EXHIBIT 99

                              CAUTIONARY STATEMENT

     The  statements  contained  in  this  Form  10-Q  include   forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 ("PSLRA"). When used in this Form 10-Q and in future filings by the Company
with the Securities and Exchange  Commission,  in the Company's  press releases,
presentations to securities analysts or investors, or in oral statements made by
or with the  approval  of an  executive  officer  of the  Company,  the words or
phrases  "believes,"  "may,"  "will  likely  result,"  "estimates,"  "projects,"
"anticipates,"  "expects"  or similar  expressions  and  variations  thereof are
intended  to  identify  such  forward-looking  statements.  Any  forward-looking
statement  involves  risks and  uncertainties  that may have a material  adverse
effect on the business, results of operation,  financial condition or prospects,
financial or other, of the Company and may cause the Company's actual results to
differ  materially  from  historical  results or the  results  discussed  in the
forward-looking statements.

     The  following  discussions  contain  cautionary  statements  regarding the
Company's business that investors and others should consider. This discussion is
intended to take  advantage of the "safe  harbor"  provisions  of the PSLRA.  In
making these cautionary statements, the Company is not undertaking to address or
update each factor in future filings or  communications  regarding the Company's
business or results.

DEPENDENCE ON CDR(TM)

     To date the Company's  revenues are primarily  generated  from sales of its
CDR(TM) system and, to a lesser extent, the CDRCam(TM), accuDEXA(TM) and the CDR
Discovery 60/70 DC(TM). There can be no assurance that any of these devices will
not be  rendered  obsolete  or  inferior  as a result of  technological  change,
changing customer needs or new product introductions, each of which would have a
material  adverse  effect on the  Company.  There can be no  assurance  that the
Company's  competitors will not succeed in developing or marketing  technologies
and products  that are more  commercially  attractive  than the CDR(TM)  system,
CDRCam(TM) or  accuDEXA(TM).  The  Company's  success will depend in part on its
ability to improve  and  enhance  its  products  in a timely  manner.  While the
Company is actively  engaged in research and  development to improve and enhance
the CDR(TM)  system and  CDRCam(TM),  there can be no assurance that the Company
will be  successful.  The failure to enhance any of the Company's  products in a
timely manner could have a material adverse effect on the Company.

DEPENDENCE ON DEVELOPING AND MARKETING NEW PRODUCTS AND ENHANCEMENTS TO EXISTING
PRODUCTS

     The Company is currently developing new products for the dental and medical
markets.  The  Company  expects  to file  510(k)  applications  with  the FDA in
connection with the digital  mammography  sensors currently under development by
the Company,  and other  future  products.  There can be no  assurance  that the
Company will obtain pre-market  clearance for the digital mammography sensors or
any other future  products,  or that in order to obtain  510(k)  clearance,  the
Company will not be required to submit  additional  data or meet  additional FDA
requirements  that may  substantially  delay the  510(k)  process  and result in
substantial  additional  expense.  Moreover,  such pre-marketing  clearance,  if
obtained,  may be subject to conditions on the marketing or manufacturing of the
digital  mammography  sensors  which  could  impede  the  Company's  ability  to
manufacture and/or market the product. In addition, while the Company intends to
distribute  the digital  mammography  sensors  through a direct  sales force and
other  established  independent  distributors  and  manufacturers of medical and
radiological equipment,  there can be no assurance that the Company will be able
to  successfully  develop any such  distribution  channel.  While the Company is
actively  engaged in research and  development  to develop  digital  mammography
sensors and other new products,  there can be no assurance that the Company will
be  successful  in such  endeavors.  There can be no assurance  that the digital
mammography sensors or any other products to be developed by the Company will be
approved  by  or  receive  marketing  clearance  from  applicable   governmental
authorities. If the Company is unable to develop, obtain regulatory approval for
and market new products and  enhancements to existing  products,  it will have a
material adverse effect on the Company.

