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                                                                      EXHIBIT 99

        DISCLOSURE REGARDING RISK FACTORS AND FORWARD-LOOKING STATEMENTS

        This exhibit contains a discussion of various risk factors and other
information that should be carefully considered. The risks and uncertainties
described below are not the only ones that impact International Remote Imaging
Systems, Inc. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also have an adverse impact on us. Among
other things, this exhibit contains forward-looking statements that are based on
certain assumptions about future risks and uncertainties. We believe that our
assumptions are reasonable. Nonetheless, it is likely that at least some of
these assumptions will not come true. Accordingly, our actual results will
probably differ from the outcomes contained in any forward-looking statements.
These differences could be material. Factors that could cause or contribute to
such differences include, among other things, those discussed below, as well as
those discussed elsewhere in our Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, of which this exhibit forms a part.

WE HAVE A POTENTIAL FOR CONTINUING OPERATING LOSSES.

        We have incurred net losses for the past three years. There can be no
assurance that we will be able to restore annual profitability. Furthermore, as
of July 31, 2001, we will be obligated to repay all amounts due under an
outstanding subordinated note. We currently owe $7.0 million under that note. At
maturity, we may not be capable of repaying the note and may seek to refinance
this debt obligation. There can be no assurance that we will be able to repay
the amounts owing under the note or that we will be able to successfully
refinance this debt.

OUR SUCCESS DEPENDS LARGELY ON SALES OF HIGH-PRICED LABORATORY INSTRUMENTS.

        Historically, we derived most of our revenues from the sale of two
families of high-priced instruments - The Yellow IRIS urinalysis workstations
and the PowerGene genetic analyzers. We recently entered into a letter of intent
to sell Perceptive Scientific Instruments--a division which manufactures and
markets the PowerGene genetic analyzers--and have restated our financial
information to account for PSI as a discontinued operation. Our remaining
product line, The Yellow IRIS, has list prices ranging from $100,000 to $195,000
depending on model and configuration. Relatively modest declines in unit sales
or gross margins for this product line could diminish our revenues and profits.

WE RELY ON SOME SINGLE-SOURCE SUPPLIERS FOR KEY COMPONENTS OF OUR INSTRUMENTS,
AND IF ANY OF THESE SUPPLIERS DISCONTINUE PRODUCTION OF THESE COMPONENTS, OR WE
ARE UNABLE TO REPLACE UNAVAILABLE COMPONENTS, IT COULD HARM OUR BUSINESS.

        Certain key components of our instruments are manufactured by
single-source suppliers. For example, Roche Diagnostics is the sole source for
our proprietary CHEMSTRIP/IRIStrip urine test strips and related urine test
strip readers, both used in The Yellow IRIS Models 300 and 500. Any of our
single-source suppliers could encounter production problems. If any
single-source supplier has an interruption in its production or discontinues a
key component, the volume of our instrument sales could be diminished and could
harm our business, financial condition and operating results.

        We currently use a unique multi-band image processor in The Yellow Iris
family of workstations.  The manufacturer has discontinued production of this
processor, and we plan to transition to an off-the-shelf new microprocessor.
Our failure to successfully and timely transition to another microprocessor
could have a material and adverse affect on system sales.

        In the past, single-source suppliers have discontinued their production
of key components and we have successfully replaced those discontinued
components with satisfactorily replacements components. However, if we are
unable to replace unavailable components in the future, we are likely to
experience a decrease in instrument


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sales.

THE INTENSIFYING COMPETITION WE FACE FROM BOTH ESTABLISHED ENTITIES AND NEW
ENTRIES IN THE MARKET MAY ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY.

        There are many companies with active research and development programs
both in and outside of the clinical laboratory imaging systems field. Many of
these companies have considerable experience in areas of competing interest to
us. Additionally, we cannot determine if other firms are conducting potentially
competitive research, which could result in the development and introduction of
products that are either comparable or superior to the products we sell.
Specifically, if a competitor introduces a new product that is comparable or
superior to any model of The Yellow IRIS, then our unit sales or gross margins
could be diminished. This in turn could have a material adverse effect on our
overall financial condition and operations. Further, new product introductions,
product enhancements and the use of other technologies by our competitors could
lead to a loss of market acceptance and cause a decline in sales or gross
margins.

OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT, RETAIN AND MOTIVATE MANAGEMENT
AND OTHER SKILLED EMPLOYEES.

        Our success depends in significant part upon the continued services of
key management and skilled personnel. Competition for qualified personnel is
intense and there are a limited number of people with knowledge of, and
experience in, our industry. We do not have employment agreements with most of
our key employees. However, we generally enter into agreements with our
employees regarding patents, confidentiality and related matters. We do not
maintain life insurance polices on our employees. Our loss of key personnel,
especially without advance notice, or our inability to hire or retain qualified
personnel, could have a material adverse effect on our instrument sales and our
ability to maintain our technological edge. We cannot guarantee that we will
continue to retain our key management and skilled personnel, or that we will be
able to attract, assimilate and retain other highly qualified personnel in the
future.

