AS  FILED  WITH  THE  SECURITIES  AND EXCHANGE COMMISSION ON MARCH 22, 2000
     REGISTRATION  NO.  333-  _____
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             ----------------------
                             CRITICARE SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)
                             ----------------------
<TABLE>
<CAPTION>
<S>                              <C>                               <C>
-------------------------------- --------------------------------  --------------------
             DELAWARE                     3845                          39-150563
--------------------------------  -------------------------------  ---------------------
(State or other jurisdiction of  (Primary Standard Industrial        (I.R.S. Employer
 incorporation or organization)  Classification Code Number)       Identification Number
-------------------------------  --------------------------------  ---------------------
</TABLE>
                             CRITICARE SYSTEMS, INC.
                             20925 CROSSROADS CIRCLE
                               WAUKESHA, WI  53186
                                 (262) 798-8282
    (Address, including zip code, and telephone number, including area code, of
                    Registrant's principal executive offices)
                                  EMIL H. SOIKA
                      PRESIDENT AND CHIEF EXECUTIVE OFFICER
                             CRITICARE SYSTEMS, INC.
                             20925 CROSSROADS CIRCLE
                               WAUKESHA, WI  53186
                                 (262) 798-8282
  (Name, address, including zip code, and telephone number, including area code,
                              of agent for service)
                             ----------------------
                                   COPIES TO:
                            BENJAMIN G. LOMBARD, ESQ.
            REINHART, BOERNER, VAN DEUREN, NORRIS & RIESELBACH, S.C.
                       1000 NORTH WATER STREET, SUITE 2100
                           MILWAUKEE, WISCONSIN 53202
                                 (414) 298-1000
                             ----------------------
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
    From time to time after the effective date of this Registration Statement


     If any of the securities being registered on this form are to be offered on
a  delayed  or  continuous  basis pursuant to Rule 415 under the Securities Act,
check  the  following  box.  [x]
     If  this  Form  is  filed to register additional securities for an offering
pursuant  to  Rule  462(b) under the Securities Act, check the following box and
list  the  Securities Act registration statement number of the earlier effective
registration  statement  for  the  same  offering.  [  ]
     If  this  Form  is a post-effective amendment filed pursuant to Rule 462(c)
under  the  Securities  Act, check the following box and list the Securities Act
registration  statement  number  of the earlier effective registration statement
for  the  same  offering.  [  ]
     If  this  Form  is a post-effective amendment filed pursuant to Rule 462(d)
under  the  Securities  Act, check the following box and list the Securities Act
registration  statement  number  of the earlier effective registration statement
for  the  same  offering.  [  ]
     If  delivery of the prospectus is expected to be made pursuant to Rule 434,
please  check  the  following  box.  [  ]
<PAGE>

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>



                                                                          PROPOSED MAXIMUM
TITLE OF EACH CLASS OF         AMOUNT TO BE   PROPOSED MAXIMUM OFFERING       AGGREGATE          AMOUNT OF
SECURITIES TO BE REGISTERED     REGISTERED         PRICE PER SHARE         OFFERING PRICE    REGISTRATION FEE
-----------------------------  ------------  ---------------------------  -----------------  -----------------
<S>                            <C>           <C>                          <C>                <C>

Common Stock, $0.04 par value        30,000  $                  3.79 (1)  $         113,700  $           30.02
=============================  ============  ===========================  =================  =================
<FN>

(1)     Calculated in accordance with Rule 457(c) based on the average of the high and low sales prices of the
Common  Stock  as  reported  on  the  Nasdaq  National  Market on March 17, 2000, solely for the purposes of
calculating  the  amount  of  the  registration  fee.
</TABLE>



     THE  REGISTRANT  HEREBY  AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE  A  FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT THIS REGISTRATION
STATEMENT  SHALL  THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH  DATE  AS  THE  COMMISSION,  ACTING  PURSUANT  TO  SUCH  SECTION  8(A), MAY
DETERMINE.





<PAGE>

     PROSPECTUS

                  PRELIMINARY PROSPECTUS DATED MARCH 22, 2000
                              SUBJECT TO COMPLETION


                                  30,000 SHARES

                             CRITICARE SYSTEMS, INC.

                                  COMMON STOCK

     The  selling  stockholder, Applied Data Systems, Inc., is offering for sale
up  to 30,000 shares of our common stock.  Because the shares offered under this
prospectus  will  be  sold  by  the selling stockholder, we will not receive any
proceeds  from  the  sale  of  these  shares.

     Shares  of  our  common  stock  are  traded  on the Nasdaq National Market.

                 Trading Symbol on Nasdaq National Market:  CXIM
               Last Sale Price on March 20, 2000:  $3-23/32 per share

                    _________________________________________

CONSIDER  CAREFULLY  THE  "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES
COMMISSION  HAS  APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS  IS  TRUTHFUL  OR  COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL  OFFENSE.









                                ___________, 2000


<PAGE>
                               PROSPECTUS SUMMARY

This  summary  highlights  selected  information  contained  elsewhere  in  this
prospectus.  This  summary  is  not  complete  and  may  not  contain all of the
information  that  you should consider before investing in the common stock. You
should  read  the  entire  prospectus carefully including "Risk Factors" and the
financial  statements  before  making  an  investment  decision.

OUR  BUSINESS

     We  design,  manufacture  and  market  vital  signs  and  gas  monitoring
instruments  and  related  noninvasive  sensors used to monitor patients in many
healthcare  settings.

     Since  a  patient's  oxygen,  anesthetic  gas and carbon dioxide levels can
change  dramatically  within  minutes,  causing  severe  side  effects or death,
continuous  monitoring  of  these  parameters  is  increasing.  Our  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous  patient  information  to  physicians  and  other  health  service
clinicians.  Our  products  also  allow  hospitals to contain costs primarily by
substituting  cost-effective  reusable  pulse  oximetry  sensors  for disposable
sensors,  controlling  the  use  of  costly anesthetics and increasing personnel
productivity.

     To  meet  the  needs of end-users in a wide variety of patient settings, we
have developed a broad line of patient monitors which combine one or more of our
patented  or  other  proprietary  technologies  for  monitoring:

-     oxygen  saturation;
-     carbon  dioxide;  and
-     anesthetic  agents,

with  standard  monitoring  technologies  that  provide:

-     electrocardiogram;
-     invasive  and  noninvasive  blood  pressures;
-     temperature;
-     heart  rate;  and
-     respiration  rate.

     In  addition, our VitalView telemetry system allows one nurse to monitor up
to  eight  patients  simultaneously  from  a  convenient central location.  This
allows  hospitals  to  move  out  of the intensive care unit those patients that
require  continuous  monitoring, but do not need all of an intensive care unit's
extensive  and  costly  personnel  and  equipment  resources.

     Our  principal  address  and telephone number are: Criticare Systems, Inc.,
20925  Crossroads  Circle,  Waukesha,  Wisconsin  53186,  telephone number (414)
798-8282.

THE  OFFERING

Common  stock  offered  by  the
selling  stockholder                         30,000  shares

Common  stock  outstanding  as
of  February  10,  2000                      8,736,151

Proceeds  from  sale                         We will not receive any proceeds
                                             from the sale of these shares


                                        2

<PAGE>
                                  RISK FACTORS

     You  should  carefully  consider  the  following risk factors and all other
information  contained  in  this  prospectus before purchasing our common stock.

WE FACE SIGNIFICANT COMPETITION IN OUR MARKETS.  AS A RESULT, WE MAY NOT BE ABLE
TO  INCREASE  OUR  MARKET  SHARE  OR  PROFIT  MARGINS.

     The  markets  for  our  products  are  highly  competitive.  Many  of  our
competitors  have  greater:

-     engineering  resources;
-     research  and  development  resources;
-     manufacturing  resources;
-     financial  and  marketing  resources;  and
-     market  presence  and  reputation.

     We  have  historically  experienced  substantial  price competition for our
products  and  price  competition  is  likely  to  continue.

WE  HAVE  A  HISTORY OF SIGNIFICANT LOSSES.  IF WE DO NOT ACHIEVE PROFITABILITY,
OUR  FINANCIAL  CONDITION  AND  STOCK  PRICE  COULD  SUFFER.

     We had net losses of $2,179,489 in fiscal 1997, $499,276 in fiscal 1998 and
$4,388,171  in 1999.  Although we had net income of $2,378,912 for the first six
months of fiscal 2000, this included a one time gain of $2,500,000 from the sale
of  stock  of Immtech International, Inc.  Although we completed a restructuring
program  during  fiscal  1999  in  an  effort to attain profitability, we cannot
assure  you  that  we will be able to achieve or sustain profitability in future
periods.

WE  RELY  ON  SINGLE  SOURCES  OF  SUPPLY  FOR MANY OF THE KEY COMPONENTS OF OUR
PRODUCTS.

     Certain  of  our  products  incorporate components currently purchased from
single  sources.  An interruption in the delivery of these components could harm
our  business.  For  example,  we have been experiencing a severe shortage of LC
monitors  during  the  third  quarter  of  fiscal  2000 which we expect to delay
international  shipments  of  our  new  product  line.

OUR  SUCCESS  DEPENDS  ON  OUR  ABILITY  TO  PROTECT  OUR INTELLECTUAL PROPERTY.

     We  rely  on  our  patented  and  other  proprietary  technology including:

-     our  sensor  technology;
-     infrared  specific  anesthetic  gas  monitoring  technology;
-     UltraSync  signal  processing  software;  and
-     disposable  respiratory  secretion  filter  system.

     The  actions  taken  by  us  to  protect  our proprietary rights may not be
adequate  to prevent imitation of our products, processes or technology.  We can
not  assure  you  that:

-     our  proprietary  information  will  not  become  known  to  competitors;
-     others  will  not independently develop substantially equivalent or better
      products that do not infringe on  our  intellectual  property  rights;  or
-     others  will  not  challenge  or  assert  rights in, and ownership of, our
      patents  and  other  proprietary  rights.

     Although  none  of  our  United  States  patents expire before 2004, to the
extent  competitors  develop equivalent or superior non-infringing technology in
these  areas,  or  to  the extent that we are unable to enforce our patents, our
ability  to  market  and  sell  our  products  could  be  harmed.


                                        3

<PAGE>
INTERNATIONAL  SALES  MAKE  OUR  BUSINESS  SUSCEPTIBLE TO NUMEROUS INTERNATIONAL
BUSINESS  RISKS  AND  CHALLENGES  THAT  COULD  AFFECT  OUR  PROFITABILITY.

     International  sales  accounted for 37% of our total net sales for the 1999
fiscal  year.  We  expect that international sales will continue to constitute a
significant  portion  of  our business.  Although we sell our products in United
States dollars and are not subject to significant currency risks, an increase in
the  value  of  the  United  States dollar relative to foreign currencies in our
international  markets  could  make  our products less price competitive in such
markets.  Also,  our  international  sales  are subject to the risks inherent in
doing  business  abroad,  including:

-     delays  in  shipments;
-     increases  in  import  duties  and  tariffs;  and
-     changes  in  foreign  regulations  and  political  climate.

WE  OPERATE  IN  A  HIGHLY  REGULATED  INDUSTRY.

     Our  products  are subject to regulation by the United States Food and Drug
Administration  and  comparable  foreign  governmental  authorities.  These
regulations  can  be  burdensome  and  may:

-     substantially  delay  or  prevent  the  introduction  of  new  products;
-     materially  increase  the  costs  of  any  new  product  introductions;
-     interfere  with  or  require  cessation  of  product  manufacturing  and
      marketing;  and
-     result  in  product  recalls.

     Additionally,  adoption  of  new regulations or modifications to applicable
regulations  could  harm  our  business.

HEALTH CARE COST CONTAINMENT PROGRAMS COULD ADVERSELY AFFECT OUR DOMESTIC SALES.

     The  cost  of a significant portion of medical care in the United States is
funded  by government or other insurance programs.  Additional limits imposed by
such  programs on health care cost reimbursements may further impair the ability
of  hospitals  and other health care providers to purchase equipment such as our
products  and  could  reduce  our  domestic  sales.

OUR  BUSINESS  IS  SUBJECT  TO  POSSIBLE  PRODUCT  LIABILITY  EXPOSURE.

     As  a  manufacturer  of medical diagnostic equipment, we could face product
liability  claims.  We have had no product liability claims to date and maintain
product  liability  insurance.  However,  we  can  make  no  assurance  that our
insurance  coverage will be adequate to cover any product liability claims which
arise  in  the  future  or  that  it will continue to be available at reasonable
prices.

OUR  STOCK  PRICE  MAY FLUCTUATE, INCREASING THE RISK TO INVESTORS IN OUR COMMON
STOCK.

     Market  prices of securities of medical technology companies, including our
common  stock, have experienced significant volatility from time to time.  There
may  be  volatility  in the market price of the common stock due to factors that
may or may not relate to our performance.  Various factors and events may have a
significant  impact  on  the  market  price  of  our  common  stock  such  as:

-     announcements  by  us  or  our  competitors  concerning  new  product
      developments;
-     governmental  approvals,  regulations  or  actions;
-     developments  or  disputes  relating  to patent or proprietary rights; and
-     public  concern  over  product  liability.

     In  addition,  our  quarterly  results  have  historically  fluctuated.

                                        4

<PAGE>

              FORWARD-LOOKING STATEMENTS MAY PROVE TO BE INACCURATE

     We  have  made forward-looking statements in this document that are subject
to  risks  and  uncertainties.  Without  limitation,  these  forward-looking
statements  include  statements:

-     regarding  new  products  we  may  introduce  in  the  future;
-     about  our  business  strategy  and  plans;
-     about  the  adequacy of our working capital and other financial resources;
      and
-     that  are  not  of  an  historical  nature.

     When  we  use words such as "believes," "expects," "anticipates" or similar
expressions,  we  are  making  forward-looking statements.  You should note that
forward-looking  statements  rely  on  a number of assumptions concerning future
events,  and are subject to a number of uncertainties and other factors, many of
which  are  outside  of  our  control, that could cause actual results to differ
materially  from  the  statements  made.  These  factors include those discussed
under  the  caption  "Risk  Factors"  in  this  prospectus.  Please note that we
disclaim  any  intention  or  obligation to update or revise any forward-looking
statements  whether  as a result of new information, future events or otherwise.

                     MARKET INFORMATION AND DIVIDEND POLICY

     Our  common  stock is traded on the Nasdaq National Market under the symbol
"CXIM."  The  following table sets forth the high and low bid quotations for our
common  stock  as  reported  by  Nasdaq.  Such  transactions reflect interdealer
prices,  without retail mark-up, mark-down or commission and may not necessarily
represent  actual  transactions.
<TABLE>
<CAPTION>



                  Common Stock
                  ------------
<S>           <C>           <C>
Quarter. . .  High          Low
------------  ------------  ------------
FISCAL 1998
First. . . .             8         4-3/8
Second . . .         6-5/8       2-13/16
Third. . . .         4-3/8         2-5/8
Fourth . . .         3-3/4       2-11/16

FISCAL 1999
First. . . .       2-15/16         1-1/4
Second . . .         2-3/4         1-5/8
Third. . . .        2-1/16         1-3/8
Fourth . . .         3-3/8        1-1/16

FISCAL 2000
First. . . .         2-5/8         1-7/8
Second(1). .         2-1/2         1-3/4
<FN>


     (1)     Trading  of  our  common  stock  on  the Nasdaq National Market was
suspended from October 6, 1999 until December 13, 1999 due to the delayed filing
of  our  Annual  Report  on  Form  10-K  with  the  SEC.
</TABLE>

     As  of December 22, 1999, there were approximately 297 holders of record of
our  common  stock.  We have never declared or paid any cash dividends on shares
of  our common stock.  We intend to retain any earnings for use in the operation
and  expansion of our business and, therefore, do not anticipate paying any cash
dividends  in  the  foreseeable  future.


                                        5

<PAGE>
                                 USE OF PROCEEDS

     We will not receive any proceeds from the sale of the shares by the selling
stockholder.

                      SELECTED CONSOLIDATED FINANCIAL DATA

     The  following  selected  financial data should be read in conjunction with
our  financial  statements  and  related  notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this  prospectus.  The  balance sheet data as of June 30, 1999 and the statement
of  operations data for the fiscal year ended June 30, 1999 are derived from our
consolidated  financial  statements  that have been audited by BDO Seidman, LLP,
independent  auditors,  and  are  included  elsewhere  in  this prospectus.  The
balance  sheet data as of June 30, 1998 and the statement of operations data for
the  fiscal years ended June 30, 1998 and 1997 are derived from our consolidated
financial  statements  that  have  been  audited  by  Deloitte  &  Touche  LLP,
independent  auditors,  and  are  included  elsewhere  in  this prospectus.  The
balance  sheet  data  as  of  June  30, 1997, 1996 and 1995 and the statement of
operations  data  for  the fiscal years ended June 30, 1996 and 1995 are derived
from  our  audited  consolidated  financial  statements  which  are not included
elsewhere  in  this  prospectus.  The balance sheet data as of December 31, 1999
and  the statement of operations data for the six months ended December 31, 1999
are  derived  from  our  unaudited consolidated financial statements and, in the
opinion  of  management,  include all adjustments, consisting only of normal and
recurring  adjustments,  necessary  to present fairly our consolidated financial
position  and  results  of  operations  as  of December 31, 1999 and for the six
months  then  ended.  Actual  results  are  not necessarily indicative of future
results.

<TABLE>
<CAPTION>


                                                                            YEARS ENDED JUNE 30,
                                                                            --------------------
                                 SIX MONTHS ENDED
                                 DECEMBER 31, 1999       1999          1998          1997          1996         1995
                                 ------------------  ------------  ------------  ------------  ------------  -----------
<S>                              <C>                 <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Net sales                        $       13,504,036  $28,512,507   $27,908,364   $26,235,355   $31,528,266   $28,660,275
Income (loss) before income
  taxes and extraordinary gain            2,378,912   (4,388,171)     (499,276)   (2,749,435)   (4,280,989)      175,643
Net income (loss)                         2,378,912   (4,388,171)     (499,276)   (2,179,489)   (4,330,989)      105,643
Net income (loss) per
  common share-basic and
  diluted                                      0.27       ($0.51)       ($0.06)       ($0.30)       ($0.63)  $      0.02

BALANCE SHEET DATA:
Long-term obligations            $        3,897,297  $ 4,014,356   $ 3,165,258   $ 5,110,934   $ 4,669,975   $ 3,646,867
Working capital                          12,484,293   10,340,014    13,716,891    12,053,165    10,282,033    13,401,741
Total assets                             23,773,611   24,041,987    24,726,819    25,145,066    27,075,922    25,468,428
Stockholders' equity                     15,090,623   12,711,709    17,282,997    14,227,135    13,917,549    17,130,449
</TABLE>


                                        6

<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  is  intended  to  provide  an  analysis  of our
financial  condition and results of operations and should be read in conjunction
with  our  financial  statements  and  the  notes  to  the  financial statements
contained  elsewhere  in this prospectus.  The matters discussed in this section
that  are  not  historical  or  current  facts  deal  with  potential  future
circumstances  and  developments.  See  "Financial  Statements"  at  page  F-1.

COMPARISON  OF  SIX  MONTHS  ENDED  DECEMBER  31,  1999  AND  1998

     Net  sales  for  the  six  months ended December 31, 1999 decreased 3.6% to
$13.5  million  from  $14.0  million  for  the same period in fiscal 1999.  This
decrease  in  revenue  is  due  to  a reduction in OEM sales to a major customer
partially  offset by an increase in international sales.  We expect sales to the
major OEM customer discussed above to improve in the second half of fiscal 2000.

     The  gross profit percentage for the six months ended December 31, 1999 was
45.4%.  This  represents  a decreased from the gross profit of 48.7% recorded in
the  same  period  of  fiscal  1999. This decrease is due primarily to continued
price  competition.  We expect to see improvement in our gross profit percentage
upon  the  release of the new products currently in development.  These products
are  expected  to  be  released  in  the  fourth  quarter  of  fiscal  2000.

     Operating  expenses  decreased  approximately  $1.7  million.  Marketing
expenses  decreased  approximately  $936,000 when compared to the same period in
fiscal  1999  due  primarily  to  decreased commissions which corresponds to the
decreased  sales,  decreased  payroll  and  related  travel  expenses  due  to a
reduction  in  direct  sales  people as more dealers were added.  Also, expenses
were  reduced  as  a  result  of closing the sales office in Germany.  Research,
development  and  engineering expense increased approximately $76,000 related to
additional  outside  contract  and project expense which are all associated with
the  new  products  under  development.  Administrative  expenses  decreased
approximately  $139,000  in the six months ended December 31, 1999 when compared
to  the same period in fiscal 1999.  This decrease is due primarily to decreased
litigation  expense  related  to the settlement of a long-standing lawsuit.  The
decreased  litigation costs were partially offset by reaudit costs incurred as a
result  of  the  resignation  of  our  former  auditors.  We  also  recorded  a
restructuring  charge of $728,000 during the six months ended December 31, 1998.
This restructuring charge relates to severance pay and other benefits payable to
our  two  co-founders.  Both  of these individuals resigned from their positions
with  us  in  November, 1998.  The severance accrual includes a portion of their
respective  salary  and  fringe  benefits  for a period which approximates three
years.

     The  loss  from  operations  decreased approximately $1,037,000 for the six
months  December 31, 1999 when compared to the same period in fiscal 1999 due to
the restructuring charge for severance pay and other benefits recorded in fiscal
1999  and  the  decrease  in  operating  expenses  which  are  a  result  of our
restructuring  plan  implemented  in  July  1999.

     Net  non-operating  income  was approximately $2,400,000 for the six months
ended December 31, 1999.  Net non-operating expenses were approximately $272,000
for  the  same  period  in  fiscal  1999.  The  significant change is due to the
private  placement  sale  of  500,000  Immtech  shares  for  $2,500,000.

     We  believe  that  our  results in the quarter ended December 31, 1999 were
negatively  affected  due  to  the time and attention expended by management and
other direct and indirect costs relating to the halt in trading of our shares on
Nasdaq  pending  refiling  of  our  Annual  Report on Form 10-K for fiscal 1999.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  1999  AND  1998

     Net  sales  for  the  twelve  months  ended June 30, 1999 increased 2.2% to
$28,512,507 from $27,908,364.  The sales increase is attributable to an increase
in  OEM  sales  partially  offset  by  a  decrease  in  international  sales.


                                        7

<PAGE>
     The  gross profit percentage decreased from 46.7% in 1998 to 45.5% in 1999.
The  primary  reason  for  the  decrease  in gross profit is the increase in OEM
sales.  OEM  sales  typically  have  a  lower gross profit than sales to non-OEM
customers.

     Operating  expenses  of  $16,871,981 represent a 32.5% increase from fiscal
1998  levels.  Marketing  expenses  increased  approximately  $1,486,000  when
compared  to  1998  levels.  This  increase  is  due  primarily  to  increased
promotional  activities  throughout  the  world.  Engineering expenses decreased
approximately  $316,000  when  compared  to  1998 levels; however, excluding the
one-time  $900,000  charge  in  1998  (discussed  in footnote 8 of the financial
statements)  engineering  expenses  increased  approximately  $584,000.  This
increase  is  due  to  expanded  research and development efforts related to new
product  introductions.  Administrative  expenses  increased  approximately
$2,159,000.  This  increase  is attributable to the settlement and related legal
costs  related to litigation with a former dealer that represented our products.
We  also recorded approximately $810,000 of severance costs related primarily to
costs  associated  with  the  resignation  of  our  two  co-founders.

     Interest  expense decreased due to the conversion of convertible debentures
to  common  stock  in  1998.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  1998  AND  1997

     Net  sales  for  the  twelve  months  ended June 30, 1998 increased 6.3% to
$27,908,364  from  $26,235,355  for  the twelve months ended June 30, 1997.  The
sales  increase  is  attributable  to the alternate care sales and new OEM sales

     The  gross  profit  percentage  remained  relatively consistent at 46.7% in
fiscal  1998  versus  46.4%  in  fiscal  1997.  Margins  in  domestic  hospital,
alternate  care, and international all remained relatively consistent with those
of  the  prior  year.

     Operating  expenses  of $12,731,695 decreased 6.3% from fiscal 1997 levels.
In addition, operating expenses as a percentage of sales decreased to 45.6% from
51.8%  in  fiscal  1997.  The largest savings occurred in the marketing expenses
where  spending  levels were reduced by approximately $1,300,000.  The reduction
in  marketing  expenses  was  primarily  related  to international spending.  We
consolidated  several  international  functions at our home office in the United
States.  This  resulted  in a savings of over $850,000.  Administrative expenses
for  fiscal  1998 decreased by 20.4% from fiscal 1997 levels, due to liquidation
expenses  incurred  in  fiscal  1997  related  to  Criticare International.  The
reduced  expenses  in  marketing  and administration were partially offset by an
increase  of  41.3%  in  research,  development, and engineering expenses, which
resulted  from  a  $900,000 charge associated with the acquisition of in-process
technology  related  to  the  transmission  of  clinical  data.

     Interest  expense  decreased during fiscal 1998 due to no borrowings on the
line  of  credit  during the year.  Interest income increased during fiscal 1998
due  to higher cash balances on hand throughout the year.  Equity in the loss of
investments  relates  to  a  $120,000 advance provided to Immtech International,
Inc.

LIQUIDITY  AND  CAPITAL  RESOURCES

     In  fiscal  1999, we generated $465,577 from operating activities, $256,413
from  the mortgage refinancing discussed below, and $10,313 from the exercise of
stock  options.  We  used $92,776 for the retirement of long-term debt, $515,017
for  capital  expenditures,  $150,000  for  the purchase of stock and intangible
assets  from Immtech International, Inc., and $193,430 for the repurchase of our
common stock.  These sources and uses of cash resulted in net negative cash flow
of  $218,920  for  the  1999  fiscal  year.

     During  the  six  months  ended  December  31,  1999, we used $2,543,154 in
operating  activities,  generated  $2,182,788 from investing activities and used
$36,244 in financing activities.  These sources and uses of cash resulted in net
negative  cash  flow  of  $396,610  for  the first six months of fiscal 2000. At
December 31, 1999, we had a cash balance of approximately $2.1 and no short-term
borrowings.  Our  negative cash flow resulted primarily from the settlement of a
long-standing lawsuit.  Proceeds for this settlement were obtained from the sale
of 500,000 shares of Immtech stock for $2.5 million in a private placement sale.

                                        8

<PAGE>

     In  March  1999,  we  refinanced  our  mortgage  note  on  our  office  and
manufacturing  facility.  The  new  mortgage  note requires monthly debt service
payments  of  approximately  $28,000  with a final payment of approximately $3.0
million  due  in  April  2004.

     We  expect  our  continued  programs  to  increase  accounts  receivable
collections,  decrease  inventory  levels  and  stabilize  sales  demonstration
equipment  levels  will have a positive effect on cash flow activities in fiscal
2000.  Additionally, we believe the cost reductions implemented during the first
quarter  of  1999  will  have  a  positive  impact  on the cash flow activities.
Consequently,  we  believe  our  research  and  development activities and other
capital  and  liquidity  requirements  for  the  next  one  to two years will be
satisfied  by cash generated from operations and other borrowings.  We also have
access  to  a commercial bank line of credit of up to $4.0 million.  At December
31,  1999,  there  were  no  borrowings  outstanding  on the line of credit.  We
violated  a  covenant related to maintaining a certain tangible net worth amount
and  achieving  certain  income  levels.  The  bank  waived compliance with this
covenant  subsequent  to  year  end.  This  line  expires  in  November  2001.

     We  currently  hold an investment in Immtech International, Inc.  Immtech's
common  stock  is  currently  traded  on the Nasdaq SmallCap Market.  As part of
Immtech's  initial public offering, we signed a lock-up agreement.  All terms of
the  lock-up  have  been met other than the holding period which continues until
April  2000.

YEAR  2000

     We  have  addressed  company-wide Year 2000 readiness.  The Year 2000 issue
relates  to computer hardware and software and other systems designed to use two
digits  rather than four digits to define the applicable year.  As a result, the
Year  2000  would be translated as two zeroes.  Because the Year 1900 could also
be  translated  as  two zeroes, systems which use two digits could read the date
incorrectly  for  a number of date-sensitive applications resulting in potential
calculation  errors  or  the  shutdown  of  major  systems.  We have updated our
internal  computer  software,  other  information technology and other operating
systems  for  the  purposes of Year 2000 compliance.  We also addressed the Year
2000  compliance  of  our new and existing products.  We substantially completed
our  Year 2000 compliance plan during November 1999 and the costs to become Year
2000  compliant  were  not  material  to  our  financial condition or results of
operations.

     Our  operations may also be adversely affected to the extent that suppliers
and other third parties are not Year 2000 compliant.  A number of risks relating
to  the Year 2000 issue may be out of our control, including reliance on outside
links  for essential services such as communications and power.  There can be no
assurance  that  a  failure of systems of third parties on which our systems and
operations  will rely to be Year 2000 compliant will not have a material adverse
effect  on  our  business,  financial  condition  or  operating  results.

     As of the date of this prospectus, we are not aware of any significant Year
2000 issues with respect to our internal systems or the systems of our suppliers
or  other  third  parties  with  whom  we  transact  business.

                                        9

<PAGE>
QUARTERLY  RESULTS

     The  following  table  contains  quarterly  information, which includes all
adjustments,  consisting  only of normal recurring adjustments, that we consider
necessary  for  a  fair  presentation.  We  recorded  a  charge of approximately
$1,800,000  for  settlement  costs  related  to a lawsuit that was substantially
resolved  in  the  quarter  ended June 30, 1999 and a charge of $900,000 for the
purchase  of  patented  technology  in the quarter ended June 30, 1998.  We also
recorded  gains  of  $1,760,000  in  the  quarter  ended  September 30, 1999 and
$740,000  in  the quarter ended December 31, 1999 relating to sales of shares of
Immtech  International,  Inc.  stock.  These  items  were  unusual, nonrecurring
adjustments.
<TABLE>
<CAPTION>



                                                                  Quarters Ended
                          Sept. 30,     Dec. 31,   March 31,    June 30,    Sept. 30,    Dec. 31,    March 31,    June 30,
                            1997          1997        1998        1998        1998         1998        1999         1999
                                                     (in thousands, except per share data)
<S>                    <C>              <C>        <C>         <C>         <C>          <C>         <C>          <C>
Net sales . . . . . .  $         7,544  $   7,138  $    6,279  $   6,947   $    6,724   $   7,290   $    7,276   $   7,223
Gross profit. . . . .            3,506      3,273       2,919      3,340        3,259       3,562        3,379       2,784
Income (loss) from
  operations. . . . .              586        422          70       (772)        (214)       (880)        (486)     (2,308)
Net income (loss) . .              172        132          19       (822)        (420)       (947)        (681)     (2,340)
Net income (loss)
   per common
   share-Basic. . . .              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
        -Diluted. . .              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
</TABLE>


<TABLE>
<CAPTION>


                                Quarters Ended
                         Sept. 30,            Dec. 31,
                           1999                 1999
                     (in thousands, except per share data)
<S>                   <C>               <C>
Net sales. . . . . .  $          6,603  $          6,901
Gross profit . . . .             2,989             3,142
Income (loss) from
  operations . . . .               157              (215)
Net income . . . . .             1,880               498
Net income
   per common
   share-Basic . . .               .22               .06
        -Diluted . .               .21               .06
</TABLE>

     We  typically receive a substantial volume of our quarterly sales orders at
or  near  the  end  of  each  quarter.  In anticipation of meeting this expected
demand, we usually build a significant inventory of finished products throughout
each quarter.  If the expected volume of sales orders is not received during the
quarter, or is received too late to allow us to ship the products ordered during
the  quarter,  our  quarterly  results  and  stock  of finished inventory can be
significantly  affected.



                                       10

<PAGE>
                                    BUSINESS

     We  design,  manufacture  and  market  vital  signs  and  gas  monitoring
instruments  and  related  noninvasive  sensors used to monitor patients in many
healthcare  environments.

     Since  a  patient's  oxygen,  anesthetic  gas and carbon dioxide levels can
change  dramatically  within  minutes,  causing  severe  side  effects or death,
continuous  monitoring  of  these  parameters  is  increasing.  Our  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous  patient  information  to  the clinician.  Our products also allow
hospitals  to  contain  costs  primarily by substituting cost-effective reusable
pulse  oximetry  sensors  for  disposable sensors, controlling the use of costly
anesthetics  and  increasing  personnel  productivity.

     To  meet  the needs of end-users in a wide variety of patient environments,
we  have developed a broad line of patient monitors which combine one or more of
our  patented  or  other  proprietary  technologies  for  monitoring:

-     oxygen  saturation;
-     carbon  dioxide;  and
-     anesthetic  agents,

with  standard  monitoring  technologies  that  provide:

-     electrocardiogram;
-     invasive  and  noninvasive  blood  pressures;
-     temperature;
-     heart  rate;  and
-     respiration  rate.

     In  addition, our VitalView telemetry system allows one nurse to monitor up
to  eight  patients  simultaneously  from  a  convenient central location.  This
allows  hospitals  to  move  out  of the intensive care unit those patients that
require  continuous  monitoring, but do not need all of an intensive care unit's
extensive  and  costly  personnel  and  equipment  resources.

PRODUCTS

     We market a broad range of vital signs and gas monitoring products designed
to  address  the  needs  of  a  variety  of  end-users  in  different  patient
environments.  Our  monitors  display  information  graphically and numerically.
All  of our monitors incorporate adjustable visual and audible alarms to provide
reliable  patient-specific  warnings  of  critical  conditions,  and most of our
monitors  record  up to 60 hours of trend data.  Our monitors are available with
printer  capability  to  provide  permanent  records  of  patient  data.

     Model  503,  503DX,  504  and  504DX.  Our complete line of pulse oximeters
     ------------------------------------
meets  the  needs  of  virtually  all  clinical  environments,  including:

-     adult,  pediatric  and  neonatal  intensive  care  units;
-     operating  rooms;
-     emergency  rooms;
-     nursing  homes;
-     physicians'  offices;  and
-     ambulances.


                                       11

<PAGE>
     Our  pulse oximeter line is designed to provide accuracy and convenience at
a  competitive  cost  to  the  end-user.

     Model  506DX  and  507E  Patient Monitors.  The 507E series is comprised of
     -----------------------------------------
small,  compact, portable, full-featured vital signs monitors configured to meet
specific  clinical  needs.  The  507E  series  is  well-suited  for  dental  and
physician  offices.  The  506DX  is  ideal  for  patient  ward  monitoring  of
noninvasive  blood pressure.  The 507E series combines electrocardiogram, oxygen
saturation and noninvasive blood pressure for a complete vital signs monitor for
physician  office  and  hospital  applications.  The 507E series is an effective
low-cost  monitoring  system  for  the  emergency  room  or  the  recovery room.

     Scholar (TM). The Scholar monitor series specifically addresses  the  needs
     -----------
of small hospitals with broad  clinical  needs,  including  the  monitoring  of:

-     electrocardiogram;
-     blood  oxygen  saturation;
-     noninvasive  blood  pressure;
-     temperature;  and
-     invasive  blood  pressure.

     Scholar  offers  all  the  primary  features  a  hospital  needs  with  the
capability  of  adding more features if desired.  Scholar monitors are available
with  printer  and  recorder  capability  and can transmit data to our VitalView
Central  Stations.

     Model  1100  Anesthesia  Monitor.  The  Model 1100 monitor provides patient
     --------------------------------
monitoring  for  a  wide variety of cardio-pulmonary parameters in an integrated
system.  The  Model  1100  is  able  to  monitor:

-     two  electrocardiogram  waveforms;
-     noninvasive  blood  pressure;
-     three  types  of  invasive  blood  pressure;
-     respiration  rate;
-     heart  rate;
-     temperature;
-     oxygen  saturation;
-     inspired/expired  oxygen;  and
-     carbon  dioxide  and  anesthetic  gases.

     The Model 1100 uses our proprietary disposable respiratory secretion filter
system.

     Model  602-3B,  602-6B,  602-11  and  602-13  Gas Monitors.  The 602 series
     ----------------------------------------------------------
provides  monitoring  of  carbon  dioxide,  pulse oximetry and anesthetic agents
using  our proprietary infrared technology.  The 602 IQ series of operating room
monitors  provides  automatic  identification  and  quantification  of  all five
approved  anesthetic  agents.

     Model  4400  Series  Blood  Pressure,  Pulse  Oximetry  and  Temperature
     ------------------------------------------------------------------------
Combination  Monitor.  The 4400 series monitor was developed in conjunction with
     ---------------
Alaris  Medical  and  incorporates  our  oximetry and noninvasive blood pressure
technology  with  Alaris's  temperature  technology.  Alaris  has  the rights to
market  the Model 4400 monitor to hospitals in the United States and Canada.  We
have  rights  to  market  the  product  to  the  alternate  care  market  and to
international  markets.

     Model 602-14 POET (TM) LT Monitor.  The hand-held  POET  LT  provides small
     ---------------------------------
hospitals  and alternate care environments with compact, portable carbon dioxide
monitoring.  The  POET  LT series is an effective, low-cost functioning solution
for  these  environments.


                                       12

<PAGE>
     VitalView (TM). The VitalView central station makes  it  possible  for  one
     -------------
nurse or technician to monitor numerous patients simultaneously.  The  VitalView
can  receive,  display  and  store  data  from  a  wide  variety of our monitors
including  the  Scholar,  507E  and  MPT.

     MPT (TM).  The  MPT  (Multiple  Parameter  Telemetry)  monitor  allows  the
     --------
transmission  of  vital  signs  (electrocardiogram,  blood oxygen saturation and
noninvasive  blood pressure) on a real time basis to a VitalView central station
while  the  patient is ambulatory.  In today's healthcare environment, hospitals
benefit  by  moving patients from expensive critical care departments as quickly
as  possible  to  less  expensive  general  nursing floors.  MPT, because of its
complete  monitoring  capability  and  its  lower cost, allows the patient to be
ambulatory  while  still  being  monitored  for  all  vital  signs.

     Pulse  Oximetry Sensors.  We have designed proprietary, noninvasive sensors
     -----------------------
that  can be used on any patient, from a premature infant to a full-grown adult.
Our  line  of  reusable  pulse  oximetry  sensors  offers users significant cost
savings  compared  to  disposables.  Our  reusable sensors generally last longer
than  the  one-year  warranty  period  and  are easily and inexpensively cleaned
between  uses.  Our  reusable  sensors  include  a  finger  sensor  for  routine
applications  and  a  multisite sensor for increased placement flexibility.  The
multisite  sensor  is  fully  immersible,  allowing  for  sterilization  between
patients.  We also sell a range of disposable sensors designed for single use in
cases  where  the  facility  would  prefer  to  use  a patient charge disposable
product.

     Water  Chek/Chek-Mate  Filter  System.  Our patented, disposable Water Chek
     -------------------------------------
system  separates a patient's respiratory secretions from a breath sample before
it  enters  the  gas  monitor(s)  for  analysis.  Our  proprietary,  disposable
Chek-Mate  filter  enhances  the  removal  of  moisture  from  the sample, while
preventing  cross-contamination.  This  system  allows  the  monitor  to operate
effectively  regardless  of  humidity  or  patient  condition.  The self-sealing
feature  also  protects  the  healthcare  provider from potential contamination.

MARKETING  AND  SALES

     Domestic  Sales.  At  November 30, 1999, our domestic sales force consisted
     ---------------
of  18  employees  and  75 independent dealers.  Our sales force and independent
dealers  market  our products to many different types of medical facilities such
as hospitals, surgery centers, nursing homes and physician offices.  We sell our
higher-end  monitors,  MPT,  Vital  View  Central  Station  and anesthetic agent
monitors,  principally  to hospitals whereas the vital signs and pulse oximeters
are  sold  primarily  for  nonhospital  settings.

     International Sales.  One of our principal marketing strategies has been to
     -------------------
target international markets, particularly Europe, Latin America and the Pacific
Rim  countries.  During  fiscal  1999,  we  sold  our  products,  principally to
hospitals,  in  over 75 countries through over 140 independent dealers.  Most of
our  international  order processing, invoicing, collection and customer service
functions are handled directly from our headquarters in Waukesha, Wisconsin.  We
believe  demand for our products in international markets is primarily driven by
cost  containment  concerns,  and  increased  interest  in using quality patient
monitoring  products  for  improved  patient  management.

     In fiscal 1999, 37% of our net sales, or $10.5 million, was attributable to
international  sales,  of  which  approximately:

-     44%  was  from  sales  in  Europe  and  the  Middle  East;
-     21%  was  from  sales  to  Pacific  Rim  countries;  and
-     35%  was  from  sales  to  Canada  and  Central  and  South  America.

     In  fiscal  1998,  46%  of  our net sales was attributable to international
sales.  In  fiscal  1997,  51% of our net sales was attributable to exports.  We
have  no  material  identifiable assets located in foreign markets.  We sell our
products  in  United  States dollars and are not subject to significant currency
risks.  However,  an  increase in the value of the United States dollar relative
to  foreign  currencies  could make our products less price competitive in those
markets.  In  addition,  significant  devaluation  of certain foreign currencies
could  adversely  affect  the

                                       13

<PAGE>
collectibility  of accounts receivable from international customers.  We analyze
this  risk  before  making  shipments  to  countries  we  view  as  unstable.

     Clinical Support.  At November 30, 1999, we employed three clinical support
     ----------------
specialists  to  provide  customer training and education, primarily to domestic
hospitals.  The clinical support staff also assists in the periodic training and
education  of  the  direct sales force.  In addition, the clinical support staff
maintains  contact  with end-users and provides additional training and updates.
Clinical  support  in  foreign markets is provided by our clinical support staff
and  direct  sales  force.

     Warranty and Service.  We believe that customer service is a key element of
     --------------------
our  marketing program.  Our monitors and reusable sensors are warranted against
defects  for  one  year.  If  a  problem develops with a Criticare product while
under warranty, we typically provide a replacement unit until the product can be
repaired at our facility.  At November 30, 1999, we had a customer service staff
of  16 people at our Waukesha, Wisconsin facility.  We offer extended warranties
and  service  contracts  on  all  of  our  monitors.

