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                                                                      Exhibit 99

                              CAUTIONARY STATEMENT

         Forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "PSLRA") are included in our Form 10-K. The
words or phrases "believes," "may," "will," "expects," "should," "continue,"
"anticipates," "intends," "will likely result," "estimates," "projects" or
similar expressions identify forward-looking statements in our Form 10-K and in
our future filings with the Securities and Exchange Commission, in our press
releases, in our presentations to securities analysts or investors, and in oral
statements made by or approved by an executive officer of Diametrics Medical,
Inc. Forward-looking statements involve risks and uncertainties that may
materially and adversely affect our business, results of operations, financial
condition or prospects, and may cause our actual results to differ materially
from historical results or the results discussed in the forward-looking
statements.

         You should consider carefully the following cautionary statements if
you own our common stock or are planning to buy our common stock. We intend to
take advantage of the "safe harbor" provisions of the PSLRA by providing this
discussion. We are not undertaking to address or update each factor in future
filings or communications regarding our business or results except to the extent
required by law.


WE ARE AT AN EARLY STAGE OF COMMERCIALIZATION WITH LIMITED OPERATING HISTORY

         Founded in 1990, we were engaged primarily in the research, development
and testing of, and the development of manufacturing capabilities for, the
IRMA(R) (Immediate Response Mobile Analysis) System and the Paratrend(R) 7 until
1995. Our marketing efforts began for both products during 1994. We have limited
operating history upon which an evaluation of our prospects can be made. Our
prospects must be considered in light of the risks, expenses and difficulties
frequently encountered in establishing a new business in the evolving,
heavily-regulated medical device industry, which is characterized by an
increasing number of entrants, intense competition and a high failure rate.


WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT FUTURE LOSSES

         We have only recently begun to generate revenues and have incurred net
operating losses since our inception. We expect to incur substantial net
operating losses at least through 1999. We cannot assure you that we will ever
generate substantial revenues or achieve profitability.


OUR SUCCESS DEPENDS UPON MARKET ACCEPTANCE OF NEW TECHNOLOGY

         Our success depends upon acceptance of our products by the medical
community as reliable, accurate and cost-effective. Our point-of-care blood
testing and monitoring devices represent a new practice in critical or stat
blood testing, which is currently performed primarily by central and stat
laboratories of hospitals or by independent commercial laboratories. Although
professional awareness of point-of-care blood testing is increasing, most acute
care hospitals have already installed expensive blood testing instruments for
use in their central and stat laboratories and may be reluctant to change
standard operating procedures or incur additional capital expenditures for new
blood analysis equipment. In addition, the limited number of blood analytes that
can be analyzed on our products may cause certain hospitals not to consider
them. We are unable to predict how quickly, if at all, our products will be
accepted by the medical community or, if accepted, predict the volume of our
products or the related disposable cartridges and sensors we can expect to sell.


WE FACE SIGNIFICANT INDUSTRY COMPETITION AND RISK OF PRODUCT OBSOLESCENCE

         The medical technology industry is characterized by rapidly evolving
technology and intense competition. We are aware of one other commercially
available hand-held point-of-care blood analysis system, which is

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manufactured and marketed by i-STAT Corporation, but we expect that
manufacturers of central and stat laboratory testing equipment will also develop
new products to maintain their revenues and market share. Many of our
competitors have substantially greater capital resources, research and
development staffs, and facilities than we do, and many of these companies also
have greater experience in research and development, obtaining regulatory
approvals, manufacturing, and sales and marketing. We cannot assure you that our
competitors will not succeed in developing or marketing technologies and
products that are more effective or less expensive than ours that could render
our products obsolete or noncompetitive. Although we believe that our products
may offer certain technological advantages over our competitors' current
products, earlier entrants in the market in a therapeutic area often obtain and
maintain significant market share. Our product pricing is competitive with other
point of care suppliers and is, in general, slightly higher than prices of
existing high volume central and near patient labs operating near capacity, but
which lack the convenience and turnaround time of point-of-care testing. In the
future, we may experience competitive pricing pressures that may cause a
decrease in unit prices and sales levels.


