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                                                                      Exhibit 99

                                  RISK FACTORS

Because we expect to incur significant product development, sales, marketing and
administrative expenses, we may not become profitable.

We have incurred significant losses since inception and expect to incur losses
in the future. We expect to incur significant product development, sales and
marketing and administrative expenses and, as a result, we will need to generate
substantially more revenue than we have to date to achieve and maintain
profitability. There is a risk that we will not be able to realize sufficient
revenues to achieve profitability in the future.

If a significant market for SANs and SAN switching products does not develop,
our business may fail.

Our growth will be limited if storage area network, or SAN, technology and
solutions do not become widely accepted. Our product development and marketing
efforts are focused on the SAN market, which has only recently begun to develop.
The markets for new technology frequently develop more slowly than the
technology targeted to those markets. Organizations often implement SANs in
connection with their deployment of new storage systems and servers and, as a
result, we are partly dependent on the storage systems and server markets.
Potential end-user customers who have invested substantial resources in their
existing data storage and management systems may be reluctant or slow to adopt a
new approach, like SANs. We cannot be sure that SANs will ever achieve
widespread market acceptance or that the market will develop as quickly as
anticipated.

Our success also depends in part upon market acceptance of our SAN switching
solutions as an alternative to the use of hubs or other interconnect devices in
SANs. In general, hubs are priced lower than switches. We currently expect that
substantially all of our future revenue will be derived from sales of our fibre
channel switches. Because this market is new, it is difficult to predict its
potential size or future growth rate. If the market does not accept the use of
SAN switches, our business could be adversely affected.

If our relationship with Sun Microsystems fails, our business would be
materially harmed.

In June 1999, we announced an original equipment manufacturing agreement with
Sun Microsystems. Under this agreement, we expect to sell fibre channel switches
to Sun for incorporation into Sun's SAN products. However, like other original
equipment manufacturer agreements, our agreement with Sun does not provide us
with any assurance that we will ultimately sell our products to Sun. The
agreement does not require Sun to purchase any volume of products from us, and
Sun could incorporate a competitor's fibre channel switch into its products. In
addition, there are risks that Sun may decide to incorporate technology other
than fibre channel switches into its products, or may experience problems
integrating our fibre channel switches with other components of its products
either of which would result in Sun failing to purchase products from us.
Together with Sun, we are currently in the final stages of testing our new
switch for use with the SAN products that Sun is developing. We cannot assure
you that Sun will be able to complete the integration of our switch with its
final SAN products, nor can we assure you that Sun will not find any material
deficiencies during this final testing


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stage. If Sun is unable to integrate our switch into its SAN products, if Sun
finds material deficiencies with our switch or if other unanticipated events
occur, our business will be adversely affected, and the price of our common
stock may decline.

In addition to the revenue we expect to generate by selling our products to Sun,
this agreement is extremely important to our business because it is viewed by
the market as a validation of our technology, our products and our ability to
service a significant original equipment manufacturer. If our relationship with
Sun were harmed in any way, it would significantly negatively impact the
market's perception of us and our products, and our revenues could be
significantly reduced.

As is generally the case with original equipment manufacturer agreements, our
agreement with Sun contains precise manufacturing quality specifications. The
agreement further contemplates that we will lower the price of our products to
Sun during the term of the agreement. If we cannot satisfy these quality and
price reduction provisions, Sun may seek an alternative supplier or could gain
access to our technology to remedy problems that we cannot correct.

If we fail to develop and maintain relationships with successful original
equipment manufacturers, we may be unable to become profitable.

To succeed in the SAN market, we will need to sell our products directly to
original equipment manufacturers. We have limited experience selling or products
to original equipment manufacturers We cannot be certain that our original
equipment manufacturer customers will continue to develop, market and sell
products that incorporate our technology, nor can we control their ability or
willingness to do so. We sell our products through original equipment
manufacturers who compete in highly competitive markets, and our success will
depend on the success of these customers. If we fail to develop and manage
relationships with original equipment manufacturers or if our customers fail to
sell our products, we may be unable to achieve profitability.

