**Exhibit 99.1****RISK FACTORS****Uncertainty of Re-release of FeHA**     FeHA, (formerly labeled as GYNECARE INTERGEL Adhesion Prevention Solution (“INTERGELSolution”)) was voluntarily withdrawn from the market by ETHICON in March 2003 in order to assessinformation obtained from postmarketing experience with the product, including allegations ofadverse events associated with off-label use in non-conservative surgical procedures (such ashysterectomies). The Company has completed the post-marketing evaluation and shared the resultswith the FDA. The Company is currently evaluating regulatory requirements and opportunities fordistribution partners for the FeHA product to return to market. There can be no assurance thatFeHA will be returned to the market.**Uncertainty of Successful Development of New Hyaluronan Products**     A significant amount of the Company’s anticipated growth is dependent on its ability todevelop, manufacture and market new product applications for hyaluronan. Such formulations must bedeveloped, tested and, in most cases, approved for use by appropriate government agencies. Onceapproved 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 assurancethat any of these products, if and when fully developed and tested, will perform in accordance withthe Company’s expectations, that necessary regulatory approvals will be obtained in a timelymanner, 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 Divisionproducts through long-term strategic alliances with corporate partners. In the case of suchrelationships, the speed and other aspects of the development project are sometimes outside of theCompany’s control, as the other party to the relationship often has priorities that differ fromthose of the Company. Thus, the timing of commercialization of the Company’s products underdevelopment may be subject to unanticipated delays.     Further, the Company currently has limited direct sales capabilities in the HyaluronanDivision and generally relies upon its corporate partners for marketing and distribution toend-users. The market success of the Company’s hyaluronan products generally will depend upon thesize and skill of the marketing organizations of the Company’s corporate partners, as well as thelevel of priority assigned to the marketing of the Company’s products by these entities, which maydiffer from the Company’s priorities. Should one or more of the Company’s strategic alliances failto develop or market products as planned, the Company’s business may be adversely affected. Noassurance can be given that the Company will be able to negotiate acceptable strategic alliances inthe future or that current strategic alliances will continue.     The development contracts into which the Company enters with corporate partners are long-termagreements that are subject to development milestones, product specifications, and other terms.Consequently, future agreement often is required regarding the course and nature of continueddevelopment activities. Contractual issues requiring resolution between the parties have arisen inthe past and are expected to arise in the ordinary course of the Company’s future developmentactivities. 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 adistribution network. Continued growth of the Company’s revenues from oral restorative productswill depend on the ability of this sales and distribution network to increase the Company’s marketshare by convincing practitioners to use the Company’s products over competing establishedproducts. No assurance can be given that the sales and distribution network will be successful inincreasing or maintaining the Company’s market share or sales levels. Failure to maintain andincrease the market share of these products would adversely affect the Company’s results ofoperations and financial condition.
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**Exposure to Product Liability Claims and Other Legal Proceedings**     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 toclaims for products of its customers which incorporate Lifecore’s materials. The Company maintainsproduct liability insurance coverage in amounts it deems adequate. However, there can be noassurance that the Company will have sufficient resources if claims exceed available insurancecoverage. In addition, other types of claims may arise that are not covered by such insurance.     Lifecore is a party in 73 pending lawsuits filed by 76 different plaintiffs, all of whichallege that the plaintiffs suffered injuries due to the defective nature of INTERGEL Solutionmanufactured by Lifecore and marketed by ETHICON. There can be no assurance that other relatedclaims will not arise. ETHICON is currently defending Lifecore in each of these lawsuits.Lifecore also has products liability insurance that it believes will cover these claims. There canbe no assurance, however, that these claims, other product liability claims, claims with respect touninsured liabilities or claims in excess of insured liabilities, will not have a material adverseeffect 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, ifavailable, the insurance will continue to be on commercially acceptable terms.**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 arenumerous and include major chemical, dental, medical, and pharmaceutical companies, as well assmaller specialized firms. Many of these competitors have substantially greater capital resources,marketing experience, and research and development resources than the Company. These companies maysucceed in developing products that are more effective than any that have been or may be developedby Lifecore and may also prove to be more successful than Lifecore in producing and marketing theseproducts. In addition, the Oral Restorative Division is competing against a number of largeestablished competitors. In order to increase sales, the Division may need to gain market sharefrom its competitors. There can be no assurance that Lifecore will be able to continue to competesuccessfully against these competitors.     Several companies produce hyaluronan through a fermentation process, including Genzyme, Inc.,Savient, Fidia SpA, IOLTECH, Kyowa Hakko, Kibun and Bayer. In addition, several companiesmanufacture hyaluronan by using rooster comb extraction methods. These companies primarily includeAnika Therapeutics, Inc., Genzyme, Inc., Fidia SpA, Pharmacia and Kibun. The Company’s competitorshave filed or obtained patents covering aspects of fermentation production or uses of hyaluronan.These patents may cover the same applications as the Company’s applications. Although the Companybelieves that it does not infringe the patents of its competitors, there can be no assurance thatthe Company will not receive claims of infringement from third parties.     In addition, negative announcements regarding any competitor’s products may have a negativeimpact on the public’s perception of the market potential for all similar products, including theCompany’s products.     There can be no assurance that product introductions by present or future competitors orfuture technological or health care innovations will not render Lifecore’s products and processesobsolete.**Protection of Proprietary Technology**     Lifecore’s success depends, to a large extent, on its ability to maintain a competitivetechnological position in its product areas. While certain of Lifecore’s patents have been allowedor issued, there can be no assurance that, to the extent issued, the Company’s patents willeffectively protect its proprietary technology. If other manufacturers were to infringe on itspatents, there can be no assurance that the Company would be successful in challenging, or wouldhave adequate resources to challenge, such infringement. Lifecore also relies upon trade secrets,proprietary know-how and continuing technological innovation to develop and maintain itscompetitive position. There can be no assurance that others will not independently develop suchknow-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 arerequired to enter into confidentiality agreements, there can be no assurance that these agreementswill provide the Company with adequate protection from loss of proprietary technology or know-how.
