GLOBAL MED TECHNOLOGIES INC, 424B3, 1997-10-31

GLOBAL MED TECHNOLOGIES INC
424B3, 1997-10-31
MANAGEMENT SERVICES

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PROSPECTUS

GLOBAL MED TECHNOLOGIES, INC.

1,108,803 SHARES

This Prospectus relates to the resale by the holders (the "Selling
Security Holders") named herein, for their own accounts, of up to 1,108,803
shares of Common Stock, including 187,800 shares which underly warrants
exercisable at $3.75 per share (hereinafter sometimes referred to as the
"Shares"). The Company's Common Stock and Common Stock Purchase Warrants
(the "Warrants") have been traded on NASDAQ Small-Cap Market since March
13, 1997, under the trading symbols GLOB and GLOBW. See MARKET FOR COMMON
EQUITY, DIVIDEND POLICY AND RELATED STOCKHOLDER MATTERS and DESCRIPTION OF
SECURITIES.

The shares of Common Stock being offered hereby are not being
underwritten in this offering, and the Company will not receive any
proceeds from their sale, although the Company will receive up to
approximately $704,250 if Selling Security Holders holding 187,800 warrants
exercise their warrants at $3.75 per share, of which there is no assurance.
However, these Selling Security Holders will have to exercise their
warrants in order to sell the underlying shares of Common Stock. See
SELLING SECURITY HOLDERS.

THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK TO
INVESTORS. PROSPECTIVE PURCHASERS SHOULD CONSIDER CAREFULLY THE DISCUSSION
UNDER RISK FACTORS COMMENCING ON PAGE 5 OF THIS PROSPECTUS.

Brokers and dealers who propose to effect transactions in the Shares
should assure themselves of the existence of appropriate exemptions from
the securities registration requirements of the securities laws of the
applicable jurisdictions or effectuate such registrations in connection
with any offers or sales of the Shares.

----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

--------------------

THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997.

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE OF THIS PROSPECTUS.

TABLE OF CONTENTS

Summary. . . . . . . . . . . . . . . 1 Security Ownership of Certain
Risk Factors . . . . . . . . . . . . 5 Beneficial Owners and Management . .60
Use of Proceeds. . . . . . . . . . .16 Certain Relationships and Related
Market For Common Equity, Transactions . . . . . . . . . . . .62
Dividend Policy and Related Description of Securities. . . . . . .63
Shareholder Matters . . . . . . . .16 Selling Security Holders . . . . . . .65
Summary Financial Information. . . .17 Plan of Distribution . . . . . . . . .71
Management's Discussion and Legal Matters. . . . . . . . . . . . .72
Analysis or Plan of Operations. . .19 Experts. . . . . . . . . . . . . . . .72
The Company. . . . . . . . . . . . .28 Shares Eligible for Future Sale. . . .73
Legal Proceedings. . . . . . . . . .45 Additional Information . . . . . . . .73
Management . . . . . . . . . . . . .46 Glossary . . . . . . . . . . . . . . .75
Executive Compensation . . . . . . .51 Financial Statements . . . . . . . . F-1

<PAGE>

SUMMARY

The following summary is qualified in its entirety by the more
detailed information and consolidated financial statements appearing
elsewhere in this Prospectus.

THE COMPANY

Global Med Technologies, Inc. (the "Company") provides information
management software products and services to the healthcare industry
through its Wyndgate Technologies ("Wyndgate") division. Wyndgate
develops, markets, licenses and supports software for the healthcare
industry. The Company has entered into an agreement to sell, subject to
shareholder approval, its DataMed International ("DataMed") division, which
provides substance abuse (which includes drug and alcohol) testing program
services to companies, including certain Fortune 1000 companies.

Founded in 1984, Wyndgate initially developed a Student Information
System ("SIS") software product, an integrated software package for
colleges and universities to track student information. Pursuant to an
agreement with eight California blood centers, Wyndgate began development
of a blood tracking system to assist community blood centers, hospitals,
and plasma centers in the U.S. in complying with the quality and safety
standards of the Food and Drug Administration ("FDA") for the collection
and management of blood and blood products. After several years of
development and approximately $1.1 million paid by eight California blood
centers, Wyndgate has completed development and commenced marketing of the
SAFETRACE(R) software product, which is a blood bank management information
software system, and which the Company believes to be the most
comprehensive and flexible system of its type available today. In
accordance with FDA regulations, the Company submitted a 510(k) application
to the FDA in October 1995 for review of its SAFETRACE(R) software product.
The Company was permitted to market the SAFETRACE(R) software product
during the review process. In April 1997, Wyndgate received notification
from the FDA of their finding of "substantial equivalence" of the Company's
SAFETRACE(R) software product. This determination permits the Company to
continue to market the SAFETRACE(R) software product.

Since its acquisition of Wyndgate in 1995, the Company has been
seeking a strategic alliance with a multi-national health care corporation
in order to attempt to enhance its acceptance in health care markets and
more efficiently and rapidly market its current and possible future product
lines. To accomplish this goal, the Company's management held numerous
discussions with several different companies. On November 14, 1996, the
Company and Ortho Diagnostic Systems Inc. ("ODSI") entered into an
Exclusivity and Software Development Agreement (the "Exclusivity
Agreement") in which the Company and ODSI agreed to negotiate, on an
exclusive basis until May 14, 1997, towards reaching a definitive
agreement relating to a transaction or transactions with respect to the
Company's activities and developments in information technology and
intellectual property relating to donor and transfusion medicine (the
"Technology"). The parties have agreed to continue such negotiations, on
a non-exclusive basis, until December 31, 1997. ODSI is a wholly owned
subsidiary of Johnson & Johnson. Any such transaction or transactions
could take any form or structure, including, without limitation, a sale or
exchange of assets of the Company, including the Technology. There can be
no

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assurance that the Company and ODSI will be able to reach a definitive
agreement on these or any other arrangements. If the Company and ODSI are
unable to reach a definitive agreement, then the Company will renew its
search for a strategic partner. The Company also agreed to perform certain
software development services in consideration of the payment from ODSI of
$1 million. If the Company and ODSI enter into a definitive agreement
relating to the Technology, the Company's other assets or Common Stock,
then ODSI may decline the software development services and apply the
payments to the Company towards any consideration payable to the Company in
connection with the definitive agreement. See THE COMPANY - WYNDGATE
TECHNOLOGIES DIVISION - AGREEMENT WITH ORTHO DIAGNOSTIC SYSTEMS INC.

DataMed was founded in 1989 by Michael I. Ruxin, M.D., the Chairman
and CEO of the Company, to offer the services of a Medical Review Officer
("MRO") to the regulated and unregulated segments of the substance abuse
testing market. The Company has entered into an agreement to sell DataMed,
subject to shareholders approval. See THE COMPANY - DATAMED INTERNATIONAL
DIVISION.

National MRO, Inc., founded in 1989, changed its name to Global Data
Technologies, Inc. in June 1995 in connection with the merger of National
MRO, Inc. and The Wyndgate Group, Ltd. in May 1995, and changed its name
again in May 1996 to Global Med Technologies, Inc. The Company's executive
offices are located at 12600 West Colfax, Suite A-500, Lakewood, Colorado
80215, and its telephone number is (303) 238-2000.

In February 1997, the Company completed an initial public offering of
1,337,000 Units, each consisting of two shares of Common Stock and one
Class A Common Stock Purchase Warrant. On March 12, 1997, the Company
received additional net proceeds from the sale of an additional 119,988
Units included in the Underwriters' over-allotment option. Net proceeds
from the initial public offering, including the net proceeds from the
Underwriter's over-allotment option, were approximately $8.2 million. The
Units were initially quoted on the NASDAQ Small-Cap Market. On March 13,
1997, the Common Stock and Warrants began trading separately.

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THE OFFERING

Common Stock Offered for
Selling Security Holders . . 1,108,803 shares of Common Stock

Use of Proceeds . . . . . . The Company will not receive any
proceeds from the sale of the Shares.
See USE OF PROCEEDS and THE COMPANY.

Risk Factors . . . . . . . An investment in the securities offered
by this Prospectus involves a high
degree of risk and should be considered
only by persons who can afford the loss
of their entire investment.
Prospective purchasers should review
carefully the entire Prospectus and
should consider, among other things the
matters set forth under Risk Factors.

NASDAQ Symbols(1) . . . . . Common Stock: GLOB
Warrants: GLOBW
____________________

(1) The continuation of quotations on NASDAQ is subject to certain
conditions. The failure to meet these conditions may prevent the
Company's securities from continuing to be quoted on NASDAQ. Failure
to maintain continued quotations on NASDAQ may have an adverse effect
on the market for the Company's securities. See RISK FACTORS.

SUMMARY FINANCIAL INFORMATION

The following summary financial data should be read in conjunction
with the consolidated financial statements and notes thereto included
elsewhere in this Prospectus. The consolidated statements of operations
data for the years ended December 31, 1996 and 1995 and the consolidated
balance sheet data at December 31, 1996 are derived from and should be read
in conjunction with the consolidated financial statements of the Company
and notes thereto audited by Ernst & Young LLP, independent auditors.

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The summary financial data as of, and for the six months ended June
30, 1997 and 1996, are derived from the unaudited consolidated financial
statements of the Company, which in the opinion of the Company reflect all
adjustments, consisting only of normal recurring adjustments, necessary for
the fair presentation of the unaudited consolidated financial statements.
The results of operations for the six months ended June 30, 1997 and 1996
are not necessarily indicative of the results to be expected for the full
year.

STATEMENT OF OPERATIONS DATA:
(In Thousands, except per share amounts)
Years Ended Six Months Ended
December 31, June 30,
---------------- ------------------

1996 1995 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 4,576 $ 934 $ 1,585 $ 2,862

Cost of sales 1,883 296 758 627

Gross profit 2,693 638 827 2,235

Selling, general and
administrative 5,504 2,422 3,349 2,096

Income (loss) from
continuing operations (2,811) (1,784) (2,522) 139

Loss from discontinued
operations(2) (1,681) (901) (880) (539)

Net loss $ (4,492) $ (2,685) $ (3,402) $ (400)
====== ====== ====== ======

Net income (loss) from
continuing operations per
common share(1) $ (0.64) $ (0.42) $ (0.35) $ 0.03
===== ==== ==== ====
Common shares used in
computing net income (loss)
from continuing operations
per common share(1) 4,384 4,211 7,153 4,384
</TABLE>

BALANCE SHEET DATA:
(In Thousands)
December 31, 1996 June 30, 1997
----------------- -------------

Cash and cash equivalents $ 489 $ 3,775

Working capital (deficit) $ (3,995) $ 872

Total assets $ 3,239 $ 6,279

Net liabilities of discontinued
operations(2) $ 1,132 $ 666

Long-term liabilities $ 232 $ 239

Stockholders' equity (deficit) $ (3,360) $ 1,897

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(1) See Note 1 to the consolidated Financial Statements for a description
of the computation of net income (loss) from continuing operations per
common share.
(2) The Company has agreed, subject to shareholder approval, to sell
DataMed. See UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND
NOTES THERETO which illustrate the effect of the sale of DataMed.

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RISK FACTORS

The Shares offered hereby are speculative in nature and involve a high
degree of risk. The Shares should be purchased only by persons who can
afford to lose their entire investment. Therefore, prior to making any
purchase, each prospective investor should consider very carefully the
following risk factors, as well as all of the other information set forth
elsewhere in this Prospectus, including the information contained in the
financial statements.

SIGNIFICANT OPERATING LOSSES; NEGATIVE NET WORTH; NET WORKING CAPITAL
DEFICIT

For the fiscal years ended December 31, 1996 and 1995, the Company
incurred a loss in the approximate amounts of $4.5 million and $2.7
million, respectively. The 1995 loss was primarily due to (i) employee
compensation which increased because of additional sales and operations
staff hired by the Company in 1995 in anticipation of future growth of the
Company's operations and (ii) expenses related to the merger with The
Wyndgate Group, Ltd. The increased loss in 1996 was primarily due to
increases in overall staffing and related expenses necessary to handle
recent and anticipated future growth of the Company. For the six months
ended June 30, 1997, the Company had a loss of $2.5 million from continuing
operations. As of June 30, 1997 and excluding the net liabilities of
DataMed, which is presently operating under the direction and control of
another company pursuant to an Interim Management Agreement, the Company
had working capital of approximately $1.5 million. Additionally, as of
June 30, 1997, the Company had cumulative net losses of approximately $11.1
million. There can be no assurance that the Company will be able to
generate sufficient revenues to operate profitably in the future or to pay
the Company's debts as they become due. See MANAGEMENT'S DISCUSSION AND
ANALYSIS OF PLAN OF OPERATIONS.

ANTICIPATED NEGATIVE CASH FLOW

Management anticipates that the Company's current and anticipated cash
balances will not be sufficient to meet the Company's liquidity and capital
requirements, given the Company's current cost structure. Even if the sale
of DataMed is approved by the Company's shareholders, the Company will
require additional funds. Accordingly, the Company must obtain additional
capital, consider significant reductions to its software development
programs and/or significantly reduce all of its operating expenses to
enable it to continue its planned operations with available cash resources.
The sale of DataMed would provide additional, but not sufficient, resources
to assure the continuation of the Company's operations and its software
development programs. The Company is currently evaluating potential
investment banking relationships to assist it in raising equity capital.
However, no assurances can be given that the Company will be successful in
raising additional capital or that the sale of DataMed will be approved by
the Company's shareholders. Further, there can be no assurance, assuming
the sale of DataMed is approved by the Company's shareholders, that the
Company will achieve profitability or positive cash flow. If the Company
is unable to obtain adequate financing, management will be required to
significantly reduce the Company's software development programs and all of
its operating expenses.

REVENUE FLUCTUATIONS

The Company has experienced revenue fluctuations when its SAFETRACE(R)
software product is delivered. The SAFETRACE(R) software product license
fees have historically been recognized as

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revenue upon delivery of the software if no significant vendor obligations
exist as of the delivery date, and therefore are subject to delays of the
delivery service and customer delayed delivery requests. Quarter to
quarter revenue fluctuations could also be affected by the decision on
whether or not to recognize revenues based upon the length of time the
Company's customers take to implement the Company's software products. The
implementation cycle of Wyndgate's SAFETRACE(R) software products is taking
longer than originally anticipated. Based on recent experience, management
anticipates that the implementation cycle will typically take approximately
14 months. The implementation cycles are dependent on various items
including the client's size and the complexity of the client's standard
operating procedures. Further, special development projects required by
customers concurrent with the licensing of the Company's software products
and other significant obligations could result in revenue recognition
delays. As a result, the Company's operating results could fluctuate
significantly from quarter to quarter and investors should put more
emphasis on the Company's results for a full year rather than on the
Company's quarterly results.

LACK OF SIGNIFICANT OPERATING HISTORY

The Company has been in existence since 1989. As such, the Company is
subject to many of the risks common to enterprises with a limited operating
history, including potential under-capitalization, limitations with respect
to personnel, financial and other resources and limited customers and
revenues. As of the date hereof, eight of the licensees of the
SAFETRACE(R) software product, Wyndgate's blood tracking system, have the
SAFETRACE(R) software product in operation. There is no assurance that the
additional licensees of the SAFETRACE(R) software product to date will ever
become operational with their SAFETRACE(R) software product, that the
Company will be able to license the SAFETRACE(R) software product to
additional customers, that the Company will be able to develop and license
new products or that the Company will be successful. The likelihood of
success of the Company must be considered in light of the problems,
expenses, difficulties, complications and delays frequently encountered in
connection with the development and marketing of new products. See THE
COMPANY.

GOVERNMENT REGULATION

The Company's products and services are subject to regulations adopted
by governmental authorities, including the FDA, which governs blood center
computer software products regulated as medical devices. The U.S.
Department of Transportation issues regulations regarding procedures
applicable to substance abuse testing programs required in six
transportation industries. Government regulations can be burdensome and
may result in delays and expense to the Company. In addition,
modifications to regulations could adversely affect the timing and cost of
new products and services introduced by the Company. Failure to comply
with applicable regulatory requirements can result in, among other things,
operating restrictions and fines. For instance, if in the future the FDA
determines that the Company's SAFETRACE TX(TM) product requires FDA
clearance prior to the marketing of such product, the time delay to market
the SAFETRACE TX(TM) software product could

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materially and negatively impact the Company's business. The Company
cannot predict the effect of possible future legislation and regulation.
The Company will also be required to follow applicable Good Manufacturing
Practices ("GMP") regulations of the FDA, which include testing, control
and documentation requirements, as well as similar requirements in other
countries, including International Standards Organization ("ISO") 9001
standards. Failure to meet these requirements would preclude the Company
from marketing its products on a commercial basis, and therefore would
materially and adversely affect the Company's business, financial condition
and results or operations. See THE COMPANY - WYNDGATE TECHNOLOGIES
DIVISION - INDUSTRY OVERVIEW and THE COMPANY - DATAMED INTERNATIONAL
DIVISION.

FLUCTUATIONS IN OPERATING RESULTS

Results of operations are expected to fluctuate significantly from
quarter to quarter depending upon numerous factors, including demand for
the Company's products; the timing of new software license agreements with
Wyndgate customers; the ability of the Company to develop, introduce and
market new and enhanced versions of the Company's products on a timely
basis; personnel changes; changes in Company strategy, and the level of
international sales. Quarter to quarter operating results could also be
affected by the timing of the receipt of individual customer orders and
other revenue fluctuation factors discussed above.

LIMITED SALES, MARKETING AND DISTRIBUTION SYSTEMS

The Company's Wyndgate division has made limited sales of its
SAFETRACE(R) software product to date. The Company currently markets its
SAFETRACE(R) software product through a small direct sales force, both in
the U.S. and internationally. Establishment of a complete sales force
capable of effectively commercializing the Company's SAFETRACE(R) software
product, and other software products currently under development, will
require substantial efforts and require significant management and
financial resources. The Company has also been evaluating other strategic
business alliances, which may assist in the development of a national and
international sales, marketing and distribution system. Any alliance which
is developed by the Company could require substantial capital and financial
resources. There can be no assurance that the Company will be able to
establish such a sales capability on a timely basis, if at all. Moreover,
there can be no assurance that any business alliance entered into by the
Company would be successful in such commercialization efforts.

POTENTIAL DIFFICULTIES IN MANAGING BUSINESS UNDERGOING RAPID GROWTH

The Company's future success will depend to a significant extent on
the ability of its current and future management personnel to operate
effectively, both independently and as a group. Most of the Company's
management team have no prior experience as senior executives of a public
corporation. There can be no assurance that the management team will
operate together effectively. To compete successfully against current and
future competitors, to complete research and development in progress and to
develop future products, the Company believes that it must continue to
expand its operations, particularly in the areas of research and
development, sales and marketing,

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and training. If the Company were to experience significant growth in the
future, such growth would likely place significant strain upon the
Company's management, operating and financial systems and resources. To
accommodate such growth and compete effectively, the Company must continue
to implement and improve information systems, procedures and controls, and
to expand, train, motivate and manage its work force. There can be no
assurance that the Company's personnel, systems, procedures and controls
will be adequate to support the Company's future operations. Any failure
to implement and improve the Company's operational, financial and
management systems or to expand, train, motivate or manage employees could
materially and adversely affect the Company's business, financial condition
and results of operations.

RAPIDLY CHANGING TECHNOLOGY

The market for applications software is characterized by rapidly
changing technology and by changes from mainframe to client/server computer
technology, including frequent new product introductions and technological
enhancements in the applications software business. During the last five
years the use of computer technology in the information management industry
has expanded significantly to create intense competition. With rapidly
expanding technology there can be no assurance that the Company, with its
limited resources, will be able to acquire or maintain any technological
advantage. The Company's success will be in large part dependent on its
ability to use the developing technology to its maximum advantage and to
remain competitive in price and product performance. If the Company is
unable to acquire or maintain a technological advantage, or if the Company
fails to stay current and evolve in the applications software and
information management fields, its efforts may not be successful. See THE
COMPANY.

ROYALTY AGREEMENTS

Pursuant to certain royalty agreements, the Company is required to pay
certain of its sales proceeds directly to outside parties. Such payments
may adversely affect the Company's available cash to fund future operations
and the Company's future profitability. See THE COMPANY - WYNDGATE
TECHNOLOGIES DIVISION - DEVELOPMENT AGREEMENTS.

POSSIBLE LOSS OF SOFTWARE LICENSES DUE TO FAILURE TO MEET MAINTENANCE
SCHEDULES

The Wyndgate software license agreements have a license term that
varies, but are typically five year licenses which are automatically
renewable. The software license may be terminated by the customer if
Wyndgate fails to deliver the maintenance services consisting of product
bug fixes, regulatory compliance and updates. Wyndgate may terminate the
license if the customer fails to meet its contractual obligations,
primarily the payment of usage fees. However, there can be no assurance
that the Company will be able to meet all of the maintenance services and
contractual commitments required to keep the license agreements in force or
that the customers will continue to make the usage fee payments.

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POSSIBLE SHRINKAGE OF MARKET DUE TO MULTIPLE SITE CONTRACTS

Presently, the Company has one specific contract which covers multiple
blood banks. The potential number of customers for the SAFETRACE(R)
software product could be reduced if the Company were to enter into
additional multiple site contracts. While the Company believes the
license fee charged for such multi-site arrangements is comparable to the
license fee which would be earned on an equivalent number of single site
licenses, there can be no assurance that the Company's revenues will be
equivalent to what it would have earned under single site licenses. See
THE COMPANY - WYNDGATE TECHNOLOGIES DIVISION - CUSTOMERS.

PRODUCT AND REPORTING LIABILITY

As of the date hereof, eight of the Company's licensees have the
SAFETRACE(R) software product in operation. Currently, the Company has
product liability exposure for defects in its SAFETRACE(R) software product
which may become apparent through widespread use of the SAFETRACE(R)
software product. No claims have been filed against the Company involving
the SAFETRACE(R) software product and the Company is not aware of any
material problems involving the SAFETRACE(R) software product. While the
Company will continue to attempt to take appropriate precautions, there can
be no assurance that it will completely avoid product liability exposure.
The Company maintains product liability insurance on a claims made basis
for the SAFETRACE(R) software product in the aggregate of at least $4
million. There can be no assurance that such coverage will be available in
the future, that it will be available at reasonable prices, or that it will
be available in amounts adequate to cover any product liabilities that may
be incurred by the Company.

DEPENDENCE ON MAJOR CUSTOMERS

During the six months ended June 30, 1997, four Wyndgate customers,
Belle Bonfils Memorial Blood Center (Belle Bonfils), Denver, Colorado;
Haemonetics Corporation, Braintree, Massachusetts; Rhode Island Blood
Center (Rhode Island), Providence Rhode Island; and Lifeblood/Mid-South
Regional Blood Center (Lifeblood), Memphis, Tennessee, accounted for 13%,
34%, 12% and 10%, respectively, of the Company's revenues. During the
three months ended June 30, 1997, five Wyndgate customers, Belle Bonfils;
Lifeblood; Rhode Island; Institute for Transfusion Medicine, Pittsburgh,
Pennsylvania; and the Royalty Group (a group of eight California blood
centers, through a 1992 development agreement with Wyndgate, paid $1.1
million to partially fund Wyndgate's development of its SAFETRACE(R)
software product), accounted for 12%, 32%, 10%, 16% and 12%, respectively,
of the Company's revenues. Accounts receivable and unbilled revenues as of
June 30, 1997 from the above Wyndgate customers were approximately $500,000
and $200,000, respectively. In order to attempt to reduce its credit
risks, the Company generally requires substantial down payments and
progress payments during the course of implementation of Wyndgate's
software products. Non-renewal or termination of the contractual
arrangements with these key Wyndgate customers could have a material
adverse effect on the Company. There can be no assurance that the Company
will be able to retain these key customers or, if such customers are not
retained, that the Company would be able to attract and retain new
customers to replace the revenues currently generated by these customers.
With the sale of DataMed, the Company will lose

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all of the revenues, accounts receivable and unbilled revenue from that
division's customers. See THE COMPANY - CUSTOMERS.

SUBSTANTIAL COMPETITION

There is substantial competition in all aspects of the blood bank and
hospital information management. Numerous companies are developing
technologies and marketing products and services in the health care
information management area. Many of these competitors have been in
business longer than the Company and have substantially greater personnel
and financial resources available to them than the Company, and there can
be no assurance that the Company will be able to compete with these
competitors successfully. See THE COMPANY - WYNDGATE TECHNOLOGIES DIVISION
- - COMPETITION and THE COMPANY - DATAMED INTERNATIONAL DIVISION.

DEPENDENCE ON DEVELOPMENT OF NEW BUSINESSES

Through the merger with The Wyndgate Group, Ltd., the Company became
engaged in the information management section of the blood center market.
To effect its plan of operations, which includes the generation of
increased revenues, the Company must expand its operations significantly
beyond the historical operations of DataMed and Wyndgate to other markets
which require similar management information services. The Company has
entered into an agreement to sell DataMed subject to shareholder approval.
There is no assurance that the Company will be able to expand its business
operations. The current activities of Wyndgate in the blood center market
does not assure future business expansion or profitability. See THE
COMPANY.

PROPRIETARY RIGHTS AND LICENSES

The Company's success depends in part on its ability to obtain and
enforce intellectual property rights for its technology and software, both
in the United States and in other countries. The Company's proprietary
software is protected by the use of copyrights, trademarks, confidentiality
agreements and license agreements that restrict the unauthorized
distribution of the Company's proprietary data and limit the Company's
software products to the customer's internal use only. While the Company
has attempted to limit unauthorized use of its software products or the
dissemination of its proprietary information, there can be no assurance
that the Company will be able to retain its proprietary software rights and
prohibit the unauthorized use of proprietary information.

The Company may file additional applications for patents, copyrights,
and trademarks as management deems appropriate. There can be no assurance
that any patents, copyrights, or trademarks the Company may obtain will be
sufficiently broad to protect the Company's products, or that applicable
law will provide effective legal or injunctive remedies to stop
infringement on the Company's patents (if obtained), trademarks, or
copyrights. In addition, there can be no assurance that any patent,
trademark, or copyright obtained by the Company will not be challenged,
invalidated, or circumvented, that intellectual property rights obtained by
the Company will provide competitive advantages, or that the Company's
competitors will not independently develop

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<PAGE>

technologies or products that are substantially equivalent or superior to
those of the Company. In addition, if the Company's software products
infringe upon the rights of others, the Company may be subject to suit for
damages or an injunction to cease the use of such products. The Company
is not aware of any claims or infringements of the Company's software
products upon the rights of others. See THE COMPANY.

DEPENDENCE ON PERSONNEL

The Company is significantly dependent on a limited number of
personnel, including Michael I. Ruxin, M.D. (Chairman and Chief Executive
Officer), Joseph F. Dudziak (President and Chief Operating Officer),
William J. Collard (Secretary/Treasurer, Director and President of the
Wyndgate division), and Gerald F. Willman, Jr. (Director and Vice President
of the Wyndgate division). Although most of these individuals are subject
to employment agreements, such agreements are difficult to enforce against
employees. If the Company fails to retain the services of one or more of
these employees, the Company's operations may be adversely affected. The
Company does not have key man insurance on any of its officers or
employees; however, the Company is the designated beneficiary of a term
life insurance policy for Dr. Ruxin in the face amount of $1,000,000. See
MANAGEMENT.

NO DIVIDENDS

The Company does not anticipate paying any cash dividends for the
foreseeable future. The Company expects that future earnings, if any, will
be used to finance growth. See MARKET FOR COMMON EQUITY, DIVIDEND POLICY
AND RELATED SHAREHOLDER MATTERS.

AUTHORIZED STOCK AVAILABLE FOR ISSUANCE BY THE COMPANY

The Company presently has 8,135,755 shares of Common Stock
outstanding, out of a total of 40,000,000 shares of Common Stock, and
10,000,000 shares of Preferred Stock authorized for future issuance under
the Company's Articles of Incorporation. These amounts do not, however,
include 1,456,988 shares issuable upon exercise of the Warrants or
1,906,321 shares issuable upon exercise of other outstanding options and
warrants. The remaining shares of Common Stock and Preferred Stock not
issued or reserved for specific purposes may be issued without any action
or approval of the Company's shareholders. Although there are no present
plans, agreements or undertakings involving the issuance of such shares
except as disclosed in this Prospectus, any such issuances could be used as
a method of discouraging, delaying or preventing a change in control of the
Company or could dilute the public ownership of the Company. There can be
no assurance that the Company will not undertake to issue such shares if it
deems it appropriate to do so. See DESCRIPTION OF SECURITIES.

