are expected to continue at a high level, and personnel
costs have increased.

The Company's ability to generate positive cash flow from operations and achieve
profitability is dependent upon the continued expansion of revenue from its
hyaluronan and oral restorative businesses. The Company expects its future cash
requirements to be covered by cash generated from anticipated operations and
from its line of credit facility. No assurance can be given that the Company
will maintain positive cash flow before its capital resources are exhausted. The
Company has received waivers through fiscal 2004 with respect to certain
covenants in the industrial development revenue bonds used to finance its
facility. There can be no assurance that waivers will continue to be granted to
the Company after fiscal 2004 and thus, such bonds may be required to be
redeemed before maturity. If additional financing is necessary, no assurance can
be given that such financing will be available and, if available, will be on
terms favorable to the Company and its shareholders.

UNCERTAINTY OF RE-RELEASE OF INTERGEL SOLUTION BY ETHICON

INTERGEL Solution was voluntarily withdrawn from the market by ETHICON in March
2003 in order to assess information obtained from post-marketing experience.
ETHICON is currently working with the Company to conduct the review of data
relating to the INTERGEL Solution post marketing experience in furtherance of
its desire to reintroduce the product to the market. There can be no assurance
that ETHICON will re-release INTERGEL Solution to the market, thereby negatively
affecting revenues and unused manufacturing capacity charges in the future. In
addition, there can be no assurance that ETHICON will successful in increasing
INTERGEL Solution in the event the product is re-released.

UNCERTAINTY OF SUCCESSFUL DEVELOPMENT OF NEW HYALURONAN PRODUCTS

A significant amount of the Company's anticipated growth is dependent on its
ability to develop, manufacture and market new product applications for
hyaluronan. Such formulations must be developed, tested and, in most cases,
approved for use by appropriate government agencies. Once approved as products,
they must be manufactured in commercial quantities and marketed successfully.
Each of these steps involves significant amounts of time and expense. There can
be no assurance that any of these products, if and when fully developed and
tested, will perform in accordance with the Company's expectations, that
necessary regulatory approvals will be obtained in a timely manner, if at all,
or that these products can be successfully and profitably produced and marketed.

RELIANCE ON MARKETING AND DEVELOPMENT SUPPORT FROM CORPORATE PARTNERS FOR
HYALURONAN DIVISION

The Company has historically developed, manufactured, and marketed its
Hyaluronan Division products through long-term strategic alliances with
corporate partners. In the case of such relationships, the speed and other
aspects of the development project are sometimes outside of the Company's
control, as the other party to the relationship often has priorities that differ
from those of the Company. Thus, the timing of commercialization of the
Company's products under development may be subject to unanticipated delays.

Further, the Company currently has limited direct sales capabilities in the
Hyaluronan Division and generally relies upon its corporate partners for
marketing and distribution to end-users. The market success of the Company's
hyaluronan products generally will depend upon the size and skill of the
marketing organizations of the Company's corporate partners, as well as the
level of priority assigned to the marketing of the Company's products by these
entities, which may differ from the Company's. Should one or more of the
Company's strategic alliances fail to develop or market products as planned, the
Company's business may be adversely affected. No assurance can be given that the
Company will be able to negotiate acceptable strategic alliances in the future
or that current strategic alliances will continue.

The development contracts into which the Company enters with corporate partners
are long-term agreements that are subject to development milestones, product
specifications, and other terms. Consequently, future agreement often is
required regarding the course and nature of continued development activities.
Contractual issues requiring resolution between the parties have arisen in the

                                       1

<PAGE>

past and are expected to arise in the ordinary course of the Company's future
development activities. There can be no assurance that all such issues will be
successfully resolved.

LIMITED DIRECT SALES AND MARKETING RESOURCES FOR ORAL RESTORATIVE DIVISION
PRODUCTS

The Oral Restorative Division markets its products through a direct sales force
and a distribution network. Continued growth of the Company's revenues from oral
restorative products will depend on the ability of this sales and distribution
network to increase the Company's market share by convincing practitioners to
use the Company's products over competing established products. No assurance can
be given that the sales and distribution network will be successful in
increasing or maintaining the Company's market share or sales levels. Failure to
maintain and increase the market share of these products would adversely affect
the Company's results of operations and financial condition.

COMPETITION

Lifecore is engaged in very competitive segments of the human health care
products industry. Competitors of the Hyaluronan and Oral Restorative Divisions
in the United States and elsewhere are numerous and include major chemical,
dental, medical, and pharmaceutical companies, as well as smaller specialized
firms. Many of these competitors have substantially greater capital resources,
marketing experience, and research and development resources than the Company.
These companies may succeed in developing products that are more effective than
any that have been or may be developed by Lifecore and may also prove to be more
successful than Lifecore in producing and marketing these products. In addition,
the Oral Restorative Division is competing against a number of large established
competitors. In order to increase sales, the Division may need to gain market
share from its competitors. There can be no assurance that Lifecore will be able
to continue to compete successfully against these competitors.