Original equipment manufacturers typically conduct significant evaluation,
testing, implementation and acceptance procedures before they begin to market
and sell products incorporating new components. This evaluation process can be
lengthy and may range from several months to over a year. In addition, the
process is complex, and we may be required to incur significant sales, marketing
and management expenses to support it. The process is becoming more complex as
we simultaneously qualify our products with multiple customers. As a result, we
may expend significant sales, marketing and managerial resources to develop
customer relationships without success or before we recognize any revenue from
these relationships. In addition, even if we are selected by an original
equipment manufacturer as a supplier, there is typically no purchase commitment
made. Thus, we cannot assure you that we will sell specified or minimum amounts
of product to any current or future original equipment manufacturer customers.

Competition in the SAN market may lead to reduced sales of our products, reduced
profits and reduced market share.

Because of the intense competition to provide components to the SAN market, our
business may not develop as significantly as we expect or we may lose current or
potential customers. Alternatively, our profitability could be impaired by
pricing pressure from intense competition.


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Our primary competitor in the fibre channel switch market, Brocade
Communications, currently sells more switches than we do, and its perception by
some as an early leader in the SAN market may adversely affect our ability to
develop new customer relationships. Other companies are also providing fibre
channel switches and other products to the SAN market, including Gadzoox, McData
and Vixel, and their products could become more widely accepted than ours. In
addition, a number of companies, including Emulex, Interphase, JNI and QLogic
are developing, or have developed, fibre channel products other than switches,
such as adapters or hubs, that compete with our products in some applications.
We anticipate that these and other companies may introduce additional fibre
channel products, including switches, in the near future. To the extent that
these companies have current supplier relationships with our potential
customers, it will be more difficult for us to win business from these potential
customers. If fibre channel technology gains wider market acceptance, it is
likely that an increasing number of competitors will begin developing and
marketing fibre channel products. Some of the companies that produce or may
produce competitive fibre channel products have substantially greater resources,
greater name recognition and access to larger customer bases than we do. As a
result, our competitors may succeed in adapting more rapidly and effectively to
changes in technology or the market. If we fail to compete effectively, it would
prevent us from generating sufficient sales to allow us to attain profitable
operations.

Our revenue will be materially reduced as a result of the warrant we granted to
Sun Microsystems.

As part of our agreement with Sun, we granted a warrant to Sun to purchase up to
1.5 million shares of our common stock at an exercise price of $7.30 per share.
In order for the warrant shares to vest, Sun must purchase products from us. The
warrant shares are earned at the rate of one share for each $67.00 of revenue we
receive from Sun through September 30, 2002. In each period in which the warrant
shares are earned, a non-cash sales discount will be recorded. The amount of the
non-cash sales discount will be the fair value of the warrant shares which are
earned in the period. Fair value of the warrant shares will be calculated by
using the Black-Scholes option pricing model. The primary component in the
Black-Scholes calculation is the value of our common stock at that time. The
value of the warrant shares, and the corresponding sales discount, increases as
our stock price increases. Conversely, the value of the warrant shares, and the
corresponding sales discount, decreases as our stock price decreases. Since the
price of our stock cannot be estimated, it is not possible to estimate the
amount of the non-cash sales discount that could be recorded, but it could be
significant. For example, on December 31, 1999, the closing price of our stock
was $67.875. The value of a warrant share was $65.80 based on the Black-Scholes
option pricing model. This means that for each $67.00 in gross revenue to Sun,
we would record a non-cash sales discount of $65.80. Depending on our stock
price, this sales discount could cause us to report a negative gross margin on
sales to Sun.

None of the warrant shares will vest until we have received a total of
$10,000,000 in revenue from Sun. During this period, any warrant shares earned
in one quarter will be revalued in subsequent quarters using the then-current
Black-Scholes option pricing model, and an additional non-cash sales discount
will be recorded if the value of the warrant shares increases or a non-cash
sales credit will be recorded if the value of the warrant shares decreases. In
the quarter in which we achieve an aggregate of $10,000,000 in revenues from
Sun, we will perform a final Black-Scholes calculation for the warrant shares
earned through the end of that quarter, which will result in a final adjustment
to the non-cash sales discount. Thereafter, warrant shares will


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vest as they are earned, and we will record a non-cash discount quarterly based
on the Black-Scholes calculation, as described above. No subsequent revaluations
will be recorded.