MANUFACTURING

     We  continually  strive  to  implement  manufacturing  efficiencies  while
maintaining  product  quality  and  reliability.  Our  oximeters and sensors are
assembled  from  off-the-shelf  components  and  other  parts  produced  to  our
specifications,  such  as  printed circuit board assemblies, custom transformers
and sensor cable/connector subassemblies.  However, we produce certain important
components  in-house.  All  electronic  components  are  subjected  to a 24-hour
high-temperature burn-in to eliminate early component failure.  Some subassembly
is  performed  by  subcontractors,  but  final  assembly and quality control are
performed  at  our  facility.  We  maintain  test  and  inspection procedures to
minimize  errors  and  enhance the operating reliability of our products.  Final
test  procedures  on  fully  assembled  units  include an operational test and a
continuous  72-hour  burn-in  procedure.

     Some of our products incorporate components currently purchased from single
sources.  While we believe these components are available from alternate sources
on  reasonable  terms,  an  interruption  in  the  delivery  of  these  or other
components  could  harm us.  In order to reduce the risk of supply interruption,
we  maintain  inventories  of  important  components.  However,  we  have  been
experiencing a severe shortage of LC monitors during the third quarter of fiscal
2000  which  we expect to delay international shipments of our new product line.

     The  ISO  9000  series  of  quality  management and assurance standards was
developed by the International Organization for Standardization and published in
1987.  In  1993  the  European  Community  was  formed  with  the signing of the
Maastricht  Treaty  by 12 European countries.  One of the many standards adopted
by  this  group  is  the  ISO  9000  international quality assurance and quality
management  series  under the designation EN2 9000.  Based on this action by the
European Community and specific requirements from European customers, we believe
ISO  9000  registration  will  be  required to compete in European Community and
other  international  markets  as an indication of compliance with international
quality  management  and  assurance  standards.  In  July 1994 the Food and Drug
Administration  announced  its  intention  of harmonizing the ISO 9000 standards
with  its  Medical  Device  Good  Manufacturing  Practices.  We  have  achieved
certification  under  ISO  9001  and  9002  standards.  See  "Regulation."

RESEARCH,  DEVELOPMENT  AND  ENGINEERING

     We  have  focused  our research development and engineering expenditures on
products  designed  to  meet  identified  market  demands.  We seek to apply our
expertise  in  gas  monitoring  and  related  sensor  technology  to develop new
products  and adapt existing products for new markets.  At November 30, 1999, we
had  an  in-house research, development and engineering staff of 23 people.  Our
research,  development  and engineering expenditures were $3.0 million in fiscal
1999,  $3.3  million  in  fiscal  1998  and  $2.3  million  in  fiscal  1997.


                                       14

<PAGE>
COMPETITION

     The  markets  for  our  products  are  highly  competitive.  Many  of  our
competitors,  including  our  principal  competitors  described  below,  have:

-     greater  financial  resources;
-     more  established  brand  identities  and  reputations;
-     longer  histories  in  the  medical  equipment  industry;  and
-     larger  and  more  experienced  sales  forces.

     In  these  respects,  our competitors may have a competitive advantage over
us.  We  compete  primarily  on  the  basis of product features, the quality and
value  of  our  products  (i.e.,  their  relative  price compared to performance
features provided) and the effectiveness of our sales and marketing efforts.  We
believe  that  our  principal  competitive  strengths  are  provided  by:

-     our  focus  on  cost  containment;
-     our patented and other proprietary technology and software for noninvasive
      continuous monitoring of oxygen,  anesthetic  gases,  carbon  dioxide  and
      noninvasive  blood  pressure;
-     our  cost-efficient  manufacturing;
-     the  efficiency  and  speed  of  our research and development efforts; and
-     our  established  international  presence.

     The  principal  competing  manufacturers  of  pulse  oximeters  are Nellcor
Puritan  Bennett, a unit of Mallinckrodt Inc., and Datex/Ohmeda, a United States
subsidiary  of  Instrumentarium OY, a Finnish company.  We estimate that Nellcor
has  captured  a  majority  of  the  worldwide  pulse  oximeter market, and that
Datex/Ohmeda  and  Criticare  have  each  captured  significant  portions of the
worldwide  pulse  oximeter  market.  In  addition,  there are approximately four
other  companies  which  compete  in  the  market  for pulse oximeters.  We also
indirectly  compete  with  manufacturers  of  numerous  other  medical equipment
products  for  limited  customer  funds.

     We  believe  that the worldwide anesthetic agent and carbon dioxide monitor
markets  are  comparatively  fragmented,  with  Datex/Ohmeda  as  the  principal
competitor.  Our  principal  competitors  in  the  domestic  gas  monitor market
include  Datex/Ohmeda  and  Hewlett-Packard Company.  The market for vital signs
monitors  includes  competitors  such  as Hewlett-Packard Company, Siemens A.G.,
Datex/Ohmeda  and  SpaceLabs,  Inc.,  a  subsidiary  of  Westmark  International
Incorporated.

     We  believe  that  our  principal  competitors  in  Western  Europe include
Datex/Ohmeda  and  that  we  have  a  significant  share of this market.  In the
Pacific  Rim  countries, we believe that Datex/Ohmeda is the leading competitor.

REGULATION

     As  a manufacturer of medical diagnostic equipment, we are regulated by the
Food  and  Drug  Administration  and  similar foreign governmental agencies.  In
producing  our products, we must comply with a variety of regulations, including
the  good  manufacturing  practices  regulations  of  the  Food  and  Drug
Administration.  In  addition,  we  are  subject to periodic inspections by this
agency.  If  the  Food  and  Drug  Administration  believes  that  its  legal
requirements  have  not  been  fulfilled,  it  has extensive enforcement powers,
including  the ability to ban or recall products from the market and to prohibit
the  operation of manufacturing facilities.  We believe our products comply with
applicable  Food  and  Drug Administration regulations in all material respects.
In  addition,  we received ISO 9002 certification on April 29, 1993 and ISO 9001
certification  on  July  8,  1994.

     Under  the  Federal  Food,  Drug  and Cosmetic Act, as amended, all medical
devices  are  classified  as  Class I, Class II or Class III, depending upon the
level  of  regulatory control to which they will be subject.  Class III devices,
which  are the most highly controlled devices, are subject to premarket approval
by  the  Food  and  Drug  Administration prior to commercial distribution in the
United  States.

                                       15

<PAGE>

     Our  current  products  have  not  been  subject  to  the  Food  and  Drug
Administration's  comprehensive  premarket  approval  requirements,  but  are
generally  subject  to  premarket notification requirements.  If a new device is
substantially  equivalent  to  a device that did not require premarket approval,
premarket  review  is  satisfied  through  a  procedure  known  as  a  "510(k)
submission,"  under  which the applicant provides product information supporting
its claim of substantial equivalence.  The Food and Drug Administration may also
require  that  it  be  provided with clinical trial results showing the device's
safety  and  efficacy.

     We  believe that the products we are currently developing generally will be
eligible for the 510(k) submission procedure and, therefore, will not be subject
to  lengthy  premarket  approval  procedures.  However, these products are still
being  developed  and  we  can  make  no  assurance  that  the  Food  and  Drug
Administration  will  determine  that  the  products  may  be  marketed  without
premarket  approval.

     We  seek,  where  appropriate,  to  comply  with  the  safety  standards of
Underwriters'  Laboratories  and  the  Canadian  Standards  Association  and the
standards  of  the  European  Community.  To  date,  we  have  not  experienced
significant  regulatory expense or delay in the foreign markets in which we sell
our  products.  Industry and professional groups such as the American Society of
Anesthesiologists,  to  the  extent  they have the power to mandate practices or
procedures  as part of their profession's standard of care, are also a source of
indirect  regulation  of  our  business.

PATENTS  AND  TRADEMARKS

     We  believe  one of our principal competitive advantages is provided by our
patented  and  other  proprietary  technology,  including  our:

-     sensor  technology;
-     infrared  specific  anesthetic  gas  monitoring  technology;
-     UltraSync  signal  processing  software;  and
-     disposable  respiratory  secretion  filter  system.

     None  of  our  U.S. patents expire before 2004.  We also have three foreign
patent  applications  pending.  There  is  no assurance that any patents held or
secured  by  us will provide any protection or commercial or competitive benefit
to  us.  There  is  also  no  assurance that our products will not infringe upon
patents  held  by  others.  We  are  the  owner  of  United  States  trademark
registrations  for  "POET"  and  "Scholar."

     We  also  rely  upon trade secret protection for certain of our proprietary
technology.  Although  we require our employees having access to our proprietary
information  to  sign  confidentiality agreements, we can make no assurance that
such  agreements  can  be  effectively  enforced  or  that  others  will  not
independently  develop  substantially  equivalent  proprietary  information  and
techniques  or  otherwise  gain  access  to  or  disclose  our  trade  secrets.

EMPLOYEES

     At  November  30,  1999  we  had  105  employees,  including:

-     41  in  manufacturing  and  operations;
-     6  in  quality  control;
-     22  in  sales  and  marketing;
-     13  in  administration;  and
-     23  in  research,  development  and  engineering.

     Many  of  our  technical employees are highly skilled.  We believe that our
continued  success  depends  in  part  on  our  ability  to  continue to attract
qualified  management,  marketing  and  technical  personnel.  None  of  our

                                       16

<PAGE>
employees are subject to a collective bargaining agreement.  We believe that our
relations  with  our  employees  are  good.

BACKLOG

     Our backlog was approximately $1,836,000 on June 30, 1999 and approximately
$1,342,000  on June 30, 1998.  The backlog at these dates consisted primarily of
products  for  which  the  sales  order  specified  a delayed delivery date.  We
generally  deliver our products out of inventory when specified by the customer.
We  do  not  believe  that  our  backlog at any date is indicative of our future
sales.

DESCRIPTION  OF  PROPERTY

     In  November  1992,  we  purchased  a  new  60,000 square foot facility for
approximately  $4.5  million  as  our  headquarters in Waukesha, Wisconsin.  Our
mortgage  calls  for  monthly  installments  of  principal  and  interest  of
approximately  $28,000  and  a  final  "balloon"  payment  of approximately $3.0
million  in  April  2004.  We  believe  this  facility  will be adequate for the
foreseeable  future.

LEGAL  PROCEEDINGS

     In  July,  1999,  Criticare  and  Dynamic Options Corporation, Inc. settled
pending legal proceedings.  We agreed to make a cash payment to Dynamic, sell on
behalf  of  Dynamic  a  portion  of the shares we hold in Immtech International,
Inc.,  issue  to Dynamic 150,000 shares of our common stock and transfer certain
inventory  related to telemetry products no longer sold by us.  In January 2000,
Criticare  and  Dynamic  agreed that we would make an additional cash payment to
Dynamic  in  lieu  of issuing to Dynamic the 150,000 shares of our common stock.

     In  the  normal course of business we also may be involved in various legal
proceedings  from  time to time.  We do not believe we are currently involved in
any  claim  or  action  the  ultimate disposition of which would have a material
adverse  effect  on  us.  We mitigate product liability claims through insurance
coverage.

                                       17

<PAGE>

                                   MANAGEMENT


DIRECTORS  AND  OFFICERS

     The  following  table  sets  forth  information regarding our directors and
executive  officers:

<TABLE>
<CAPTION>



<S>                        <C>  <C>
NAME                       AGE  TITLE
-------------------------  ---  ------------------------------------------------
Karsten Houm (1)(2)         53  Chairman of the Board and Director

Emil H. Soika               61  President, Chief Executive Officer and Director

Gerhard J. Von der Ruhr     58  Director

N.C. Joseph Lai, Ph.D       57  Director

Milton Datsopoulos (1)(2)   59  Director

Mark Ruehle                 38  Vice President-Finance and Secretary

Stephen D. Okland           57  Vice President-Domestic Sales

Drew M. Diaz                36  Vice President-International Sales

Michael T. Larsen           40  Vice President-Quality Control/Quality Assurance

Joseph Lester               49  Vice President-Operations
______________________
<FN>


     (1)     Member  of  Audit  Committee.
     (2)     Member  of  Compensation  Committee.
</TABLE>

     KARSTEN  HOUM,  CHAIRMAN OF THE BOARD AND DIRECTOR.  Mr. Houm has served as
our Chairman of the Board since November 1998 and as a Director since 1985.  Mr.
Houm  also  currently  works as a management consultant.  From September 1985 to
1997,  Mr.  Houm  served  as  President of Unitor, a Norwegian shipping company.

     EMIL  H. SOIKA, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR.  Mr. Soika
has served as our President, Chief Executive Officer and Director since November
1998.  From  November 1995 to September 1998, Mr. Soika served as Vice President
and  General  Manager  of  Spacelabs  Medical  Systems, a medical monitoring and
clinical  information  systems company.  From March 1991 to July 1995, Mr. Soika
served as President and Chief Executive Officer of Block Medical, a manufacturer
of  intravenous  dispensers.  Mr.  Soika is a director of Immtech International,
Inc.,  a  company  engaged  in  the  research and development of products in the
fields  of  biochemistry  and  immunology.

     GERHARD  J.  VON  DER  RUHR,  DIRECTOR.  Mr.  Von  der Ruhr has served as a
Director  since  1984.  Mr. Von der Ruhr is Chairman of O.B. Scientific, Inc., a
medical  technology  company.  Mr.  Von der Ruhr is our co-founder and served as
our  Chairman,  President (CEO) and Treasurer from our inception in October 1984
until  November  1998.


                                       18

<PAGE>
     N.C.  JOSEPH  LAI, PH.D., DIRECTOR.  Dr. Lai has served as a Director since
1984.  Dr. Lai is a management consultant.  Dr. Lai is our co-founder and served
as  our Vice Chairman and as an officer from our inception in October 1984 until
November  1998.

     MILTON  DATSOPOULOS,  DIRECTOR.  Mr.  Datsopoulos  has served as a Director
since  1986.  Mr. Datsopoulos has been a partner in the law firm of Datsopoulos,
MacDonald & Lind in Missoula, Montana since 1974.  Mr. Datsopoulos is a director
of  Montana  Naturals  Int'l,  Inc., a manufacturer of natural food products and
nutritional  supplements,  Kafus  Environmental  Industries  Ltd., a producer of
consumer  and  industrial  waste  recycling  technology,  and  Leigh  Resource
Corporation,  a  company  engaged  in  mineral  exploration  and  development.

     MARK  RUEHLE,  VICE PRESIDENT-FINANCE AND SECRETARY.  Mr. Ruehle has served
as  our  Vice  President-Finance  and  Secretary  since February 2000.  Prior to
joining  us,  Mr.  Ruehle  was  Senior  Manager  of  Finance for AmeriServe Food
Distribution,  Inc.  from  December  1992  to  June  1999.

     STEPHEN D. OKLAND, VICE PRESIDENT-DOMESTIC SALES.  Mr. Okland has served as
one  of  our  Vice  Presidents  since  May  1988.

     DREW  M.  DIAZ, VICE PRESIDENT-INTERNATIONAL SALES.  Mr. Diaz served as our
Regional Sales Manager for the Middle East and Western Europe from 1993 until he
was  appointed  Director  of  International  Sales  in  1995.  Mr. Diaz was most
recently  promoted  to Vice President-International Sales in 1997.  From October
1996  until  August 1997, Mr. Diaz also served as Geschaeftsfuehrer of Criticare
International  GmbH  Marketing  Services,  our wholly-owned subsidiary which was
dissolved  in  1998  following  bankruptcy  proceedings  under  German  law.

     MICHAEL  T.  LARSEN, VICE PRESIDENT-QUALITY CONTROL/QUALITY ASSURANCE.  Mr.
Larsen  has served as our Vice President-Quality Control/Quality Assurance since
September  1990.

     JOSEPH  LESTER,  VICE  PRESIDENT-OPERATIONS.  Mr.  Lester has served as our
Vice  President-Operations  since January 2000.  Prior to joining us, Mr. Lester
was  Vice President-Operations for Siemens Medical Systems, Inc. from April 1997
to  January  2000.  From  1993  to  1997,  Mr.  Lester  was  Senior  Director of
Operations  for  Spacelabs  Medical  Systems.

BOARD  OF  DIRECTORS

     Our  Board of Directors consists of five members.  Our By-laws provide that
our  Board  of  Directors  will  be  divided into three classes, with each class
serving  staggered  three year terms.  Karsten Houm and Emil H. Soika will stand
for  re-election at the 2000 annual meeting of stockholders.  Milton Datsopolous
will  stand for re-election at the 2001 annual meeting of stockholders.  Gerhard
J.  Von  der  Ruhr  and  N.C.  Joseph Lai will stand for re-election at the 2002
annual  meeting  of  stockholders.

COMPENSATION  OF  DIRECTORS

     Our  Directors  are  reimbursed  for  out-of-pocket  expenses  incurred  in
attending  meetings  of  the  Board of Directors.  Our Directors receive no cash
directors'  fees.  During  fiscal  1999,  we  granted:

-     200,000  stock  options  to  Mr.  Soika;
-     22,500  stock  options  to  each  of  Mr.  Houm  and  Mr. Datsopoulos; and
-     regranted  77,500  stock  options  to each of Mr. Houm and Mr. Datsopoulos
      through  the  repricing  of  options  on  December  11,  1998.


                                       19

<PAGE>
EXECUTIVE  COMPENSATION

     Cash  and  Other Compensation.  The following table sets forth compensation
information  for  the three fiscal years ended June 30, 1999 with respect to the
two persons who served as our Chief Executive Officer during fiscal 1999 and our
two  other  executive  officers  whose salary exceeded $100,000 for fiscal 1999.
The  persons  listed  below  are sometimes referred to in this prospectus as the
"named  executive  officers."
<TABLE>
<CAPTION>

                                             SUMMARY COMPENSATION TABLE
                                                                                     LONG-TERM
                                     ANNUAL COMPENSATION                            COMPENSATION
                                     -------------------                           ---------------
                                                                                       AWARDS:
                                                                                     SECURITIES
NAME AND                                                      OTHER ANNUAL           UNDERLYING        ALL OTHER
PRINCIPAL POSITION          YEAR             SALARY($)        COMPENSATION($) (1)  OPTIONS/SARS (#)  COMPENSATION($)
--------------------------  ---------------  ---------------  -------------------  ----------------  ---------------
<S>                         <C>              <C>              <C>                  <C>               <C>
Emil H. Soika,              1999                  78,125                       --       200,000               --
  President, Chief
  Executive Officer and
  Director (2)

Gerhard J. Von der Ruhr,    1999                  60,000                    1,915            --          593,646 (4)
  Chairman of the Board,    1998                 144,000                      958            --           56,838 (4)
  President (CEO) and       1997                 144,000                      957            --           56,620 (4)
  Treasurer (3)

Stephen D. Okland,          1999                 277,576 (5)                6,000        43,500 (6)        3,701 (7)
  Vice President-Domestic   1998                 302,628 (5)                6,000            --            3,690 (7)
  Sales                     1997                 253,706 (5)                6,000        10,000            3,441 (7)

Drew M. Diaz,               1999                 165,609                    1,915       100,000 (8)        1,882 (9)
  Vice President-           1998                 188,292                      638            --               86 (9)
  International Sales       1997                 180,717                    8,223        50,000            3,226 (9)
_____________________
<FN>

(1)     The  amounts  represent  automobile  allowance  payments.

(2)     Mr.  Soika  commenced  employment  with  us  in  November  1998.

(3)     Mr.  Von  der  Ruhr  resigned  as our Chairman of the Board, President (CEO) and Treasurer in November 1998.

(4)     For  fiscal  1999,  represents  $50,396  of premiums we paid on two life insurance policies, the proceeds of
which  are  payable to the beneficiary of Mr. Von der Ruhr, $2,760 of our contributions to the 401(k) plan on behalf
of  Mr. Von der Ruhr and $540,490 paid or accrued for severance.  For fiscal 1998, represents $53,638 of premiums we
paid  on  two life insurance policies, the proceeds of which are payable to the beneficiary of Mr. Von der Ruhr, and
$3,200  of  our contributions to the 401(k) plan on behalf of Mr. Von der Ruhr.  For fiscal 1997, represents $53,620
of  premiums we paid on two life insurance policies, the proceeds of which are payable to the beneficiary of Mr. Von
der  Ruhr,  and  $3,000  of  our  contributions  to  the  401(k)  plan  on  behalf  of  Mr.  Von  der  Ruhr.

(5)     Represents  commissions  we  paid  to  Mr.  Okland  based on a percentage of our domestic sales.  Mr. Okland
receives  no  fixed  salary.

                                       20

<PAGE>

(6)     Represents  30,000  stock options granted in fiscal 1999 and 13,500 stock options regranted due to repricing
of  options  on  December  11,  1998.

(7)     For  fiscal  1999, represents $501 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,200 of our contributions to the 401(k) plan on behalf of Mr.
Okland.  For  fiscal 1998, represents $490 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,200 of our contributions to the 401(k) plan on behalf of Mr.
Okland.  For  fiscal 1997, represents $441 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,000 of our contributions to the 401(k) plan on behalf of Mr.
Okland.

(8)     Represents  34,000  stock options granted in fiscal 1999 and 66,000 stock options regranted due to repricing
of  options  on  December  11,  1998.

(9)     For  fiscal  1999, represents $101 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary of Mr. Diaz, and $1,781 of our contributions to the 401(k) plan on behalf of Mr. Diaz.
For fiscal 1998, represents $86 of premiums we paid on a life insurance policy, the proceeds of which are payable to
the  beneficiary  of  Mr. Diaz.  For fiscal 1997, represents $3,226 of premiums we paid on a health insurance policy
while  Mr.  Diaz  was  a  resident  of  Europe,  the  proceeds  of which are payable to the beneficiary of Mr. Diaz.
</TABLE>

     Options  Granted  During  Fiscal  1999.  The  following  table  provides
information  regarding  stock  options  granted  to our named executive officers
during  the  fiscal  year  ended  June  30,  1999.

                        OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>

                         NUMBER OF        % OF TOTAL
                         SECURITIES     OPTIONS/SARS
                         UNDERLYING     GRANTED TO
                         OPTIONS/SARS   EMPLOYEES IN  EXERCISE PRICE   EXPIRATION
NAME                     GRANTED (#)    FISCAL YEAR           ($/ SH)  DATE
-----------------------  -------------  ------------  ---------------  ----------
<S>                      <C>            <C>           <C>              <C>

Emil H. Soika                  100,000           9.0           1.6875     2/23/04
                               100,000           9.0           1.5000     3/10/04

Gerhard J. Von der Ruhr             --            --               --          --

Stephen D. Okland               30,000           2.7           1.8750    12/11/03
                                10,000             *           1.8750    10/08/00
                                 3,500             *           1.8750    12/31/01

Drew M. Diaz                    34,000           3.1           1.5000     3/10/04
                                 2,000             *           1.8750     1/25/00
                                 4,000             *           1.8750    12/31/01
                                10,000             *           1.8750    10/08/00
                                50,000           4.5           1.8750     1/23/02
<FN>

*     Less  than  1%
</TABLE>


                                       21

<PAGE>
Fiscal  Year-End  Option  Values.  The following table shows the fiscal year-end
value  of unexercised options held by the named executive officers.  None of the
named  executive  officers  exercised  options  in  fiscal  1999.

<TABLE>
<CAPTION>


                                        FISCAL YEAR-END OPTION VALUES
                          NUMBER OF SECURITIES UNDERLYING          VALUE OF UNEXERCISED
                               UNEXERCISED OPTIONS AT                  IN-THE-MONEY
                                  FISCAL YEAR-END(#)          OPTIONS AT FISCAL YEAR END($) (1)
                                 ------------------           ---------------------------------
NAME                     EXERCISABLE         UNEXERCISABLE  EXERCISABLE             UNEXERCISABLE
-----------------------  ------------------  -------------  ----------------------  -------------
<S>                      <C>                 <C>            <C>                     <C>
Emil H. Soika                            --        200,000                      --         93,750
Gerhard J. Von der Ruhr                  --             --                      --             --
Stephen D. Okland                    13,500         30,000                   2,531          5,625
Drew M. Diaz                         32,000         68,000                   4,125         27,375
<FN>


(1)     Based  on  the  reported  closing  bid price of $2.0625 per share of common stock on June 30, 1999.
</TABLE>

     Employment  Agreements  and  Severance  Arrangements.  On June 1, 1999, we
entered  into  employment  agreements  with  Emil  H.  Soika,  President,  Chief
Executive  Officer  and  Director,  Stephen  D.  Okland, Vice President-Domestic
Sales,  and  Drew  M.  Diaz, Vice President-International Sales.  The agreements
provide, respectively, that Mr. Soika will receive a base salary of $125,000 per
year,  and  Mr.  Okland  and  Mr. Diaz will continue to receive their respective
current  compensation,  with an annual review of the compensation within 30 days
prior to the end of each fiscal year.  Mr. Soika is eligible to participate in a
cash bonus program and each of Mr. Soika, Mr. Okland and Mr. Diaz is entitled to
receive  health  and  life  insurance coverage and disability insurance.  We may
terminate  Mr.  Soika's, Mr. Okland's or Mr. Diaz's respective employment at any
time and any of Mr. Soika, Mr. Okland or Mr. Diaz may resign at any time.  If we
terminate employment without cause at any time either prior to or after a change
in  control, Mr. Soika is entitled to receive payment of his base salary and his
other employee benefits for 12 months, Mr. Okland is entitled to receive payment
of $18,750 per month and his other employee benefits for 24 months, and Mr. Diaz
is  entitled  to  receive payment of his then current compensation and his other
employee benefits for 12 months, respectively, from the date of termination.  If
Mr.  Soika's,  Mr. Okland's or Mr. Diaz's employment is terminated for any other
reason  before a change in control, the terminated employee will not be entitled
to  receive  any base salary or other benefits for periods after the termination
date.  If  we  experience  a change in control, and Mr. Soika, Mr. Okland or Mr.
Diaz voluntarily terminates his employment for any reason after completing three
months  of  employment  after  the  change  in control, Mr. Soika is entitled to
receive  payment  of  his  base  salary  and  his other employee benefits for 12
months,  Mr.  Okland is entitled to receive payment of $18,750 per month and his
other  employee  benefits  for  24  months,  and Mr. Diaz is entitled to receive
payment  of his then current compensation and his other employee benefits for 12
months,  respectively,  after  the  date of termination, or until Mr. Soika, Mr.
Okland  or Mr. Diaz secures alternative employment, whichever period is shorter.
Each  of  Mr.  Soika, Mr. Okland and Mr. Diaz have agreed not to compete with us
during  employment  and for a period of 3, 24 and 12 months, respectively, after
any voluntary termination of employment or for a period of 12, 24 and 12 months,
respectively,  after any termination by us without cause.  Mr. Soika, Mr. Okland
and  Mr.  Diaz have each agreed to maintain the confidentiality of our financial
statements  and  other  financial  information.

     On  November  16, 1998, we entered into a severance agreement with Gerhard
J.  Von  der  Ruhr,  our  former  Chairman  of  the  Board,  President (CEO) and
Treasurer.  Pursuant  to  this  severance  agreement,  we  are  required to make
payments  to  Mr.  Von  der  Ruhr  of  $6,000  per month over the 36 months from
December  1998  through  November  2001.  We also agreed to (i) issue options to
purchase  up  to  21,000  shares  of  common  stock  to Mr. Von der Ruhr with an
exercise  price of $2.0625 per share, (ii) allow Mr. Von der Ruhr to continue to
use office space and secretarial services for a period of up to 12 months, (iii)
continue  to  provide  fringe  benefits  to  Mr.  Von  der

                                       22

<PAGE>
Ruhr through September 30, 2001, and (iv) continue to provide health benefits to
Mr.  Von  der Ruhr and his spouse until the earlier of the date Mr. Von der Ruhr
reaches  age  65  or  he obtains comparable insurance coverage from a subsequent
employer.  Pursuant  to this severance agreement, we also transferred patent and
technology rights that we had received from Immtech International, Inc. relating
to  treatment  for  sepsis  and prophylaxis and 172,414 shares of Immtech common
stock  to O. B. Scientific, Inc. in exchange for the payment by O. B. Scientific
of  $150,000 in ten semi-annual installments of $15,000 each starting on June 1,
1999.  We  received  10%  of  the outstanding shares of O. B. Scientific and the
right  to  elect  one  member  of  the  board  of directors of O. B. Scientific.
Criticare  and  Mr. Von der Ruhr also agreed to certain provisions regarding the
distribution  of  products  related to the technology transferred by us to O. B.
Scientific.

     On November 16, 1998, we also entered into a severance agreement with N.C.
Joseph  Lai, Ph.D., our former Senior Vice President, Vice Chairman of the Board
and  Secretary.  Pursuant  to  this severance agreement, we are required to make
payments  to  Dr.  Lai of $5,000 per month over the 36 months from December 1998
through  November  2001.  We  also agreed to (i) issue options to purchase up to
21,000  shares  of common stock to Dr. Lai with an exercise price of $2.0625 per
share,  (ii)  allow  Dr.  Lai  to  continue  to use office space and secretarial
services  for  a  period  of  up  to 12 months, (iii) continue to provide fringe
benefits  to  Dr.  Lai  through September 30, 2001, and (iv) continue to provide
health  benefits to Dr. Lai and his spouse until the earlier of the date Dr. Lai
reaches  age  65  or  he obtains comparable insurance coverage from a subsequent
employer.


                                       23

<PAGE>
                             PRINCIPAL STOCKHOLDERS

     The  following  table  provides  information  regarding  the  beneficial
ownership  of  our  common  stock  as  of  December  22,  1999  by:

-     each  stockholder  known by us to be the beneficial owner of more than 5%
      of  our  common  stock;
-     each  director;
-     each  named  executive  officer;  and
-     all  directors  and  executive  officers  as  a  group.

     We have determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission.  Unless otherwise indicated, the persons and
entities  included  in  the  table  have  sole  voting and investment power with
respect  to  all  shares  beneficially  owned,  subject  to applicable community
property  laws.  Shares  of  common  stock  subject  to  options that are either
currently  exercisable  or  exercisable  within 60 days of December 22, 1999 are
treated  as  outstanding  and  beneficially  owned  by the option holder for the
purpose  of  computing  the percentage ownership of the option holder.  However,
these  shares  are  not  treated as outstanding for the purpose of computing the
percentage  ownership  of  any  other  person.
<TABLE>
<CAPTION>

                                                                    SHARES
PRINCIPAL STOCKHOLDER (1)                                     BENEFICIALLY OWNED   PERCENT
------------------------------------------------------------  -------------------  --------
<S>                                                           <C>                  <C>
Emil H. Soika. . . . . . . . . . . . . . . . . . . . . . . .                  --        --
Gerhard J. Von der Ruhr. . . . . . . . . . . . . . . . . . .          560,275 (2)      6.4%
N.C. Joseph Lai. . . . . . . . . . . . . . . . . . . . . . .          713,894 (3)      8.2
Karsten Houm . . . . . . . . . . . . . . . . . . . . . . . .          103,365 (4)      1.2
Milton Datsopoulos . . . . . . . . . . . . . . . . . . . . .           77,500 (5)        *
Stephen D. Okland. . . . . . . . . . . . . . . . . . . . . .           17,000 (6)        *
Drew M. Diaz . . . . . . . . . . . . . . . . . . . . . . . .           45,500 (7)        *
All directors and executive officers as a group (10 persons)        1,629,634 (8)     18.1
_____________________
<FN>


*     Less  than  1%

(1)     Unless otherwise indicated, the address of the beneficial owner is 20925 Crossroads
Circle,  Waukesha,  WI  53186.  The  address  of  Mr. Houm is Kristinelundvn 21, 0268 Oslo,
Norway  and  the  address  of  Mr.  Datsopoulos  is Central Square Building, 201 West Main,
Missoula,  Montana  59802.

(2)     Includes  410,000 shares owned of record by Ursula Von der Ruhr, Mr. Von der Ruhr's
wife,  and  1,175  shares  owned  of  record  by Mark Von der Ruhr, Mr. Von der Ruhr's son.

(3)     Includes  116,000  shares  owned  of  record  by Helen Lai, Dr. Lai's wife; 137,000
shares  owned  jointly  by  Dr.  Lai and his wife; 184,000 shares in the aggregate owned of
record  by  Dr.  Lai's  sons,  Christopher  Lai and Thomas Lai; and 134,000 shares owned of
record  by  the  Lai  Family  Foundation.

(4)     Includes  87,500  shares  which  Mr.  Houm has the right to acquire under currently
exercisable  options.

(5)     Includes  77,500  shares  which  Mr.  Datsopoulos  has  the  right to acquire under
currently  exercisable  options.


                                       24

<PAGE>
(6)     Includes  13,500  shares  which Mr. Okland has the right to acquire under currently
exercisable  options.

(7)     Includes  44,000  shares  which  Mr.  Diaz has the right to acquire under currently
exercisable  options.

(8)     Includes  277,500  shares  of common stock the members of the group have a right to
acquire  under  currently  exercisable  options.
</TABLE>

                               SELLING STOCKHOLDER

     All  of  the  shares  of our common stock offered for sale pursuant to this
prospectus  are  being offered by the selling stockholder.  We issued the shares
to  the  selling  stockholder  in  March,  2000  as  part  of  the settlement of
litigation  between  the  selling  stockholder  and  us.

     Information  with  respect  to  the shares of our common stock beneficially
owned  by  the  selling  stockholder  follows.
<TABLE>
<CAPTION>

                            SHARES OF COMMON STOCK
                              OWNED PRIOR TO THE    SHARES OFFERED   SHARES TO BE OWNED
                                   OFFERING         FOR SALE HEREBY  AFTER THE OFFERING*
                            ----------------------  ---------------  -------------------
<S>                         <C>                     <C>              <C>                  <C>
                                                                     NUMBER               PERCENT
                                                                     -------------------  -------
Applied Data Systems, Inc.                  30,000           30,000                   --       --
<FN>


*Assumes  sale  of  all  shares  offered  by  this  prospectus.
</TABLE>

                              PLAN OF DISTRIBUTION

     The selling stockholder may, without limitation and from time to time, sell
all  or  a portion of its shares of our common stock being registered under this
prospectus on any stock exchange, market or trading facility on which the common
stock  is  traded, at market prices prevailing at the time of sale, fixed prices
or  at  negotiated  prices.  The  shares may, without limitation, be sold by the
selling  stockholder  by  one  or  more  of  the  following  methods:

-     ordinary  brokerage  transactions  and  transactions  in  which  the
      broker-dealer  solicits  purchasers;

-     block trades in which the broker-dealer engaged by the selling stockholder
      will  attempt  to sell the shares as agent for the selling stockholder but
      may position and resell a portion of the block as principal to  facilitate
      the  transaction;

-     purchases by a broker-dealer as principal and resale by such broker-dealer
      for  its  account;

-     privately  negotiated  transactions;

-     in  accordance with Rule 144 promulgated under the Securities Act of 1933,
      as  amended,  rather  than  pursuant  to  this  prospectus;

-     a  combination  of  any  such  methods  of  sale;  or

-     any  other  method  permitted  pursuant  to  applicable  law.

     From time to time the selling stockholder may pledge its shares pursuant to
the  margin provisions of the selling stockholder's customer agreements with its
brokers.  Upon  a  default by the selling stockholder, the broker may, from time
to  time,  offer  and  sell  the  pledged  shares.


                                       25

<PAGE>
     In  effecting sales, brokers-dealers engaged by the selling stockholder may
arrange  for other broker-dealers to participate in such sales.  Brokers-dealers
may  receive  commissions  or discounts from the selling stockholder (or, if any
such  broker-dealer  acts  as  agent  for the purchase of such shares, from such
purchaser)  in  amounts  to be negotiated which are not expected to exceed those
customary  in the types of transactions involved.  Broker-dealers may agree with
the selling stockholder to sell a specified number of shares of the common stock
at a stipulated price per share, and, to the extent such broker-dealer is unable
to  do  so acting as agent for the selling stockholder, to purchase as principal
any  unsold shares at the price required to fulfill the broker-dealer commitment
to  the  selling  stockholder.

     The  selling  stockholder and any broker-dealers or agents that participate
with  the  selling  stockholder  in  sales  of  the  shares  may be deemed to be
"underwriters"  within the meaning of the Securities Act in connection with such
sales.  In  such event, any commissions received by such broke-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting  commissions  or  discounts  under  the  Securities  Act.

     We  are  required to pay all fees and expenses incident to the registration
of  the  selling  stockholder's shares, other than the fees and disbursements of
counsel to the selling stockholder and underwriting discounts or commissions, if
any.  Additionally,  we  have  agreed  to indemnify the selling stockholder from
certain liabilities in connection with the offering, including liabilities under
the  federal  securities  laws.

                          DESCRIPTION OF CAPITAL STOCK

     Our authorized capital stock consists of 15,000,000 shares of common stock,
$0.04 par value per share and 500,000 shares of preferred stock, $0.04 par value
per  share.  The  following description of our capital stock is qualified in all
respects  by  reference  to  our  Restated  Certificate  of  Incorporation.

COMMON  STOCK

     As  of  December  22,  1999, approximately 8,736,151 shares of common stock
were  outstanding,  held  of  record by 297 stockholders.  The holders of common
stock  are  entitled  to  one  vote per share on all matters to be voted upon by
stockholders.  Subject  to preferences that may be applicable to any outstanding
preferred  stock,  holders  of common stock are entitled to receive ratably such
dividends  as  may  declared  by  the  Board  of  Directors out of funds legally
available  for  that  purpose.  In  the event of our liquidation, dissolution or
winding  up,  the  holders  of common stock are entitled to share ratably in all
assets  remaining after payment of liabilities and the liquidation preference of
any  outstanding  preferred  stock.  The  common  stock  has  no  preemptive  or
conversion  rights,  other  subscription  rights,  or redemption or sinking fund
provisions.  All  outstanding  shares  of  common  stock  are  fully  paid  and
non-assessable,  and  the  shares  of common stock offered under this prospectus
will  be  fully  paid  and  non-assessable.

PREFERRED  STOCK

     The  Board  of  Directors  has the authority, without further action by the
stockholders,  to  issue  up to 500,000 shares of preferred stock in one or more
series and the designate the rights, preferences, privileges and restrictions of
each  such  series.  The  issuance  of  preferred stock could have the effect of
restricting  dividends  on  the  common  stock, diluting the voting power of the
common  stock,  impairing the liquidation rights of the common stock or delaying
or  preventing our change in control without further action by the stockholders.
We  have  no  present  plans  to  issue any shares of preferred stock.  We have,
however,  rights  which may become exercisable to purchase preferred stock under
our  rights  plan.  See  "Rights  Plan."

DELAWARE  ANTI-TAKEOVER  LAW  AND  OUR  CERTIFICATE  OF INCORPORATION AND BY-LAW
PROVISIONS

     Delaware  law  and  our Certificate of Incorporation and By-laws could make
more difficult our acquisition by a third party and the removal of our incumbent
officers  and directors.  We have summarized the relevant provisions of Delaware
law  and  our existing charter and By-laws below.  These provisions are expected
to  discourage  coercive  takeover practices and inadequate takeover bids and to
encourage  persons  seeking  to  acquire

                                       26

<PAGE>
control  of  Criticare to first negotiate with us.  We believe that the benefits
of  increased  protection  of  our ability to negotiate with the proponent of an
unfriendly  or  unsolicited  acquisition  proposal outweigh the disadvantages of
discouraging  such  proposals  because,  among  other  things, negotiation could
result  in  an  improvement  of  their  terms.

     We are subject to Section 203 of the Delaware General Corporation Law which
regulates  corporate  acquisitions.  Section  203  prohibits  a  publicly  held
Delaware  corporation  from  engaging  in  a  "business  combination"  with  an
"interested  stockholder"  for  a  period  of three years following the date the
person  became  an  interested  stockholder,  unless:

-     the  Board of Directors approved the transaction in which such stockholder
      became  an  interested  stockholder  prior  to  the  date  the  interested
      stockholder  attained  such  status;

-     upon  consummation  of  the transaction that resulted in the stockholder's
      becoming an interested stockholder, he or she owned at least 85 %  of  the
      voting stock of the  corporation  outstanding  at the time the transaction
      commenced  excluding  shares  owned  by persons who are directors and also
      officers; or

-     on  or subsequent to such date the business combination is approved by the
      Board  of  Directors  and  authorized  at  an annual or special meeting of
      stockholders  by  the holders of at least 662/3% of our outstanding voting
      stock which  is  not  owned  by  the  interested  stockholder.

     A  "business  combination" includes a merger, asset or stock sale, or other
transaction  resulting in a financial benefit to the interested stockholder.  An
"interested  stockholder"  is  a  person  who,  together  with  affiliates  and
associates, owns, or within three years prior to the determination of interested
stockholder  status,  did  own,  15%  or  more  of a corporation's voting stock.

     Our Restated Certificate of Incorporation permits the Board of Directors to
issue  preferred  stock  with  voting  or  other  rights without any stockholder
action.  Our  By-laws  provide that our Board of Directors is divided into three
classes, with each class serving staggered three year terms.  The classification
of  our Board of Directors could have the effect of making it more difficult for
a  third  party to acquire control of Criticare or discourage a third party from
attempting  to  acquire  control  of  Criticare.  These  provisions may have the
effect  of  deterring  hostile  takeovers or delaying changes in our management.

RIGHTS  PLAN

     On  March  27,  1997,  our  Board  of  Directors declared a dividend of one
preferred  share  purchase right for each outstanding share of our common stock.
The dividend was payable on April 24, 1997 to the stockholders of record on that
date.  Each  purchase  right  entitles the registered holder to purchase from us
one  one-hundredth  of  one  of  our  preferred shares at a price of $25 per one
one-hundredth  share,  subject  to adjustment.  The description and terms of the
purchase rights are set forth in a Rights Agreement between us and Firstar Trust
Company,  as  rights  agent.