WE HAVE LIMITED MANUFACTURING EXPERIENCE

         We must manufacture our products in compliance with regulatory
requirements, in sufficient quantities and on a timely basis, and still maintain
product quality and acceptable manufacturing costs. Our products consist of two
principal components: portable, microprocessor-based instruments and disposable
sensors. We have limited experience producing our products in large commercial
quantities. Although we believe that we will be able to achieve and maintain
product accuracy and reliability when producing in large quantities, on a timely
basis and at an acceptable cost, we cannot assure you that we will be able to do
so. Also, product design changes, equipment failures and manufacturing process
changes may disrupt our existing operations and impact sales.


WE DEPEND ON PATENTS AND PROPRIETARY TECHNOLOGY, WHICH WE MAY NOT BE ABLE TO
PROTECT

         Our success will depend in part on our ability to obtain patent
protection for our products and processes, to preserve our trade secrets and to
operate without infringing the intellectual property rights of others. The
patent positions of medical device companies are uncertain and involve complex
and evolving legal and factual questions. We cannot assure you that any of our
pending or future patent applications will result in issued patents, that any
current or future patents will not be challenged, invalidated or circumvented,
that the scope of any of our patents will exclude competitors or that the patent
rights granted to us will provide us any competitive advantage. In addition, we
cannot assure you that our competitors will not seek to apply for and obtain
patents that will prevent, limit or interfere with our ability to make, use or
sell our products either in the United States or in international markets.
Further, the laws of certain foreign countries may not protect our intellectual
property rights to the same extent as do the laws of the United States.

         In addition to patents, we rely on trade secrets and proprietary
knowledge that we seek to protect, in part, through confidentiality agreements
with employees, consultants and others. We cannot assure you that our
proprietary information or confidentiality agreements will not be breached, that
we will have adequate remedies for any breach, or that our trade secrets will
not otherwise become known to or independently developed by competitors.


WE MAY FACE INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS WHICH WOULD BE COSTLY TO
RESOLVE

         There has been substantial litigation regarding patent and other
intellectual property rights in the medical device industry and our competitors
may resort to intellectual property litigation as a means of competition.
Intellectual property litigation is complex and expensive and the outcome is
difficult to predict. We cannot assure you that we will not become subject to
patent infringement claims or litigation. Litigation or regulatory proceedings
may also be necessary to enforce our patents or other intellectual property
rights. We may not always have the financial resources to assert patent
infringement suits or to defend ourselves from claims. An adverse result in any
litigation could subject us to liabilities to, or require us to seek licenses
from or pay royalties to, others that may be

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substantial. Furthermore, we cannot assure you that the necessary licenses would
be available to us on satisfactory terms, if at all.


OUR SUCCESS MAY DEPEND IN PART ON UNCERTAIN GOVERNMENT HEALTH CARE POLICIES AND
REIMBURSEMENT BY THIRD PARTIES

         The willingness of hospitals to purchase our products may depend on the
extent to which hospitals limit their own capital expenditures due to existing
or future cost reimbursement regulations. In addition, sales volumes and prices
of our products in certain markets will depend in part on the level of
reimbursement to hospitals for blood analysis from third-party payors, such as
government and private insurance plans, health maintenance organizations and
preferred provider organizations. Third-party payors are increasingly
challenging the pricing of medical procedures they consider unnecessary,
inappropriate or not cost-effective. We cannot assure you that current
reimbursement amounts, if any, will not be decreased in the future, and that any
decrease will not reduce the demand for or the price of our products. Any
federal or state health care reform measures could adversely affect the price of
medical devices in the United States, including our products, or the amount of
reimbursement available. We cannot predict whether any reform measures will be
adopted or what impact they may have on us.