ANY FAILURE TO SUCCESSFULLY INTRODUCE OUR FUTURE PRODUCTS AND SYSTEMS INTO THE
MARKET COULD ADVERSELY AFFECT OUR BUSINESS.

        The commercial success of our future products and systems depends upon
their acceptance by the medical community. Our future product plans include
capital-intensive laboratory instruments. We believe that these products can
significantly reduce labor costs, improve precision and offer other distinctive
benefits to the medical research community. However, there is often market
resistance to products which require significant capital expenditures or which
eliminate jobs through automation. We can make no assurance that the market will
accept our future products and systems, or that sales of our future products and
systems will grow at the rates expected by our management.

IF WE FAIL TO MEET CHANGING DEMANDS OF TECHNOLOGY, WE MAY NOT CONTINUE TO BE
ABLE TO COMPETE SUCCESSFULLY WITH OUR COMPETITORS.

        The market for our products and systems is characterized by rapid
technological advances, changes in customer requirements, and frequent new
product introductions and enhancements. Our future success depends upon our
ability to introduce new products that keep pace with technological
developments, enhance current product lines and respond to evolving customer
requirements. Our failure to meet these demands could result in a loss of our
market share and competitiveness and could harm our revenues and results of
operations.

ANY FAILURE OR INABILITY TO PROTECT OUR TECHNOLOGY AND CONFIDENTIAL INFORMATION
COULD ADVERSELY AFFECT OUR BUSINESS.

        PATENTS. Our commercial success depends in part on our ability to
protect and maintain our automated intelligent microscopy (or AIM) and other
proprietary technology. We have received patents with respect to portions of the
technologies of AIM. However, ownership of technology patents may not insulate
us from potentially damaging competition. Patent litigation relating to clinical
laboratory instrumentation patents (like the ones we own) often involve complex
legal and factual questions. Therefore, we can make no assurance that claims
under patents



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currently held by us, or our pending or future patent applications, will be
sufficiently broad to adequately protect what we believe to be our proprietary
rights. Additionally, one or more of our patents could be circumvented by a
competitor. We believe that our proprietary rights do not infringe upon the
proprietary rights of third parties. However, third parties may assert
infringement claims against us in the future. If we are unsuccessful in our
defense against any infringement claim our patents, or patents in which we have
licensed rights, may be held invalid and unenforceable.

        TRADE SECRETS. We have trade secrets, unpatented technology and
proprietary knowledge related to the sale, promotion, operation, development and
manufacturing of our products. We generally enter into confidentiality
agreements with our employees and consultants. However, we cannot guarantee that
our trade secrets, unpatented technology or proprietary knowledge will not
become known or be independently developed by competitors. If any of this
proprietary information becomes know to third parties, we may have no practical
recourse against these parties.

        COPYRIGHTS. We claim copyrights in our software and the ways in which it
assembles and displays images. We also claim trademark rights in the United
States and other foreign countries. However, we can make no assurance that we
will be able to obtain enforceable copyright and trademark protection, nor that
this protection will provide us a significant commercial advantage.

        POTENTIAL LITIGATION EXPENSES. Offensive or defensive litigation
regarding patent and other intellectual property rights could be time-consuming
and expensive. Additionally, litigation could demand significant attention from
our technical and management personnel. Any change in our ability to protect and
maintain our proprietary rights could materially and adversely affect our
financial condition and results of operations.

WE OPERATE IN A CONSOLIDATING INDUSTRY WHICH CREATES BARRIERS TO OUR MARKET
PENETRATION.

        The healthcare industry in recent years has been characterized by
consolidation. Large hospital chains and groups of affiliated hospitals prefer
to negotiate comprehensive supply contracts for all of their supply needs at
once. Large suppliers can often equip an entire laboratory and offer these
hospital chains and groups one-stop shopping for laboratory instruments,
supplies and service. Larger suppliers also typically offer annual rebates to
their customers based on the customer's total volume of business with the
supplier. The convenience and rebates offered by these large suppliers are
administrative and financial incentives that we do not offer our customers. Our
plans for further market penetration in the urinalysis market of The Yellow IRIS
family of workstations will depend in part on our ability to overcome these and
any new barriers resulting from continued consolidation in the healthcare
industry.

SINCE WE OPERATE IN THE MEDICAL TECHNOLOGY INDUSTRY, OUR PRODUCTS ARE SUBJECT TO
GOVERNMENT REGULATION THAT COULD IMPAIR OUR OPERATIONS.