     Initially,  the  purchase  rights  are  attached  to  all  certificates
representing  common  stock  then  outstanding  and  no  separate  certificates
representing  the purchase rights will be distributed.  The purchase rights will
separate  from the common stock upon the distribution date, which is the earlier
to  occur  of:

-     10  days  following  a public announcement that an acquiring person, which
      includes  a  person  or  group  of  affiliated  or associated persons, has
      acquired beneficial ownership of 20% or  more  of  our  outstanding common
      stock; or

-     10 business days, or such later date as may be determined by action of our
      Board of Directors prior to such time  as  any  person or group becomes an
      acquiring  person,  following  the  commencement of, or announcement of an
      intention  to  make,  a tender offer or exchange offer the consummation of
      which  would  result in the beneficial ownership by an acquiring person of
      30%  or  more  of  our  outstanding  common  stock.

     The Rights Agreement provides that, until the distribution date, or earlier
redemption  or  expiration  of  the  purchase  rights:

-     the  purchase  rights  will  be  transferred with and only with the common
      stock;

                                       27

<PAGE>
-     new common share certificates issued after April 24, 1997 upon transfer or
      new  issuance  of  common  stock will contain a notation incorporating the
      Rights  Agreement  by  reference;  and
-     the  surrender  for  transfer  of  any  certificates  for  common  stock
      outstanding as of April 24, 1997, even  without  such  notation, will also
      constitute  the transfer of the purchase rights associated with the common
      stock  represented  by  such  certificate.

     As  soon  as  practicable  following  the  distribution  date,  separate
certificates  evidencing the purchase rights will be mailed to holders of record
of the common stock as of the close of business on the distribution date and the
separate  right  certificates  alone  will  evidence  the  purchase  rights.

     The  purchase  rights are not exercisable until the distribution date.  The
purchase  rights  will  expire at the close of business on April 1, 2007, unless
the  final expiration date is extended or unless the purchase rights are earlier
redeemed  or  exchanged  by  us,  in  each  case,  as  described  below.

     The  purchase price payable, and the number of one one-hundredths preferred
shares  or  other securities or property issuable, upon exercise of the purchase
rights  are  subject  to adjustment from time to time to prevent dilution.  With
certain  exceptions, no adjustment in the purchase price would be required until
cumulative  adjustments  require  an  adjustment of at least 1% in such purchase
price.  We are not required to issue any fractional preferred shares and in lieu
of  fractional  shares,  an  adjustment  in cash may be made based on the market
price  of  the  preferred  shares  on  the last trading day prior to the date of
exercise.

     If,  without  the  prior  approval  of  a  majority  of  our  disinterested
directors:

-     we  are the surviving corporation in a merger with an acquiring person and
      the  common  stock  is  not  changed  or  exchanged;
-     an  acquiring  person becomes the beneficial owner of more than 30% of our
      then  outstanding  common  stock;
-     an  acquiring person engages in one or more "self-dealing" transactions as
      set  forth  in  the  Rights  Agreement;  or
-     during  such  time  as there is an acquiring person, an event occurs which
      results  in  the  acquiring person's ownership interest being increased by
      more  than  1%  (e.g.,  a  reverse  stock  split),

at  any time following the distribution date, but no earlier than the expiration
of the redemption period of the purchase rights, each holder of a purchase right
will  thereafter  have  the right to receive, upon exercise, common stock or, in
certain circumstances, cash, property or other of our securities, having a value
equal  to  two  times  the  exercise price of the purchase right.  Following the
occurrence  of  any  of the events set forth above, all purchase rights that are
or,  under  certain  circumstances  specified  in  the  Rights  Agreement,  were
beneficially  owned  by  any  acquiring  person  would  be  null  and  void.

     For  example, at an exercise price of $25 per purchase right, each purchase
right not owned by an acquiring person, or by certain related parties, following
an  event  set  forth  in  the  preceding  paragraph would entitle its holder to
purchase  $50 worth of common stock, or other consideration, as noted above, for
$25.  Assuming  that the common stock had a per share value of $10 at such time,
the  holder  of  each  valid  purchase  right would be entitled to purchase five
shares  of  common  stock  for  $25.

     If,  at  any  time  following  the  stock  acquisition  date:

-     we  are  acquired  in  a merger or other business combination transaction,
      other  than a merger in which we are the surviving corporation in a merger
      with an acquiring person and the common stock is not changed or exchanged;
      or
-     50%  or  more  of  our  assets  or  earning  power is sold or transferred,

each holder of a purchase right shall thereafter have the right to receive, upon
exercise,  common  stock  of  the  acquiring company having a value equal to two
times  the  exercise  price  of  the  purchase  right.

                                       28

<PAGE>

     At  any  time  prior  to  the  twentieth  day  after  the acquisition by an
acquiring  person  of  beneficial  ownership  of  20% or more of our outstanding
common  stock,  our  Board of Directors may redeem the purchase rights in whole,
but  not  in  part,  at  a  redemption  price  of  $.01 per purchase right.  The
redemption  of  the  purchase  rights may be made effective at such time on such
basis  with such conditions as our Board of Directors in its sole discretion may
establish.  Immediately upon any redemption of the purchase rights, the right to
exercise the purchase rights will terminate and the only right of the holders of
purchase  rights  will  be  to  receive  the  redemption  price.

     Other than those provisions relating to the principal economic terms of the
purchase  rights  and  an  amendment  lengthening  the  redemption period of the
purchase rights, any of the provisions of the Rights Agreement may be amended by
our  Board  of Directors prior to the distribution date.  After the distribution
date,  the  provisions  of  the  Rights  Agreement  may be amended by the Board:

-     in  order  to  cure  any  ambiguity;
-     to  make changes which do not adversely affect the interests of holders of
      purchase rights, excluding the  interests  of  any  acquiring  person;  or
-     to  shorten  or  lengthen  any  time  period  under  the Rights Agreement;

provided,  however,  that  no  amendment  to  lengthen the time period governing
redemption  shall  be  made.

     Until a purchase right is exercised, the holder thereof, as such, will have
no  rights  as one of our stockholders, including, without limitation, the right
to  vote  or  to  receive  dividends.

     Our  rights  plan  may have antitakeover effects.  The purchase rights will
cause  substantial  dilution  to  any  person  or group that attempts to acquire
Criticare on terms not approved by our Board of Directors, except pursuant to an
offer conditioned on a substantial number of the purchase rights being acquired.
The  purchase  rights  should  not  interfere  with any merger or other business
combination  approved  by  our  Board  of  Directors.

TRANSFER  AGENT

     The  transfer  agent  and  registrar  for our common stock is Firstar Trust
Company.  The  transfer  agent's  address is 1555 North RiverCenter Drive, Suite
301,  Milwaukee,  Wisconsin  53212,  and  its  telephone number is 414-276-3737.


                                       29

<PAGE>
                                  LEGAL MATTERS

     The  validity  of  the securities offered by this prospectus will be passed
upon for our company by Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.

                                     EXPERTS

     The  consolidated financial statements as of June 30, 1999 and for the year
then  ended  included  in this prospectus have been audited by BDO Seidman, LLP,
independent  auditors,  as stated in their report appearing elsewhere herein and
have  been so included in reliance upon the report of such firm given upon their
authority  as  experts  in  accounting  and  auditing.

     The  consolidated  financial statements as of June 30, 1998 and for each of
the  two  years  in the period ended June 30, 1998, included in this prospectus,
the  related consolidated financial statement schedule for each of the two years
in  the  period  ended  June  30,  1998  included  elsewhere in the registration
statement,  and  the  consolidated  financial statements from which the Selected
Consolidated Financial Data as of June 30, 1998 and for each of the two years in
the  period  then ended included in this prospectus have been derived, have been
audited  by  Deloitte  &  Touche  LLP,  independent auditors, as stated in their
reports  appearing  herein  and  elsewhere  in the registration statement.  Such
consolidated  financial  statements,  consolidated financial statement schedule,
and Selected Consolidated Financial Data have been included herein and elsewhere
in  the  registration  statement in reliance upon the reports of such firm given
their  authority  as  experts  in  accounting  and  auditing.


                       WHERE YOU CAN FIND MORE INFORMATION

     We file reports, proxy statements and other information with the Securities
and  Exchange  Commission  (SEC).  You  may  read  and  copy  any reports, proxy
statements  or  other  information we file at the SEC's public reference room at
450  Fifth  Street,  N.W.,  Room  1024,  Washington, D.C. 20549 or at its public
reference  rooms  in  New York, New York, or Chicago, Illinois.  Please call the
SEC  at  1-800-SEC-0330  for  further information on the public reference rooms.
You can also obtain copies of our SEC filings by writing to the Public Reference
Section  of  the  SEC  at  450  Fifth  Street, N.W., Washington, D.C. 20549.  In
addition,  many  of our SEC filings are available at the SEC's site on the World
Wide  Web  at  "http//www.sec.gov."

     We have filed a Registration Statement on Form S-1 to register with the SEC
the  common  stock  offered by this prospectus.  This prospectus is part of that
registration  statement.  As  allowed  by  SEC  rules,  this prospectus does not
contain  all  the  information you can find in the registration statement or the
exhibits to the registration statement.  Statements contained in this prospectus
concerning  the  provisions  of  documents  are  necessarily  summaries  of such
documents,  and  each statement is qualified in its entirety by reference to the
copy  of  the  applicable  document  filed  with  the  SEC.

                                       30

<PAGE>

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES


TABLE  OF  CONTENTS
-------------------

<TABLE>
<CAPTION>

                                                                                          PAGE
<S>                                                                                       <C>
INDEPENDENT AUDITORS' REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

AUDITED CONSOLIDATED FINANCIAL STATEMENTS:

  Consolidated Balance Sheets of June 30, 1999 and 1998. . . . . . . . . . . . . . . . .  F-4

  Consolidated Statements of Operations for the years ended June 30, 1999, 1998 and 1997  F-6

  Consolidated Statements of Stockholders' Equity for the years ended June 30, 1999,
  1998 and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-7

  Consolidated Statements of Cash Flows for the years ended June 30, 1999, 1998 and 1997  F-8

  Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . .  F-9

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

  Unaudited Consolidated Balance Sheet as of December 31, 1999 . . . . . . . . . . . . .  F-19

  Unaudited Consolidated Income Statements for the six months ended
  December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-20

  Unaudited Consolidated Statements of Cash Flows for the six months ended
  December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-21

  Notes to Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . .  F-22
</TABLE>

                                      F-1

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

     To  the  Stockholders  and  Directors  Criticare  Systems,  Inc.:

     We  have  audited  the accompanying consolidated balance sheet of Criticare
Systems, Inc. and subsidiaries as of June 30, 1999, and the related consolidated
statements of operations, stockholders' equity and cash flows for the year ended
June  30,  1999.  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  audit.

     We  conducted  our  audit  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  audit  provides  a  reasonable  basis  for  our opinion.

     In  our  opinion,  the  consolidated financial statements referred to above
present  fairly,  in  all material respects, the financial position of Criticare
Systems,  Inc.  at June 30, 1999, and the results of its operations and its cash
flows  for  the year then ended in conformity with generally accepted accounting
principles.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
November  30,  1999

                                      F-2

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

     To  the  Stockholders  and  Directors  of  Criticare  Systems,  Inc.:

     We  have  audited  the accompanying consolidated balance sheet of Criticare
Systems, Inc. and subsidiaries as of June 30, 1998, and the related consolidated
statements  of  operations,  stockholders' equity and cash flows for each of the
two years in the period ended June 30, 1998.  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.

     In  our  opinion, such consolidated financial statements present fairly, in
all  material  respects,  the  financial position of Criticare Systems, Inc. and
subsidiaries at June 30, 1998 and the results of their operations and their cash
flows  for each of the two years in the period ended June 30, 1998 in conformity
with  generally  accepted  accounting  principles.

/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998

                                      F-3

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS
JUNE  30,  1999  AND  1998
--------------------------
<TABLE>
<CAPTION>



ASSETS                                                         1999         1998
<S>                                                         <C>          <C>
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $ 2,511,078  $ 2,729,998
Accounts receivable, less allowance for doubtful accounts
  of $375,000 and $300,000, respectively . . . . . . . . .    6,358,487    6,921,713
Other receivables. . . . . . . . . . . . . . . . . . . . .       83,106      322,976
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,510,975    7,682,471
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      192,290      338,297
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   17,655,936   17,995,455
                                                            -----------  -----------

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,051,442    1,796,120
Furniture and fixtures . . . . . . . . . . . . . . . . . .      819,579      712,428
Demonstration and loaner monitors. . . . . . . . . . . . .    1,416,893    1,783,611
Production tooling . . . . . . . . . . . . . . . . . . . .    2,158,378    2,005,834
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   10,971,292   10,822,993
Less accumulated depreciation. . . . . . . . . . . . . . .    4,697,232    4,210,622
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    6,274,060    6,612,371

INVESTMENTS (Notes 1, 3 and 5) . . . . . . . . . . . . . .            -            -

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      111,991      118,993
Total other assets . . . . . . . . . . . . . . . . . . . .      111,991      118,993
                                                            -----------  -----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987  $24,726,819
                                                            ===========  ===========
</TABLE>



See  notes  to  consolidated  financial  statements.
                                      F-4

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS  (CONTINUED)
JUNE  30,  1999  AND  1998
--------------------------
<TABLE>
<CAPTION>



LIABILITIES AND STOCKHOLDERS' EQUITY                                        1999          1998
<S>                                                                     <C>           <C>
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,078,020   $ 2,305,721
Accrued liabilities:
  Compensation and commissions . . . . . . . . . . . . . . . . . . . .    1,446,614       819,886
  Product warranties (Note 1). . . . . . . . . . . . . . . . . . . . .      325,000       328,000
  Lawsuit settlement (Note 7). . . . . . . . . . . . . . . . . . . . .    1,600,000             -
  Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . .      380,000             -
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      412,395       715,603
Current maturities of long-term debt (Note 5). . . . . . . . . . . . .       73,893       109,354
                                                                        ------------  ------------
Total current liabilities                                                 7,315,922     4,278,564
                                                                        ------------  ------------

LONG-TERM DEBT, less current maturities (Note 5) . . . . . . . . . . .    3,364,356     3,165,258
                                                                        ------------  ------------

OTHER LONG-TERM OBLIGATIONS (Note 11). . . . . . . . . . . . . . . . .      650,000             -
                                                                        ------------  ------------

CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (Notes 5, 6 and 8):
Preferred stock - $.04 par value, 500,000 shares authorized,
  no shares issued or outstanding. . . . . . . . . . . . . . . . . . .            -             -
Common stock - $.04 par value, 15,000,000 shares authorized,
  8,706,151 and 8,351,151 shares issued and outstanding, respectively.      348,246       334,046
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . .   17,960,363    17,964,250
Common stock held in treasury 103,840 shares - at cost . . . . . . . .     (193,430)            -
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . .   (5,403,470)   (1,015,299)
                                                                        ------------  ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . .   12,711,709    17,282,997
                                                                        ------------  ------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987   $24,726,819
                                                                        ============  ============
</TABLE>



See  notes  to  consolidated  financial  statements.

                                      F-5

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  OPERATIONS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
<TABLE>
<CAPTION>



                                                    1999          1998          1997
<S>                                             <C>           <C>           <C>
NET SALES (Note 10). . . . . . . . . . . . . .  $28,512,507   $27,908,364   $26,235,355

COST OF GOODS SOLD . . . . . . . . . . . . . .   15,528,314    14,870,453    14,059,508
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   12,984,193    13,037,911    12,175,847
                                                ------------  ------------  ------------

OPERATING EXPENSES:
Marketing. . . . . . . . . . . . . . . . . . .    8,941,036     7,454,619     8,761,731
Research, development and engineering (Note 8)    2,963,134     3,278,714     2,320,655
Administrative (Note 7). . . . . . . . . . . .    4,157,811     1,998,362     2,509,506
Severance pay (Note 11). . . . . . . . . . . .      810,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   16,871,981    12,731,695    13,591,892
                                                ------------  ------------  ------------

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (3,887,788)      306,216    (1,416,045)
                                                ------------  ------------  ------------

OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (432,477)     (797,376)   (1,048,391)
Interest income. . . . . . . . . . . . . . . .       82,094       111,884        39,001
Equity in loss of investments (Notes 1 and 3).     (150,000)     (120,000)     (324,000)
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .     (500,383)     (805,492)   (1,333,390)
                                                ------------  ------------  ------------

LOSS BEFORE INCOME TAXES
  AND EXTRAORDINARY GAIN . . . . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

INCOME TAX PROVISION (Notes 1 and 4) . . . . .            -             -             -

LOSS BEFORE EXTRAORDINARY GAIN . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

EXTRAORDINARY GAIN ON EXTINGUISHMENT
  OF DEBT (Note 5) . . . . . . . . . . . . . .            -             -       569,946

NET LOSS . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $  (499,276)  $(2,179,489)
                                                ============  ============  ============

LOSS PER COMMON SHARE-
BASIC AND DILUTED: (Note 1)
Before extraordinary gain. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.38)
Extraordinary gain . . . . . . . . . . . . . .          ___           ___           .08

NET LOSS PER COMMON SHARE. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.30)
                                                ============  ============  ============

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING (Note 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
Diluted. . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
                                                ============  ============  ============
</TABLE>



See  notes  to  consolidated  financial  statements.

                                      F-6

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
<TABLE>
<CAPTION>



                                                                                                                 RETAINED
                                                              ADDITIONAL               COMMON STOCK              EARNINGS
                                           COMMON STOCK        PAID-IN                   TREASURY              (ACCUMULATED
                                        SHARES      AMOUNT     CAPITAL     NUMBER OF SHARES       COST           DEFICIT)
<S>                                  <C>           <C>       <C>           <C>               <C>              <C>
Balance, June 30, 1996. . . . . . .     7,128,272  $285,131  $11,995,118                                      $    1,663,466
Net loss                                                                                                          (2,179,489)
Foreign currency translation
  adjustments
Comprehensive income/(loss)
Common stock issued in connection
  with extinguishment of debt . . .       200,000     8,000      772,000
Exercise of options and warrants. .       252,020    10,081      570,838
Convertible debentures converted
  to common stock, net of $61,872
  of unamortized issuance costs . .       216,173     8,647    1,047,075
Issuance of warrants for services                                 84,375

Balance, June 30, 1997. . . . . . .     7,796,465   311,859   14,469,406                                            (516,023)
Net loss                                                                                                            (499,276)
Foreign currency translation
  adjustments
Comprehensive income/(loss)
Issuance of common stock. . . . . .        20,425       817      119,183
Exercise of options and warrants. .       126,500     5,060      271,371
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .       407,761    16,310    2,181,225
Commitment to issue common
  stock for patented technology                                  900,000
Issuance of warrants for services                                 23,065

Balance, June 30, 1998. . . . . . .     8,351,151   334,046   17,964,250                                          (1,015,299)
Net loss                                                                                                          (4,388,171)
Comprehensive income/(loss)                                      (14,000)
Issuance of common stock for                                      10,113
  patented technology . . . . . . .       350,000    14,000
Exercise of options and warrants. .         5,000       200
Common stock repurchased                                                            103,840  $     (193,430)

Balance, June 30, 1999. . . . . . .     8,706,151  $348,246  $17,960,363            103,840  $     (193,430)  $   (5,403,470)

                                     ACCUMULATED
                                        OTHER          TOTAL
                                    COMPREHENSIVE  STOCKHOLDERS'
                                    INCOME/(LOSS)      EQUITY
<S>                                  <C>           <C>
Balance, June 30, 1996. . . . . . .  $   (26,166)  $13,917,549
Net loss. . . . . . . . . . . . . .                 (2,179,489)
Foreign currency translation
  adjustments . . . . . . . . . . .      (11,941)      (11,941)
Comprehensive income/(loss) . . . .                 (2,191,430)
Common stock issued in connection
  with extinguishment of debt . . .                    780,000
Exercise of options and warrants. .                    580,919
Convertible debentures converted
  to common stock, net of $61,872
  of unamortized issuance costs . .                  1,055,722
Issuance of warrants for services .                     84,375

Balance, June 30, 1997. . . . . . .      (38,107)   14,227,135
Net loss. . . . . . . . . . . . . .                   (499,276)
Foreign currency translation
  adjustments . . . . . . . . . . .       38,107        38,107
Comprehensive income/(loss) . . . .                   (461,169)
Issuance of common stock. . . . . .                    120,000
Exercise of options and warrants. .                    276,431
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .                  2,197,535
Commitment to issue common
  stock for patented technology . .                    900,000
Issuance of warrants for services .                     23,065

Balance, June 30, 1998. . . . . . .                 17,282,997
Net loss. . . . . . . . . . . . . .                 (4,388,171)
Comprehensive income/(loss) . . . .                 (4,388,171)
Issuance of common stock for
  patented technology . . . . . . .                          -
Exercise of options and warrants. .                     10,313
Common stock repurchased. . . . . .                   (193,430)

Balance, June 30, 1999. . . . . . .                $12,711,709
</TABLE>



See  notes  to  consolidated  financial  statements.

                                      F-7

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
<TABLE>
<CAPTION>




                                                                       1999         1998          1997
<S>                                                                <C>           <C>          <C>
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $ (499,276)  $(2,179,489)
Adjustments to reconcile net loss to net cash
  Provided by (used in) operating activities:
     Depreciation . . . . . . . . . . . . . . . . . . . . . . . .      486,610      721,476       709,618
     Amortization . . . . . . . . . . . . . . . . . . . . . . . .        7,002       21,440        74,749
     Interest and discount accrued on convertible debentures. . .            -      462,034       451,438
     Provision for doubtful accounts. . . . . . . . . . . . . . .      380,004       99,000       366,505
     Expense related to equity in loss of investments . . . . . .      150,000      120,000       324,000
     Expense related to issuance of warrants for services . . . .            -       23,065        84,375
     Expense related to commitment to issue common stock
       for patented technology. . . . . . . . . . . . . . . . . .            -      900,000             -
     Extraordinary gain on extinguishment of debt . . . . . . . .            -            -      (569,946)
Changes in assets and liabilities:
     Accounts receivable. . . . . . . . . . . . . . . . . . . . .      183,222      161,524     2,321,416
     Other receivables. . . . . . . . . . . . . . . . . . . . . .      239,870      (86,121)      117,783
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . .     (461,786)      46,207        93,351
     Prepaid expenses . . . . . . . . . . . . . . . . . . . . . .      146,007      (68,677)      (81,488)
     Accounts payable . . . . . . . . . . . . . . . . . . . . . .      772,299     (768,284)     (509,017)
     Accrued liabilities. . . . . . . . . . . . . . . . . . . . .    2,950,520     (683,954)      287,876
                                                                   ------------  -----------  ------------
Net cash provided by operating activities . . . . . . . . . . . .      465,577      448,434     1,491,171
                                                                   -----------  ------------  ------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net . . . . . . . . .     (515,017)    (287,205)     (134,785)
Purchase of license rights. . . . . . . . . . . . . . . . . . . .            -       (1,080)      (40,815)
Advances to Immtech International, Inc. . . . . . . . . . . . . .     (150,000)    (120,000)      (24,000)
                                                                   -----------  ------------  ------------
Net cash used in investing activities . . . . . . . . . . . . . .     (665,017)    (408,285)     (199,600)
                                                                   -----------  ------------  ------------

FINANCING ACTIVITIES:
Proceeds from mortgage refinancing. . . . . . . . . . . . . . . .    3,450,000            -             -
Repayment of mortgage . . . . . . . . . . . . . . . . . . . . . .   (3,193,587)           -             -
Repurchase of Company stock . . . . . . . . . . . . . . . . . . .     (193,430)           -             -
Borrowings (payments) under line of credit facility . . . . . . .            -            -    (2,300,000)
Proceeds from the issuance of convertible debentures. . . . . . .            -            -     2,500,000
Principal payments on long-term debt. . . . . . . . . . . . . . .      (92,776)    (147,441)     (217,619)
Convertible debenture issuance costs. . . . . . . . . . . . . . .            -            -      (220,657)
Proceeds from issuance of common stock. . . . . . . . . . . . . .       10,313      396,431       580,919
                                                                   -----------  ------------  ------------
Net cash (used in) provided by financing activities . . . . . . .      (19,480)     248,990       342,643
                                                                   -----------  ------------  ------------

NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . . . .     (218,920)     289,139     1,634,214
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR. . . . . . . . . . .    2,729,998    2,440,859       806,645
                                                                   -----------  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . . . . . . . . .  $ 2,511,078   $2,729,998   $ 2,440,859
                                                                   ===========  ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
   Income taxes (refunded) paid-net . . . . . . . . . . . . . . .  $     8,010   $    8,525   $   (87,626)
   Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      437,401      335,342       456,880
Noncash investing and financing activities:
   Common stock issued in connection with extinguishment of debt.            -            -       780,000
   Common stock issued upon conversion of convertible debentures,
        net of $100,822 and $61,872 of unamortized issuance costs            -    2,197,535     1,055,722
   Issuance of warrants for services. . . . . . . . . . . . . . .            -       23,065        84,375
   Commitment to issue common stock for patented technology . . .            -      900,000             -
</TABLE>



See  notes  to  consolidated  financial  statements.

                                      F-8

<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include
the  accounts  of  Criticare  Systems, Inc. (the "Company") and its wholly owned
subsidiaries:  Criticare  International  GmbH  Marketing  Services  ("Criticare
International"),  CSI  Trading,  Inc.  ("CSI  Trading"), Criticare Service GmbH,
Criticare  Biomedical,  Inc.  ("Criticare Biomedical"), Sleep Care, Inc. ("Sleep
Care"),  Criticare  (FSC),  Inc.  and CSI International Corp. (DISC).  Criticare
International  was  liquidated during fiscal 1998.  CSI Trading was incorporated
in  November 1996 to assist with European marketing activities.  All significant
intercompany  accounts  and  transactions  have  been  eliminated.

     CASH  EQUIVALENTS  -  The  Company considers all investments with purchased
maturities  of  less  than  three  months  to  be  cash  equivalents.

     INVENTORIES  -  Inventories are stated at the lower of cost or market, with
cost  determined  on  the  first-in,  first-out  method.

     INVESTMENTS  -  The  Company  accounts  for  its  investment  in  Intercare
Technologies,  Inc.  ("Intercare")  on  the  cost  method  and  accounts for its
investment  in  Immtech  International, Inc. ("Immtech") and Blatz House Offices
Limited Partnership (the "Blatz Partnership") on the equity method (see Note 3).

     PROPERTY,  PLANT  AND EQUIPMENT - Property, plant and equipment is recorded
at  cost.  Each  member  of  the  Company's  sales  force  is  provided  with
demonstration monitors to assist them in their sales efforts.  Also, the Company
has loaner monitors which are used to temporarily replace a customer's unit when
it  is  being repaired or upgraded.  Depreciation is provided over the estimated
useful  lives  of  the assets.  The building is being depreciated over 40 years,
and  the remaining assets are being depreciated over three to seven years, using
primarily  the  straight-line  method.

     LICENSE  RIGHTS AND PATENTS - License rights and patents are amortized over
the  estimated  useful  lives  of  the  related  agreements  using primarily the
straight-line  method.  Approximately $7,000, $7,000, and $9,000 of amortization
was  charged  to  operations  in 1999, 1998 and 1997, respectively.  Accumulated
amortization  approximated  $85,000  and  $78,000  at  June  30,  1999 and 1998,
respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
and  $46,000  of  amortization  was charged to operations in 1998 and 1997.  The
prorata  amount  of  unamortized  debenture  issuance  costs  were  charged  to
additional  paid-in-capital  upon  conversion of the debentures to common stock.
Unamortized  debenture  issuance  costs  charged  to  additional paid-in capital
amounted  to  $100,822  and  $61,872  during  1998  and  1997.  (See  Note  6.)

     GOODWILL  - Goodwill relating to the excess of the cost over the fair value
of  the  net assets of an acquired subsidiary was amortized on the straight-line
method over approximately five years.  Approximately $20,000 of amortization was
charged  to operations in 1997.  The goodwill was fully amortized as of June 30,
1997.

     REVENUE  RECOGNITION  -  Revenues  and  the  costs  of  products  sold  are
recognized  as  the  related  products  are  shipped  or installed, if there are
significant  installation  costs.


                                      F-9


<PAGE>
     PRODUCT WARRANTIES - Estimated costs for product warranties are accrued for
and  charged  to  operations  as  the  related  products  are  shipped.

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,798,000,
$3,156,000,  and  $2,175,000  in  1999,  1998  and 1997, respectively.  The 1998
amount  includes  $900,000 related to certain acquired patented technology which
was  charged  to  operations as in-process research and development costs at the
time  of  the  acquisition.  (See  Note  8.)

     INCOME  TAXES  -  The  Company accounts for income taxes using an asset and
liability  approach.  Deferred  income  tax  assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and  liabilities that will result in taxable or deductible amounts in the future
based  on  enacted  tax  laws  and  rates applicable to the periods in which the
differences  are  expected  to  affect  taxable  income.

     FOREIGN  CURRENCY  TRANSLATION  -  The  effects of unrealized exchange rate
fluctuations  from  translating  foreign  currency  assets  and liabilities into
United  States  dollars are accumulated as cumulative translation adjustments in
stockholders'  equity.

     NET  INCOME  (LOSS)  PER  COMMON  SHARE  - Basic income (loss) per share is
computed  using  the weighted average number of common shares outstanding during
the  periods.  Diluted  income  per share is computed using the weighted average
number  of  common  and dilutive common equivalent shares outstanding during the
periods.

     FAIR  VALUE  OF  FINANCIAL STATEMENTS - The Company's financial instruments
under  Statement  of  Financial  Account  Standards ("SFAS") No. 107 "Disclosure
About  Fair Value of Financial Instruments," includes cash, accounts receivable,
accounts  payable,  borrowings under line of credit facility and long-term debt.
The  Company  believes  that  the  carrying  amounts  of  these  accounts  are a
reasonable estimate of their fair value because of the short-term nature of such
instruments  or,  in  the  case  of  long-term  debt  because  of interest rates
available  to  the  Company  for  similar  obligations.

     COMPREHENSIVE  INCOME  -  In  1999,  the  Company  adopted  SFAS  No.  130,
"Reporting  Comprehensive  Income."  his  statement  establishes  rules  for the
reporting  of  comprehensive  income  and  its components.  Comprehensive income
consists  of  net  income  and  foreign  currency translation adjustments and is
presented  in  the Consolidated Statement of Stockholders' Equity.  The adoption
of  SFAS  130 had no impact on total stockholders' equity.  Prior year financial
statements  have  been  reclassified  to  conform  to the SFAS 130 requirements.

     APPROVED ACCOUNTING STANDARDS - In 1998, the FASB also issued SFAS No. 133,
"Accounting  for Derivative Instruments and Hedging Activities."  This statement
is  required  to  be  adopted  in  fiscal 2001.  The Company is currently in the
process  of  evaluating  the  impact  of  adopting  SFAS  No.  133.

     USE  OF  ESTIMATES  - The preparation of financial statements in conformity
with  generally  accepted  accounting  principles  requires  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.


                                      F-10

<PAGE>
2.     INVENTORIES

     Inventories  consist  of  the  following  as  of  June  30:
<TABLE>
<CAPTION>

                      1999        1998
<S>                <C>         <C>
Component parts .  $3,790,728  $2,647,231
Work in process .   1,261,709   1,409,187
Finished units. .   3,458,538   3,626,053
Total inventories  $8,510,975  $7,682,471
</TABLE>

3.     INVESTMENTS

     INTERCARE TECHNOLOGIES, INC. - During 1992, the Company's subsidiary, Sleep
Care,  transferred  certain assets to Intercare Technologies, Inc. ("Intercare")
in  exchange  for 75,000 shares of convertible preferred stock of Intercare with
an  estimated  fair  value  of  $300,000,  at that time.  In connection with the
transfer,  Sleep  Care  licensed to Intercare the rights to certain intellectual
property  and  technology,  primarily  license  rights  and  patents, related to
products previously marketed by Sleep Care.  In exchange for the license rights,
the  Company  is  to receive royalties of 5% of the gross revenues from sales of
products  licensed under the agreement.  No royalty income was recognized during
1999,  1998  and  1997  and  no royalty income is expected in future years.  The
assets  retained  by  Sleep  Care  were  fully  amortized  as  of June 30, 1996.
Amortization  of  the intellectual property approximated $8,000 in 1996.  During
the year ended June 30, 1997, management of the Company concluded the investment
in  Intercare  was impaired and the carrying value of the investment was reduced
from  $300,000  to  zero.

     IMMTECH  INTERNATIONAL,  INC.  -  The  Company owns common stock of Immtech
International,  Inc.  ("Immtech").  Immtech  is  a  biopharmaceutical  company
focusing on the discovery and commercialization of therapeutics for treatment of
patients  afflicted with opportunistic infectious diseases, cancer, or comprised
immune  systems.  Immtech has two independent programs for developing drugs: one
based  on  a  technology  for  the design of a class of pharmaceutical compounds
referred  to  as  dications.  The  second  is  based  on  developing a series of
biological  proteins  that  work in conjunction with the immune system.  Immtech
has  no  products  currently  for sale, and none are expected to be commercially
available  for  several  years.  Immtech  has  a  March  31  fiscal  year  end.

     The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999  and  1998:
<TABLE>
<CAPTION>

                                       1999          1998
<S>                                <C>           <C>
Investment in Immtech . . . . . .  $ 2,736,000   $ 2,586,000
Advances to Immtech . . . . . . .      863,940       863,940
Total . . . . . . . . . . . . . .    3,599,940     3,449,940
Less investment losses recognized   (3,599,940)   (3,449,940)
Net investment. . . . . . . . . .  $         0   $         0
</TABLE>

     During  July  1998,  the Company purchased certain intangible assets and an
additional  172,414 shares of Immtech stock for $150,000.  These intangibles and
shares of stock were subsequently sold to a related party as part of a severance
agreement  for  $150,000  (see  note  11).

     The  Company  has recognized investment losses related to the investment in
Immtech  of $150,000, $120,000 and $24,000 in 1999, 1998 and 1997, respectively.
As of June 30, 1999, the Company owned approximately 20% of Immtech's issued and
outstanding  common  stock.


                                      F-11

<PAGE>
     During  April 1999, Immtech completed an Initial Public Offering ("IPO") of
its  stock.  As  part  of  this  IPO, the Company was required to sign a lock-up
agreement  by  which  it was agreed that no shares owned by the Company could be
sold  in  the  public  market until the Immtech stock traded at $20 (200% of its
initial IPO) price ($10) for 20 consecutive trading days and one year has passed
from the date of the IPO.  The lock-up agreement expires in April 2004.  At June
30,  1999,  the  lock-up  provisions  were still in force.  Unrestricted Immtech
shares  were  trading  at  $17.50  on  June  30,  1999.

     Subsequent  to  June  30,  1999,  the Company sold a portion of its Immtech
stock in a Private Placement.  The proceeds from this sale were $1,760,000.  The
following  is  summarized financial information for Immtech at June 30, 1999 and
1998  and  for  the  twelve  months  then  ended.
<TABLE>
<CAPTION>

                                                   1999          1998
<S>                                            <C>           <C>
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000   $    84,000
Noncurrent assets . . . . . . . . . . . . . .       68,000       111,000
Current liabilities . . . . . . . . . . . . .      253,000     4,097,000
Noncurrent liabilities. . . . . . . . . . . .            -             -
Redeemable preferred stock. . . . . . . . . .            -     5,548,000
Common stockholders' equity (deficit) . . . .    8,356,000    (9,450,000)
Revenues. . . . . . . . . . . . . . . . . . .      136,000       156,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)   (1,152,000)
Net loss attributable to common stockholders.   (4,657,000)   (1,666,000)
</TABLE>

     BLATZ  PARTNERSHIP  -  The  Company  was the sole limited partner in a real
estate  limited  partnership  which  owns  the  Blatz Phase II Commercial Office
Buildings  located  in  Milwaukee,  Wisconsin.  Under  terms  of the Partnership
Agreement (the "Agreement"), profits and losses (other than those resulting from
a sale or refinancing of the Project) were allocated 40% to the general partners
and  60%  to the Company.  This investment was sold during 1999, resulting in no
material  gain  or  loss.

4.     INCOME  TAXES

     The Company accounts for income taxes using an asset and liability approach
which  generally  requires  the  recognition  of  deferred income tax assets and
liabilities  based on the expected future income tax consequences of events that
have  previously  been  recognized  in the Company's financial statements or tax
returns.  In  addition, a valuation allowance is recognized if it is more likely
than not that some or all of the deferred income tax asset will not be realized.
A  valuation  allowance  is  used  to offset the related net deferred income tax
assets  due  to uncertainties of realizing the benefits of certain net operating
loss  and  tax  credit  carryforwards.

     Significant  components  of  the  Company's  deferred income tax assets and
deferred  income  tax  liabilities  are  as  follows:
<TABLE>
<CAPTION>

                                              JUNE 30,    JUNE 30,    JULY 1,
                                                1999        1998        1997
<S>                                          <C>         <C>         <C>
Deferred income tax assets:
   Accounts receivable and sales allowances  $  170,000  $  156,000  $  237,000
   Inventory allowances . . . . . . . . . .     254,000     110,000     207,000
   Product warranties . . . . . . . . . . .     127,000     128,000     144,000
   Other accrued liabilities. . . . . . . .     243,000      86,000      98,000
   Severance pay accrual. . . . . . . . . .     279,000           -           -
   Lawsuit settlement . . . . . . . . . . .     626,000           -           -
   Federal net operating loss carryforwards   2,244,000   1,870,000   1,717,000
   State net operating loss carryforwards .     325,000     270,000     255,000
   Federal tax credit carryforwards . . . .     152,000     152,000     198,000
   Investment losses not deducted . . . . .   1,532,000   1,481,000   1,434,000
   Total deferred income tax assets . . . .   5,952,000   4,253,000   4,290,000
</TABLE>

                                      F-12

<PAGE>
<TABLE>
<CAPTION>

                                                               JUNE 30,      JUNE 30,      JULY 1,
                                                                 1999          1998          1997
<S>                                                          <C>           <C>           <C>
Deferred income tax liabilities:
   Excess of tax over book depreciation and amortization. .     (619,000)     (596,000)   (1,007,000)
   Prepaid expenses . . . . . . . . . . . . . . . . . . . .       (7,000)       (3,000)       (6,000)
   Total deferred income tax liabilities. . . . . . . . . .     (626,000)     (599,000)   (1,013,000)

   Valuation allowance. . . . . . . . . . . . . . . . . . .   (5,326,000)   (3,654,000)   (3,277,000)

   Net deferred income taxes recognized in the consolidated
     balance sheets . . . . . . . . . . . . . . . . . . . .  $         0   $         0   $         0
</TABLE>

     At  June 30, 1999, the Company had Federal net operating loss carryforwards
of  approximately  $6,600,000  which  expire  in 2008 through 2019.  At June 30,
1999,  the  Company  had available for federal income tax purposes approximately
$41,000  of  alternative  minimum  tax  credit carryforwards which carry forward
indefinitely and approximately $111,000 tax credit carryforwards which expire in
the  years  2007 through 2009.  The Company also has approximately $6,500,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2019,
available  to  offset  certain  future  state  taxable  income.

     The  income  tax  provision  consists  of  the  following:
<TABLE>
<CAPTION>

                               1999   1998   1997
<S>                            <C>    <C>    <C>
Current
   Federal. . . . . . . . . .  $   0  $   0  $   0
   State. . . . . . . . . . .      0      0      0
   Total income tax provision  $   0  $   0  $   0
</TABLE>

     A reconciliation of the provision for income taxes (benefit) at the federal
statutory  income  tax  rate  to  the  effective  income  tax  rate  follows:
<TABLE>
<CAPTION>

                                              1999     1998     1997
<S>                                          <C>      <C>      <C>
   Federal statutory income tax rate. . . .  (34.0)%  (34.0)%  (34.0)%
   Losses for which no benefit was provided    29.3     30.9     29.1
   Non-deductible losses of subsidiaries. .     3.2        -      4.0
   Other-net. . . . . . . . . . . . . . . .     1.5      3.1       .9
   Effective income tax rate. . . . . . . .       0%       0%       0%
</TABLE>

5.     LINE  OF  CREDIT  FACILITY  AND  LONG-TERM  DEBT
<TABLE>
<CAPTION>

                                                                               1999        1998
<S>                                                                         <C>         <C>
Long-term debt consists of the following:

   Mortgage note, 7.5% due in monthly installments of $27,793
     with a final payment of $3,048,253 due in April 1, 2004,
     collateralized by real estate with a carrying value of approximately
     $3,934,000 at June 30, 1999.. . . . . . . . . . . . . . . . . . . . .  $3,438,249           -
   Mortgage note, 9.625% due in monthly installments of $34,983
     with a final payment of $2,688,336 due in December 2002,
     collateralized by real estate (refinanced in 1999). . . . . . . . . .           -  $3,274,612
   Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,438,249  $3,274,612
   Less current maturities . . . . . . . . . . . . . . . . . . . . . . . .      73,893     109,354
   Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,364,356  $3,165,258
</TABLE>

                                      F-13

<PAGE>
     Aggregate  annual  principal payments required under terms of the long-term
debt  agreements  are  as  follows:
<TABLE>
<CAPTION>

YEARS ENDING JUNE 30,  PRINCIPAL PAYMENTS
<S>                    <C>
2000. . . . . . . . .  $            73,893
2001. . . . . . . . .               79,430
2002. . . . . . . . .               86,764
2003. . . . . . . . .               93,596
2004. . . . . . . . .            3,104,566
Total . . . . . . . .  $         3,438,249
</TABLE>

     In  March  1999,  the Company refinanced its mortgage note on the Company's
office and manufacturing facility.  The Company incurred a prepayment penalty of
approximately  $120,000  which  was  recorded  as  interest  expense.

