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                                  EXHIBIT 99

     CAUTIONARY FACTORS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT

Diametrics Medical, Inc. (the "Company") desires to take advantage of the "safe
harbor" provisions contained in the Private Securities Litigation Reform Act of
1995 (the "Act"). Contained in this Form 10-K are statements which are intended
as "forward-looking statements" within the meaning of the Act. The words or
phrases "expects," "will continue," "is anticipated," "management believes,"
"estimate," "projects," "hope" or expressions of a similar nature denote
forward-looking statements. Those statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or from those results presently anticipated or projected. The
Company wishes to caution readers not to place undue reliance on forward-looking
statements. Readers should be advised that the factors listed below have
affected the Company's performance in the past and could affect future
performance. Those factors include, but are not limited to, the lack of, or slow
rate of, market acceptance of the Company's products; the impact of competitors'
products and pricing; the effect of changes in customer demands; the risk there
will be technical difficulties in production; and the inability of the Company
to attract and retain skilled employees in the product development and
manufacturing areas.

Other factors include the following:

EARLY STAGE OF COMMERCIALIZATION; LIMITED RELEVANT OPERATING HISTORY

The Company was founded in 1990 and until 1995 was 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. Marketing efforts began for both products during 1994. The
Company has limited operating history upon which an evaluation of its prospects
can be made. Such 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.

ABSENCE OF PROFITABILITY; ANTICIPATED FUTURE LOSSES

The Company has only recently begun to generate revenues and has incurred net
operating losses since its inception.  Net losses for the years ended
December 31, 1997, 1996 and 1995 were approximately $21,037,000, $23,575,000 and
$23,046,000, respectively.  The Company had an accumulated deficit of
approximately $101,056,000 at December 31, 1997.  The Company expects to incur
substantial net operating losses at least through 1998.  There is no assurance
that the Company will ever generate substantial revenues or achieve
profitability.

NEW TECHNOLOGY; UNCERTAIN MARKET ACCEPTANCE

The Company's success is dependent upon acceptance of its products by the
medical community as reliable, accurate and cost-effective. Because the products
are point of care blood testing and monitoring devices, they represent a new
practice in the analysis of blood analytes.  Critical or stat blood testing is
currently performed primarily by central and stat laboratories of hospitals or
by independent commercial laboratories, rather than at the point of care.
Although professional awareness of point of care blood testing is increasing,
most acute care hospitals have already installed costly benchtop blood testing
instruments for use in their central and stat laboratories and may be reluctant
to change standard operating procedures for performing blood analysis or incur
additional capital expenditures for new blood analysis equipment.  In addition,
the limited number of analytes that can be analyzed on the products may cause
certain hospitals not to consider them.  The Company is unable to predict how
quickly, if at all, the products will be accepted by members of the medical
community or, if accepted, what the utilization of disposable cartridges and
sensors may
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be. Therefore, the Company is unable to provide any assurance as to sales volume
of the products or the related disposable cartridges and sensors.

FUTURE ADDITIONAL CAPITAL REQUIREMENTS

The Company expects that its existing capital resources, warrant and stock
option exercises, future equipment financing and asset based credit
arrangements, and strategic alliances will enable the Company to maintain its
current and planned operations through 1998. Nonetheless, the Company's capital
requirements depend on numerous factors, including the rate of market acceptance
of the Company's products, the level of resources devoted to expanding the
Company's marketing organization and manufacturing capabilities, the Company's
research and development activities, the availability of financing for capital
acquisitions and other factors. The timing and amount of such capital
requirements cannot accurately be predicted. If capital requirements vary
materially from those currently planned, the Company will require additional
capital at an earlier time. The Company has no commitments for any additional
financing, and no assurance exists that any such commitments can be obtained on
favorable terms, if at all. Any additional equity financings may be dilutive to
shareholders, and debt financing, if available, may involve restrictive
covenants. The Company is also pursuing corporate strategic alliances. Such
alliances may require the Company to relinquish rights to certain of its
technologies, products or marketing territories.

HIGHLY COMPETITIVE MARKETS; RISK OF TECHNOLOGICAL OBSOLESCENCE

The medical technology industry is characterized by rapidly evolving technology
and intense competition. The Company is aware of one other commercially
available hand-held point of care blood analysis system, which is manufactured
and marketed by i-STAT Corporation ("i-STAT"). The Company expects that
manufacturers of central and stat laboratory testing equipment will also compete
to maintain their revenues and market share. Many of the companies in the
medical technology industry and manufacturers of central and stat laboratory
equipment have substantially greater capital resources, research and development
staffs and facilities than the Company. Such entities have developed, may be
developing or could in the future attempt to develop additional products
competitive with the Company's. Many of these companies also have substantially
greater experience than the Company in research and development, obtaining
regulatory approvals, manufacturing, and sales and marketing, and may therefore
represent significant competition. There can be no assurance that the Company's
competitors will not succeed in developing or marketing technologies and
products that are more effective or less expensive than those developed or
marketed by the Company or that would render the Company's technology and
products obsolete or noncompetitive. Although the Company believes that its
products may offer certain technological advantages over its competitors'
currently-marketed products, earlier entrants in the market in a therapeutic
area often obtain and maintain significant market share relative to later
entrants. In the future, the Company may experience competitive pricing
pressures that may adversely affect unit prices and sales levels.