RAPID AND SIGNIFICANT TECHNOLOGICAL CHANGE

     The  market  for the  Company's  products  is  characterized  by rapid  and
significant  technological  change,  evolving industry standards and new product
introductions.  The Company's  products require  significant  planning,  design,
development  and testing  which  require  significant  capital  commitments  and
investment by the Company. There can be no assurance that the Company's products
or  proprietary  technologies  will not become  uncompetitive  or  obsolete as a
result of  technological  change,  evolving  industry  standards  or new product
introductions  or that the Company will be able to generate any economic  return
on  its  investment  in  product  development.  If  the  Company's  products  or
technologies become  uncompetitive or obsolete,  it will have a material adverse
effect on the Company.


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<PAGE>


RELIANCE ON PATENTS AND PROPRIETARY TECHNOLOGY; RISK OF PATENT INFRINGEMENT

     The Company  currently has issued United States  patents for an 'Intra-Oral
Sensor For Computer  Aided  Radiography,'  which  expires on October 16, 2012, a
'Large Area Image Detector' which expires on November 20, 2016 and a 'Method and
Apparatus for Measuring  Bone Density'  which expires on September 24, 2017. The
Company also has five additional  patent  applications  currently pending before
the United States Patent and Trademark Office (the 'PTO').

     The Company is the licensee in certain  fields of  biomedical  radiology of
certain  patents,   patent  applications  and  other  know-how  related  to  APS
technology  (collectively,  the 'APS  Technology'),  which was  developed by the
California Institute of Technology. The Company has been advised by the licensor
of the APS Technology  that the Company's  rights to such technology are subject
to  government  rights  to  use,  noncommercial  educational  rights  to  use by
California Tech and the right of a third party to obtain a nonexclusive  license
from the California Institute of Technology with respect to such technology. The
Company  believes  that,  as of the date of this  filing,  except for such third
party's  exercise  of its  right to  obtain a  nonexclusive  license  to use APS
Technology  in a field other than  biomedical  radiology,  none of the foregoing
parties have given notice of their exercise of any of their respective rights to
the APS Technology.  There can be no assurance that this will continue to be the
case, and any such exercise could have a material adverse effect on the Company.

     There can be no assurance  that any of the  Company's  patents,  any of the
patents of which the Company is a licensee or any patents which may issue to the
Company or which the Company may license in the future, will provide the Company
with  a  competitive   advantage  or  afford  the  Company   protection  against
infringement by others, or that the patents will not be successfully  challenged
or circumvented by competitors of the Company.

     The Company is also the owner of certain trade  secrets,  which it protects
by,  among  other  things,   entering  into   non-disclosure,   confidentiality,
non-solicitation  and  non-competition  agreements.  However,  there  can  be no
assurance  that the  duties  imposed  by these  agreements,  such as the duty to
maintain  confidentiality and the duty not to compete,  will not be breached, or
that such breaches will not have a material adverse effect on the Company.

     There also can be no assurance that the technology practiced by the Company
will not infringe upon the patents of others.  The Company's  CDR(TM)  system is
currently  the subject of litigation  regarding the patent rights of others.  In
the  event  that any such  infringement  claim is  successful,  there  can be no
assurance that the Company would be able to negotiate with the patent holder for
a license,  in which case the Company  could be prevented  from  practicing  the
subject  matter claimed by such patent.  In addition,  there can be no assurance
that the Company  would be able to redesign its products to avoid  infringement.
The inability of the Company to practice the subject  matter of patents  claimed
by others  or to  redesign  its  products  to avoid  infringement  could  have a
material adverse effect on the Company.



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LITIGATION AND INSURANCE

     The  Company is a named  defendant  in two  lawsuits  instituted  by Trophy
Radiologie,  S.A. ('Trophy S.A.').  One lawsuit was instituted in France and the
other in the United States.

     The French  lawsuit was filed in November  1995,  in the tribunal de Grande
Instance de Bobigny,  the French patent court,  and originally  alleged that the
Company's CDR(TM) system infringes French Patent No. 2,547,495,  European Patent
No. 129,451 and French Certificate of Addition No. 2,578,737. These patents, all
of which are  related,  are  directed to a CCD-based  intra-oral  sensor.  Since
filing its lawsuit,  Trophy S.A. has  withdrawn its  allegation of  infringement
with respect to the Certificate of Addition.  Trophy S.A. is seeking a permanent
injunction and  unspecified  damages,  including  damages for its purported lost
profits.