        Most of our products are subject to stringent government regulation in
the United States and other countries. These regulatory processes can be
lengthy, expensive and uncertain. Additionally, securing necessary clearances or
approvals may require the submission of extensive official data and other
supporting information. Our failure to comply with applicable requirements could
result in fines, recall or seizure of products, total or partial suspension of
production, withdrawal of existing product approvals or clearances, refusal to
approve or clear new applications or notices, or criminal prosecution. If any of
these things occur, they could harm our business. Changes in existing federal,
state or foreign laws or regulations, or in the interpretation or enforcement of
these laws, could also materially and adversely affect our business.

CHANGES IN GOVERNMENT REGULATION OF THE HEALTHCARE INDUSTRY COULD ADVERSELY
AFFECT OUR BUSINESS.

        Federal and state legislative proposals are periodically introduced or
proposed that would affect major changes in the healthcare system, nationally,
at the state level or both. Future legislation, regulation or payment policies
of Medicare, Medicaid, private health insurance plans, health maintenance
organizations and other third-party payors could adversely affect the demand for
our current or future products and our ability to sell our products on a
profitable basis. Moreover, healthcare legislation is an area of extensive and
dynamic change, and we cannot predict future legislative changes in the
healthcare field or their impact on our industry or our business.



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OUR NET OPERATING LOSS CARRYFORWARDS COULD BE REDUCED IF THERE IS A "CHANGE OF
OWNERSHIP" UNDER SECTION 382 OF THE INTERNAL REVENUE CODE.

        At December 31, 1999, we had federal net operating loss carryforwards of
approximately $17.5 million. Section 382 of the Internal Revenue Code imposes an
annual limitation on the utilization of net operating loss carryforwards based
on a statutory rate of return (usually the "applicable federal rate," as defined
in the Internal Revenue Code) and the value of the corporation at the time of a
"change of ownership" as defined by Section 382. If substantially all of our
outstanding options and warrants are exercised on or before December 31, 2000,
there will be a "change in ownership" under Section 382. Most of our currently
exercisable warrants and options are out-of-the-money, with exercise prices
ranging from $.[69 TO $7.80] per share. However, if the market price of our
common stock increases, a sufficient number selling stockholders may choose to
exercise their warrants and options. This may result in a change of ownership
under Section 382. If this set of circumstances occurs, the limitations imposed
by Section 382 could trigger a substantial write-down of our deferred tax assets
and a corresponding charge to our earnings in the relevant quarter.

WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS IN OUR CHARTER THAT COULD DELAY OR
PREVENT AN ACQUISITION OF OUR COMPANY, EVEN IF SUCH AN ACQUISITION WOULD BE
BENEFICIAL TO OUR STOCKHOLDERS.

        Certain provisions of our certificate of incorporation, our bylaws and
Delaware law could, together or separately, delay or prevent a third party from
acquiring us, even if doing so might be beneficial to our stockholders. These
provisions may also limit the price that investors might be willing to pay for
shares of our common stock. Some of these provisions:

                -       establish a classified board of directors;

                -       authorize the issuance of preferred stock with rights
                        and privileges which could be senior to the common
                        stock, without prior stockholder approval;

                -       limit the right of stockholders to call a special
                        meeting of stockholders; and

                -       prohibit stockholder action by written consent.

        We also adopted a shareholders rights plan in December 1999.  The
rights are not presently exercisable.  They become exercisable only if a person
or group acquires 20% or more of our common stock, or announces a tender offer
for 20% or more of our common stock, without board approval.  If the rights are
triggered, all common stockholders (except the hostile party) will be entitled
to purchase shares of common stock (or the economic equivalent in preferred
stock) at a price based on a substantial discount from the market price of the
common stock.  The Board of Directors may terminate the plan at any time or
redeem the rights prior to their becoming exercisable.  The rights expire on
December 22, 2009.

        We also are subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, prohibits a Delaware corporation from
engaging in any of a broad range of business combinations with any "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder.

DEFECTIVE PRODUCTS MAY SUBJECT US TO LIABILITY.

        Our products are used to gather information for medical decisions and
diagnosis. Accordingly, the manufacture and sale of our products entails an
inherent risk of product liability arising from an inaccurate, or allegedly
inaccurate, test result. We currently maintain product liability insurance
coverage for up to $1.0 million per incident and up to an aggregate of $2.0
million per year. We also currently maintain a product liability umbrella policy
for coverage of claims aggregating more than $5.0 million. Although management
believes this liability coverage is sufficient protection against future claims,
there can be no assurance of the sufficiency of these policies. We have not
received any indication that our insurance carrier will not renew our product
liability insurance at or near current premiums; however, we cannot guarantee
that this will continue to be the case. In addition, any failure to



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comply with Federal Drug Administration regulations governing manufacturing
practices could hamper our ability to defend against product liability lawsuits.