AS  FILED  WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 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.  [  ]

<PAGE>

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>

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

Common Stock, $0.04 par value     1,786,273  $                 2.43 (1)  $       4,340,643  $           1,146
=============================  ============  ==========================  =================  =================
<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 November 20, 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.



                                        2
<PAGE>

                                   PROSPECTUS

                 PRELIMINARY PROSPECTUS DATED NOVEMBER 28, 2000
                              SUBJECT TO COMPLETION


                                1,786,273 SHARES

                             CRITICARE SYSTEMS, INC.

                                  COMMON STOCK

     The  selling  stockholders  listed  under  the  section  entitled  "Selling
Stockholders"  are offering for sale up to 1,786,273 shares of our common stock.
Because  the  shares  offered  under this prospectus will be sold by the selling
stockholders,  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 November 27, 2000:  $2.38 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>
                                     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 (262)
798-8282.

THE  OFFERING

Common  stock  offered  by  the     1,786,273  shares
  selling  stockholders
Common  stock  outstanding  as      10,777,524  shares
  of  October  31,  2000
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 $4,388,171 in fiscal 1999, $186,388 in fiscal 2000,
and  $165,970  in  the first quarter of fiscal 2001.  Our results in fiscal 1999
included  a charge of approximately $1,800,000 for settlement costs related to a
lawsuit  and  our results for fiscal 2000 included a gain of $2,500,000 from our
private  placement  sale  of  500,000  shares of Immtech International, Inc.  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  experienced  a severe shortage of LC monitors
during the third quarter of fiscal 2000 which delayed international shipments of
a  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 41% of our total net sales for the 2000
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 closing sale prices for
our  common  stock  as  reported  by  Nasdaq.
<TABLE>
<CAPTION>

                Common Stock
                ------------
Quarter        High      Low
------------  -------  -------
<S>           <C>      <C>
FISCAL 1999
First. . . .  2-15/16    1-1/4
Second . . .    2-3/4    1-5/8
Third. . . .    2-1/8   1-7/16
Fourth . . .    3-3/8  1-11/16

FISCAL 2000
First. . . .    2-7/8    1-7/8
Second(1). .    2-3/4        2
Third. . . .   5-1/16    2-1/4
Fourth . . .   3-7/16  1-31/32

FISCAL 2001
First. . . .    3-3/8   2-5/16
<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  October 31, 2000, there were approximately 278 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
stockholders.

                         DETERMINATION OF OFFERING PRICE

     The  common stock offered by this prospectus may be offered for sale by the
selling  stockholders  from  time to time in transactions on the Nasdaq National
Market,  in  negotiated transactions, or otherwise, or by a combination of these
methods,  at  fixed prices which may be changed, at market prices at the time of
sale,  at prices related to market prices or at negotiated prices.  As such, the
offering price is indeterminate as of the date of this prospectus.  See "Plan of
Distribution."



                                        6
<PAGE>
                      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, 2000 and 1999 and the
statements  of operations data for the fiscal years ended June 30, 2000 and 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 statement of operations data for the fiscal year ended June 30,
1998  is  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, 1998, 1997
and  1996 and the statement of operations data for the fiscal years end June 30,
1998,  1997  and  1996  are  derived  from  our  audited  consolidated financial
statements  which  are  not  included elsewhere in this prospectus.  The balance
sheet  data  as  of  September 30, 2000 and 1999 and the statement of operations
data for the three months ended September 30, 2000 and 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  September  30,  2000  and 1999 and for the three months then
ended.  Actual  results  are  not  necessarily  indicative  of  future  results.
<TABLE>
<CAPTION>

                                    THREE MONTHS ENDED
                                        SEPTEMBER 30,                             YEARS ENDED JUNE 30,
                                        -------------                             --------------------
                                     2000         1999          2000          1999          1998          1997          1996
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
<S>                              <C>           <C>          <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Net sales . . . . . . . . . . .  $ 6,229,877   $ 6,603,337  $27,154,236   $28,512,507   $27,908,364   $26,235,355   $31,528,266
(Loss) income before income
  taxes and
  extraordinary gain. . . . . .     (165,970)    1,880,476     (186,388)   (4,388,171)     (499,276)   (2,749,435)   (4,280,989)
Net (loss) income . . . . . . .     (165,970)    1,880,476     (186,388)   (4,388,171)     (499,276)   (2,179,489)   (4,330,989)
Net (loss) income per
  common share--Basic . . . . .  $     (0.02)  $      0.22  $     (0.02)  $     (0.51)  $     (0.06)  $     (0.30)  $     (0.63)
              --Diluted . . . .  $     (0.02)  $      0.21  $     (0.02)  $     (0.51)  $     (0.06)  $     (0.30)  $     (0.63)
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
Average shares outstanding
  --Basic . . . . . . . . . . .    8,898,607     8,706,151    8,694,918     8,581,863     8,309,240     7,267,184     6,913,557
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
  --Diluted . . . . . . . . . .    8,898,607     8,921,806    8,694,918     8,581,863     8,309,240     7,267,184     6,913,557
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
BALANCE SHEET DATA:
Long-term obligations . . . . .  $ 3,495,488   $ 3,979,687  $ 3,552,474   $ 4,014,356   $ 3,165,258   $ 5,110,934   $ 4,669,975
Working capital . . . . . . . .   17,984,238    12,188,902   16,257,780    10,340,014    13,716,891    12,053,165    10,282,033
Total assets. . . . . . . . . .   28,664,974    23,362,905   27,210,867    24,041,987    24,726,819    25,145,066    27,075,922
Stockholders' equity. . . . . .   20,526,259    14,592,186   18,798,952    12,711,709    17,282,997    14,227,135    13,917,549
</TABLE>


