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                                                                    EXHIBIT 99.1


                              CAUTIONARY STATEMENT
                                        
     Nutrition Medical, 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 may make, in 
writing or orally, "forward-looking statements" as defined under the Private 
Securities Litigation Reform Act of 1996 (the "Act").  This Cautionary 
Statement is for the purpose of qualifying for the "safe harbor" provisions 
of the Act and is intended to be a readily available written document that 
contains factors any one of which may cause actual results to differ from 
those which might be projected, forecast, estimated or budgeted in such 
forward-looking statement.  The factors set forth below 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:


LACK OF OPERATING PROFITS; LIMITED OPERATING HISTORY

     The Company, which was incorporated in July 1993, is subject to all of the
risks inherent in the establishment of a new business. The likelihood of the
success of the Company must be considered in light of the difficulties, expenses
and delays frequently encountered in connection with the development and
marketing of new products and the competitive environment in which the Company
is operating. 

     Although the Company began generating revenues from product sales in
May 1994, the Company has accumulated substantial losses to date.  No assurance
can be given that the Company will be able to achieve profitability. Further,
there can be no assurance that the Company will be able to successfully develop
or market additional products or that the Company will have sufficient funds
available to successfully market its current products or any new products that
it may develop in the future. 

PRODUCT ACCEPTANCE AND PRICING

     The Company's products are designed to be substantially equivalent to
existing branded competitive products. Although the Company believes that the
efficacy of its products is comparable to branded competitive products, no
independent comparison between the Company's products and 


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competitive products has been completed and there can be no assurance that the
efficacy of the Company's products is or will be comparable to branded
competitive products. 

     Furthermore, the Company's name and its products are relatively unknown to
large segments of the Company's target markets, and there can be no assurance
that the Company's marketing efforts will achieve sufficient name recognition of
the Company and its products to significantly enhance revenues. 

     The principal advantage of the Company's products is, and is expected to
be, lower price. The Company is aware of one competitor in the critical care
nutrition products market that has lowered prices to various customers of its
branded products to levels that offset all or part of the price advantage of the
Company's competitive products. The Company believes that these selective price
reductions resulted in indeterminable lost sales of the Company's competing
products, and that this competitor has begun to use this form of price
competition more frequently. This competitor may decide to consistently lower
its prices to the Company's level, and other competitors may adopt the same
strategy.  The Company has also encountered price competition from other
suppliers of adult nutrition supplements.  Because the Company's marketing
strategy is focused on the price advantage of its products, if a competitor
selling competitive products reduces or eliminates the price advantage of the
Company's products, there can be no assurance that the Company can compete
successfully with such a competitor or operate profitably under such conditions.

DEVELOPMENT OF NEW PRODUCTS

     The Company intends to continue to develop new products, which will require
both the timely identification of market opportunities and the identification
of, and the negotiation of contracts with, suitable technical consultants. There
can be no assurance that an adequate market opportunity will exist for the
potential products the Company selects for development or that such products
will be successfully developed or marketed. 

DEPENDENCE ON CONTRACT MANUFACTURERS

     The Company engages contract manufacturers to produce its products
according to the Company's specifications. The Company relies on these
manufacturers to comply with all applicable government regulations and
manufacturing guidelines. There can be no assurance that contract manufacturers
will consistently supply adequate quantities of the Company's products on a
timely basis, that such manufacturers will consistently comply with government
regulations or that the quality of such products will be consistently
maintained. In the event of a sale of a defective product, the Company would be
exposed to product liability claims and could lose customer confidence. In
addition, minimum quantity order requirements imposed by manufacturers may
result in excess inventory levels, requiring additional working capital and
increasing exposure to losses from inventory obsolescence. Although the Company
believes it could find alternative manufacturers for its products, any
interruption in supply of any of the Company's products could adversely affect
the Company's ability to market its products and, therefore, the Company's
business, financial condition and results of operations.


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DEPENDENCE ON RETAIL DISTRIBUTION OF PRODUCTS

     The Company's private label nutrition products are sold only through retail
chains. The Company's strategy includes the development of additional products,
including an infant formula that is currently under development by the Company.
There can be no assurance that the Company will be able to enter into
arrangements with retailers to market its infant formula or any other private
label products or that any such arrangements will result in successful product
commercialization. The Company's future profitability will depend in large part
upon the Company's ability to develop products that meet the needs of these
potential retail customers and upon the marketing efforts of such retailers.
Although the Company believes that its current and prospective retail customers
have an economic motivation to market vigorously the Company's products, the
amount and timing of resources to be devoted to marketing by such retailers is
not within the control of the Company. In addition, successful commercialization
might result in a substantial portion of the Company's revenues being generated
by one or a few retailers. Such retailers could make material marketing and
other commercialization decisions that would adversely affect the Company's
future revenues, financial condition and results of operations.