Several companies produce hyaluronan through a fermentation process, including
Genzyme, Bio-Technology General Corporation, Fidia SpA, IOLTECH, Kyowa Hakko,
Kibun and Bayer. In addition, several companies manufacture hyaluronan by using
rooster comb extraction methods. These companies primarily include Anika
Therapeutics, Inc., Genzyme, Inc., Fidia SpA, and Pharmacia and Kibun. The
Company's competitors have filed or obtained patents covering aspects of
fermentation production or uses of hyaluronan. These patents may cover the same
applications as the Company's. Although the Company believes that it does not
infringe the patents of its competitors, there can be no assurance that the
Company will not receive claims of infringement from third parties.

In addition, negative announcements regarding any competitor's products may have
a negative impact on the public's perception of the market potential for all
similar products, including the Company's products.

There can be no assurance that product introductions by present or future
competitors or future technological or health care innovations will not render
Lifecore's products and processes obsolete.

PROTECTION OF PROPRIETARY TECHNOLOGY

Lifecore's success depends, to a large extent, on its ability to maintain a
competitive technological position in its product areas. While certain of
Lifecore's patents have been allowed or issued, there can be no assurance that,
to the extent issued, the Company's patents will effectively protect its
proprietary technology. If other manufacturers were to infringe on its patents,
there can be no assurance that the Company would be successful in challenging,
or would have adequate resources to challenge, such infringement. Lifecore also
relies upon trade secrets, proprietary know-how and continuing technological
innovation to develop and maintain its competitive position. There can be no
assurance that others will not independently develop such know-how or otherwise
obtain access to the Company's technology. While Lifecore's employees, temporary
staff, consultants and corporate partners with access to proprietary information
are required to enter into confidentiality agreements, there can be no assurance
that these agreements will provide the Company with adequate protection from
loss of proprietary technology or know-how.

                                        2

<PAGE>

Under current law, patent applications in the United States are maintained in
secrecy until patents are issued, and patent applications in foreign countries
are maintained in secrecy for a period after filing. The right to a device
patent in the United States is attributable to the first to invent the device,
not the first to file a patent application. Accordingly, the Company cannot be
sure that its products or technologies do not infringe patents that may be
granted in the future pursuant to pending patent applications. The Company has
not received any notices alleging, and is not aware of, any infringement by the
Company of any other entity's patents relating to the Company's current or
anticipated products. There can be no assurance, however, that its products do
not infringe any patents or proprietary rights of third parties. In the event
that any relevant claims of third-party patents are upheld as valid and
enforceable, the Company could be prevented from selling its products or could
be required to obtain licenses from the owners of such patents or be required to
redesign its products or processes to avoid infringement. There can be no
assurance that such licenses would be available or, if available, would be on
terms acceptable to the Company or that the Company would be successful in any
attempt to redesign its products or processes to avoid infringement. The
Company's failure to obtain these licenses or to redesign its products or
processes would have a material adverse effect on the Company's business,
financial condition, and results of operations.

LACK OF REGULATORY APPROVALS; REGULATION OF EXISTING PRODUCTS

The Company's products under development are considered to be medical devices
and, therefore, they require clearance or approval by the FDA before commercial
sales can be made in the United States. The products also require approvals of
foreign government agencies before sales may be made in many other countries.
The process of obtaining these clearances or approvals varies according to the
nature and use of the product. It can involve lengthy and detailed laboratory
and clinical testing, sampling activities and other costly and time-consuming
procedures. There can be no assurance that any of the required clearances or
approvals will be granted on a timely basis, if at all.

In addition, most of the existing products being sold by the Company and its
customers are subject to continued regulation by the FDA, various state agencies
and foreign regulatory agencies which regulate manufacturing, labeling and
record keeping procedures for such products. Marketing clearances or approvals
by these agencies can be withdrawn due to failure to comply with regulatory
standards or the occurrence of unforeseen problems following initial clearance
or approval. These agencies can also limit or prevent the manufacture or
distribution of the Company's products. A determination that the Company is in
violation of such regulations could lead to the imposition of civil penalties,
including fines, product recalls or product seizures, injunctions, and, in
extreme cases, criminal sanctions.

POSSIBLE LIMITATIONS ON ABILITY TO MANUFACTURE PRODUCTS

The Company has designed its modular facility to permit the production of
hyaluronan at levels exceeding current levels of production. However, in the
event of a sudden increase in demand for any of the Company's hyaluronan
products, the Company will be required to scale-up operations, including the
acquisition and validation of additional equipment and training of additional
personnel. No assurance can be given that the Company will be able to adequately
meet any such demands on a timely basis.