The market for SANs and for our products may be impaired if sufficient
interoperability is not achieved and maintained.

Given that organizations want products that they purchase from different vendors
to work together, the ability of the various components that comprise a SAN,
such as adapter cards, hubs and switches, to interoperate is an important factor
in the development of the SAN market. Currently, manufacturers of these various
components have not established a complete interoperability standard and may
never do so. If manufacturers of fibre channel SAN products do not manufacture
products that interoperate with the products of other manufacturers, the
development of the SAN market may be limited. In addition, if interoperability
standards are not agreed upon, our products could fail to achieve the desired
level of market acceptance because potential customers may believe that a
competitor's products represent the standard that will more likely prevail.

In addition, our products are designed to conform to the fibre channel
interconnect protocol and other industry standards. There is a risk that fibre
channel, or the other standards we have employed, may not be widely adopted, and
competing standards may emerge that will be preferred by original equipment
manufacturers or end-users. If end-users and original equipment manufacturers do
not adopt the standards we have adopted for our products, our growth may be
limited.

Since we have entered the SAN business recently, we cannot reliably predict our
operating requirements.

Our inability to accurately anticipate our future operating results could cause
us to incur unnecessary expenses or to forego opportunities because we may not
take sufficient steps to support growth. Moreover, most of our expenses are
fixed in the short-term or incurred in advance of receipt of corresponding
revenue. As a result, we may not be able to decrease our spending to offset any
unexpected shortfall in our revenues. We have only recently begun marketing our
products to the SAN market and do not have meaningful historical results upon
which to base our forecasts. If we are unable to forecast our operating
requirements, our results of operations could be negatively impacted.

If we are unable to develop new and enhanced products that meet customer needs
and achieve widespread market acceptance, our results of operations could be
negatively impacted.

The data storage markets are subject to rapid technological change, including
changes in customer requirements, frequent new product introductions and
enhancements and progressing industry standards. Our success depends in part on
our ability to keep pace with technological developments and emerging industry
standards. We must also respond to developing customer requirements by enhancing
our current products and developing and introducing new products. There is a
risk that if we fail to anticipate or respond rapidly to advances in technology
by adapting our products appropriately, our products could become obsolete. If
this occurs, our business could be adversely affected. As we introduce new or
enhanced products, we will also


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need to manage successfully the transition from older products to minimize
disruption in our customers' ordering patterns, to avoid excessive levels of
older product inventories and to ensure that enough supplies of new products can
be delivered to meet our customers' demands. If we fail to develop and introduce
successfully new products and product enhancements, our revenue would be
reduced, or we could incur substantial charges.

Since our business is dependent on a small number of customers, the loss of any
one of them will materially reduce our revenues.

We expect to derive a substantial portion of our revenue from original equipment
manufacturers. To date, we have agreements with only eleven original equipment
manufacturers, and anticipate that a small number of customers will account for
a significant portion of our future revenues. In 1998 sales from two customers
accounted for 72% of total revenues. In 1999 sales from four customers accounted
for 73% of total revenues. Our agreements with original equipment manufacturers
do not provide any assurance of future sales to these customers. Original
equipment manufacturers can stop purchasing and marketing our products at any
time and our agreements are not exclusive and do not require any minimum
purchases. If we lose any significant customers or if a significant customer
materially reduces its purchases of our products, our revenues might decline.

New products we develop may contain undetected hardware and software errors,
which could require significant expenditures of time and money to correct, harm
our relationships with existing customers, and negatively impact our reputation
in the industry.

Like other products as complex as ours, our SAN switches may contain undetected
hardware or software errors when we first introduce new products or release new
versions of existing products. Despite our testing and quality control efforts,
we anticipate that errors may be found from time to time in our new or enhanced
products after commercial introduction. In addition, our products are combined
with products from other vendors. As a result, when problems occur, it may be
difficult to identify the source of the problem. If we are unable to rapidly
correct any errors, it could result in the following consequences, among others:

  . delay or loss of market acceptance of our products;

  . significant warranty or other liability claims;

  . diversion of engineering and other resources from product development
    efforts;

  . significant customer relations problems;

  . loss of credibility in the market; and

  . inability to sell our products until any errors are corrected.