POSSIBLE FLUCTUATIONS IN OPERATING RESULTS

     The Company believes that its future operating results may be subject to
substantial quarterly fluctuations because its retail customers may order large
quantities at irregular intervals. In addition, the gross profit as a percentage
of sales on the Company's private label nutrition products is substantially less
than the gross profit percentage on the Company's critical care nutrition
products, and therefore the Company's overall gross profit percentage could vary
widely based on the product mix in a given period. To the extent that quarterly
revenues and operating results fluctuate substantially, the market price of the
Company's Common Stock may be affected.

CUSTOMER CONCENTRATION

     Although the Company's experience with its customer base is limited, retail
customers often place a large initial stocking order that can increase the
relative importance of a particular customer in a particular period.  There can
be no assurance that such retail orders will continue or that its future orders
will not significantly decline. 

FUTURE CAPITAL REQUIREMENTS; NO ASSURANCE FUTURE CAPITAL WILL BE AVAILABLE

     Although the Company's existing cash balances are expected to be sufficient
to fund the Company's operations through 1997, under certain circumstances the
Company may require substantial additional funds before the end of 1997 to meet
its working capital requirements in connection with the introduction of new
products, including its proposed infant formula. In order to meet this possible
need, and to meet possible needs after 1997, the Company may be required to
raise additional funds through public or private financings, including equity
financings. Any additional equity financings may be dilutive to purchasers in
this offering, and debt financing, if available, may 


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involve restrictive covenants. Adequate funds for the Company's operations,
regardless of the source, may not be available when needed or on terms
attractive to the Company. Insufficient funds may require the Company to delay,
scale back or eliminate the introduction of new products, including its proposed
infant formula, and the failure to obtain funding when needed could have a
material adverse effect on the Company's business, financial condition and
results of operations.

KEY PERSONNEL

     The Company is particularly dependent on the services of its President,
Mr. William Rush. If the services of Mr. Rush were to become unavailable to the
Company for any reason, there can be no assurance that the Company could
adequately replace him. The loss of Mr. Rush's services could have a material
adverse effect on the Company. The Company has an employment agreement with
Mr. Rush that expires September 30, 1999. The Company currently maintains a life
insurance policy with a face value of $1 million on Mr. Rush. 

ADDITION OF MANAGEMENT PERSONNEL AND STAFF

     In order to pursue its growth objectives, the Company intends to increase
the number of its employees, including management personnel and sales and
marketing staff. There can be no assurance that the Company will be able to
hire, train and retain sufficient personnel with the necessary experience and
abilities to achieve the Company's growth objectives, or that they will perform
at a level commensurate with the Company's expectations. 

LITIGATION INVOLVING COMPETITORS

     It is not uncommon for companies in the generic and private label industry
to be the subject of claims and lawsuits brought by brand name competitors
alleging that the generic or private label products have formulas, labelings or
packagings similar to competing brand name products. The Company recently
resolved two lawsuits in which competitors alleged patent infringement and false
advertising by the Company, and the Company is currently subject to another suit
alleging patent infringement. Since the Company's business strategy is to
develop and market products that are equivalent to competitors' branded
products, similar claims may be made by competitors in the future. Competitors
may also respond to the Company's strategy by more aggressively seeking patents
on their products to limit the Company's future product development efforts. 

     If similar allegations are made against the Company in the future, some of
the Company's current and future products may need to be reformulated or
repackaged in order for the Company to continue to market products that are
comparable to competitors' patented products. While the Company believes that
reformulation of its products is generally possible, the Company may be unable
to effectively reformulate certain of its products, and there can be no
assurance that a reformulated product would be deemed by customers to be
essentially equivalent to the patented product. Moreover, there can be no
assurance that any future lawsuits could be satisfactorily settled by
reformulating, relabeling or repackaging a product, that such litigation will
not require the commitment of substantial management time and legal fees, or
that such litigation would not have a material adverse effect on the Company's
future revenues, financial condition and results of operations.


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COMPETITION

     Competition in the critical care nutrition products market consists of
established companies that sell branded products which have achieved a high
level of customer awareness. Although the Company believes it is the only
company currently offering low cost, generic alternatives to the established
brands, other companies may enter this market. 

