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                                                                    Exhibit 99.1

                              CAUTIONARY STATEMENT

     Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other
filings with the Securities and Exchange Commission, as well as other documents
incorporated by reference therein, contain certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements represent the Company's expectations, beliefs,
intentions or strategies concerning future events, including, but not limited
to, any statements regarding its current assumptions about future financial
performance; the continuation of historical trends; the sufficiency of its cash
balances and cash generated from operating activities for future liquidity and
capital resource needs; the expected impact of changes in accounting policies on
the Company's results of operations, financial condition or cash flows;
anticipated problems and its plans for future operations; and the economy in
general or the future of the medical device industry, all of which are subject
to various risks and uncertainties.

     When used in our Form 10-K and in other filings by the Company with the
Securities and Exchange Commission, in our press releases, presentations to
securities analysts or investors, in oral statements made by or with the
approval of an executive officer , the words or phrases "believes," "may,"
"will," "expects," "should," "continue," "anticipates," "intends," "will likely
result," "estimates," "projects" or similar expressions and variations thereof
are intended to identify such forward-looking statements. However, any
statements that are not statements of historical fact should be deemed to be
forward-looking statements.

     We caution that these statements by their nature involve risks and
uncertainties, certain of which are beyond our control, and actual results may
differ materially depending on a variety of important factors, including, but
not limited to such factors as our ability to successfully implement our new
business plan; our ability to raise an adequate level of capital and fund our
operations; market demand and pressures on the pricing for our products;
changing market conditions, competition and growth rates within the medical
device industry; changes in accounting policies; risks associated with
operations outside of the U.S.; changing economic conditions such as general
economic slowdown, decreased consumer confidence and the impact of war on the
economy; and other risks and uncertainties, including those described below.

     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.

Our financial success will depend upon our ability to successfully implement our
new business plan.

     In accordance with our recent restructuring efforts, we have realigned our
strategic focus to our continuous monitoring products. Many factors may
negatively impact our ability to achieve our plan, including our possible
inability to manage the development of our continuous monitoring business;
sustain the productivity of our workforce and retain key employees; or manage
operating expenses and quickly respond to unforeseen events associated with the
continuous monitoring business. We may be required by market conditions and
other factors to undertake additional restructuring efforts in the future.

We have received a qualified opinion from our independent auditors, have a
history of operating losses, and may not achieve profitability sufficient to
generate a positive return on your investment.

     We have incurred net operating losses since our inception. We have prepared
our consolidated financial statements for the year ended December 31, 2003 on a
going-concern basis, which contemplates the realization of assets and
satisfaction of liabilities and other commitments in the normal course of
business. The report of our independent auditors covering the December 31, 2003
consolidated financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern as a result
of recurring losses and negative cash flows. We incurred consolidated net losses
of $8,479,145, $7,531,016 and $3,875,899 for the years ended December 31, 2003,
2002 and 2001, respectively. For our continuing operations, we incurred net
losses of $8,240,168, $5,666,547and $3,371,194 for the years ended December 31,
2003, 2002 and 2001, respectively. Our accumulated deficit as of December 31,
2003 was $152,856,593. We expect to incur net operating

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losses at least through 2005. We cannot assure you that we will ever generate
substantial revenues or achieve profitability at a level sufficient to generate
a positive return on your investment. If we are unable to raise an adequate
level of additional capital or generate sufficient cash flows from operations,
we may be unable to execute our business plan and remain a going concern.

We may be unable to raise additional funds or generate sufficient cash from
operations to meet our future capital requirements and execute our business
plan.

     Our long-term capital requirements for the development of our continuous
monitoring business will depend upon numerous factors, including the impact of
changes in distribution relationships and methods on revenue; the rate of market
acceptance of our products; the level of resources devoted to expanding our
business and manufacturing capabilities; and the level of research and
development activities. Cash and marketable securities excluding restricted cash
decreased by $3.6 million during the year ended December 31, 2003 to $315,176.
We are monitoring our cash position carefully and evaluating our future
operating cash requirements in the context of our strategy, business plan and
expected operating performance. As part of this, we have delayed certain project
spending and capital expenditures, and implemented other cost-cutting measures
across all areas of our operations. A significant amount of available instrument
inventory will allow a reduction of our inventory purchases and production
during 2004.