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     Under current law, patent applications in the United States are maintained in secrecy untilpatents are issued, and patent applications in foreign countries are maintained in secrecy for aperiod after filing. The right to a device patent in the United States is attributable to thefirst to invent the device, not the first to file a patent application. Accordingly, the Companycannot be sure that its products or technologies do not infringe patents that may be granted in thefuture 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 theCompany’s current or anticipated products. There can be no assurance, however, that its productsdo not infringe any patents or proprietary rights of third parties. In the event that any relevantclaims of third-party patents are upheld as valid and enforceable, the Company could be preventedfrom selling its products or could be required to obtain licenses from the owners of such patentsor be required to redesign its products or processes to avoid infringement. There can be noassurance that such licenses would be available or, if available, would be on terms acceptable tothe Company or that the Company would be successful in any attempt to redesign its products orprocesses to avoid infringement. The Company’s failure to obtain these licenses or to redesign itsproducts or processes would have a material adverse effect on the Company’s business, financialcondition, 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 UnitedStates. The products also require approvals of foreign government agencies before sales may bemade in many other countries. The process of obtaining these clearances or approvals variesaccording to the nature and use of the product. It can involve lengthy and detailed laboratory andclinical testing, sampling activities and other costly and time-consuming procedures. There can beno assurance that any of the required clearances or approvals will be granted on a timely basis, ifat all.     In addition, most of the existing products being sold by the Company and its customers aresubject to continued regulation by the FDA, various state agencies and foreign regulatory agencieswhich regulate manufacturing, labeling and record keeping procedures for such products. Marketingclearances or approvals by these agencies can be withdrawn due to failure to comply with regulatorystandards or the occurrence of unforeseen problems following initial clearance or approval. Theseagencies can also limit or prevent the manufacture or distribution of the Company’s products. Adetermination that the Company is in violation of such regulations could lead to the imposition ofcivil penalties, including fines, product recalls or product seizures, injunctions, and, in extremecases, criminal sanctions.**Possible Limitations on Ability to Manufacture Products**     The Company has designed its modular facility to permit the production of hyaluronan at levelsexceeding current levels of production. However, in the event of a sudden significant increase indemand for any of the Company’s hyaluronan products, the Company will be required to scale-upoperations, including the acquisition and validation of additional equipment and training ofadditional personnel. No assurance can be given that the Company will be able to adequately meetany such demands on a timely basis.**Risk of Interruption of Manufacturing**     The Company’s manufacturing requires extensive specialized equipment. In addition, theCompany manufactures its hyaluronan products at one facility. Although the Company has contingencyplans in effect for certain natural disasters, as well as other unforeseen events that could damagethe Company’s facilities or equipment, no assurance can be given that any such events will notmaterially interrupt the Company’s business. In the event of such an occurrence, the Company hasbusiness interruption insurance to cover lost revenues and profits. However, such insurance wouldnot compensate the Company for the loss of opportunity and potential adverse impact on relationswith existing customers created by an inability to produce its products.
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**Dependence on Management**     The Company’s success depends in large part upon the services of its executive officers. Theexecutive officers consist of Dennis J. Allingham, President and Chief Executive Officer, David M.Noel, Vice President of Finance and Chief Financial Officer; Larry Hiebert, Vice President ofOperations; and Kipling Thacker, Ph.D., Vice President of New Business Development. The loss ofany one of these individuals may have a material adverse effect on the Company’s business andoperations. The Company does not have employment agreements with or life insurance on itsofficers.**Possible Volatility of Share Price**     Market prices in the United States for securities of medical technology companies can behighly volatile, and the trading price of the Company’s Common Stock could be subject tosignificant fluctuations in response to quarterly variations in operating results, announcements ofthe status or results of development projects or technological innovations by the Company or itscompetitors, government regulation and other events or factors. The volatility in market pricesmay be unrelated to the operating performance of particular companies. These market fluctuationshave in the past materially adversely affected the market price of the Company’s Common Stock, andmay have such an effect in the future.**Anti-Takeover Considerations**     The Company’s charter documents, Minnesota law and the Company’s shareholder rights planinclude provisions that may discourage or prevent takeover attempts. The Board of Directors of theCompany has the authority, without any action by the shareholders, to fix the rights andpreferences 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 threeclasses of directors, with each director serving a three-year term. Each year only one class ofdirectors is subject to a shareholder vote. A shareholder desiring to control the Board ofDirectors must participate in two elections of directors to obtain majority representation on theBoard of Directors. In addition, as a Minnesota corporation, the Company is subject to certainanti-takeover provisions of the Minnesota Business Corporation Act. The Company also has ashareholder rights plan, commonly referred to as a poison pill, which makes it difficult, if notimpossible, for a person to acquire control of the Company without the consent of the Board ofDirectors. All of these factors could have the effect of delaying, deferring or preventing achange in control of the Company, may discourage bids for the Company’s Common Stock at a premiumover the then prevailing market price of the Common Stock, and may adversely affect the marketprice 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 anticipatedoing so for the foreseeable future.
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