     Competition in the private label nutrition market consists of companies
that sell established national brands and companies that sell private label
products. Competitors that sell private label products include established
companies that produce private label products for a wide range of markets and a
number of small producers of private label products. Nearly all of the Company's
competitors and potential competitors have substantially greater financial
resources, more extensive business experience and more personnel than the
Company. The Company's ability to compete will depend on the timeliness of the
development of its products and its ability to market its products effectively. 

     If a larger company with significant financial resources were to compete
directly with the Company in particular market segments, there can be no
assurance that the Company will be able to compete successfully with such a
competitor or operate profitably.

PRODUCT LIABILITY AND INSURANCE RISKS

     The Company's business involves exposure to potential product liability
risks that are inherent in the production, manufacture and distribution of food
products. The Company maintains a general insurance policy that includes
coverage for product liability claims up to an aggregate amount of $5 million.
There can be no assurance, however, that the Company will be able to maintain
such insurance on acceptable terms, that the Company will be able to secure
increased coverage as the commercialization of its products increases or that
any insurance will provide adequate protection against potential liabilities. 

GOVERNMENT REGULATION

     The Company's products and potential products are or will be subject to
government regulation. The Company's current products are regulated as food and
medical food by the Food and Drug Administration (the "FDA") and are subject to
labeling requirements, current good manufacturing practice ("CGMP") regulations
and certain other regulations designed to ensure the safety of the products. The
Company's proposed infant formula may be required to undergo an adequate and
well controlled clinical study, in accordance with good clinical practice, to
determine whether the formula supports normal physical growth in infants when
fed as the sole source of nutrition. There can be no assurance that the
Company's proposed infant formula, if developed, would successfully complete
this trial. 

     Additionally, the FDA has recently proposed significant revisions to its
infant formula regulations to establish requirements for quality factors and
CGMP, and to amend its quality control 


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procedure, notification, and records and report requirements for infant
formulas. These regulations, if adopted, may delay, and increase the cost of,
the Company's introduction of an infant formula product. 

     Claims made by the Company in labeling and advertising its products are
subject to regulation by the FDA, the Federal Trade Commission and various state
agencies under their general authority to prevent false, misleading and
deceptive trade practices. Failure to comply with such requirements can result
in adverse regulatory action, including injunctions, civil or criminal
penalties, product recalls or the relabeling, reformulation or possible
termination of certain products. 

     The Company's current and potential products may become subject to further
regulation in the future. The burden of such regulation could add materially to
the costs and risks of the Company's development and marketing efforts. There
can be no assurance that the Company could obtain the required approvals or
comply with new regulations if the Company's products are subject to additional
governmental regulation in the future. Failure to obtain necessary approvals or
otherwise comply with government regulations could have a material adverse
effect on the Company's future revenues, financial condition and results of
operations. 

CONTROL BY PRINCIPAL SHAREHOLDERS

     Directors, officers and principal shareholders of the Company own
beneficially approximately 30% of the outstanding Common Stock. As a result,
such shareholders may have the ability to effectively control the election of
the Company's entire Board of Directors and the affairs of the Company,
including all fundamental corporate transactions such as mergers, consolidations
and the sale of substantially all of the Company's assets.

TRADEMARKS

     The Company has not registered its existing trademarks, but instead relies
on its common law trademark rights. The lack of such registration may impair the
ability of the Company to prosecute successfully an infringement action against
other users of these trademarks. There can be no assurance that the Company's
marks do not or will not violate the proprietary rights of others, that the
Company's proprietary rights in the marks would be upheld if challenged, or that
the Company would not be prevented from using its marks, any of which could have
an adverse effect on the Company. In addition, there can be no assurance that
the Company will have the financial resources necessary to enforce or defend its
trademarks. 

UNDESIGNATED STOCK

     The Company's authorized capital consists of 25,000,000 shares of capital
stock, of which 20,000,000 shares are designated as Common Stock and 5,000,000
are preferred shares undesignated as to series. The Company has no outstanding
shares of preferred stock, and there are no current plans to designate or issue
any shares of preferred stock. Nevertheless, the Company's Board of Directors
has the power to issue any or all of these shares of unissued stock, including
the authority to establish the rights and preferences of the unissued shares,
without shareholder approval. Furthermore, as a Minnesota corporation, the
Company is subject to certain "anti-takeover" provisions of the Minnesota


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Business Corporation Act. These provisions and the power to issue additional
shares and to establish separate classes or series of common or preferred stock
may, in certain circumstances, deter or discourage take-over attempts and other
changes in control of the Company not approved by the Board.