Moreover, the occurrence of hardware and software errors, whether caused by our
products or another vendor's SAN products, could delay or prevent the
development of the SAN market. Our growth depends on our SAN products and if any
of the above events occur, our business could be seriously harmed.


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If our subcontractors do not meet our manufacturing needs, we may not be able to
produce and sell our products.

We subcontract a majority of our production activities, including the
manufacture, assembly and testing of our products. We currently depend upon LSI
Logic for the manufacture of our application specific integrated circuits, or
ASICs, and Pemstar for the manufacture and assembly of our switch products. We
depend on these and other subcontractors to deliver high-quality products in a
timely manner, but we cannot assure you that they will. We currently do not have
a long-term supply contract with any of our subcontractors. Our subcontractors
are not obligated to supply products to us for any specific period, or in any
specific quantity, except as may be provided in a particular purchase order. We
generally place orders with our subcontractors between one and three months
before scheduled delivery of products to our customers. Accordingly, if we
inaccurately forecast demand for our products, we may be unable to obtain
adequate manufacturing capacity from our subcontractors to meet our customers'
delivery requirements, or we may accumulate excess inventories. Poor performance
by one of our subcontractors would have a material adverse effect on our
business until we find an alternate subcontractor. We cannot assure you that we
would be able to find an alternate subcontractor to deliver quality products at
an acceptable price. If we experience problems with one of our subcontractors,
our business could be materially adversely affected.

In addition, future growth may cause us to increase the orders to our
subcontractors. If this happens, we may not be able to accurately forecast our
needs or manage our relationship with our subcontractors during the transition.
Significant increases in the volume of product we order will also place
increased demands on our subcontractors, including the need to secure adequate
supplies of the components needed for our products and to successfully begin
large scale production of a new line of products. Frequently, manufacturers
encounter delays or difficulties in beginning volume production of new product
lines. If we or our subcontractors are not able to effectively manage the
anticipated increase in production volumes, our business could suffer.

Our dependence on a limited number of suppliers and the possible unavailability
of some key components may prevent us from being able to produce our products.

Some of the components we use in our products are available only from a single
supplier, or from a limited number of suppliers. For example, we purchase ASICs
and microprocessors from single sources, and power supplies and other specific
electronic components used in our products from limited sources. Other
components may occasionally be in short supply or temporarily be available from
only a single supplier. The following factors could each have a material adverse
effect on our ability to obtain components for our products:

  . scarce quantities of components;

  . a reduction or interruption in component supply;

  . a disruption of existing supplier relationships;

  . an inability to develop alternative sources; and


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  . a significant increase in the price of components.

If we are unable to buy components on a timely basis, we will not be able to
produce our products.

If our business grows, it will place increased demands on our management,
operational and production capabilities that we may not be able to adequately
address. If we are unable to meet these increased demands, our business will be
harmed.

Unless we manage our growth effectively, we may make mistakes in operating our
business, such as inaccurate sales forecasting and material planning. Future
growth of our operations may place significant demands on our management,
operational and production resources. In order to manage growth effectively, we
must implement and improve our operational systems, procedures and controls on a
timely basis. If we cannot manage growth effectively, our business could suffer.

If we fail to comply with evolving regulatory approvals or government
regulations or the emerging fibre channel standard, we may be unable to sell our
products.

If we fail to comply with evolving regulatory approvals or government
regulations, we may be unable to sell our products. Similarly, if we fail to
comply with the emerging fibre channel standard, we may be unable to sell our
products. Our products must comply with various regulations and standards
defined by the Federal Communications Commission and Underwriters Laboratories
in the United States. Internationally, products that we develop will also be
required to comply with standards established by authorities in various
countries.

We expect our quarterly revenues and operating results to fluctuate for a number
of reasons, which could cause our stock price to fluctuate.