LIMITED CAPITALIZATION

The Company has only limited capitalization available to it. The
Company anticipates it will need additional capital to pursue its intended
business plan; however, the Company has received no

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<PAGE>

commitment from any person for that financing, and there can be no
assurance that adequate financing will be available on reasonable terms, if
and when needed. See THE COMPANY.

CONTROL BY OFFICERS AND DIRECTORS

The Company's officers and directors, own approximately 33% of the
outstanding Common Stock of the Company and will be able to substantially
influence all matters requiring approval by the shareholders of the
Company, including the election of directors. The Company does not provide
for cumulative voting in the election of directors; hence, purchasers of
the securities offered hereby should not expect to be able to elect any
directors to the Company's Board of Directors. See SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

POSSIBLE ANTI-TAKEOVER EFFECTS OF PROXIES GRANTED TO ODSI, PREFERRED STOCK
AND SEVERANCE PAYMENTS

Certain of the Company's officers, directors and major shareholders
beneficially owning 3,001,500 shares of the Company's Common Stock have
granted an irrevocable proxy to ODSI until November 14, 1997, to vote their
shares in favor of a proposal to approve any definitive agreement between
the Company and ODSI relating to the Technology and on any other proposal
relating to the sale of any of the stock of the Company or all or
substantially all of the assets of the Company or any of the Technology.
The grant of the proxies to ODSI could have the effect of delaying,
deferring or preventing a change in control of the Company or a bid by a
third person for the Company and/or the Technology. See SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The Board of Directors of the Company may issue shares of Preferred
Stock without stockholder approval on such terms as the Board may
determine. 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. In addition, as discussed
under MANAGEMENT - EMPLOYMENT AGREEMENTS, if the Company terminates the
employment of Michael I. Ruxin, William J. Collard or Gerald F. Willman,
Jr. for any reason other than cause or disability, the Company will be
required to pay a lump sum per individual of up to $2.5 million. The
effect of the severance payment provisions is to increase the likelihood
that a potential purchaser will seek to negotiate directly with the Board
of Directors and management in order to gain control of the Company or its
assets rather than directly approaching the Company's shareholders as a
group. All of the foregoing could have the effect of delaying, deferring
or preventing a change in control of the Company and could limit the price
that certain investors might be willing to pay in the future for shares of
the Company's Common Stock. See MANAGEMENT - EMPLOYMENT AGREEMENTS and
DESCRIPTION OF SECURITIES - PREFERRED STOCK.

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<PAGE>

ADVERSE IMPACT OF SALES OF SHARES ON MARKET FOR COMPANY'S SECURITIES

Sales of Shares by Selling Security Holders hereunder could adversely
affect the market price of the Company's securities and make it more
difficult for the Company to sell equity securities in the future at a time
and price which it deems appropriate. The Company is unable to predict the
effect that sales of Shares pursuant to this Prospectus may have on the
then prevailing market price of the Common Stock. The sale of the Shares
may have a depressive effect on the prices of the Company's Common Stock
and Warrants. See DESCRIPTION OF SECURITIES.

POSSIBLE VOLATILITY OF PRICE OF SHARES, SHARES OF COMMON STOCK AND WARRANTS

The prices of securities of publicly traded corporations tend to
fluctuate significantly. It can be expected, therefore, that there may be
significant fluctuations in price of the Company's Common Stock and
Warrants. Although a trading market for the Company's Common Stock and
Warrants currently exists, there can be no assurance that a market will be
sustained. Fluctuations in trading interest and changes in the Company's
operating results, financial condition and prospects could have a
significant impact on the market prices for the Common Stock and the
Warrants.

NASDAQ MAINTENANCE REQUIREMENTS AND EFFECTS OF POSSIBLE DELISTING; RISKS
RELATED TO LOW-PRICED STOCKS

Although the Company's shares of Common Stock and the Warrants are
currently trading on the NASDAQ Small-Cap Market, the Company must continue
to meet certain maintenance requirements in order for such securities to
continue to be listed on NASDAQ. NASDAQ recently announced new entry and
maintenance requirements for companies traded on the NASDAQ Small-Cap
Market, including increased financial standards and requiring companies to
have at least two independent directors and an audit committee, a majority
of which are independent directors. There can be no assurance that the
Company will be able to meet such new criteria. The Company has until
February 22, 1998 to meet such new requirements. If the Company's
securities are delisted from NASDAQ, this could restrict investors'
interest in the Company's securities and could materially and adversely
affect any trading market and prices for such securities. In addition, if
the Company's securities are delisted from NASDAQ, and if the Company's net
tangible assets do not exceed $2 million, and if the Common Stock is
trading for less than $5.00 per share, then the Company's Common Stock and
Warrants would each be considered a "penny stock" under federal securities
law. Additional regulatory requirements apply to trading by broker-dealers
of penny stocks which could result in the loss of effective trading markets
for the Company's Common Stock and Warrants.

WARRANTS TO REPRESENTATIVE

At the closing of the Company's February 1997 initial public offering,
the Company sold to the Representative and its designees, for $100,
warrants to purchase up to 133,700 Units (the "Representative's Warrants"),
exercisable at $11.55 per Unit. The Representative's Warrants are
exercisable for a forty nine month period, commencing 11 months from the
date of their issuance.

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<PAGE>

The Representative will be given the opportunity to profit from a rise in
the market price of the Company's Common Stock with a resulting dilution of
the interest of stockholders. Furthermore, the Company granted certain
registration rights with regard to the shares underlying the
Representative's Warrants and issuable upon exercise of the Warrants
included in the Representative's Warrants, and such registration could
result in substantial expense to the Company.

POTENTIAL LITIGATION DUE TO THE SALE OF DATAMED

DataMed's substance abuse testing service agreements have contract
terms that vary from one to five years and, unless cancelled generally
ninety days prior to the end of the license term, most are automatically
renewable. Generally, such contracts are not assignable. The Asset
Purchase Agreement for the sale of DataMed provides that the Company will
assign its customers contracts to the purchaser, and if the customer does
not consent to the assignment, the purchaser can require the Company to
terminate any such non-consenting customer's contract. The Company will
not be in the substance abuse testing business if the sale of DataMed is
approved by the Company's shareholders. While the Company does not
consider it likely, it is possible non-consenting customers could commence
litigation against the Company for failure to provide substance abuse
testing pursuant to such customer's contract with DataMed.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and the
Company intends that such forward-looking statements be subject to the safe
harbors for such statements under such sections. The Company's forward-
looking statements include the plans and objectives of management for
future operations, including plans and objectives relating to the Company's
planned marketing efforts and future economic performance of the Company.
The forward-looking statements and associated risks set forth in the
Prospectus include or relate to: (i) the ability of the Company to obtain
a meaningful degree of consumer acceptance for its software products and
proposed software products, (ii) the ability of the Company to market its
software products and proposed software products on a national and
international basis at competitive prices, (iii) the ability of the
Company's software products and proposed software products to meet
government regulations and standards, (iv) the ability of the Company to
develop and maintain an effective national and international sales network,
(v) success of the Company in forecasting demand for its software products
and proposed software products, (vi) the ability of the Company to maintain
pricing and thereby maintain adequate profit margins, (vii) the ability of
the Company to achieve adequate intellectual property protection for the
Company's software products and proposed software products and (viii) the
ability of the Company and its customers to successfully and timely
implement the Company's software products.

The forward-looking statements herein are based on current
expectations that involve a number of risk and uncertainties. Such
forward-looking statements are based on assumptions that the Company will
market and provide software products on a timely basis, that there will be
no

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<PAGE>

material adverse competitive or technological change in condition of the
Company's business, that demand for the Company's software products will
significantly increase, that the Company's Chief Executive Officer will
remain employed as such by the Company, that the Company's forecasts
accurately anticipate market demand, that the shareholders will approve the
sale of DataMed and that there will be no material adverse change in the
Company's operations, business or governmental regulation affecting the
Company or its suppliers. The foregoing assumptions are based on judgments
with respect to, among other things, future economic, competitive and
market conditions, and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are beyond
the Company's control. Accordingly, although the Company believes that the
assumptions underlying the forward-looking statements are reasonable, any
such assumption could prove to be inaccurate and therefore there can be no
assurance that the results contemplated in forward-looking statements will
be realized. In addition, as disclosed elsewhere in the "Risk Factors"
section of the Prospectus, there are a number of other risks inherent in
the Company's business and operations which could cause the Company's
operating results to vary markedly and adversely from prior results or the
results contemplated by the forward-looking statements. Growth in absolute
and relative amounts of cost of goods sold, research and development and
selling, general and administrative expenses or the occurrence of other
events could cause actual results to vary materially from the results
contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions
must be made to reflect actual conditions and business developments, the
impact of which may cause the Company to alter its marketing, capital
investment and other expenditures, may also materially adversely affect
the Company's results of operations. In light of significant uncertainties
inherent in the forward-looking information included in the Prospectus, the
inclusion of such information should not be regarded as a representation by
the Company or any other person that the Company's objectives or plans will
be achieved, See MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR PLAN OF OPERATIONS and THE COMPANY.

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<PAGE>

USE OF PROCEEDS

None of the proceeds from the sale of the shares of Common Stock by
the Selling Security Holders will be received by the Company. See SELLING
SECURITY HOLDERS and PLAN OF DISTRIBUTION.

If holders of the 187,800 warrants exercised their warrants at $3.75
per share, of which there can be no assurance, the Company would receive
approximately $704,250 from such exercises.

MARKET FOR COMMON EQUITY, DIVIDEND POLICY AND
RELATED SHAREHOLDER MATTERS

MARKET INFORMATION. The Units, each of which consisted of two shares
of Common Stock and one Warrant, commenced trading on the NASDAQ Small-Cap
Market on February 12, 1997. On March 13, 1997, the Common Stock and
Warrants included in the Units began to trade separately and the Units
ceased to trade.

The following table sets forth the high and low bid prices for the
Company's Common Stock since the Common Stock commenced trading on March
13, 1997. The quotations reflect inter-dealer prices, with retail mark-up,
mark-down or commissions, and may not represent actual transactions. The
information presented has been derived from the National Quotation Bureau,
Inc. Library.

1997 Fiscal Year High Bid Low Bid
---------------- -------- -------

First Quarter (from March 13) . . . . . . $3.875 $3.00

Second Quarter. . . . . . . . . . . . . . $3.00 $2.75

Third Quarter . . . . . . . . . . . . . . $2.9375 $1.8125

Fourth Quarter (through October 28) . . . $3.0625 $2.125

On October 28, 1997, the last reported bid and asked prices for the
Common Stock were $2.125 and $2.1875, respectively, and the last reported
bid and asked prices for the Class A Common Stock Purchase Warrants were
$.75 and $.875, respectively.

DIVIDEND POLICY. The payment of dividends by the Company is within
the discretion of its Board of Directors and depends in part upon the
Company's earnings, capital requirements and financial condition. Since
its inception, the Company has not paid any dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.
The Company intends to retain earnings, if any, to finance its operations.

SHAREHOLDER INFORMATION. As of September 22, 1997, the Company had
approximately 135 holders of record of the Company's Common Stock.

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<PAGE>

SUMMARY FINANCIAL INFORMATION

The following table sets forth summary financial information regarding
the results of operations and financial position of the Company for the
periods and at the dates indicated. The consolidated financial statements
of the Company as of December 31, 1996 and 1995 and for the years ended
December 31, 1996 and 1995 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report included elsewhere in
this Prospectus. This data should be read in conjunction with the
Company's consolidated financial statements (including the notes thereto)
appearing elsewhere in this Prospectus and in conjunction with MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS DATA:
(In Thousands)
Years Ended Six Months Ended
December 31, June 30,
---------------- ------------------

1996 1995 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:

Software sales and
consulting $ 3,648 $ 934 $ 1,365 $ 2,771

Hardware and software,
obtained from vendors 928 -- 220 91
-------- -------- -------- --------

Total revenue 4,576 934 1,585 2,862

COST OF REVENUE AND PRODUCT
DEVELOPMENT:

Software sales and consulting 937 296 590 560

Hardware and software,
obtained from vendors 946 -- 168 67
-------- -------- -------- --------

Total cost of revenue and
product development 1,883 296 758 627
-------- -------- -------- --------

Gross profit $ 2,693 $ 638 $ 827 $ 2,235

OPERATING EXPENSES:

Payroll and other 1,524 844 971 521

General and administrative 924 604 577 308

Sales and marketing 903 153 486 402

Research and development 1,538 655 1,078 725

Provision for doubtful accounts 19 44 70 10

Depreciation and amortization 162 45 154 72
-------- -------- -------- --------

Income (loss) from
continuing operations $ (2,377) $ (1,707) $ (2,509) $ 197
</TABLE>

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<PAGE>

STATEMENT OF OPERATIONS DATA, CONTINUED
- ----------------------------
(In Thousands)
Years Ended Six Months Ended
December 31, June 30,
---------------- ------------------

1996 1995 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 25 $ 27 $ 115 $ 10

Interest expense (209) (51) (47) (68)

Other 250 24 81 --

Provision for income taxes -- 29 -- --

Income (loss) from continuing
options after provision for
income taxes (2,811) (1,784) (2,522) 139

Loss from discontinued
operations (1,681) (901) (880) (539)

Net loss $ (4,492) $ (2,685) $ (3,402) $ (400)
======== ======== ======== ========
</TABLE>

BALANCE SHEET DATA:
(In Thousands)
December 31, June 30,
1995 1996 1997
---- ---- ----

Working capital (deficit) . . . . . . . $ (2,001) $ (3,995) $ 872

Total assets . . . . . . . . . . . . . . $ 1,193 $ 3,239 $ 6,279

Net liabilities of discontinued
operations. . . . . . . . . . . . . . . $ 819 $ 1,132 $ 666

Accumulated deficit. . . . . . . . . . . $ (3,200) $ (7,692) $(11,094)

Stockholders' equity (deficit) . . . . . $ (1,459) $ (3,360) $ 1,897

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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

Global Med Technologies, Inc. is comprised of two operating divisions,
Wyndgate Technologies ("Wyndgate") and DataMed International ("DataMed").
Wyndgate designs, develops, markets and supports health care information
management software products for blood banks, hospitals and other
facilities. Revenues for Wyndgate are derived from the licensing of
software, the provision of consulting and other value-added support
services and the sale of related hardware and software obtained from
vendors. DataMed is in the business of substance abuse testing and medical
surveillance management services, including medical review officer
functions, data management, record storage and coordination of all
substance abuse testing program elements. Revenues for DataMed are derived
from the provision of substance abuse testing management services and the
coordination of laboratory and collection site services for substance abuse
tests. The Company has entered into an agreement to sell DataMed, subject
to shareholder approval.

During the three months ended March 31, 1997, the Company completed an
initial public offering in which approximately 2,914,000 shares of common
stock were issued and provided the Company with approximately $8.2 million,
net of expenses (the "February 1997 public offering"). Through August
1997, the Company has used approximately $5 million of the net proceeds
from the February 1997 public offering. The use of proceeds to date have
been principally expended to repay short-term debt, notes payable, accounts
payable and other accrued expenses, to fund Wyndgate's research and
development and sales and marketing efforts, as well as for general working
capital purposes. Due to delays in the software license fee revenues and
delays in the implementation cycles discussed below as part of Liquidity
and Capital Resources, the Company's use of the net proceeds from the
February 1997 public offering for working capital purposes has been, and is
expected to continue to be, greater than originally anticipated. As a
result, management anticipates that the remaining funds will not be
sufficient to fund the Company's anticipated cash requirements necessary to
fund management's intended plans for the Company.

From inception to June 30, 1997, the Company incurred cumulative net
losses of approximately $11.1 million. The Company expects to continue to
incur losses until 1999, and possibly thereafter, until its existing
SAFETRACE(R) software product is fully implemented and fully operational
within the Company's customers information system environment and until its
transfusion management information system software product, which is
currently under development, is established in its markets.

During the quarter ended June 30, 1997, management became aware of
certain delays in future software license fee revenues expected from
certain large internationally based blood centers and hospital
organizations. See Liquidity and Capital Resources below for further
discussion of the Company's cash requirements and management's plans.

The Company's Wyndgate division has historically incurred, and expects
to continue to incur, losses related to its operations, including the
continued costs for research and development of new software products by
Wyndgate and the expansion of sales and marketing resources. The timing
and amounts of the Company's expenditures will depend upon a number of
factors, including the

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<PAGE>

progress of the Company's research and development process, the status and
timing of regulatory approval, the timing of market acceptance of the
Company's products, the level of support needed by the Company's customers
to implement the software products they license from Wyndgate, and the
efforts required to develop the Company's sales and marketing organization.

Management's Discussion and Analysis or Plan of Operations contains
certain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 including, without limitation,
statements regarding the sufficiency of the Company's liquidity and sources
of capital. Any statements contained herein which are not historical facts
or which contain the words expect, believe or anticipate, or words of
similar import shall be deemed to be forward-looking statements. These
forward-looking statements are subject to certain risks, uncertainties and
other factors which could cause actual results to differ materially.
Additional information regarding factors that could potentially affect the
Company or its financial results may be included in the Company's filings
with the Securities and Exchange Commission.

The results of operations and cash flows for the six months ended June
30, 1997 are not necessarily indicative of the results that may be expected
for any other interim period of 1997 or for the year ending December 31,
1997.

SIX MONTHS ENDED JUNE 30, 1997 ("INTERIM 1997") AS COMPARED TO SIX MONTHS
ENDED JUNE 30, 1996 ("INTERIM 1996")

RESULTS OF OPERATIONS

REVENUES. Revenues are comprised of software sales and consulting
revenues, and sales of hardware and software obtained from vendors.
Revenues from software sales and consulting decreased by $1,406,000, or
51%, to $1,365,000 for Interim 1997 compared to $2,771,000 for Interim
1996. This decrease in software sales and consulting revenue is primarily
the result of significantly reduced new sales and related deliveries of
Wyndgate's SAFETRACE(R) software products.

Revenues from hardware and software, obtained from vendors increased
by $129,000, or 142%, to $220,000 for Interim 1997 compared to $91,000 for
Interim 1996. This increase was primarily due to an increase in the
average price per order and in the number of Wyndgate customers which
ordered third party hardware and software through Wyndgate.

The Company's marketing and sales efforts will continue to be focused
on current and future Wyndgate software products and services. If future
sales of Wyndgate's SAFETRACE(R) software product licenses are less than
management anticipates, the Company's revenues, gross margins, and
liquidity may be materially adversely affected.

TOTAL COST OF REVENUE AND PRODUCT DEVELOPMENT. Cost of revenue and
product development as a percentage of total revenues was 48% and 22% for
Interim 1997 and Interim 1996, respectively.

Cost of software sales and consulting as a percentage of the related
revenue was 43% and 20% for Interim 1997 and Interim 1996, respectively.
This increase was primarily a result of

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<PAGE>

decreased sales of Wyndgate's SAFETRACE(R) software product licenses which
are typically priced at higher profit margins than revenues from consulting
and implementation related services.

Cost of hardware and software, obtained from vendors as a percentage
of the related revenue was 76% and 74% for Interim 1997 and Interim 1996,
respectively. Typically, hardware and software, obtained from vendors is
priced at lower profit margins than revenues from software sales and
consulting.

GROSS PROFIT. Gross profit as a percentage of total revenue was 52%
and 78% for Interim 1997 and Interim 1996, respectively. This decrease in
gross profit was primarily a result of the decreased sales of the higher
margin SAFETRACE(R) software products discussed above.

PAYROLL AND OTHER. Payroll and other increased $450,000, or 86%, to
$971,000 for Interim 1997 compared to $521,000 for Interim 1996. The
increase in payroll and other was primarily due to increased salary and
employee benefit costs incurred as a result of the hiring of additional
client service personnel necessary to manage Wyndgate's new customers
together with increased management personnel.

GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased $269,000, or 87%, to $577,000 for Interim 1997 compared to
$308,000 for Interim 1996. The increase in general and administrative
expenses was attributable primarily to outside contract services, insurance
related expenses, leased office space expenses and other general and
administrative expenses which were related to the increase in the number of
Wyndgate employees.

SALES AND MARKETING. Sales and marketing expenses were $486,000 and
$402,000 for Interim 1997 and Interim 1996, respectively, an increase of
$84,000, or 21%, compared Interim 1996. The increase in sales and
marketing expenses was primarily due to increased activity in advertising
and direct sales personnel and travel related expenditures of Wyndgate
offset by a $45,000 decrease related to certain stock options granted to a
business advisory enterprise expensed in 1996 and which expired on June
30, 1997. Management expects that there will be additional increases in
sales and marketing expenses if the Company is successful in introducing
its new transfusion management information system, the SAFETRACE TX(TM)
software product and if the Company is successful in its current capital
raising efforts.

RESEARCH AND DEVELOPMENT. Research and development expenses increased
$353,000, or 49%, from Interim 1996 to Interim 1997. The increase in
research and development expenses was primarily due to an increase in the
number of employees assigned to software development at Wyndgate.
Management expects research and development expenses to increase as
additional software development related to Wyndgate's SAFETRACE TX(TM)
software product is planned within the remainder of 1997.

PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
increased $60,000, or 600%, from Interim 1996 to Interim 1997. The
provision for doubtful accounts for Interim 1997 of $70,000 provided for
potential uncollectability of certain accounts receivable.

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<PAGE>

DEPRECIATION AND AMORTIZATION. Depreciation and amortization
increased $82,000, or 114%, from Interim 1996 to Interim 1997. The
increase in depreciation and amortization is due to the increases in fixed
assets.

INTEREST INCOME. Interest income increased $105,000 from Interim 1996
to Interim 1997. The increase was primarily due to interest income derived
from the net proceeds of the February 1997 public offering.

INTEREST EXPENSE. Interest expense decreased $21,000, or 31%, from
Interim 1996 to Interim 1997. This decrease was primarily due to the
repayment of approximately $1.4 million in short term debt and notes
payable from the net proceeds of the February 1997 public offering, which
was partially offset by an increase in interest expense on capital lease
obligations.

OTHER. Other expenses increased $81,000 from Interim 1996 to Interim
1997. This increase was primarily due to $79,000 of expenses incurred
during the first quarter of 1997 in conjunction with the issuance and
registration of warrants to two unrelated investors who provided the
company with approximately $450,000 through the January 1997 issuance of
certain 12% notes. The 12% notes plus accrued interest thereon were repaid
in full from a portion of the net proceeds from the February 1997 public
offering.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and cash equivalents of $3.78 million at June 30,
1997, none of which is restricted. During Interim 1997, management became
aware of delays in future software license fee revenues expected from
certain large internationally based blood centers and hospital
organizations. These delays are expected to cause a greater use of
liquidity and capital resources during the remainder of 1997 than
originally anticipated. Based on this recent information, management
anticipates that the Company's current and anticipated cash balances will
not be sufficient to meet the Company's liquidity and capital requirements
necessary to fund management's intended plan of operations, even if DataMed
is sold. Management recognizes that the Company must obtain additional
capital resources, consider significant reductions to its software
development programs and/or significantly reduce all of its operating
expenses to enable it to continue operations with available resources.
Management's plans include consideration of the sale of additional equity
securities and the sale of DataMed which would provide sufficient resources
to continue the Company's operations and its software development programs.
The Company anticipates it will continue to incur losses until 1999, and
possibly thereafter; accordingly, the Company will require additional
capital beyond current capital raising efforts.

The Company had working capital of $872,000 at June 30, 1997 compared
to a working capital deficit of $4 million at December 31, 1996. Excluding
the net liabilities of the discontinued operations, the Company had working
capital of $1.5 million at June 30, 1997 compared to a working capital
deficit of $2.9 million at December 31, 1996. The change in working
capital during Interim 1997 was primarily due to the completion of the
February 1997 public offering which generated approximately $8.2 million in
net proceeds. To date, the net proceeds from the February 1997 public
offering have principally been expended to repay short term debt, notes
payable,

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<PAGE>

accounts payable and other accrued expenses, to fund Wyndgate's research
and development and sales and marketing efforts, and for general working
capital purposes.

The Company used $3.4 million in net cash for operating activities
during Interim 1997, compared to $1.6 million during Interim 1996. These
amounts include $1.3 million net cash used by discontinued operations
during Interim 1997 and $585,000 net cash used by discontinued operations
during Interim 1996. The cash used in continuing operations during Interim
1997 consisted primarily of the net loss from continuing operations of $2.5
million and net decreases of $537,000 in certain current liabilities
partially offset by an increase of $468,000 in unearned revenue and
$274,000 of depreciation and amortization expense incurred during Interim
1997.

Net cash used in investing activities was $496,000 and $91,000 during
Interim 1997 and Interim 1996, respectively. This included capital
expenditures for discontinued operations of $58,000 and $15,000 during
Interim 1997 and 1996, respectively. During Interim 1997, net cash used in
investing activities consisted entirely of purchases of equipment and
fixtures related to the increase in the number of Wyndgate employees and
Wyndgate's occupation of additional office space. During Interim 1996, net
cash used in investing activities consisted of purchases of equipment and
fixtures related to the increase in the number of employees and an increase
in capitalized software development costs.

Net cash provided by financing activities was $7.1 million and $1.5
million during Interim 1997 and Interim 1996, respectively. This included
capital lease principal payments for discontinued operations of $107,000
and $105,000 during Interim 1997 and Interim 1996, respectively. During
Interim 1997, the Company completed its February 1997 public offering and
received approximately $8.2 million in net proceeds. The Company used a
portion of these net proceeds to repay approximately $1.4 million in short
term debt and notes payable, and also to pay certain offering and
distribution costs related to the February 1997 public offering. In
addition, the Company paid $95,000 in principal payments on its capital
lease obligations during Interim 1997.

The implementation cycle of Wyndgate's SAFETRACE(R) software products
is running longer than originally anticipated. Based on recent experience,
management now anticipates that the implementation cycle will typically
take an average of approximately 14 months. The implementation cycles are
dependent on various items including the clients' size and the complexity
of the clients' standard operating procedures. Eight of the current
twenty-five SAFETRACE(R) software product clients are implemented and
operational using the SAFETRACE(R) software product. The results of the
implementation cycle delays are expected to delay future SAFETRACE(R)
software product maintenance revenues, future progress payments from
clients as defined in the SAFETRACE(R) software product license agreements,
the previously anticipated increase in future software license fee revenue
from further sales of the SAFETRACE(R) software product, and cause a
greater use of liquidity and capital resources than originally anticipated.
Correspondingly, the implementation delays have created billing and
collection delays. Management recognizes the significant impact accounts
receivable, accounts receivable turnover trends and unbilled revenues have
on the Company's liquidity and working capital, and is continuing to
attempt to reduce the implementation cycles for Wyndgate's software
products.

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<PAGE>

The Company is currently evaluating potential investment banking
relationships to assist it in the possible sale of equity securities. The
Company also has entered into an agreement to sell DataMed, subject to
shareholder approval. Assuming the Company successfully raises additional
funds and/or shareholders approve the sale of DataMed, there can be no
assurance that the Company will achieve profitability or positive cash
flow. If the Company is unable to obtain adequate financing or if
consummation of the DataMed transaction does not occur during 1997,
management will be required to significantly reduce the Company's software
development programs and all of its operating expenses. If the Company is
successful in raising additional funds through the sale of additional
equity securities, such a change in capitalization could also increase the
number of shares of common stock outstanding, thus diluting ownership of
current shareholders in the Company.

YEAR ENDED DECEMBER 31, 1996 ("FISCAL 1996") AS COMPARED TO THE YEAR ENDED
DECEMBER 31, 1995 ("FISCAL 1995")

RESULT OF OPERATIONS

REVENUES. Revenues increased by $3.7 million, or 396%, to $4.6
million for Fiscal 1996 compared to $934,000 for Fiscal 1995. The increase
was primarily the result of the introduction of Wyndgate's SAFETRACE(R)
software product and related sales of hardware and software obtained from
vendors.