     At  June  30,  1999,  the  Company  had  a $4,000,000 demand line of credit
facility  with  a  commercial  bank  to  meet  its  short-term  borrowing needs.
Borrowings  against the line are payable on demand with interest payable monthly
at  the bank's reference rate, plus .25% (8.0% as of June 30, 1999).  As of June
30,  1999, there were no borrowings against the line.  Borrowings under the line
of  credit  facility  are  collateralized  by  substantially  all  assets of the
Company.  The  credit  facility  has  covenants  which require minimum levels of
tangible  net  worth  and income levels.  The Company was not in compliance with
these covenants at June 30, 1999.  This non-compliance was waived by the lending
institution,  and  the line of credit facility was extended until November 2001.

     In  March  1997,  the  Company  satisfied a $1,240,000 promissory note plus
interest  accrued  on the note of approximately $110,000 in exchange for 200,000
shares of newly issued common stock.  Under the provisions of the agreement, the
shares must be held for one full year prior to resale.  In conjunction with this
transaction, the Company recorded an extraordinary gain on the extinguishment of
debt  of  $569,946 for the outstanding indebtedness under the promissory note in
excess  of  the  estimated  fair  market  value  of  the  restricted  stock.

6.     CONVERTIBLE  DEBENTURES

     In  February 1997, the Company issued $2,500,000 of convertible debentures.
The  debentures  had  a  two year term to maturity with a stated annual interest
rate of 8%, payable in shares of common stock at the conversion date or maturity
date.  The  holders of the debentures had the option to convert up to $1,250,000
of  the debentures and accrued interest to common stock of the Company sixty-one
(61)  days after the February 1997 closing date at a conversion price equal to a
20%  discount  from  the average closing bid price of the Company's common stock
for  the  five  days  preceding  the  conversion  date.  Debentures  aggregating
$550,000  were  converted  under  the  20%  discount  conversion  feature.  The
remaining  debentures and accrued interest were converted to common stock of the
Company  at  a conversion price equal to a 25% discount from the average closing
bid  price  of  the  Company's  common  stock  for  the  five days preceding the
conversion  date.  For  the  years  ended June 30, 1998 and 1997, $1,650,000 and
$850,000  of  debentures  were converted to 407,761 and 216,173 shares of common
stock with a fair market value of $2,298,357 and $1,117,594 as of the conversion
dates.

     Proceeds  from  the issuance of the debentures were recorded as a liability
at  the  issuance  date.  The  conversion discount was amortized and reported as
additional  interest  expense  over  the  life  of  the  debentures.  Additional
interest  expense  was  recognized  for  any  unamortized  discount  as  of  the
conversion  date.


                                      F-14

<PAGE>
7.     CONTINGENCIES

     From  time  to  time,  various  lawsuits  arise out of the normal course of
business.  These  proceedings  are  handled  by  outside  counsel.  Currently
management  is not aware of any claim or action pending against the Company that
would  have  a  material  adverse  effect on the Company's financial position or
results  of  operations.

     The  Company  has  received  two  grants  from  the  State of Wisconsin for
research  and development of certain products.  The grants are to be repaid only
upon  successful  completion and marketing of the related product.  Repayment of
these  grants  is  to be made on a sales by unit basis.  Repayments approximated
$182,000  and  $14,000  in 1999 and 1997, respectively.  One grant was repaid in
full during 1999.  The repayments are charged to expense as the related products
are  sold.  Since  the  second grant did not result in the successful completion
and  marketing  of a product, the Company does not have to repay the grant.  The
Company has been awarded a third grant from the State of Wisconsin for an amount
up to $100,000 which requires repayment of the grant amount plus interest at 8%,
plus  payment  of  a  royalty  in  the  amount of 1% of net sales of the related
product  for  a five-year period, as defined.  No funds have been received under
this  grant  at  June  30,  1999.

     As  of June 30, 1999, the Company accrued a liability of $1,600,000 related
to  certain  legal  proceedings with a former dealer.  In July 1999, the Company
agreed to a $1,600,000 settlement with the dealer.  The Company agreed to make a
cash  payment  to the dealer, transfer a portion of the shares the Company holds
in  Immtech,  issue the dealer 150,000 shares of the Company's common stock, and
transfer  certain  inventory related to telemetry products no longer sold by the
Company.  The  settlement agreement requires that a broker chosen by the Company
sell  the  Immtech  and  Company  common  stock  on behalf of the dealer.  As of
November  30, 1999, the Criticare shares had not been sold due to the halting of
trading  on  October  6,  1999.

8.     STOCKHOLDERS'  EQUITY

     STOCK  OPTIONS  -  In  December 1992, the Board of Directors approved a new
Employee  Stock  Option  Plan  and Non-Employee Stock Option Plan.  No new stock
options  can  be  granted  under the Employee Stock Option Plan and Non-Employee
Stock  Option  Plan  which  existed prior to the approval of the new plans.  The
Board  of  Directors  has  authorized  in  connection  with  these new plans the
issuance  of 1,720,000 reserved shares of common stock of which 220,750 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 1999.  The Board of Directors increased the number of
reserved  shares for issuance under the Plans from 1,220,000 to 1,720,000 during
1999.  The  activity  during  1997,  1998  and  1999  for  the  above  plans are
summarized  as  follows:
<TABLE>
<CAPTION>


                                                 NUMBER OF   STOCK OPTIONS  WEIGHTED AVG.
                                                  SHARES      PRICE RANGE   EXERCISE PRICE
<S>                                             <C>          <C>            <C>
Outstanding at July 1, 1996. . . . . . . . . .   1,069,420       1.88-8.50            2.45
   Granted . . . . . . . . . . . . . . . . . .     250,500       2.50-5.25            2.64
   Cancelled . . . . . . . . . . . . . . . . .    (113,500)      2.00-8.50            3.38
   Exercised . . . . . . . . . . . . . . . . .    (162,020)      2.00-2.63            2.47
Outstanding at June 30, 1997 . . . . . . . . .   1,044,400       1.88-5.25            2.40
   Granted . . . . . . . . . . . . . . . . . .      60,000       3.00-3.25            3.13
   Cancelled . . . . . . . . . . . . . . . . .    (179,200)      2.00-5.25            2.38
   Exercised . . . . . . . . . . . . . . . . .     (85,500)      2.00-2.75            2.27
Outstanding at June 30, 1998 . . . . . . . . .     839,700       1.88-3.63            2.50
   Granted . . . . . . . . . . . . . . . . . .     993,700       1.50-1.88            1.74
   Cancelled . . . . . . . . . . . . . . . . .    (636,800)      1.69-3.00            2.06
   Exercised . . . . . . . . . . . . . . . . .      (5,000)           2.06            2.06
Outstanding at June 30, 1999 . . . . . . . . .   1,191,600       1.50-3.00            1.83
Exercisable at June 30, 1999 . . . . . . . . .     560,600       1.50-3.00            2.02

Weighted Average Fair Value of Options Granted
During the Fiscal Year Ended June 30, 1998 . .  $      .23
</TABLE>


                                      F-15

<PAGE>

     Additionally,  on  December  11, 1998, the Company repriced 479,700 options
outstanding  to  $1.875 per share.  The repricing was considered a forfeiture of
the  existing  options  and  a grant of new options for the purpose of the table
above.

     The  following table summarizes information about stock options outstanding
as  of  June  30,  1999:
<TABLE>
<CAPTION>

                                OPTIONS OUTSTANDING     OPTIONS EXERCISABLE

                                    WEIGHTED AVERAGE
                       SHARES          REMAINING          WEIGHTED            SHARES
RANGE OF            OUTSTANDING       CONTRACTUAL     AVERAGE EXERCISE     EXERCISABLE     WEIGHTED AVERAGE
EXERCISE PRICES   AT JUNE 30, 1999     LIFE-YEARS           PRICE        AT JUNE 30, 1999   EXERCISE PRICE
<S>               <C>               <C>               <C>                <C>               <C>
1.50-1.875. . .           980,700              3.52  $            1.74           355,700              1.90
2.00-3.00 . . .           210,900              1.15               2.28           204,900              2.21
1.50-3.00 . . .         1,191,600              3.10               1.90           560,600              2.02
</TABLE>

     Outstanding  options  have  fixed  terms  and are exercisable over a period
determined by the Compensation Committee of the Company's Board of Directors but
no  longer than five years after the date of grant.  At June 30, 1999, 1,412,350
shares  of  common  stock  were  reserved  under  the  above  plans.

     The  Company  has  adopted  the disclosure-only provisions of SFAS No. 123,
"Accounting  for  Stock-Based  Compensation,"  but applies Accounting Principles
Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees" and related
interpretations  in  accounting  for  its  plans.  If the Company had elected to
recognize  compensation cost for the options granted during the years ended June
30,  1998,1997, and 1996, consistent with the method prescribed by SFAS No. 123,
net loss and net loss per share would have been changed to the pro forma amounts
indicated  below:

<TABLE>
<CAPTION>

                                                  YEARS  ENDED  JUNE  30,

                                            1999         1998         1997
<S>                                     <C>           <C>         <C>
Net loss-as reported . . . . . . . . .  $(4,388,171)  $(499,276)  $(2,179,489)
Net loss-pro forma . . . . . . . . . .  $(4,555,200)  $(779,276)  $(2,325,795)
Net loss per common share-as reported.  $      (.51)  $    (.06)  $      (.30)
Net loss per common share-pro forma. .  $      (.53)  $    (.09)  $      (.32)
Assumptions used:
   Expected volatility . . . . . . . .           15%         14%           58%
   Risk-free interest rate . . . . . .            5%          5%            6%
   Expected option life (in years) . .            3           3             3
</TABLE>

     The  fair value of stock options used to compute pro forma net loss and net
loss per common share is the estimated present value at the grant date using the
Black-Scholes  option-pricing  model.

     In  March 1999, the Company granted 120,000 stock options to a non-employee
at  a  price  of  $2.50  per  share.  The  options  vest  if certain performance
parameters  are  achieved by May 2000.  No such parameters were achieved by June
30,  1999.

     STOCK  WARRANTS  -  In  September  1995,  the  Company  executed  a warrant
agreement with a consultant.  The warrant agreement provided for the issuance of
warrants  to  purchase  up to 150,000 shares of the common stock of the Company,
exercisable  at  a  price of $2.00 per share.  The warrant was exercisable as to
37,500  shares  upon execution of the agreement and the warrants to purchase the
remaining  112,500  shares  were  to  become  exercisable if certain performance
parameters  were achieved by September 1996.  Such parameters were not met as of
such  date.  In January 1997, the agreement was extended and the parameters were
changed.

                                      F-16

<PAGE>
During  the  year ended June 30, 1997, the Company recognized $84,375 of expense
related  to  the  value  of  the  services performed by the consultant under the
extended  agreement.  By  June  30,  1997,  warrants  to  purchase the remaining
112,500 shares of common stock at a price of $2.00 per share became exercisable.
The  warrant  holder  exercised rights and purchased 41,000 and 90,000 shares of
common  stock  at $2.00 per share during the years ended June 30, 1998 and 1997.
Warrants  to  purchase  15,000  shares  of  common stock at $2.00 per share were
exercisable  as  of  June  30,  1999.  Such  warrants  expire in September 2000.

     In February 1998, the Company executed a similar warrant agreement with the
consultant.  The  warrant  agreement  provides  for  the issuance of warrants to
purchase  up  to  150,000  shares of common stock at a price of $3.00 per share.
The  warrant  is exercisable as to 30,000 shares upon execution of the agreement
and the warrants to purchase the remaining 120,000 shares will be exercisable if
certain  performance  parameters  are  achieved  by  February  1999.  No  such
parameters  were  achieved.  During  the  year  ended June 30, 1998, the Company
recognized  $23,065  of  expense  related to the value of the services performed
under  the  agreement.  As  of  June 30, 1999, 30,000 warrants were exercisable.
Such  warrants  expire  in  February  2003.

     COMMITMENT  TO  ISSUE  SHARES  OF COMMON STOCK - In April 1998, the Company
agreed  to and accepted the patent rights assigned to them by a third party with
respect  to certain technology related to the transmission of clinical data.  In
consideration  for the patent, the Company has agreed to provide the third party
with  400,000  shares  of common stock payable over a four-year time period with
additional consideration of up to 112,000 shares contingent upon the achievement
of  certain  sales  levels.  The  Company  recorded  a  charge  to operations of
$900,000  in  fiscal 1998 with respect to the value of the in-process technology
which  was expensed as research and development costs.  During 1999, the Company
renegotiated  the agreement and issued the third party 350,000 shares instead of
the  400,000  shares  payable over four years and the 112,000 contingent shares.
The  400,000 shares to have been issued were considered to be outstanding shares
for  purposes of computing basic and diluted income (loss) per common share from
April  1998  until  the  350,000  shares  were  issued  in  November  1998.

     PREFERRED  STOCK  -  The  Company's Board of Directors has the authority to
determine  the  relative  rights  and preferences of any series it may establish
with  respect  to  the  500,000  shares  of  $.04 par value authorized preferred
shares.  No  preferred  stock  is  issued  or  outstanding.

     On  March  27,  1997,  the  Board  of  Directors  of the Company declared a
dividend  of one preferred share purchase right (a "Right") for each outstanding
share  of  common stock of the Company.  The dividend was made on April 24, 1997
to  the  stockholders  of  record  on  that  date  to  purchase  Preferred Stock
("Preferred")  upon  the  occurrence  of  certain  events.  The  Rights  will be
exercisable  the  tenth business day after a person or group acquires 20% of the
Company's  common  stock,  or  makes  an  offer  to  acquire  30% or more of the
Company's  common  stock.  When  exercisable,  each right entitles the holder to
purchase  for  $25, subject to adjustment, one-hundredth of a share of Preferred
for  each share of common stock owned.  Each share of Preferred will be entitled
to a minimum preferential quarterly dividend of $25 per share, but not less than
an  aggregate  dividend of 100 times the common stock dividend.  Each share will
have  100  votes,  voting  together  with the common stock.  In the event of any
merger, each share of Preferred will be entitled to receive 100 times the amount
received  per  share  of  common  stock.  The  Rights  expire  on April 1, 2007.

9.     EMPLOYEE  BENEFIT  PLAN

     The  Company  has  a  401(k) plan which covers substantially all employees.
Company  contributions  to the plan are discretionary and determined annually by
the  Company's  Board  of  Directors.  The  Company's  contributions  were
approximately  $84,000,  $77,000,  and  $81,000  in  1999,  1998  and  1997,
respectively.

10.     BUSINESS  AND  CREDIT  CONCENTRATIONS

     The  Company  operates in one business segment-the manufacturing of medical
monitoring  and  telemetry equipment.  The Company's customers include hospitals
and  alternative health care sites throughout the world.  Although the Company's
products  are  sold  primarily  to  health  care  providers,  concentrations  of

                                      F-17

<PAGE>
credit  risk  with  respect  to trade accounts receivable are limited due to the
Company's  large  number  of  customers and their geographic dispersion.  During
1999,  a  customer,  who  has  entered  into  an OEM agreement with the Company,
purchased  approximately  $4,360,000 of the Company's products.  This represents
approximately  15%  of  the  Company's  total  sales.  The  Company  currently
coordinates  substantially  all international sales and distribution activities.
Such  activities  were previously provided by the Company with the assistance of
Criticare  International.  Identifiable  assets  located  outside  of the United
States  are insignificant in relation to the Company's total assets.  Net export
sales  by  geographic  area  are  as  follows:
<TABLE>
<CAPTION>

                                         1999         1998         1997
<S>                                   <C>          <C>          <C>
Europe and Middle East . . . . . . .  $ 4,635,000  $ 5,464,000  $ 5,606,000
Pacific Rim. . . . . . . . . . . . .    2,243,000    3,895,000    3,784,000
Canada and Central and South America    3,634,000    3,414,000    3,867,000
Net export sales . . . . . . . . . .  $10,512,000  $12,773,000  $13,257,000
</TABLE>

11.     SEVERANCE  PAY

     During  November  1998,  the  two  co-founders of the Company resigned from
their  positions.  The  Company  has  provided  each of these individuals with a
severance agreement which includes a portion of their salary and fringe benefits
for  a  period  which approximates three years and recorded a charge of $810,000
for  their  severance  in  the  year  ended  June  30,  1999.

                                      F-18

<PAGE>
                             CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                           DECEMBER 31,
                                                              1999
                                                           ------------
<S>                                                        <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents . . . . . . . . . . . . . . .  $ 2,114,468
  Accounts receivable . . . . . . . . . . . . . . . . . .    6,393,348
  Other receivables . . . . . . . . . . . . . . . . . . .        4,261
  Inventory . . . . . . . . . . . . . . . . . . . . . . .    8,350,562
  Prepaid expenses. . . . . . . . . . . . . . . . . . . .      407,345
                                                           ------------
        Total current assets. . . . . . . . . . . . . . .   17,269,984
                                                           ------------

PROPERTY, PLANT AND EQUIPMENT - NET . . . . . . . . . . .    6,400,636
                                                           ------------

INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . .            -

LICENSE RIGHTS AND PATENTS - NET. . . . . . . . . . . . .      102,991

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $23,773,611
                                                           ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable. . . . . . . . . . . . . . . . . . . .  $ 2,484,663
  Accrued liabilities:
    Compensation and commissions. . . . . . . . . . . . .    1,130,036
    Product warranties. . . . . . . . . . . . . . . . . .      450,000
    Lawsuit settlement. . . . . . . . . . . . . . . . . .      300,000
    Deferred income . . . . . . . . . . . . . . . . . . .            -
    Other . . . . . . . . . . . . . . . . . . . . . . . .      344,713
  Current maturities of long-term debt. . . . . . . . . .       76,279
                                                           ------------
        Total current liabilities . . . . . . . . . . . .    4,785,691
                                                           ------------

LONG-TERM DEBT, less current maturities . . . . . . . . .    3,325,726
                                                           ------------


OTHER LONG-TERM OBLIGATIONS . . . . . . . . . . . . . . .      571,571

STOCKHOLDERS' EQUITY
  Preferred stock . . . . . . . . . . . . . . . . . . . .            -
  Common stock. . . . . . . . . . . . . . . . . . . . . .      348,246
  Additional paid-in capital. . . . . . . . . . . . . . .   17,960,363
  Common stock held in treasury 103,840 shares - at cost.     (193,430)
  Retained earnings (accumulated deficit) . . . . . . . .   (3,024,556)
                                                           ------------
        Total stockholders' equity. . . . . . . . . . . .   15,090,623
                                                           ------------

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $23,773,611
                                                           ------------
</TABLE>

See  condensed  notes  to  consolidated  financial  statements.

                                      F-19

<PAGE>
                             CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                   SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                          1999          1998
                                                      ------------  ------------
<S>                                                   <C>           <C>

NET SALES. . . . . . . . . . . . . . . . . . . . . .  $13,504,036   $14,014,480

COST OF GOODS SOLD . . . . . . . . . . . . . . . . .    7,373,259     7,192,945
                                                      ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . . . . .    6,130,777     6,821,535
                                                      ------------  ------------

OPERATING EXPENSES:
  Marketing. . . . . . . . . . . . . . . . . . . . .    3,543,432     4,479,724
  Research, development and engineering. . . . . . .    1,564,662     1,488,262
  Administrative . . . . . . . . . . . . . . . . . .    1,080,671     1,220,137
  Restructuring expenses - severance pay . . . . . .            -       728,000
                                                      ------------  ------------
        Total. . . . . . . . . . . . . . . . . . . .    6,188,765     7,916,123
                                                      ------------  ------------

(LOSS) FROM OPERATIONS . . . . . . . . . . . . . . .      (57,988)   (1,094,588)
                                                      ------------  ------------

OTHER INCOME (EXPENSE):
  Interest expense . . . . . . . . . . . . . . . . .     (130,513)     (158,251)
  Interest income. . . . . . . . . . . . . . . . . .       67,413        36,445
  Equity in loss of investments. . . . . . . . . . .            -      (150,000)
  Gain on sale of Immtech International, Inc. stock.    2,500,000             -

        Total. . . . . . . . . . . . . . . . . . . .    2,436,900      (271,806)
                                                      ------------  ------------


INCOME (LOSS) BEFORE INCOME TAXES. . . . . . . . . .    2,378,912    (1,366,394)

INCOME TAX PROVISION . . . . . . . . . . . . . . . .            -             -
                                                      ------------  ------------

NET INCOME (LOSS). . . . . . . . . . . . . . . . . .    2,378,912   $(1,366,394)
                                                      ------------  ------------

EARNINGS (LOSS) PER COMMON SHARE:
  Basic. . . . . . . . . . . . . . . . . . . . . . .         0.27         (0.16)
  Diluted. . . . . . . . . . . . . . . . . . . . . .  $      0.26   $     (0.16)
                                                      ------------  ------------

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING:
  Basic. . . . . . . . . . . . . . . . . . . . . . .    8,707,809     8,701,151
  Diluted. . . . . . . . . . . . . . . . . . . . . .    9,004,686     8,701,151
                                                      ------------  ------------

</TABLE>

See  condensed  notes  to  consolidated  financial  statements.


                                      F-20

<PAGE>
                             CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998

                                   (Unaudited)
<TABLE>
<CAPTION>



                                                                  1999          1998
                                                              ------------  ------------
<S>                                                           <C>           <C>
OPERATING ACTIVITIES:

Net income (loss). . . . . . . . . . . . . . . . . . . . . .  $ 2,378,912   $(1,366,394)
Adjustments to reconcile net income to net
     cash (used in) provided by operating activities:
          Depreciation . . . . . . . . . . . . . . . . . . .      450,843       458,040
          Amortization . . . . . . . . . . . . . . . . . . .        9,000         9,000
          Equity in loss of investments. . . . . . . . . . .            -       150,000
          Gain on sale of Immtech International, Inc. stock.   (2,500,000)            -
          Changes in assets and liabilities:
             Accounts receivable . . . . . . . . . . . . . .      (34,861)     (230,045)
             Other receivables . . . . . . . . . . . . . . .       78,845       204,425
             Inventories . . . . . . . . . . . . . . . . . .      (99,794)   (1,274,859)
             Prepaid expenses. . . . . . . . . . . . . . . .     (215,055)      155,110
             Accounts payable. . . . . . . . . . . . . . . .     (593,357)    1,312,747
             Accrued liabilities . . . . . . . . . . . . . .   (2,017,687)      839,360
                                                              ------------  ------------
Net cash (used in) provided by operating activities. . . . .   (2,543,154)      257,384
                                                              ------------  ------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . .     (317,212)     (148,403)
Proceeds from the sale of Immtech International, Inc. stock.    2,500,000             -
Advances to Immtech International, Inc.. . . . . . . . . . .            -      (150,000)
                                                              ------------  ------------

Net cash provided by (used in) investing activities. . . . .    2,182,788      (298,403)
                                                              ------------  ------------

FINANCING ACTIVITIES:
Principal payments on long-term debt . . . . . . . . . . . .      (36,244)      (53,368)
Repurchase of Company stock. . . . . . . . . . . . . . . . .            -      (103,549)
                                                              ------------  ------------

Net cash (used in) provided by operating activities. . . . .      (36,244)     (156,917)

NET (DECREASE) IN CASH AND
   CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . . . .     (396,610)     (197,936)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . .    2,511,078     2,729,998
                                                              ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . .  $ 2,114,468   $ 2,532,062
                                                              ------------  ------------
</TABLE>

See  condensed  notes  to  consolidated  financial  statements.

                                      F-21

<PAGE>
                             CRITICARE SYSTEMS, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.     BASIS  OF  PRESENTATION

     The  accompanying  unaudited  financial  statements  have  been prepared by
Criticare Systems, Inc. (the "Company") pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission  ("SEC")  and,  in the opinion of the
Company,  include  all adjustments necessary for a fair statement of results for
each  period  shown.  Certain  information  and  footnote  disclosures  normally
included  in financial statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such SEC rules
and regulations.  The Company believes that the disclosures made are adequate to
prevent  the financial information given from being misleading.  It is suggested
that  these  financial  statements  be  read  in  conjunction with the financial
statements  and notes thereto included in the Company's latest annual report and
previously filed Form 10-K  The results of operations in the unaudited financial
statements  for  the  six  months  ended  December  31, 1999 are not necessarily
indicative  of  the  operating  results  for  the  full  year.

2.     CASH  EQUIVALENTS

     The  Company  considers  all  investments with purchased maturities of less
than  three  months  to  be  cash  equivalents.

3.     INVENTORY  VALUATION

     Inventory is stated at the lower of cost or market, with cost determined on
the  first-in,  first-out  method.  Components  of  inventory  consisted  of the
following  at  December  31,  1999  and  June  30,  1999,  respectively:
<TABLE>
<CAPTION>

                   DECEMBER 31    JUNE 30,
                       1999         1999
                   ------------  ----------
<S>                <C>           <C>
Component parts .  $  3,971,541  $3,790,728
Work in process .     1,197,266   1,261,709
Finished units. .     3,181,755   3,458,538
                   ------------  ----------
Total inventories  $  8,350,562  $8,510,975
                   ------------  ----------
</TABLE>

4.     INVESTMENTS

     During August, September and October, 1999, the Company sold 500,000 shares
of  Immtech  International,  Inc.  ("Immtech") stock for $2,500,000 in a private
placement.  The  funds  were  used  primarily  to settle a long-standing lawsuit
which was settled in July, 1999.  The Company holds approximately 460,000 shares
of  Immtech  stock  which  had  a  market  value of approximately $13,000,000 at
December 31, 1999.  These shares are subject to certain lock-up provisions which
do  not  allow  the  Company to sell any of these sales in the open market until
April, 2000.  The market value of these shares could change substantially due to
overall  market  risk.


                                      F-22

<PAGE>
5.     PROPERTY,  PLANT  AND  EQUIPMENT

     Property,  plant  and  equipment  consist  of  the  following:
<TABLE>
<CAPTION>

                                      DECEMBER 31,    JUNE 30,
                                          1999          1999
                                      -------------  -----------
<S>                                   <C>            <C>
Land and building. . . . . . . . . .  $   4,525,000  $ 4,525,000
Machinery and equipment. . . . . . .      2,115,511    2,051,442
Furniture and fixtures . . . . . . .        901,830      819,579
Demonstration and loaner monitors. .      1,677,100    1,416,893
Production tooling . . . . . . . . .      2,329,270    2,158,378
                                      -------------  -----------
Property, plant and equipment - cost     11,548,711   10,971,292
Less accumulated depreciation. . . .      5,148,075    4,697,232
                                      -------------  -----------
Property, plant and equipment - net.  $   6,400,636  $ 6,274,060
                                      -------------  -----------
</TABLE>

6.     CONTINGENCIES

     The  Company  is  involved  in  lawsuits  that  have arisen from the normal
conduct  of business.  These proceedings are handled by outside counsel.  In the
opinion  of management, the ultimate resolution of these matters will not have a
material  effect  on  the  consolidated  financial  statements.

                                      F-23

<PAGE>

     You  should  rely  on  the  information contained in this document or other
information  we  referred  you to.  We have not authorized anyone to provide you
with  information  that  is  different.  This  prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any security other than the
shares  of  common  stock  offered by this prospectus, nor does it constitute an
offer to sell or a solicitation of an offer to buy shares of common stock in any
jurisdiction  where  such  offer or solicitation would be unlawful.  Neither the
delivery  of  this  prospectus  nor  any  sales  made hereunder shall, under any
circumstances,  create  any  implication  that  there  has been no change in the
affairs  of  Criticare  since  the  date  hereof.


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                        Page
                                        -----
<S>                                     <C>

Summary. . . . . . . . . . . . . . . .    2
Risk Factors . . . . . . . . . . . . .    3
Forward-Looking Statements . . . . . .    5
Market Information and Dividend Policy    5
Use of Proceeds. . . . . . . . . . . .    6
Selected Consolidated Financial Data .    6
Management's Discussion and Analysis
    of Financial Condition and Results
    of Operations. . . . . . . . . . .    7
Business . . . . . . . . . . . . . . .   11
Management . . . . . . . . . . . . . .   18
Principal Stockholders . . . . . . . .   24
Selling Stockholder. . . . . . . . . .   25
Plan of Distribution . . . . . . . . .   25
Description of Capital Stock . . . . .   26
Legal Matters. . . . . . . . . . . . .   30
Experts. . . . . . . . . . . . . . . .   30
Where You Can Find More Information. .   30
Consolidated Financial Statements. . .  F-1
</TABLE>

                             CRITICARE SYSTEMS, INC.


                          30,000 SHARES OF COMMON STOCK






                                   PROSPECTUS








                            _______________ ___, 2000



<PAGE>

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM  13.  OTHER  EXPENSES  OF  ISSUANCE  AND  DISTRIBUTION

     The  expenses  relating  to  the registration of the shares of common stock
being offered hereby, other than underwriting discounts and commissions, will be
borne  by  the  Company.  Such  expenses  are  estimated  to  be  as  follows:
<TABLE>
<CAPTION>

ITEM                                AMOUNT
----------------------------------  -------
<S>                                 <C>

Securities and Exchange Commission
Registration Fee . . . . . . . . .  $    30

Printing and Engraving Fees. . . .    1,000

Legal Fees and Expenses. . . . . .   15,000

Accounting Fees and Expenses . . .    5,000

Miscellaneous Expenses . . . . . .      470
                                    -------

                                    $21,500
                                    =======
   Total
</TABLE>

ITEM  14.  INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS

     The Company's By-Laws provide that the Company shall, to the fullest extent
permitted  by the Delaware General Corporation Law and other applicable laws, as
in  effect  from  time to time, indemnify any person who was or is a party or is
threatened  to  be made a party to any formal or informal threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  including,  without limitation, any action brought under federal
or  state securities laws, rules or regulations (collectively, "Actions"), other
than  in  certain  limited  circumstances,  because  he  is or was a director or
officer  of  the  Company,  or because he is or was a director or officer of the
Company  and  is  or  was  serving  at the request of the Company as a director,
officer,  employee,  consultant  or  agent  of  another  corporation  or  other
enterprise  or is or was serving at the request of the Company as a fiduciary of
an  employee  benefit  plan or as an employee or agent of the Company; provided,
however,  that  no  director  or  officer  shall  be entitled to indemnification
unless,  with respect to the conduct that is the subject of the Action, he acted
in  good faith and in a manner he reasonably believed to be in or not opposed to
the  best  interest  of  the Company and, with respect to any criminal action or
proceeding,  he  had  no  reasonable  cause to believe his conduct was unlawful.
This  indemnification obligation mirrors the permissive indemnification provided
under section 145 of the Delaware General Corporation Law.  The determination of
whether  indemnification  is  proper  under  the circumstances, unless made by a
court,  shall  be  made  (a)  by arbitration; (b) by the Board of Directors by a
majority  vote  of  a  quorum consisting of directors who are not parties to the
subject  Action;  (c) if such quorum is not obtainable or, even if obtainable, a
quorum  of disinterested directors so directs, by independent legal counsel in a
written  opinion;  or  (d)  by  the affirmative vote of a majority of the shares
entitled  to  vote  thereon.


                                      II-1

<PAGE>
     The  Company's  Certificate  of Incorporation provides that a director will
not be personally liable for monetary damages to the Company or its stockholders
for  or  with  respect to any acts or omissions in the performance of his or her
duties  as a director, except for liability (i) for any breach of the director's
duty  of  loyalty  to  such  corporation  or  its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for paying a dividend or approving a stock repurchase in
violation  of  section  174 of the Delaware General Corporation Law or (iv) with
respect  to any transaction from which the director derived an improper personal
benefit.

     Article  VI, section 6.01 of the Company's Restated By-Laws provides that a
director  or officer is not liable to the Company for damages arising out of any
action  taken or omitted to be taken by such person if he exercised and used the
same  degree  of  care  and  skill as a prudent man would have exercised or used
under  the circumstances in the conduct of his own affairs or took or omitted to
take  such  action  in  reliance  on  the  advice  of  the  Company's counsel or
statements made or information furnished by officers or employees of the Company
which  he  had  reasonable  grounds  to  believe  were  true.

     The  indemnification  provided  as  set forth above is not exclusive of any
other  rights  to which a director or an officer of the Company may be entitled.

     The  general  effect  of  the  foregoing  provisions  is  to  reduce  the
circumstances  in  which  an  officer  or  director  may be required to bear the
economic  burdens  of  the  foregoing  liabilities  and  expenses.


ITEM  15.  RECENT  SALES  OF  UNREGISTERED  SECURITIES

     Effective  November  3,  1998,  the Company issued 350,000 shares of common
stock to Telemed Technologies International, Inc. in exchange for certain patent
and  other  intellectual property rights.  These shares were issued in a private
placement  exempt  from  the  registration requirements of the Securities Act of
1933,  as  amended  (the  "Act"),  pursuant  to  Section  4(2)  of  the  Act.


ITEM  16.  EXHIBITS  AND  FINANCIAL  STATEMENT  SCHEDULES

<TABLE>
<CAPTION>



EXHIBIT
NUMBER   DESCRIPTION
-------  --------------------------------------------------------------------------------------------------
<C>      <S>

    3.1  Restated Certificate of Incorporation of the Company (incorporated by reference to the
         Registration Statement filed on Form S-1, Registration No. 33-13050).

    3.2  By-Laws of the Company (incorporated by reference to the Registration Statement filed on
         Form S-1, Registration No. 33-13050).

    4.1  Specimen Common Stock certificate (incorporated by reference to the Registration Statement
         filed on Form S-1, Registration No. 33-13050).

    4.2  Specimen Convertible Debenture (incorporated by reference to the Registration Statement filed on
         Form S-3, Registration No. 333-25153).

      5  Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.

   10.1  Blatz House Offices Limited Partnership Agreement (incorporated by reference to the Company's
         Quarterly Report on Form 10-Q for the quarter ended December 31, 1987).

   10.2  Rights Agreement (incorporated by reference to the Company's Current Report on Form 8-K filed
         on April 18, 1997).

   10.3  Assignment of Rights to Patent Applications, Patents and/or Inventions, effective November 3,
         1998, between the Company and TeleMed Technologies International, Inc. (incorporated by
         reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

                                      II-2

<PAGE>
   10.4  Registration Agreement, dated as of November 3, 1998, between the Company and TeleMed
         Technologies International, Inc. (incorporated by reference to the Company's Quarterly Report on
         Form 10-Q for the quarter ended March 31, 1999).

   10.5  1999 Employee Stock Purchase Plan.

   10.6  1992 Employee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-60644).

   10.7  1992 Nonemployee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-60214).

   10.8  1987 Employee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-33497).

   10.9  1987 Nonemployee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-40038).

  10.10  Form of Executive Officer and Director Indemnity Agreement (incorporated by reference to the
         Company's Registration Statement on Form S-1, Registration No. 33-13050).

  10.11  Employment Agreement of Gerhard J. Von der Ruhr (incorporated by reference to the
         Registration Statement filed on Form S-1, Registration No. 33-13050).

  10.12  Employment Agreement of N.C. Joseph Lai (incorporated by reference to the Registration
         Statement filed on Form S-1, Registration No. 33-13050).

  10.13  Amendment to Employment Agreement of Gerhard J. Von der Ruhr (incorporated by reference to
         the Company's Annual Report on Form 10-K for the year ended June 30, 1997).

  10.14  Amendment to Employment Agreement of N.C. Joseph Lai (incorporated by reference to the
         Company's Annual Report on Form 10-K for the year ended June 30, 1997).

  10.15  Severance Agreement, dated as of November 16, 1998, of Gerhard J. Von der Ruhr (incorporated
         by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

  10.16  Severance Agreement, dated as of November 16, 1998, of N.C. Joseph Lai (incorporated by
         reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

  10.17  Employment Agreement of Emil H. Soika, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).

  10.18  Employment Agreement of Joseph M. Siekierski, (incorporated by reference to the Company's
         Annual Report on Form 10-K for the year ended June 30, 1999).

  10.19  Employment Agreement of Stephen D. Okland, (incorporated by reference to the Company's
         Annual Report on Form 10-K for the year ended June 30, 1999).

  10.20  Employment Agreement of Drew M. Diaz, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).


                                      II-3

<PAGE>
  10.21  Employment Agreement of Gloria Najera, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).

  10.22  Amendment to Employment Agreement of Gloria Najera, (incorporated by reference to the
         Company's Annual Report on Form 10-K for the year ended June 30, 1999).

     21  Subsidiaries (incorporated by reference to the Company's Annual Report on Form 10-K for the
         year ended June 30, 1999).

   23.1  Consent of BDO Seidman, LLP

   23.2  Consent of Deloitte & Touche LLP

   23.3  Consent of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c. (included in its opinion filed
         as Exhibit 5 hereto).

     24  Power of Attorney (incorporated by reference to the signature page hereof).
</TABLE>

FINANCIAL  STATEMENT  SCHEDULES
-------------------------------

          Financial  Statement Schedule for the years ending June 30, 1999, 1998
and  1997:

Schedule
Number     Description                       Page
------     -----------                       ----

II         Valuation  and  Qualifying          21
           Accounts  and  Reserves

     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting  regulations  of  the  Securities  and  Exchange  Commission  are not
required  under  the  related  instructions,  are  inapplicable  or the required
information is shown in the financial statements or notes thereto, and therefore
have  been  omitted.


ITEM  17.  UNDERTAKINGS

     The  undersigned  Registrant  undertakes  as  follows:

          1.     To  file,  during any period in which offers or sales are being
made,  a  post-effective  amendment  to  this  Registration  Statement:

               (a)     To include any prospectus required by section 10(a)(3) of
the  Securities  Act  of  1933;

               (b)     To  reflect in the prospectus any facts or events arising
after  the  effective  date  of  the  Registration Statement (or the most recent
post-effective  amendment  thereof)  which,  individually  or  in the aggregate,
represent  a fundamental change in the information set forth in the Registration
Statement;  Notwithstanding the foregoing, any increase or decrease in volume of
securities  offered  (if  the total dollar value of securities offered would not
exceed  that which was registered) and any deviation from the low or high end of
the  estimated maximum offering range may be reflected in the form of prospectus
filed  with  the  Commission  pursuant  to Rule 424(b) if, in the aggregate, the
changes  in  volume  and  price  represent  no  more  than  a  20%

                                      II-4

<PAGE>
change  in the maximum aggregate offering price set forth in the "Calculation of
Registration  Fee"  table  in  the  effective  Registration  Statement,  and

               (c)     To  include  any material information with respect to the
plan  of  distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs 1(a) and (b) will not apply if the information required
to be included in a post effective amendment by those paragraphs is contained in
periodic  reports filed by the Registrant pursuant to section 13 or 15(d) of the
Securities  Exchange Act of 1934 and which are incorporated by reference in this
Registration  Statement.

          2.     That,  for  the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

          3.     To  remove  from  registration  by  means  of  a post-effective
amendment  any  of  the  securities  being registered which remain unsold at the
termination  of  the  offering.

          4.     That,  for  purposes  of  determining  any  liability under the
Securities  Act  of 1933, each filing of the Registrant's annual report pursuant
to  section  13(a)  or  15(d) of the Securities Exchange Act of 1934 (and, where
applicable,  each  filing  of an employee benefit plan annual report pursuant to
section  15(d)  of  the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement  relating  to the securities offered therein, and the offering of such
securities  at  that  time  shall be deemed to be the initial bona fide offering
thereof.

          5.     Insofar  as  indemnification  for liabilities arising under the
Securities  Act  of  1933  may  be  permitted  to directors, officers or persons
controlling  the Registrant pursuant to the foregoing provisions, the Registrant
has been informed 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 Registrant of expenses incurred
or  paid  by  a director, officer or controlling person of the Registrant 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 Registrant 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.

                                      II-5

<PAGE>
                                   SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
has  duly  caused  this Registration Statement to be signed on its behalf by the
undersigned,  thereunto  duly  authorized,  in  the  City  of Waukesha, State of
Wisconsin,  on  the  22nd  day  of  March,  2000.

                                          CRITICARE  SYSTEMS,  INC.

                                             BY /s/  Emil  H.  Soika
                                                --------------------------------
                                                Emil  H.  Soika,  President  and
                                                Chief  Executive  Officer

                                POWER OF ATTORNEY

     Each person whose signature appears below hereby appoints Emil H. Soika and
Mark  Ruehle,  and  each  of  them  individually,  his  true  and  lawful
attorney-in-fact,  with  power  to  act  with or without the other and with full
power of substitution and resubstitution, in any and all capacities, to sign any
or  all  amendments  (including  post-effective  amendments) to the Registration
Statement  and  file  the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said  attorneys-in-fact  and  agents  full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises,  as  fully  to  all  intents  and  purposes as he might or could do in
person,  hereby  ratifying  and  confirming  all that said attorneys-in-fact and
agents,  or  their  substitutes, may lawfully cause to be done by virtue hereof.

     Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities  and  on  the  dates  indicated.

<TABLE>
<CAPTION>



Signature                               Title                   Date
---------------------------  ----------------------------  --------------
<S>                          <C>                           <C>

/s/ Emil H. Soika            President, Chief Executive    March 22, 2000
---------------------------  Officer and a Director
Emil H. Soika

/s/ Karsten Houm             Chairman of the Board and     March 22, 2000
---------------------------  Director
Karsten Houm

/s/ Mark Ruehle              Vice President-Finance and    March 22, 2000
---------------------------  Secretary (Principal
Mark Ruehle                  Accounting Officer and
                             Principal Financial Officer)

/s/ Milton Datsopoulos       Director                      March 22, 2000
---------------------------
Milton Datsopoulos

/s/ N.C. Joseph Lai          Director                      March 22, 2000
---------------------------
N.C. Joseph Lai

/s/ Gerhard J. Von der Ruhr  Director                      March 22, 2000
---------------------------
Gerhard J. Von der Ruhr
</TABLE>

                                      II-6

<PAGE>

INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  as of June 30, 1999, and have issued our report thereon dated
November  30,  1999;  such  report  is included elsewhere in this Form S-1.  Our
audit also included the consolidated financial statement schedule, as it relates
to  the  year ended June 30, 1999, of Criticare Systems, Inc.  This consolidated
financial  statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audit.  In our opinion,
such  consolidated  financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly in
all  material  respects  the  information  set  forth  therein.

