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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 by 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 
quality and efficacy of its products is comparable to branded competitive 
products, no independent comparison between the Company's products and 
competitive products has been completed and there can be no assurance that 
the efficacy or quality of the Company's products is or will be comparable to 
branded competitive products. 

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     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 market for the clinical nutrition products acquired from 
Elan Pharma, Inc. in January 1997 is expected to be extremely price 
competitive and often involves the need to offer package pricing of products. 
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 and a large 
OEM pump customer 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 and clinical 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.  In 
addition, the Company may incur similar concentration issues with large 
distributors and OEM customers for its clinical nutrition products, including 
the products acquired from Elan.  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 existing shareholders, 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 clinical 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. 

     The Company is currently developing, for sale to regional and national 
retail and grocery chains, a lower-priced infant formula designed to be 
equivalent in nutritional profile and efficacy to the leading national brand. 
The Company is aware of a competitor attempting to market an already existing 
lower-priced infant formula, which Management believes is not equivalent to 
the national brand.  While the Company believes that successful development 
of a national brand equivalent will give it a competitive advantage over this 
competitor, it is unable to determine the impact, if any, that this 
competitor may have with regard to product acceptance by the targeted 
customers.

     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 and medical device 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

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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 will 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 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. With the addition of the products acquired from 
Elan, the Company will be subject to FDA regulations regarding Class 2 
medical devices.  These regulations involve more stringent tracking, testing 
and documentation standards. 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 41% 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

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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 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.