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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,
2001, of which this exhibit forms a part.

Our success depends largely on sales of
high-priced laboratory instruments.

Historically, we derived most of our revenues
from the sale of high-priced urinalysis workstations. Relatively
modest declines in unit sales or gross margins for this product
line could diminish our revenues and profits.

We are in the process of introducing a
significantly upgraded workstation later this year on a new
operating platform.

This transition is both in response to the
changing market needs and to the technical obsolescence of key
components in our current product design. We have made end of
life buys for many of these components and have initiated
sustaining engineering projects to identify alternative sources
for others. Our ability to build new systems of the old design
is finite. The failure to successfully and timely complete this
transition to the new workstation would have an adverse affect
on new system sales. As with any new platform introduction, the
desirability of the older system will fall off and our ability
to move the remaining inventory will become problematic.

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 certain models of our urinalysis workstations. 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.

Roche Diagnostics has exercised their right to
terminate in 2003 the contracts relating to the supply of
CHEMSTRIP/ IRIStrip urine test strips and related urine test
strip reader. Roche will continue to supply test strips and
replacement readers to our installed base of workstations for
six years after termination of these contracts, but they will
not supply strips or readers for new workstation placements. We
believe that we can successfully phase out their strips and
readers without interruption in the sale of our workstations.
However, the failure to successfully and timely complete this
task would have a material adverse affect on our instrument
sales and the revenue growth for system supplies and service.
After termination, we will be permitted to modify our
workstations to accommodate other test strip readers.

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,





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if we are unable to replace unavailable
components in the future, we are likely to experience a decrease
in instrument 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 our urinalysis workstation, 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 that 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

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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 involves complex legal and factual questions.
Therefore, we can make no assurance that claims under patents
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
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

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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.


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.                                                                                                      

Additionally, in December 1999, the Board of
Directors of IRIS approved and adopted a shareholders rights
plan. Under the terms of the plan, each shareholder of record at
the close of business on February 7, 2000 will receive
rights to purchase shares of a new Series C Preferred
Stock. Each share of Series C Preferred Stock would be the
economic equivalent of 1,000 shares of IRIS Common Stock. The
Company currently has approximately 10.4 million
outstanding shares of common stock. The rights will be
exercisable only if a person or group acquires 20% or more of
the IRIS Common Stock, or announces a tender offer for 20% or
more of the IRIS Common Stock, without board approval. If the
rights are triggered, all stockholders (except the hostile
party) will be entitled to purchase shares of the Series C
Preferred Stock at a price based on a substantial discount from
the market price of the IRIS Common Stock. The Board of
Directors may terminate the plan at any time or redeem the
rights prior to their becoming exercisable.

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 commercial umbrella policy with an additional
aggregate coverage of $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 comply with Federal Drug Administration
regulations governing manufacturing practices could hamper our
ability to defend against product liability lawsuits.

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