LIMITED MANUFACTURING EXPERIENCE

The Company must manufacture its products in compliance with regulatory
requirements, in sufficient quantities and on a timely basis, while maintaining
product quality and acceptable manufacturing costs. The products consist of two
principal components: portable, microprocessor-based instruments and disposable
sensors. The Company has limited experience producing in large commercial
quantities. Although the Company believes that, based on its manufacturing
experience to date, it will be able to achieve and maintain product accuracy and
reliability when producing in the quantities required for profitable operations,
on a timely basis and at an acceptable cost, there can be no assurance that it
will be able to do so. The instruments are manufactured for the Company by
outside vendors, and there can be no assurance that such vendors will be able to
provide the Company with a sufficient quantity to meet the Company's needs.
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DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY

The Company's success will depend in part on its ability to obtain patent
protection for products and processes, to preserve its trade secrets and to
operate without infringing the proprietary rights of third parties. The validity
and breadth of claims covered in medical technology patents involves complex
legal and factual questions and, therefore, may be highly uncertain. No
assurance can be given that any patents under pending patent applications or any
future patent applications will be issued, that the scope of any patent
protection will exclude competitors or provide competitive advantages to the
Company, that any of the Company's patents will be held valid if subsequently
challenged or that others will not claim rights in or ownership to the patents
and other proprietary rights held by the Company. Furthermore, there can be no
assurance that others have not developed or will not develop similar products,
duplicate any of the Company's products or, if patents are issued to the
Company, design around such patents. In addition, whether or not the Company's
patents are issued, others may hold or receive patents which contain claims
having a scope that covers products developed by the Company. The Company also
relies upon unpatented trade secrets to protect its proprietary technology, and
no assurance can be given that others will not independently develop or
otherwise acquire substantially equivalent techniques or otherwise gain access
to the Company's proprietary technology or disclose such technology or that the
Company can ultimately protect meaningful rights to such unpatented proprietary
technology.

RISK OF PATENT LITIGATION

There has been substantial litigation regarding patent and other intellectual
property rights in the medical device industry. Litigation, which could result
in substantial cost to and diversion of effort by the Company, may be necessary
to enforce patents issued to the Company, to protect trade secrets or know-how
owned by the Company, to defend the Company against claimed infringement of the
rights of others or to determine the ownership, scope or validity of the
proprietary rights of the Company and others. An adverse determination in any
such litigation could subject the Company to significant liabilities to third
parties, could require the Company to seek licenses from third parties and could
prevent the Company from manufacturing, selling or using its products, any of
which could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company is not currently a party to any
patent litigation.

DEPENDENCE ON MANAGEMENT AND OTHER KEY PERSONNEL

The success of the Company and of its business strategy is dependent in large
part on the ability of the Company to attract and retain key management and
operating personnel. Such individuals are in high demand and are often subject
to competing offers. In addition, the Company will have an ongoing need to
expand its management personnel and support staff. The loss of the services of
one or more members of the management group or the inability to hire additional
personnel as needed may have an adverse effect on the Company.

UNCERTAINTY OF GOVERNMENT HEALTH CARE POLICY AND FUTURE REIMBURSEMENT

The willingness of hospitals to purchase the Company's products may depend on
the extent to which hospitals limit capital expenditures due to cost
reimbursement regulations, including regulations promulgated by the Health Care
Financing Administration ("HCFA"), and general uncertainty relating to
government health care policy. In addition, sales volumes and prices of the
Company's products in certain markets will be dependent in part on the level of
availability 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. There can be no assurance
that current reimbursement amounts, if any, will not be decreased in the future,
and that any such decrease will not reduce the demand for or the price of the
Company's products. Any health care reform measures adopted by the federal
government could adversely affect the price of medical devices in the United
States or the amount of reimbursement available, and consequently could be
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adverse to the Company. No prediction can be made as to the outcome of any
reform initiatives or their impact on the Company.