Our quarterly revenues and operating results have varied significantly in the
past and are likely to vary significantly in the future due to several factors.
The primary factors that may affect our quarterly results include the following:

  . the effect of the warrant granted to Sun Microsystems;

  . timing, size and terms of customer orders;

  . changes in customer buying patterns;

  . uncertainties associated with the introduction of any new product or
    product enhancement;

  . the timing of the announcement and introduction of new products by us or
    our competitors;

  . the mix of our products sold and the mix of distribution channels through
    which our products are sold;

  . deferrals of customer orders in anticipation of new products, services or
    product enhancements introduced by us or our competitors;

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  . technological developments affecting the data communication network
    market; and

  . the overall strength of the economy.

As a result of the variability in our operating results, our stock price has
fluctuated and may continue to fluctuate in the future. It is likely that in
some future period our operating results will be below your expectations or
those of public market analysts. If our operating results are lower than
expected, our stock price could decline.

The market price of our stock may be volatile.

Like other technology companies, our stock price may be volatile and could drop
substantially. In addition to changes in our stock price resulting from
operating results, our stock price may fluctuate due to the following factors:

  . changes in financial estimates by securities analysts;

  . changes in market valuations of other technology companies;

  . gain or loss of significant original equipment manufacturer customers;

  . short-selling of our common stock;

  . announcements of business developments by us or our competitors;

  . public perception regarding fibre channel's market status;

  . developments or disputes concerning proprietary rights;

  . technological innovations or newly introduced products;

  . general conditions in the data communications network industry and the
    economy; and

  . comments about us or our markets posted on the internet.

Loss of key personnel or the inability to hire additional qualified personnel
would negatively impact our business.

The loss of the services of any of our key management employees, our inability
to attract and retain qualified personnel or delays in hiring required
personnel, particularly engineers and sales personnel, could delay the
development and introduction of, and negatively impact our ability to sell, our
products. In addition to our key management personnel, our success depends on
our ability to attract and retain highly skilled managerial, engineering, sales
and marketing and other personnel. Competition for these personnel is intense.
In recent years, there has been great demand for qualified skilled and unskilled
employees in the Minneapolis area, where our main operations are located, and in
other areas where we operate. There is a risk that we will be unsuccessful in
attracting and retaining the personnel we need for our business.


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Our business is dependent on our intellectual property, and our inability to
protect our intellectual property could negatively affect our ability to
compete.

Our success will depend on our ability to protect our intellectual property
rights. To establish and protect our intellectual property rights, we rely on a
combination of patent, copyright, trademark and trade secret laws and
restrictions on disclosure. We also enter into confidentiality or license
agreements with our consultants, customers and corporate partners. We cannot be
certain that the steps we take to protect our intellectual property will
adequately protect our proprietary rights, or that others will not independently
develop or otherwise acquire equivalent or superior technology. In addition, the
laws of some of the countries in which our products are or may be sold may not
protect our proprietary rights as fully as the laws of the United States.

We may be a party to intellectual property litigation, which may result in
significant costs and be time consuming.

In the future, we may be a party to intellectual property litigation, either to
protect our intellectual property or as a result of an alleged infringement of
others' intellectual property. Any litigation or dispute, regardless of its
success, would likely result in substantial costs and be time consuming. An
adverse determination could:

  . subject us to significant liabilities to third parties;

  . invalidate our proprietary rights;

  . require us to seek licenses from or pay royalties to third parties;

  . require us to develop appropriate alternative technology; or

  . require us to stop using the challenged intellectual property or stop
    selling our products that incorporate it.

Any of these events could have a material adverse effect on our business,
financial condition and results of operations.

Because of competitive pricing pressures, the average price of our products may
decline, resulting in a decrease in our revenues and gross margins.

We anticipate that the average price of our products will decrease in the future
in response to competitive pricing pressures and changes in product mix or other
factors. If we are unable to offset these decreases by increasing our sales
volumes, our revenues will decline. In addition, to maintain our gross margins,
we must develop and introduce new products and product enhancements, and we must
continue to reduce the manufacturing cost of our products. If we fail to do
this, our business could suffer.


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We may not be successful in our international sales activities, which could
adversely affect our growth.