     The  lawsuit in the United  States was filed in March 1996 by Trophy  S.A.,
Trophy  Radiology,  Inc., a United  States  subsidiary  of Trophy S.A.  ('Trophy
Inc.') and the named inventor on the patent in suit,  Francis  Mouyen,  a French
citizen.  The suit was  brought  in the  United  States  District  Court for the
Eastern  District of New York,  and alleges that the  Company's  CDR(TM)  system
infringes  United States Patent No.  4,593,400  (the ' '400  patent'),  which is
related to the patents in the French  lawsuit.  Trophy  S.A.,  Trophy  Inc.  and
Mouyen are seeking a permanent  injunction and  unspecified  damages,  including
damages for purported lost profits, enhanced damages for the Company's purported
willful infringement and an award of attorney fees.

     In addition,  the Company has counter-sued  Trophy S.A. and Trophy Inc. for
infringement of United States Patent No. 4,160,997,  a  recently-expired  patent
which was  exclusively  licensed  to the  Company by its  inventor,  Dr.  Robert
Schwartz, and for false advertising and unfair competition. The Company believes
that its counter-suits are meritorious, and is vigorously pursuing them.

     On September 12, 1997, the Company served two motions for summary  judgment
seeking  dismissal of the action pending in the United States District Court for
the Eastern  District of New York,  on the grounds of  non-infringement  and the
"best mode" defense. Those motions are currently pending.

     While the Company  believes such suits against it are without merit,  there
can be no assurance that the Company will be successful in its defense of any of
these actions,  or in its  counter-suits.  If the Company is unsuccessful in its
defense of any of these  actions,  it could have a material  adverse effect upon
the Company.

     In addition, the Company and certain of its current and former officers and
directors are defendants in shareholder  complaints  described in this Report in
"Part II, Item I - Legal Proceedings."

     The Company may be a party to a variety of legal actions  (including  those
referred to above),  such as employment  and  employment  discrimination-related
suits,  employee  benefit  claims,  breach of  contract  actions,  tort  claims,
shareholder suits, including securities fraud, and intellectual property related
litigation.  In addition,  because of the nature of its business, the Company is
subject to a variety  of legal  actions  relating  to its  business  operations.
Recent court  decisions  and  legislative  activity  may increase the  Company's
exposure  for  any  of  these  types  of  claims.  In  some  cases,  substantial
non-economic  or punitive  damages  may be sought.  The  Company  currently  has
insurance  coverage for some of these  potential  liabilities.  Other  potential
liabilities may not be covered by insurance,  insurers may dispute coverage,  or
the  amount of  insurance  may not be enough to cover the  damages  awarded.  In
addition, certain types of damages, such as punitive damages, may not be covered
by insurance  and  insurance  coverage for all or certain forms of liability may
become unavailable or prohibitively expensive in the future.


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<PAGE>


DEPENDENCE ON KEY SUPPLIERS; VOLATILITY OF SEMICONDUCTOR MARKET

Semiconductors   are  the  most  significant   product  components  the  Company
purchases.  The  availability  and price of these  components  may be subject to
change due to interruptions in production,  changing market conditions and other
events.  There can be no  assurance  that,  if the  Company  were to enter  into
purchase  arrangements  with other  suppliers,  such suppliers  would be able to
deliver such semiconductors at an acceptable price or in a timely manner. If the
Company were unable to develop reasonably-priced alternative sources in a timely
manner, or if the Company encountered delays or other difficulties in the supply
of such  products  and other  materials  from third  parties,  there  could be a
material adverse effect on the Company. In past years,  semiconductors have been
subject to significant  price  fluctuations.  There can be no assurance that the
Company can  mitigate  the effect of future  price  increases  on its results of
operations and financial condition.

PRODUCT WARRANTIES; WARRANTS

     The Company  generally  warrants  each of its products  against  defects in
materials  and  workmanship  for a period of one year from the date of shipment.
Costs  associated with product  returns,  including  servicing  and/or repair of
products,  during the warranty period  increased  substantially  in fiscal 1999.
Product  returns could have a material  adverse  effect on the Company by, among
other things,  requiring additional expenditures for parts and personnel as well
as damaging the Company's reputation and goodwill.