GOVERNMENT REGULATION AND NEW PRODUCT DEVELOPMENT

Human diagnostic products are subject, prior to clearance for marketing, 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. The Company has
obtained pre-market notification clearances under Section 510(k)
("Section 501(k)") of the Food, Drug and Cosmetic Act (the "FDC Act") to market
the IRMA SL System to test blood gases, electrolytes and hematocrit in whole
blood in hospital laboratories and at the point of care and the Paratrend 7 and
Paratrend 7+ to monitor blood gases. In early 1998 additional pre-market
notifications were obtained for the addition of glucose testing capability to
the IRMA SL System, and Neotrend for blood gas monitoring of critically ill
neonates. A 510(k) clearance is subject to continual review and later discovery
of previously unknown problems may result in restrictions on the product's
marketing or withdrawal of the product from the market. The Company's long-term
business strategy includes development of cartridges and sensors for performing
additional blood and tissue chemistry tests, and any such additional tests will
be subject to the same regulatory process. No assurance can be given that the
Company will be able to develop such additional products or uses on a timely
basis, if at all, or that the necessary clearances for such products and uses
will be obtained by the Company on a timely basis or at all, or that the Company
will not be subjected to a more extensive prefiling testing and FDA approval
process. The Company also plans to market its 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.
Manufacturing facilities are also subject to FDA inspection on a periodic basis
and the Company and its contract manufacturers must demonstrate compliance with
current Good Manufacturing Practices ("GMP") promulgated by the FDA. The Company
will be required to expend time, resources and effort in the areas of production
and quality control to ensure full technical compliance. If violations of the
applicable regulations are noted during FDA inspections of the Company's
manufacturing facilities or the manufacturing facilities of its contract
manufacturers, the continued marketing of the Company's products may be
adversely affected.

EFFECT OF CLINICAL LABORATORY IMPROVEMENT ACT OF 1988

The Company's products are affected by the Clinical Laboratory Improvement
Amendment 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 personnel qualification, administration, participation in proficiency
testing, patient test management, quality control, quality assurance and
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 the products have been categorized
as moderate complexity tests, there can be no assurance that they will continue
to be so categorized. Personnel standards for high complexity tests are more
rigorous than those for moderate complexity tests, requiring that testing
personnel have more education and experience than personnel conducting moderate
complexity tests. Any recategorization of the tests performed by the Company's
products as high complexity tests could affect the Company's ability to
successfully market them. As a result of the CLIA requirements, hospitals may be
discouraged from expanding point of care analysis and previously unregulated
testing markets, including physician office laboratories and small volume test
sites, and may be dissuaded from initiating, continuing or expanding patient
testing. There can be no assurance that the CLIA regulations or future
administrative interpretations of CLIA or various state regulations requiring
licensed technicians to operate point of care devices will not have a material
adverse effect on the Company.
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PRODUCT LIABILITY RISK; NO ASSURANCE INSURANCE IS ADEQUATE

The Company faces an inherent business risk of exposure to product liability
claims in the event that the use of its products is alleged to have resulted in
adverse effects to a patient. Although the Company has not experienced any
product liability claims to date, any such claims could have an adverse impact
on the Company. The Company maintains 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. The Company also carries umbrella liability insurance which provides
coverage up to $10,000,000. There can be no assurance that liability claims will
not exceed the coverage limits of such policies or that such insurance will
continue to be available on commercially reasonable terms or at all.
Consequently, a product liability claim or other claim with respect to uninsured
liabilities or in excess of insured liabilities could have a material adverse
effect on the Company.

DEPENDENCE ON CONTRACT MANUFACTURERS AND SUPPLIERS

The Company's instruments, both monitors and IRMA analyzers, are manufactured
for the Company by single vendors, generally from off-the-shelf components. A
few components are supplied by a single source and manufactured to the Company's
specifications. Although the Company believes that it could find alternative
vendors, any interruption in supply could have a material adverse effect on the
Company. Although the Company believes that alternative sources for key
components are available, any interruption in supply of these components could
have a material adverse effect on the Company's ability to manufacture its
products.

CONTROL BY EXISTING SHAREHOLDERS

As of December 31, 1997, directors, executive officers and principal
shareholders of the Company, and certain of their affiliates, owned beneficially
approximately 30% of the Company's outstanding Common Stock. Accordingly, these
shareholders, individually and as a group, may be able to influence the outcome
of shareholder votes, including votes concerning the election of directors,
adopting or amending provisions in the Company's Articles of Incorporation and
Bylaws and approving certain mergers or other similar transactions, such as
sales of substantially all of the Company's assets. Such control by existing
shareholders could have the effect of delaying, deferring or preventing a change
in control of the Company.

POSSIBLE VOLATILITY OF STOCK PRICE IN THE PUBLIC MARKET

The securities markets have from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. The market prices of the common stock of many publicly
traded medical device companies have in the past been, and can in the future be
expected to be, especially volatile. Announcements of technological innovations
or new products by the Company or its competitors, developments or disputes
concerning patents or proprietary rights, regulatory developments and economic
and other external factors, as well as period-to-period fluctuations in the
Company's financial results, may have a significant impact on the market price
of the Common Stock. Sales of Common Stock in the public market could adversely
affect prevailing market prices.
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POSSIBLE ISSUANCES OF PREFERRED STOCK; ANTI-TAKEOVER EFFECT OF MINNESOTA LAW

The Board of Directors has authority to issue up to 5,000,000 shares of
preferred stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the shareholders. The rights of the holders of Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock could
have the effect of delaying, deferring or preventing a change in control of the
Company. In addition, certain provisions of Minnesota law applicable to the
Company could have the effect of discouraging certain attempts to acquire the
Company which could deprive the Company's shareholders of opportunities to sell
their shares of Common Stock at prices higher than prevailing market prices.