     Proceeds from the sale of our intermittent testing business increased our
cash and reduced our spending rate. Effective upon the sale of our intermittent
testing business, the holders of our Series E preferred stock elected to
exercise their option to put back to us 50% of their original $1.5 million
investment plus a return of 1% per month. The Series E investors subsequently
purchased $1.5 million of Series F Shares in January 2004 and retained the right
to invest an additional $1.5 million through the purchase of Series F Shares.
Our current cash reserves, supplemented by projected revenues and other receipts
are expected to fund our operations into mid 2004. We will be required to raise
additional capital during the first half of 2004 in order to sustain and fund
our operations over the long term. We may pursue the issuance of additional
equity or debt securities to the extent funding raised from other business
alternatives is not sufficient to meet our funding requirements. The issuance of
equity related instruments to raise funding is limited, however, to the level of
our remaining unissued and available authorized shares, currently approximating
3.2 million shares subsequent to the issuance of the first tranche of Series F
preferred stock and related warrants. Our inability to obtain shareholder
approval for an increase in authorized shares of common stock at our annual
meeting in April 2004 may negatively affect our ability to raise equity funding.
While we believe that we will be able to raise adequate funding to meet our
operational requirements, there can be no assurance that adequate funds will be
available when needed and on acceptable terms.

Our common stock is traded on the Over-the-Counter Bulletin Board, which may
result in reduced liquidity for our common stock.

     On July 1, 2003, we announced that we received a notice from The Nasdaq
Stock Market indicating that the Nasdaq Listing Qualifications Panel determined
to delist our common stock from The Nasdaq SmallCap Market effective July 2,
2003. Our common stock became immediately eligible to trade on the OTC Bulletin
Board under the symbol "DMED." Trading our common stock through the OTC Bulletin
Board may be more difficult because of lower trading volumes, transaction delays
and reduced security analyst and news media coverage. These factors could
contribute to lower share prices and larger spreads in the bid and ask prices
for our common stock. Trading of our common stock in an over-the-counter market
may also attract a different type of investor in our common stock, which may
limit further our future equity funding options.

Conversion of our Series E and Series F convertible preferred stock to common
stock may have a dilutive effect to our common shareholders and a negative
effect on the trading price of our common stock.

     On May 12, 2003, we completed the sale in a private placement of 15,000
shares of Series E convertible preferred stock, at a price of $100 per share,
resulting in aggregate gross proceeds of $1,500,000. We were required to redeem
$750,000 of the Series E preferred stock investment in October 2003 as a result
of the election of the Series E holders to exercise their option to put back to
us 50% of their original $1.5 million investment upon the completion of the sale
of our intermittent testing business. The stock is convertible at any time into
common stock at 88% of the volume weighted average trading price of the common
stock for the five consecutive trading days before

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the conversion date, but at an exercise price no greater than $0.75 per share
and no less than $0.35 per share (which was subsequently amended to $0.283 per
share). On January 16, 2004, we completed the sale in a private placement of
15,000 shares of Series F convertible preferred stock, at a price of $100 per
share, resulting in aggregate gross proceeds of $1,500,000. The Series F Shares
are convertible at any time into common stock at 75% of the volume weighted
average trading price of the lowest three inter-day trading prices of the common
stock for the five trading days preceding the conversion date, but at an
exercise price of no more than $0.25 per share and no less than $0.20 per share.
The holders of the Series E and Series F convertible preferred stock have agreed
not to short sell our common stock. Nevertheless, conversion of the Series E and
Series F convertible preferred stock into common stock at a discount to market
may have a dilutive effect to our common shareholders and result in a decline in
the trading price of our common stock.

Our financial success depends upon acceptance of our continuous monitoring
devices by the medical community.