WE MUST OBTAIN REGULATORY APPROVAL FOR NEW PRODUCTS WE DEVELOP

         Human diagnostic products are subject to rigorous pre-clinical and
clinical testing mandated by the United States Food and Drug Administration (the
"FDA") and comparable agencies in other countries and, to a lesser extent, by
state regulatory authorities. We have obtained pre-market notification
clearances under Section 510(k) of the Food, Drug and Cosmetic Act (the "FDC
Act") to market our IRMA SL System to test blood gases, electrolytes (i.e.,
inorganic compounds including sodium, potassium, chloride and ionized calcium),
blood urea nitrogen and hematocrit (i.e., the concentration of red blood cells)
in whole blood in hospital laboratories and at the point of care, and to market
the Paratrend 7 and Paratrend 7+ to monitor blood gases and temperature. 
Additional pre-market notification clearances were obtained in late 1997 to
market Neotrend for blood gas monitoring of critically ill babies, and in early
1998 for the addition of glucose testing capability to the IRMA SL system. A
Section 510(k) clearance is subject to continual review, and later discovery of
previously unknown problems may result in restrictions on marketing or
withdrawal of the product from the market. Our long-term business strategy
includes development of cartridges and sensors for performing additional blood
and tissue chemistry tests, and any new tests will be subject to the same
regulatory process. We cannot assure you that we will be able to develop
additional products or uses or that we will obtain the necessary clearances for
new products and uses on a timely basis or at all.

         We also market our products in several foreign markets. Requirements 
vary widely from country to country, ranging from simple product registrations
to detailed submissions such as those required by the FDA. Our manufacturing
facilities are also subject to FDA inspection on a periodic basis and we and our
contract manufacturers must demonstrate compliance with current Good
Manufacturing Practices promulgated by the FDA. Violations of the applicable
regulations at our manufacturing facilities or the manufacturing facilities of
our contract manufacturers may prevent us from marketing of our products.

OUR PRODUCTS AND THE TECHNICIANS AUTHORIZED TO USE THEM MAY BE RESTRICTED BY THE
CLINICAL LABORATORY IMPROVEMENT ACT OF 1988

         Our products are affected by the Clinical Laboratory Improvement Act of
1988 ("CLIA") which has been implemented by the FDA. This law is intended to
assure the quality and reliability of all medical testing in the United States
regardless of where tests are performed. The regulations require laboratories
performing blood chemistry tests to meet specified standards in the areas of:

         o        personnel qualification,

         o        administration,

         o        participation in proficiency testing,


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         o        patient test management,

         o        quality control,

         o        quality assurance, and

         o        inspections.

         The regulations have established three levels of regulatory control
based on test complexity - "waived," "moderate complexity" and "high
complexity." Although the tests performed by our products have been categorized
as moderate complexity tests, we cannot assure you that our products will not be
placed in a more restrictive category. Personnel standards for high complexity
tests are more rigorous than those for moderate complexity tests, requiring more
education and experience. If our products are recategorized as high complexity
tests, our ability to successfully market them to hospitals or other potential
buyers may suffer. We cannot assure you that the CLIA regulations or various
state licensing requirements for technicians will not have a material adverse
effect on our financial condition or results of operation.


OUR PRODUCTS MAY EXPOSE US TO COSTLY LITIGATION

         We may be exposed to product liability claims if a patient is adversely
affected by our products. We maintain a general insurance policy which includes
coverage for product liability claims. The policy is limited to a maximum of
$1,000,000 per product liability claim and an annual aggregate policy limit of
$2,000,000. We also carry umbrella liability insurance which provides coverage
up to $10,000,000. We cannot assure you that our existing insurance coverage
limits are adequate to cover any liabilities we might incur or that insurance
will continue to be available on commercially reasonable terms, if at all.


WE DEPEND ON CONTRACT MANUFACTURERS AND SUPPLIERS FOR KEY COMPONENTS OF OUR
PRODUCTS

         Our monitors and IRMA analyzers are manufactured for us by single
vendors, generally from off-the-shelf components. A few components are supplied
by a single source and manufactured to our specifications. Although we believe
that we could find alternative vendors, any interruption in supply could have a
material and adverse effect on our ability to manufacture our products, and our
financial condition and results of operations.