/s/  BDO  Seidman,  LLP

Milwaukee,  Wisconsin
November  30,  1999


<PAGE>
INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  as  of  June  30,  1998, and for each of the two years in the
period  ended June 30, 1998, and have issued our report thereon dated August 20,
1998;  such  report  is  included  elsewhere  in this Form S-1.  Our audits also
included  the  consolidated  financial  statement schedule of Criticare Systems,
Inc.  for  each  of  the  two  years  in  the  period ended June 30, 1998.  This
consolidated financial statement schedule is the responsibility of the Company's
management.  Our  responsibility  is  to express an opinion based on our audits.
In  our opinion, such consolidated financial statement schedule, when considered
in  relation  to  the  basic consolidated financial statements taken as a whole,
presents  fairly  in  all  material  respects the information set forth therein.

/s/  Deloitte  &  Touche  LLP

Milwaukee,  Wisconsin
August  20,  1998


<PAGE>
                                    SCHEDULE II
                             CRITICARE SYSTEMS, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997

<TABLE>
<CAPTION>



COLUMN A                             COLUMN B           COLUMN C         COLUMN D       COLUMN E
---------------------------------  -------------  --------------------  -----------  ---------------
                                    BALANCE AT
                                   BEGINNING OF        CHARGED TO                    BALANCE AT END
    DESCRIPTION                       PERIOD      COSTS AND  EXPENSES   DEDUCTIONS      OF PERIOD
---------------------------------  -------------  --------------------  -----------  ---------------
<S>                                <C>            <C>                   <C>          <C>
YEAR ENDED JUNE 30, 1997:
  Allowance for doubtful accounts  $     295,000  $            366,505  $   194,505  $       467,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     504,000  $          1,283,931  $ 1,647,931  $       140,000

YEAR ENDED JUNE 30, 1998:
  Allowance for doubtful accounts  $     467,000  $             99,000  $   266,000  $       300,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     140,000  $          1,357,917  $ 1,397,917  $       100,000

YEAR ENDED JUNE 30, 1999:
  Allowance for doubtful accounts  $     300,000  $            380,004  $   305,004  $       375,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     100,000  $            760,194  $   800,194  $        60,000
</TABLE>
[{"type": "S-1", "sequence": "1", "secsgml_size_bytes": 213369}]
{"company-data": {"conformed-name": "CRITICARE SYSTEMS INC /DE/", "cik": "0000812121", "assigned-sic": "3845", "irs-number": "391501563", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-33030", "film-number": "575837"}, "business-address": {"street1": "20925 CROSSROADS CIRCLE", "city": "WAUKESHA", "state": "WI", "zip": "53186", "phone": "4147988282"}, "mail-address": {"street1": "20925 CROSSROADS CIRCLE", "street2": "20925 CROSSROADS CIRCLE", "city": "WAUKESHA", "state": "WI", "zip": "53186"}}
AS  FILED  WITH  THE  SECURITIES  AND EXCHANGE COMMISSION ON MARCH 22, 2000
     REGISTRATION  NO.  333-  _____
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             ----------------------
                             CRITICARE SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)
                             ----------------------
-------------------------------- --------------------------------  --------------------
             DELAWARE                     3845                          39-150563
--------------------------------  -------------------------------  ---------------------
(State or other jurisdiction of  (Primary Standard Industrial        (I.R.S. Employer
 incorporation or organization)  Classification Code Number)       Identification Number
-------------------------------  --------------------------------  ---------------------
CRITICARE SYSTEMS, INC.
                             20925 CROSSROADS CIRCLE
                               WAUKESHA, WI  53186
                                 (262) 798-8282
    (Address, including zip code, and telephone number, including area code, of
                    Registrant's principal executive offices)
                                  EMIL H. SOIKA
                      PRESIDENT AND CHIEF EXECUTIVE OFFICER
                             CRITICARE SYSTEMS, INC.
                             20925 CROSSROADS CIRCLE
                               WAUKESHA, WI  53186
                                 (262) 798-8282
  (Name, address, including zip code, and telephone number, including area code,
                              of agent for service)
                             ----------------------
                                   COPIES TO:
                            BENJAMIN G. LOMBARD, ESQ.
            REINHART, BOERNER, VAN DEUREN, NORRIS & RIESELBACH, S.C.
                       1000 NORTH WATER STREET, SUITE 2100
                           MILWAUKEE, WISCONSIN 53202
                                 (414) 298-1000
                             ----------------------
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
    From time to time after the effective date of this Registration Statement

     If any of the securities being registered on this form are to be offered on
a  delayed  or  continuous  basis pursuant to Rule 415 under the Securities Act,
check  the  following  box.  [x]
     If  this  Form  is  filed to register additional securities for an offering
pursuant  to  Rule  462(b) under the Securities Act, check the following box and
list  the  Securities Act registration statement number of the earlier effective
registration  statement  for  the  same  offering.  [  ]
     If  this  Form  is a post-effective amendment filed pursuant to Rule 462(c)
under  the  Securities  Act, check the following box and list the Securities Act
registration  statement  number  of the earlier effective registration statement
for  the  same  offering.  [  ]
     If  this  Form  is a post-effective amendment filed pursuant to Rule 462(d)
under  the  Securities  Act, check the following box and list the Securities Act
registration  statement  number  of the earlier effective registration statement
for  the  same  offering.  [  ]
     If  delivery of the prospectus is expected to be made pursuant to Rule 434,
please  check  the  following  box.  [  ]
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF         AMOUNT TO BE   PROPOSED MAXIMUM OFFERING       AGGREGATE          AMOUNT OF
SECURITIES TO BE REGISTERED     REGISTERED         PRICE PER SHARE         OFFERING PRICE    REGISTRATION FEE
-----------------------------  ------------  ---------------------------  -----------------  -----------------
Common Stock, $0.04 par value        30,000  $                  3.79 (1)  $         113,700  $           30.02
=============================  ============  ===========================  =================  =================
(1)     Calculated in accordance with Rule 457(c) based on the average of the high and low sales prices of the
Common  Stock  as  reported  on  the  Nasdaq  National  Market on March 17, 2000, solely for the purposes of
calculating  the  amount  of  the  registration  fee.
THE  REGISTRANT  HEREBY  AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE  A  FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT THIS REGISTRATION
STATEMENT  SHALL  THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH  DATE  AS  THE  COMMISSION,  ACTING  PURSUANT  TO  SUCH  SECTION  8(A), MAY
DETERMINE.
PROSPECTUS

                  PRELIMINARY PROSPECTUS DATED MARCH 22, 2000
                              SUBJECT TO COMPLETION

                                  30,000 SHARES

                             CRITICARE SYSTEMS, INC.

                                  COMMON STOCK

     The  selling  stockholder, Applied Data Systems, Inc., is offering for sale
up  to 30,000 shares of our common stock.  Because the shares offered under this
prospectus  will  be  sold  by  the selling stockholder, we will not receive any
proceeds  from  the  sale  of  these  shares.

     Shares  of  our  common  stock  are  traded  on the Nasdaq National Market.

                 Trading Symbol on Nasdaq National Market:  CXIM
               Last Sale Price on March 20, 2000:  $3-23/32 per share

                    _________________________________________

CONSIDER  CAREFULLY  THE  "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES
COMMISSION  HAS  APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS  IS  TRUTHFUL  OR  COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL  OFFENSE.

                                ___________, 2000
PROSPECTUS SUMMARY

This  summary  highlights  selected  information  contained  elsewhere  in  this
prospectus.  This  summary  is  not  complete  and  may  not  contain all of the
information  that  you should consider before investing in the common stock. You
should  read  the  entire  prospectus carefully including "Risk Factors" and the
financial  statements  before  making  an  investment  decision.

OUR  BUSINESS

     We  design,  manufacture  and  market  vital  signs  and  gas  monitoring
instruments  and  related  noninvasive  sensors used to monitor patients in many
healthcare  settings.

     Since  a  patient's  oxygen,  anesthetic  gas and carbon dioxide levels can
change  dramatically  within  minutes,  causing  severe  side  effects or death,
continuous  monitoring  of  these  parameters  is  increasing.  Our  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous  patient  information  to  physicians  and  other  health  service
clinicians.  Our  products  also  allow  hospitals to contain costs primarily by
substituting  cost-effective  reusable  pulse  oximetry  sensors  for disposable
sensors,  controlling  the  use  of  costly anesthetics and increasing personnel
productivity.

     To  meet  the  needs of end-users in a wide variety of patient settings, we
have developed a broad line of patient monitors which combine one or more of our
patented  or  other  proprietary  technologies  for  monitoring:

-     oxygen  saturation;
-     carbon  dioxide;  and
-     anesthetic  agents,

with  standard  monitoring  technologies  that  provide:

-     electrocardiogram;
-     invasive  and  noninvasive  blood  pressures;
-     temperature;
-     heart  rate;  and
-     respiration  rate.

     In  addition, our VitalView telemetry system allows one nurse to monitor up
to  eight  patients  simultaneously  from  a  convenient central location.  This
allows  hospitals  to  move  out  of the intensive care unit those patients that
require  continuous  monitoring, but do not need all of an intensive care unit's
extensive  and  costly  personnel  and  equipment  resources.

     Our  principal  address  and telephone number are: Criticare Systems, Inc.,
20925  Crossroads  Circle,  Waukesha,  Wisconsin  53186,  telephone number (414)
798-8282.

THE  OFFERING

Common  stock  offered  by  the
selling  stockholder                         30,000  shares

Common  stock  outstanding  as
of  February  10,  2000                      8,736,151

Proceeds  from  sale                         We will not receive any proceeds
                                             from the sale of these shares

                                        2
RISK FACTORS

     You  should  carefully  consider  the  following risk factors and all other
information  contained  in  this  prospectus before purchasing our common stock.

WE FACE SIGNIFICANT COMPETITION IN OUR MARKETS.  AS A RESULT, WE MAY NOT BE ABLE
TO  INCREASE  OUR  MARKET  SHARE  OR  PROFIT  MARGINS.

     The  markets  for  our  products  are  highly  competitive.  Many  of  our
competitors  have  greater:

-     engineering  resources;
-     research  and  development  resources;
-     manufacturing  resources;
-     financial  and  marketing  resources;  and
-     market  presence  and  reputation.

     We  have  historically  experienced  substantial  price competition for our
products  and  price  competition  is  likely  to  continue.

WE  HAVE  A  HISTORY OF SIGNIFICANT LOSSES.  IF WE DO NOT ACHIEVE PROFITABILITY,
OUR  FINANCIAL  CONDITION  AND  STOCK  PRICE  COULD  SUFFER.

     We had net losses of $2,179,489 in fiscal 1997, $499,276 in fiscal 1998 and
$4,388,171  in 1999.  Although we had net income of $2,378,912 for the first six
months of fiscal 2000, this included a one time gain of $2,500,000 from the sale
of  stock  of Immtech International, Inc.  Although we completed a restructuring
program  during  fiscal  1999  in  an  effort to attain profitability, we cannot
assure  you  that  we will be able to achieve or sustain profitability in future
periods.

WE  RELY  ON  SINGLE  SOURCES  OF  SUPPLY  FOR MANY OF THE KEY COMPONENTS OF OUR
PRODUCTS.

     Certain  of  our  products  incorporate components currently purchased from
single  sources.  An interruption in the delivery of these components could harm
our  business.  For  example,  we have been experiencing a severe shortage of LC
monitors  during  the  third  quarter  of  fiscal  2000 which we expect to delay
international  shipments  of  our  new  product  line.

OUR  SUCCESS  DEPENDS  ON  OUR  ABILITY  TO  PROTECT  OUR INTELLECTUAL PROPERTY.

     We  rely  on  our  patented  and  other  proprietary  technology including:

-     our  sensor  technology;
-     infrared  specific  anesthetic  gas  monitoring  technology;
-     UltraSync  signal  processing  software;  and
-     disposable  respiratory  secretion  filter  system.

     The  actions  taken  by  us  to  protect  our proprietary rights may not be
adequate  to prevent imitation of our products, processes or technology.  We can
not  assure  you  that:

-     our  proprietary  information  will  not  become  known  to  competitors;
-     others  will  not independently develop substantially equivalent or better
      products that do not infringe on  our  intellectual  property  rights;  or
-     others  will  not  challenge  or  assert  rights in, and ownership of, our
      patents  and  other  proprietary  rights.

     Although  none  of  our  United  States  patents expire before 2004, to the
extent  competitors  develop equivalent or superior non-infringing technology in
these  areas,  or  to  the extent that we are unable to enforce our patents, our
ability  to  market  and  sell  our  products  could  be  harmed.

                                        3
INTERNATIONAL  SALES  MAKE  OUR  BUSINESS  SUSCEPTIBLE TO NUMEROUS INTERNATIONAL
BUSINESS  RISKS  AND  CHALLENGES  THAT  COULD  AFFECT  OUR  PROFITABILITY.

     International  sales  accounted for 37% of our total net sales for the 1999
fiscal  year.  We  expect that international sales will continue to constitute a
significant  portion  of  our business.  Although we sell our products in United
States dollars and are not subject to significant currency risks, an increase in
the  value  of  the  United  States dollar relative to foreign currencies in our
international  markets  could  make  our products less price competitive in such
markets.  Also,  our  international  sales  are subject to the risks inherent in
doing  business  abroad,  including:

-     delays  in  shipments;
-     increases  in  import  duties  and  tariffs;  and
-     changes  in  foreign  regulations  and  political  climate.

WE  OPERATE  IN  A  HIGHLY  REGULATED  INDUSTRY.

     Our  products  are subject to regulation by the United States Food and Drug
Administration  and  comparable  foreign  governmental  authorities.  These
regulations  can  be  burdensome  and  may:

-     substantially  delay  or  prevent  the  introduction  of  new  products;
-     materially  increase  the  costs  of  any  new  product  introductions;
-     interfere  with  or  require  cessation  of  product  manufacturing  and
      marketing;  and
-     result  in  product  recalls.

     Additionally,  adoption  of  new regulations or modifications to applicable
regulations  could  harm  our  business.

HEALTH CARE COST CONTAINMENT PROGRAMS COULD ADVERSELY AFFECT OUR DOMESTIC SALES.

     The  cost  of a significant portion of medical care in the United States is
funded  by government or other insurance programs.  Additional limits imposed by
such  programs on health care cost reimbursements may further impair the ability
of  hospitals  and other health care providers to purchase equipment such as our
products  and  could  reduce  our  domestic  sales.

OUR  BUSINESS  IS  SUBJECT  TO  POSSIBLE  PRODUCT  LIABILITY  EXPOSURE.

     As  a  manufacturer  of medical diagnostic equipment, we could face product
liability  claims.  We have had no product liability claims to date and maintain
product  liability  insurance.  However,  we  can  make  no  assurance  that our
insurance  coverage will be adequate to cover any product liability claims which
arise  in  the  future  or  that  it will continue to be available at reasonable
prices.

OUR  STOCK  PRICE  MAY FLUCTUATE, INCREASING THE RISK TO INVESTORS IN OUR COMMON
STOCK.

     Market  prices of securities of medical technology companies, including our
common  stock, have experienced significant volatility from time to time.  There
may  be  volatility  in the market price of the common stock due to factors that
may or may not relate to our performance.  Various factors and events may have a
significant  impact  on  the  market  price  of  our  common  stock  such  as:

-     announcements  by  us  or  our  competitors  concerning  new  product
      developments;
-     governmental  approvals,  regulations  or  actions;
-     developments  or  disputes  relating  to patent or proprietary rights; and
-     public  concern  over  product  liability.

     In  addition,  our  quarterly  results  have  historically  fluctuated.

                                        4
FORWARD-LOOKING STATEMENTS MAY PROVE TO BE INACCURATE

     We  have  made forward-looking statements in this document that are subject
to  risks  and  uncertainties.  Without  limitation,  these  forward-looking
statements  include  statements:

-     regarding  new  products  we  may  introduce  in  the  future;
-     about  our  business  strategy  and  plans;
-     about  the  adequacy of our working capital and other financial resources;
      and
-     that  are  not  of  an  historical  nature.

     When  we  use words such as "believes," "expects," "anticipates" or similar
expressions,  we  are  making  forward-looking statements.  You should note that
forward-looking  statements  rely  on  a number of assumptions concerning future
events,  and are subject to a number of uncertainties and other factors, many of
which  are  outside  of  our  control, that could cause actual results to differ
materially  from  the  statements  made.  These  factors include those discussed
under  the  caption  "Risk  Factors"  in  this  prospectus.  Please note that we
disclaim  any  intention  or  obligation to update or revise any forward-looking
statements  whether  as a result of new information, future events or otherwise.

                     MARKET INFORMATION AND DIVIDEND POLICY

     Our  common  stock is traded on the Nasdaq National Market under the symbol
"CXIM."  The  following table sets forth the high and low bid quotations for our
common  stock  as  reported  by  Nasdaq.  Such  transactions reflect interdealer
prices,  without retail mark-up, mark-down or commission and may not necessarily
represent  actual  transactions.
Common Stock
                  ------------
Quarter. . .  High          Low
------------  ------------  ------------
FISCAL 1998
First. . . .             8         4-3/8
Second . . .         6-5/8       2-13/16
Third. . . .         4-3/8         2-5/8
Fourth . . .         3-3/4       2-11/16

FISCAL 1999
First. . . .       2-15/16         1-1/4
Second . . .         2-3/4         1-5/8
Third. . . .        2-1/16         1-3/8
Fourth . . .         3-3/8        1-1/16

FISCAL 2000
First. . . .         2-5/8         1-7/8
Second(1). .         2-1/2         1-3/4
(1)     Trading  of  our  common  stock  on  the Nasdaq National Market was
suspended from October 6, 1999 until December 13, 1999 due to the delayed filing
of  our  Annual  Report  on  Form  10-K  with  the  SEC.
As  of December 22, 1999, there were approximately 297 holders of record of
our  common  stock.  We have never declared or paid any cash dividends on shares
of  our common stock.  We intend to retain any earnings for use in the operation
and  expansion of our business and, therefore, do not anticipate paying any cash
dividends  in  the  foreseeable  future.

                                        5
USE OF PROCEEDS

     We will not receive any proceeds from the sale of the shares by the selling
stockholder.

                      SELECTED CONSOLIDATED FINANCIAL DATA

     The  following  selected  financial data should be read in conjunction with
our  financial  statements  and  related  notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this  prospectus.  The  balance sheet data as of June 30, 1999 and the statement
of  operations data for the fiscal year ended June 30, 1999 are derived from our
consolidated  financial  statements  that have been audited by BDO Seidman, LLP,
independent  auditors,  and  are  included  elsewhere  in  this prospectus.  The
balance  sheet data as of June 30, 1998 and the statement of operations data for
the  fiscal years ended June 30, 1998 and 1997 are derived from our consolidated
financial  statements  that  have  been  audited  by  Deloitte  &  Touche  LLP,
independent  auditors,  and  are  included  elsewhere  in  this prospectus.  The
balance  sheet  data  as  of  June  30, 1997, 1996 and 1995 and the statement of
operations  data  for  the fiscal years ended June 30, 1996 and 1995 are derived
from  our  audited  consolidated  financial  statements  which  are not included
elsewhere  in  this  prospectus.  The balance sheet data as of December 31, 1999
and  the statement of operations data for the six months ended December 31, 1999
are  derived  from  our  unaudited consolidated financial statements and, in the
opinion  of  management,  include all adjustments, consisting only of normal and
recurring  adjustments,  necessary  to present fairly our consolidated financial
position  and  results  of  operations  as  of December 31, 1999 and for the six
months  then  ended.  Actual  results  are  not necessarily indicative of future
results.
YEARS ENDED JUNE 30,
                                                                            --------------------
                                 SIX MONTHS ENDED
                                 DECEMBER 31, 1999       1999          1998          1997          1996         1995
                                 ------------------  ------------  ------------  ------------  ------------  -----------
STATEMENT OF OPERATIONS DATA:
Net sales                        $       13,504,036  $28,512,507   $27,908,364   $26,235,355   $31,528,266   $28,660,275
Income (loss) before income
  taxes and extraordinary gain            2,378,912   (4,388,171)     (499,276)   (2,749,435)   (4,280,989)      175,643
Net income (loss)                         2,378,912   (4,388,171)     (499,276)   (2,179,489)   (4,330,989)      105,643
Net income (loss) per
  common share-basic and
  diluted                                      0.27       ($0.51)       ($0.06)       ($0.30)       ($0.63)  $      0.02

BALANCE SHEET DATA:
Long-term obligations            $        3,897,297  $ 4,014,356   $ 3,165,258   $ 5,110,934   $ 4,669,975   $ 3,646,867
Working capital                          12,484,293   10,340,014    13,716,891    12,053,165    10,282,033    13,401,741
Total assets                             23,773,611   24,041,987    24,726,819    25,145,066    27,075,922    25,468,428
Stockholders' equity                     15,090,623   12,711,709    17,282,997    14,227,135    13,917,549    17,130,449
6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  is  intended  to  provide  an  analysis  of our
financial  condition and results of operations and should be read in conjunction
with  our  financial  statements  and  the  notes  to  the  financial statements
contained  elsewhere  in this prospectus.  The matters discussed in this section
that  are  not  historical  or  current  facts  deal  with  potential  future
circumstances  and  developments.  See  "Financial  Statements"  at  page  F-1.

COMPARISON  OF  SIX  MONTHS  ENDED  DECEMBER  31,  1999  AND  1998

     Net  sales  for  the  six  months ended December 31, 1999 decreased 3.6% to
$13.5  million  from  $14.0  million  for  the same period in fiscal 1999.  This
decrease  in  revenue  is  due  to  a reduction in OEM sales to a major customer
partially  offset by an increase in international sales.  We expect sales to the
major OEM customer discussed above to improve in the second half of fiscal 2000.

     The  gross profit percentage for the six months ended December 31, 1999 was
45.4%.  This  represents  a decreased from the gross profit of 48.7% recorded in
the  same  period  of  fiscal  1999. This decrease is due primarily to continued
price  competition.  We expect to see improvement in our gross profit percentage
upon  the  release of the new products currently in development.  These products
are  expected  to  be  released  in  the  fourth  quarter  of  fiscal  2000.

     Operating  expenses  decreased  approximately  $1.7  million.  Marketing
expenses  decreased  approximately  $936,000 when compared to the same period in
fiscal  1999  due  primarily  to  decreased commissions which corresponds to the
decreased  sales,  decreased  payroll  and  related  travel  expenses  due  to a
reduction  in  direct  sales  people as more dealers were added.  Also, expenses
were  reduced  as  a  result  of closing the sales office in Germany.  Research,
development  and  engineering expense increased approximately $76,000 related to
additional  outside  contract  and project expense which are all associated with
the  new  products  under  development.  Administrative  expenses  decreased
approximately  $139,000  in the six months ended December 31, 1999 when compared
to  the same period in fiscal 1999.  This decrease is due primarily to decreased
litigation  expense  related  to the settlement of a long-standing lawsuit.  The
decreased  litigation costs were partially offset by reaudit costs incurred as a
result  of  the  resignation  of  our  former  auditors.  We  also  recorded  a
restructuring  charge of $728,000 during the six months ended December 31, 1998.
This restructuring charge relates to severance pay and other benefits payable to
our  two  co-founders.  Both  of these individuals resigned from their positions
with  us  in  November, 1998.  The severance accrual includes a portion of their
respective  salary  and  fringe  benefits  for a period which approximates three
years.

     The  loss  from  operations  decreased approximately $1,037,000 for the six
months  December 31, 1999 when compared to the same period in fiscal 1999 due to
the restructuring charge for severance pay and other benefits recorded in fiscal
1999  and  the  decrease  in  operating  expenses  which  are  a  result  of our
restructuring  plan  implemented  in  July  1999.

     Net  non-operating  income  was approximately $2,400,000 for the six months
ended December 31, 1999.  Net non-operating expenses were approximately $272,000
for  the  same  period  in  fiscal  1999.  The  significant change is due to the
private  placement  sale  of  500,000  Immtech  shares  for  $2,500,000.

     We  believe  that  our  results in the quarter ended December 31, 1999 were
negatively  affected  due  to  the time and attention expended by management and
other direct and indirect costs relating to the halt in trading of our shares on
Nasdaq  pending  refiling  of  our  Annual  Report on Form 10-K for fiscal 1999.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  1999  AND  1998

     Net  sales  for  the  twelve  months  ended June 30, 1999 increased 2.2% to
$28,512,507 from $27,908,364.  The sales increase is attributable to an increase
in  OEM  sales  partially  offset  by  a  decrease  in  international  sales.

                                        7
The  gross profit percentage decreased from 46.7% in 1998 to 45.5% in 1999.
The  primary  reason  for  the  decrease  in gross profit is the increase in OEM
sales.  OEM  sales  typically  have  a  lower gross profit than sales to non-OEM
customers.

     Operating  expenses  of  $16,871,981 represent a 32.5% increase from fiscal
1998  levels.  Marketing  expenses  increased  approximately  $1,486,000  when
compared  to  1998  levels.  This  increase  is  due  primarily  to  increased
promotional  activities  throughout  the  world.  Engineering expenses decreased
approximately  $316,000  when  compared  to  1998 levels; however, excluding the
one-time  $900,000  charge  in  1998  (discussed  in footnote 8 of the financial
statements)  engineering  expenses  increased  approximately  $584,000.  This
increase  is  due  to  expanded  research and development efforts related to new
product  introductions.  Administrative  expenses  increased  approximately
$2,159,000.  This  increase  is attributable to the settlement and related legal
costs  related to litigation with a former dealer that represented our products.
We  also recorded approximately $810,000 of severance costs related primarily to
costs  associated  with  the  resignation  of  our  two  co-founders.

     Interest  expense decreased due to the conversion of convertible debentures
to  common  stock  in  1998.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  1998  AND  1997

     Net  sales  for  the  twelve  months  ended June 30, 1998 increased 6.3% to
$27,908,364  from  $26,235,355  for  the twelve months ended June 30, 1997.  The
sales  increase  is  attributable  to the alternate care sales and new OEM sales

     The  gross  profit  percentage  remained  relatively consistent at 46.7% in
fiscal  1998  versus  46.4%  in  fiscal  1997.  Margins  in  domestic  hospital,
alternate  care, and international all remained relatively consistent with those
of  the  prior  year.

     Operating  expenses  of $12,731,695 decreased 6.3% from fiscal 1997 levels.
In addition, operating expenses as a percentage of sales decreased to 45.6% from
51.8%  in  fiscal  1997.  The largest savings occurred in the marketing expenses
where  spending  levels were reduced by approximately $1,300,000.  The reduction
in  marketing  expenses  was  primarily  related  to international spending.  We
consolidated  several  international  functions at our home office in the United
States.  This  resulted  in a savings of over $850,000.  Administrative expenses
for  fiscal  1998 decreased by 20.4% from fiscal 1997 levels, due to liquidation
expenses  incurred  in  fiscal  1997  related  to  Criticare International.  The
reduced  expenses  in  marketing  and administration were partially offset by an
increase  of  41.3%  in  research,  development, and engineering expenses, which
resulted  from  a  $900,000 charge associated with the acquisition of in-process
technology  related  to  the  transmission  of  clinical  data.

     Interest  expense  decreased during fiscal 1998 due to no borrowings on the
line  of  credit  during the year.  Interest income increased during fiscal 1998
due  to higher cash balances on hand throughout the year.  Equity in the loss of
investments  relates  to  a  $120,000 advance provided to Immtech International,
Inc.

LIQUIDITY  AND  CAPITAL  RESOURCES

     In  fiscal  1999, we generated $465,577 from operating activities, $256,413
from  the mortgage refinancing discussed below, and $10,313 from the exercise of
stock  options.  We  used $92,776 for the retirement of long-term debt, $515,017
for  capital  expenditures,  $150,000  for  the purchase of stock and intangible
assets  from Immtech International, Inc., and $193,430 for the repurchase of our
common stock.  These sources and uses of cash resulted in net negative cash flow
of  $218,920  for  the  1999  fiscal  year.

     During  the  six  months  ended  December  31,  1999, we used $2,543,154 in
operating  activities,  generated  $2,182,788 from investing activities and used
$36,244 in financing activities.  These sources and uses of cash resulted in net
negative  cash  flow  of  $396,610  for  the first six months of fiscal 2000. At
December 31, 1999, we had a cash balance of approximately $2.1 and no short-term
borrowings.  Our  negative cash flow resulted primarily from the settlement of a
long-standing lawsuit.  Proceeds for this settlement were obtained from the sale
of 500,000 shares of Immtech stock for $2.5 million in a private placement sale.

                                        8
In  March  1999,  we  refinanced  our  mortgage  note  on  our  office  and
manufacturing  facility.  The  new  mortgage  note requires monthly debt service
payments  of  approximately  $28,000  with a final payment of approximately $3.0
million  due  in  April  2004.

     We  expect  our  continued  programs  to  increase  accounts  receivable
collections,  decrease  inventory  levels  and  stabilize  sales  demonstration
equipment  levels  will have a positive effect on cash flow activities in fiscal
2000.  Additionally, we believe the cost reductions implemented during the first
quarter  of  1999  will  have  a  positive  impact  on the cash flow activities.
Consequently,  we  believe  our  research  and  development activities and other
capital  and  liquidity  requirements  for  the  next  one  to two years will be
satisfied  by cash generated from operations and other borrowings.  We also have
access  to  a commercial bank line of credit of up to $4.0 million.  At December
31,  1999,  there  were  no  borrowings  outstanding  on the line of credit.  We
violated  a  covenant related to maintaining a certain tangible net worth amount
and  achieving  certain  income  levels.  The  bank  waived compliance with this
covenant  subsequent  to  year  end.  This  line  expires  in  November  2001.

     We  currently  hold an investment in Immtech International, Inc.  Immtech's
common  stock  is  currently  traded  on the Nasdaq SmallCap Market.  As part of
Immtech's  initial public offering, we signed a lock-up agreement.  All terms of
the  lock-up  have  been met other than the holding period which continues until
April  2000.

YEAR  2000

     We  have  addressed  company-wide Year 2000 readiness.  The Year 2000 issue
relates  to computer hardware and software and other systems designed to use two
digits  rather than four digits to define the applicable year.  As a result, the
Year  2000  would be translated as two zeroes.  Because the Year 1900 could also
be  translated  as  two zeroes, systems which use two digits could read the date
incorrectly  for  a number of date-sensitive applications resulting in potential
calculation  errors  or  the  shutdown  of  major  systems.  We have updated our
internal  computer  software,  other  information technology and other operating
systems  for  the  purposes of Year 2000 compliance.  We also addressed the Year
2000  compliance  of  our new and existing products.  We substantially completed
our  Year 2000 compliance plan during November 1999 and the costs to become Year
2000  compliant  were  not  material  to  our  financial condition or results of
operations.

     Our  operations may also be adversely affected to the extent that suppliers
and other third parties are not Year 2000 compliant.  A number of risks relating
to  the Year 2000 issue may be out of our control, including reliance on outside
links  for essential services such as communications and power.  There can be no
assurance  that  a  failure of systems of third parties on which our systems and
operations  will rely to be Year 2000 compliant will not have a material adverse
effect  on  our  business,  financial  condition  or  operating  results.

     As of the date of this prospectus, we are not aware of any significant Year
2000 issues with respect to our internal systems or the systems of our suppliers
or  other  third  parties  with  whom  we  transact  business.

                                        9
QUARTERLY  RESULTS

     The  following  table  contains  quarterly  information, which includes all
adjustments,  consisting  only of normal recurring adjustments, that we consider
necessary  for  a  fair  presentation.  We  recorded  a  charge of approximately
$1,800,000  for  settlement  costs  related  to a lawsuit that was substantially
resolved  in  the  quarter  ended June 30, 1999 and a charge of $900,000 for the
purchase  of  patented  technology  in the quarter ended June 30, 1998.  We also
recorded  gains  of  $1,760,000  in  the  quarter  ended  September 30, 1999 and
$740,000  in  the quarter ended December 31, 1999 relating to sales of shares of
Immtech  International,  Inc.  stock.  These  items  were  unusual, nonrecurring
adjustments.
Quarters Ended
                          Sept. 30,     Dec. 31,   March 31,    June 30,    Sept. 30,    Dec. 31,    March 31,    June 30,
                            1997          1997        1998        1998        1998         1998        1999         1999
                                                     (in thousands, except per share data)
Net sales . . . . . .  $         7,544  $   7,138  $    6,279  $   6,947   $    6,724   $   7,290   $    7,276   $   7,223
Gross profit. . . . .            3,506      3,273       2,919      3,340        3,259       3,562        3,379       2,784
Income (loss) from
  operations. . . . .              586        422          70       (772)        (214)       (880)        (486)     (2,308)
Net income (loss) . .              172        132          19       (822)        (420)       (947)        (681)     (2,340)
Net income (loss)
   per common
   share-Basic. . . .              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
        -Diluted. . .              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
Quarters Ended
                         Sept. 30,            Dec. 31,
                           1999                 1999
                     (in thousands, except per share data)
Net sales. . . . . .  $          6,603  $          6,901
Gross profit . . . .             2,989             3,142
Income (loss) from
  operations . . . .               157              (215)
Net income . . . . .             1,880               498
Net income
   per common
   share-Basic . . .               .22               .06
        -Diluted . .               .21               .06
We  typically receive a substantial volume of our quarterly sales orders at
or  near  the  end  of  each  quarter.  In anticipation of meeting this expected
demand, we usually build a significant inventory of finished products throughout
each quarter.  If the expected volume of sales orders is not received during the
quarter, or is received too late to allow us to ship the products ordered during
the  quarter,  our  quarterly  results  and  stock  of finished inventory can be
significantly  affected.

                                       10
BUSINESS

     We  design,  manufacture  and  market  vital  signs  and  gas  monitoring
instruments  and  related  noninvasive  sensors used to monitor patients in many
healthcare  environments.

     Since  a  patient's  oxygen,  anesthetic  gas and carbon dioxide levels can
change  dramatically  within  minutes,  causing  severe  side  effects or death,
continuous  monitoring  of  these  parameters  is  increasing.  Our  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous  patient  information  to  the clinician.  Our products also allow
hospitals  to  contain  costs  primarily by substituting cost-effective reusable
pulse  oximetry  sensors  for  disposable sensors, controlling the use of costly
anesthetics  and  increasing  personnel  productivity.

     To  meet  the needs of end-users in a wide variety of patient environments,
we  have developed a broad line of patient monitors which combine one or more of
our  patented  or  other  proprietary  technologies  for  monitoring:

-     oxygen  saturation;
-     carbon  dioxide;  and
-     anesthetic  agents,

with  standard  monitoring  technologies  that  provide:

-     electrocardiogram;
-     invasive  and  noninvasive  blood  pressures;
-     temperature;
-     heart  rate;  and
-     respiration  rate.

     In  addition, our VitalView telemetry system allows one nurse to monitor up
to  eight  patients  simultaneously  from  a  convenient central location.  This
allows  hospitals  to  move  out  of the intensive care unit those patients that
require  continuous  monitoring, but do not need all of an intensive care unit's
extensive  and  costly  personnel  and  equipment  resources.

PRODUCTS

     We market a broad range of vital signs and gas monitoring products designed
to  address  the  needs  of  a  variety  of  end-users  in  different  patient
environments.  Our  monitors  display  information  graphically and numerically.
All  of our monitors incorporate adjustable visual and audible alarms to provide
reliable  patient-specific  warnings  of  critical  conditions,  and most of our
monitors  record  up to 60 hours of trend data.  Our monitors are available with
printer  capability  to  provide  permanent  records  of  patient  data.

     Model  503,  503DX,  504  and  504DX.  Our complete line of pulse oximeters
     ------------------------------------
meets  the  needs  of  virtually  all  clinical  environments,  including:

-     adult,  pediatric  and  neonatal  intensive  care  units;
-     operating  rooms;
-     emergency  rooms;
-     nursing  homes;
-     physicians'  offices;  and
-     ambulances.

                                       11
Our  pulse oximeter line is designed to provide accuracy and convenience at
a  competitive  cost  to  the  end-user.

     Model  506DX  and  507E  Patient Monitors.  The 507E series is comprised of
     -----------------------------------------
small,  compact, portable, full-featured vital signs monitors configured to meet
specific  clinical  needs.  The  507E  series  is  well-suited  for  dental  and
physician  offices.  The  506DX  is  ideal  for  patient  ward  monitoring  of
noninvasive  blood pressure.  The 507E series combines electrocardiogram, oxygen
saturation and noninvasive blood pressure for a complete vital signs monitor for
physician  office  and  hospital  applications.  The 507E series is an effective
low-cost  monitoring  system  for  the  emergency  room  or  the  recovery room.

     Scholar (TM). The Scholar monitor series specifically addresses  the  needs
     -----------
of small hospitals with broad  clinical  needs,  including  the  monitoring  of:

-     electrocardiogram;
-     blood  oxygen  saturation;
-     noninvasive  blood  pressure;
-     temperature;  and
-     invasive  blood  pressure.

     Scholar  offers  all  the  primary  features  a  hospital  needs  with  the
capability  of  adding more features if desired.  Scholar monitors are available
with  printer  and  recorder  capability  and can transmit data to our VitalView
Central  Stations.

     Model  1100  Anesthesia  Monitor.  The  Model 1100 monitor provides patient
     --------------------------------
monitoring  for  a  wide variety of cardio-pulmonary parameters in an integrated
system.  The  Model  1100  is  able  to  monitor:

-     two  electrocardiogram  waveforms;
-     noninvasive  blood  pressure;
-     three  types  of  invasive  blood  pressure;
-     respiration  rate;
-     heart  rate;
-     temperature;
-     oxygen  saturation;
-     inspired/expired  oxygen;  and
-     carbon  dioxide  and  anesthetic  gases.

     The Model 1100 uses our proprietary disposable respiratory secretion filter
system.

     Model  602-3B,  602-6B,  602-11  and  602-13  Gas Monitors.  The 602 series
     ----------------------------------------------------------
provides  monitoring  of  carbon  dioxide,  pulse oximetry and anesthetic agents
using  our proprietary infrared technology.  The 602 IQ series of operating room
monitors  provides  automatic  identification  and  quantification  of  all five
approved  anesthetic  agents.

     Model  4400  Series  Blood  Pressure,  Pulse  Oximetry  and  Temperature
     ------------------------------------------------------------------------
Combination  Monitor.  The 4400 series monitor was developed in conjunction with
     ---------------
Alaris  Medical  and  incorporates  our  oximetry and noninvasive blood pressure
technology  with  Alaris's  temperature  technology.  Alaris  has  the rights to
market  the Model 4400 monitor to hospitals in the United States and Canada.  We
have  rights  to  market  the  product  to  the  alternate  care  market  and to
international  markets.

     Model 602-14 POET (TM) LT Monitor.  The hand-held  POET  LT  provides small
     ---------------------------------
hospitals  and alternate care environments with compact, portable carbon dioxide
monitoring.  The  POET  LT series is an effective, low-cost functioning solution
for  these  environments.

                                       12
VitalView (TM). The VitalView central station makes  it  possible  for  one
     -------------
nurse or technician to monitor numerous patients simultaneously.  The  VitalView
can  receive,  display  and  store  data  from  a  wide  variety of our monitors
including  the  Scholar,  507E  and  MPT.

     MPT (TM).  The  MPT  (Multiple  Parameter  Telemetry)  monitor  allows  the
     --------
transmission  of  vital  signs  (electrocardiogram,  blood oxygen saturation and
noninvasive  blood pressure) on a real time basis to a VitalView central station
while  the  patient is ambulatory.  In today's healthcare environment, hospitals
benefit  by  moving patients from expensive critical care departments as quickly
as  possible  to  less  expensive  general  nursing floors.  MPT, because of its
complete  monitoring  capability  and  its  lower cost, allows the patient to be
ambulatory  while  still  being  monitored  for  all  vital  signs.

     Pulse  Oximetry Sensors.  We have designed proprietary, noninvasive sensors
     -----------------------
that  can be used on any patient, from a premature infant to a full-grown adult.
Our  line  of  reusable  pulse  oximetry  sensors  offers users significant cost
savings  compared  to  disposables.  Our  reusable sensors generally last longer
than  the  one-year  warranty  period  and  are easily and inexpensively cleaned
between  uses.  Our  reusable  sensors  include  a  finger  sensor  for  routine
applications  and  a  multisite sensor for increased placement flexibility.  The
multisite  sensor  is  fully  immersible,  allowing  for  sterilization  between
patients.  We also sell a range of disposable sensors designed for single use in
cases  where  the  facility  would  prefer  to  use  a patient charge disposable
product.

     Water  Chek/Chek-Mate  Filter  System.  Our patented, disposable Water Chek
     -------------------------------------
system  separates a patient's respiratory secretions from a breath sample before
it  enters  the  gas  monitor(s)  for  analysis.  Our  proprietary,  disposable
Chek-Mate  filter  enhances  the  removal  of  moisture  from  the sample, while
preventing  cross-contamination.  This  system  allows  the  monitor  to operate
effectively  regardless  of  humidity  or  patient  condition.  The self-sealing
feature  also  protects  the  healthcare  provider from potential contamination.

MARKETING  AND  SALES

     Domestic  Sales.  At  November 30, 1999, our domestic sales force consisted
     ---------------
of  18  employees  and  75 independent dealers.  Our sales force and independent
dealers  market  our products to many different types of medical facilities such
as hospitals, surgery centers, nursing homes and physician offices.  We sell our
higher-end  monitors,  MPT,  Vital  View  Central  Station  and anesthetic agent
monitors,  principally  to hospitals whereas the vital signs and pulse oximeters
are  sold  primarily  for  nonhospital  settings.

     International Sales.  One of our principal marketing strategies has been to
     -------------------
target international markets, particularly Europe, Latin America and the Pacific
Rim  countries.  During  fiscal  1999,  we  sold  our  products,  principally to
hospitals,  in  over 75 countries through over 140 independent dealers.  Most of
our  international  order processing, invoicing, collection and customer service
functions are handled directly from our headquarters in Waukesha, Wisconsin.  We
believe  demand for our products in international markets is primarily driven by
cost  containment  concerns,  and  increased  interest  in using quality patient
monitoring  products  for  improved  patient  management.