REGULATORY AND LEGISLATIVE RISKS

     The Company must obtain certain approvals by and marketing  clearances from
governmental  authorities,  including the FDA and similar health  authorities in
foreign countries,  to market and sell its products in those countries.  The FDA
regulates the marketing,  manufacturing,  labeling, packaging, advertising, sale
and  distribution  of 'medical  devices,' as do various  foreign  authorities in
their  respective   jurisdictions.   The  FDA  enforces  additional  regulations
regarding the safety of equipment  utilizing x-rays.  Various states also impose
similar regulations. The Company's CDR(TM) system is currently regulated by such
authorities  and certain of the Company's new products will require  approval by
or marketing clearance from various governmental authorities, including the FDA.

     The FDA review process typically requires extended  proceedings  pertaining
to the safety and efficacy of new products.  A 510(k) application is required in
order to market a new or modified  medical device.  If specifically  required by
the FDA, a pre-market approval ("PMA") may be necessary. Such proceedings, which
must be  completed  prior to  marketing a new medical  device,  are  potentially
expensive and time consuming.  They may delay or hinder a product's timely entry
into the  marketplace.  Moreover,  there can be no assurance  that the review or
approval  process  for  these  products  by  the  FDA or  any  other  applicable
governmental  authorities  will occur in a timely  fashion,  if at all,  or that
additional  regulations  will not be adopted or current  regulations  amended in
such a manner as will adversely  affect the Company.  The FDA also regulates the
content of  advertising  and marketing  materials  relating to medical  devices.
Failure  to comply  with such  regulations  may  result in a delay in  obtaining
approval for the marketing of such  products or the  withdrawal of such approval
if previously obtained. There can be no assurance that the Company's advertising
and  marketing  materials  regarding  its products are and will be in compliance
with such regulations.  The Company is also subject to other federal,  state and
local laws, regulations and recommendations relating to safe working conditions,
laboratory and manufacturing practices. The extent of government regulation that
might result from any future  legislation  or  administrative  action  cannot be
accurately predicted.  Failure to comply with regulatory requirements could have
a material adverse effect on the Company.  International  sales of the Company's
products are subject to the regulatory agency product registration  requirements
of each country in which the Company's  products are sold. The regulatory review
process  varies  from  country to  country  and may in some  cases  require  the
submission of clinical data. The Company typically relies on its distributors in
foreign countries to obtain the required regulatory  approvals.  There can be no
assurance,  however,  that such approvals will be obtained on a timely basis, if
at all, or that the failure to obtain such  approval by a  distributor  will not
have a material adverse effect on the Company.  The Company's  customers operate
in the health care industry, which is highly regulated. Both existing and future
governmental  regulations  could  adversely  impact the  Company.  Additionally,
cost-containment


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<PAGE>


efforts by health  maintenance  organizations may adversely affect the potential
market for the Company's devices.

POTENTIAL FOR PRODUCT RECALL AND PRODUCT LIABILITY CLAIMS

     Products  such as those  sold by the  Company  may be subject to recall for
unforeseen  reasons.  In addition,  certain  applications,  including  projected
applications,  of the Company's  products  entail the risk of product  liability
claims.  Such risks will exist  even with  respect to those  products  that have
received, or in the future may receive, regulatory approval for commercial sale.
These  claims may be made by  consumers,  distributors,  wholesalers  or others.
Although  the  Company  has  maintained  insurance  coverage  related to product
liability  claims,  no assurance can be given that product  liability  insurance
coverage will continue to be available or, if available, that it can be obtained
in  sufficient  amounts or at  reasonable  cost or that it will be sufficient to
cover any claims that may arise.  The Company does not  maintain  any  insurance
relating to potential  recalls of its products.  Costs associated with potential
product recalls or product liability claims could have a material adverse effect
on the Company.

DEPENDENCE ON THIRD-PARTY REIMBURSEMENT

     Third-party payors, including government health administration authorities,
private health care insurers and other organizations  regulate the reimbursement
of  fees  related  to  certain  diagnostic  procedures  or  medical  treatments.
Third-party payors are increasingly challenging the price and cost-effectiveness
of medical  products and services.  While the Company cannot predict what effect
the policies of government  entities and other  third-party  payors will have on
future sales of the  Company's  products,  there can be no  assurance  that such
policies would not have a material adverse effect on the Company.