COST OF SALES AND PRODUCT DEVELOPMENT. Cost of sales and product
development as a percentage of revenues was 41% in Fiscal 1996 compared to
32% in Fiscal 1995. This increase was primarily a result of the
following: increased royalty fee expenses based on increased sales of
Wyndgate's SAFETRACE(R) software product licenses; increased sales of
hardware and software obtained from vendors priced at lower profit margins
than Company developed software sales and increased amortization expense of
the capitalized software development costs related to the development of
Wyndgate's SAFETRACE(R) software product.

GROSS PROFIT. Gross profit as a percentage of revenues was 59% in
Fiscal 1996 compared to 68% in Fiscal 1995 as a result of the increased
costs discussed above.

PAYROLL AND OTHER. Payroll and other increased $680,000, or 81%, in
Fiscal 1996 compared to Fiscal 1995. The increase in payroll and other was
primarily due to the hiring of additional management personnel together
with increases in client service personnel necessary to manage Wyndgate's
new customers.

GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased $320,000, or 53%, in Fiscal 1996 compared to Fiscal 1995. The
increase in general and administrative expenses was attributable primarily
to increases in outside contract services, product liability insurance,
leased office space and other general administrative expenses which were
related to the increase in the number of Wyndgate employees. These
expenses were offset by a significant decline in merger and reorganization
expenses.

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<PAGE>

SALES AND MARKETING. Sales and marketing expenses increased $750,000,
or 490%, in Fiscal 1996 compared to Fiscal 1995. The increase in sales and
marketing expenses was primarily due to increased activity in advertising
media, trade shows and direct sales including personnel and travel related
expenditures for Wyndgate.

RESEARCH AND DEVELOPMENT. Research and development expenses were $1.5
million in Fiscal 1996 compared to $655,000 in Fiscal 1995 representing an
increase of 129%. The increase in research and development expenses was
primarily due to an increase in the number of employees assigned to
software and systems development at Wyndgate.

PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts
decreased $25,000, or 57%, in Fiscal 1996 compared to Fiscal 1995. The
provisions for doubtful accounts in both Fiscal 1996 and Fiscal 1995 were
generally consistent with management's expectations.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization
increased $117,000 in Fiscal 1996 compared to Fiscal 1995. The increase in
depreciation and amortization is due to the increases in fixed assets.

INTEREST EXPENSE. Interest expense increased $158,000, or 310%, in
Fiscal 1996 compared to Fiscal 1995. This increase was primarily due to
increases in capital lease financing, interest incurred related to the 10%
Notes, and increases in other short-term borrowings. Management used a
portion of the net proceeds from the Company's February 1997 public
offering to repay certain short-term borrowings and certain of the 10%
Notes not converted into Common Stock.

OTHER. Other expenses increased $226,000, or 942%, in Fiscal 1996
compared to Fiscal 1995. These expenses included $250,000 provided for
potential uncollectability of a note receivable. This $250,000 expense was
offset by a $24,000 decrease in losses on disposal of fixed assets.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital deficit of approximately $4 million
as of December 31, 1996 compared with a working capital deficit at December
31, 1995 of approximately $2 million. The Company used $2.65 million and
$553,000 in net cash for operating activities during Fiscal 1996 and Fiscal
1995, respectively. These amounts include $1 million of net cash used in
discontinued operations during Fiscal 1996 and $9,000 of net cash provided
by discontinued operations during Fiscal 1995. The cash used in continuing
operations during Fiscal 1996 of $1.6 million, consisted of the net loss
from continuing operations of $2.8 million, an increase in accounts
receivable and unbilled revenue of $1.2 million, an increase in other
assets of $190,000, a decrease in the non-compete accrual of $175,000,
offset by an increase in accounts payable and other accrued current
liabilities of $1.4 million and a $ 1 million increase in unearned revenue.
The Company used cash in investing activities of approximately $242,000
during Fiscal 1996 compared with approximately $191,000 during Fiscal 1995.
During Fiscal 1996, these operating and investing activities were financed
primarily from the proceeds of private placements of Common Stock, notes
payable and short term borrowing on a line of credit with a bank.

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<PAGE>

The Company generated approximately $751,000 from the issuance of
notes payable during Fiscal 1996 and received net short-term borrowings of
$597,000 for the same period. Additionally, the Company received proceeds
of approximately $1.74 million from the private placement of its Common
Stock after deducting commissions and expenses of $260,000 during Fiscal
1996. During Fiscal 1996, the Company also used cash from the financing
activities by making approximately $353,000 in principal payments on
capital leases and by payment of $486,000 of issuance and distribution
costs for the Company's February 1997 public offering.

Cash provided by financing activities for Fiscal 1995 included
proceeds from the issuance of common stock of approximately $735,000. Net
proceeds for this period from other sources were minimal.

During January 1997, the Company borrowed $450,000 from two unrelated
investors at 12% interest. These notes were repaid with accrued interest
of approximately $5,000 in February 1997. The proceeds of the notes were
used for short-term working capital. In connection with the notes, the
Company issued two warrants to purchase 150,000 shares of the Company's
Common Stock, exercisable at 85% of the per share price of the shares of
Common Stock included in the Units.

The Company's cash flows have historically been used primarily in
investing in software development and working capital needs. The Company
is using proceeds from the Company's February 1997 public offering
primarily to repay debt, to pay certain accounts payable and accrued
expenses, for Wyndgate's research and development, Wyndgate's sales and
marketing programs and for working capital purposes.

The Company maintained a $1 million line of credit with a bank which
matured February 12, 1997. The amount drawn on this line of credit at
December 31, 1996 was $970,000. During February 1997, the Company used net
proceeds from the Company's February 1997 public offering to repay
approximately $970,000 for the $1 million line of credit plus accrued
interest of approximately $5,000. A principal stockholder of the Company
had personally guaranteed the repayment of the line of credit.

The Company recognizes the significant impact of accounts receivable
on its working capital needs. The substantial increase in revenue from
software sales and consulting for Fiscal 1996 generated corresponding
increases in accounts receivable. While management does not believe there
are any unusual or material credit risks related to the Company's software
sales, the high number of SAFETRACE(R) software product implementations for
the Company's customers within a short period of time and delays
experienced in implementation of the SAFETRACE(R) software product created
billing and collection delays.

The Company incurred a loss of approximately $4.5 million during
Fiscal 1996. The Company expects to continue to incur losses until 1999,
and possibly thereafter, until its software products are better established
in its markets. There can be no assurance that the Company can generate
sufficient revenues, earnings and cash collections from software sales to
satisfy its working capital requirements after such time. The Company's
working capital requirements will depend on

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<PAGE>

numerous factors, including progress of the Company's research and
development of the SAFETRACE TX(TM) software product, other new products,
as well as new applications for its present core products, which include
both SAFETRACE(R) and the SAFETRACE TX(TM) software products.
Additionally, the Company's working capital requirements may depend upon
its success in obtaining a FDA 510K clearance letter for its SAFETRACE
TX(TM) software product within the next 12 months. Failure to receive such
clearance letter may require the Company to seek additional financing. The
Company may seek financing to meet its working capital requirements through
strategic alliances within the Company's industry, through collaborative
arrangements with other suppliers to the Company's customers and/or through
raising additional capital through private placements of its Common or
Preferred Stock. There can be no assurance, however, that additional
funds, if required, will be available from sources historically available
to the Company or other sources on favorable terms, if at all.

EFFECT OF INFLATION AND FOREIGN CURRENCY EXCHANGE

The Company has not experienced material unfavorable effects on its
results of operations due to currency exchange fluctuations with its
foreign customers or material unfavorable effects upon its results of
operations as a result of domestic inflation.

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<PAGE>

THE COMPANY

Global Med Technologies, Inc. (the "Company") provides information
management software products and services to the healthcare industry and
provides substance abuse testing program services to companies, including
certain Fortune 1000 companies. Formerly known as National MRO, Inc.,
which was founded in 1989, the Company changed its name to Global Data
Technologies, Inc. in 1995 in connection with the merger of National MRO,
Inc. and The Wyndgate Group, Ltd. in May 1995. The Company changed its
name again in May 1996 to Global Med Technologies, Inc. The Company now
consists of two divisions, Wyndgate Technologies ("Wyndgate") and DataMed
International ("DataMed"), both of which operate under their respective
trade names. Wyndgate develops, markets, licenses and supports software
for the healthcare industry. DataMed manages and markets a variety of
services that are designed to assist companies with administering substance
abuse testing programs. As more fully described below, the Company has
entered into an agreement to sell, subject to shareholder approval,
specified assets and liabilities of DataMed.

Founded in 1984, Wyndgate initially developed a Student Information
System ("SIS"), an integrated software package for colleges and
universities to track student information. Pursuant to an agreement with
eight California blood centers (the "Royalty Group"), Wyndgate began
development of a blood tracking system to assist community blood centers,
hospitals, plasma centers and outpatient clinics in the U.S. in complying
with the quality and safety standards of the FDA for the collection and
management of blood and blood products. After several years of development
and approximately $1.1 million paid by the Royalty Group, Wyndgate has
completed development and commenced marketing of the SAFETRACE(R) software
product (Wyndgate's blood bank management information system software),
which it believes to be the most comprehensive and flexible system of its
type available today. In accordance with FDA regulations, the Company
submitted a 510(k) application to the FDA in October 1995 for review of its
SAFETRACE(R) software product. The Company was permitted to continue to
market the SAFETRACE(R) software product during the review process. In
April 1997, the Company's Wyndgate division received notification from the
FDA of their finding of "substantial equivalence" of the Company's
SAFETRACE(R) software product. This determination permits the Company to
continue to market the SAFETRACE(R) software product. See THE COMPANY -
WYNDGATE TECHNOLOGIES DIVISION - INDUSTRY OVERVIEW.

The Company continues to concentrate its development efforts on
Wyndgate's existing SAFETRACE(R) software product and Wyndgate's SAFETRACE
TX(TM) product which is currently under development.

The Company's internally developed software development tool EDEN-OA(R),
was used in the development of Wyndgate's existing character-based
SAFETRACE(R) software product, and EDEN-OA(R) provides the foundation for
Wyndgate's existing SAFETRACE(R) software product. Until recently,
management planned to continue to focus research and development efforts
for further development of EDEN-OA(R).

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<PAGE>

Based on management's now anticipated development requirements of
Wyndgate's graphical user interface version of the SAFETRACE(R) software
product and the SAFETRACE TX(TM) software product, management plans to
shift Wyndgate's development efforts from enhancements of EDEN-OA(R)
towards enhancements of commercially available, graphical software
development tools. Management intends to continue EDEN-OA(R) support for
the existing character-based SAFETRACE(R) software product. As a result,
management no longer expects EDEN-OA(R) to be essential to the Company's
strategic goals or to be critical to the Company's competitive advantages.

Management believes purchasing and using commercially available,
graphical software development tools for development provides Wyndgate cost
and time effective software development tool solutions when compared to the
estimated time and costs of further development and enhancements of EDEN-OA(R).

DataMed was founded in 1989 by Michael I. Ruxin, M.D. to offer the
services of a Medical Review Officer ("MRO") to the regulated and
unregulated segments of the substance abuse testing market. Due to federal
regulations, companies involved in commercial transportation must comply
with requirements mandating substance abuse testing of employees in safety
sensitive positions and substance abuse awareness education for supervisors
and employees. Additionally, federal substance abuse testing requirements
applicable to commercial transportation mandate the use of an MRO to
evaluate the quality and accuracy of the testing laboratory and to
determine legal or illegal use of substances. Corporate outsourcing has
been a positive factor for DataMed as some large companies have contracted
with DataMed to outsource the management of their substance abuse testing
programs.

DataMed provides customized program management services to companies
in an attempt to increase total program quality and decrease total program
costs. DataMed provides substance abuse testing management services which
coordinate and actively manage the specimen collection process, the
laboratory testing process, the MRO review process, the random testing
process, the blind sample quality control process, the substance abuse
testing process, and the data management process including compliance
reporting and record keeping.

STRATEGY

The following are key elements of the Company's strategy; however,
there can be no assurance that the Company will be successful in its
strategy.

EXPAND SALES & MARKETING EFFORTS. The Company intends to increase its
sales and marketing efforts by hiring additional field sales and other
marketing personnel during the twelve months following its February 1997
public offering. The Company's Wyndgate division currently has five sales
and marketing personnel. The Company believes it can increase its
presence in the U.S. blood bank information management market through its
planned increases in its sales and marketing staff.

DEVELOP NEW HEALTHCARE MANAGEMENT SOFTWARE PRODUCTS AND SERVICES. The
Company believes that it can develop new products and services from its
existing technology base. In the future, the Company intends to introduce
a transfusion management information system, to be known as the SAFETRACE
TX(TM) software product.

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EXPAND INTERNATIONAL MARKETS. The Company is focused on expanding
international markets. The Company plans to pursue international growth as
it relates to blood banks, plasma centers and hospitals.

DEVELOP STRATEGIC RELATIONSHIPS. The Company intends to pursue
strategic relationships in order to further develop uses for its
technology. Additionally, the Company may work with other healthcare
information providers to develop applications.

MAINTAIN TECHNOLOGY ADVANTAGE. The Company will continue to focus
research and development on evolving its software development environment.
Additional financing will be required to enable the Company to accomplish
its goals in this area.

SALES AND MARKETING

The Company intends to continue to sell and market its medical
information management products and services through a direct sales force.
Each sales representative will have a geographic area and will market all
products and services. Additionally, the Company will continue to respond
to requests for proposals ("RFPs") issued by blood banks, plasma centers
and hospitals.

CUSTOMERS

The Company currently has 25 (including the Royalty Group) customers
for its SAFETRACE(R) software product and intends to continue to target
domestic and international blood banks, plasma centers and hospitals.

During the six months ended June 30, 1997, four Wyndgate customers,
Belle Bonfils Memorial Blood Center (Belle Bonfils), Denver, Colorado;
Haemonetics Corporation, Braintree, Massachusetts; Rhode Island Blood
Center (Rhode Island), Providence Rhode Island; and Lifeblood/Mid-South
Regional Blood Center (Lifeblood), Memphis, Tennessee, accounted for 13%,
34%, 12% and 10%, respectively, of the Company's revenues. During the
three months ended June 30, 1997, five Wyndgate customers, Belle Bonfils;
Lifeblood; Rhode Island; Institute for the Transfusion Medicine,
Pittsburgh, Pennsylvania; and the Royalty Group (a group of eight
California blood centers, through a 1992 development agreement with
Wyndgate, paid $1.1 million to partially fund Wyndgate's development of its
SAFETRACE(R) software product), accounted for 12%, 32%, 10%, 16% and 12%,
respectively, of the Company's revenues. Accounts receivable and unbilled
revenues as of June 30, 1997 from the above Wyndgate customers were
approximately $500,000 and $200,000, respectively. In order to attempt to
reduce its credit risks, the Company generally requires substantial down
payments and progress payments during the course of implementation of
Wyndgate's software products. Non-renewal or termination of the contractual
arrangements with these key Wyndgate customers could have a material
adverse effect on the Company. There can be no assurance that the Company
will be able to retain these key customers or, if such customers are not
retained, that the Company would be able to attract and retain new
customers to replace the revenues currently generated by these customers.
The Company will lose the revenues, accounts receivable and unbilled
revenue from DataMed's customers if the sale of DataMed is approved. See
THE COMPANY - SALES AND MARKETING.

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<PAGE>

RESEARCH AND DEVELOPMENT

During the six months ended June 30, 1997 and 1996, the Company
expended approximately $1.1 million, and $725,000, respectively, for
research and development.

EMPLOYEES

Currently, the Company had 134 full-time employees, consisting of 7
employees for the corporate office, 81 at Wyndgate and 46 at DataMed. As
a result of the Interim Management Agreement relating to DataMed, as of
July 1, 1997, the DataMed employees are no longer being compensated by the
Company. The Company has employment agreements with certain personnel.
See MANAGEMENT. The Company's employees are not represented by a labor
union or subject to collective bargaining agreements. The Company has
never experienced a work stoppage and believes that its employee relations
are satisfactory.

PROPERTIES

The Company currently occupies two primary locations. The Company
occupies approximately 17,000 square feet of office space in Lakewood,
Colorado pursuant to a lease that expires on December 31, 2000. If the
Asset Purchase Agreement is approved by the Company's shareholders, the
Company's need for a substantial portion of such space for its corporate
offices will be eliminated, and the Company intends to enter into a new
lease for approximately 3,439 square feet. The Company through its
Wyndgate division, also leases approximately 22,000 square feet of office
space in Sacramento, California pursuant to a lease that expires on
September 7, 2002. The Company also has employees located in Virginia,
Illinois, Pennsylvania and Texas. No office lease is required at those
locations because the employees work out of their homes. During the year
ended December 31, 1996, office lease expenses per month were approximately
$25,000.

WYNDGATE TECHNOLOGIES DIVISION

Wyndgate designs, develops, markets, licenses and supports software
for the healthcare industry. Pursuant to an agreement with eight
California blood centers, Wyndgate developed a blood tracking system called
the SAFETRACE(R) software product to assist community blood centers, plasma
centers, hospitals and outpatient clinics in the U.S. in complying with the
quality and safety standards of the FDA for the collection and management
of blood and blood products. Wyndgate incorporates and integrates products
and services for the management of the blood supply and its derived
products from donor recruitment to shipment from the blood bank to the
hospital, clinic, medical research institution or other purchaser.

In addition, Wyndgate provides training and consulting services for
installation, implementation, special programming, system design, and
maintenance for its software products. The majority of customers for
Wyndgate's software products use all or a portion of these services.
Historically, maintenance and product upgrades from Wyndgate's software
products have provided an on-going revenue stream and information
concerning Wyndgate's customers' requirements and

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<PAGE>

satisfaction. Special programming services can result in customer funded
development, as was done with the SAFETRACE(R) software product.

INDUSTRY OVERVIEW

The management of the Company believes that market driven forces to
increase quality while containing rising healthcare costs have resulted in
an increasing demand for healthcare information systems that meet the
changing needs of the marketplace. This shift has resulted in systems that
utilize new technologies to provide more accurate information.

With the spread of AIDS and Hepatitis-B, stringent FDA guidelines have
been imposed on blood banks in order to insure a safe blood supply. Some
community blood centers ("CBCs") have been cited by the FDA for
noncompliance and some have even been closed. The American Red Cross and
Blood Systems, Inc. blood centers are currently under consent decrees
requiring them to comply with FDA guidelines. The blood banking industry
has developed various in-house systems to track blood collection, testing,
processing, distribution and transfusion activities. The Company believes
that most blood center in-house developed systems are not fully integrated
and do not offer the capabilities required by the FDA in view of the fact
that the Company's current customers are switching from their in-house
systems to the Company's SAFETRACE(R) software product. While laboratory
equipment vendors have developed automated testing and reporting procedures
directed at a segment of the community blood center process, these systems
address only the laboratory function and are not fully integrated. The
Company believes that blood centers and the laboratory equipment products
vendors are looking for a way to meet the FDA guidelines and minimize their
risk and cost.

The FDA required all blood tracking application software vendors to
submit a 510(k) application for review by March 31, 1996. The application
process for FDA review and compliance with the new guidelines relates to
computer software products regulated as medical devices. The FDA considers
software products intended for the following to be medical devices: (i)
use in the manufacture of blood and blood components; or (ii) maintenance
of data used to evaluate the suitability of donors and the release of blood
or blood components for transfusion or further manufacturing. As medical
device manufacturers, the Company and its competitors are required to
register with the Center for Biologics Evaluation and Research ("CBER"),
list their medical devices, and submit a pre-market notification or
application for pre-market review. In April 1997, the Company's Wyndgate
Division received notification from the FDA of their finding of
"substantial equivalence" of the Company's SAFETRACE(R) software product.
This determination provides a 501(k) clearance and permits the Company to
continue to market the SAFETRACE(R) software product. A competitor also
recently received a 510(k) clearance letter from the FDA for certain
modules of its blood bank management information system software product.
The Company does not believe this will impact Wyndgate's marketing of its
SAFETRACE(R) software product because the Company does not believe that
this competitor offers the spectrum of software modules offered by the
Company.

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WYNDGATE STRATEGY

The key elements of Wyndgate's strategy include:

EXPAND SALES AND MARKETING EFFORTS TO increase its customer base
nationally and internationally. In the near-term, the Company will
aggressively pursue opportunities in the U.S. and abroad in blood tracking
and management with its SAFETRACE(R) software product.

DEVELOP NEW HEALTHCARE MANAGEMENT SOFTWARE PRODUCTS AND SERVICES. By
using its background in healthcare information systems, the Company will
continue to attempt to develop new applications. In the future, the
Company intends to introduce a transfusion management information system
(the SAFETRACE TX(TM) software product). However, there can be no
assurance that such introduction to the domestic market will be succesful
as the Company currently believes a 510(k) application is required to be
submitted to the FDA for the SAFETRACE TX(TM) software product. Therefore
the SAFETRACE TX(TM) software product may not be marketed by the Company in
the United States until clearance is received from the FDA; however, the
product could be marketed internationally. There can be no assurance as to
the length of time required for the FDA to review a 510(k) submission made
by the Company, or that the Company would ultimately receive a clearance
letter relating to the SAFETRACE TX(TM) software product.

DEVELOPS STRATEGIC RELATIONSHIPS. Wyndgate intends to continue to
pursue strategic relationships to further develop uses for its technology.

SOFTWARE PRODUCTS

The SAFETRACE(R) software product is a set of integrated software
modules that are used to manage and control multiple aspects of blood and
plasma operations, from recruiting of donors and collecting donated blood
or plasma, to testing and manufacturing of blood products, distribution and
billing. The Company currently markets its SAFETRACE(R) software product
to blood banks and plasma centers and eventually will market it to
hospitals and transfusion centers. A customer can license one or more
modules as needed to automate its operations.

SAFETRACE(R) Modules Function
- -------------------- --------

DONOR RECRUITMENT Used by the marketing department of a blood
or plasma center to systematically solicit,
recruit and schedule donors. Facilitates
the recruiting process by producing call
lists on demand or scheduling calls by batch
processing.

DONOR MANAGEMENT Provides a means for registering donors and
recording necessary medical and personal
donor data. All real-time donor deferral
and eligibility information is used to
determine current eligibility status of the
donor to be registered.

LABORATORY MANAGEMENT Performs a number of data recording and
evaluation functions. Permits the posting
of tests either by interfacing directly with
testing equipment or manually. Also performs
inventory label validation, which helps to

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ensure that all blood components are suitable
for distribution and have been properly tested,
validated and labeled.

BLOOD INVENTORY AND Maintains current inventories of all
DISTRIBUTION available blood products which have been
tested and labeled. Records the movement of
blood products from the blood or plasma
center to the customer and between
customers. Also maintains records for
imported blood related products.

SPECIAL PROCEDURES Registers patients and tracks blood
requirements for surgeries. Also provides
the capabilities to define and manage
special requests for autologous, designated
and therapeutic donations.

BILLING Implements the pricing and billing practices
associated with each blood product for
customers. Also provides financial
information for management control.

The SAFETRACE(R) software product relies on its donor identification,
laboratory component, labeling and release site-based logic technology to
assist blood banks in complying with FDA regulations. The SAFETRACE(R)
software product has an 85% table driven structure which permits it to
easily adapt to each customer's individual and unique operations. The
SAFETRACE(R) software product has been developed using industry standards,
common operating systems and database managers to ensure portability.
Because of the independence of the SAFETRACE(R) software product's
database, operating systems and hardware, customers have freedom and
flexibility in selecting computer hardware and software components. The
SAFETRACE(R) software product permits customers to preserve their
application software and training investment as customer systems needs and
technology change. Currently, management estimates the SAFETRACE(R)
software product consists of more than 1.5 million lines of code, 481 data
tables, 6,054 data elements, 59 labeling occurrences of component and
release logic, 3,000 discrete programs and over 1,000 screens and windows.

SERVICES

Wyndgate believes that the high quality of the services component of
the business is the key to retaining current customers and enhancing
Wyndgate's reputation for quality and increasing its market presence
Wyndgate's services begin with initial customer contact and continue
throughout the relationship. Services include complete installation and
implementation, training, consulting and maintenance. The license
agreements currently used by Wyndgate typically commit a customer to five
years of maintenance service. The fees associated with the maintenance
service are typically invoiced monthly, quarterly or annually in advance.
Service fees, excluding maintenance, range from 10% to 50% of the initial
software license fee. Under the Company's current license agreements, only
the software license fee and the maintenance fee are required to be paid
and the other fees are optional. However, many customers that have
licensed the SAFETRACE(R) software product to date have contracted for
additional services.

INSTALLATION AND IMPLEMENTATION SERVICES. Installation and
implementation services assist the customers with the selection of
hardware and software systems and, if necessary, the initial installation
of the software on the customer's system. Implementation services include
assisting

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customers in analyzing work flow and standard operating procedures
("SOPs"), developing tables, screen layouts, reports, and installation
specific requirements. Management estimates that it takes approximately
fourteen months from the date of delivery of the software to the customer
to implement the SAFETRACE(R) software product and a portion of Wyndgate's
resources are used during that time. Installation and implementation
services are not considered part of the SAFETRACE(R) software product
license fee or usage fee, and are typically invoiced separately.

TRAINING SERVICES. Training services are provided to customers either
at the customer site or at Wyndgate's offices. Training includes hands-on
access to Wyndgate's software and usually includes building initial tables
and screens. All customers to date have purchased initial training
services which range from five to fifteen days depending on the customer
size and number of people to be trained. Wyndgate also offers follow-up
training services to assist customers in training new staff on new product
functions.

MAINTENANCE SERVICES. Fees for maintenance services are required to
be paid under certain SAFETRACE(R) software product license agreements for
the term of the license. Maintenance services are optional under the other
license agreements. Maintenance services include "bug" fixing,
enhancements and product upgrades. Wyndgate provides an 800-Help Line
number for customer service calls that permits access to Wyndgate's
technical resources directly during the working day and on a paged call-back
basis at all other times.

CONSULTING SERVICES. Consulting services are provided to customers
who request special features, assistance with system configurations,
database consulting, systems management, networking or additional
capabilities beyond those included in the applications software. Wyndgate
also performs special applications development projects under certain
development agreements. The Company has been contracted to provide
consulting services by some of its SAFETRACE(R) software product customers.

PRODUCT DEVELOPMENT

SAFETRACE TX(TM) - TRANSFUSION MANAGEMENT INFORMATION SYSTEM.
Wyndgate has begun the development of the SAFETRACE TX(TM) software
product, a transfusion management information system that can be utilized
by hospitals to help them insure the safety of the blood transfused into
patient-recipients. If completely developed, it will provide electronic
cross-matching capabilities to help insure blood compatibility with the
recipients and will track, inventory, bill and document all activities with
the blood product from the time it is received in inventory to the time the
blood product is used or sent back to the blood center. The SAFETRACE
TX(TM) software product will complement the SAFETRACE(R) software product
as it can integrate hospitals with blood centers that supply blood
products. The Company currently believes a 510(k) application is required
to be submitted to the FDA for the SAFETRACE TX(TM) software product.
Therefore the SAFETRACE TX(TM) software product may not be able to be
marketed by the Company in the United States until clearance is received
from the FDA; however, the product could be marketed internationally.
There can be no assurance as to the length of time required for the FDA to
review a 510(k) submission made by the Company, or that the Company would
ultimately receive a clearance letter relating to the SAFETRACE TX(TM)
software product.