     In fiscal 1999, 37% of our net sales, or $10.5 million, was attributable to
international  sales,  of  which  approximately:

-     44%  was  from  sales  in  Europe  and  the  Middle  East;
-     21%  was  from  sales  to  Pacific  Rim  countries;  and
-     35%  was  from  sales  to  Canada  and  Central  and  South  America.

     In  fiscal  1998,  46%  of  our net sales was attributable to international
sales.  In  fiscal  1997,  51% of our net sales was attributable to exports.  We
have  no  material  identifiable assets located in foreign markets.  We sell our
products  in  United  States dollars and are not subject to significant currency
risks.  However,  an  increase in the value of the United States dollar relative
to  foreign  currencies  could make our products less price competitive in those
markets.  In  addition,  significant  devaluation  of certain foreign currencies
could  adversely  affect  the

                                       13
collectibility  of accounts receivable from international customers.  We analyze
this  risk  before  making  shipments  to  countries  we  view  as  unstable.

     Clinical Support.  At November 30, 1999, we employed three clinical support
     ----------------
specialists  to  provide  customer training and education, primarily to domestic
hospitals.  The clinical support staff also assists in the periodic training and
education  of  the  direct sales force.  In addition, the clinical support staff
maintains  contact  with end-users and provides additional training and updates.
Clinical  support  in  foreign markets is provided by our clinical support staff
and  direct  sales  force.

     Warranty and Service.  We believe that customer service is a key element of
     --------------------
our  marketing program.  Our monitors and reusable sensors are warranted against
defects  for  one  year.  If  a  problem develops with a Criticare product while
under warranty, we typically provide a replacement unit until the product can be
repaired at our facility.  At November 30, 1999, we had a customer service staff
of  16 people at our Waukesha, Wisconsin facility.  We offer extended warranties
and  service  contracts  on  all  of  our  monitors.

MANUFACTURING

     We  continually  strive  to  implement  manufacturing  efficiencies  while
maintaining  product  quality  and  reliability.  Our  oximeters and sensors are
assembled  from  off-the-shelf  components  and  other  parts  produced  to  our
specifications,  such  as  printed circuit board assemblies, custom transformers
and sensor cable/connector subassemblies.  However, we produce certain important
components  in-house.  All  electronic  components  are  subjected  to a 24-hour
high-temperature burn-in to eliminate early component failure.  Some subassembly
is  performed  by  subcontractors,  but  final  assembly and quality control are
performed  at  our  facility.  We  maintain  test  and  inspection procedures to
minimize  errors  and  enhance the operating reliability of our products.  Final
test  procedures  on  fully  assembled  units  include an operational test and a
continuous  72-hour  burn-in  procedure.

     Some of our products incorporate components currently purchased from single
sources.  While we believe these components are available from alternate sources
on  reasonable  terms,  an  interruption  in  the  delivery  of  these  or other
components  could  harm us.  In order to reduce the risk of supply interruption,
we  maintain  inventories  of  important  components.  However,  we  have  been
experiencing a severe shortage of LC monitors during the third quarter of fiscal
2000  which  we expect to delay international shipments of our new product line.

     The  ISO  9000  series  of  quality  management and assurance standards was
developed by the International Organization for Standardization and published in
1987.  In  1993  the  European  Community  was  formed  with  the signing of the
Maastricht  Treaty  by 12 European countries.  One of the many standards adopted
by  this  group  is  the  ISO  9000  international quality assurance and quality
management  series  under the designation EN2 9000.  Based on this action by the
European Community and specific requirements from European customers, we believe
ISO  9000  registration  will  be  required to compete in European Community and
other  international  markets  as an indication of compliance with international
quality  management  and  assurance  standards.  In  July 1994 the Food and Drug
Administration  announced  its  intention  of harmonizing the ISO 9000 standards
with  its  Medical  Device  Good  Manufacturing  Practices.  We  have  achieved
certification  under  ISO  9001  and  9002  standards.  See  "Regulation."

RESEARCH,  DEVELOPMENT  AND  ENGINEERING

     We  have  focused  our research development and engineering expenditures on
products  designed  to  meet  identified  market  demands.  We seek to apply our
expertise  in  gas  monitoring  and  related  sensor  technology  to develop new
products  and adapt existing products for new markets.  At November 30, 1999, we
had  an  in-house research, development and engineering staff of 23 people.  Our
research,  development  and engineering expenditures were $3.0 million in fiscal
1999,  $3.3  million  in  fiscal  1998  and  $2.3  million  in  fiscal  1997.

                                       14
COMPETITION

     The  markets  for  our  products  are  highly  competitive.  Many  of  our
competitors,  including  our  principal  competitors  described  below,  have:

-     greater  financial  resources;
-     more  established  brand  identities  and  reputations;
-     longer  histories  in  the  medical  equipment  industry;  and
-     larger  and  more  experienced  sales  forces.

     In  these  respects,  our competitors may have a competitive advantage over
us.  We  compete  primarily  on  the  basis of product features, the quality and
value  of  our  products  (i.e.,  their  relative  price compared to performance
features provided) and the effectiveness of our sales and marketing efforts.  We
believe  that  our  principal  competitive  strengths  are  provided  by:

-     our  focus  on  cost  containment;
-     our patented and other proprietary technology and software for noninvasive
      continuous monitoring of oxygen,  anesthetic  gases,  carbon  dioxide  and
      noninvasive  blood  pressure;
-     our  cost-efficient  manufacturing;
-     the  efficiency  and  speed  of  our research and development efforts; and
-     our  established  international  presence.

     The  principal  competing  manufacturers  of  pulse  oximeters  are Nellcor
Puritan  Bennett, a unit of Mallinckrodt Inc., and Datex/Ohmeda, a United States
subsidiary  of  Instrumentarium OY, a Finnish company.  We estimate that Nellcor
has  captured  a  majority  of  the  worldwide  pulse  oximeter market, and that
Datex/Ohmeda  and  Criticare  have  each  captured  significant  portions of the
worldwide  pulse  oximeter  market.  In  addition,  there are approximately four
other  companies  which  compete  in  the  market  for pulse oximeters.  We also
indirectly  compete  with  manufacturers  of  numerous  other  medical equipment
products  for  limited  customer  funds.

     We  believe  that the worldwide anesthetic agent and carbon dioxide monitor
markets  are  comparatively  fragmented,  with  Datex/Ohmeda  as  the  principal
competitor.  Our  principal  competitors  in  the  domestic  gas  monitor market
include  Datex/Ohmeda  and  Hewlett-Packard Company.  The market for vital signs
monitors  includes  competitors  such  as Hewlett-Packard Company, Siemens A.G.,
Datex/Ohmeda  and  SpaceLabs,  Inc.,  a  subsidiary  of  Westmark  International
Incorporated.

     We  believe  that  our  principal  competitors  in  Western  Europe include
Datex/Ohmeda  and  that  we  have  a  significant  share of this market.  In the
Pacific  Rim  countries, we believe that Datex/Ohmeda is the leading competitor.

REGULATION

     As  a manufacturer of medical diagnostic equipment, we are regulated by the
Food  and  Drug  Administration  and  similar foreign governmental agencies.  In
producing  our products, we must comply with a variety of regulations, including
the  good  manufacturing  practices  regulations  of  the  Food  and  Drug
Administration.  In  addition,  we  are  subject to periodic inspections by this
agency.  If  the  Food  and  Drug  Administration  believes  that  its  legal
requirements  have  not  been  fulfilled,  it  has extensive enforcement powers,
including  the ability to ban or recall products from the market and to prohibit
the  operation of manufacturing facilities.  We believe our products comply with
applicable  Food  and  Drug Administration regulations in all material respects.
In  addition,  we received ISO 9002 certification on April 29, 1993 and ISO 9001
certification  on  July  8,  1994.

     Under  the  Federal  Food,  Drug  and Cosmetic Act, as amended, all medical
devices  are  classified  as  Class I, Class II or Class III, depending upon the
level  of  regulatory control to which they will be subject.  Class III devices,
which  are the most highly controlled devices, are subject to premarket approval
by  the  Food  and  Drug  Administration prior to commercial distribution in the
United  States.

                                       15
Our  current  products  have  not  been  subject  to  the  Food  and  Drug
Administration's  comprehensive  premarket  approval  requirements,  but  are
generally  subject  to  premarket notification requirements.  If a new device is
substantially  equivalent  to  a device that did not require premarket approval,
premarket  review  is  satisfied  through  a  procedure  known  as  a  "510(k)
submission,"  under  which the applicant provides product information supporting
its claim of substantial equivalence.  The Food and Drug Administration may also
require  that  it  be  provided with clinical trial results showing the device's
safety  and  efficacy.

     We  believe that the products we are currently developing generally will be
eligible for the 510(k) submission procedure and, therefore, will not be subject
to  lengthy  premarket  approval  procedures.  However, these products are still
being  developed  and  we  can  make  no  assurance  that  the  Food  and  Drug
Administration  will  determine  that  the  products  may  be  marketed  without
premarket  approval.

     We  seek,  where  appropriate,  to  comply  with  the  safety  standards of
Underwriters'  Laboratories  and  the  Canadian  Standards  Association  and the
standards  of  the  European  Community.  To  date,  we  have  not  experienced
significant  regulatory expense or delay in the foreign markets in which we sell
our  products.  Industry and professional groups such as the American Society of
Anesthesiologists,  to  the  extent  they have the power to mandate practices or
procedures  as part of their profession's standard of care, are also a source of
indirect  regulation  of  our  business.

PATENTS  AND  TRADEMARKS

     We  believe  one of our principal competitive advantages is provided by our
patented  and  other  proprietary  technology,  including  our:

-     sensor  technology;
-     infrared  specific  anesthetic  gas  monitoring  technology;
-     UltraSync  signal  processing  software;  and
-     disposable  respiratory  secretion  filter  system.

     None  of  our  U.S. patents expire before 2004.  We also have three foreign
patent  applications  pending.  There  is  no assurance that any patents held or
secured  by  us will provide any protection or commercial or competitive benefit
to  us.  There  is  also  no  assurance that our products will not infringe upon
patents  held  by  others.  We  are  the  owner  of  United  States  trademark
registrations  for  "POET"  and  "Scholar."

     We  also  rely  upon trade secret protection for certain of our proprietary
technology.  Although  we require our employees having access to our proprietary
information  to  sign  confidentiality agreements, we can make no assurance that
such  agreements  can  be  effectively  enforced  or  that  others  will  not
independently  develop  substantially  equivalent  proprietary  information  and
techniques  or  otherwise  gain  access  to  or  disclose  our  trade  secrets.

EMPLOYEES

     At  November  30,  1999  we  had  105  employees,  including:

-     41  in  manufacturing  and  operations;
-     6  in  quality  control;
-     22  in  sales  and  marketing;
-     13  in  administration;  and
-     23  in  research,  development  and  engineering.

     Many  of  our  technical employees are highly skilled.  We believe that our
continued  success  depends  in  part  on  our  ability  to  continue to attract
qualified  management,  marketing  and  technical  personnel.  None  of  our

                                       16
employees are subject to a collective bargaining agreement.  We believe that our
relations  with  our  employees  are  good.

BACKLOG

     Our backlog was approximately $1,836,000 on June 30, 1999 and approximately
$1,342,000  on June 30, 1998.  The backlog at these dates consisted primarily of
products  for  which  the  sales  order  specified  a delayed delivery date.  We
generally  deliver our products out of inventory when specified by the customer.
We  do  not  believe  that  our  backlog at any date is indicative of our future
sales.

DESCRIPTION  OF  PROPERTY

     In  November  1992,  we  purchased  a  new  60,000 square foot facility for
approximately  $4.5  million  as  our  headquarters in Waukesha, Wisconsin.  Our
mortgage  calls  for  monthly  installments  of  principal  and  interest  of
approximately  $28,000  and  a  final  "balloon"  payment  of approximately $3.0
million  in  April  2004.  We  believe  this  facility  will be adequate for the
foreseeable  future.

LEGAL  PROCEEDINGS

     In  July,  1999,  Criticare  and  Dynamic Options Corporation, Inc. settled
pending legal proceedings.  We agreed to make a cash payment to Dynamic, sell on
behalf  of  Dynamic  a  portion  of the shares we hold in Immtech International,
Inc.,  issue  to Dynamic 150,000 shares of our common stock and transfer certain
inventory  related to telemetry products no longer sold by us.  In January 2000,
Criticare  and  Dynamic  agreed that we would make an additional cash payment to
Dynamic  in  lieu  of issuing to Dynamic the 150,000 shares of our common stock.

     In  the  normal course of business we also may be involved in various legal
proceedings  from  time to time.  We do not believe we are currently involved in
any  claim  or  action  the  ultimate disposition of which would have a material
adverse  effect  on  us.  We mitigate product liability claims through insurance
coverage.

                                       17
MANAGEMENT

DIRECTORS  AND  OFFICERS

     The  following  table  sets  forth  information regarding our directors and
executive  officers:
NAME                       AGE  TITLE
-------------------------  ---  ------------------------------------------------
Karsten Houm (1)(2)         53  Chairman of the Board and Director

Emil H. Soika               61  President, Chief Executive Officer and Director

Gerhard J. Von der Ruhr     58  Director

N.C. Joseph Lai, Ph.D       57  Director

Milton Datsopoulos (1)(2)   59  Director

Mark Ruehle                 38  Vice President-Finance and Secretary

Stephen D. Okland           57  Vice President-Domestic Sales

Drew M. Diaz                36  Vice President-International Sales

Michael T. Larsen           40  Vice President-Quality Control/Quality Assurance

Joseph Lester               49  Vice President-Operations
______________________
(1)     Member  of  Audit  Committee.
     (2)     Member  of  Compensation  Committee.
KARSTEN  HOUM,  CHAIRMAN OF THE BOARD AND DIRECTOR.  Mr. Houm has served as
our Chairman of the Board since November 1998 and as a Director since 1985.  Mr.
Houm  also  currently  works as a management consultant.  From September 1985 to
1997,  Mr.  Houm  served  as  President of Unitor, a Norwegian shipping company.

     EMIL  H. SOIKA, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR.  Mr. Soika
has served as our President, Chief Executive Officer and Director since November
1998.  From  November 1995 to September 1998, Mr. Soika served as Vice President
and  General  Manager  of  Spacelabs  Medical  Systems, a medical monitoring and
clinical  information  systems company.  From March 1991 to July 1995, Mr. Soika
served as President and Chief Executive Officer of Block Medical, a manufacturer
of  intravenous  dispensers.  Mr.  Soika is a director of Immtech International,
Inc.,  a  company  engaged  in  the  research and development of products in the
fields  of  biochemistry  and  immunology.

     GERHARD  J.  VON  DER  RUHR,  DIRECTOR.  Mr.  Von  der Ruhr has served as a
Director  since  1984.  Mr. Von der Ruhr is Chairman of O.B. Scientific, Inc., a
medical  technology  company.  Mr.  Von der Ruhr is our co-founder and served as
our  Chairman,  President (CEO) and Treasurer from our inception in October 1984
until  November  1998.

                                       18
N.C.  JOSEPH  LAI, PH.D., DIRECTOR.  Dr. Lai has served as a Director since
1984.  Dr. Lai is a management consultant.  Dr. Lai is our co-founder and served
as  our Vice Chairman and as an officer from our inception in October 1984 until
November  1998.

     MILTON  DATSOPOULOS,  DIRECTOR.  Mr.  Datsopoulos  has served as a Director
since  1986.  Mr. Datsopoulos has been a partner in the law firm of Datsopoulos,
MacDonald & Lind in Missoula, Montana since 1974.  Mr. Datsopoulos is a director
of  Montana  Naturals  Int'l,  Inc., a manufacturer of natural food products and
nutritional  supplements,  Kafus  Environmental  Industries  Ltd., a producer of
consumer  and  industrial  waste  recycling  technology,  and  Leigh  Resource
Corporation,  a  company  engaged  in  mineral  exploration  and  development.

     MARK  RUEHLE,  VICE PRESIDENT-FINANCE AND SECRETARY.  Mr. Ruehle has served
as  our  Vice  President-Finance  and  Secretary  since February 2000.  Prior to
joining  us,  Mr.  Ruehle  was  Senior  Manager  of  Finance for AmeriServe Food
Distribution,  Inc.  from  December  1992  to  June  1999.

     STEPHEN D. OKLAND, VICE PRESIDENT-DOMESTIC SALES.  Mr. Okland has served as
one  of  our  Vice  Presidents  since  May  1988.

     DREW  M.  DIAZ, VICE PRESIDENT-INTERNATIONAL SALES.  Mr. Diaz served as our
Regional Sales Manager for the Middle East and Western Europe from 1993 until he
was  appointed  Director  of  International  Sales  in  1995.  Mr. Diaz was most
recently  promoted  to Vice President-International Sales in 1997.  From October
1996  until  August 1997, Mr. Diaz also served as Geschaeftsfuehrer of Criticare
International  GmbH  Marketing  Services,  our wholly-owned subsidiary which was
dissolved  in  1998  following  bankruptcy  proceedings  under  German  law.

     MICHAEL  T.  LARSEN, VICE PRESIDENT-QUALITY CONTROL/QUALITY ASSURANCE.  Mr.
Larsen  has served as our Vice President-Quality Control/Quality Assurance since
September  1990.

     JOSEPH  LESTER,  VICE  PRESIDENT-OPERATIONS.  Mr.  Lester has served as our
Vice  President-Operations  since January 2000.  Prior to joining us, Mr. Lester
was  Vice President-Operations for Siemens Medical Systems, Inc. from April 1997
to  January  2000.  From  1993  to  1997,  Mr.  Lester  was  Senior  Director of
Operations  for  Spacelabs  Medical  Systems.

BOARD  OF  DIRECTORS

     Our  Board of Directors consists of five members.  Our By-laws provide that
our  Board  of  Directors  will  be  divided into three classes, with each class
serving  staggered  three year terms.  Karsten Houm and Emil H. Soika will stand
for  re-election at the 2000 annual meeting of stockholders.  Milton Datsopolous
will  stand for re-election at the 2001 annual meeting of stockholders.  Gerhard
J.  Von  der  Ruhr  and  N.C.  Joseph Lai will stand for re-election at the 2002
annual  meeting  of  stockholders.

COMPENSATION  OF  DIRECTORS

     Our  Directors  are  reimbursed  for  out-of-pocket  expenses  incurred  in
attending  meetings  of  the  Board of Directors.  Our Directors receive no cash
directors'  fees.  During  fiscal  1999,  we  granted:

-     200,000  stock  options  to  Mr.  Soika;
-     22,500  stock  options  to  each  of  Mr.  Houm  and  Mr. Datsopoulos; and
-     regranted  77,500  stock  options  to each of Mr. Houm and Mr. Datsopoulos
      through  the  repricing  of  options  on  December  11,  1998.

                                       19
EXECUTIVE  COMPENSATION

     Cash  and  Other Compensation.  The following table sets forth compensation
information  for  the three fiscal years ended June 30, 1999 with respect to the
two persons who served as our Chief Executive Officer during fiscal 1999 and our
two  other  executive  officers  whose salary exceeded $100,000 for fiscal 1999.
The  persons  listed  below  are sometimes referred to in this prospectus as the
"named  executive  officers."
SUMMARY COMPENSATION TABLE
                                                                                     LONG-TERM
                                     ANNUAL COMPENSATION                            COMPENSATION
                                     -------------------                           ---------------
                                                                                       AWARDS:
                                                                                     SECURITIES
NAME AND                                                      OTHER ANNUAL           UNDERLYING        ALL OTHER
PRINCIPAL POSITION          YEAR             SALARY($)        COMPENSATION($) (1)  OPTIONS/SARS (#)  COMPENSATION($)
--------------------------  ---------------  ---------------  -------------------  ----------------  ---------------
Emil H. Soika,              1999                  78,125                       --       200,000               --
  President, Chief
  Executive Officer and
  Director (2)

Gerhard J. Von der Ruhr,    1999                  60,000                    1,915            --          593,646 (4)
  Chairman of the Board,    1998                 144,000                      958            --           56,838 (4)
  President (CEO) and       1997                 144,000                      957            --           56,620 (4)
  Treasurer (3)

Stephen D. Okland,          1999                 277,576 (5)                6,000        43,500 (6)        3,701 (7)
  Vice President-Domestic   1998                 302,628 (5)                6,000            --            3,690 (7)
  Sales                     1997                 253,706 (5)                6,000        10,000            3,441 (7)

Drew M. Diaz,               1999                 165,609                    1,915       100,000 (8)        1,882 (9)
  Vice President-           1998                 188,292                      638            --               86 (9)
  International Sales       1997                 180,717                    8,223        50,000            3,226 (9)
_____________________
(1)     The  amounts  represent  automobile  allowance  payments.

(2)     Mr.  Soika  commenced  employment  with  us  in  November  1998.

(3)     Mr.  Von  der  Ruhr  resigned  as our Chairman of the Board, President (CEO) and Treasurer in November 1998.

(4)     For  fiscal  1999,  represents  $50,396  of premiums we paid on two life insurance policies, the proceeds of
which  are  payable to the beneficiary of Mr. Von der Ruhr, $2,760 of our contributions to the 401(k) plan on behalf
of  Mr. Von der Ruhr and $540,490 paid or accrued for severance.  For fiscal 1998, represents $53,638 of premiums we
paid  on  two life insurance policies, the proceeds of which are payable to the beneficiary of Mr. Von der Ruhr, and
$3,200  of  our contributions to the 401(k) plan on behalf of Mr. Von der Ruhr.  For fiscal 1997, represents $53,620
of  premiums we paid on two life insurance policies, the proceeds of which are payable to the beneficiary of Mr. Von
der  Ruhr,  and  $3,000  of  our  contributions  to  the  401(k)  plan  on  behalf  of  Mr.  Von  der  Ruhr.

(5)     Represents  commissions  we  paid  to  Mr.  Okland  based on a percentage of our domestic sales.  Mr. Okland
receives  no  fixed  salary.

                                       20
(6)     Represents  30,000  stock options granted in fiscal 1999 and 13,500 stock options regranted due to repricing
of  options  on  December  11,  1998.

(7)     For  fiscal  1999, represents $501 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,200 of our contributions to the 401(k) plan on behalf of Mr.
Okland.  For  fiscal 1998, represents $490 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,200 of our contributions to the 401(k) plan on behalf of Mr.
Okland.  For  fiscal 1997, represents $441 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary  of  Mr.  Okland,  and $3,000 of our contributions to the 401(k) plan on behalf of Mr.
Okland.

(8)     Represents  34,000  stock options granted in fiscal 1999 and 66,000 stock options regranted due to repricing
of  options  on  December  11,  1998.

(9)     For  fiscal  1999, represents $101 of premiums we paid on a life insurance policy, the proceeds of which are
payable  to  the  beneficiary of Mr. Diaz, and $1,781 of our contributions to the 401(k) plan on behalf of Mr. Diaz.
For fiscal 1998, represents $86 of premiums we paid on a life insurance policy, the proceeds of which are payable to
the  beneficiary  of  Mr. Diaz.  For fiscal 1997, represents $3,226 of premiums we paid on a health insurance policy
while  Mr.  Diaz  was  a  resident  of  Europe,  the  proceeds  of which are payable to the beneficiary of Mr. Diaz.
Options  Granted  During  Fiscal  1999.  The  following  table  provides
information  regarding  stock  options  granted  to our named executive officers
during  the  fiscal  year  ended  June  30,  1999.

                        OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF        % OF TOTAL
                         SECURITIES     OPTIONS/SARS
                         UNDERLYING     GRANTED TO
                         OPTIONS/SARS   EMPLOYEES IN  EXERCISE PRICE   EXPIRATION
NAME                     GRANTED (#)    FISCAL YEAR           ($/ SH)  DATE
-----------------------  -------------  ------------  ---------------  ----------
Emil H. Soika                  100,000           9.0           1.6875     2/23/04
                               100,000           9.0           1.5000     3/10/04

Gerhard J. Von der Ruhr             --            --               --          --

Stephen D. Okland               30,000           2.7           1.8750    12/11/03
                                10,000             *           1.8750    10/08/00
                                 3,500             *           1.8750    12/31/01

Drew M. Diaz                    34,000           3.1           1.5000     3/10/04
                                 2,000             *           1.8750     1/25/00
                                 4,000             *           1.8750    12/31/01
                                10,000             *           1.8750    10/08/00
                                50,000           4.5           1.8750     1/23/02
*     Less  than  1%
21
Fiscal  Year-End  Option  Values.  The following table shows the fiscal year-end
value  of unexercised options held by the named executive officers.  None of the
named  executive  officers  exercised  options  in  fiscal  1999.
FISCAL YEAR-END OPTION VALUES
                          NUMBER OF SECURITIES UNDERLYING          VALUE OF UNEXERCISED
                               UNEXERCISED OPTIONS AT                  IN-THE-MONEY
                                  FISCAL YEAR-END(#)          OPTIONS AT FISCAL YEAR END($) (1)
                                 ------------------           ---------------------------------
NAME                     EXERCISABLE         UNEXERCISABLE  EXERCISABLE             UNEXERCISABLE
-----------------------  ------------------  -------------  ----------------------  -------------
Emil H. Soika                            --        200,000                      --         93,750
Gerhard J. Von der Ruhr                  --             --                      --             --
Stephen D. Okland                    13,500         30,000                   2,531          5,625
Drew M. Diaz                         32,000         68,000                   4,125         27,375
(1)     Based  on  the  reported  closing  bid price of $2.0625 per share of common stock on June 30, 1999.
Employment  Agreements  and  Severance  Arrangements.  On June 1, 1999, we
entered  into  employment  agreements  with  Emil  H.  Soika,  President,  Chief
Executive  Officer  and  Director,  Stephen  D.  Okland, Vice President-Domestic
Sales,  and  Drew  M.  Diaz, Vice President-International Sales.  The agreements
provide, respectively, that Mr. Soika will receive a base salary of $125,000 per
year,  and  Mr.  Okland  and  Mr. Diaz will continue to receive their respective
current  compensation,  with an annual review of the compensation within 30 days
prior to the end of each fiscal year.  Mr. Soika is eligible to participate in a
cash bonus program and each of Mr. Soika, Mr. Okland and Mr. Diaz is entitled to
receive  health  and  life  insurance coverage and disability insurance.  We may
terminate  Mr.  Soika's, Mr. Okland's or Mr. Diaz's respective employment at any
time and any of Mr. Soika, Mr. Okland or Mr. Diaz may resign at any time.  If we
terminate employment without cause at any time either prior to or after a change
in  control, Mr. Soika is entitled to receive payment of his base salary and his
other employee benefits for 12 months, Mr. Okland is entitled to receive payment
of $18,750 per month and his other employee benefits for 24 months, and Mr. Diaz
is  entitled  to  receive payment of his then current compensation and his other
employee benefits for 12 months, respectively, from the date of termination.  If
Mr.  Soika's,  Mr. Okland's or Mr. Diaz's employment is terminated for any other
reason  before a change in control, the terminated employee will not be entitled
to  receive  any base salary or other benefits for periods after the termination
date.  If  we  experience  a change in control, and Mr. Soika, Mr. Okland or Mr.
Diaz voluntarily terminates his employment for any reason after completing three
months  of  employment  after  the  change  in control, Mr. Soika is entitled to
receive  payment  of  his  base  salary  and  his other employee benefits for 12
months,  Mr.  Okland is entitled to receive payment of $18,750 per month and his
other  employee  benefits  for  24  months,  and Mr. Diaz is entitled to receive
payment  of his then current compensation and his other employee benefits for 12
months,  respectively,  after  the  date of termination, or until Mr. Soika, Mr.
Okland  or Mr. Diaz secures alternative employment, whichever period is shorter.
Each  of  Mr.  Soika, Mr. Okland and Mr. Diaz have agreed not to compete with us
during  employment  and for a period of 3, 24 and 12 months, respectively, after
any voluntary termination of employment or for a period of 12, 24 and 12 months,
respectively,  after any termination by us without cause.  Mr. Soika, Mr. Okland
and  Mr.  Diaz have each agreed to maintain the confidentiality of our financial
statements  and  other  financial  information.

     On  November  16, 1998, we entered into a severance agreement with Gerhard
J.  Von  der  Ruhr,  our  former  Chairman  of  the  Board,  President (CEO) and
Treasurer.  Pursuant  to  this  severance  agreement,  we  are  required to make
payments  to  Mr.  Von  der  Ruhr  of  $6,000  per month over the 36 months from
December  1998  through  November  2001.  We also agreed to (i) issue options to
purchase  up  to  21,000  shares  of  common  stock  to Mr. Von der Ruhr with an
exercise  price of $2.0625 per share, (ii) allow Mr. Von der Ruhr to continue to
use office space and secretarial services for a period of up to 12 months, (iii)
continue  to  provide  fringe  benefits  to  Mr.  Von  der

                                       22
Ruhr through September 30, 2001, and (iv) continue to provide health benefits to
Mr.  Von  der Ruhr and his spouse until the earlier of the date Mr. Von der Ruhr
reaches  age  65  or  he obtains comparable insurance coverage from a subsequent
employer.  Pursuant  to this severance agreement, we also transferred patent and
technology rights that we had received from Immtech International, Inc. relating
to  treatment  for  sepsis  and prophylaxis and 172,414 shares of Immtech common
stock  to O. B. Scientific, Inc. in exchange for the payment by O. B. Scientific
of  $150,000 in ten semi-annual installments of $15,000 each starting on June 1,
1999.  We  received  10%  of  the outstanding shares of O. B. Scientific and the
right  to  elect  one  member  of  the  board  of directors of O. B. Scientific.
Criticare  and  Mr. Von der Ruhr also agreed to certain provisions regarding the
distribution  of  products  related to the technology transferred by us to O. B.
Scientific.

     On November 16, 1998, we also entered into a severance agreement with N.C.
Joseph  Lai, Ph.D., our former Senior Vice President, Vice Chairman of the Board
and  Secretary.  Pursuant  to  this severance agreement, we are required to make
payments  to  Dr.  Lai of $5,000 per month over the 36 months from December 1998
through  November  2001.  We  also agreed to (i) issue options to purchase up to
21,000  shares  of common stock to Dr. Lai with an exercise price of $2.0625 per
share,  (ii)  allow  Dr.  Lai  to  continue  to use office space and secretarial
services  for  a  period  of  up  to 12 months, (iii) continue to provide fringe
benefits  to  Dr.  Lai  through September 30, 2001, and (iv) continue to provide
health  benefits to Dr. Lai and his spouse until the earlier of the date Dr. Lai
reaches  age  65  or  he obtains comparable insurance coverage from a subsequent
employer.

                                       23
PRINCIPAL STOCKHOLDERS

     The  following  table  provides  information  regarding  the  beneficial
ownership  of  our  common  stock  as  of  December  22,  1999  by:

-     each  stockholder  known by us to be the beneficial owner of more than 5%
      of  our  common  stock;
-     each  director;
-     each  named  executive  officer;  and
-     all  directors  and  executive  officers  as  a  group.

     We have determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission.  Unless otherwise indicated, the persons and
entities  included  in  the  table  have  sole  voting and investment power with
respect  to  all  shares  beneficially  owned,  subject  to applicable community
property  laws.  Shares  of  common  stock  subject  to  options that are either
currently  exercisable  or  exercisable  within 60 days of December 22, 1999 are
treated  as  outstanding  and  beneficially  owned  by the option holder for the
purpose  of  computing  the percentage ownership of the option holder.  However,
these  shares  are  not  treated as outstanding for the purpose of computing the
percentage  ownership  of  any  other  person.
SHARES
PRINCIPAL STOCKHOLDER (1)                                     BENEFICIALLY OWNED   PERCENT
------------------------------------------------------------  -------------------  --------
Emil H. Soika. . . . . . . . . . . . . . . . . . . . . . . .                  --        --
Gerhard J. Von der Ruhr. . . . . . . . . . . . . . . . . . .          560,275 (2)      6.4%
N.C. Joseph Lai. . . . . . . . . . . . . . . . . . . . . . .          713,894 (3)      8.2
Karsten Houm . . . . . . . . . . . . . . . . . . . . . . . .          103,365 (4)      1.2
Milton Datsopoulos . . . . . . . . . . . . . . . . . . . . .           77,500 (5)        *
Stephen D. Okland. . . . . . . . . . . . . . . . . . . . . .           17,000 (6)        *
Drew M. Diaz . . . . . . . . . . . . . . . . . . . . . . . .           45,500 (7)        *
All directors and executive officers as a group (10 persons)        1,629,634 (8)     18.1
_____________________
*     Less  than  1%

(1)     Unless otherwise indicated, the address of the beneficial owner is 20925 Crossroads
Circle,  Waukesha,  WI  53186.  The  address  of  Mr. Houm is Kristinelundvn 21, 0268 Oslo,
Norway  and  the  address  of  Mr.  Datsopoulos  is Central Square Building, 201 West Main,
Missoula,  Montana  59802.

(2)     Includes  410,000 shares owned of record by Ursula Von der Ruhr, Mr. Von der Ruhr's
wife,  and  1,175  shares  owned  of  record  by Mark Von der Ruhr, Mr. Von der Ruhr's son.

(3)     Includes  116,000  shares  owned  of  record  by Helen Lai, Dr. Lai's wife; 137,000
shares  owned  jointly  by  Dr.  Lai and his wife; 184,000 shares in the aggregate owned of
record  by  Dr.  Lai's  sons,  Christopher  Lai and Thomas Lai; and 134,000 shares owned of
record  by  the  Lai  Family  Foundation.

(4)     Includes  87,500  shares  which  Mr.  Houm has the right to acquire under currently
exercisable  options.

(5)     Includes  77,500  shares  which  Mr.  Datsopoulos  has  the  right to acquire under
currently  exercisable  options.

                                       24
(6)     Includes  13,500  shares  which Mr. Okland has the right to acquire under currently
exercisable  options.

(7)     Includes  44,000  shares  which  Mr.  Diaz has the right to acquire under currently
exercisable  options.

(8)     Includes  277,500  shares  of common stock the members of the group have a right to
acquire  under  currently  exercisable  options.
SELLING STOCKHOLDER

     All  of  the  shares  of our common stock offered for sale pursuant to this
prospectus  are  being offered by the selling stockholder.  We issued the shares
to  the  selling  stockholder  in  March,  2000  as  part  of  the settlement of
litigation  between  the  selling  stockholder  and  us.

     Information  with  respect  to  the shares of our common stock beneficially
owned  by  the  selling  stockholder  follows.
SHARES OF COMMON STOCK
                              OWNED PRIOR TO THE    SHARES OFFERED   SHARES TO BE OWNED
                                   OFFERING         FOR SALE HEREBY  AFTER THE OFFERING*
                            ----------------------  ---------------  -------------------
NUMBER               PERCENT
                                                                     -------------------  -------
Applied Data Systems, Inc.                  30,000           30,000                   --       --
*Assumes  sale  of  all  shares  offered  by  this  prospectus.
PLAN OF DISTRIBUTION

     The selling stockholder may, without limitation and from time to time, sell
all  or  a portion of its shares of our common stock being registered under this
prospectus on any stock exchange, market or trading facility on which the common
stock  is  traded, at market prices prevailing at the time of sale, fixed prices
or  at  negotiated  prices.  The  shares may, without limitation, be sold by the
selling  stockholder  by  one  or  more  of  the  following  methods:

-     ordinary  brokerage  transactions  and  transactions  in  which  the
      broker-dealer  solicits  purchasers;

-     block trades in which the broker-dealer engaged by the selling stockholder
      will  attempt  to sell the shares as agent for the selling stockholder but
      may position and resell a portion of the block as principal to  facilitate
      the  transaction;

-     purchases by a broker-dealer as principal and resale by such broker-dealer
      for  its  account;

-     privately  negotiated  transactions;

-     in  accordance with Rule 144 promulgated under the Securities Act of 1933,
      as  amended,  rather  than  pursuant  to  this  prospectus;

-     a  combination  of  any  such  methods  of  sale;  or

-     any  other  method  permitted  pursuant  to  applicable  law.

     From time to time the selling stockholder may pledge its shares pursuant to
the  margin provisions of the selling stockholder's customer agreements with its
brokers.  Upon  a  default by the selling stockholder, the broker may, from time
to  time,  offer  and  sell  the  pledged  shares.

                                       25
In  effecting sales, brokers-dealers engaged by the selling stockholder may
arrange  for other broker-dealers to participate in such sales.  Brokers-dealers
may  receive  commissions  or discounts from the selling stockholder (or, if any
such  broker-dealer  acts  as  agent  for the purchase of such shares, from such
purchaser)  in  amounts  to be negotiated which are not expected to exceed those
customary  in the types of transactions involved.  Broker-dealers may agree with
the selling stockholder to sell a specified number of shares of the common stock
at a stipulated price per share, and, to the extent such broker-dealer is unable
to  do  so acting as agent for the selling stockholder, to purchase as principal
any  unsold shares at the price required to fulfill the broker-dealer commitment
to  the  selling  stockholder.

     The  selling  stockholder and any broker-dealers or agents that participate
with  the  selling  stockholder  in  sales  of  the  shares  may be deemed to be
"underwriters"  within the meaning of the Securities Act in connection with such
sales.  In  such event, any commissions received by such broke-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting  commissions  or  discounts  under  the  Securities  Act.

     We  are  required to pay all fees and expenses incident to the registration
of  the  selling  stockholder's shares, other than the fees and disbursements of
counsel to the selling stockholder and underwriting discounts or commissions, if
any.  Additionally,  we  have  agreed  to indemnify the selling stockholder from
certain liabilities in connection with the offering, including liabilities under
the  federal  securities  laws.

                          DESCRIPTION OF CAPITAL STOCK

     Our authorized capital stock consists of 15,000,000 shares of common stock,
$0.04 par value per share and 500,000 shares of preferred stock, $0.04 par value
per  share.  The  following description of our capital stock is qualified in all
respects  by  reference  to  our  Restated  Certificate  of  Incorporation.

COMMON  STOCK

     As  of  December  22,  1999, approximately 8,736,151 shares of common stock
were  outstanding,  held  of  record by 297 stockholders.  The holders of common
stock  are  entitled  to  one  vote per share on all matters to be voted upon by
stockholders.  Subject  to preferences that may be applicable to any outstanding
preferred  stock,  holders  of common stock are entitled to receive ratably such
dividends  as  may  declared  by  the  Board  of  Directors out of funds legally
available  for  that  purpose.  In  the event of our liquidation, dissolution or
winding  up,  the  holders  of common stock are entitled to share ratably in all
assets  remaining after payment of liabilities and the liquidation preference of
any  outstanding  preferred  stock.  The  common  stock  has  no  preemptive  or
conversion  rights,  other  subscription  rights,  or redemption or sinking fund
provisions.  All  outstanding  shares  of  common  stock  are  fully  paid  and
non-assessable,  and  the  shares  of common stock offered under this prospectus
will  be  fully  paid  and  non-assessable.

PREFERRED  STOCK

     The  Board  of  Directors  has the authority, without further action by the
stockholders,  to  issue  up to 500,000 shares of preferred stock in one or more
series and the designate the rights, preferences, privileges and restrictions of
each  such  series.  The  issuance  of  preferred stock could have the effect of
restricting  dividends  on  the  common  stock, diluting the voting power of the
common  stock,  impairing the liquidation rights of the common stock or delaying
or  preventing our change in control without further action by the stockholders.
We  have  no  present  plans  to  issue any shares of preferred stock.  We have,
however,  rights  which may become exercisable to purchase preferred stock under
our  rights  plan.  See  "Rights  Plan."

DELAWARE  ANTI-TAKEOVER  LAW  AND  OUR  CERTIFICATE  OF INCORPORATION AND BY-LAW
PROVISIONS

     Delaware  law  and  our Certificate of Incorporation and By-laws could make
more difficult our acquisition by a third party and the removal of our incumbent
officers  and directors.  We have summarized the relevant provisions of Delaware
law  and  our existing charter and By-laws below.  These provisions are expected
to  discourage  coercive  takeover practices and inadequate takeover bids and to
encourage  persons  seeking  to  acquire

                                       26
control  of  Criticare to first negotiate with us.  We believe that the benefits
of  increased  protection  of  our ability to negotiate with the proponent of an
unfriendly  or  unsolicited  acquisition  proposal outweigh the disadvantages of
discouraging  such  proposals  because,  among  other  things, negotiation could
result  in  an  improvement  of  their  terms.

     We are subject to Section 203 of the Delaware General Corporation Law which
regulates  corporate  acquisitions.  Section  203  prohibits  a  publicly  held
Delaware  corporation  from  engaging  in  a  "business  combination"  with  an
"interested  stockholder"  for  a  period  of three years following the date the
person  became  an  interested  stockholder,  unless:

-     the  Board of Directors approved the transaction in which such stockholder
      became  an  interested  stockholder  prior  to  the  date  the  interested
      stockholder  attained  such  status;

-     upon  consummation  of  the transaction that resulted in the stockholder's
      becoming an interested stockholder, he or she owned at least 85 %  of  the
      voting stock of the  corporation  outstanding  at the time the transaction
      commenced  excluding  shares  owned  by persons who are directors and also
      officers; or

-     on  or subsequent to such date the business combination is approved by the
      Board  of  Directors  and  authorized  at  an annual or special meeting of
      stockholders  by  the holders of at least 662/3% of our outstanding voting
      stock which  is  not  owned  by  the  interested  stockholder.

     A  "business  combination" includes a merger, asset or stock sale, or other
transaction  resulting in a financial benefit to the interested stockholder.  An
"interested  stockholder"  is  a  person  who,  together  with  affiliates  and
associates, owns, or within three years prior to the determination of interested
stockholder  status,  did  own,  15%  or  more  of a corporation's voting stock.

     Our Restated Certificate of Incorporation permits the Board of Directors to
issue  preferred  stock  with  voting  or  other  rights without any stockholder
action.  Our  By-laws  provide that our Board of Directors is divided into three
classes, with each class serving staggered three year terms.  The classification
of  our Board of Directors could have the effect of making it more difficult for
a  third  party to acquire control of Criticare or discourage a third party from
attempting  to  acquire  control  of  Criticare.  These  provisions may have the
effect  of  deterring  hostile  takeovers or delaying changes in our management.