INTERNATIONAL OPERATIONS WILL EXPOSE US TO ADDITIONAL RISKS

         We market a majority of our products through distributors in
international markets, subject to receipt of required foreign regulatory
approvals. We cannot assure you that international distributors for our products
will devote adequate resources to selling our products. Doing business outside
of the United States also exposes us to various risks that could have a material
and adverse effect on our ability to market our products internationally,
including:

         o        changes in overseas economic and political conditions,

         o        currency exchange rate fluctuations,

         o        foreign tax laws, or

         o        tariffs or other trade regulations.

         Our business is also expected to subject us and our representatives,
agents and distributors to laws and regulations of the foreign jurisdictions in
which they operate or our products are sold. We may depend on foreign
distributors and agents for compliance and adherence to foreign laws and
regulations. We have no control over most of these risks and may be unable to
anticipate changes in international economic and political conditions, and may
be unable to alter our business practices in time to avoid any adverse effects.


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CONCENTRATION OF OWNERSHIP MAY GIVE SOME SHAREHOLDERS SUBSTANTIAL INFLUENCE AND
MAY PREVENT OR DELAY A CHANGE IN CONTROL

         As of December 31, 1998, directors, executive officers and principal
shareholders, and certain of their affiliates, owned beneficially approximately
43% of our outstanding common stock, assuming all vested stock options, stock
purchase warrants and convertible debt held by them are exercised or converted.
These shareholders, may be able to exercise substantial influence over all
matters requiring shareholder approval, including the election of directors, and
approval of significant corporate transactions. This concentration of ownership
could also have the effect of delaying, deferring or preventing a change in
control of Diametrics Medical, Inc.

OUR CHARTER DOCUMENTS AND MINNESOTA LAW MAY DISCOURAGE AN ACQUISITION OF
DIAMETRICS MEDICAL, INC.

         Provisions of our articles of incorporation, including our ability to
issue up to 5,000,000 shares of preferred stock without any further vote or
action by the shareholders, our bylaws and Minnesota law could make it more
difficult for a third party to acquire us, even if doing so would be beneficial
to our shareholders.

WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS

         We expect that our existing capital resources should enable us to
maintain our current and planned operations through 1999. Nonetheless, our
capital requirements depend on many factors, including the rate of market
acceptance of our products, the level of resources we devote to expanding our
marketing organization and manufacturing capabilities, our research and
development activities, the availability of financing for capital acquisitions
and other factors. We cannot accurately predict the timing and amount of our
capital needs. If capital requirements vary materially from those currently
planned, we will require additional capital. Issuing additional shares of
capital stock may be dilutive to our shareholders, and debt financing, if
available, may involve restrictive covenants.

OUR PRODUCTS AND SYSTEMS MAY BE SUBJECT TO YEAR 2000 PROBLEMS

         We have identified teams to review our products, our internal
financial, manufacturing and other process control systems, and our interface
with major customers and suppliers in order to assess and remediate Year 2000
issues. Based upon our assessments to date, we believe we will not experience
any material disruption in our operations as a result of Year 2000 problems.
However, if major suppliers, including those providing component parts,
electricity, communications and transportation services, experience difficulties
resulting in disruption of critical supplies or services to us, a shutdown of
our operations could occur for the duration of the disruption. We are working on
minimizing component supply risk by evaluating alternative suppliers in cases
where we are single-sourced, with completion of our evaluation expected by June
1999. We have not yet developed a contingency plan in the event the other
described problem scenarios arise, but we will assess the need to develop a plan
based upon the outcome of compliance areas currently under review, and the
results of remaining survey feedback from our major suppliers. Assuming no major
disruption in service from critical third party providers, we believe that we
will be able to manage the Year 2000 transition without any material effect on
our results of operations or financial position.





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