                                        7
<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.
<TABLE>
<CAPTION>

                                               PERCENTAGE OF NET SALES
                                               -----------------------
                                       THREE MONTHS
                                          ENDED
                                       SEPTEMBER  30,  YEARS  ENDED  JUNE  30,
                                       --------------  -----------------------
                                        2000    1999    2000    1999     1998
                                       ------  ------  ------  -------  ------
<S>                                    <C>     <C>     <C>     <C>      <C>
Net sales . . . . . . . . . . . . . .  100.0%  100.0%  100.0%   100.0%  100.0%
Cost of goods sold. . . . . . . . . .   59.7    54.7    60.6     54.5    53.3
Gross profit. . . . . . . . . . . . .   40.3    45.3    39.4     45.5    46.7

Operating expenses:
Marketing . . . . . . . . . . . . . .   23.7    24.3    29.5     31.4    26.7
Research, development
  and engineering . . . . . . . . . .    9.3    10.8    10.5     10.4    11.7
Administrative. . . . . . . . . . . .    9.0     7.8     8.6     14.6     7.2
Severance pay . . . . . . . . . . . .     --      --      --      2.8      --
Total . . . . . . . . . . . . . . . .   42.0    42.9    48.6     59.2    45.6

(Loss) income  from operations. . . .   (1.7)    2.4    (9.2)   (13.7)    1.1
Interest expense. . . . . . . . . . .   (1.0)   (1.0)   (1.0)    (1.5)   (2.9)
Interest income . . . . . . . . . . .    0.1     0.4     0.3      0.3     0.4
Equity in loss of investments . . . .     --      --      --     (0.5)   (0.4)
Gain on sale of stock . . . . . . . .     --    26.7     9.2       --      --
(Loss) income before income taxes . .   (2.7)   28.5    (0.7)   (15.4)   (1.8)
Income tax provision. . . . . . . . .     --      --      --       --      --
Net (loss) income . . . . . . . . . .  (2.7)%   28.5%  (0.7)%  (15.4)%  (1.8)%
</TABLE>

COMPARISON  OF  THREE  MONTHS  ENDED  SEPTEMBER  30,  2000  AND  1999

     Sales  volume  (number  of units sold) for the three months ended September
30,  2000  rose  15%  from  the  same  period in fiscal 1999, however, net sales
revenue  fell  by approximately $400,000, or approximately 6.1%, from $6,600,000
in the first quarter of fiscal 2000 to $6,200,000 in the first quarter of fiscal
2001.  One  of the reasons for this result is the large systems sale recorded in
the first quarter of the prior year.  Resulting hospital sales in the prior year
were  $1,500,000  higher  than that of the current year.  Another reason for the
overall  decrease  in revenue is the decline in the selling price of some of our
older  product  line.  Prices have fallen, in part, due to increased competition
and,  in  part, due to our willingness to accept a lower margin during the phase
out  period  of  some  of  these  products,  rather than absorb future inventory
obsolescence  costs.  However, OEM sales in the current year have rebounded from
a  sluggish  start in fiscal 1999, posting an $800,000 gain over the same period
last  year.

     The gross profit percentage of 40% in the first quarter of the current year
represents  a  decrease of 11% from the same period in fiscal 2000, but shows an
improvement over both of the previous two quarters.  A comparison of the current
year  cost  of  sales  to that of the prior year (after adjusting for the higher
margin  systems  sale)  shows  that  the  cost  per unit has remained relatively
constant.  Therefore,  the  lower  margin  in  fiscal  2000 is attributed to the
profitable systems sale in the prior year, the lower sales prices on established
products  as  discussed  above, and introductory pricing on our newly introduced
products  being  sold as demonstration units.  We expect to see some improvement
in  its  margins, as most of the demonstration units have been moved through the
backlog,  and  future  sales of the newer products are expected to be subject to
less  discounting.