RIGHTS  PLAN

     On  March  27,  1997,  our  Board  of  Directors declared a dividend of one
preferred  share  purchase right for each outstanding share of our common stock.
The dividend was payable on April 24, 1997 to the stockholders of record on that
date.  Each  purchase  right  entitles the registered holder to purchase from us
one  one-hundredth  of  one  of  our  preferred shares at a price of $25 per one
one-hundredth  share,  subject  to adjustment.  The description and terms of the
purchase rights are set forth in a Rights Agreement between us and Firstar Trust
Company,  as  rights  agent.

     Initially,  the  purchase  rights  are  attached  to  all  certificates
representing  common  stock  then  outstanding  and  no  separate  certificates
representing  the purchase rights will be distributed.  The purchase rights will
separate  from the common stock upon the distribution date, which is the earlier
to  occur  of:

-     10  days  following  a public announcement that an acquiring person, which
      includes  a  person  or  group  of  affiliated  or associated persons, has
      acquired beneficial ownership of 20% or  more  of  our  outstanding common
      stock; or

-     10 business days, or such later date as may be determined by action of our
      Board of Directors prior to such time  as  any  person or group becomes an
      acquiring  person,  following  the  commencement of, or announcement of an
      intention  to  make,  a tender offer or exchange offer the consummation of
      which  would  result in the beneficial ownership by an acquiring person of
      30%  or  more  of  our  outstanding  common  stock.

     The Rights Agreement provides that, until the distribution date, or earlier
redemption  or  expiration  of  the  purchase  rights:

-     the  purchase  rights  will  be  transferred with and only with the common
      stock;

                                       27
-     new common share certificates issued after April 24, 1997 upon transfer or
      new  issuance  of  common  stock will contain a notation incorporating the
      Rights  Agreement  by  reference;  and
-     the  surrender  for  transfer  of  any  certificates  for  common  stock
      outstanding as of April 24, 1997, even  without  such  notation, will also
      constitute  the transfer of the purchase rights associated with the common
      stock  represented  by  such  certificate.

     As  soon  as  practicable  following  the  distribution  date,  separate
certificates  evidencing the purchase rights will be mailed to holders of record
of the common stock as of the close of business on the distribution date and the
separate  right  certificates  alone  will  evidence  the  purchase  rights.

     The  purchase  rights are not exercisable until the distribution date.  The
purchase  rights  will  expire at the close of business on April 1, 2007, unless
the  final expiration date is extended or unless the purchase rights are earlier
redeemed  or  exchanged  by  us,  in  each  case,  as  described  below.

     The  purchase price payable, and the number of one one-hundredths preferred
shares  or  other securities or property issuable, upon exercise of the purchase
rights  are  subject  to adjustment from time to time to prevent dilution.  With
certain  exceptions, no adjustment in the purchase price would be required until
cumulative  adjustments  require  an  adjustment of at least 1% in such purchase
price.  We are not required to issue any fractional preferred shares and in lieu
of  fractional  shares,  an  adjustment  in cash may be made based on the market
price  of  the  preferred  shares  on  the last trading day prior to the date of
exercise.

     If,  without  the  prior  approval  of  a  majority  of  our  disinterested
directors:

-     we  are the surviving corporation in a merger with an acquiring person and
      the  common  stock  is  not  changed  or  exchanged;
-     an  acquiring  person becomes the beneficial owner of more than 30% of our
      then  outstanding  common  stock;
-     an  acquiring person engages in one or more "self-dealing" transactions as
      set  forth  in  the  Rights  Agreement;  or
-     during  such  time  as there is an acquiring person, an event occurs which
      results  in  the  acquiring person's ownership interest being increased by
      more  than  1%  (e.g.,  a  reverse  stock  split),

at  any time following the distribution date, but no earlier than the expiration
of the redemption period of the purchase rights, each holder of a purchase right
will  thereafter  have  the right to receive, upon exercise, common stock or, in
certain circumstances, cash, property or other of our securities, having a value
equal  to  two  times  the  exercise price of the purchase right.  Following the
occurrence  of  any  of the events set forth above, all purchase rights that are
or,  under  certain  circumstances  specified  in  the  Rights  Agreement,  were
beneficially  owned  by  any  acquiring  person  would  be  null  and  void.

     For  example, at an exercise price of $25 per purchase right, each purchase
right not owned by an acquiring person, or by certain related parties, following
an  event  set  forth  in  the  preceding  paragraph would entitle its holder to
purchase  $50 worth of common stock, or other consideration, as noted above, for
$25.  Assuming  that the common stock had a per share value of $10 at such time,
the  holder  of  each  valid  purchase  right would be entitled to purchase five
shares  of  common  stock  for  $25.

     If,  at  any  time  following  the  stock  acquisition  date:

-     we  are  acquired  in  a merger or other business combination transaction,
      other  than a merger in which we are the surviving corporation in a merger
      with an acquiring person and the common stock is not changed or exchanged;
      or
-     50%  or  more  of  our  assets  or  earning  power is sold or transferred,

each holder of a purchase right shall thereafter have the right to receive, upon
exercise,  common  stock  of  the  acquiring company having a value equal to two
times  the  exercise  price  of  the  purchase  right.

                                       28
At  any  time  prior  to  the  twentieth  day  after  the acquisition by an
acquiring  person  of  beneficial  ownership  of  20% or more of our outstanding
common  stock,  our  Board of Directors may redeem the purchase rights in whole,
but  not  in  part,  at  a  redemption  price  of  $.01 per purchase right.  The
redemption  of  the  purchase  rights may be made effective at such time on such
basis  with such conditions as our Board of Directors in its sole discretion may
establish.  Immediately upon any redemption of the purchase rights, the right to
exercise the purchase rights will terminate and the only right of the holders of
purchase  rights  will  be  to  receive  the  redemption  price.

     Other than those provisions relating to the principal economic terms of the
purchase  rights  and  an  amendment  lengthening  the  redemption period of the
purchase rights, any of the provisions of the Rights Agreement may be amended by
our  Board  of Directors prior to the distribution date.  After the distribution
date,  the  provisions  of  the  Rights  Agreement  may be amended by the Board:

-     in  order  to  cure  any  ambiguity;
-     to  make changes which do not adversely affect the interests of holders of
      purchase rights, excluding the  interests  of  any  acquiring  person;  or
-     to  shorten  or  lengthen  any  time  period  under  the Rights Agreement;

provided,  however,  that  no  amendment  to  lengthen the time period governing
redemption  shall  be  made.

     Until a purchase right is exercised, the holder thereof, as such, will have
no  rights  as one of our stockholders, including, without limitation, the right
to  vote  or  to  receive  dividends.

     Our  rights  plan  may have antitakeover effects.  The purchase rights will
cause  substantial  dilution  to  any  person  or group that attempts to acquire
Criticare on terms not approved by our Board of Directors, except pursuant to an
offer conditioned on a substantial number of the purchase rights being acquired.
The  purchase  rights  should  not  interfere  with any merger or other business
combination  approved  by  our  Board  of  Directors.

TRANSFER  AGENT

     The  transfer  agent  and  registrar  for our common stock is Firstar Trust
Company.  The  transfer  agent's  address is 1555 North RiverCenter Drive, Suite
301,  Milwaukee,  Wisconsin  53212,  and  its  telephone number is 414-276-3737.

                                       29
LEGAL MATTERS

     The  validity  of  the securities offered by this prospectus will be passed
upon for our company by Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.

                                     EXPERTS

     The  consolidated financial statements as of June 30, 1999 and for the year
then  ended  included  in this prospectus have been audited by BDO Seidman, LLP,
independent  auditors,  as stated in their report appearing elsewhere herein and
have  been so included in reliance upon the report of such firm given upon their
authority  as  experts  in  accounting  and  auditing.

     The  consolidated  financial statements as of June 30, 1998 and for each of
the  two  years  in the period ended June 30, 1998, included in this prospectus,
the  related consolidated financial statement schedule for each of the two years
in  the  period  ended  June  30,  1998  included  elsewhere in the registration
statement,  and  the  consolidated  financial statements from which the Selected
Consolidated Financial Data as of June 30, 1998 and for each of the two years in
the  period  then ended included in this prospectus have been derived, have been
audited  by  Deloitte  &  Touche  LLP,  independent auditors, as stated in their
reports  appearing  herein  and  elsewhere  in the registration statement.  Such
consolidated  financial  statements,  consolidated financial statement schedule,
and Selected Consolidated Financial Data have been included herein and elsewhere
in  the  registration  statement in reliance upon the reports of such firm given
their  authority  as  experts  in  accounting  and  auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

     We file reports, proxy statements and other information with the Securities
and  Exchange  Commission  (SEC).  You  may  read  and  copy  any reports, proxy
statements  or  other  information we file at the SEC's public reference room at
450  Fifth  Street,  N.W.,  Room  1024,  Washington, D.C. 20549 or at its public
reference  rooms  in  New York, New York, or Chicago, Illinois.  Please call the
SEC  at  1-800-SEC-0330  for  further information on the public reference rooms.
You can also obtain copies of our SEC filings by writing to the Public Reference
Section  of  the  SEC  at  450  Fifth  Street, N.W., Washington, D.C. 20549.  In
addition,  many  of our SEC filings are available at the SEC's site on the World
Wide  Web  at  "http//www.sec.gov."

     We have filed a Registration Statement on Form S-1 to register with the SEC
the  common  stock  offered by this prospectus.  This prospectus is part of that
registration  statement.  As  allowed  by  SEC  rules,  this prospectus does not
contain  all  the  information you can find in the registration statement or the
exhibits to the registration statement.  Statements contained in this prospectus
concerning  the  provisions  of  documents  are  necessarily  summaries  of such
documents,  and  each statement is qualified in its entirety by reference to the
copy  of  the  applicable  document  filed  with  the  SEC.

                                       30
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

TABLE  OF  CONTENTS
-------------------
PAGE
INDEPENDENT AUDITORS' REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

AUDITED CONSOLIDATED FINANCIAL STATEMENTS:

  Consolidated Balance Sheets of June 30, 1999 and 1998. . . . . . . . . . . . . . . . .  F-4

  Consolidated Statements of Operations for the years ended June 30, 1999, 1998 and 1997  F-6

  Consolidated Statements of Stockholders' Equity for the years ended June 30, 1999,
  1998 and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-7

  Consolidated Statements of Cash Flows for the years ended June 30, 1999, 1998 and 1997  F-8

  Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . .  F-9

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

  Unaudited Consolidated Balance Sheet as of December 31, 1999 . . . . . . . . . . . . .  F-19

  Unaudited Consolidated Income Statements for the six months ended
  December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-20

  Unaudited Consolidated Statements of Cash Flows for the six months ended
  December 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-21

  Notes to Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . .  F-22
F-1
INDEPENDENT AUDITORS' REPORT

     To  the  Stockholders  and  Directors  Criticare  Systems,  Inc.:

     We  have  audited  the accompanying consolidated balance sheet of Criticare
Systems, Inc. and subsidiaries as of June 30, 1999, and the related consolidated
statements of operations, stockholders' equity and cash flows for the year ended
June  30,  1999.  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  audit.

     We  conducted  our  audit  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  audit  provides  a  reasonable  basis  for  our opinion.

     In  our  opinion,  the  consolidated financial statements referred to above
present  fairly,  in  all material respects, the financial position of Criticare
Systems,  Inc.  at June 30, 1999, and the results of its operations and its cash
flows  for  the year then ended in conformity with generally accepted accounting
principles.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
November  30,  1999

                                      F-2
INDEPENDENT AUDITORS' REPORT

     To  the  Stockholders  and  Directors  of  Criticare  Systems,  Inc.:

     We  have  audited  the accompanying consolidated balance sheet of Criticare
Systems, Inc. and subsidiaries as of June 30, 1998, and the related consolidated
statements  of  operations,  stockholders' equity and cash flows for each of the
two years in the period ended June 30, 1998.  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.

     In  our  opinion, such consolidated financial statements present fairly, in
all  material  respects,  the  financial position of Criticare Systems, Inc. and
subsidiaries at June 30, 1998 and the results of their operations and their cash
flows  for each of the two years in the period ended June 30, 1998 in conformity
with  generally  accepted  accounting  principles.

/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998

                                      F-3
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS
JUNE  30,  1999  AND  1998
--------------------------
ASSETS                                                         1999         1998
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $ 2,511,078  $ 2,729,998
Accounts receivable, less allowance for doubtful accounts
  of $375,000 and $300,000, respectively . . . . . . . . .    6,358,487    6,921,713
Other receivables. . . . . . . . . . . . . . . . . . . . .       83,106      322,976
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,510,975    7,682,471
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      192,290      338,297
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   17,655,936   17,995,455
                                                            -----------  -----------

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,051,442    1,796,120
Furniture and fixtures . . . . . . . . . . . . . . . . . .      819,579      712,428
Demonstration and loaner monitors. . . . . . . . . . . . .    1,416,893    1,783,611
Production tooling . . . . . . . . . . . . . . . . . . . .    2,158,378    2,005,834
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   10,971,292   10,822,993
Less accumulated depreciation. . . . . . . . . . . . . . .    4,697,232    4,210,622
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    6,274,060    6,612,371

INVESTMENTS (Notes 1, 3 and 5) . . . . . . . . . . . . . .            -            -

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      111,991      118,993
Total other assets . . . . . . . . . . . . . . . . . . . .      111,991      118,993
                                                            -----------  -----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987  $24,726,819
                                                            ===========  ===========
See  notes  to  consolidated  financial  statements.
                                      F-4
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS  (CONTINUED)
JUNE  30,  1999  AND  1998
--------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY                                        1999          1998
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,078,020   $ 2,305,721
Accrued liabilities:
  Compensation and commissions . . . . . . . . . . . . . . . . . . . .    1,446,614       819,886
  Product warranties (Note 1). . . . . . . . . . . . . . . . . . . . .      325,000       328,000
  Lawsuit settlement (Note 7). . . . . . . . . . . . . . . . . . . . .    1,600,000             -
  Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . .      380,000             -
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      412,395       715,603
Current maturities of long-term debt (Note 5). . . . . . . . . . . . .       73,893       109,354
                                                                        ------------  ------------
Total current liabilities                                                 7,315,922     4,278,564
                                                                        ------------  ------------

LONG-TERM DEBT, less current maturities (Note 5) . . . . . . . . . . .    3,364,356     3,165,258
                                                                        ------------  ------------

OTHER LONG-TERM OBLIGATIONS (Note 11). . . . . . . . . . . . . . . . .      650,000             -
                                                                        ------------  ------------

CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (Notes 5, 6 and 8):
Preferred stock - $.04 par value, 500,000 shares authorized,
  no shares issued or outstanding. . . . . . . . . . . . . . . . . . .            -             -
Common stock - $.04 par value, 15,000,000 shares authorized,
  8,706,151 and 8,351,151 shares issued and outstanding, respectively.      348,246       334,046
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . .   17,960,363    17,964,250
Common stock held in treasury 103,840 shares - at cost . . . . . . . .     (193,430)            -
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . .   (5,403,470)   (1,015,299)
                                                                        ------------  ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . .   12,711,709    17,282,997
                                                                        ------------  ------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987   $24,726,819
                                                                        ============  ============
See  notes  to  consolidated  financial  statements.

                                      F-5
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  OPERATIONS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
1999          1998          1997
NET SALES (Note 10). . . . . . . . . . . . . .  $28,512,507   $27,908,364   $26,235,355

COST OF GOODS SOLD . . . . . . . . . . . . . .   15,528,314    14,870,453    14,059,508
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   12,984,193    13,037,911    12,175,847
                                                ------------  ------------  ------------

OPERATING EXPENSES:
Marketing. . . . . . . . . . . . . . . . . . .    8,941,036     7,454,619     8,761,731
Research, development and engineering (Note 8)    2,963,134     3,278,714     2,320,655
Administrative (Note 7). . . . . . . . . . . .    4,157,811     1,998,362     2,509,506
Severance pay (Note 11). . . . . . . . . . . .      810,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   16,871,981    12,731,695    13,591,892
                                                ------------  ------------  ------------

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (3,887,788)      306,216    (1,416,045)
                                                ------------  ------------  ------------

OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (432,477)     (797,376)   (1,048,391)
Interest income. . . . . . . . . . . . . . . .       82,094       111,884        39,001
Equity in loss of investments (Notes 1 and 3).     (150,000)     (120,000)     (324,000)
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .     (500,383)     (805,492)   (1,333,390)
                                                ------------  ------------  ------------

LOSS BEFORE INCOME TAXES
  AND EXTRAORDINARY GAIN . . . . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

INCOME TAX PROVISION (Notes 1 and 4) . . . . .            -             -             -

LOSS BEFORE EXTRAORDINARY GAIN . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

EXTRAORDINARY GAIN ON EXTINGUISHMENT
  OF DEBT (Note 5) . . . . . . . . . . . . . .            -             -       569,946

NET LOSS . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $  (499,276)  $(2,179,489)
                                                ============  ============  ============

LOSS PER COMMON SHARE-
BASIC AND DILUTED: (Note 1)
Before extraordinary gain. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.38)
Extraordinary gain . . . . . . . . . . . . . .          ___           ___           .08

NET LOSS PER COMMON SHARE. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.30)
                                                ============  ============  ============

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING (Note 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
Diluted. . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
                                                ============  ============  ============
See  notes  to  consolidated  financial  statements.

                                      F-6
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
RETAINED
                                                              ADDITIONAL               COMMON STOCK              EARNINGS
                                           COMMON STOCK        PAID-IN                   TREASURY              (ACCUMULATED
                                        SHARES      AMOUNT     CAPITAL     NUMBER OF SHARES       COST           DEFICIT)
Balance, June 30, 1996. . . . . . .     7,128,272  $285,131  $11,995,118                                      $    1,663,466
Net loss                                                                                                          (2,179,489)
Foreign currency translation
  adjustments
Comprehensive income/(loss)
Common stock issued in connection
  with extinguishment of debt . . .       200,000     8,000      772,000
Exercise of options and warrants. .       252,020    10,081      570,838
Convertible debentures converted
  to common stock, net of $61,872
  of unamortized issuance costs . .       216,173     8,647    1,047,075
Issuance of warrants for services                                 84,375

Balance, June 30, 1997. . . . . . .     7,796,465   311,859   14,469,406                                            (516,023)
Net loss                                                                                                            (499,276)
Foreign currency translation
  adjustments
Comprehensive income/(loss)
Issuance of common stock. . . . . .        20,425       817      119,183
Exercise of options and warrants. .       126,500     5,060      271,371
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .       407,761    16,310    2,181,225
Commitment to issue common
  stock for patented technology                                  900,000
Issuance of warrants for services                                 23,065

Balance, June 30, 1998. . . . . . .     8,351,151   334,046   17,964,250                                          (1,015,299)
Net loss                                                                                                          (4,388,171)
Comprehensive income/(loss)                                      (14,000)
Issuance of common stock for                                      10,113
  patented technology . . . . . . .       350,000    14,000
Exercise of options and warrants. .         5,000       200
Common stock repurchased                                                            103,840  $     (193,430)

Balance, June 30, 1999. . . . . . .     8,706,151  $348,246  $17,960,363            103,840  $     (193,430)  $   (5,403,470)

                                     ACCUMULATED
                                        OTHER          TOTAL
                                    COMPREHENSIVE  STOCKHOLDERS'
                                    INCOME/(LOSS)      EQUITY
Balance, June 30, 1996. . . . . . .  $   (26,166)  $13,917,549
Net loss. . . . . . . . . . . . . .                 (2,179,489)
Foreign currency translation
  adjustments . . . . . . . . . . .      (11,941)      (11,941)
Comprehensive income/(loss) . . . .                 (2,191,430)
Common stock issued in connection
  with extinguishment of debt . . .                    780,000
Exercise of options and warrants. .                    580,919
Convertible debentures converted
  to common stock, net of $61,872
  of unamortized issuance costs . .                  1,055,722
Issuance of warrants for services .                     84,375

Balance, June 30, 1997. . . . . . .      (38,107)   14,227,135
Net loss. . . . . . . . . . . . . .                   (499,276)
Foreign currency translation
  adjustments . . . . . . . . . . .       38,107        38,107
Comprehensive income/(loss) . . . .                   (461,169)
Issuance of common stock. . . . . .                    120,000
Exercise of options and warrants. .                    276,431
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .                  2,197,535
Commitment to issue common
  stock for patented technology . .                    900,000
Issuance of warrants for services .                     23,065

Balance, June 30, 1998. . . . . . .                 17,282,997
Net loss. . . . . . . . . . . . . .                 (4,388,171)
Comprehensive income/(loss) . . . .                 (4,388,171)
Issuance of common stock for
  patented technology . . . . . . .                          -
Exercise of options and warrants. .                     10,313
Common stock repurchased. . . . . .                   (193,430)

Balance, June 30, 1999. . . . . . .                $12,711,709
See  notes  to  consolidated  financial  statements.

                                      F-7
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------
1999         1998          1997
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $ (499,276)  $(2,179,489)
Adjustments to reconcile net loss to net cash
  Provided by (used in) operating activities:
     Depreciation . . . . . . . . . . . . . . . . . . . . . . . .      486,610      721,476       709,618
     Amortization . . . . . . . . . . . . . . . . . . . . . . . .        7,002       21,440        74,749
     Interest and discount accrued on convertible debentures. . .            -      462,034       451,438
     Provision for doubtful accounts. . . . . . . . . . . . . . .      380,004       99,000       366,505
     Expense related to equity in loss of investments . . . . . .      150,000      120,000       324,000
     Expense related to issuance of warrants for services . . . .            -       23,065        84,375
     Expense related to commitment to issue common stock
       for patented technology. . . . . . . . . . . . . . . . . .            -      900,000             -
     Extraordinary gain on extinguishment of debt . . . . . . . .            -            -      (569,946)
Changes in assets and liabilities:
     Accounts receivable. . . . . . . . . . . . . . . . . . . . .      183,222      161,524     2,321,416
     Other receivables. . . . . . . . . . . . . . . . . . . . . .      239,870      (86,121)      117,783
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . .     (461,786)      46,207        93,351
     Prepaid expenses . . . . . . . . . . . . . . . . . . . . . .      146,007      (68,677)      (81,488)
     Accounts payable . . . . . . . . . . . . . . . . . . . . . .      772,299     (768,284)     (509,017)
     Accrued liabilities. . . . . . . . . . . . . . . . . . . . .    2,950,520     (683,954)      287,876
                                                                   ------------  -----------  ------------
Net cash provided by operating activities . . . . . . . . . . . .      465,577      448,434     1,491,171
                                                                   -----------  ------------  ------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net . . . . . . . . .     (515,017)    (287,205)     (134,785)
Purchase of license rights. . . . . . . . . . . . . . . . . . . .            -       (1,080)      (40,815)
Advances to Immtech International, Inc. . . . . . . . . . . . . .     (150,000)    (120,000)      (24,000)
                                                                   -----------  ------------  ------------
Net cash used in investing activities . . . . . . . . . . . . . .     (665,017)    (408,285)     (199,600)
                                                                   -----------  ------------  ------------

FINANCING ACTIVITIES:
Proceeds from mortgage refinancing. . . . . . . . . . . . . . . .    3,450,000            -             -
Repayment of mortgage . . . . . . . . . . . . . . . . . . . . . .   (3,193,587)           -             -
Repurchase of Company stock . . . . . . . . . . . . . . . . . . .     (193,430)           -             -
Borrowings (payments) under line of credit facility . . . . . . .            -            -    (2,300,000)
Proceeds from the issuance of convertible debentures. . . . . . .            -            -     2,500,000
Principal payments on long-term debt. . . . . . . . . . . . . . .      (92,776)    (147,441)     (217,619)
Convertible debenture issuance costs. . . . . . . . . . . . . . .            -            -      (220,657)
Proceeds from issuance of common stock. . . . . . . . . . . . . .       10,313      396,431       580,919
                                                                   -----------  ------------  ------------
Net cash (used in) provided by financing activities . . . . . . .      (19,480)     248,990       342,643
                                                                   -----------  ------------  ------------

NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . . . .     (218,920)     289,139     1,634,214
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR. . . . . . . . . . .    2,729,998    2,440,859       806,645
                                                                   -----------  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . . . . . . . . .  $ 2,511,078   $2,729,998   $ 2,440,859
                                                                   ===========  ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
   Income taxes (refunded) paid-net . . . . . . . . . . . . . . .  $     8,010   $    8,525   $   (87,626)
   Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      437,401      335,342       456,880
Noncash investing and financing activities:
   Common stock issued in connection with extinguishment of debt.            -            -       780,000
   Common stock issued upon conversion of convertible debentures,
        net of $100,822 and $61,872 of unamortized issuance costs            -    2,197,535     1,055,722
   Issuance of warrants for services. . . . . . . . . . . . . . .            -       23,065        84,375
   Commitment to issue common stock for patented technology . . .            -      900,000             -
See  notes  to  consolidated  financial  statements.

                                      F-8
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997
-----------------------------------------------

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include
the  accounts  of  Criticare  Systems, Inc. (the "Company") and its wholly owned
subsidiaries:  Criticare  International  GmbH  Marketing  Services  ("Criticare
International"),  CSI  Trading,  Inc.  ("CSI  Trading"), Criticare Service GmbH,
Criticare  Biomedical,  Inc.  ("Criticare Biomedical"), Sleep Care, Inc. ("Sleep
Care"),  Criticare  (FSC),  Inc.  and CSI International Corp. (DISC).  Criticare
International  was  liquidated during fiscal 1998.  CSI Trading was incorporated
in  November 1996 to assist with European marketing activities.  All significant
intercompany  accounts  and  transactions  have  been  eliminated.

     CASH  EQUIVALENTS  -  The  Company considers all investments with purchased
maturities  of  less  than  three  months  to  be  cash  equivalents.

     INVENTORIES  -  Inventories are stated at the lower of cost or market, with
cost  determined  on  the  first-in,  first-out  method.

     INVESTMENTS  -  The  Company  accounts  for  its  investment  in  Intercare
Technologies,  Inc.  ("Intercare")  on  the  cost  method  and  accounts for its
investment  in  Immtech  International, Inc. ("Immtech") and Blatz House Offices
Limited Partnership (the "Blatz Partnership") on the equity method (see Note 3).

     PROPERTY,  PLANT  AND EQUIPMENT - Property, plant and equipment is recorded
at  cost.  Each  member  of  the  Company's  sales  force  is  provided  with
demonstration monitors to assist them in their sales efforts.  Also, the Company
has loaner monitors which are used to temporarily replace a customer's unit when
it  is  being repaired or upgraded.  Depreciation is provided over the estimated
useful  lives  of  the assets.  The building is being depreciated over 40 years,
and  the remaining assets are being depreciated over three to seven years, using
primarily  the  straight-line  method.

     LICENSE  RIGHTS AND PATENTS - License rights and patents are amortized over
the  estimated  useful  lives  of  the  related  agreements  using primarily the
straight-line  method.  Approximately $7,000, $7,000, and $9,000 of amortization
was  charged  to  operations  in 1999, 1998 and 1997, respectively.  Accumulated
amortization  approximated  $85,000  and  $78,000  at  June  30,  1999 and 1998,
respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
and  $46,000  of  amortization  was charged to operations in 1998 and 1997.  The
prorata  amount  of  unamortized  debenture  issuance  costs  were  charged  to
additional  paid-in-capital  upon  conversion of the debentures to common stock.
Unamortized  debenture  issuance  costs  charged  to  additional paid-in capital
amounted  to  $100,822  and  $61,872  during  1998  and  1997.  (See  Note  6.)

     GOODWILL  - Goodwill relating to the excess of the cost over the fair value
of  the  net assets of an acquired subsidiary was amortized on the straight-line
method over approximately five years.  Approximately $20,000 of amortization was
charged  to operations in 1997.  The goodwill was fully amortized as of June 30,
1997.

     REVENUE  RECOGNITION  -  Revenues  and  the  costs  of  products  sold  are
recognized  as  the  related  products  are  shipped  or installed, if there are
significant  installation  costs.

                                      F-9
PRODUCT WARRANTIES - Estimated costs for product warranties are accrued for
and  charged  to  operations  as  the  related  products  are  shipped.

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,798,000,
$3,156,000,  and  $2,175,000  in  1999,  1998  and 1997, respectively.  The 1998
amount  includes  $900,000 related to certain acquired patented technology which
was  charged  to  operations as in-process research and development costs at the
time  of  the  acquisition.  (See  Note  8.)

     INCOME  TAXES  -  The  Company accounts for income taxes using an asset and
liability  approach.  Deferred  income  tax  assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and  liabilities that will result in taxable or deductible amounts in the future
based  on  enacted  tax  laws  and  rates applicable to the periods in which the
differences  are  expected  to  affect  taxable  income.

     FOREIGN  CURRENCY  TRANSLATION  -  The  effects of unrealized exchange rate
fluctuations  from  translating  foreign  currency  assets  and liabilities into
United  States  dollars are accumulated as cumulative translation adjustments in
stockholders'  equity.

     NET  INCOME  (LOSS)  PER  COMMON  SHARE  - Basic income (loss) per share is
computed  using  the weighted average number of common shares outstanding during
the  periods.  Diluted  income  per share is computed using the weighted average
number  of  common  and dilutive common equivalent shares outstanding during the
periods.

     FAIR  VALUE  OF  FINANCIAL STATEMENTS - The Company's financial instruments
under  Statement  of  Financial  Account  Standards ("SFAS") No. 107 "Disclosure
About  Fair Value of Financial Instruments," includes cash, accounts receivable,
accounts  payable,  borrowings under line of credit facility and long-term debt.
The  Company  believes  that  the  carrying  amounts  of  these  accounts  are a
reasonable estimate of their fair value because of the short-term nature of such
instruments  or,  in  the  case  of  long-term  debt  because  of interest rates
available  to  the  Company  for  similar  obligations.

     COMPREHENSIVE  INCOME  -  In  1999,  the  Company  adopted  SFAS  No.  130,
"Reporting  Comprehensive  Income."  his  statement  establishes  rules  for the
reporting  of  comprehensive  income  and  its components.  Comprehensive income
consists  of  net  income  and  foreign  currency translation adjustments and is
presented  in  the Consolidated Statement of Stockholders' Equity.  The adoption
of  SFAS  130 had no impact on total stockholders' equity.  Prior year financial
statements  have  been  reclassified  to  conform  to the SFAS 130 requirements.

     APPROVED ACCOUNTING STANDARDS - In 1998, the FASB also issued SFAS No. 133,
"Accounting  for Derivative Instruments and Hedging Activities."  This statement
is  required  to  be  adopted  in  fiscal 2001.  The Company is currently in the
process  of  evaluating  the  impact  of  adopting  SFAS  No.  133.

     USE  OF  ESTIMATES  - The preparation of financial statements in conformity
with  generally  accepted  accounting  principles  requires  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.

                                      F-10
2.     INVENTORIES

     Inventories  consist  of  the  following  as  of  June  30:
1999        1998
Component parts .  $3,790,728  $2,647,231
Work in process .   1,261,709   1,409,187
Finished units. .   3,458,538   3,626,053
Total inventories  $8,510,975  $7,682,471
3.     INVESTMENTS

     INTERCARE TECHNOLOGIES, INC. - During 1992, the Company's subsidiary, Sleep
Care,  transferred  certain assets to Intercare Technologies, Inc. ("Intercare")
in  exchange  for 75,000 shares of convertible preferred stock of Intercare with
an  estimated  fair  value  of  $300,000,  at that time.  In connection with the
transfer,  Sleep  Care  licensed to Intercare the rights to certain intellectual
property  and  technology,  primarily  license  rights  and  patents, related to
products previously marketed by Sleep Care.  In exchange for the license rights,
the  Company  is  to receive royalties of 5% of the gross revenues from sales of
products  licensed under the agreement.  No royalty income was recognized during
1999,  1998  and  1997  and  no royalty income is expected in future years.  The
assets  retained  by  Sleep  Care  were  fully  amortized  as  of June 30, 1996.
Amortization  of  the intellectual property approximated $8,000 in 1996.  During
the year ended June 30, 1997, management of the Company concluded the investment
in  Intercare  was impaired and the carrying value of the investment was reduced
from  $300,000  to  zero.

     IMMTECH  INTERNATIONAL,  INC.  -  The  Company owns common stock of Immtech
International,  Inc.  ("Immtech").  Immtech  is  a  biopharmaceutical  company
focusing on the discovery and commercialization of therapeutics for treatment of
patients  afflicted with opportunistic infectious diseases, cancer, or comprised
immune  systems.  Immtech has two independent programs for developing drugs: one
based  on  a  technology  for  the design of a class of pharmaceutical compounds
referred  to  as  dications.  The  second  is  based  on  developing a series of
biological  proteins  that  work in conjunction with the immune system.  Immtech
has  no  products  currently  for sale, and none are expected to be commercially
available  for  several  years.  Immtech  has  a  March  31  fiscal  year  end.

     The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999  and  1998:
1999          1998
Investment in Immtech . . . . . .  $ 2,736,000   $ 2,586,000
Advances to Immtech . . . . . . .      863,940       863,940
Total . . . . . . . . . . . . . .    3,599,940     3,449,940
Less investment losses recognized   (3,599,940)   (3,449,940)
Net investment. . . . . . . . . .  $         0   $         0
During  July  1998,  the Company purchased certain intangible assets and an
additional  172,414 shares of Immtech stock for $150,000.  These intangibles and
shares of stock were subsequently sold to a related party as part of a severance
agreement  for  $150,000  (see  note  11).

     The  Company  has recognized investment losses related to the investment in
Immtech  of $150,000, $120,000 and $24,000 in 1999, 1998 and 1997, respectively.
As of June 30, 1999, the Company owned approximately 20% of Immtech's issued and
outstanding  common  stock.

                                      F-11
During  April 1999, Immtech completed an Initial Public Offering ("IPO") of
its  stock.  As  part  of  this  IPO, the Company was required to sign a lock-up
agreement  by  which  it was agreed that no shares owned by the Company could be
sold  in  the  public  market until the Immtech stock traded at $20 (200% of its
initial IPO) price ($10) for 20 consecutive trading days and one year has passed
from the date of the IPO.  The lock-up agreement expires in April 2004.  At June
30,  1999,  the  lock-up  provisions  were still in force.  Unrestricted Immtech
shares  were  trading  at  $17.50  on  June  30,  1999.

     Subsequent  to  June  30,  1999,  the Company sold a portion of its Immtech
stock in a Private Placement.  The proceeds from this sale were $1,760,000.  The
following  is  summarized financial information for Immtech at June 30, 1999 and
1998  and  for  the  twelve  months  then  ended.
1999          1998
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000   $    84,000
Noncurrent assets . . . . . . . . . . . . . .       68,000       111,000
Current liabilities . . . . . . . . . . . . .      253,000     4,097,000
Noncurrent liabilities. . . . . . . . . . . .            -             -
Redeemable preferred stock. . . . . . . . . .            -     5,548,000
Common stockholders' equity (deficit) . . . .    8,356,000    (9,450,000)
Revenues. . . . . . . . . . . . . . . . . . .      136,000       156,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)   (1,152,000)
Net loss attributable to common stockholders.   (4,657,000)   (1,666,000)
BLATZ  PARTNERSHIP  -  The  Company  was the sole limited partner in a real
estate  limited  partnership  which  owns  the  Blatz Phase II Commercial Office
Buildings  located  in  Milwaukee,  Wisconsin.  Under  terms  of the Partnership
Agreement (the "Agreement"), profits and losses (other than those resulting from
a sale or refinancing of the Project) were allocated 40% to the general partners
and  60%  to the Company.  This investment was sold during 1999, resulting in no
material  gain  or  loss.

4.     INCOME  TAXES

     The Company accounts for income taxes using an asset and liability approach
which  generally  requires  the  recognition  of  deferred income tax assets and
liabilities  based on the expected future income tax consequences of events that
have  previously  been  recognized  in the Company's financial statements or tax
returns.  In  addition, a valuation allowance is recognized if it is more likely
than not that some or all of the deferred income tax asset will not be realized.
A  valuation  allowance  is  used  to offset the related net deferred income tax
assets  due  to uncertainties of realizing the benefits of certain net operating
loss  and  tax  credit  carryforwards.

     Significant  components  of  the  Company's  deferred income tax assets and
deferred  income  tax  liabilities  are  as  follows:
JUNE 30,    JUNE 30,    JULY 1,
                                                1999        1998        1997
Deferred income tax assets:
   Accounts receivable and sales allowances  $  170,000  $  156,000  $  237,000
   Inventory allowances . . . . . . . . . .     254,000     110,000     207,000
   Product warranties . . . . . . . . . . .     127,000     128,000     144,000
   Other accrued liabilities. . . . . . . .     243,000      86,000      98,000
   Severance pay accrual. . . . . . . . . .     279,000           -           -
   Lawsuit settlement . . . . . . . . . . .     626,000           -           -
   Federal net operating loss carryforwards   2,244,000   1,870,000   1,717,000
   State net operating loss carryforwards .     325,000     270,000     255,000
   Federal tax credit carryforwards . . . .     152,000     152,000     198,000
   Investment losses not deducted . . . . .   1,532,000   1,481,000   1,434,000
   Total deferred income tax assets . . . .   5,952,000   4,253,000   4,290,000
F-12
JUNE 30,      JUNE 30,      JULY 1,
                                                                 1999          1998          1997
Deferred income tax liabilities:
   Excess of tax over book depreciation and amortization. .     (619,000)     (596,000)   (1,007,000)
   Prepaid expenses . . . . . . . . . . . . . . . . . . . .       (7,000)       (3,000)       (6,000)
   Total deferred income tax liabilities. . . . . . . . . .     (626,000)     (599,000)   (1,013,000)

   Valuation allowance. . . . . . . . . . . . . . . . . . .   (5,326,000)   (3,654,000)   (3,277,000)

   Net deferred income taxes recognized in the consolidated
     balance sheets . . . . . . . . . . . . . . . . . . . .  $         0   $         0   $         0
At  June 30, 1999, the Company had Federal net operating loss carryforwards
of  approximately  $6,600,000  which  expire  in 2008 through 2019.  At June 30,
1999,  the  Company  had available for federal income tax purposes approximately
$41,000  of  alternative  minimum  tax  credit carryforwards which carry forward
indefinitely and approximately $111,000 tax credit carryforwards which expire in
the  years  2007 through 2009.  The Company also has approximately $6,500,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2019,
available  to  offset  certain  future  state  taxable  income.

     The  income  tax  provision  consists  of  the  following:
1999   1998   1997
Current
   Federal. . . . . . . . . .  $   0  $   0  $   0
   State. . . . . . . . . . .      0      0      0
   Total income tax provision  $   0  $   0  $   0
A reconciliation of the provision for income taxes (benefit) at the federal
statutory  income  tax  rate  to  the  effective  income  tax  rate  follows:
1999     1998     1997
Federal statutory income tax rate. . . .  (34.0)%  (34.0)%  (34.0)%
   Losses for which no benefit was provided    29.3     30.9     29.1
   Non-deductible losses of subsidiaries. .     3.2        -      4.0
   Other-net. . . . . . . . . . . . . . . .     1.5      3.1       .9
   Effective income tax rate. . . . . . . .       0%       0%       0%
5.     LINE  OF  CREDIT  FACILITY  AND  LONG-TERM  DEBT
1999        1998
Long-term debt consists of the following:

   Mortgage note, 7.5% due in monthly installments of $27,793
     with a final payment of $3,048,253 due in April 1, 2004,
     collateralized by real estate with a carrying value of approximately
     $3,934,000 at June 30, 1999.. . . . . . . . . . . . . . . . . . . . .  $3,438,249           -
   Mortgage note, 9.625% due in monthly installments of $34,983
     with a final payment of $2,688,336 due in December 2002,
     collateralized by real estate (refinanced in 1999). . . . . . . . . .           -  $3,274,612
   Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,438,249  $3,274,612
   Less current maturities . . . . . . . . . . . . . . . . . . . . . . . .      73,893     109,354
   Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,364,356  $3,165,258
F-13
Aggregate  annual  principal payments required under terms of the long-term
debt  agreements  are  as  follows:
YEARS ENDING JUNE 30,  PRINCIPAL PAYMENTS
2000. . . . . . . . .  $            73,893
2001. . . . . . . . .               79,430
2002. . . . . . . . .               86,764
2003. . . . . . . . .               93,596
2004. . . . . . . . .            3,104,566
Total . . . . . . . .  $         3,438,249
In  March  1999,  the Company refinanced its mortgage note on the Company's
office and manufacturing facility.  The Company incurred a prepayment penalty of
approximately  $120,000  which  was  recorded  as  interest  expense.

     At  June  30,  1999,  the  Company  had  a $4,000,000 demand line of credit
facility  with  a  commercial  bank  to  meet  its  short-term  borrowing needs.
Borrowings  against the line are payable on demand with interest payable monthly
at  the bank's reference rate, plus .25% (8.0% as of June 30, 1999).  As of June
30,  1999, there were no borrowings against the line.  Borrowings under the line
of  credit  facility  are  collateralized  by  substantially  all  assets of the
Company.  The  credit  facility  has  covenants  which require minimum levels of
tangible  net  worth  and income levels.  The Company was not in compliance with
these covenants at June 30, 1999.  This non-compliance was waived by the lending
institution,  and  the line of credit facility was extended until November 2001.

     In  March  1997,  the  Company  satisfied a $1,240,000 promissory note plus
interest  accrued  on the note of approximately $110,000 in exchange for 200,000
shares of newly issued common stock.  Under the provisions of the agreement, the
shares must be held for one full year prior to resale.  In conjunction with this
transaction, the Company recorded an extraordinary gain on the extinguishment of
debt  of  $569,946 for the outstanding indebtedness under the promissory note in
excess  of  the  estimated  fair  market  value  of  the  restricted  stock.