RISK OF INTERRUPTION OF MANUFACTURING

The Company's manufacturing requires extensive specialized equipment. In
addition, the Company manufactures its hyaluronan products at one facility.
Although the Company has contingency plans in effect for certain natural
disasters, as well as other unforeseen events that could damage the Company's
facilities or equipment, no assurance can be given that any such events will not
materially interrupt the Company's business. In the event of such an occurrence,
the Company has business interruption insurance to cover lost revenues and
profits. However, such insurance would not compensate the Company for the loss
of opportunity and potential adverse impact on relations with existing customers
created by an inability to produce its products.

DEPENDENCE ON MANAGEMENT

The Company's success depends in large part upon the services of its executive
officers. The executive officers consist of Dr. James W. Bracke, President and
Chief Executive Officer; Dennis J. Allingham, Executive Vice President and Chief
Financial Officer; Andre P. Decarie, Vice President of Marketing and Sales; and
Colleen M. Olson, Vice President of Corporate Administrative Operations. The
loss of any one of these individuals may have a material adverse effect on the
Company's business and operations. Dr. Bracke has an employment agreement with
the Company that extends through November 2001, with automatic renewal options
for successive one-year periods. Although the Company is the owner and
beneficiary of a life insurance policy covering Dr. Bracke, there can be no
assurance that the proceeds of such policy will be sufficient to compensate the
Company for the loss of his services. The Company does not have employment
agreements with or life insurance on the other officers.

                                       3

<PAGE>

EXPOSURE TO PRODUCT LIABILITY CLAIMS

The manufacture and sale of the Company's products entails a risk of product
liability claims. In addition to product liability exposure for its own
products, the Company may be subject to claims for products of its customers
which incorporate Lifecore's materials. The Company maintains product liability
insurance coverage in amounts it deems adequate. However, there can be no
assurance that the Company will have sufficient resources if claims exceed
available insurance coverage. While the Company has not experienced any product
liability claims to date, a product liability claim, or other claim with respect
to uninsured liabilities or in excess of insured liabilities, could have a
material adverse effect on the business, financial condition and results of
operations of the Company. In addition, there can be no assurance that insurance
will continue to be available to the Company and that, if available, the
insurance will continue to be on commercially acceptable terms.

POSSIBLE VOLATILITY OF SHARE PRICE

Market prices in the United States for securities of medical technology
companies can be highly volatile, and the trading price of the Company's Common
Stock could be subject to significant fluctuations in response to quarterly
variations in operating results, announcements of the status or results of
development projects or technological innovations by the Company or its
competitors, government regulation and other events or factors. The volatility
in market prices may be unrelated to the operating performance of particular
companies. These market fluctuations have in the past materially adversely
affected the market price of the Company's Common Stock, and may have such an
effect in the future.

ANTI-TAKEOVER CONSIDERATIONS

The Company's charter documents, Minnesota law and the Company's shareholder
rights plan include provisions that may discourage or prevent takeover attempts.
The Board of Directors of the Company has the authority, without any action by
the shareholders, to fix the rights and preferences of any shares of the
Company's Preferred Stock to be issued from time to time. Pursuant to the
Company's Articles of Incorporation, the Board of Directors is divided into
three classes of directors, with each director serving a three-year term. Each
year only one class of directors is subject to a shareholder vote. A shareholder
desiring to control the Board of Directors must participate in two elections of
directors to obtain majority representation on the Board of Directors. In
addition, as a Minnesota corporation, the Company is subject to certain
anti-takeover provisions of the Minnesota Business Corporation Act. The Company
also has a shareholder rights plan, commonly referred to as a poison pill, which
makes it difficult, if not impossible, for a person to acquire control of the
Company without the consent of the Board of Directors. All of these factors
could have the effect of delaying, deferring or preventing a change in control
of the Company, may discourage bids for the Company's Common Stock at a premium
over the then prevailing market price of the Common Stock, and may adversely
affect the market price of, and the voting and other rights of the holders of,
Common Stock.

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.

LEGAL PROCEEDINGS

         On August 25, 2003, Lifecore was served with a lawsuit in the Federal
District Court for the district of California by Renee Contratto. The complaint
alleges several claims against all defendants arising from Ms. Contratto's claim
that she was injured by INTERGEL Solution. Lifecore manufactures INTERGEL
Solution under contract with ETHICON. Lifecore believes that its contract with
ETHICON obligates ETHICON to indemnify and hold Lifecore harmless from Ms.
Contratto's claims, and has tendered defense of the matter to ETHICON.

                                        4