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DEVELOPMENT AGREEMENTS

Pursuant to the development agreement between Wyndgate and the Royalty
Group, Wyndgate developed the SAFETRACE(R) software product and Wyndgate
must make royalty payments to the Royalty Group based on a percentage of
Wyndgate's SAFETRACE(R) software product license sales, measured by cash
received from purchasers of the SAFETRACE(R) software product, net of
certain fees and charges. The time period under the royalty schedule is
based upon the first date of customer invoicing, which was September 14,
1995. The Wyndgate royalty payment schedule is as follows:

Date Royalty Percentage
---- ------------------

September 1995 to September 1997 12%
September 1997 to September 1998 9%
September 1998 to September 1999 6%
After September 1999 3%

Pursuant to a Development Agreement ("Agreement") between the Company
and The Institute for Transfusion Medicine ("ITxM"), the Company has agreed
to develop Commercial Centralized Transfusion System Software ("Commercial
CTS Software"), which it is planned will become Wyndgate's SAFETRACE TX(TM)
software product. This Agreement requires that the Commercial CTS Software
be completed by December 16, 1997. If not timely completed, the Company
would be subject to monetary penalties. The Agreement provides for a
royalty payment to ITxM for revenues received from the sale of the
Commercial CTS Software, net of certain fees and charges. The royalty
period starts with the first commercial transfer for value of the
Commercial CTS Software. The royalty that would be paid is as follows:

Percentage of License Fee Percentage of License Fee
if ITxM Initiates Sale if Company Initiates Sale
---------------------- -------------------------
1 Year 10% 5%

2 Year 10% 5%

3 Year 6% 3%

4 Year 6% 3%

5 Year 4% 2%

6 Year 4% 2%

7 Year 4% 2%

8 Year 4% 2%

9 Year 4% 2%

Thereafter 2% 1%

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<PAGE>

CUSTOMERS

Wyndgate currently has SAFETRACE(R) software product contracts with
the following blood centers, which are in various stages of implementation:

* Belle Bonfils Memorial Blood Center, Denver, CO
* Blood Bank of Alameda-Contra Costa Medical Association, Oakland, CA
* Blood Bank of San Bernardino and Riverside Counties, San Bernardino,
CA
* Blood Bank of the Redwoods, Santa Rosa, CA(1)
* Coffee Memorial Blood Center, Albuquerque, NM
* Community Blood Bank of Erie County, Erie, PA
* Community Blood Bank of Lancaster County Medical Society, Lincoln, NE
* Community Blood Center of Appleton, Appleton, WI
* Gulf Coast Regional Blood Center, Houston, TX
* Institute For Transfusion Medicine, Pittsburgh, PA
* Irwin Memorial Blood Center, San Francisco, CA
* Lifeblood/Mid-South Regional Blood Center, Memphis, TN
* Peninsula Blood Bank, Inc., Burlingame, CA
* Rhode Island Blood Center, Providence, Rhode Island
* Sacramento Medical Foundation Blood Center, Sacramento, CA(1)
* Samuel W. Miller Memorial Blood Center, Bethlehem, PA(1)
* San Diego Blood Bank, San Diego, CA
* Siouxland Community Blood Bank, Sioux City, IA(1)
* Stanford Medical School Blood Center, Palo Alto, CA(1)
* The Blood Center of Central Iowa, Des Moines, IA
* The Blood Center for Southeast Louisiana, New Orleans, LA(1)
* Tri-Counties Blood Bank, Santa Barbara, CA(1)
* The Memorial Blood Centers of Minnesota, Inc., Minneapolis, MN
* Oklahoma Blood Institute, Oklahoma City, OK
- --------------------
(1) Implemented and operational.

See SERVICES, above, for a description of a typical license agreement.

Based upon its installation experience, management now estimates that
SAFETRACE(R) software product implementations will take approximately 14
months from the date of delivery of the software to the customer depending
on the blood center's size and complexity of the blood center's standard
operations procedures ("SOPs").

On February 13, 1997, Wyndgate entered into a multi-million dollar,
10-year contract with Haemonetics Corporation ("Haemonetics"), a New York
Stock Exchange listed company located in Braintree, Massachusetts.
Licensing and other fees are payable by Haemonetics over the life of the
contract. Under the contract, Wyndgate will provide the use of its
SAFETRACE(R) blood bank information management software to Haemonetics for
its entry into the service side of blood banking in multiple locations,
including one of the blood banks listed above which was previously
contracted by Wyndgate. Haemonetics has traditionally provided blood
separation products to blood banks and hospitals domestically and
internationally.

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<PAGE>

The potential customers for Wyndgate's products include community
blood centers ("CBC"), hospitals, out-patient centers and stand alone
transfusion sites. CBCs are able to utilize the SAFETRACE(R) software
product to manage their business and comply with FDA regulations to help
insure the safety of the blood supply. The SAFETRACE(R) software product
allows the CBCs to enter the FDA guidelines, consistent with the CBC's
SOPs, into SAFETRACE(R) software product tables which then provide system
control over the manufacturing and processing of blood and blood products.
In the future, the Company plans to introduce a transfusion management
information system (which it is planned will be the SAFETRACE TX(TM)
software product). All acute care hospitals and alternate transfusion
sites will be potential customers for the SAFETRACE TX(TM) software
product.

In the transfusion market the potential customer base is easily
identified but presents a challenge in reaching the volume of clients for
product demonstrations. Customers will require a product demonstration
before making a commitment to purchase. In addition, the transfusion
product being developed will face severe competition from established
vendors in this market. Wyndgate believes that by contracting with blood
centers for the SAFETRACE(R) software product, hospitals that receive blood
from these blood centers may want to link their transfusion software to the
blood centers' SAFETRACE(R) software. There can be no assurance that
hospitals will desire to establish this link using Wyndgate's SAFETRACE
TX(TM) software product.

AGREEMENTS WITH ORTHO DIAGNOSTIC SYSTEMS INC.

On November 14, 1996, the Company entered into an Exclusivity and
Software Development Agreement (the "Exclusivity Agreement") with Ortho
Diagnostic Systems Inc. ("ODSI"), a wholly-owned subsidiary of Johnson &
Johnson. The Exclusivity Agreement provides that until May 14, 1997 (the
"Exclusivity Period"), ODSI had the exclusive right to negotiate with the
Company with respect to the Company's activities and developments in
information technology and intellectual property relating to donor and
transfusion medicine (the "Technology") and that, during the Exclusivity
Period, the Company would not, directly or through any intermediary,
accept, encourage, solicit, entertain or otherwise discuss any acquisition
of any of the Company's Common Stock, business, property or know-how,
including the Technology, with any person or entity other than ODSI or an
affiliate thereof and will not otherwise encumber the ability of ODSI or an
affiliate thereof to enter into any arrangement with the Company concerning
the Technology.

In May 1997, the Company received communication from ODSI that it had
not yet completed an internal evaluation of the Company's Technology and
would not be prepared at the conclusion of the Exclusivity Period to
discuss a transaction between the Company and ODSI. ODSI requested, and
the Company agreed, that ODSI be permitted to continue its evaluation of
the Company's Technology, on a non-exclusive basis, with the intent of
responding to the Company by July 14, 1997 regarding whether or not ODSI
would propose some form of transaction with the Company. On July 14, 1997,
the parties agreed to a further extension to September 30, 1997, and on
September 17, 1997, the parties agreed to an extension until December 31,
1997.

The Company also agreed to perform certain software development
services in consideration of the payment by ODSI of $500,000 on November
14, 1996, and $500,000 received in January 1997. If the Company and ODSI
enter into a definitive agreement relating to the Technology, the Company's
other assets or Common Stock, then ODSI may elect to decline the software
development services and apply the payments to the Company towards any
consideration payable

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<PAGE>

to the Company in connection with a definitive agreement. If the parties
are unable to come to terms with respect to a definitive agreement, then
the Company will provide the software development services selected by ODSI
and the parties will negotiate a definitive software development agreement.
If ODSI has not elected to decline the Company's services and the Company
fails to provide the software development services, unless ODSI has
breached its obligations under the definitive agreement and is then in
breach, the Company shall have been deemed to have granted ODSI a
non-exclusive license (with the right to sub-license) to the Technology with
a royalty rate not to exceed 4% of net sales, and the parties agreed they
would negotiate a definitive license agreement. On September 17, 1997, the
parties agreed to extend the time for ODSI's election with respect to the
software development services until June 30, 1998.

Pursuant to the Exclusivity Agreement, the Company granted ODSI a
right of first refusal for a period of six months after the expiration of
the Exclusivity Period in the event the Company proposed to effect certain
transactions with respect to the Technology. In connection with the
extension of the Exclusivity Agreement to September 30, 1997, ODSI
relinquished its right of first refusal.

The Company has agreed in the Exclusivity Agreement that in the event
(a) the Company breaches any covenant, agreement, representation or
warranty contained in the Exclusivity Agreement and the Company shall have
had contracts or entered into negotiations relating to a Business
Combination (as hereafter defined) at any time during the Exclusivity
Period, as such may be extended, and with respect to any person, entity or
group with whom such contacts or negotiations have occurred, a Business
Combination shall have occurred or the Company shall have entered into a
definitive agreement providing for a Business Combination; or (b) any
definitive agreement entered into between the Company and ODSI fails to
receive the requisite affirmative vote of the shareholders of the Company
at a shareholders' meeting called for the purpose of voting on such
agreement and at the time of such meeting there exists a Competing
Transaction (as hereafter defined); or (c) (i) the Board of Directors of
the Company shall withdraw, modify or change its recommendation of the
Exclusivity Agreement or any subsequent agreement in a manner adverse to
ODSI, or shall have resolved to do any of the foregoing; (ii) if the Board
of Directors of the Company shall have recommended to the shareholders of
the Company a Competing Transaction; (iii) a tender offer or exchange offer
for 20% or more of the outstanding shares of Common Stock of the Company is
commenced and the Company's Board of Directors recommends that the
shareholders of the Company tender their shares in such tender or exchange
offer; or (iv) any person shall have acquired beneficial ownership or the
right to acquire beneficial ownership of or any "group" (as such term is
defined under Section 13(d) of the Securities Exchange Act of 1934, and the
rules and regulations promulgated thereunder) shall have been formed which
beneficially owns, or has the right to acquire "beneficial ownership" of
more than 20% of the then outstanding shares of the Company's Common Stock,
then the Company shall pay ODSI an amount equal to $2 million plus ODSI's
expenses. For purposes of the Exclusivity Agreement, the term "Business
Combination" means (i) a merger, consolidation, share exchange, business
combination or similar transaction involving the Company; (ii) a sale,
lease, exchange, transfer or disposition of 20% or more of the assets of
the Company and its subsidiaries, if any, taken as a whole, in a single
transaction or series of transactions, including, without limitation, any
sale that would trigger ODSI's right of first refusal described in the
immediately preceding paragraph; or (iii) the acquisition by a person or
entity, or any "group" (as such term is defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) of "beneficial
ownership" of 20% or more of the

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<PAGE>

Company's Common Stock whether by tender offer or exchange offer or
otherwise. A "Competing Transaction" means any of the following involving
the Company or any or its subsidiaries (either existing or hereafter
created): (i) any merger, consolidation, share exchange, business
combination, or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer, license (except for a non-exclusive license in
the ordinary course of the Company's business) or other disposition of 20%
or more of the assets, taken as a whole, in a single transaction or series
of transactions, or any of the Technology; (iii) any tender offer or
exchange offer for 20% or more of the outstanding shares of Common Stock of
the Company or the filing of a registration statement under the Securities
Act of 1933 in connection therewith; (iv) any person having acquired
beneficial ownership or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under Section 13(d) of the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder)
having been formed which beneficially owns or has the right to acquire
beneficial ownership of, 20% or more of the then outstanding shares of the
Common Stock of the Company; or (v) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in
any of the foregoing.

Concurrently with executing the Exclusivity Agreement, ODSI and
Michael I. Ruxin, William J. Collard, Gerald F. Willman, Jr., Lori J.
Willman, Timothy J. Pellegrini and Gordon Segal (collectively, the
"Shareholders") entered into a Proxy and Right of First Refusal Agreement
(the "Shareholders Agreement"), dated November 14, 1996, pursuant to which
each of the Shareholders has granted an irrevocable proxy to ODSI to vote
their shares of the Company's Common Stock (i) in favor of a proposal to
approve any definitive agreement between the Company and ODSI relating to
the Technology, or (ii) on any other proposal relating to the sale of any
of the stock of the Company or all or substantially all of the assets of
the Company or any of the Technology, unless prior to the date of the
shareholders' meeting, the definitive agreement has been terminated for any
reason other than the occurrence of any event that would trigger the
payment of the termination fees pursuant to the Exclusivity Agreement or
any similar provision in the definitive agreement, or ODSI has materially
breached any of its material obligations under the definitive agreement, in
any of which events the proxy would terminate upon the termination of the
definitive agreement. Unless earlier terminated, the proxy granted by each
of the Shareholders expires November 14, 1997. Each of the Shareholders
also agreed that until November 14, 1997, such Shareholder will not
transfer, dispose of, or otherwise sell to any third party or grant to any
third party an option or other right to buy any shares of the Company's
Common Stock held by the Shareholder without having first offered ODSI the
right to enter into a similar transaction with the Shareholder on the same
terms as proposed; provided, that each Shareholder has the right to donate
up to 6% of such Shareholder's stock ownership to a non-profit institution
without invoking ODSI's right of first refusal. ODSI has 30 days to
exercise its right of first refusal after being notified of the proposed
third party transaction. In the event ODSI declines to enter into such
transaction, then the Shareholder has 90 days after the end of the 30 day
acceptance period to consummate the proposed transaction on the terms and
conditions as proposed. In the event the transaction is not consummated
within 90 days, then ODSI has the right of first refusal with respect to
any future proposed transactions by Shareholders to a third party. ODSI's
right of first refusal is not assignable except to an affiliate of ODSI.

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COMPETITION

Currently, Wyndgate is aware of five primary competitors in the blood
bank industry segment including MAK from France, Blood Trac Systems, Inc.
from Canada, Information Data Management ("IDM"), Blood Bank Computer
Systems and Systec from the United States. Some of these competitors are
larger and have greater resources than the Company. The Company believes
it is able to compete on the basis of the capabilities of the technology in
its SAFETRACE(R) software product; however, the Company can provide no
assurances in this regard.

DATAMED INTERNATIONAL DIVISION

Founded in 1989, DataMed manages and markets a variety of services
that are designed to assist companies with administering substance abuse
testing programs. Due to federal regulations, employers involved in
commercial transportation must comply with requirements mandating substance
abuse testing of employees in safety sensitive positions and substance
abuse awareness education for supervisors and employees. Additionally,
federal substance abuse testing requirements mandate the use of a Medical
Review Officer ("MRO") to evaluate the quality and accuracy of a testing
laboratory and determine legal versus illegal use of controlled substances.
DataMed provides customized substance abuse testing management services to
companies. DataMed coordinates and actively manages the specimen
collection process, the laboratory testing process, the MRO review process,
the process of random testing, the blind sample quality control process,
the substance abuse testing process and the data management process,
including compliance reporting and record storage. DataMed arranges for
specimens to be tested by a qualified laboratory and monitors the
performance of: testing laboratories; specimen collection providers; MROs;
and the overall quality of information that is received, stored and
reported. DataMed currently provides substance abuse testing management
services to a number of clients worldwide.

ASSET PURCHASE AGREEMENT/INTERIM MANAGEMENT AGREEMENT

On August 18, 1997, the Company and National Medical Review Offices,
Inc. ("NMRO") entered into an Asset Purchase Agreement (the "Asset Purchase
Agreement") which provides for the sale of DataMed to NMRO. The sale of
DataMed is subject to the approval of the Company's shareholders at a
meeting tentatively scheduled to be held in November 1997. NMRO has
assigned the Interim Management Agreement to Substance Abuse Technologies,
Inc. ("SAT"), a publicly held company, and has advised the Company that,
following the closing (the "Closing") of the Asset Purchase Agreement, NMRO
has agreed to sell DataMed to SAT.

On September 10, 1997, SAT announced that it had filed a voluntary
petition for reorganization under Chapter 11 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Florida. In
the announcement, as well as the documents filed with the court, SAT stated
that its plans to complete the acquisition of DataMed from NMRO through
financing it has obtained.

The following is a summary of what the Company believes are material
features of the Asset Purchase Agreement and the Interim Management
Agreement.

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PURCHASED ASSETS. NMRO will purchase from the Company certain assets
and assume certain liabilities associated with DataMed at June 30, 1997.
The assets include accounts receivable, accrued accounts receivable
(unbilled revenue), pre-paid expenses, customer list of DataMed, customer
contracts, furniture, fixtures and equipment, names, telephone numbers,
trade names and copyrighted materials. Included in the obligations assumed
by NMRO are accounts payable (excluding intercompany payables), certain
accrued expenses not to exceed approximately $127,000, capitalized leases
of approximately $500,000, a new lease on approximately 10,500 square feet
of office space in which DataMed's operations are located, accrued payroll
and vacation pay for DataMed employees and certain sales commissions.

PURCHASE PRICE. In consideration for the Assets, NMRO shall pay
$1,200,000 at closing, $600,000 of which has been placed in an escrow
account.

FINANCING OF SALE. NMRO has advised the Company that it received the
$600,000 which has been placed in escrow from SAT. The Company has been
informed that the additional $600,000 of the purchase price to be paid at
Closing will also be paid by SAT.

EMPLOYEES. At Closing, NMRO or SAT will offer to employ certain
employees of DataMed at compensation levels to be negotiated, provided that
NMRO or SAT may make changes in job description and other terms to meet
operational objectives. Included in the employees expected to be employed
is Bart K. Valdez, Chief Financial Officer and Director of Operations of
DataMed.

CONDITIONS. Each party's obligations pursuant to the Asset
Purchase Agreement are subject to certain conditions, including the consent
of the Company's shareholders.

TERMINATION. The Asset Purchase Agreement may be terminated by
mutual consent of both parties prior to the Closing Date. The Asset
Purchase Agreement may also be terminated by either of the parties on the
Closing Date in the event that all of the conditions precedent to a party's
obligation to consummate the Closing have not been satisfied on or before
the Closing Date.

The Asset Purchase Agreement may be terminated by the Company in the
event (i) a voluntary or involuntary proceeding involving NMRO is commenced
under the United States Bankruptcy Code or if NMRO makes or commences
negotiations for partial or complete assignment of its assets for the
benefit of creditors; (ii) a receiver, custodian, examiner or trustee is
appointed for any of NMRO's property or assets; (iii) NMRO is terminated,
liquidated or dissolved; (iv) in the event the Company's shareholders do
not approve the sale of DataMed within the time required, but only if the
Company is not in breach of any material duty or obligation imposed upon
the Company under the Asset Purchase Agreement and no event has occurred
which with the giving of notice or the passage of time would constitute a
breach by Company of any such material duty or obligation; (v) NMRO
defaults in the performance of any material duty or obligation imposed on
it pursuant to the Asset Purchase Agreement, which default is not corrected
after written notice is given to NMRO by the Company. If the Company
terminates the Asset Purchase Agreement as a result of any of the
foregoing, except the failure of the Company's shareholders to approve the
Asset Purchase Agreement, or if the Company terminates the Asset Purchase
Agreement following the failure to satisfy any of its conditions precedent
set forth therein, then the Asset Purchase Agreement and the Management
Agreement will terminate, the Company will not be obligated to reimburse
NMRO for

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its Expenses (as defined in the Management Agreement), and the Company will
assume all rights (including rights to accounts receivable of DataMed) and
all obligations and liabilities (including accounts payable) relating to
the operation of DataMed after the date of such termination. If the
Company terminates the Asset Purchase Agreement because the Company's
shareholders do not approve the Asset Purchase Agreement, then the Company
retains all rights and all obligations and liabilities relating to the
operation of DataMed prior to the Closing, and the Company will reimburse
NMRO for its Expenses, as defined in the Management Agreement.

The Asset Purchase Agreement may be terminated by NMRO in the event
(i) a voluntary or involuntary proceeding against the Company is commenced
under the United States Bankruptcy Code or if the Company makes or
commences negotiations for partial or complete assignment of its assets for
the benefit of creditors; (ii) a receiver, custodian, examiner or trustee
is appointed for any of the Company's property or assets; (iii) the Company
is terminated, liquidated or dissolved, except if a third party expressly
assumes the obligations and succeeds to the interests of the Company under
the Asset Purchase Agreement; (iv) in the event the Company's shareholders
do not approve the Asset Purchase Agreement and the transactions
contemplated therein within the time required, but only if NMRO is not then
in breach of any material duty or obligation imposed upon NMRO, and no
event has occurred which the giving of notice or the passage of time would
constitute a breach by NMRO of any such duty or obligation; or (v) the
Company defaults in the performance of any material duty or obligation
imposed on it pursuant to the Asset Purchase Agreement, which default is
not corrected after written notice is given to the Company by NMRO. If
NMRO terminates the Asset Purchase Agreement as a result of any of the
foregoing or following the Company's failure to satisfy the conditions
precedent set forth in the Asset Purchase Agreement (except the requirement
to obtain the consents of other persons the Company will retain all rights
(including rights to accounts receivable of DataMed) and all obligations
and liabilities (including accounts payable) prior to the Closing, and the
Company will reimburse NMRO for its Expenses, as defined in the Management
Agreement.

INTERIM MANAGEMENT AGREEMENT. Effective at Closing, the existing
Interim Management Agreement (the "Management Agreement"), which was
entered into between the Company and NMRO on July 7, 1997, effective June
30, 1997, will terminate. Under the Management Agreement, NMRO assumed the
direction and control of the business and operations of DataMed. On July
15, 1997, the Company was notified that NMRO had assigned the Management
Agreement to SAT.

Under the Management Agreement, NMRO has the right (i) to sell,
assign, dispose of or transfer any or all of the assets or contractual
obligations of DataMed, (ii) reduce DataMed's work force, (iii) assign or
transfer DataMed's administrative responsibilities, (iv) administer the
DataMed's contracts with its customers, service providers, vendors or
purchasers of services or supplies, including negotiating, amending,
maintaining and entering into such contracts, but not the termination of
any such contract, or any service provided by DataMed to any customer,
without the prior consent of the Company, (v) to bill for services rendered
by DataMed, and collect accounts receivable of the Company relating to
DataMed and (vi) to fix, change or relocate the offices used by DataMed.
NMRO also agreed to pay and discharge all Expenses (as defined below)
incurred by NMRO in the operation of DataMed.

As compensation for its management services, NMRO receives a monthly
management fee in an amount equal to the Net Income (which is defined as
Revenues less Expenses, as determined

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on an accrual basis in accordance with generally accepted accounting
principles consistently applied). Revenues are defined as all fees and
payments to which the Company is entitled during the term of the Management
Agreement in connection with the provision of services or supplies by
DataMed, investment income and any other income collected by or on behalf
of DataMed during the term of the Management Agreement. Expenses are
defined as all expenses which were fully disclosed and recorded on
DataMed's June 30, 1997 balance sheet and profit and loss statement,
expenses incurred in the ordinary course of operation of DataMed during the
term of the Management Agreement and other non-reimbursed or insured
expenses. Excluded from the definition of Expenses in the Agreement are
(i) interest on borrowed funds, (ii) legal accounting and other consulting
expenses incurred by the Company, (iii) property taxes and taxes based on
the Company's income, (iv) insurance expenses (other than health insurance
for employees providing services exclusively to DataMed), (v) judgements
and expenses of litigation (except legal actions initiated by NMRO to
collect accounts receivable of DataMed), (vi) bank charges on Company
accounts, (vii) employee bonuses or compensation increases for employees of
DataMed not disclosed on the June 30, 1997 profit and loss statement;
(viii) compensation and benefits paid to Company employees whose services
are not rendered exclusively to DataMed, (ix) intercompany charges or
allocations for overhead and loans, as mutually agreed by the parties, and
(x) expenses paid by the Company relating to DataMed's operations that are
not disclosed and recorded in the June 30, 1997 profit and loss statement
of DataMed.

During the term of the Management Agreement and based upon the
historical financial results of DataMed, the Company and NMRO anticipate
that the operations of DataMed will result in a Net Loss. Net Loss is
defined as the amount by which Expenses exceed Revenue. Any Net Loss is to
be the sole responsibility of NMRO if the Company's shareholders approve
the proposal to sell the DataMed to NMRO. If the Management Agreement is
terminated by NMRO pursuant to NMRO's right to terminate (as described
below), then the Company shall be solely responsible for the Net Loss
incurred in the operation of DataMed. If the Company is obligated to
reimburse NMRO for any Net Losses, the Company has the right to have the
Net Loss reviewed and verified by the Company's independent accountants.

The Management Agreement may be terminated by the Company in the event
(i) a voluntary or involuntary proceeding involving NMRO is commenced under
the United States Bankruptcy Code or negotiations for partial or complete
assignment of its assets for the benefit of creditors are commenced, (ii)
a receiver, custodian, examiner or trustee is appointed for any of NMRO's
property or assets, (iii) NMRO is terminated, liquidated or dissolved, (iv)
NMRO defaults in the performance of any material duty or obligation under
the Management Agreement and such default is not cured within 30 days after
written notice thereof is provided to NMRO, and (v) if the Company's
shareholders do not approve the proposal to sell DataMed to NMRO. The
Management Agreement may be terminated by NMRO in the event (i) the
Company's shareholders do not approve the proposal to sell DataMed to NMRO,
(ii) a voluntary or involuntary proceeding involving the Company is
commenced under the United States Bankruptcy Code, or the Company is
terminated, liquidated or dissolved (except if a third party expressly
assumes the obligations and succeeds to the interests of the Company
thereunder), (iii) a receiver, custodian, examiner or trustee is appointed
for any of the Company's property or assets or (iv) the Company defaults in
the performance of a material duty or obligation under the Management
Agreement, which default is not cured within 30 days of written notice of
such default is provided to the Company. If NMRO terminates the Management
Agreement pursuant to any such provision, the Company shall retain all
rights

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<PAGE>

(including rights to accounts receivable of DataMed) and all obligations
and liabilities (including accounts payable) relating to the operation of
DataMed, and will reimburse NMRO's Expenses.

The Management Agreement also provides that the Company would assign
Bart K. Valdez, Chief Financial Officer of the Company and Director of
DataMed Operations, to provide services on behalf of DataMed. The
Management Agreement provides that Mr. Valdez may not allocate in excess of
8 hours per week of his time to the Company and shall not be required to
travel more than twice for the Company during the term of the Management
Agreement, each of which may be for a maximum of three days.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings which management
believes to be material, and there are no such proceedings which are known
to be contemplated

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<PAGE>

MANAGEMENT

The following table sets forth the names and positions of the
director, executive officers and key employees of the Company:

Officer or
Name Age Position Director Since
- ---- --- -------- --------------

Michael I. Ruxin, M.D. 51 Chairman of the Board 1989
and CEO

Joseph F. Dudziak 59 President and COO 1995

William J. Collard 56 Secretary/Treasurer, 1995
Director and Wyndgate
President

Gerald F. Willman, Jr. 40 Director and Wyndgate 1995
Vice-President

Bart K. Valdez 34 Chief Financial Officer 1996
and Director of
DataMed Operations

Gordon E. Segal, M.D. 45 Director 1997

The directors of the Company are elected to hold office until the next
annual meeting of shareholders and until their respective successors have
been elected and qualified. Officers of the Company are elected annually
by the Board of Directors and hold office until their successors are
elected and qualified.

The following sets forth biographical information concerning the
Company's directors and executive officers for at least the past five
years. All of the following persons who are executive officers of the
Company are full time employees of the Company.

MICHAEL I. RUXIN, M.D., the founder of the Company, has been an
officer and director of the Company since its incorporation in 1989 and is
currently the Chairman and Chief Executive Officer of the Company. From
1982 to 1994, Dr. Ruxin was a director of GeriMed of America, Inc., a
private company administering senior health care centers. From 1985 to
1993, Dr. Ruxin was an officer and director of CBL Medical, Inc. ("CBL"),
a public company which managed multiple medical groups, including Medcomp
Medical Group which was a group of small clinics owned by Dr. Ruxin. CBL
focused on providing second opinions on workers compensation claims. Dr.
Ruxin left CBL management in 1988 to found the Company although he remained
on the board of CBL due to his continued ownership of clinics until 1993.
Five years after Dr. Ruxin left CBL management, in 1993, CBL filed a
Petition under Chapter 7 of the Federal Bankruptcy Code to

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<PAGE>

liquidate due to a change in the workers compensation regulations in the
State of California. Dr. Ruxin received a B.A. degree from the University
of Pittsburgh and an M.D. degree from the University of Southern
California. Dr. Ruxin is a licensed physician in California and Colorado.
He is a member of the American Association of Medical Review Officers.