6.     CONVERTIBLE  DEBENTURES

     In  February 1997, the Company issued $2,500,000 of convertible debentures.
The  debentures  had  a  two year term to maturity with a stated annual interest
rate of 8%, payable in shares of common stock at the conversion date or maturity
date.  The  holders of the debentures had the option to convert up to $1,250,000
of  the debentures and accrued interest to common stock of the Company sixty-one
(61)  days after the February 1997 closing date at a conversion price equal to a
20%  discount  from  the average closing bid price of the Company's common stock
for  the  five  days  preceding  the  conversion  date.  Debentures  aggregating
$550,000  were  converted  under  the  20%  discount  conversion  feature.  The
remaining  debentures and accrued interest were converted to common stock of the
Company  at  a conversion price equal to a 25% discount from the average closing
bid  price  of  the  Company's  common  stock  for  the  five days preceding the
conversion  date.  For  the  years  ended June 30, 1998 and 1997, $1,650,000 and
$850,000  of  debentures  were converted to 407,761 and 216,173 shares of common
stock with a fair market value of $2,298,357 and $1,117,594 as of the conversion
dates.

     Proceeds  from  the issuance of the debentures were recorded as a liability
at  the  issuance  date.  The  conversion discount was amortized and reported as
additional  interest  expense  over  the  life  of  the  debentures.  Additional
interest  expense  was  recognized  for  any  unamortized  discount  as  of  the
conversion  date.

                                      F-14
7.     CONTINGENCIES

     From  time  to  time,  various  lawsuits  arise out of the normal course of
business.  These  proceedings  are  handled  by  outside  counsel.  Currently
management  is not aware of any claim or action pending against the Company that
would  have  a  material  adverse  effect on the Company's financial position or
results  of  operations.

     The  Company  has  received  two  grants  from  the  State of Wisconsin for
research  and development of certain products.  The grants are to be repaid only
upon  successful  completion and marketing of the related product.  Repayment of
these  grants  is  to be made on a sales by unit basis.  Repayments approximated
$182,000  and  $14,000  in 1999 and 1997, respectively.  One grant was repaid in
full during 1999.  The repayments are charged to expense as the related products
are  sold.  Since  the  second grant did not result in the successful completion
and  marketing  of a product, the Company does not have to repay the grant.  The
Company has been awarded a third grant from the State of Wisconsin for an amount
up to $100,000 which requires repayment of the grant amount plus interest at 8%,
plus  payment  of  a  royalty  in  the  amount of 1% of net sales of the related
product  for  a five-year period, as defined.  No funds have been received under
this  grant  at  June  30,  1999.

     As  of June 30, 1999, the Company accrued a liability of $1,600,000 related
to  certain  legal  proceedings with a former dealer.  In July 1999, the Company
agreed to a $1,600,000 settlement with the dealer.  The Company agreed to make a
cash  payment  to the dealer, transfer a portion of the shares the Company holds
in  Immtech,  issue the dealer 150,000 shares of the Company's common stock, and
transfer  certain  inventory related to telemetry products no longer sold by the
Company.  The  settlement agreement requires that a broker chosen by the Company
sell  the  Immtech  and  Company  common  stock  on behalf of the dealer.  As of
November  30, 1999, the Criticare shares had not been sold due to the halting of
trading  on  October  6,  1999.

8.     STOCKHOLDERS'  EQUITY

     STOCK  OPTIONS  -  In  December 1992, the Board of Directors approved a new
Employee  Stock  Option  Plan  and Non-Employee Stock Option Plan.  No new stock
options  can  be  granted  under the Employee Stock Option Plan and Non-Employee
Stock  Option  Plan  which  existed prior to the approval of the new plans.  The
Board  of  Directors  has  authorized  in  connection  with  these new plans the
issuance  of 1,720,000 reserved shares of common stock of which 220,750 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 1999.  The Board of Directors increased the number of
reserved  shares for issuance under the Plans from 1,220,000 to 1,720,000 during
1999.  The  activity  during  1997,  1998  and  1999  for  the  above  plans are
summarized  as  follows:
NUMBER OF   STOCK OPTIONS  WEIGHTED AVG.
                                                  SHARES      PRICE RANGE   EXERCISE PRICE
Outstanding at July 1, 1996. . . . . . . . . .   1,069,420       1.88-8.50            2.45
   Granted . . . . . . . . . . . . . . . . . .     250,500       2.50-5.25            2.64
   Cancelled . . . . . . . . . . . . . . . . .    (113,500)      2.00-8.50            3.38
   Exercised . . . . . . . . . . . . . . . . .    (162,020)      2.00-2.63            2.47
Outstanding at June 30, 1997 . . . . . . . . .   1,044,400       1.88-5.25            2.40
   Granted . . . . . . . . . . . . . . . . . .      60,000       3.00-3.25            3.13
   Cancelled . . . . . . . . . . . . . . . . .    (179,200)      2.00-5.25            2.38
   Exercised . . . . . . . . . . . . . . . . .     (85,500)      2.00-2.75            2.27
Outstanding at June 30, 1998 . . . . . . . . .     839,700       1.88-3.63            2.50
   Granted . . . . . . . . . . . . . . . . . .     993,700       1.50-1.88            1.74
   Cancelled . . . . . . . . . . . . . . . . .    (636,800)      1.69-3.00            2.06
   Exercised . . . . . . . . . . . . . . . . .      (5,000)           2.06            2.06
Outstanding at June 30, 1999 . . . . . . . . .   1,191,600       1.50-3.00            1.83
Exercisable at June 30, 1999 . . . . . . . . .     560,600       1.50-3.00            2.02

Weighted Average Fair Value of Options Granted
During the Fiscal Year Ended June 30, 1998 . .  $      .23
F-15
Additionally,  on  December  11, 1998, the Company repriced 479,700 options
outstanding  to  $1.875 per share.  The repricing was considered a forfeiture of
the  existing  options  and  a grant of new options for the purpose of the table
above.

     The  following table summarizes information about stock options outstanding
as  of  June  30,  1999:
OPTIONS OUTSTANDING     OPTIONS EXERCISABLE

                                    WEIGHTED AVERAGE
                       SHARES          REMAINING          WEIGHTED            SHARES
RANGE OF            OUTSTANDING       CONTRACTUAL     AVERAGE EXERCISE     EXERCISABLE     WEIGHTED AVERAGE
EXERCISE PRICES   AT JUNE 30, 1999     LIFE-YEARS           PRICE        AT JUNE 30, 1999   EXERCISE PRICE
1.50-1.875. . .           980,700              3.52  $            1.74           355,700              1.90
2.00-3.00 . . .           210,900              1.15               2.28           204,900              2.21
1.50-3.00 . . .         1,191,600              3.10               1.90           560,600              2.02
Outstanding  options  have  fixed  terms  and are exercisable over a period
determined by the Compensation Committee of the Company's Board of Directors but
no  longer than five years after the date of grant.  At June 30, 1999, 1,412,350
shares  of  common  stock  were  reserved  under  the  above  plans.

     The  Company  has  adopted  the disclosure-only provisions of SFAS No. 123,
"Accounting  for  Stock-Based  Compensation,"  but applies Accounting Principles
Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees" and related
interpretations  in  accounting  for  its  plans.  If the Company had elected to
recognize  compensation cost for the options granted during the years ended June
30,  1998,1997, and 1996, consistent with the method prescribed by SFAS No. 123,
net loss and net loss per share would have been changed to the pro forma amounts
indicated  below:
YEARS  ENDED  JUNE  30,

                                            1999         1998         1997
Net loss-as reported . . . . . . . . .  $(4,388,171)  $(499,276)  $(2,179,489)
Net loss-pro forma . . . . . . . . . .  $(4,555,200)  $(779,276)  $(2,325,795)
Net loss per common share-as reported.  $      (.51)  $    (.06)  $      (.30)
Net loss per common share-pro forma. .  $      (.53)  $    (.09)  $      (.32)
Assumptions used:
   Expected volatility . . . . . . . .           15%         14%           58%
   Risk-free interest rate . . . . . .            5%          5%            6%
   Expected option life (in years) . .            3           3             3
The  fair value of stock options used to compute pro forma net loss and net
loss per common share is the estimated present value at the grant date using the
Black-Scholes  option-pricing  model.

     In  March 1999, the Company granted 120,000 stock options to a non-employee
at  a  price  of  $2.50  per  share.  The  options  vest  if certain performance
parameters  are  achieved by May 2000.  No such parameters were achieved by June
30,  1999.

     STOCK  WARRANTS  -  In  September  1995,  the  Company  executed  a warrant
agreement with a consultant.  The warrant agreement provided for the issuance of
warrants  to  purchase  up to 150,000 shares of the common stock of the Company,
exercisable  at  a  price of $2.00 per share.  The warrant was exercisable as to
37,500  shares  upon execution of the agreement and the warrants to purchase the
remaining  112,500  shares  were  to  become  exercisable if certain performance
parameters  were achieved by September 1996.  Such parameters were not met as of
such  date.  In January 1997, the agreement was extended and the parameters were
changed.

                                      F-16
During  the  year ended June 30, 1997, the Company recognized $84,375 of expense
related  to  the  value  of  the  services performed by the consultant under the
extended  agreement.  By  June  30,  1997,  warrants  to  purchase the remaining
112,500 shares of common stock at a price of $2.00 per share became exercisable.
The  warrant  holder  exercised rights and purchased 41,000 and 90,000 shares of
common  stock  at $2.00 per share during the years ended June 30, 1998 and 1997.
Warrants  to  purchase  15,000  shares  of  common stock at $2.00 per share were
exercisable  as  of  June  30,  1999.  Such  warrants  expire in September 2000.

     In February 1998, the Company executed a similar warrant agreement with the
consultant.  The  warrant  agreement  provides  for  the issuance of warrants to
purchase  up  to  150,000  shares of common stock at a price of $3.00 per share.
The  warrant  is exercisable as to 30,000 shares upon execution of the agreement
and the warrants to purchase the remaining 120,000 shares will be exercisable if
certain  performance  parameters  are  achieved  by  February  1999.  No  such
parameters  were  achieved.  During  the  year  ended June 30, 1998, the Company
recognized  $23,065  of  expense  related to the value of the services performed
under  the  agreement.  As  of  June 30, 1999, 30,000 warrants were exercisable.
Such  warrants  expire  in  February  2003.

     COMMITMENT  TO  ISSUE  SHARES  OF COMMON STOCK - In April 1998, the Company
agreed  to and accepted the patent rights assigned to them by a third party with
respect  to certain technology related to the transmission of clinical data.  In
consideration  for the patent, the Company has agreed to provide the third party
with  400,000  shares  of common stock payable over a four-year time period with
additional consideration of up to 112,000 shares contingent upon the achievement
of  certain  sales  levels.  The  Company  recorded  a  charge  to operations of
$900,000  in  fiscal 1998 with respect to the value of the in-process technology
which  was expensed as research and development costs.  During 1999, the Company
renegotiated  the agreement and issued the third party 350,000 shares instead of
the  400,000  shares  payable over four years and the 112,000 contingent shares.
The  400,000 shares to have been issued were considered to be outstanding shares
for  purposes of computing basic and diluted income (loss) per common share from
April  1998  until  the  350,000  shares  were  issued  in  November  1998.

     PREFERRED  STOCK  -  The  Company's Board of Directors has the authority to
determine  the  relative  rights  and preferences of any series it may establish
with  respect  to  the  500,000  shares  of  $.04 par value authorized preferred
shares.  No  preferred  stock  is  issued  or  outstanding.

     On  March  27,  1997,  the  Board  of  Directors  of the Company declared a
dividend  of one preferred share purchase right (a "Right") for each outstanding
share  of  common stock of the Company.  The dividend was made on April 24, 1997
to  the  stockholders  of  record  on  that  date  to  purchase  Preferred Stock
("Preferred")  upon  the  occurrence  of  certain  events.  The  Rights  will be
exercisable  the  tenth business day after a person or group acquires 20% of the
Company's  common  stock,  or  makes  an  offer  to  acquire  30% or more of the
Company's  common  stock.  When  exercisable,  each right entitles the holder to
purchase  for  $25, subject to adjustment, one-hundredth of a share of Preferred
for  each share of common stock owned.  Each share of Preferred will be entitled
to a minimum preferential quarterly dividend of $25 per share, but not less than
an  aggregate  dividend of 100 times the common stock dividend.  Each share will
have  100  votes,  voting  together  with the common stock.  In the event of any
merger, each share of Preferred will be entitled to receive 100 times the amount
received  per  share  of  common  stock.  The  Rights  expire  on April 1, 2007.

9.     EMPLOYEE  BENEFIT  PLAN

     The  Company  has  a  401(k) plan which covers substantially all employees.
Company  contributions  to the plan are discretionary and determined annually by
the  Company's  Board  of  Directors.  The  Company's  contributions  were
approximately  $84,000,  $77,000,  and  $81,000  in  1999,  1998  and  1997,
respectively.

10.     BUSINESS  AND  CREDIT  CONCENTRATIONS

     The  Company  operates in one business segment-the manufacturing of medical
monitoring  and  telemetry equipment.  The Company's customers include hospitals
and  alternative health care sites throughout the world.  Although the Company's
products  are  sold  primarily  to  health  care  providers,  concentrations  of

                                      F-17
credit  risk  with  respect  to trade accounts receivable are limited due to the
Company's  large  number  of  customers and their geographic dispersion.  During
1999,  a  customer,  who  has  entered  into  an OEM agreement with the Company,
purchased  approximately  $4,360,000 of the Company's products.  This represents
approximately  15%  of  the  Company's  total  sales.  The  Company  currently
coordinates  substantially  all international sales and distribution activities.
Such  activities  were previously provided by the Company with the assistance of
Criticare  International.  Identifiable  assets  located  outside  of the United
States  are insignificant in relation to the Company's total assets.  Net export
sales  by  geographic  area  are  as  follows:
1999         1998         1997
Europe and Middle East . . . . . . .  $ 4,635,000  $ 5,464,000  $ 5,606,000
Pacific Rim. . . . . . . . . . . . .    2,243,000    3,895,000    3,784,000
Canada and Central and South America    3,634,000    3,414,000    3,867,000
Net export sales . . . . . . . . . .  $10,512,000  $12,773,000  $13,257,000
11.     SEVERANCE  PAY

     During  November  1998,  the  two  co-founders of the Company resigned from
their  positions.  The  Company  has  provided  each of these individuals with a
severance agreement which includes a portion of their salary and fringe benefits
for  a  period  which approximates three years and recorded a charge of $810,000
for  their  severance  in  the  year  ended  June  30,  1999.

                                      F-18
CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999

                                   (UNAUDITED)
DECEMBER 31,
                                                              1999
                                                           ------------
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents . . . . . . . . . . . . . . .  $ 2,114,468
  Accounts receivable . . . . . . . . . . . . . . . . . .    6,393,348
  Other receivables . . . . . . . . . . . . . . . . . . .        4,261
  Inventory . . . . . . . . . . . . . . . . . . . . . . .    8,350,562
  Prepaid expenses. . . . . . . . . . . . . . . . . . . .      407,345
                                                           ------------
        Total current assets. . . . . . . . . . . . . . .   17,269,984
                                                           ------------

PROPERTY, PLANT AND EQUIPMENT - NET . . . . . . . . . . .    6,400,636
                                                           ------------

INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . .            -

LICENSE RIGHTS AND PATENTS - NET. . . . . . . . . . . . .      102,991

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $23,773,611
                                                           ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable. . . . . . . . . . . . . . . . . . . .  $ 2,484,663
  Accrued liabilities:
    Compensation and commissions. . . . . . . . . . . . .    1,130,036
    Product warranties. . . . . . . . . . . . . . . . . .      450,000
    Lawsuit settlement. . . . . . . . . . . . . . . . . .      300,000
    Deferred income . . . . . . . . . . . . . . . . . . .            -
    Other . . . . . . . . . . . . . . . . . . . . . . . .      344,713
  Current maturities of long-term debt. . . . . . . . . .       76,279
                                                           ------------
        Total current liabilities . . . . . . . . . . . .    4,785,691
                                                           ------------

LONG-TERM DEBT, less current maturities . . . . . . . . .    3,325,726
                                                           ------------

OTHER LONG-TERM OBLIGATIONS . . . . . . . . . . . . . . .      571,571

STOCKHOLDERS' EQUITY
  Preferred stock . . . . . . . . . . . . . . . . . . . .            -
  Common stock. . . . . . . . . . . . . . . . . . . . . .      348,246
  Additional paid-in capital. . . . . . . . . . . . . . .   17,960,363
  Common stock held in treasury 103,840 shares - at cost.     (193,430)
  Retained earnings (accumulated deficit) . . . . . . . .   (3,024,556)
                                                           ------------
        Total stockholders' equity. . . . . . . . . . . .   15,090,623
                                                           ------------

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $23,773,611
                                                           ------------
See  condensed  notes  to  consolidated  financial  statements.

                                      F-19
CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                   SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998

                                   (UNAUDITED)
1999          1998
                                                      ------------  ------------
NET SALES. . . . . . . . . . . . . . . . . . . . . .  $13,504,036   $14,014,480

COST OF GOODS SOLD . . . . . . . . . . . . . . . . .    7,373,259     7,192,945
                                                      ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . . . . .    6,130,777     6,821,535
                                                      ------------  ------------

OPERATING EXPENSES:
  Marketing. . . . . . . . . . . . . . . . . . . . .    3,543,432     4,479,724
  Research, development and engineering. . . . . . .    1,564,662     1,488,262
  Administrative . . . . . . . . . . . . . . . . . .    1,080,671     1,220,137
  Restructuring expenses - severance pay . . . . . .            -       728,000
                                                      ------------  ------------
        Total. . . . . . . . . . . . . . . . . . . .    6,188,765     7,916,123
                                                      ------------  ------------

(LOSS) FROM OPERATIONS . . . . . . . . . . . . . . .      (57,988)   (1,094,588)
                                                      ------------  ------------

OTHER INCOME (EXPENSE):
  Interest expense . . . . . . . . . . . . . . . . .     (130,513)     (158,251)
  Interest income. . . . . . . . . . . . . . . . . .       67,413        36,445
  Equity in loss of investments. . . . . . . . . . .            -      (150,000)
  Gain on sale of Immtech International, Inc. stock.    2,500,000             -

        Total. . . . . . . . . . . . . . . . . . . .    2,436,900      (271,806)
                                                      ------------  ------------

INCOME (LOSS) BEFORE INCOME TAXES. . . . . . . . . .    2,378,912    (1,366,394)

INCOME TAX PROVISION . . . . . . . . . . . . . . . .            -             -
                                                      ------------  ------------

NET INCOME (LOSS). . . . . . . . . . . . . . . . . .    2,378,912   $(1,366,394)
                                                      ------------  ------------

EARNINGS (LOSS) PER COMMON SHARE:
  Basic. . . . . . . . . . . . . . . . . . . . . . .         0.27         (0.16)
  Diluted. . . . . . . . . . . . . . . . . . . . . .  $      0.26   $     (0.16)
                                                      ------------  ------------

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING:
  Basic. . . . . . . . . . . . . . . . . . . . . . .    8,707,809     8,701,151
  Diluted. . . . . . . . . . . . . . . . . . . . . .    9,004,686     8,701,151
                                                      ------------  ------------
See  condensed  notes  to  consolidated  financial  statements.

                                      F-20
CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998

                                   (Unaudited)
1999          1998
                                                              ------------  ------------
OPERATING ACTIVITIES:

Net income (loss). . . . . . . . . . . . . . . . . . . . . .  $ 2,378,912   $(1,366,394)
Adjustments to reconcile net income to net
     cash (used in) provided by operating activities:
          Depreciation . . . . . . . . . . . . . . . . . . .      450,843       458,040
          Amortization . . . . . . . . . . . . . . . . . . .        9,000         9,000
          Equity in loss of investments. . . . . . . . . . .            -       150,000
          Gain on sale of Immtech International, Inc. stock.   (2,500,000)            -
          Changes in assets and liabilities:
             Accounts receivable . . . . . . . . . . . . . .      (34,861)     (230,045)
             Other receivables . . . . . . . . . . . . . . .       78,845       204,425
             Inventories . . . . . . . . . . . . . . . . . .      (99,794)   (1,274,859)
             Prepaid expenses. . . . . . . . . . . . . . . .     (215,055)      155,110
             Accounts payable. . . . . . . . . . . . . . . .     (593,357)    1,312,747
             Accrued liabilities . . . . . . . . . . . . . .   (2,017,687)      839,360
                                                              ------------  ------------
Net cash (used in) provided by operating activities. . . . .   (2,543,154)      257,384
                                                              ------------  ------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . .     (317,212)     (148,403)
Proceeds from the sale of Immtech International, Inc. stock.    2,500,000             -
Advances to Immtech International, Inc.. . . . . . . . . . .            -      (150,000)
                                                              ------------  ------------

Net cash provided by (used in) investing activities. . . . .    2,182,788      (298,403)
                                                              ------------  ------------

FINANCING ACTIVITIES:
Principal payments on long-term debt . . . . . . . . . . . .      (36,244)      (53,368)
Repurchase of Company stock. . . . . . . . . . . . . . . . .            -      (103,549)
                                                              ------------  ------------

Net cash (used in) provided by operating activities. . . . .      (36,244)     (156,917)

NET (DECREASE) IN CASH AND
   CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . . . .     (396,610)     (197,936)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . .    2,511,078     2,729,998
                                                              ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . .  $ 2,114,468   $ 2,532,062
                                                              ------------  ------------
See  condensed  notes  to  consolidated  financial  statements.

                                      F-21
CRITICARE SYSTEMS, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.     BASIS  OF  PRESENTATION

     The  accompanying  unaudited  financial  statements  have  been prepared by
Criticare Systems, Inc. (the "Company") pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission  ("SEC")  and,  in the opinion of the
Company,  include  all adjustments necessary for a fair statement of results for
each  period  shown.  Certain  information  and  footnote  disclosures  normally
included  in financial statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such SEC rules
and regulations.  The Company believes that the disclosures made are adequate to
prevent  the financial information given from being misleading.  It is suggested
that  these  financial  statements  be  read  in  conjunction with the financial
statements  and notes thereto included in the Company's latest annual report and
previously filed Form 10-K  The results of operations in the unaudited financial
statements  for  the  six  months  ended  December  31, 1999 are not necessarily
indicative  of  the  operating  results  for  the  full  year.

2.     CASH  EQUIVALENTS

     The  Company  considers  all  investments with purchased maturities of less
than  three  months  to  be  cash  equivalents.

3.     INVENTORY  VALUATION

     Inventory is stated at the lower of cost or market, with cost determined on
the  first-in,  first-out  method.  Components  of  inventory  consisted  of the
following  at  December  31,  1999  and  June  30,  1999,  respectively:
DECEMBER 31    JUNE 30,
                       1999         1999
                   ------------  ----------
Component parts .  $  3,971,541  $3,790,728
Work in process .     1,197,266   1,261,709
Finished units. .     3,181,755   3,458,538
                   ------------  ----------
Total inventories  $  8,350,562  $8,510,975
                   ------------  ----------
4.     INVESTMENTS

     During August, September and October, 1999, the Company sold 500,000 shares
of  Immtech  International,  Inc.  ("Immtech") stock for $2,500,000 in a private
placement.  The  funds  were  used  primarily  to settle a long-standing lawsuit
which was settled in July, 1999.  The Company holds approximately 460,000 shares
of  Immtech  stock  which  had  a  market  value of approximately $13,000,000 at
December 31, 1999.  These shares are subject to certain lock-up provisions which
do  not  allow  the  Company to sell any of these sales in the open market until
April, 2000.  The market value of these shares could change substantially due to
overall  market  risk.

                                      F-22
5.     PROPERTY,  PLANT  AND  EQUIPMENT

     Property,  plant  and  equipment  consist  of  the  following:
DECEMBER 31,    JUNE 30,
                                          1999          1999
                                      -------------  -----------
Land and building. . . . . . . . . .  $   4,525,000  $ 4,525,000
Machinery and equipment. . . . . . .      2,115,511    2,051,442
Furniture and fixtures . . . . . . .        901,830      819,579
Demonstration and loaner monitors. .      1,677,100    1,416,893
Production tooling . . . . . . . . .      2,329,270    2,158,378
                                      -------------  -----------
Property, plant and equipment - cost     11,548,711   10,971,292
Less accumulated depreciation. . . .      5,148,075    4,697,232
                                      -------------  -----------
Property, plant and equipment - net.  $   6,400,636  $ 6,274,060
                                      -------------  -----------
6.     CONTINGENCIES

     The  Company  is  involved  in  lawsuits  that  have arisen from the normal
conduct  of business.  These proceedings are handled by outside counsel.  In the
opinion  of management, the ultimate resolution of these matters will not have a
material  effect  on  the  consolidated  financial  statements.

                                      F-23
You  should  rely  on  the  information contained in this document or other
information  we  referred  you to.  We have not authorized anyone to provide you
with  information  that  is  different.  This  prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any security other than the
shares  of  common  stock  offered by this prospectus, nor does it constitute an
offer to sell or a solicitation of an offer to buy shares of common stock in any
jurisdiction  where  such  offer or solicitation would be unlawful.  Neither the
delivery  of  this  prospectus  nor  any  sales  made hereunder shall, under any
circumstances,  create  any  implication  that  there  has been no change in the
affairs  of  Criticare  since  the  date  hereof.

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Page
                                        -----
Summary. . . . . . . . . . . . . . . .    2
Risk Factors . . . . . . . . . . . . .    3
Forward-Looking Statements . . . . . .    5
Market Information and Dividend Policy    5
Use of Proceeds. . . . . . . . . . . .    6
Selected Consolidated Financial Data .    6
Management's Discussion and Analysis
    of Financial Condition and Results
    of Operations. . . . . . . . . . .    7
Business . . . . . . . . . . . . . . .   11
Management . . . . . . . . . . . . . .   18
Principal Stockholders . . . . . . . .   24
Selling Stockholder. . . . . . . . . .   25
Plan of Distribution . . . . . . . . .   25
Description of Capital Stock . . . . .   26
Legal Matters. . . . . . . . . . . . .   30
Experts. . . . . . . . . . . . . . . .   30
Where You Can Find More Information. .   30
Consolidated Financial Statements. . .  F-1
CRITICARE SYSTEMS, INC.

                          30,000 SHARES OF COMMON STOCK

                                   PROSPECTUS

                            _______________ ___, 2000
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM  13.  OTHER  EXPENSES  OF  ISSUANCE  AND  DISTRIBUTION

     The  expenses  relating  to  the registration of the shares of common stock
being offered hereby, other than underwriting discounts and commissions, will be
borne  by  the  Company.  Such  expenses  are  estimated  to  be  as  follows:
ITEM                                AMOUNT
----------------------------------  -------
Securities and Exchange Commission
Registration Fee . . . . . . . . .  $    30

Printing and Engraving Fees. . . .    1,000

Legal Fees and Expenses. . . . . .   15,000

Accounting Fees and Expenses . . .    5,000

Miscellaneous Expenses . . . . . .      470
                                    -------

                                    $21,500
                                    =======
   Total
ITEM  14.  INDEMNIFICATION  OF  DIRECTORS  AND  OFFICERS

     The Company's By-Laws provide that the Company shall, to the fullest extent
permitted  by the Delaware General Corporation Law and other applicable laws, as
in  effect  from  time to time, indemnify any person who was or is a party or is
threatened  to  be made a party to any formal or informal threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  including,  without limitation, any action brought under federal
or  state securities laws, rules or regulations (collectively, "Actions"), other
than  in  certain  limited  circumstances,  because  he  is or was a director or
officer  of  the  Company,  or because he is or was a director or officer of the
Company  and  is  or  was  serving  at the request of the Company as a director,
officer,  employee,  consultant  or  agent  of  another  corporation  or  other
enterprise  or is or was serving at the request of the Company as a fiduciary of
an  employee  benefit  plan or as an employee or agent of the Company; provided,
however,  that  no  director  or  officer  shall  be entitled to indemnification
unless,  with respect to the conduct that is the subject of the Action, he acted
in  good faith and in a manner he reasonably believed to be in or not opposed to
the  best  interest  of  the Company and, with respect to any criminal action or
proceeding,  he  had  no  reasonable  cause to believe his conduct was unlawful.
This  indemnification obligation mirrors the permissive indemnification provided
under section 145 of the Delaware General Corporation Law.  The determination of
whether  indemnification  is  proper  under  the circumstances, unless made by a
court,  shall  be  made  (a)  by arbitration; (b) by the Board of Directors by a
majority  vote  of  a  quorum consisting of directors who are not parties to the
subject  Action;  (c) if such quorum is not obtainable or, even if obtainable, a
quorum  of disinterested directors so directs, by independent legal counsel in a
written  opinion;  or  (d)  by  the affirmative vote of a majority of the shares
entitled  to  vote  thereon.

                                      II-1
The  Company's  Certificate  of Incorporation provides that a director will
not be personally liable for monetary damages to the Company or its stockholders
for  or  with  respect to any acts or omissions in the performance of his or her
duties  as a director, except for liability (i) for any breach of the director's
duty  of  loyalty  to  such  corporation  or  its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for paying a dividend or approving a stock repurchase in
violation  of  section  174 of the Delaware General Corporation Law or (iv) with
respect  to any transaction from which the director derived an improper personal
benefit.

     Article  VI, section 6.01 of the Company's Restated By-Laws provides that a
director  or officer is not liable to the Company for damages arising out of any
action  taken or omitted to be taken by such person if he exercised and used the
same  degree  of  care  and  skill as a prudent man would have exercised or used
under  the circumstances in the conduct of his own affairs or took or omitted to
take  such  action  in  reliance  on  the  advice  of  the  Company's counsel or
statements made or information furnished by officers or employees of the Company
which  he  had  reasonable  grounds  to  believe  were  true.

     The  indemnification  provided  as  set forth above is not exclusive of any
other  rights  to which a director or an officer of the Company may be entitled.

     The  general  effect  of  the  foregoing  provisions  is  to  reduce  the
circumstances  in  which  an  officer  or  director  may be required to bear the
economic  burdens  of  the  foregoing  liabilities  and  expenses.

ITEM  15.  RECENT  SALES  OF  UNREGISTERED  SECURITIES

     Effective  November  3,  1998,  the Company issued 350,000 shares of common
stock to Telemed Technologies International, Inc. in exchange for certain patent
and  other  intellectual property rights.  These shares were issued in a private
placement  exempt  from  the  registration requirements of the Securities Act of
1933,  as  amended  (the  "Act"),  pursuant  to  Section  4(2)  of  the  Act.

ITEM  16.  EXHIBITS  AND  FINANCIAL  STATEMENT  SCHEDULES
EXHIBIT
NUMBER   DESCRIPTION
-------  --------------------------------------------------------------------------------------------------
3.1  Restated Certificate of Incorporation of the Company (incorporated by reference to the
         Registration Statement filed on Form S-1, Registration No. 33-13050).

    3.2  By-Laws of the Company (incorporated by reference to the Registration Statement filed on
         Form S-1, Registration No. 33-13050).

    4.1  Specimen Common Stock certificate (incorporated by reference to the Registration Statement
         filed on Form S-1, Registration No. 33-13050).

    4.2  Specimen Convertible Debenture (incorporated by reference to the Registration Statement filed on
         Form S-3, Registration No. 333-25153).

      5  Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.

   10.1  Blatz House Offices Limited Partnership Agreement (incorporated by reference to the Company's
         Quarterly Report on Form 10-Q for the quarter ended December 31, 1987).

   10.2  Rights Agreement (incorporated by reference to the Company's Current Report on Form 8-K filed
         on April 18, 1997).

   10.3  Assignment of Rights to Patent Applications, Patents and/or Inventions, effective November 3,
         1998, between the Company and TeleMed Technologies International, Inc. (incorporated by
         reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

                                      II-2
10.4  Registration Agreement, dated as of November 3, 1998, between the Company and TeleMed
         Technologies International, Inc. (incorporated by reference to the Company's Quarterly Report on
         Form 10-Q for the quarter ended March 31, 1999).

   10.5  1999 Employee Stock Purchase Plan.

   10.6  1992 Employee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-60644).

   10.7  1992 Nonemployee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-60214).

   10.8  1987 Employee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-33497).

   10.9  1987 Nonemployee Stock Option Plan (incorporated by reference to the Company's Registration
         Statement on Form S-8, Registration No. 33-40038).

  10.10  Form of Executive Officer and Director Indemnity Agreement (incorporated by reference to the
         Company's Registration Statement on Form S-1, Registration No. 33-13050).

  10.11  Employment Agreement of Gerhard J. Von der Ruhr (incorporated by reference to the
         Registration Statement filed on Form S-1, Registration No. 33-13050).

  10.12  Employment Agreement of N.C. Joseph Lai (incorporated by reference to the Registration
         Statement filed on Form S-1, Registration No. 33-13050).

  10.13  Amendment to Employment Agreement of Gerhard J. Von der Ruhr (incorporated by reference to
         the Company's Annual Report on Form 10-K for the year ended June 30, 1997).

  10.14  Amendment to Employment Agreement of N.C. Joseph Lai (incorporated by reference to the
         Company's Annual Report on Form 10-K for the year ended June 30, 1997).

  10.15  Severance Agreement, dated as of November 16, 1998, of Gerhard J. Von der Ruhr (incorporated
         by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

  10.16  Severance Agreement, dated as of November 16, 1998, of N.C. Joseph Lai (incorporated by
         reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         1999).

  10.17  Employment Agreement of Emil H. Soika, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).

  10.18  Employment Agreement of Joseph M. Siekierski, (incorporated by reference to the Company's
         Annual Report on Form 10-K for the year ended June 30, 1999).

  10.19  Employment Agreement of Stephen D. Okland, (incorporated by reference to the Company's
         Annual Report on Form 10-K for the year ended June 30, 1999).

  10.20  Employment Agreement of Drew M. Diaz, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).

                                      II-3
10.21  Employment Agreement of Gloria Najera, (incorporated by reference to the Company's Annual
         Report on Form 10-K for the year ended June 30, 1999).

  10.22  Amendment to Employment Agreement of Gloria Najera, (incorporated by reference to the
         Company's Annual Report on Form 10-K for the year ended June 30, 1999).

     21  Subsidiaries (incorporated by reference to the Company's Annual Report on Form 10-K for the
         year ended June 30, 1999).

   23.1  Consent of BDO Seidman, LLP

   23.2  Consent of Deloitte & Touche LLP

   23.3  Consent of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c. (included in its opinion filed
         as Exhibit 5 hereto).

     24  Power of Attorney (incorporated by reference to the signature page hereof).
FINANCIAL  STATEMENT  SCHEDULES
-------------------------------

          Financial  Statement Schedule for the years ending June 30, 1999, 1998
and  1997:

Schedule
Number     Description                       Page
------     -----------                       ----

II         Valuation  and  Qualifying          21
           Accounts  and  Reserves

     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting  regulations  of  the  Securities  and  Exchange  Commission  are not
required  under  the  related  instructions,  are  inapplicable  or the required
information is shown in the financial statements or notes thereto, and therefore
have  been  omitted.

ITEM  17.  UNDERTAKINGS

     The  undersigned  Registrant  undertakes  as  follows:

          1.     To  file,  during any period in which offers or sales are being
made,  a  post-effective  amendment  to  this  Registration  Statement:

               (a)     To include any prospectus required by section 10(a)(3) of
the  Securities  Act  of  1933;

               (b)     To  reflect in the prospectus any facts or events arising
after  the  effective  date  of  the  Registration Statement (or the most recent
post-effective  amendment  thereof)  which,  individually  or  in the aggregate,
represent  a fundamental change in the information set forth in the Registration
Statement;  Notwithstanding the foregoing, any increase or decrease in volume of
securities  offered  (if  the total dollar value of securities offered would not
exceed  that which was registered) and any deviation from the low or high end of
the  estimated maximum offering range may be reflected in the form of prospectus
filed  with  the  Commission  pursuant  to Rule 424(b) if, in the aggregate, the
changes  in  volume  and  price  represent  no  more  than  a  20%

                                      II-4
change  in the maximum aggregate offering price set forth in the "Calculation of
Registration  Fee"  table  in  the  effective  Registration  Statement,  and

               (c)     To  include  any material information with respect to the
plan  of  distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs 1(a) and (b) will not apply if the information required
to be included in a post effective amendment by those paragraphs is contained in
periodic  reports filed by the Registrant pursuant to section 13 or 15(d) of the
Securities  Exchange Act of 1934 and which are incorporated by reference in this
Registration  Statement.

          2.     That,  for  the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering  of such securities at that time shall be deemed to be the initial bona
fide  offering  thereof.

          3.     To  remove  from  registration  by  means  of  a post-effective
amendment  any  of  the  securities  being registered which remain unsold at the
termination  of  the  offering.

          4.     That,  for  purposes  of  determining  any  liability under the
Securities  Act  of 1933, each filing of the Registrant's annual report pursuant
to  section  13(a)  or  15(d) of the Securities Exchange Act of 1934 (and, where
applicable,  each  filing  of an employee benefit plan annual report pursuant to
section  15(d)  of  the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement  relating  to the securities offered therein, and the offering of such
securities  at  that  time  shall be deemed to be the initial bona fide offering
thereof.

          5.     Insofar  as  indemnification  for liabilities arising under the
Securities  Act  of  1933  may  be  permitted  to directors, officers or persons
controlling  the Registrant pursuant to the foregoing provisions, the Registrant
has been informed 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 Registrant of expenses incurred
or  paid  by  a director, officer or controlling person of the Registrant 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 Registrant 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.

                                      II-5
SIGNATURES

     Pursuant  to the requirements of the Securities Act of 1933, the Registrant
has  duly  caused  this Registration Statement to be signed on its behalf by the
undersigned,  thereunto  duly  authorized,  in  the  City  of Waukesha, State of
Wisconsin,  on  the  22nd  day  of  March,  2000.

                                          CRITICARE  SYSTEMS,  INC.

                                             BY /s/  Emil  H.  Soika
                                                --------------------------------
                                                Emil  H.  Soika,  President  and
                                                Chief  Executive  Officer

                                POWER OF ATTORNEY

     Each person whose signature appears below hereby appoints Emil H. Soika and
Mark  Ruehle,  and  each  of  them  individually,  his  true  and  lawful
attorney-in-fact,  with  power  to  act  with or without the other and with full
power of substitution and resubstitution, in any and all capacities, to sign any
or  all  amendments  (including  post-effective  amendments) to the Registration
Statement  and  file  the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said  attorneys-in-fact  and  agents  full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises,  as  fully  to  all  intents  and  purposes as he might or could do in
person,  hereby  ratifying  and  confirming  all that said attorneys-in-fact and
agents,  or  their  substitutes, may lawfully cause to be done by virtue hereof.

     Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities  and  on  the  dates  indicated.
Signature                               Title                   Date
---------------------------  ----------------------------  --------------
/s/ Emil H. Soika            President, Chief Executive    March 22, 2000
---------------------------  Officer and a Director
Emil H. Soika

/s/ Karsten Houm             Chairman of the Board and     March 22, 2000
---------------------------  Director
Karsten Houm

/s/ Mark Ruehle              Vice President-Finance and    March 22, 2000
---------------------------  Secretary (Principal
Mark Ruehle                  Accounting Officer and
                             Principal Financial Officer)

/s/ Milton Datsopoulos       Director                      March 22, 2000
---------------------------
Milton Datsopoulos

/s/ N.C. Joseph Lai          Director                      March 22, 2000
---------------------------
N.C. Joseph Lai

/s/ Gerhard J. Von der Ruhr  Director                      March 22, 2000
---------------------------
Gerhard J. Von der Ruhr
II-6
INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  as of June 30, 1999, and have issued our report thereon dated
November  30,  1999;  such  report  is included elsewhere in this Form S-1.  Our
audit also included the consolidated financial statement schedule, as it relates
to  the  year ended June 30, 1999, of Criticare Systems, Inc.  This consolidated
financial  statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audit.  In our opinion,
such  consolidated  financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly in
all  material  respects  the  information  set  forth  therein.

/s/  BDO  Seidman,  LLP

Milwaukee,  Wisconsin
November  30,  1999
INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  as  of  June  30,  1998, and for each of the two years in the
period  ended June 30, 1998, and have issued our report thereon dated August 20,
1998;  such  report  is  included  elsewhere  in this Form S-1.  Our audits also
included  the  consolidated  financial  statement schedule of Criticare Systems,
Inc.  for  each  of  the  two  years  in  the  period ended June 30, 1998.  This
consolidated financial statement schedule is the responsibility of the Company's
management.  Our  responsibility  is  to express an opinion based on our audits.
In  our opinion, such consolidated financial statement schedule, when considered
in  relation  to  the  basic consolidated financial statements taken as a whole,
presents  fairly  in  all  material  respects the information set forth therein.

/s/  Deloitte  &  Touche  LLP

Milwaukee,  Wisconsin
August  20,  1998
SCHEDULE II
                             CRITICARE SYSTEMS, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997
COLUMN A                             COLUMN B           COLUMN C         COLUMN D       COLUMN E
---------------------------------  -------------  --------------------  -----------  ---------------
                                    BALANCE AT
                                   BEGINNING OF        CHARGED TO                    BALANCE AT END
    DESCRIPTION                       PERIOD      COSTS AND  EXPENSES   DEDUCTIONS      OF PERIOD
---------------------------------  -------------  --------------------  -----------  ---------------
YEAR ENDED JUNE 30, 1997:
  Allowance for doubtful accounts  $     295,000  $            366,505  $   194,505  $       467,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     504,000  $          1,283,931  $ 1,647,931  $       140,000

YEAR ENDED JUNE 30, 1998:
  Allowance for doubtful accounts  $     467,000  $             99,000  $   266,000  $       300,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     140,000  $          1,357,917  $ 1,397,917  $       100,000

YEAR ENDED JUNE 30, 1999:
  Allowance for doubtful accounts  $     300,000  $            380,004  $   305,004  $       375,000

  Reserve for sales returns and
    allowances. . . . . . . . . .  $     100,000  $            760,194  $   800,194  $        60,000