     Our success depends upon acceptance of our products by the medical
community as reliable, accurate and cost-effective. Our point-of-care continuous
monitoring devices represent an alternative practice in blood testing which is
currently performed primarily by central laboratories of hospitals or by
point-of-care intermittent blood testing devices. Although professional
awareness of continuous blood gas monitoring is increasing, most acute care
hospitals have already installed expensive blood testing instruments and may be
reluctant to change standard operating procedures or incur additional capital
expenditures for new blood analysis equipment. We are unable to predict how
quickly, if at all, our products will be accepted by the medical community or,
if accepted, to predict the volume of our systems or the related disposable
sensors we can expect to sell.

We face significant competition in the medical device industry that may have a
negative impact on our product prices and market share.

     Our industry is characterized by rapidly evolving technology and intense
competition. Many of our competitors have substantially greater capital
resources, research and development staff 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 and therefore make 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 often obtain and
maintain significant market share. We believe our product pricing is competitive
with alternative products of other suppliers. In the future, we may experience
competitive pricing pressures that may cause a decrease in unit prices and sales
levels.

Our financial success will depend upon our ability to manage any growth in our
business with limited resources.

     If we are successful in increasing the revenues of our continuous
monitoring business, we may be required to expand our operations. Such expansion
could result in new and increased responsibilities for our management personnel
and place significant strain on our management, operating and financial systems
and other resources. To accommodate any such growth and compete effectively, we
may be required to implement improved information systems, procedures and
controls, and to expand, train, motivate and manage our work force. Our future
success will depend to a significant extent on the ability of our current and
future management personnel to operate effectively both independently and as a
group. We cannot assure you that our personnel, systems, procedures and controls
will be adequate to support our future operations.

We have limited manufacturing experience, and we may not be able to produce
large commercial quantities of our products in a cost-effective manner if demand
increases.

     We manufacture our products in compliance with strict regulatory
requirements and must maintain product quality, acceptable manufacturing costs
and timely production schedules. 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 these

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requirements when producing in large quantities, 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, that we may not be able to
protect in a manner that will provide us any competitive advantage.

     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 and may exceed our financial resources to assert or defend our claim.

     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 significant liabilities to, or require us to seek
licenses from or pay royalties to, others. Furthermore, we cannot assure you
that the necessary licenses would be available to us on satisfactory terms, if
at all.

The demand for and price of our products may depend in part on uncertain
government health care policies and reimbursement by third parties, and which
could decline as a result of future health care reform.

     The willingness of hospitals or others to purchase our products may depend
on the extent to which they 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 and maintain regulatory approval in order to sell our products.

     Our business is regulated by the Food and Drug Administration. We have
obtained pre-market notification clearances under Section 510(k) to market the
Paratrend 7+ and Neotrend L to monitor blood gases and temperature,

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and the Neurotrend system to monitor oxygen, carbon dioxide, acidity and
temperature in the brain. 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.

     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 Quality System
Regulations promulgated by the FDA. Violations of the applicable regulations at
our manufacturing facilities or the manufacturing facilities of our contract
manufacturers could prevent us from marketing our products.

Our products may expose us to costly product liability claims that may exceed
our insurance coverage.

     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
$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 which could have an adverse effect on our ability to manufacture our
products if the supply chain is interrupted.

     The majority of the raw materials and purchased components used to
manufacture our products are readily available. Many of these raw materials and
components are purchased from single sources due to technology, price, quality
or other considerations. Some of these single-sourced components are
manufactured to our specifications. Most of these items could be sourced from
other suppliers, often after a requalification process. Sourcing from
alternative suppliers in some cases may require product design or software
changes to accommodate variations from the original components. In the event
that our supply of critical raw materials or components was interrupted due to
the time required to requalify materials or components or modify product
designs, our ability to manufacture the related product in desired quantities
and in a timely manner could be adversely affected, potentially negatively
impacting our financial condition and results of operations.

International operations will expose us to additional risks that could have an
adverse effect on our ability to market our products abroad.

     Our distributors sell our products globally, including international
markets, subject to receipt of required foreign regulatory approvals. We cannot
assure you that our distributors will devote adequate resources to selling our
products internationally. 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:

     .    changes in overseas economic and political conditions,

     .    currency exchange rate fluctuations,

     .    foreign tax laws, or

     .    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.