INTENSE COMPETITION

     Competition  relating  to the  Company's  current  products  is intense and
includes various  companies,  both within and outside of the United States.  The
Company  anticipates  that  competition  for its  future  products  will also be
intense and  include  various  companies,  both within and outside of the United
States. Many of the Company's competitors are large companies with substantially
greater financial, sales and marketing, and technical resources, larger and more
experienced  research and development staffs, more extensive physical facilities
and substantially  greater experience in obtaining  regulatory  approvals and in
marketing products than the Company. In addition, there can be no assurance that
the Company's competitors are not currently  developing,  or will not attempt to
develop,  technologies  and products  that are more  effective  than those being
developed by the Company or that would otherwise  render the Company's  existing
and new technology and products obsolete or  uncompetitive.  No assurance can be
given that the Company will be able to compete  successfully.  The  inability of
the  Company  to  compete  successfully  or the  development  by  the  Company's
competitors  of technology and products that are more effective than those being
developed by the Company would have a material adverse effect on the Company.

DEPENDENCE ON THIRD-PARTY DISTRIBUTORS

     The Company  markets and  distributes a significant  portion of its CDR(TM)
systems  overseas through  third-party  independent  distributors.  From time to
time, a limited number of distributors  account for a significant portion of the
Company's   revenues.   In  1996,  one   distributor,   Dental   Computer/Dental
Technologies,  accounted for 18.0% of the  Company's  sales.  In general,  these
distributors  could discontinue  marketing the Company's products with little or
no notice.  Certain of the  Company's  distributors  also could market  products
which compete with the Company's products.  Additionally, the Company intends to
market its  current  and  future  products  in the United  States and its future
products overseas through independent third-party distributors.  The loss of, or
a significant  reduction in sales volume  through,  one or more of the Company's
distributors could have a material adverse effect on the Company.

UNCERTAINTIES ASSOCIATED WITH INTERNATIONAL MARKETS

     In fiscal 1998, 1997 and 1996,  international  sales accounted for 18%, 24%
and 31% respectively,  of the Company's  revenues,  and the Company  anticipates
that international  sales will continue to account for a significant  percentage
of the  Company's  revenues.  International  revenues are subject to a number of

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uncertainties,  including the following:  agreements may be difficult to enforce
and receivables  difficult to collect;  foreign  customers and  distributors may
have longer payment cycles,  foreign countries may impose additional withholding
taxes or otherwise tax the Company's  foreign  income,  impose  tariffs or adopt
other  restrictions on foreign trade;  fluctuations in exchange rates may affect
product demand in relation to foreign competitors that may achieve  advantageous
pricing based on the  comparative  strength of the United States dollar;  United
States export  licenses may be difficult to obtain;  and  intellectual  property
rights in foreign countries may be difficult to enforce.  Moreover, many foreign
countries have their own regulatory  approval  requirements  for the sale of the
Company's products. As a result, the Company's introduction of new products into
international  markets could be costly and  time-consuming,  and there can be no
assurance  that the  Company  will be able to  obtain  the  required  regulatory
approvals on a timely basis,  if at all.  There can be no assurance  that any of
these factors will not have a material adverse effect on the Company.

DEPENDENCE UPON KEY PERSONNEL

     The success of the Company is dependent,  in part, upon its ability to hire
and retain  management,  sales and research personnel who are in high demand and
are often subject to competing  employment  opportunities.  The inability of the
Company to hire or retain key management, sales or research personnel could have
a material  adverse effect on the Company.  In addition,  the development of the
Company's  business has been  primarily  dependent  upon the efforts of David B.
Schick,  the  Company's  President  and Chief  Executive  Officer.  Although the
Company has expanded the depth of the  expertise of its  personnel,  the loss of
Mr.  Schick or  turnover  in other  management  positions  could have a material
adverse affect on the Company.  The Company does not have employment  agreements
with any of its current  employees,  including Mr.  Schick,  and there can be no
assurance  that he or any other key employee will continue to be active with the
Company. The Company maintains and is the named insured party under a $1,000,000
life insurance  policy on Mr. Schick.  There is no assurance that such insurance
can be maintained or will be adequate to meet the Company's future needs.