JOSEPH F. DUDZIAK has been President and Chief Operating Officer of
the Company since June 1995. From January 1993 to June 1995, he was
employed as a "site executive" with Analysts International Corporation, a
contract consulting firm engaged primarily in development and support of
software. From August 1991 to December 1992, he was a self-employed
executive consultant, during which time he provided consulting services
primarily to The Wyndgate Group, Ltd. in the areas of product development
and marketing and the development of a business plan. For the 30 years
prior to August 1991, Mr. Dudziak was employed in various capacities (most
recently as a group Vice President) by Control Data Corporation ("CDC"),
which was involved in the computer systems, software and information
management businesses.

WILLIAM J. COLLARD has been a director and the Secretary/Treasurer of
the Company and the President of the Wyndgate division since May 1995.
From 1984 to May 1995 he was president and a director of The Wyndgate
Group, Ltd., and responsible for directing the sales, operations and
research and development efforts of The Wyndgate Group, Ltd. From 1976 to
1984, Mr. Collard was the executive director of Sigma Systems, Inc., a
company that provides colleges and other institutions with administrative
computer applications. Mr. Collard received a B.S. degree in Business
Administration (Finance) and an M.S. degree in Business Administration
(Quantitative Methods) from California State University.

GERALD F. WILLMAN, JR. has been a director of the Company and the Vice
President of the Wyndgate division since May 1995. Mr. Willman was
director and then a Vice President of The Wyndgate Group, Ltd., from 1984
to 1995 and was responsible for the overall design and development of the
products developed by The Wyndgate Group, Ltd., including research of new
technologies. Prior to his employment at The Wyndgate Group, Ltd., he was
employed as a development team leader at Systems Research, Inc. Mr.
Willman received a B.S. degree from Hampden Sydney College and M.B.A.
degree from National University.

BART K. VALDEZ has been the Director of Operations for DataMed since
October 1996 and the Principal Financial Officer since June 1997. He was
Director of Finance and Operations and also acted as the Principal
Financial Officer for the Company from June 1995 through mid-October 1996.
Mr. Valdez functions under the direct supervision of the President and is
accountable for the effective operations of the account management team,
medical review, data management, vendor management and information systems
departments. From 1989 to joining the Company in 1995, he was employed by
Baxter International, Inc., a medical supply and manufacturing company,
most recently as Regional Director of Operations for the Mountain Region.
Mr. Valdez received a B.S. degree in Management from Colorado State
University and a M.B.A. degree from the University of Colorado. In October
1997, the Company and Mr. Valdez entered into a severance agreement
pursuant to which Mr. Valdez will terminate his employment with the Company
upon the closing

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<PAGE>

of the sale of DataMed and will receive a lump sum payment of $55,000. Mr.
Valdez was granted 50,000 fully vested options on August 25, 1997, which
are exercisable over a ten year period at $1.81 per share.

GORDON E. SEGAL, M.D., has been a director of the Company since April
1997. Since December 1995, he has been co-founder and principal of M & S
Ventures, a privately held investment venture capital firm specializing in
biotechnology and health care companies. From January 1992 to December
1995, Dr. Segal was a private venture capitalist. Dr. Segal received a
B.A. degree in 1973 from Southern Methodist University and an M.D. degree
in 1978 from the University of Tennessee. Dr. Segal is a licensed physician
in New York and is a board certified anesthesiologist.

Effective November 3, 1997, ALAN K. GEDDES will become the Chief
Financial Officer of the Company. Mr. Geddes has been Vice President and
Chief Financial Officer of EDnet, Inc., a publicly held company based in
San Francisco, California, since 1996. From 1986 to 1996, Mr. Geddes was
the Chief Financial Officer of Oncogenetics, Inc., Phoenix, Arizona, IMAR
Corporation, San Rafael, California, both emerging companies in medical
technology, in addition to founding his own company, California Pacific
Leasing, Inc., San Rafael, California. Previously, he served as Corporate
Controller at Fiberplastics, Inc., Corte Madera, California, in corporate
management at Bio-Rad Laboratories, Richmond, California, as Plant
Controller with Abbott Laboratories, Pasedena, California and a Financial
Analyst with Litton Industries, Woodland Hills, California. Mr. Geddes
received a B.A. degree in 1971 from the University of California and an
M.B.A. degree in finance from Utah State University in 1974.

The Company's Audit/Systems Committee acts as the liaison between the
Company and its independent public accountants. Its sole current member is
Dr. Ruxin. The Audit Committee did not hold any meetings during 1996. The
Audit/Systems Committee is responsible for reviewing and approving the
scope of the annual audit undertaken by the Company's independent
accountants and will meet with the accountants to review the progress and
results of their work, as well as any recommendations the accountants may
offer. The Audit/Systems Committee will also review the fees of the
independent accountants and make recommendations to the Board of Directors
as to the appointment of the accountants. In connection with the Company's
internal accounting controls, the Audit/Systems Committee will review the
internal audit procedures and reporting systems in place at the Company and
review their accuracy and adequacy with management and with the Company's
independent accountants.

The Company's Compensation Committee, which will recommend
compensation levels to the Board of Directors, consists of Dr. Ruxin and
Mr. Collard, who have met once as a committee. The Compensation Committee
will review salaries, bonuses, and other forms of compensation for officers
and key employees of the Company and its subsidiaries, and will establish
salaries, benefits, and other forms of compensation for new employees.
Included in the Compensation Committee's responsibility is the issuance of
stock bonuses and stock options under the Company's two stock option/bonus
plans. In addition, the Compensation Committee will review other matters
concerning

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<PAGE>

compensation and personnel as the Board of Directors may request. The
Compensation Committee will design the Company's compensation to enable the
Company to attract, retain, and reward highly qualified executives, while
maintaining a strong and direct link between executive pay, the Company's
financial performance, and total stockholder return. The Compensation
Committee believes that officers and certain other key employees should
have a significant stake in the Company's stock price performance under
programs which link executive compensation to stockholder return.

SCIENTIFIC ADVISORY COMMITTEE

The Board of Directors has established a Scientific Advisory Committee
to advise and consult with the Board of Directors as may be requested by
the Board from time-to-time. Currently, the Scientific Advisory Committee
consists of William C. Dickey, M.D., Cathy Bryan and Ronald O. Gilcher,
M.D. It is not presently contemplated that the Scientific Advisory
Committee will have formal meetings as a group. The members of the
Scientific Advisory Committee will not receive any cash compensation from
the Company for serving in that capacity, but each will be reimbursed for
any expenditures incurred on behalf of the Company. In connection with
their appointment to the Scientific Advisory Committee, in January 1996,
Dr. Dickey, Ms. Bryan and Dr. Gilcher were issued options to purchase
2,500, 1,000 and 1,000 shares and respectively, of the Company's Common
Stock, exercisable at $3.75 per share and which vest over a five year
period and are exercisable until January 2006.

WILLIAM C. DICKEY, M.D., CHAIRMAN OF THE SCIENTIFIC ADVISORY
COMMITTEE, has been the Medical Director, Chief Executive Officer and
President of the Belle Bonfils Memorial Blood Center, Denver, Colorado
since July 1990. From 1972 to 1974, he was the Director of the Blood Bank
for Irwin Army Hospital, located in Texas, and from 1974 to 1991, he was
the Director of the Blood Bank for St. Anthony Hospital, Denver, Colorado.
He graduated from the University of Denver with a B.S. degree and received
his M.D. degree from the University of Colorado School of Medicine. He was
certified by the American Board of Pathology for Anatomic and Clinical
Pathology in 1972, and is licensed to practice medicine in Colorado and
Kansas.

CATHY BRYAN has been the Chief Executive Officer, Administrator and
FDA Responsible Head for the Blood Bank of the Redwoods, Santa Rosa,
California, since July 1987. She received a B.A. degree in social sciences
from San Jose State University. She was one of the founders of the Blood
Centers of California, of which she served as a Director (1987) and
President (1994), and is a member of the California Blood Bank Society, of
which she served as Chairman of the Administrator Program from 1992 - 1994,
and the American Association of Blood Banks.

RONALD O. GILCHER, M.D. has been the President and Chief Executive
Officer of the Sylvan N. Goldman Center, Oklahoma Blood Institute, Oklahoma
City, Oklahoma, since 1990 and was the director thereof from 1979 to 1990.
He served in the U.S. Army Medical Corps at Walter Reed Army Institute of
Research, Washington, D.C. from 1968 - 1971, and from 1971 to the present,
has been an assistant or associate professor at the University of
Pittsburgh School of Medicine (1971-

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<PAGE>

1979) and an adjunct professor and clinical associate professor at the
University of Oklahoma School of Medicine (1979 to present). Dr. Gilcher
graduated from the University of Pittsburgh with a B.S. degree in
chemistry, and received his M.D. degree from Jefferson Medical College. He
was certified by the American Board of Internal Medicine for Internal
Medicine (1969 and 1977) and by the American Board of Internal Medicine for
Hematology (1972), and is licensed to practice medicine in the states of
Pennsylvania, Oklahoma and California.

EDWARD P. SCOTT, M.D. has been the Medical Director and Chief
Executive Officer of Lifeblood/Mid-South Regional Blood Center, Memphis,
Tennessee from 1986 to present. Dr. Scott graduated from Mississippi State
University in 1970 and received his M.D. degree from the University of
Mississippi Medical School in 1973. He is certified by the American Board
of Internal Medicine, the American Board of Pathology, Blood Banking (1981)
and the American Board of Internal Medicine, Hematology (1982). He was a
member of the American Association of Blood Banks Managerial Think Tank in
1989, and a member of its Standards Committee from 1993-1996. He is the
author or co-author of numerous published medical journal articles, book
chapters and abstracts.

SIGNIFICANT EMPLOYEE

THOMAS F. MARCINEK has recently been hired by the Company to act as
Chief Operating Officer for Wyndgate. From 1994 until joining the Company,
he was the President and owner of Prax Information Systems, Wantagh, New
York, a practice management software consulting company. From 1990-1994,
he was the President of the Data Technologies Group, a division of Henry
Schein, Inc., Melville, New York. From 1985-1990, he was the Vice
President of MIS for that same company.

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<PAGE>

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding compensation paid
to the Company's CEO and the other executive officers of the Company who
received in excess of $100,000 of salary and bonus from the Company during
the year ended December 31, 1996:

<TABLE>
<CAPTION>
Annual Compensation ($$) Long Term Compensation
------------------------ ----------------------
Awards
------
Restricted
Name and Stock Options Other
Position Year Salary Bonus Awards & SARs Compensation
- -------- ---- ------ ----- ------ ------ -------------
($$) ($$) ($$) (##) ($$)

<S> <C> <C> <C> <C> <C> <C>
Michael I. Ruxin, 1996 $195,000 -0- -0- -0- $ 16,520(1)
Chairman and CEO 1995 $190,000 -0- -0- -0- $ 16,520(1)
1994 $180,000 -0- -0- -0- $ 8,216(2)

Joseph F. Dudziak, 1996 $110,000 -0- -0- 25,000(3) $ 4,800(4)
President and COO 1995 $105,000 -0- -0- 100,000(3) $ 4,800(4)
1994 -0- -0- -0- -0- $ -0-

William J. Collard, 1996 $100,000 -0- -0- -0- $188,400(5)
Secretary/Treasurer 1995 $100,000 -0- -0- -0- $ 30,400(5)
and Director, 1994 $ 75,000 $ 100(6) -0- -0- $ -0-
Wyndgate President

</TABLE>
- ----------
(1) Dr. Ruxin receives $5,000 per annum in life insurance premiums and a
$960 per month car allowance.
(2) Dr. Ruxin received a car allowance of $368 per month, and $3,800 in
life insurance premiums.
(3) In June 1995, Mr. Dudziak received options to purchase 100,000 shares
exercisable at $2.45 per share. In September 1996, Mr. Dudziak
received options to purchase 25,000 shares exercisable at $2.50 per
share. These options vest at the rate of 20% per year. No value has
been attributed to these options since the exercise price was the
estimated fair value of the Company's shares at the time of grant.
(4) Mr. Dudziak receives $400 per month car allowance.
(5) Mr. Collard receives a $450 per month car allowance. In 1995, Mr.
Collard received $25,000 under his non-compete agreement. In 1996,
Mr. Collard received $175,000 under his non-compete agreement and
reimbursement for a vacation in the approximate amount of $8,000.
(6) In 1994, Mr. Collard received a performance bonus of $100.

EMPLOYMENT AGREEMENTS

The Company has entered into an employment agreement with Dr. Ruxin
for a period of five years commencing May 24, 1995. The initial term of
this agreement can be extended at the close of the second year for an
additional two years beyond the initial term (creating a term of seven
years from May 24, 1995). Under the agreement, Dr. Ruxin receives a salary
of $190,000 per year and certain other fringe benefits. Dr. Ruxin's
employment agreement includes a cost-of-living increase at the rate of 2
1/2% per annum, plus any other increase which may be determined from time
to time at the discretion of the Company's Board of Directors. Pursuant to
the employment agreement, Dr. Ruxin is provided with a car on such lease
terms to be determined by the Company, provided that the monthly operating
costs (including lease payments) to be paid by the Company will not exceed
$960. The agreement also includes a covenant not to compete for which Dr.
Ruxin was to be paid

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a lump sum of $115,000 on January 1, 1996. No payments have been made in
connection with the covenant not to compete. The covenant not to compete
will terminate the later of five years from the date of the agreement or
the term of the agreement; hence, the Company will not receive any benefit
from the covenant not to compete unless the agreement is terminated prior
to May 24, 2000. Dr. Ruxin has now agreed that such payment will have to
be made only if and when the Company has sufficient cash flow, as
determined by the Board of Directors. Proceeds from this offering will not
be used to make any payments in connection with the covenant not to
compete. Dr. Ruxin's employment under the employment agreement may be
terminated by Dr. Ruxin upon the sale by the Company of substantially all
of its assets, the sale, exchange or other disposition of at least 40% of
the outstanding voting shares of the Company, a decision by the Company to
terminate its business and liquidate its assets, the merger or
consolidation of the Company with another entity or an agreement to such a
merger or consolidation or any other type of reorganization, or if the
Company makes a general assignment for the benefit of creditors, files for
voluntary bankruptcy or if a petition for the involuntary bankruptcy of the
Company is filed in which an order for relief is entered and remains in
effect for a period of thirty days or more, or if the Company seeks,
consents to, or acquiesces in the appointment of a trustee, receiver or
liquidator of the Company or any material part of its assets. Dr. Ruxin's
employment under the employment agreement also may be terminated by reason
of Dr. Ruxin's death or disability or for cause as set forth in the
employment agreement. If the agreement is terminated by the Company for
any reason other than cause or permanent disability, the Company must pay
Dr. Ruxin a lump sum severance payment of $2.5 million.

On May 24, 1995, the Company also entered into a five year employment
agreement with William J. Collard which contains the same extension
provision and reasons for termination as does Dr. Ruxin's agreement, and
provides for an annual salary of $100,000. Mr. Collard's employment
agreement includes a cost-of-living increase at the rate of 2 1/2% per
annum, plus any other increase which may be determined from time to time at
the discretion of the Company's Board of Directors. Mr. Collard's
agreement also contains a covenant not to compete, with payments of
$100,000 for the covenant to have been made on January 1, 1996 and May 24,
1996, respectively. Aggregate payments of $200,000 were made as follows:
$25,000 in December 1995; $75,000 in January 1996; and $100,000 in May
1996. The covenant not to compete will terminate the later of five years
from the date of the agreement or the term of the agreement; hence, the
Company will not receive any benefit from the covenant not to compete
unless the agreement is terminated prior to May 24, 2000. If Mr. Collard's
agreement is terminated by the Company for any reason other than cause or
permanent disability, the Company must pay him a lump sum severance payment
of $2.5 million. Mr. Collard also receives a car allowance of $450 per
month. Mr. Collard received approximately $8,000 for vacation related
expenses during 1996. During 1997, Mr. Collard received approximately
$11,000 for tax expenses related to the May 1995 Wyndgate merger.

The Company also has an employment agreement with Gerald F. Willman,
Jr. which contains an extension provision for the term of the agreement and
reasons for termination similar to those of Dr. Ruxin and Mr. Collard with
an annual salary of $95,000, except the initial term is for three years
commencing May 24, 1995 and the extension is for an additional two years.
Mr. Willman's employment agreement includes a cost-of-living increase at
the rate of 2 1/2% per annum, plus any

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other increase which may be determined from time to time in the discretion
of the Company's Board of Directors. The employment agreement requires
that if he is terminated by the Company for any reason other than cause or
permanent disability, the Company must pay Mr. Willman a lump sum severance
payment of $1.0 million. During 1996, Mr. Willman received approximately
$8,000 for tax related expenses related to the May 1995 Wyndgate merger.
During 1997, Mr. Willman received approximately $17,000 for tax expenses
related to the May 1995 Wyndgate merger and $8,000 for vacation related
expenses.

On June 28, 1995, the Company entered into an employment agreement
with Joseph F. Dudziak for a two year term pursuant to which Mr. Dudziak
earns a salary of $105,000 per year. Mr. Dudziak's employment agreement
contains the same reasons for termination as the other employment
agreements described above, but does not include the same extension
provision or an annual cost-of-living increase. However, if increased, his
salary may not be decreased thereafter during the term of the agreement
without Mr. Dudziak's consent. If Mr. Dudziak's employment is terminated
by the Company for any reason other than for cause or permanent disability,
the Company is required to pay Mr. Dudziak his salary and benefits for the
full two years. Mr. Dudziak is entitled to certain incentive compensation
based on the Company's pre-tax profits for 1996. The agreement also grants
Mr. Dudziak options to purchase an aggregate of 100,000 shares of the
Company's Common Stock. Subject to early vesting in certain circumstances,
the options vest over a five year period at the rate of 20% per year and
are exercisable at $2.45 per share, which was the estimated fair value of
the shares at the time of grant. Mr. Dudziak receives a car allowance of
$400 per month. The Company has agreed to pay Mr. Dudziak approximately
$25,000 for moving expenses which was paid during the six months ended June
30, 1997. The employment agreement with Mr. Dudziak has expired; however,
he is continuing to be employed under the same terms.

The Company also has an employment agreement with Bradley V. Maberto
which contains an extension provision for the term of the agreement and
reasons for termination similar to those of Mr. Willman. The agreement
provides for an annual salary of $55,000. The initial term for the
agreement is three years commencing on May 24, 1995 and the extension is
for an additional two years. Mr. Maberto's employment agreement includes
a cost-of-living increase at the rate of 2 1/2% per annum, plus any other
increase which may be determined from time to time in the discretion of the
Company's Board of Directors. The agreement requires that if Mr. Maberto
is terminated by the Company for any reason other than cause or permanent
disability, the Company must pay Mr. Maberto a lump sum severance payment
of $1.0 million.

COMPENSATION OF DIRECTORS

Members of the Company's Board of Directors are not compensated in
their capacities as Board Members. However, the Company reimburses all of
its officers, directors and employees for accountable expenses incurred on
behalf of the Company and has granted certain of its Board Members stock
options under the Company's Amended and Restated Stock Option Plan.

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<PAGE>

STOCK OPTION PLAN

The Company has adopted its Amended and Restated Stock Option Plan
(the "Plan") which provides for the issuance of options to purchase up to
1,234,279 shares of Common Stock to employees, officers, directors and
consultants of the Company. The purposes of the Plan are to encourage
stock ownership by employees, officers, directors and consultants of the
Company so that they may acquire or increase their proprietary interest in
the Company, to (i) reward employees, officers, directors and consultants
for past services to the Company and (ii) encourage such persons to become
employed by or remain in the employ of or otherwise continue their
association with the Company and to put forth maximum efforts for the
success of the business of the Company.

The Plan is administered by a Committee consisting of the Board of
Directors or Compensation Committee, if appointed. At its discretion, the
Committee may determine the persons to whom Options may be granted and the
terms thereof. As noted above, the Committee may issue options to the
Board.

The terms of any Options granted under the Plan are not required to be
identical as long as they are not inconsistent with the express provisions
of the Plan. In addition, the Committee may interpret the Plan and may
adopt, amend and rescind rules and regulations for the administration of
the Plan.

Options may be granted as incentive stock options ("Incentive
Options") intended to qualify for special treatment under the Internal
Revenue Code of 1986, as amended (the "Code"), or as non-qualified stock
options ("Non-Qualified Options") which are not intended to so qualify.
Only employees of the Company are eligible to receive Incentive Options.
The period during which Options may be exercised may not exceed ten years.
The exercise price for Incentive Options may not be less than 100% of the
fair market value of the Common Stock on the date of grant; except that the
exercise price for Incentive Options granted to persons owning more than
10% of the total combined voting power of the Common Stock may not be less
than 110% of the fair market value of the Common Stock on the date of grant
and may not be exercisable for more than five years. The exercise price
for Non-Qualified Options may not be less than 85% of the fair market value
of the Common Stock on the date of grant. The Plan defines "fair market
value" as the last sale price of the Company's Common Stock as reported on
a national securities exchange or on the NASDAQ NMS or, if the quotation
for the last sale reported is not available for the Company's Common Stock,
the average of the closing bid and asked prices of the Company's Common
Stock as reported by NASDAQ or on the electronic bulletin board or, if
none, the National Quotation Bureau, Inc.'s "Pink Sheets" or, if such
quotations are unavailable, the value determined by the Committee in
accordance with its discretion in making a bona fide, good faith
determination of fair market value.

The Plan contains provisions for proportionate adjustment of the
number of shares issuable upon the exercise of outstanding Options and the
exercise price per share in the event of stock dividends, recapitalizations
resulting in stock splits or combinations or exchanges of shares.

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<PAGE>

In the event of the proposed dissolution or liquidation of the
Company, or any corporate separation or division, including, but not
limited to, split-up, split-off or spin-off, merger or consolidation of the
Company with another company in which the Company is not the survivor, or
any sale or transfer by the Company of all or substantially all its assets
or any tender offer or exchange offer for or the acquisition, directly or
indirectly, by any person or group for more than 50% of the then
outstanding voting securities of the Company, the Committee may provide
that the holder of each Option then exercisable will have the right to
exercise such Option (at its then current Option Price) solely for the kind
and amount of shares of stock and other securities, property, cash or any
combination thereof receivable upon such dissolution, liquidation,
corporate separation or division, merger or consolidation, sale or transfer
of assets or tender offer or exchange offer, by a holder of the number of
shares of Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate separation
or division, merger or consolidation, sale or transfer of assets or tender
offer or exchange offer; or in the alternative the Committee may provide
that each Option granted under the Plan will terminate as of a date fixed
by the Committee; provided, however, that not less than 30 days written
notice of the date so fixed will be given to each recipient, who will have
the right, during the period of 30 days preceding such termination, to
exercise the Option to the extent then exercisable. To the extent that
Section 422(d) of the Code would not permit this provision to apply to any
outstanding Incentive Options, such Incentive Options will immediately upon
the occurrence of the dissolution or liquidation, etc., be treated for all
purposes of the Plan as Non-Qualified Options and shall be immediately
exercisable as such.

Except as otherwise provided under the Plan, an Option may not be
exercised unless the recipient then is an employee, officer or director of
or consultant to the Company or a subsidiary of or parent to the Company,
and unless the recipient has remained continuously as an employee, officer
or director of or consultant to the Company since the date of grant of the
Option.

If the recipient ceases to be an employee, officer or director of, or
consultant to, the Company or a subsidiary or parent to the Company (other
than by reason of death, disability or retirement), other than for cause,
all Options theretofore granted to such recipient but not theretofore
exercised will terminate three months after the date the recipient ceased
to be an employee, officer or director of, or consultant to, the Company.

If the recipient ceases to be an employee, officer or director of, or
consultant to, the Company or a subsidiary or parent to the Company by
reason of termination for cause, all Options theretofore granted to such
recipient but not theretofore exercised will terminate thirty days after
the date the recipient ceases to be an employee, officer or director of, or
consultant to, the Company.

If a recipient dies while an employee, officer or director of or a
consultant to the Company, or if the recipient's employment, officer or
director status or consulting relationship, shall terminate by reason of
disability or retirement, all Options theretofore granted to such
recipient, whether or not otherwise exercisable, unless earlier terminated
in accordance with their terms, may be exercised by the recipient or by the
recipient's estate or by a person who acquired the right to exercise such

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<PAGE>

Options by bequest or inheritance or otherwise by reason of the death or
disability of the recipient, at any time within one year after the date of
death, disability or retirement of the recipient; provided, however, that
in the case of Incentive Options such one-year period will be limited to
three months in the case of retirement.

Options granted under the Plan are not transferable other than by will
or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, or the rules thereunder. Options
may be exercised, during the lifetime of the recipient, only by the
recipient and thereafter only by his legal representative.

The Committee may suspend, terminate, modify or amend the Plan, but
without shareholder approval the Board may not materially increase the
number of shares as to which Options may be granted, change the eligibility
requirements for persons entitled to participate in the Plan or materially
increase the benefits to be received by any participant under the Plan.
The Board may not adversely affect any Option previously granted without
the consent of the participant. Unless sooner terminated, the Plan will
expire on May 31, 2000.

OPTION GRANTS

The following table sets forth certain information regarding options
to purchase shares of Common Stock issued to Executive Officers of the
Company during the fiscal year ended December 31, 1996:

OPTION GRANTS IN 1996

Number of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise Expiration
Name Granted in 1996 Price Date
---- ------- ------- ----- -----

Joseph F. Dudziak 25,000(1) 10.8% $2.50 09/30/06

Bart K. Valdez 30,000(2) 13.0% $2.50 09/30/06

- ------------------
(1) As originally granted, options to purchase 5,000 shares were to vest
each year Mr. Dudziak remains in the employ of the Company, beginning
September 30, 1997 and continuing each September 30 thereafter. Once
vested, the options are exercisable for a ten year period. On August
25, 1997, Mr. Dudziak's options were modified in the following
respects: (a) such options are immediately vested and (b) the exercise
price of the options was reduced to $1.81 per share.
(2) As originally granted, options to purchase 6,000 shares were to vest
each year Mr. Valdez remain in the employ of the Company, beginning
September 30, 1997 and continuing each September 30 thereafter. Once
vested, the options are exercisable for a ten year period. On August
25, 1997 Mr. Valdez's options were modified in the following respects:
(a) such options are immediately vested, (b) the options are
exercisable for a period of ten years, without regard to Mr. Valdez's
employment status with the Company and (c) the exercise price was
reduced to $1.81 per share.

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<PAGE>

There were no options exercised during the last fiscal year by the
Company's executive officers, and no value has been ascribed to their
unexercised options at December 31, 1996 as there was no public market for
the Company's Common Stock.

At its Annual Meeting of Shareholders to be held on December 2, 1997,
the Company will present to its shareholders a proposal to increase the
number of available shares under the Company's Second Amended and Restated
Stock Option Plan from 1,234,279 shares of Common Stock to 2,200,000.
Currently, the Company has approximately 1,000,000 options outstanding
under its Amended and Restated Stock Option Plan.

STOCK COMPENSATION PLAN

The board of directors of the Company has approved the 1997 Employee
Stock Compensation Plan ("Stock Compensation Plan"), to support and
increase the Company's ability to attract, retain and compensate persons of
experience and ability and whose services are considered valuable.

A maximum of 100,000 shares of the Company's common stock are issuable
under the terms of the Stock Compensation Plan. The Stock Compensation
Plan provides for compensation through the award of Common Stock in payment
for services rendered or in recognition of past services of performances
rendered to the Company or as a bonus. Shares subject to a stock award are
valued at not less than 100% of their fair market value on the date the
award is granted, whether or not they are subject to restrictions.

The Stock Compensation Plan is administered by the Compensation
Committee appointed by the Board or, in the absence of a designated and
qualified Committee, the entire Board must serve as the Committee. Stock
Compensation Plan participants may be selected by the Board from: (i) key
employees of the Company; (ii) officers and directors of the Company; (iii)
consultants or advisors to the Company; and a (iv) lawyer, law firm,
accountant or accounting firm, or other professionals or professional firms
engaged by the Company. The Committee has broad discretion to determine
the number of shares which may be granted to participants. The award of
Common Stock will be granted on such terms and conditions as the Board
determines. The Committee also may interpret the Stock Compensation Plan
and is empowered to make all other determinations deemed necessary or
advisable for the administration of the Stock Compensation Plan. The Board
may suspend, terminate, modify or amend the Stock Compensation Plan.