Our international sales will be limited if we are unable to establish and
maintain relationships with international distributors and original equipment
manufacturers. Even if we increase our international sales efforts, we cannot be
certain that we will increase demand for our products in these markets. Our
international operations are subject to a number of risks, including:

  . longer sales cycles;

  . difficulty in collecting accounts receivable;

  . political and economic instability;

  . reduced protection of intellectual property rights;

  . protectionist laws and business practices that favor local competition; and

  . dependence on local vendors.

To date, none of our international revenues and costs has been denominated in
foreign currencies. As a result, an increase in the value of the U.S. dollar
relative to foreign currencies could make our products more expensive and
therefore less competitive in foreign markets. A portion of our international
revenues may be denominated in foreign currencies in the future, which would
subject us to risks associated with fluctuations in those foreign currencies.

Our shareholder rights plan, articles of incorporation and Minnesota law could
make it more difficult for a third party to acquire us and may prevent our
shareholders from recognizing a premium on our stock.

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Our shareholder rights plan and provisions of our articles of incorporation and
of the Minnesota Business Corporation Act may make it more difficult for a third
party to acquire us, even if doing so would allow our shareholders to receive a
premium over the prevailing market price of our shares. Our shareholder rights
plan and those provisions of our articles of incorporation and Minnesota law are
intended to encourage potential acquirers to negotiate with us and allow our
board of directors the opportunity to consider alternative proposals in the
interest of maximizing shareholder value. In addition, our stock option
agreements provide for acceleration of vesting of stock options granted to our
officers and employees upon a change of control of Ancor. To the extent that a
potential acquiror is interested in us because of our human capital, this
acceleration of vesting will make us less attractive because key employees may
not be motivated to remain with the new entity following a change of control.
However, such provisions may also discourage acquisition proposals or delay or
prevent a change in control, which could harm our stock price.

We may not meet our future capital needs, limiting our ability to grow.

We may require additional capital to support our operations in the future.
Additional capital may be unavailable, or available only on unfavorable terms.
Any additional equity financings may be dilutive to purchasers in this offering.
Any debt financing may involve restrictive covenants that could limit how we
conduct our business or limit our ability to pay dividends. Failure to secure
additional financing if and when needed could adversely affect our operations.
If we are unable to raise additional capital, we would be required to delay,
scale back, or eliminate market expansion activities and research and
development on existing or new products, or cease operations entirely.

We have a legal proceeding pending which, if decided against us, could require a
substantial cash payment.

We have been sued in Hennepin County district court in the State of Minnesota by
an entity with which we were negotiating a lease. We intend to defend this suit
vigorously. However, the litigation process is inherently uncertain and we may
not prevail. Our defense of this litigation, regardless of its outcome, has and
will continue to consume management and financial resources. If we do not
prevail, we could be subject to material financial liabilities.

Our business may be harmed by class action litigation due to the volatility of
our stock price.

In the past, parties have brought securities class action litigation against a
company after periods of volatility in the market price of the company's
securities. We were a defendant in a consolidated class action captioned In re
Ancor Communications, Inc. Securities Litigation, Case No. 97-CV-1696 (D. Minn.)
which alleged that we violated the federal securities laws. We settled the
lawsuit in November 1998 and the district court dismissed it in February 1999.
Under the terms of the settlement, a fund was created in the amount of
$1,650,000. We paid $250,000 of the total settlement and our insurer paid the
remaining $1,400,000. We may be the target of similar litigation in the future.
Additional securities litigation could result in substantial costs and divert
our management's attention and resources.


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Future sales of our common stock could adversely affect our stock price.

Future sales of substantial amounts of our common stock in the public market, or
the perception that these sales could occur, could adversely affect the market
price of our common stock. As of December 31, 1999, we had outstanding
28,506,172 shares of common stock, plus 3,857,650 shares of common stock
reserved for issuance upon exercise of outstanding options, 1,565,111 of which
are currently exercisable, and 1,562,113 shares of common stock reserved for
issuance upon exercise of outstanding warrants, 62,113 of which are currently
exercisable. All of the outstanding shares of our common stock are either freely
saleable or saleable under currently effective registration statements.


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