RECENT RAPID GROWTH; ABILITY TO MANAGE GROWTH

     There can be no assurance  that the growth  experienced by the Company will
continue or that the Company will be able to achieve the growth  contemplated by
its business strategy.  Furthermore,  there are significant risks,  expenses and
difficulties   associated   with  managing  the  operation  and  sustaining  the
development of an expanding business.  The Company's growth has placed, and will
continue to place,  significant  demands on the  Company's  financial  and other
resources.  The  Company  will be  required to  continually  improve  operating,
financial,  and other  systems,  as well as to train,  motivate,  and manage its
employees. If the Company's management is unable to manage growth effectively or
new employees are unable to achieve appropriate levels of performance,  it could
have a material adverse effect on the Company.

CONTROL OF THE COMPANY BY CERTAIN STOCKHOLDERS

     Currently, the executive officers and directors of the Company collectively
beneficially own  approximately  39% of the outstanding  shares of Common Stock.
Accordingly, they may effectively have the ability to elect all of the directors
of the Company and determine the outcome of all other matters  submitted for the
approval of the stockholders.  In particular, David B. Schick and members of his
immediate family beneficially own approximately 26% of the outstanding shares of
Common Stock and,  accordingly,  may be able to exert significant influence over
the Company.

PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

     The  Company's  Common  Stock is  currently  listed on The Nasdaq  National
Market.  The stock market  historically  has  experienced  volatility  which has
affected  the  market  price of  securities  of many  companies  and  which  has
historically been unrelated to the operating performance of such companies.  The
market prices for securities of medical  technology  companies have historically
been  highly  volatile.  Future  technological  innovations  or  new  commercial
products,  results of clinical  testing,  changes in regulation,  litigation and
public concerns as to product safety as well as period-to-period fluctuations in
financial  performance and  fluctuations in securities  markets  generally could
cause the  market  price of the  Common  Stock to  fluctuate  substantially.  In
addition,  the stock market  prices of many medical  technology  companies  have
experienced  substantial  fluctuations.  Such price fluctuations have often been

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unrelated to the operating  performance of the affected  companies.  These broad
market fluctuations may adversely affect the market price of the Common Stock.

POTENTIALLY SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY

     Several factors may significantly  affect the Company's revenues,  expenses
and results of operations  from quarter to quarter,  including the timing of new
product introductions by the Company or its competitors,  developments regarding
new  treatments  for  osteoporosis,  developments  in  government  reimbursement
policies,  product mix, the ability to supply  products to meet customer  demand
and  fluctuations in  manufacturing  costs. In addition,  the Company's  CDR(TM)
products  are  subject to  seasonal  variations.  Historically,  the Company has
experienced  higher sales  growth  rates in its first and third fiscal  quarters
than in its second and fourth fiscal quarters.  Consequently,  quarterly results
of  operations  can be expected to  fluctuate.  Such  fluctuations  in quarterly
results of  operation  could  adversely  affect  the market  price of the Common
Stock.

NEED FOR ADDITIONAL FINANCING

     The Company may require  additional  outside  financing  to expand its core
technology  and  develop  new  products,  for  working  capital  and for capital
expenditures. There can be no assurance that such financing will be available on
acceptable  terms  or at all.  The  inability  of the  Company  to  obtain  such
financing could have a material adverse effect on the Company. In addition,  the
Company may issue additional shares of Common Stock or other securities, whether
through public or private offerings. Such offerings would have a dilutive effect
on the  percentage of ownership in the Company of any holder of shares of Common
Stock.  In the  event  the  Company  is  unable  to raise  necessary  additional
financing in the future,  it may  experience  cash flow  difficulties  and/or be
forced to curtail its expansion activities.

THE YEAR 2000

     The  Company  is in the  process  of  modifying  its  computer  systems  to
accommodate  the Year 2000.  The  Company  currently  expects to  complete  this
modification  enough in advance of the Year 2000 to avoid adverse impacts on our
operations.   The  Company  is  expensing  the  costs  incurred  to  make  these
modifications.  The  Company's  operations  could be  adversely  affected if the
Company is unable to complete its Year 2000  modifications in a timely manner or
if other  companies  with which the Company does business fail to complete their
Year 2000 modifications in a timely manner.


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