Under the present provisions of the Internal Revenue Code ("Code") and
regulations thereunder, the recipient of an award of common stock will
recognize ordinary income upon award of the stock, in an amount equal to
the fair market value of the shares on the date of the award, and the
Company will be entitled to a deduction (as a compensation expense) in the
same amount in the year the shares are awarded. The recipient's tax basis
for the Common Stock issued under a stock award will generally be equal to
the fair market value of the shares on the date of award. Upon disposition
of those shares, the recipient will realize a capital gain (or loss) equal
to the difference between the tax basis and the amount realized upon
disposition. Any subsequent resale of these

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<PAGE>

shares will not result in any further tax consequences to the Company. The
Stock Compensation Plan is not qualified under Section 401(a) of the Code.

Stock awards granted under the Stock Compensation Plan confer no right
upon any participant with respect to continuation of employment and do not
interfere with the employee's or the Company's right to terminate
employment at any time.

LIMITATIONS ON DIRECTORS' AND OFFICERS' LIABILITY

The Company's Articles of Incorporation limit the liability of
directors to shareholders for monetary damages for breach of a fiduciary
duty except in the case of liability: (i) for any breach of their duty of
loyalty to the Company or its shareholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for unlawful distributions as provided in Section
7-108-403 of the Colorado Business Corporation Act; or (iv) for any
transaction from which the director derived an improper personal benefit.

The Company's Articles of Incorporation and Bylaws provide for the
indemnification of directors and officers of the Company to the maximum
extent permitted by law, including Section 7-109-102 of the Colorado
Business Corporation Act, against all liability and expense (including
attorneys' fees) incurred by reason of the fact that the officer or
director served in such capacity for the Company, or in a certain capacity
for another entity at the request of the Company. Section 7-109-102 of
the Colorado Business Corporation Act provides generally for
indemnification of directors against liability incurred as a result of
actions, suits or proceedings if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of
the Company. The Company has entered into employment agreements with
certain of its employees which provide for indemnification in addition to
the indemnification provided for above. These agreements, among other
things, indemnify and hold harmless the employees against all claims,
actions, costs, expenses, damages and liabilities arising out of or in
connection with activities of the Company or its employees or other agents
within the scope of the employment agreements or as a result of being an
officer or director of the Company. Excluded is indemnification for
matters resulting from gross negligence or willful misconduct of the
employee. The Company believes that these provisions and agreements are
necessary to attract and retain qualified persons as directors and
officers. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act") may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred
or paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the small business issuer will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

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<PAGE>

There is no pending litigation or proceeding involving a director,
officer, employee or other agent of the Company as to which indemnification
is being or may be sought, and the Company is not aware of any other
pending or threatened litigation that may result in claims for
indemnification by any director, officer, employee or other agent.

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<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth, as of the date hereof, the ownership
of the Company's Common Stock by (i) each director and executive officer of
the Company, (ii) all executive officers and directors of the Company as a
group, and (iii) all persons known by the Company to beneficially own more
than 5% of the Company's Common Stock.

Amount and Nature of
Name and Address Beneficial
of Shareholder Ownership (1) Percent of Class
- -------------- -------------------- ----------------
Michael I. Ruxin, M.D.(8) 906,250(2) 11.1%
12600 W. Colfax
Suite A-500
Lakewood, CO 80215

Joseph F. Dudziak 151,914(3) 1.8%
12600 W. Colfax Ave.
Suite A-500
Lakewood, CO 80215

William J. Collard(8) 613,006(4)(5) 7.5%
11121 Sun Center Drive
Suite C
Rancho Cordova, CA 95670

Gerald F. Willman, Jr.(8) 882,514(6) 10.9%
11121 Sun Center Drive
Suite C
Rancho Cordova, CA 95670

Lori J. Willman(8) 882,514(7) 10.9%
11121 Sun Center Drive
Suite C
Rancho Cordova, CA 95670

Gordon E. Segal 256,250(9) 3.2%
340 W. 57th
Apt. 9J
New York, NY 10019

Bart K. Valdez 52,800(10) 0.7%
12600 W. Colfax
Suite A-500
Lakewood, CO 80215

All Directors and
Executive Officers as
a group (6 persons) 2,862,734 34.3%
___________________
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting
and investment power with respect to all such shares. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person, but are not deemed outstanding for the purpose
of calculating the percentage owned by each other person listed.
(2) Includes 6,250 shares underlying warrants issued in connection with
the purchase of the 10% Notes.
(3) Includes options to purchase 125,000 shares at $1.81 per share and
12,500 shares underlying warrants issued in connection with the
purchase of the 10% Notes.
(4) Includes 15,000 shares underlying warrants issued in connection with
the purchase of the 10% Notes.

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<PAGE>

(5) William J. Collard has granted individual options to an employee of
Wyndgate to purchase all or any part of 1,633 of his shares of the
Company, exercisable until September 21, 2005.
(6) Includes 346,481 shares owned by Lori J. Willman, the spouse of Gerald
F. Willman, Jr. Gerald F. Willman, Jr. has granted individual options
to certain employees of Wyndgate to purchase all or any part of
109,434 of his shares of the Company, exercisable until September 21,
2005.
(7) Includes 536,033 shares owned by Gerald F. Willman, Jr., the spouse of
Lori J. Willman.

(8) On November 14, 1996, Michael I. Ruxin, William J. Collard, Gerald F.
Willman, Jr., Lori J. Willman, Timothy J. Pellegrini and Gordon Segal
(collectively, the "Shareholders") entered into a Proxy and Right of
First Refusal Agreement (the "Shareholders Agreement") with ODSI
pursuant to which each of the Shareholders granted an irrevocable
proxy to ODSI to vote their shares of the Company's Common Stock (i)
in favor of a proposal to approve any definitive agreement between the
Company and ODSI relating to the Technology, or (ii) on any other
proposal relating to the sale of any of the stock of the Company or
all or substantially all of the assets of the Company or any of the
Technology, unless prior to the date of the shareholders' meeting, the
definitive agreement has been terminated under certain conditions.
Unless earlier terminated, the proxy granted by each of the
Shareholders expires November 14, 1997. Each of the Shareholders also
granted ODSI a right of first refusal to purchase the Shareholder's
shares until November 14, 1997, in the event such Shareholder proposes
to transfer, dispose of, or otherwise sell such Shareholder's shares
to any third party or grant to any third party an option or other
right to buy any shares of the Company's Common Stock held by such
Shareholder. In July 1997, ODSI relinquished the right of first
refusal in connection with the Company's extension to September 30,
1997 of ODSI's right to negotiate with the Company, on a non-exclusive
basis, with respect to the Technology. In September 1997, the parties
agreed to a further extension to December 31, 1997. See THE COMPANY
-WYNDGATE TECHNOLOGIES DIVISION - AGREEMENTS WITH ORTHO DIAGNOSTIC
SYSTEMS INC.

(9) Includes 6,250 shares underlying warrants issued in connection with
the 10% Notes. Does not include 30,000 shares underlying unvested
options.
(10) Includes 2,800 shares underlying warrants issued in connection with
the 10% Notes and options to purchase 50,000 shares at $1.81 per
share.

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<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1996, Gordon Segal, Michael I. Ruxin, William J. Collard,
Joseph F. Dudziak and Bart K. Valdez, officers and directors of the
Company, purchased 10% Notes in the principal amounts of $25,000, $25,000,
$60,000, $50,000 and $11,200, respectively, in the 10% Note offering by the
Company. Drs. Segal and Ruxin and Messrs. Collard, Dudziak and Valdez were
also issued warrants to purchase 6,250, 6,250, 15,000, 12,500 and 2,800
shares of the Company's Common Stock, respectively, at $3.75 per share in
connection with their purchase of the 10% Notes. The purchases of the 10%
Notes were on the same terms and conditions as purchases by non-affiliates.
In March 1997, Drs. Segal and Ruxin, and Messrs. Collard and Valdez were
repaid the principal amounts of their 10% Notes, plus interest thereon.
Joseph F. Dudziak converted his 10% Note, plus the accrued interest
thereon, into a total of 14,414 shares of Common Stock ($3.75 per share).

On May 5, 1995, the shareholders of the Company approved a loan in the
amount of $161,500, with interest at 8% per annum, made by the Company to
Sonya M. Levine, the wife of Michael I. Ruxin, in 1994, which had not
previously been approved by the shareholders in accordance with Colorado
corporate law. Effective June 30, 1995, the Company forgave Ms. Levine's
note in consideration of the forgiveness of a note payable by the Company
to Dr. Ruxin in the same amount and at the same interest rate as Ms.
Levine's note.

The Chairman and Chief Executive Officer of the Company, Dr. Michael
I. Ruxin, is a guarantor of certain capital lease obligations of the
Company totaling approximately $1.1 million. The sale of DataMed will
result in the termination of a portion of such capital lease obligations
and NMRO and/or SAT will enter into new capital lease agreements. As a
result, Dr. Ruxin will be released from his guarantees of approximately
$500,000 on capital lease obligations.

In June 1995, the Company agreed to pay approximately $20,000 in tax
liability incurred by the shareholders of The Wyndgate Group, Ltd. (an "S"
corporation) in connection with the merger between The Wyndgate Group, Ltd.
and the Company. The Company paid approximately $8,000 and $28,000 related
to this agreement during 1996 and 1997, respectively. The Company does not
anticipate additional payments related to this agreement.

The Board of Directors of the Company has adopted resolutions that no
business transaction, loan or advance will be made by the Company to any
officer, director or holder of more than 5% of the Company's Common Stock,
or any affiliate thereof, unless it has been established that a bona fide
business purpose exists, that all future transactions between the Company
and its officers, directors, or principal shareholders, or any affiliate of
any of such person, must be approved or ratified by a majority of the
disinterested directors of the Company, and the terms of such transaction
must be no less favorable to the Company than could have been realized by
the Company in an arms-length transaction with an unaffiliated person. The
Company believes that all ongoing transactions with the Company's
affiliates are on terms no less favorable than could be obtained from
unaffiliated third parties.

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<PAGE>

The Board of Directors of the Company has also adopted a resolution
that provides that the areas of business in which the Company shall be
interested for the purpose of the doctrine of corporate opportunities shall
be the business of information management software products and services.
Any business opportunity which falls within such areas of interest must be
brought to the attention of the Company for acceptance or rejection prior
to any officer or director of the Company taking advantage of such
opportunity. Any business opportunity outside such areas of interest may
be entered into by any officer or director of the Company without the
officer or director first offering the business opportunity to the Company.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue up to 40,000,000 shares of Common
Stock, $.01 par value. There are 8,135,755 shares presently outstanding.
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, have one vote per share in all matters to be voted
upon by shareholders. There are approximately 135 holders of record of the
Company's Common Stock. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully paid and non-assessable shares. Cumulative voting in the election of
directors is not allowed, which means that the holders of a majority of the
outstanding shares represented at any meeting at which a quorum is present
will be able to elect all of the directors if they choose to do so and, in
such event, the holders of the remaining shares will not be able to elect
any directors. On liquidation of the Company, each common shareholder is
entitled to receive a pro rata share of the Company's assets available for
distribution to common shareholders.

Excluding the Warrants described below, the Company has outstanding
options and warrants to purchase an aggregate of 1,906,321 shares of Common
Stock. The Company has no stock option plan or similar plan which may
result in the issuance of stock options, stock purchase warrants or stock
bonuses other than the Amended and Restated Stock Option Plan adopted by
the Company pursuant to which an aggregate of 1,234,279 shares of Common
Stock have been reserved for issuance pursuant to options or warrants.

At its Annual Meeting of Shareholders to be held on December 2, 1997,
the Company will present to its shareholders a proposal to increase the
number of available shares under the Company's Second Amended and Restated
Stock Option Plan from 1,234,279 shares of Common Stock to 2,200,000 shares
of Common Stock. Currently, the Company has approximately 1,000,000
options outstanding under its Amended and Restated Stock Option Plan.

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<PAGE>

PREFERRED STOCK

The Company is authorized to issue up to a total of 10,000,000 shares
of preferred stock, $.01 par value, with the shares to be issued in series
by the Board of Directors. The Company's Board of Directors has designated
100,000 shares of preferred stock as Series A Preferred Stock, of which
66,667 were issued and subsequently converted into an equal number of
shares of the Company's Common Stock. The remaining shares of preferred
stock may be issued in one or more series from time to time with such
designations, rights, preferences and limitations as the Company's board of
directors may determine without approval of its shareholders. Series A
Preferred Stock has the same voting rights of Common Stock, except that
the holders of Series A Preferred Stock are entitled to elect as a class
one director to the Company's Board of Directors. The holders of the
Series A Preferred Stock shall be entitled to dividends when, as and if
declared on the same basis as the holders of the Company's Common Stock.
The rights, preferences and limitations of separate series of serial
preferred stock may differ with respect to such matters as may be
determined by the Company's Board of Directors, including without
limitation, the rate of dividends, method or nature or prepayment of
dividends, terms of redemption, amounts payable on liquidation, sinking
fund provisions, conversion rights and voting rights. The ability of the
Board to issue preferred stock could also be used by it as a means for
resisting a change of control of the Company and can therefore be
considered an "anti-takeover" device.

10% NOTES

The Company issued $751,200 principal amount of convertible 10% Notes
(the "10% Notes") accruing interest at the rate of 10% per annum until
maturity, which was March 6, 1997. Holders of $423,500 principal amount of
10% Notes have converted the principal amount of their 10% Notes, plus
accrued interest thereon, into an aggregate of 121,003 shares of Common
Stock, of which 28,000 were converted at December 31, 1996, at the rate of
one share per $3.75 of interest and principal. In addition, 187,800 shares
of Common Stock are issuable upon exercise of warrants issued in
conjunction with the 10% Note offering. The 121,003 shares issued upon
conversion of the 10% Notes and the 187,800 shares underlying the Warrants
are being offered for sale hereby.

WARRANTS

Each Warrant entitles the holder thereof to purchase one share of
Common Stock at an exercise price of $4.55 (130% of the initial public
offering price of the Common Stock) per share, subject to adjustment in
certain events, at any time prior to February 11, 2000. In addition to
customary anti-dilution provisions, the exercise price of the Warrants may
be adjusted if the Company issues Common Stock or Common Stock purchase
rights at a price less than the then exercise price.

The Warrants are subject to redemption by the Company at $.55 per
Warrant at any time until February 11, 1999, and thereafter at $.75 per
Warrant at any time until their expiration, on 30 days' prior written
notice to the holders of Warrants, provided that the daily trading price
per share of Common Stock has been as least $5.46 (120% of the Warrant
exercise price) for a period of at least 20 consecutive trading days ending
within 10 days prior to the date upon which the notice of redemption is
given. For purposes of determining the daily trading price of the
Company's Common Stock, if the Common Stock is listed on a national
securities exchange, is admitted to unlisted trading privileges on a
national securities exchange, or is listed for trading on a trading system
of the

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<PAGE>

NASD such as the NASDAQ Small Cap Market or the NASDAQ/NMS, then the last
reported sale price of the Common Stock on such exchange or system each day
shall be used or if the Common Stock is not so listed on such exchange or
system or admitted to unlisted trading privileges then the average of the
last reported high bid prices reported by the National Quotation Bureau,
Inc. each day shall be used to determine such daily trading price. The
Warrants will be exercisable until the close of the business day preceding
the date fixed for redemption, if any.

The Warrants are subject to the terms of a Warrant Agreement dated as
of February 11, 1997, (the "Warrant Agreement") between the Company and
American Securities Transfer & Trust Inc., as Warrant Agent. Reference is
made to said Warrant Agreement (which has been filed as an Exhibit to the
Registration Statement of which this Prospectus is a part) for a complete
description of the terms and conditions thereof. The description herein is
qualified in its entirety by reference to the Warrant Agreement.
The exercise prices and number of shares of Common Stock or other
securities issuable on exercise of the Warrants are subject to adjustment
in certain circumstances, including in the event of a stock dividend, stock
split, recapitalization, reorganization, merger or consolidation of the
Company. Fractional shares will not be issued and such shares will have no
value.

The Warrants may be exercised upon surrender of the Warrant
certificate on or prior to the expiration date at the offices of the
Warrant Agent, with the exercise form on the reverse side of the Warrant
certificate completed and executed as indicated, accompanied by full
payment of the exercise price (by cashier's or certified check payable to
the Company) to the Warrant Agent for the number of warrants being
exercised. The Warrant holders do not have the rights or privileges of
holders of Common Stock.

DIVIDEND POLICY

Dividends are payable on Common Stock when, as, and if declared by the
Board of Directors out of funds legally available to pay dividends, subject
to any preferences which may be given to holders of preferred stock. The
Company has paid no cash dividends to date and it does not anticipate
payment of cash dividends in the foreseeable future.

STOCK TRANSFER AGENT

The Company has designated American Securities Transfer & Trust, Inc.
as its transfer agent for the Common Stock and as its Warrant Agent.

SELLING SECURITY HOLDERS

This Prospectus covers the proposed sale of 1,108,803 shares of Common
Stock which includes (i) 800,000 shares which the Company has agreed to
register on behalf of purchasers in the Company's Private Placement
completed in September 1996, (ii) 121,003 shares issued to holders of the
10% Notes who elected to convert the principal amount of their 10% Notes,
plus accrued

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<PAGE>

interest thereon, to shares of Common Stock and (iii) 187,800 shares of
Common Stock underlying warrants issued in connection with the sale of the
10% Notes. The shares of Common Stock and warrants are held by 87 persons.
Included in the persons who hold Common Stock and/or warrants issued in
connection with the 10% Notes are Michael I. Ruxin, Chief Executive Officer
of the Company, Joseph F. Dudziak, President of the Company, William J.
Collard, a Director and Secretary of the Company, Bart K. Valdez, Director
of Operations of DataMed and Chief Financial Officer of the Company and the
principal of LMU & Company, a consultant to the Company.

The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Security Holders.

The following table sets forth certain information concerning the
beneficial ownership of Common Stock by each Selling Security Holder as of
August 4, 1997:

<TABLE>
<CAPTION>
Shares Owned After
Shares Offering
Shares to be Underlying -------- Warrants
Shares Owned Warrants Sold Warrants to Owned
Prior to Owned Prior in the be Sold in After
Name Offering to Offering Offering the Offering Number Percentage Offering
---- -------- ----------- -------- ------------ ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert M. 180,334 (1) 28,500 40,000 -0- 97,000 1.2 % 28,500
Kassenbrock

Hugo Brooks 10,000 -0- 10,000 -0- -0- -0- -0-

Lawrence M. 33,835 25,000 5,000 25,000 28,835 0.4 % -0-
Underwood

Paul R. Hoover 10,000 -0- 10,000 -0- -0- -0- -0-
and Janet F.
Hoover, JTWROS

Battersea 10,000 -0- 10,000 -0- -0- -0- -0-
Capital, Inc.

ESN Financial, 20,000 -0- 20,000 -0- -0- -0- -0-
LP

Anil & Bina 10,000 -0- 10,000 -0- -0- -0- -0-
Patel, JTWROS

Michal & 50,000 -0- 50,000 -0- -0- -0- -0-
Renata Pivonka
JTWROS

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<PAGE>

William B. & 10,000 -0- 10,000 -0- -0- -0- -0-
Cheryl A. Bacon
JRWROS

Vannette F. 20,000 -0- 20,000 -0- -0- -0- -0-
Poole

John L. Moran 20,000 -0- 20,000 -0- -0- -0- -0-

William R. 10,000 -0- 10,000 -0- -0- -0- -0-
Teele

Alan David 10,000 -0- 10,000 -0- -0- -0- -0-
Cohen

Peter and Luba 40,000 -0- 40,000 -0- -0- -0- -0-
Bondra JTWROS

Harvey D.
Rhoads 2,500 -0- 2,500 -0- -0- -0- -0-

E. Pat Manuel 25,000 -0- 25,000 -0- -0- -0- -0-

Allen E. Hoyt 10,000 -0- 10,000 -0- -0- -0- -0-

Richard Kay 20,000 -0- 20,000 -0- -0- -0- -0-

Mildred J.
Geiss 7,000 -0- 7,000 -0- -0- -0- -0-

Clyde William 10,000 -0- 10,000 -0- -0- -0- -0-
and Valerie J.
Pray JTWROS

Barry Slosberg 10,000 -0- 10,000 -0- -0- -0- -0-

Bradley Subler 2,000 -0- 2,000 -0- -0- -0- -0-

Andrew E.
Kauders 6,000 -0- 6,000 -0- -0- -0- -0-

Richard J. N. 6,000 -0- 6,000 -0- -0- -0- -0-
Leonard

David Hickey 10,000 -0- 10,000 -0- -0- -0- -0-

Georgia M. 10,000 -0- 10,000 -0- -0- -0- -0-
Dunston

TradeLink, 10,000 -0- 10,000 -0- -0- -0- -0-
L.L.C.

-67-

<PAGE>

Laurence P. 4,000 -0- 4,000 -0- -0- -0- -0-
Emrie

Larry and 5,000 -0- 5,000 -0- -0- -0- -0-
Michelle
Weinstein, JTWROS

Underwood Family 20,000 -0- 20,000 -0- -0- -0- -0-
Partners, LTD

Amar J. & 6,000 -0- 6,000 -0- -0- -0- -0-
Vangie Romero,
JTWROS

Consulting on 10,000 -0- 10,000 -0- -0- -0- -0-
Government
Procurement
FBO J. S.
Sansome

Lawrence E. and 10,000 -0- 10,000 -0- -0- -0- -0-
Jeanne F. Keith,
JTWROS

Riley Wilson 20,000 -0- 20,000 -0- -0- -0- -0-
Enterprises

John Solomita 10,000 -0- 10,000 -0- -0- -0- -0-

William Vasey 10,000 -0- 10,000 -0- -0- -0- -0-

Tadahiko
Nakamura 30,000 -0- 30,000 -0- -0- -0- -0-

Robert W. and 4,000 -0- 4,000 -0- -0- -0- -0-
Rhonda W. Braun,
JTWROS

Donald H. & 2,000 -0- 2,000 -0- -0- -0- -0-
Mary Lou Wilbois,
JTWROS

Jon and Laurie 4,000 -0- 4,000 -0- -0- -0- -0-
Lindvall

Maurice S. Cohen 10,000 -0- 10,000 -0- -0- -0- -0-

-68-

<PAGE>

Wilbert D. 10,000 -0- 10,000 -0- -0- -0- -0-
Pearson

Georgina S. 10,000 -0- 10,000 -0- -0- -0- -0-
Caslavka

Lynne D. 6,000 -0- 6,000 -0- -0- -0- -0-
Caslavka

Voss Boreta 10,000 -0- 10,000 -0- -0- -0- -0-

Keith D. & 10,000 -0- 10,000 -0- -0- -0- -0-
Carolyn P.
McDonald,
JTWROS

Howard I.
Saiontz 10,000 -0- 10,000 -0- -0- -0- -0-

James A.
Newsham III 5,000 -0- 5,000 -0- -0- -0- -0-
& Vivian M.
Newsham, JTWROS

William C. & 10,000 -0- 10,000 -0- -0- -0- -0-
Mary Claire
McCormick,
JTWROS

Patrick M. 4,000 -0- 4,000 -0- -0- -0- -0-
Sheridan

Thomas D. 20,000 -0- 20,000 -0- -0- -0- -0-
Fiorino

Richard G. 10,000 -0- 10,000 -0- -0- -0- -0-
Belcher

Scot C. Irwin 5,000 -0- 5,000 -0- -0- -0- -0-

Alan Goldstein 10,000 -0- 10,000 -0- -0- -0- -0-

Maurice and 10,000 -0- 10,000 -0- -0- -0- -0-
Stacy Gozlan,
JTWROS

Howard Wall 20,000 -0- 20,000 -0- -0- -0- -0-

William C. 4,000 -0- 4,000 -0- -0- -0- -0-
Meyer

Jeffery M. 7,000 -0- 7,000 -0- -0- -0- -0-
Savell

-69-

<PAGE>

James A. & 15,000 -0- 15,000 -0- -0- -0- -0-
Joann
Wiedenhoeft,
JTWROS

A. Thomas 6,000 -0- 6,000 -0- -0- -0- -0-
Tenenbaum

Brenman Key & 10,000 -0- 10,000 -0- -0- -0- -0-
Bromberg 401K
Profit Sharing
Plan FBO
Thomas R.
Bromberg

Brenman Key & 20,000 -0- 20,000 -0- -0- -0- -0-
Bromberg 401K
Profit Sharing
Plan FBO Albert
Brenman

Stuart McNab 1,000 -0- 1,000 -0- -0- -0- -0-

Kenneth R. 5,000 -0- 5,000 -0- -0- -0- -0-
Higgens

George D. 9,500 -0- 9,500 -0- -0- -0- -0-
Thompson

Delaware Charter 20,000 -0- 20,000 -0- -0- -0- -0-
G&T TTEE FBO
Richard T.
Baldwin, IRA

Brenman Key & 14,000 -0- 14,000 -0- -0- -0- -0-
Bromberg 401K
Profit Sharing
Plan FBO A.
Thomas Tenenbaum

Thomas R. Ulie -0- 12,500 -0- 12,500 -0- -0- -0-

Wilshire Center 14,000 12,500 14,000 12,500 -0- -0- -0-
Geriatrics
Medical Group

Eugene H. 17,333 12,500 14,000 12,500 3,333 .04% -0-
Seymour

Bart K. 8,800 2,800 -0- 2,800 6,000 0.1% -0-
Valdez(2)

Richard Sher 14,440 12,500 14,440 12,500 -0- -0- -0-

-70-

<PAGE>

Arnold E. 7,218 6,250 7,218 6,250 -0- -0- -0-
Prince

Gordon Segal(2) 256,250 6,250 -0- 6,250 250,000 3.1% -0-

Jeffery Appel -0- 6,250 -0- 6,250 -0- -0- -0-

Ellen Sakaguchi 1,000 3,125 1,000 3,125 -0- -0- -0-

Benjamin R. 14,500 2,500 -0- 2,500 12,000 0.1% -0-
Budraitis

William J. 613,006 15,000 -0- 15,000 598,006 7.4% -0-
Collard(2)

Neill & Nita 7,207 6,250 7,207 6,250 -0- -0- -0-
Freeman

Joseph F. 14,414 12,500 14,414 12,500 -0- -0- -0-
Dudziak(2)

Michael Lipkin 10,090 8,750 10,090 8,750 -0- -0- -0-

Thomas R. 1,600 5,000 1,600 5,000 -0- -0- -0-
Sakaguchi

James Sakaguchi 1,000 6,875 1,000 6,875 -0- -0- -0-

Harris A. Cahn 7,199 6,250 7,199 6,250 -0- -0- -0-

Michael I. 906,250 6,250 -0- 6,250 900,000 11.1% -0-
Ruxin(2)

Joel C. & -0- 6,250 -0- 6,250 -0- -0- -0-
Lorainne
Newman

Ralph A. -0- 12,500 -0- 12,500 -0- -0- -0-
Grills, Jr.
</TABLE>
- --------------------
(1) Includes 83,334 shares underlying warrants to purchase Common Stock,
exercisable at $2.975 per share which have been previously registered
for sale.
(2) See SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

PLAN OF DISTRIBUTION

Sales of the Selling Security Holders' Shares may be effected from
time to time in transactions (which may include block transactions) in the
over-the counter market, in negotiated transactions, or a combination of
such methods of sale, at fixed prices which may be changed, at market
prices prevailing at the time of sale, or at negotiated prices. The
Selling Security Holders have advised the Company that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of its securities. The
Selling Security Holders may effect such transactions by selling Common
Stock directly to purchasers or to or through broker-dealers which may act
as agents or principals. Such broker-dealers may receive

-71-

<PAGE>

compensation in the form of discounts, concessions, or commissions from the
Selling Security Holders and/or the purchasers of Common Stock for whom
such broker-dealers may act as agents or to whom they sell as principals,
or both. RAF Financial Corporation, the underwriter of the Company's
initial public offering, will receive normal and ordinary brokerage
commissions on sales of Shares made on behalf of Selling Security Holders.
Sales of the Shares may be made pursuant to this Prospectus or pursuant to
Rule 144 adopted under the Securities Act of 1933, as amended. The Selling
Security Holders and any broker-dealers that act in connection with the
sale of the Common Stock might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and any commission received
by them and any profit on the resale of the shares of Common Stock as
principal might be deemed to be underwriting discounts and commissions
under the Securities Act. Such arrangement may necessitate a filing with
the National Association of Securities Dealers, Inc. pursuant to Notice to
Members 88-101. The Selling Security Holders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against certain liabilities, including liabilities
arising under the Securities Act.

If any of the following events occurs, this Prospectus will be amended
to include additional disclosure before offers and sales of the Selling
Shareholders' shares are made: (a) to the extent the securities are sold
at a fixed price or by option at a price other than the prevailing market
price, such price would be set forth in the prospectus, (b) if the
securities are sold in block transactions and the purchaser wishes to
resell, such arrangements would be disclosed in the prospectus and (c) if
the compensation paid to broker-dealers is other than usual and customary
discounts, concessions or commissions, disclosure of the terms of the
transaction in the prospectus would be included.

Because the Selling Security Holders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act,
the Selling Security Holders will be subject to prospectus delivery
requirements under the Securities Act.

LEGAL MATTERS

Legal matters in connection with the Shares being offered hereby have
been passed on for the Company by the law firm of Brenman Bromberg &
Tenenbaum, P.C., Denver, Colorado. Members of the firm of Brenman Bromberg
& Tenenbaum, P.C. own 50,000 shares of the Company's Common Stock.

EXPERTS

The consolidated financial statements of Global Med Technologies, Inc.
as of December 31, 1996 and 1995 and for the years then ended included in
this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and
auditing.

-72-

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

The Company presently has outstanding 8,135,755 shares of Common
Stock. Holders of 4,254,936 shares have entered into lock up agreements
with the Representative. The Shares registered hereby are no longer
subject to such lock up agreements, effective August 11, 1997.

In general, under Rule 144, as currently in effect, any person (or
persons whose shares are aggregated), including persons deemed to be
affiliates, whose restricted securities have been fully paid for and held
for at least one year from the later of the date of payment therefor to the
Company or acquisition thereof from an affiliate, may sell such securities
in brokers' transactions or directly to market makers, provided that the
number of shares sold in any three month period may not exceed the greater
of 1% of the then outstanding Common Stock or the average weekly trading
volume of the Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 are also subject to certain notice requirements
and the availability of current public information about the Company.
After two years have elapsed from the later of the issuance of restricted
securities by the Company or their acquisition from an affiliate, such
securities may be sold without limitation by persons who are not affiliates
under Rule 144.

Sales of substantial amounts of Common Stock by shareholders of the
Company under Rule 144 or otherwise, or even the potential for such sales,
are likely to have a depressive effect on the market price of the shares of
Common Stock and Warrants and could impair the Company's ability to raise
capital through the sale of its equity securities. See RISK FACTORS.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement under the Securities
Act of 1933, as amended with respect to the securities offered hereby with
the United States Securities and Exchange Commission ("SEC"), 450 Fifth
Street, N.W., Washington, D.C. 20549. This Prospectus, which is a part of
the Registration Statement, does not contain all of the information
contained in the Registration Statement and the exhibits and schedules
thereto, certain items of which are omitted in accordance with the rules
and regulations of the SEC. For further information with respect to the
Company and the securities offered hereby, reference is made to the
Registration Statement, including all exhibits and schedules therein, which
may be examined at the SEC's Washington, D.C. office, 450 Fifth Street,
N.W., Washington, D.C. 20549 without charge, or copies of which may be
obtained from the SEC upon request and payment of the prescribed fee.
Statements made in this Prospectus as to the contents of any contract,
agreement or document are not necessarily complete, and in each instance
reference is made to the copy of such contract, agreement or other document
filed as an exhibit to the Registration Statement, and each such statement
is qualified in its entirety by such reference. The Company is a reporting
company under the Securities Exchange Act of 1934, as amended, and in
accordance therewith in the future will file reports and other information
with the SEC. All of such reports and other information may be inspected
and copied at the public reference facilities maintained by the SEC at the
address set forth above in Washington, D.C. and at regional offices of the
SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. In
addition, the

-73-

<PAGE>

Company intends to provide its shareholders with annual reports, including
audited financial statements, unaudited interim reports and such other
reports as the Company may determine necessary. The SEC maintains a Web
site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC at
http://www.secgov.

-74-

<PAGE>

GLOSSARY

COMMUNITY BLOOD CENTERS - Community Blood Centers or CBCs are typically not
for profit blood centers usually affiliated with a local city or community.
These are different from the American Red Cross Blood Centers that maintain
national affiliation.

DONOR IDENTIFICATION AND LABORATORY COMPONENT LABELING AND RELEASE
SITE-BASED LOGIC - Multiple-occurring program logic that is designed to
help control and help manage those areas of a blood center's operation in
which the hazard potential of the purity, potency and safety of the blood
and blood products effects a recognized level of concern.

EDEN-OA(R) - EDEN-OA(R) (OA is for Open Architecture) is the proprietary
Wyndgate application development product and environment used as a basis
for the SAFETRACE(R) software product. It provides basic functions common
to applications plus maintenance management features and processes.

FDA 510(k) - FDA 510(k) refers to the Federal Drug Administration process
number 510(k) which governs a clearance letter distributed by the FDA.
Software such as the SAFETRACE(R) software product is classified as a
medical device. The 510(k) process is a stringent set of testing,
verification and review of products like the SAFETRACE(R) software product.

GUI - GUI refers to the Graphical User Interface, most commonly seen as the
icon driven windows on PCs. Special software development tools are needed
to develop GUI windows.

HELP LINE - Help Line refers to the service line number provided by
Wyndgate for use of its customers to receive assistance regarding Wyndgate
products. Wyndgate provides a 1-800 number for its customers who have a
maintenance contract.

MODULE - Refers to pieces of applications computer code used to perform a
certain set of tasks or functions. Generally, modules have a name
commensurate with the major function of that set of computer code, e.g.,
Billing Module refers to handling the processing of invoices.

MRO - Medical Review Officer

SAFETRACE(R) SOFTWARE PRODUCT - The SAFETRACE(R) software product is the
blood bank information management system developed by Wyndgate using
EDEN-OA(R) in conjunction with eight California blood centers. The
SAFETRACE(R) software product contains the following application modules:
Donor Recruitment; Donor Management; Laboratory Management; Special
Procedures; Inventory-Distribution; and Billing.

-75-

<PAGE>

SAFETRACE TX(TM) SOFTWARE PRODUCT - The SAFETRACE TX(TM) software product
is the transfusion management software system under development. This
transfusion system, if fully developed, will service hospitals and those
blood centers that not only supply blood or blood components to a hospital
but also manage the transfusion process.

SUBSTANCE ABUSE - Substance abuse refers to the use of chemical products
which may have an adverse effect on humans. Classified under substance
abuse are drugs such as cocaine and heroin and chemicals such as alcohol.

-76-

<PAGE>

Consolidated Financial Statements

GLOBAL MED TECHNOLOGIES, INC.

YEARS ENDED DECEMBER 31, 1996 AND 1995
WITH REPORT OF INDEPENDENT AUDITORS

<PAGE>

Global Med Technologies, Inc.

Consolidated Financial Statements

Years ended December 31, 1996 and 1995

CONTENTS

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . .F-1

Consolidated Financial Statements

Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . .F-2
Consolidated Statements of Operations. . . . . . . . . . . . . . . . .F-4
Consolidated Statements of Stockholders' Equity (Deficit). . . . . . .F-5
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . .F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . .F-9

<PAGE>

Report of Independent Auditors

Board of Directors
Global Med Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Global Med
Technologies, Inc. as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholders' equity (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

Since the date of completion of our audit of the accompanying financial
statements and initial issuance of our report thereon dated March 11, 1997,
the Company, as discussed in Note 1, has experienced a reduction in
revenues and increased costs that adversely affect the Company's results of
operations and liquidity. Note 1 describes management's plans to address
these issues.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Global Med
Technologies, Inc. at December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

Denver, Colorado
March 11, 1997, except for Notes 1 and 2,
as to which the date is August 18, 1997, and
the sixth paragraph of Note 11, as to which
the date is September 10, 1997

F-1

Global Med Technologies, Inc.

Consolidated Balance Sheets
(In thousands)

DECEMBER 31 JUNE 30
1995 1996 1997
-----------------------------------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 422 $ 489 $ 3,775
Accounts receivable-trade, net of
allowance for uncollectible
accounts of $50, $75, and $145
at December 31, 1995 and 1996
and June 30, 1997, respectively 18 875 800
Unbilled revenues, net of allowance
for uncollectible accounts of $0,
$125, and $125 at December 31, 1995
and 1996 and June 30, 1997,
respectively - 326 339
Prepaid expenses and other assets 6 196 101
Deferred offering costs - 486 -
-----------------------------------------
Total current assets 446 2,372 5,015

Equipment and fixtures, at cost:
Furniture and fixtures 95 67 326
Machinery and equipment - - 233
Computer hardware and software 401 613 863
-----------------------------------------
496 680 1,422

Less accumulated depreciation and
amortization (152) (189) (414)
-----------------------------------------
344 491 1,008

Capitalized software development costs,
less accumulated amortization of $66,
$163, and $283 at December 31, 1995
and 1996 and June 30, 1997,
respectively 403 376 256

-----------------------------------------
Total assets $ 1,193 $ 3,239 $ 6,279
=========================================
</TABLE>

F-2

<PAGE>

Global Med Technologies, Inc.

Consolidated Balance Sheets (continued)
(In thousands, except par value amounts)

DECEMBER 31 JUNE 30
1995 1996 1997
-----------------------------------------
(UNAUDITED)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 65 $ 483 $ 256
Accrued expenses 86 731 429
Accrued payroll 36 243 207
Accrued compensated absences 261 352 380
Noncompete accrual 325 150 150
Unearned revenue 271 1,359 1,827
Short-term debt 500 1,097 -
Notes payable (including $181 to
related parties at December 31,
1996) - 651 -
Current portion of capital lease
obligations 84 169 228
Net liabilities of discontinued
operations 819 1,132 666
-----------------------------------------
Total current liabilities 2,447 6,367 4,143

Capital lease obligations, less
current portion 205 232 239

Commitments and contingencies

Stockholders' equity (deficit):
Preferred stock, $.01 par value:
Authorized shares - 10,000
None issued or outstanding - - -
Common stock, $.01 par value:
Authorized shares - 40,000
Issued and outstanding shares -
3,949, 4,994, and 8,136 at
December 31, 1995 and 1996
and June 30, 1997, respectively 39 50 81
Additional paid-in capital 1,702 4,282 12,910
Accumulated deficit (3,200) (7,692) (11,094)
----------------------------------------
Total stockholders' equity (deficit) (1,459) (3,360) 1,897
----------------------------------------
Total liabilities and stockholders'
equity (deficit) $ 1,193 $ 3,239 $ 6,279
========================================
</TABLE>

SEE ACCOMPANYING NOTES.

F-3

<PAGE>

Global Med Technologies, Inc.

Consolidated Statements of Operations
(In thousands except per common share information)

YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1995 1997 1996
---------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Software sales and consulting $ 3,648 $ 934 $ 1,365 $ 2,771
Hardware and software,
obtained from vendors 928 - 220 91
---------------------------------------------------
4,576 934 1,585 2,862

Cost of sales and product
development:
Software sales and consulting 937 296 590 560
Hardware and software, obtained
from vendors 946 - 168 67
---------------------------------------------------
1,883 296 758 627
---------------------------------------------------

Gross profit 2,693 638 827 2,235

Operating expenses:
Payroll and other 1,524 844 971 521
General and administrative 924 604 577 308
Sales and marketing 903 153 486 402
Research and development 1,538 655 1,078 725
Provision for doubtful accounts 19 44 70 10
Depreciation and amortization 162 45 154 72
---------------------------------------------------
Income (loss) from continuing
operations (2,377) (1,707) (2,509) 197

Other income (expense):
Interest income 25 27 115 10
Interest expense (209) (51) (47) (68)
Other (250) (24) (81) -
---------------------------------------------------

Income (loss) from continuing
operations before income taxes (2,811) (1,755) (2,522) 139
Provision for income taxes - 29 - -
---------------------------------------------------
Income (loss) from continuing
operations (2,811) (1,784) (2,522) 139

Loss from discontinued operations (1,681) (901) (880) (539)
---------------------------------------------------
Net loss $ (4,492) $ (2,685) $ (3,402) $ (400)
===================================================

Income (loss) per share of
common stock:
Income (loss) from continuing
operations $(0.64) $(0.42) $(0.35) $ 0.03
Loss from discontinued
operations (0.38) (0.22) (0.12) (0.12)
---------------------------------------------------
Net loss $(1.02) $(0.64) $(0.47) $(0.09)
===================================================

Weighted average of common
shares outstanding 4,384 4,211 7,153 4,384
===================================================
</TABLE>

SEE ACCOMPANYING NOTES.

F-4

<PAGE>

Global Med Technologies, Inc.

Consolidated Statements of Stockholders' Equity (Deficit)
(In thousands)

Common Stock Additional
--------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
----------------------------------------------
Balance, December 31, 1994 3,619 $36 $ 719 $ (478) $ 277
Issuance of common stock
related to May 1995
private placements 300 3 732 - 735
Issuance of common stock
warrants related to
May 1995 private
placement - - 15 - 15
Issuance of common stock-
finder's fee related
to Wyndgate merger 30 - 74 - 74
Compensation related to
personal grants of
common stock options
by principal
stockholders - - 162 - 162
Distribution to stockholders
(Wyndgate) - - - (37) (37)
Net loss - - - (2,685) (2,685)
-----------------------------------------------
Balance, December 31, 1995 3,949 39 1,702 (3,200) (1,459)
Issuance of common stock-
January 1996 exercise
of common stock warrants
related to May 1995
private placement 150 2 448 - 450
January 1996 issuance of
Series A preferred
stock converted to
common stock 67 1 249 - 250
Issuance of common stock
from exercise of stock
options under Company's
stock option plan - - 1 - 1
Issuance of common stock
related to July 1996
private placement 800 8 1,732 - 1,740
Grants of common stock
options to a business
advisory enterprise - - 45 - 45
Issuance of common stock
related to conversion
of certain 10% notes 28 - 105 - 105
Net loss - - - (4,492) (4,492)
----------------------------------------------
Balance, December 31, 1996 4,994 50 4,282 (7,692) (3,360)

F-5

<PAGE>

Global Med Technologies, Inc.

Consolidated Statements of Stockholders' Equity (Deficit) (continued)
(In thousands)

Common Stock Additional
--------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
----------------------------------------------

Issuance of warrants
related to January 1997
12% notes (unaudited) - $ - $ 79 $ - $ 79
Initial public offering,
including underwriter's
overallotment option-net
of offering expenses
(unaudited) 2,914 29 8,197 - 8,226
Expiration of common stock
options to a business
advisory enterprise
(unaudited) - - (45) - (45)
Share adjustments related
to May 1995 private
placement common stock
(unaudited) 120 1 (1) - -
Issuance of common stock
from exercise of stock
options under Company's
stock option plan
(unaudited) 15 - 21 - 21
Option grants under the
Company's stock option
plan (unaudited) - - 29 - 29
Issuance of common stock
related to conversion of
certain 10% notes
(unaudited) 93 1 348 - 349
Net loss (unaudited) - - - (3,402) (3,402)
----------------------------------------------
Balance, June 30, 1997
(unaudited) 8,136 $81 $12,910 $(11,094) $1,897
==============================================

SEE ACCOMPANYING NOTES.

F-6

<PAGE>

Global Med Technologies, Inc.

Consolidated Statements of Cash Flows
(In thousands)

YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1995 1997 1996
--------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>

OPERATING ACTIVITIES
Net loss $ (4,492) $ (2,685) $ (3,402) $ (400)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Loss from discontinued operations 1,681 901 880 539
Depreciation and amortization 259 95 274 101
Loss on disposal of assets - - 2 -
Deferred income taxes - 29 - -
Issuance of common stock options 45 162 - -
Issuance of common stock-finder's
fee - 74 - -
Issuance of warrants - - 63 -
Changes in operating assets
and liabilities:
Accounts receivable-trade, net (857) (5) 75 (390)
Unbilled revenues, net (326) 258 (13) (1,143)
Note receivable - - - (250)
Prepaid expenses and other assets (190) (31) 95 (11)
Accounts payable 418 59 (227) 141
Accrued payroll 207 10 (302) 308
Accrued expenses 645 108 (36) 82
Accrued compensated absences 91 171 28 (6)
Noncompete accrual (175) 325 - (175)
Unearned revenue 1,088 (33) 468 222
--------------------------------------------------
Net cash used in continuing
operations (1,606) (562) (2,095) (982)
Net cash (used in) provided by
discontinued operations (1,040) 9 (1,255) (585)
--------------------------------------------------
Net cash used in operating
activities (2,646) (553) (3,350) (1,567)

INVESTING ACTIVITIES
Purchases of equipment and fixtures (67) (32) (438) (36)
Capital expenditures of
discontinued operations (105) - (58) (15)
Increase in software development
costs (70) (159) - (40)
--------------------------------------------------
Net cash used in investing
activities (242) (191) (496) (91)

FINANCING ACTIVITIES
Borrowings on short-term debt 715 1,355 - 425
Principal payments on short-term
debt (118) (1,105) (1,097) (105)
Principal payments under capital
lease obligations (130) (34) (95) (50)
Principal payments under capital
lease obligations of discontinued
operations (223) (74) (107) (105)
Principal payments on notes payable - - (327) -
</TABLE>

F-7

<PAGE>

Global Med Technologies, Inc.

Consolidated Statements of Cash Flows (continued)
(In thousands)

YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1995 1997 1996
--------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>

FINANCING ACTIVITIES (CONTINUED)
Issuance of notes payable $ 651 $ - $ - $ 751
Issuance of common stock 2,546 735 8,272 700
Deferred offering costs (486) - 486 (99)
Issuance of common stock warrants - 15 - -
Distribution to stockholders
(Wyndgate) - (37) - -
--------------------------------------------------
Net cash provided by financing
activities 2,955 855 7,132 1,517
--------------------------------------------------

Net increase (decrease) in cash
and cash equivalents 67 111 3,286 (141)
Cash and cash equivalents at
beginning of period 422 311 489 422
--------------------------------------------------
Cash and cash equivalents at
end of period $ 489 $ 422 $ 3,775 $ 281
==================================================
</TABLE>

Supplemental disclosures:

The Company entered into capital lease obligations of $585,000 and
$941,000 in 1996 and 1995, respectively, including $343,000 and
$598,000 related to discontinued operations in 1996 and 1995,
respectively.

Interest expense approximates interest paid.

During 1994, the Company loaned approximately $162,000 to a related
party in exchange for a note receivable which accrued interest at an
annual rate of 8%. During 1995, the Company forgave the note
receivable in consideration of the forgiveness of a note payable by
the Company to a principal stockholder which also was for
approximately $162,000 and which also accrued interest at an annual
rate of 8%.

During 1996, convertible 10% notes payable of $105,000 including
accrued interest of $5,000 were converted into 28,000 shares of common
stock (see Note 8).

SEE ACCOMPANYING NOTES.

F-8

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements

December 31, 1996

(Information as of June 30, 1997 and for the six month periods
ended June 30, 1997 and 1996 is unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

On May 23, 1995, The Wyndgate Group, Limited (Wyndgate) merged with
National MRO, Inc. (National MRO) in accordance with the terms and
provisions of an Agreement of Merger and National MRO changed its name to
Global Data Technologies, Inc., which subsequently changed its name to
Global Med Technologies, Inc. (the Company). Also, the National MRO and
Wyndgate divisions are now referred to as DataMed International (DataMed)
and Wyndgate Technologies (Wyndgate), respectively. All shares of Wyndgate
common stock were exchanged for a total of 1,960,000 shares of common stock
of the Company. This merger transaction was accounted for as a pooling of
interests; therefore, the Company's 1995 financial statements include the
results of operations as if the merger had been consummated on January 1,
1995 (see Note 2). Subsequent to the merger, the businesses of both
Wyndgate and DataMed have been operated as divisions of the Company. The
Company incurred expenses related to the merger of $164,000 which included
a $130,000 finder's fee, which consisted of $75,000 in common stock of the
Company and $55,000 in cash, and $34,000 related to legal and other fees.
The related merger costs are included in general and administrative
expenses in the accompanying consolidated statements of operations.

DESCRIPTION OF BUSINESS

The Company, through its Wyndgate division, provides information management
software products and services to the health care industry. The Company,
through its DataMed division, which is shown in the accompanying
consolidated financial statements as discontinued operations (Note 2), is
in the business of providing substance abuse testing and medical
surveillance management services, including medical review officer
functions, data management, record storage and coordination of all
substance abuse testing program elements. The Company, through its two
divisions, serves international, national and regional clients in a variety
of industries.

LIQUIDITY AND MANAGEMENT'S PLANS

F-9

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

completely implemented and operational within the Company's customer
information system environment and until its transfusion management
information system software product, which is currently under development,
is established in its markets.

During the quarter ended June 30, 1997, management became aware of certain
delays in future software license fee revenues expected from certain large
internationally based blood centers and hospital organizations. In
addition, the implementation cycle for Wyndgate's SAFETRACE(R) software
product is running longer than originally anticipated. These delays are
expected to cause a greater use of liquidity and capital resources during
the remainder of 1997 than originally anticipated. Based on this
information, management anticipates that the Company's current and
anticipated cash balances, including proceeds from the initial public
offering, will not be sufficient to meet the Company's capital or liquidity
requirements as presently structured. Management recognizes that the
Company must obtain additional capital resources, consider significant
reductions to its software development programs and/or significantly reduce
all of its operating expenses to enable it to continue operations with
available cash resources. Management's plans include consideration of the
sale of additional equity securities and the sale of DataMed (see Note 2),
which would provide sufficient resources to continue the Company's
operations and its software development programs for the remainder of 1997.
If the Company is unable to obtain adequate financing, management will be
required to significantly reduce the Company's software development
programs and its operating expenses.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and its divisions. All significant interdivision accounts and
transactions have been eliminated.

INTERIM FINANCIAL STATEMENTS

The financial statements as of June 30, 1997 and for the six month periods
ended June 30, 1997 and 1996 are unaudited, but include all adjustments
(consisting of only normal recurring adjustments) which the Company
considers necessary for a fair statement of the financial position as of
such date and the operating results and cash flows for such periods.
Results for interim periods are not necessarily indicative of results for
the entire year.

F-10

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

Revenue from sales of software licenses, included in software sales and
consulting revenue, is recognized upon delivery of the software product to
the customer, unless the Company has significant related vendor obligations
remaining. When significant obligations remain after the software product
has been delivered, revenue is not recognized until such obligations have
been completed or are no longer significant. The costs of any
insignificant obligations are accrued when the related revenue is
recognized.

Revenue from postcontract customer support, included in software sales and
consulting revenue, is recognized over the period the customer support
services are provided, and software services revenue is recognized as
services are performed.

Revenue from software development contracts, included in software sales and
consulting revenue, is recognized on a percentage-of-completion method with
progress to completion measured based upon labor costs incurred or
achievement of contract milestones.

Revenue from the sale of hardware and software, obtained from vendors, is
recognized at the time the hardware and software are delivered to the
customer.

UNBILLED REVENUES

Unbilled revenues at December 31, 1996 have been reduced by an allowance
for doubtful accounts of $125,000 and are generally billable and
collectible within one year.

UNEARNED REVENUE

Included in unearned revenue at December 31, 1996 and 1995 is approximately
$52,000 and $200,000, respectively, of unperformed professional services
related to an agreement between the Royalty Group and Wyndgate (see Note
10). At December 31, 1996, $500,000 of the unearned revenue balance is
related to an agreement between the Company (through its Wyndgate division)
and Ortho Diagnostic Systems, Inc., a subsidiary of Johnson & Johnson (see
Note 10). The remaining balance of $807,000 at December 31, 1996 primarily
consists of unearned software maintenance revenue, sales of software
licenses and related postcontract customer support, and sales of hardware
obtained from vendors which are not recognizable as revenue at December 31,
1996 pursuant to the Company's revenue recognition accounting policies
discussed above.

F-11

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SIGNIFICANT CUSTOMERS

During 1996, one of the Company's customers, Gulf Coast Regional Blood
Center, accounted for approximately 29% of the Company's revenues.

During 1995, one of the Company's customers, the Royalty Group (see Note
10), accounted for approximately 71% of the Company's revenues.

Accounts receivable from the above customers was approximately $70,000 and
$22,000 at December 31, 1996 and 1995, respectively. Unbilled revenues
from the above customers was $0 at December 31, 1996.

CREDIT AND MARKET RISK

Accounts receivable are derived entirely from sales to blood banks and
universities. The Company generally does not require collateral or other
security to support customer receivables. In order to reduce credit risk,
the Company requires substantial down payments and progress payments during
the course of an installation of software products. The Company
establishes allowances for doubtful accounts based upon factors surrounding
the credit risk specific to customers. Losses and allowances have
generally been within management's expectations.

Accounts receivable turnover trends have generally slowed from previously
expected rates due to certain implementation delays experienced to date
related to implementation of Wyndgate's blood bank management information
system software product (SAFETRACE(R)).

FOREIGN CURRENCY AND INFLATION RISK

Sales to customers in foreign countries and operations located in foreign
countries have not been material. Foreign currency translation gains
(losses) and domestic inflation have not had a material effect on the
Company's financial position or results of operations.

F-12

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NOTE RECEIVABLE

During the first quarter of 1996, the Company advanced $250,000 to a
development company in California (the Development Company) in exchange for
a convertible promissory note (the Note) due February 26, 1997. During the
fourth quarter of 1996, the maturity date of the Note was extended to
December 31, 1997 and can, upon certain conditions, be further extended
until June 30, 1998. The Note accrues interest at an annual rate of prime
plus two percent and is primarily collateralized by the Development
Company's technology. At December 31, 1996, the Company has offset the
Note with an allowance in the amount of $250,000 and the related expense is
included in other expenses in the accompanying consolidated statements of
operations. The Company believes it prudent to fully reserve for the Note
based on the current financial position of the Development Company.

EQUIPMENT AND FIXTURES

Equipment and fixtures are stated at cost. Depreciation and amortization,
which includes amortization of assets under capital leases (see Note 5), is
based on the straight-line method over the following estimated useful
lives:

Furniture and fixtures 3 - 5 years
Machinery and equipment 3 - 5 years
Computer and software 3 - 5 years

FINANCIAL INSTRUMENTS

The carrying amounts of the Company's financial instruments approximate
fair value due to the short maturity of these items.

LONG-LIVED ASSETS

In March 1995, the FASB issued Statement of Financial Accounting Standard
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF (SFAS No. 121), which requires impairment
losses to be recorded on long-lived assets used in operations when
indications of impairment are present. The Company adopted SFAS No. 121
during 1996, with no impact on its financial statements.

F-13

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SOFTWARE DEVELOPMENT COSTS

Certain software development costs incurred after the determination of
technological feasibility of the related software product are capitalized
and amortized on a straight-line basis over the life of the related
software product. Costs incurred prior to the establishment of the
technological feasibility of the related software product are expensed as
incurred as research and development. Costs of maintenance and customer
support are expensed as incurred. Amortization of capitalized costs
commences when the product is available for general release to the public
or when software development revenue has begun to be recognized.
Amortization of capitalized software development costs was $97,000 and
$50,000 for the years ended December 31, 1996 and 1995, respectively, and
is included in cost of sales in the accompanying consolidated statements of
operations.

MALPRACTICE INSURANCE

The Company maintains malpractice insurance coverage on a claims made basis
through a commercial insurance carrier. Should the current claims made
policy not be renewed or replaced with equivalent insurance at a future
date, claims based on occurrences during its term but subsequently reported
will be uninsured. Based upon historical experience, the Company's
management believes the Company has adequately provided for the ultimate
liability, if any, from the settlement of such potential claims.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For purposes of the accompanying consolidated statements of cash flows, the
Company considers all highly liquid investments with original maturities of
three months or less when purchased to be cash equivalents.

INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standard No. 109, ACCOUNTING FOR INCOME TAXES (SFAS
No. 109), which requires that the Company account for income taxes using
the liability method. Under SFAS No. 109, deferred income taxes are
provided for temporary differences in recognizing certain income and
expense items for financial reporting and tax reporting purposes. Upon
completion of the merger in May 1995, Wyndgate terminated its S corporation
status and began providing for current and deferred income taxes as a C
corporation as part of the Company. Accordingly, Wyndgate adopted SFAS No.
109 in

F-14

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

May 1995, and the statement of operations for the year ended December 31,
1995 includes a one-time charge (included in the provision for income
taxes) of approximately $150,000 to record the related deferred tax
liability. The supplemental net loss after elimination of the $150,000
one-time charge was $2,835,000 for the year ended December 31, 1995.

LOSS PER COMMON SHARE

Loss per common share is based upon the weighted average of common and
common equivalent shares outstanding during the period. Primary and fully
diluted loss per share are the same. Pursuant to Securities and Exchange
Commission Staff Accounting Bulletins and Staff Policy, common and common
equivalent shares issued during the 12-month period prior to an initial
public offering at prices below the public offering price are presumed to
have been issued in contemplation of the public offering, even if
antidilutive, and have been included in the calculation as if these common
and common equivalent shares were outstanding for all periods presented
(using the treasury stock method and the initial public offering price for
the Company's common stock).

In February 1997, the Company completed an initial public offering of
1,337,000 units, each consisting of two shares of common stock and one
Class A common stock purchase warrant (the Offering). Management used
approximately $1.4 million of the net proceeds from the Offering to repay
borrowings under the Company's $1 million revolving line of credit, other
short-term debt obligations and certain notes payable. If the Offering had
occurred on January 1, 1995, the net loss per common share would have been
($0.92) and ($0.64) for the years ended December 31, 1996 and 1995,
respectively (see Note 11).

In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, EARNINGS PER SHARE, which is required to be adopted on December
31, 1997. At that time, the Company will be required to change the method
currently used to compute net loss per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded. The impact
of Statement 128 on the calculation of primary and fully diluted net loss
per share for the six months ended June 30, 1997 and 1996 is not expected
to be material.

F-15

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

2. DISCONTINUED OPERATIONS

On August 18, 1997, the Company entered into an agreement with National
Medical Review Offices, Inc. (NMRO) which provides, subject to the approval
of the stockholders of the Company and the satisfaction of certain other
conditions, that the Company will sell DataMed to NMRO (the Agreement).
The Agreement provides that NMRO will (i) pay the Company $1.2 million in
cash, $600,000 of which was deposited into an escrow account with a bank on
July 2, 1997 (the Deposit), (ii) assume certain capital lease obligations
related to DataMed as of June 30, 1997, (iii) assume certain accounts
payable and accrued expenses related to DataMed as of June 30, 1997, and
(iv) be assigned accounts receivable related to DataMed at June 30, 1997.
The accompanying consolidated financial statements and related footnotes
have been restated to reflect the sale of DataMed as discontinued
operations in accordance with Accounting Principles Board Opinion No. 30
(APB 30).

In connection with the Agreement and pursuant to an interim management
agreement which was entered into between the Company and NMRO on July 7,
1997, NMRO will assume the operations of DataMed, effective June 30, 1997.
The final agreement will also include the Company's agreement not to
compete with NMRO in the substance abuse testing business and to maintain
the confidentiality of trade secrets of that business.

Subsequently NMRO informed the Company it would sell DataMed to Substance
Abuse Technologies, Inc. (SAT) and assign the interim management agreement
to SAT. Additionally, NMRO informed the Company it received the Deposit
from SAT and the additional $600,000 of the purchase price will also be
paid by SAT (see Note 11).

F-16

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

2. DISCONTINUED OPERATIONS (CONTINUED)

The operating results of the discontinued operations are summarized as
follows (in thousands):

YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1995 1997 1996
--------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Substance abuse testing $ 6,458 $ 5,740 $ 2,953 $ 3,116
and other revenue
Cost of revenue 4,587 2,922 2,151 1,844
--------------------------------------------------
Gross profit $ 1,871 $ 2,818 $ 802 $ 1,272
==================================================

Net loss $ (1,681) $ (901) $ (880) $ (539)
==================================================

The net liabilities of the discontinued operations are summarized as follows (in
thousands):

</TABLE>
<TABLE>
<CAPTION>

DECEMBER 31 JUNE 30
1996 1995 1997
------------------------------------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets $ 1,022 $ 914 $ 913
Equipment and fixtures, net 738 614 472
Current liabilities (2,426) (1,904) (1,789)
Long-term liabilities (466) (443) (262)
------------------------------------------
Net liabilities $ (1,132) $ (819) $ (666)
==========================================
</TABLE>

3. NONCOMPETE AGREEMENTS

During 1995, the Company entered into noncompete agreements with three key
employees for $350,000. The terms of the agreements are for the greater of
five years or the term of the related employee's employment contract. Of
the $350,000, $25,000 was paid in 1995, $175,000 was paid in 1996, with the
remaining $150,000 payable in 1997 or whenever cash is available. The
entire amount of $350,000 was expensed in the second half of 1995 and is
included in general and administrative expenses in the accompanying
consolidated statements of operations.

F-17

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

4. INCOME TAXES

The components of income tax expense for the years ended December 31, 1996
and 1995 are as follows:

1996 1995
----------------------------
(IN THOUSANDS)
Provision for income taxes:
Deferred:
Federal $ - $ 25
State - 4
----------------------------
Total deferred - 29
----------------------------
Provision for income taxes $ - $ 29
============================

The Company has net operating loss carryforwards of approximately
$4,408,000 which expire in the years 2006 to 2011. Such net operating loss
carryforwards may be subject to separate return limitation laws.

The components of the deferred tax provision, which arise from temporary
differences between financial and tax reporting, are presented below:

1996 1995
----------------------------
(IN THOUSANDS)

Cash to accrual adjustment $ (59) $ 239
Allowance for uncollectible
accounts receivable 98 96
Accelerated depreciation (46) (12)
Deferred revenue and accrued expenses 435 195
Capitalized software (10) 11
Net operating loss carryforward 1,236 450
Valuation allowance (1,654) (1,008)
----------------------------
Total deferred provision $ - $ (29)
============================

F-18

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

4. INCOME TAXES (CONTINUED)

Variations from the federal statutory rate are as follows:

1996 1995
---------------------------
(IN THOUSANDS)

Expected benefit from federal income
taxes at statutory rate of 34% $ (1,527) $ (903)
Termination of S corporation election
by Wyndgate - 150
Wyndgate income nontaxable due to
S corporation status - (77)
Valuation allowance 1,780 1,008
State tax benefit, net of federal
benefit (247) (146)
Other (6) (3)
----------------------------
$ - $ 29
============================

The components of the net accumulated deferred income tax asset as of
December 31, 1996 and 1995 are as follows:

1996 1995
----------------------------
(IN THOUSANDS)
Deferred tax assets:
Cash to accrual adjustment $ 296 $ 874
Excess of capital losses over
capital gains 79 79
Net operating loss carryforward 1,731 495
Allowance for uncollectible
accounts receivable 217 119
Deferred revenue and accrued expenses 666 231
Valuation allowance (2,784) (1,130)
----------------------------
205 668

Deferred tax liabilities:
Cash to accrual adjustment - 489
Capitalized software 149 159
Accelerated depreciation 56 20
----------------------------
205 668
----------------------------
Deferred tax asset, net $ - $ -
============================

F-19

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

5. LEASES

The Company primarily leases equipment and office space. An operating
lease expiring in 2000 is personally guaranteed by a principal stockholder.
Rental expense under operating leases, included in general and
administrative expenses in the accompanying statements of operations, for
the years ended December 31, 1996 and 1995 was $135,000 and $85,000,
respectively. Certain leases for furniture and fixtures and machinery and
equipment are classified as capital leases. A principal stockholder of the
Company has personally guaranteed repayment of substantially all capital
lease obligations. Included in equipment and fixtures in the accompanying
consolidated balance sheets are the following assets held under capital
leases on behalf of continuing operations:

DECEMBER 31
1996 1995
----------------------------
(IN THOUSANDS)

Furniture and fixtures $ 55 $ 52
Computer hardware and software 507 269
----------------------------
Assets under capital lease 562 321
Less accumulated amortization (166) (26)
----------------------------
Assets under capital lease, net $ 396 $ 295
============================

The following represents the minimum lease payments remaining under capital
leases and the future minimum lease payments for all noncancelable
operating leases included in continuing operations at December 31, 1996:

CAPITAL OPERATING
LEASES LEASES
----------------------------
(IN THOUSANDS)

1997 $ 213 $ 151
1998 202 114
1999 54 46
2000 2 45
----------------------------
Total minimum lease payments 471 $ 356
=============
Less amount representing interest (70)
--------------
Present value of minimum lease
payments 401
Less current portion of obligations
under capital lease (169)
--------------
Obligations under capital lease,
less current portion $ 232
==============

F-20

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

5. LEASES (CONTINUED)

In June 1997, the Company (through its Wyndgate division) entered into a
new operating lease which provided increased office space to accommodate
the increased number of employees assigned to research and development
projects (see Note 11).

6. SHORT-TERM DEBT

The Company maintained a $25,000 unsecured revolving credit line with a
bank which bore interest at an annual rate of prime plus one percent or a
minimum of ten percent and matured on March 1, 1997. Amounts outstanding
under this revolving line of credit were $25,000 and $100 at December 31,
1996 and 1995, respectively. The Company repaid this revolving line of
credit in April 1997 from a portion of the net proceeds of the Offering
(see Note 11).

The Company maintained a $1 million line of credit with a bank secured by
substantially all of the Company's assets except for those assets under
lease agreements (see Note 5), which bore interest at an annual rate of
prime plus two percent and which matured on February 12, 1997. Amounts
outstanding under this line of credit were $970,000 and $500,000 at
December 31, 1996 and 1995, respectively. The balance under the line was
repaid in February 1997 from a portion of the net proceeds of the Offering
(see Note 11).

The Company maintained a $55,000 unsecured line of credit with a bank which
bore interest at an annual rate of 14.75 percent. Amounts outstanding
under this line of credit were $50,000 and $0 at December 31, 1996 and
1995, respectively. The balance under the line was repaid in February 1997
from a portion of the net proceeds of the Offering (see Note 11).

During 1996, the Company entered into a $25,000 unsecured promissory note
with an individual which bore interest at an annual rate of twelve percent.
At December 31, 1996, $25,000 was outstanding under this promissory note.
The note was repaid in February 1997 from a portion of the net proceeds of
the Offering (see Note 11).

The Company incurred interest expense on outstanding borrowings, excluding
capital lease obligations, of approximately $151,000 and $43,000 for the
years ended December 31, 1996 and 1995, respectively.

F-21

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

7. STOCK OPTION PLANS

During 1990, the Company adopted an incentive stock option plan and a
nonqualified stock option plan, and in 1995 consolidated these plans by
adopting the Company's Amended and Restated Stock Option Plan (the Plan).
The Plan provides for the issuance of options to purchase up to 1,234,279
shares of common stock to employees, officers, directors and consultants of
the Company.

The terms of any options granted under the Plan are not required to be
identical as long as they are not inconsistent with the express provisions
of the Plan. Options may be granted as incentive options or as
nonqualified options; however, only employees of the Company are eligible
to receive incentive options. The period during which options vest may not
exceed ten years; however, the majority of the options granted under the
Plan vest over five years at the rate of twenty percent per year. The
exercise price for incentive options may not be less than one-hundred
percent of the fair market value of the common stock on the grant date,
except that the exercise price for incentive options granted to persons
owning more than ten percent of the total combined voting power of the
common stock may not be less than one-hundred and ten percent of the fair
market value of the common stock on the grant date and may not be
exercisable for more than five years. The exercise price for nonqualified
options may not be less than eighty-five percent of the fair market value
of the common stock on the grant date.

The Company has elected to continue to follow Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25), and
related Interpretations in accounting for its stock options because, as
discussed below, the alternative fair value accounting provided for by
Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION (Statement No. 123), requires use of option valuation models
that were not developed for use in valuing the stock options. Under APB
25, because the exercise price of the Company's stock options equals or
exceeds the estimated market price of the underlying stock on the date of
grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is
required by Statement No. 123, which also requires that the information be
determined as if the Company has accounted for its employee stock options
granted subsequent to December 31, 1994 under the fair value method of that
Statement. The fair value of these options was estimated at the date of
grant using the minimum value method available to nonpublic companies under
Statement No. 123. Under this method, option value is determined as the
excess of the fair value of the stock at the date of grant over the present
value of both the exercise price and the expected dividend payments, each
discounted at

F-22

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

7. STOCK OPTION PLANS (CONTINUED)

the risk-free rate, over the expected exercise life of the option. A
risk-free rate of 5.3%, a weighted-average expected life of ten years and a
dividend yield of 0% were used for the years ended December 31, 1996 and
1995. As a result of the Offering, the Company will use the Black-Scholes
option pricing model to determine the fair value of options granted
subsequent to December 31, 1996 (see Note 11).

For the purposes of pro forma disclosures, the estimated fair value of the
employee options is amortized to expense over the options' vesting period.
The Company's pro forma information follows (in thousands, except per share
amounts):

1996 1995
----------------------------

Pro forma net loss $ (4,582) $ (2,703)
Pro forma net loss per share $ (1.05) $ (0.64)

Because Statement No. 123 is applicable only to options granted subsequent
to December 31, 1994, its pro forma effect will not be fully reflected
until 2001.

A summary of the Company's stock option activity and related information
regarding the Plan are as follows:

INCENTIVE STOCK NONQUALIFIED STOCK
OPTION PLAN OPTION PLAN
--------------------------------------------------------
STOCK STOCK
NUMBER OF OPTION NUMBER OF OPTION
STOCK PRICE STOCK PRICE
OPTIONS RANGE OPTIONS RANGE
---------------------------------------------------------
Outstanding,
December 31, 1994 96,700 $1.00 - $1.54 38,029 $1.54
Granted 206,050 1.54 - 3.75 - -
Forfeited - - (6,000) 1.54
---------------------------------------------------------
Outstanding,
December 31, 1995 302,750 1.00 - 3.75 32,029 1.54
Granted 206,750 2.50 - 3.75 31,500 3.75
Exercised (480) 1.54 - -
Forfeited (4,920) 1.54 - 2.50 - -
---------------------------------------------------------
Outstanding,
December 31, 1996 504,100 $1.00 - $3.75 63,529 $1.54 - $3.75
Granted (unaudited) 1,000 1.54 45,000 2.00 - 2.875
Exercised
(unaudited) (14,000) 1.54 - -
Forfeited
(unaudited) (94,500) 1.54 - 2.50 - -
---------------------------------------------------------
Outstanding,
June 30, 1997
(unaudited) 396,600 $1.00 - $3.75 108,529 $1.54 - $3.75
=========================================================

F-23

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

7. STOCK OPTION PLANS (CONTINUED)

During 1995, certain of the Company's principal stockholders granted
options to certain employees for the right to buy 111,067 shares of the
Company's common stock from the principal stockholders at an exercise price
of $1.00 per share. This transaction has been accounted for as if the
options were granted to the employees directly from the Company.

The Company recorded compensation expense related to this transaction of
$162,000 as such options were issued for prior service, were fully vested
at the grant date, and were granted at an exercise price which was less
than the estimated fair market value of the underlying shares of common
stock of the Company at the grant date. The related compensation expense
is included in general and administrative expenses in the accompanying
consolidated statements of operations for the year ended December 31, 1995.
To date, no options have been exercised as a result of these agreements.

During the second quarter of 1996, the Company entered into an agreement
with a business advisory enterprise. As part of the agreement, the Company
granted 160,000 stock options at an exercise price of $2.50 per share. The
Company recognized expense in 1996 related to these options of $45,000.
This amount is included in general and administrative expenses in the
accompanying consolidated statements of operations for the year ended
December 31, 1996. To date, no options have been exercised as a result of
this agreement.

8. STOCKHOLDERS' EQUITY AND NOTES PAYABLE

Certain members of the Company's Scientific Advisory Committee serve as
officers and directors of certain of the Company's customers. In addition,
these members also are beneficial owners of the Company through grants of
stock options and through the Company's ten percent note offering (see
Notes 6 and 7).

In May 1995, the Company completed a private placement of 150,000 units at
$5 per unit (the May 1995 Private Placement). Each unit consisted of two
shares of common stock ($2.45 each) and one common stock warrant ($0.10
each), exercisable at $3.00 per share for a period of three years from the
closing date of the May 1995 Private Placement. During the first quarter
of 1996, 150,000 common stock warrants issued in conjunction with the May
1995 Private Placement were exercised for $450,000. In addition, the May
1995 Private Placement provided for a share adjustment of 120,000 shares in
the event the price per common share in the Company's initial public
offering was less than $4.90 per share (see Note 10).

F-24

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

8. Stockholders' Equity and Notes Payable (continued)

The Company has 10,000 warrants outstanding to a nonrelated investor which
are convertible into common stock at an exercise price of $1.54 per share
and which expire in October 1997.

During the first quarter of 1996, the Company completed a private placement
whereby it issued 66,667 shares of Series A convertible preferred stock at
$3.75 per share. During 1996, the preferred shares were converted into
66,667 shares of common stock.

During the second quarter of 1996, the Company conducted an offering
consisting of convertible notes with detachable common stock warrants and
which accrue interest at an annual rate of ten percent (the 10% Notes).
The 10% Notes mature in three years from the date of issuance and are
convertible into common stock of the Company at $3.75 per share. In
addition, each investor received one detachable common stock warrant for
the right to purchase one share of common stock at $3.75 per share for each
$4 invested. The warrants are exercisable over a period of three years.
Total proceeds from the 10% Note offering amounted to approximately
$751,000. Approximately $181,000 of the proceeds from the 10% Notes
issuance were received from a beneficial owner of over 5% of the
outstanding common stock of the Company and other officers, directors and
employees of the Company on the same terms and conditions as nonaffiliates.
Common stock issuable upon conversion of certain of the 10% Notes,
including principal and accrued interest, related to certain noteholders
who have given the Company notice of their intent to convert their 10% Note
amounts to 93,003 shares (see Note 10). Common stock issuable related to
the detachable warrants provided in conjunction with the 10% Notes amounts
to 187,800 shares (see Note 10). During the fourth quarter of 1996,
certain noteholders converted $100,000 of principal and $5,000 of related
accrued interest into 28,000 shares of common stock. Interest expense
related to the 10% Notes was approximately $43,000 in 1996.

In March 1997, the Company paid approximately $355,000 to certain holders
of the 10% Notes from a portion of the net proceeds of the Offering (see
Note 11).

During the third quarter of 1996, the Company completed a private placement
whereby it issued 800,000 shares of common stock at $2.50 per share. Net
proceeds from the private placement were approximately $1.74 million and
were primarily used for working capital purposes.

F-25

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

9. CONTRIBUTIONS TO RETIREMENT PLAN

During April 1992, the Company established a 401(k) retirement plan which
covers eligible employees, as defined, of the Company. Employees may defer
up to sixteen percent of their annual compensation up to the maximum amount
as determined by the Internal Revenue Service. Under the retirement plan
agreement, the Company, at its discretion, may make contributions to the
plan. No contributions were made to the plan in 1996 or 1995. Retirement
plan administrative expenses were approximately $4,000 and $8,000 for the
years ended December 31, 1996 and 1995, respectively, and are included in
general and administrative expenses in the accompanying consolidated
statements of operations.

10. COMMITMENTS AND CONTINGENCIES

The Company has entered into ten employment agreements with certain
management employees; the initial terms are generally for three to five
years. Certain of the agreements may be extended for two additional years.
Such agreements, which can be revised from time to time, provide for
minimum salary levels as adjusted for cost-of-living changes, as well as
for incentive bonuses which are payable when specified management goals are
attained. At December 31, 1996, the aggregate commitment for future
salaries payable through May 2000, excluding bonuses, is approximately $1.9
million. If all agreements are extended, the additional commitment for
future salaries will be approximately $1.5 million.

The Company maintains product liability insurance for Wyndgate's software-
related products. To date, no claims have been filed against the Company
related to its Wyndgate developed SAFETRACE(R) software product or any
other of its software-related products. In addition, the Company applied
for certain regulatory approval of its SAFETRACE(R) software product during
October 1995. The Company was permitted to market the SAFETRACE(R)
software product during the review process. In April 1997, Wyndgate
received notification from the United States Food and Drug Administration
of their finding of substantial equivalence of the SAFETRACE(R) software
product. This determination permits the Company to continue to market the
SAFETRACE(R) software product.

In January 1993, Wyndgate entered into an agreement with the EDEN-OA Blood
Bank Users Group (the Royalty Group) to develop Blood Bank Management
Information System Software (BBMIS). As part of the consideration for
funding the development of BBMIS (currently known as SAFETRACE(R)),
Wyndgate agreed to pay to the Royalty

F-26

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Group certain royalty payments on future software license fees. All
payments are due 30 days after each quarter and are based on software
license fees collected. Royalty expenses related to this agreement were
approximately $323,000 and $0 for the years ended December 31, 1996 and
1995, respectively, and are included in cost of sales and product
development in the accompanying consolidated statements of operations. The
time period under the royalty schedule is based upon the first date of
customer invoicing, which was September 14, 1995. The royalty payment
schedule is as follows:

From September:
1995 - 1997 12 percent
1997 - 1998 9 percent
1998 - 1999 6 percent
1999 - thereafter 3 percent

In July 1996, the Company (through its Wyndgate division) entered into a
Development Agreement (Agreement) with The Institute for Transfusion
Medicine (ITxM), to develop Commercial Centralized Transfusion System
Software (Commercial CTS Software). This Agreement requires that the
Commercial CTS Software be completed by December 16, 1997. If not timely
completed, the Company would be subject to certain monetary penalties. The
Agreement provides for a royalty payment to ITxM from the Company for
revenues received from the eventual sale of the Commercial CTS Software,
net of certain fees and charges. The royalty period starts with the first
commercial transfer for value of the Commercial CTS Software by the
Company. The royalty amounts for each year are higher if the sales of the
Commercial CTS Software are initiated by ITxM. The royalty payments range
from ten or five percent in year one to two or one percent in year ten and
thereafter. To date, the Company has not incurred any royalty expenses
related to this agreement.

During November 1996, the Company (through its Wyndgate division) entered
into an Exclusivity and Software Development Agreement (Agreement) with
Ortho Diagnostic Systems, Inc. (ODSI), a subsidiary of Johnson & Johnson.
This Agreement requires the Company to perform certain software development
services in consideration of the payment by ODSI of $500,000 received by
the Company in November 1996, and an additional payment of $500,000
received by the Company in January 1997 (see Note 1). The Agreement
provided that until May 14, 1997 (the Exclusivity Period), ODSI had the
exclusive right to negotiate with the Company with respect to the Company's
activities and developments in information technology and intellectual
property relating to donor and transfusion medicine (the Technology) and
that, during the Exclusivity Period, the

F-27

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Company would not, directly or through any intermediary, accept, encourage,
solicit, entertain or otherwise discuss any acquisition of any of the
Company's common stock, business, property or know-how, including the
Technology, with any person or entity other than ODSI or an affiliate
thereof and would not otherwise encumber the ability of ODSI or an
affiliate thereof to enter into any arrangement with the Company concerning
the Technology.

Pursuant to the Agreement, the Company granted ODSI a right of first
refusal for a period of six months after the expiration of the Exclusivity
Period in the event the Company proposes to transfer, dispose of, sell,
lease, license (except on a non-exclusive basis in the ordinary course of
its business), mortgage or otherwise encumber or subject to any pledge,
claim, lien, charge, encumbrance or security interest (except for a
security interest with a bank which was in effect at the time the
Exclusivity Agreement was negotiated) of any kind or nature any of the
Technology (see Note 11).

As of December 31, 1996, the Company had 1,805,082 shares of common stock
reserved for future issuance as a result of the following: 1,234,279
shares issuable from the Company's Amended and Restated Stock Option Plan
(see Note 7); 187,800 shares issuable upon the exercise of certain
detachable warrants outstanding as a result of the 1996 10% Note offering
(see Note 8); 93,003 shares issuable upon conversion of certain of the 10%
Notes, including principal and accrued interest, related to certain
noteholders who have given the Company notice of their intent to convert
their 10% Notes to shares of common stock (see Note 8); 10,000 shares
issuable upon the exercise of certain warrants granted to a nonrelated
investor (see Note 8); 160,000 shares underlying certain stock options
granted to a business advisory enterprise during the second quarter of 1996
(see Note 7); and 120,000 shares pursuant to the terms of the May 1995
Private Placement which provided for a share adjustment in the event the
price per common share of the Company's initial public offering was less
than $4.90 per share (see Note 8). See Note 11 for additional shares
reserved for future issuance as a result of the Offering.

11. SUBSEQUENT EVENTS

During January 1997, the Company received $450,000 from two nonrelated
investors related to an offering consisting of notes which accrued interest
at an annual rate of twelve percent (the 12% Notes). In connection with
the 12% Notes, the Company issued 150,000 common stock warrants which are
exercisable at eighty-five percent of the price per share of the Company's
common stock included in the Units of the Offering. During February 1997,
the Company used a portion of the net proceeds from the Offering to

F-28

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

11. SUBSEQUENT EVENTS (CONTINUED)

repay $450,000 plus accrued interest of approximately $5,000 related to the
12% Notes. In addition, the Company used net proceeds from the Offering to
repay approximately $970,000 plus accrued interest of approximately $5,000
on its $1 million line of credit (see Note 6).

During February 1997, the Company completed an initial public offering (the
Offering) whereby it issued 1,337,000 units, each unit consisting of two
shares of common stock and one Class A Common Stock Purchase Warrant (the
Units), at $7.00 per unit. Net proceeds from the Offering (including net
proceeds from the underwriter's overallotment option) were approximately
$8.2 million. In addition to the shares of common stock reserved for
future issuance discussed in Note 10 above and in connection with the
Offering, the underwriter's overallotment option, and certain other
warrants granted to the Company's underwriter, the Company has an
additional 1,858,088 shares of common stock reserved for future issuance as
of June 30, 1997.

On February 13, 1997, the Company (through its Wyndgate division) entered
into a 10-year contract with Haemonetics Corporation (Haemonetics), a New
York Stock Exchange listed company located in Braintree, Massachusetts.
Licensing and other fees are payable by Haemonetics over the life of the
contract. Under the contract, Wyndgate will provide the use of its
SAFETRACE(R) software product to Haemonetics for its entry into the service
side of blood banking in multiple locations, including one of the blood
banks previously contracted by Wyndgate. Haemonetics has traditionally
provided blood separation products to blood banks and hospitals
domestically and internationally.

In May 1997, the Company received communication from ODSI that it had not
yet completed an internal evaluation of the Company's Technology and would
not be prepared at the conclusion of the Exclusivity Period to discuss a
transaction between the Company and ODSI. ODSI requested, and the Company
agreed, that ODSI be permitted to continue its evaluation of the Company's
Technology, on a non-exclusive basis, with the intent of responding to the
Company by July 14, 1997 regarding whether or not they would propose some
form of transaction with the Company. On July 14, 1997, the Company and
ODSI agreed to a further extension to September 30, 1997. In connection
with the extension to September 30, 1997, ODSI relinquished its right of
first refusal.

During June 1997 and to accommodate the increased number of Wyndgate
employees assigned to research and development, the Company entered into a
new operating lease which provides Wyndgate with approximately 22,000
square feet of office space and

F-29

<PAGE>

Global Med Technologies, Inc.

Notes to Consolidated Financial Statements (continued)

11. SUBSEQUENT EVENTS (CONTINUED)

which expires in September 2002. The future minimum lease payments are as
follows (in thousands) (unaudited):

1997 $ 125
1998 375
1999 377
2000 389
2001 396
2002 268
---------
Total minimum lease payments $ 1,930
=========

On September 10, 1997, SAT announced it had filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of Florida. In the
announcement, SAT stated that it plans to complete the acquisition of
DataMed from NMRO through financing it has obtained.

F-30

<PAGE>

GLOBAL MED TECHNOLOGIES, INC.

1,108,803 Shares

___________________________

PROSPECTUS

___________________________

OCTOBER 29, 1997