                                       8
<PAGE>
     In  the  prior  year,  we made great strides in reducing operating expenses
from  that of the year before, and that emphasis has continued into fiscal 2001.
Current  year  operating  expenses  decreased $200,000 in the first quarter from
that  of  the  prior  year.  Approximately $100,000 is attributed to the service
area  in  the  form of higher warranty sales and better control of materials and
supplies.  Research and development accounts for another $100,000 in reductions,
as  there was a significant amount of activity in the first quarter of the prior
year  related  to  the  development  of the new products released in late fiscal
2000.

     Income  from  operations  fell  approximately $250,000 for the three months
ended  September 30, 2000 when compared to the same period in fiscal 2000 due to
the  decrease  in  revenue  and  gross  profit,  which  offset  the reduction in
operating  expense.

     Net  non-operating  expenses  were  approximately  $60,000, the majority of
which relates to interest expense on the building mortgage, and is comparable to
the amount spent on interest in the prior year.  However, offsetting last year's
interest  expense  was  a  $1,800,000  gain  on the sale of Immtech stock, which
accounts  for  the  difference  in  the  non-operating  expense  totals.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  2000  AND  1999

     For  the  twelve  months  ended  June  30,  2000,  international sales rose
approximately $600,000, but were offset by a decrease in total domestic sales of
approximately  $2,000,000.  The  net  result was a decline in net sales of 4.8%,
from  $28,512,507  to  $27,154,236,  which  resulted  primarily  from decreasing
product  prices.

     The  gross  profit percentage declined from 45.5% in 1999 to 39.4% in 2000.
This  decrease  is  due  primarily  to  continued price erosion on products in a
portion  of  our  older  product  line.

     Total  operating  expenses  were  reduced by $3,700,000, which represents a
21.7%  cost  reduction  during  fiscal 2000.  Marketing expenses were lowered by
approximately  $900,000  due to a variety of factors.  These include a reduction
in  service  labor  and  materials,  a  decrease  in  payroll and related travel
expenses  due  to a reduction in direct sales people as more dealers were added,
and  a  decrease in commissions associated with the lower sales.  Offsetting the
$1,800,000  of  reductions  was  a $900,000 increase in the reserve for doubtful
accounts  related to the receivable balances of certain international customers.
Research  and  development  expenses  decreased  approximately  $100,000, as the
design  phase  of  the  8100  product  was  completed  and production commenced.
Administration  expenses  decreased  approximately  $2,000,000.  The majority of
this  reduction  is  due  to the non-reoccurring litigation and settlement costs
associated with a lawsuit in the prior year.  In addition, $810,000 of severance
costs  were  recorded  in  1999.

     Interest  expense was reduced $170,000 from 1999 levels due to the mortgage
that  was refinanced in March 1999.  However, the more significant change is the
$2,500,000 gain recorded on the private placement sale of 500,000 Immtech shares
in  fiscal  2000.

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.

     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.


                                       9
<PAGE>
     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 as no purchase discount related to convertible
debentures  was recorded in 1999.  All debentures were converted to common stock
during  1998.

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  September 30, 2000, we had a cash balance of approximately $200,000
and  no  short-term  borrowings.  In  the three months ended September 30, 2000,
approximately  $200,000  was  provided  by  operations,  of  which  $100,000 was
reinvested  in  property,  plant and equipment.  In the same period of the prior
year,  approximately  $1,700,000  was used in operations, of which a significant
portion  was  attributed to the settlement of a long-standing lawsuit.  Proceeds
for  this settlement were obtained from the sale of shares of Immtech stock in a
private placement sale. Subsequent to September 30, 2000, we received $4,000,000
in  proceeds  from the private placement of 1,786,273 shares of our common stock
to  the  selling  stockholders.  The  primary intended use of these funds is for
additional  research  and  development  and  an  expanded marketing program.  We
believe  all  other capital and liquidity requirements will be satisfied by cash
generated  from  operations  and  periodic  utilization  of a $4,000,000 line of
credit  currently  in place, if necessary.  At September 30, 2000, there were no
borrowings  outstanding  under  the  line  of  credit.

     In  fiscal  2000,  we  generated $2.5 million through the private placement
sale  of  Immtech  stock  and  $499,581  from  the exercise of stock options and
employee stock purchases from the treasury.  We used $73,925 to retire long-term
debt,  $595,412  for  capital  expenditures  and  $4,726,492 to fund operations.
These  sources and uses of cash resulted in net negative cash flow of $2,396,248
for  the  2000  fiscal  year.

     In  fiscal  1999, we generated $315,577 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, and $193,430 for the repurchase of our stock.  These
sources  and uses of cash resulted in net negative cash flow of $218,920 for the
1999  fiscal  year.

     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
$3,000,000  due  in  December  2002.

     We  expect  our  continued  programs  to  increase  accounts  receivable
collections,  decrease  inventory  levels,  reduce  product  development tooling
requirements  and  stabilize  sales  demonstration  equipment levels will have a
positive  effect on cash flow activities in the next fiscal year.  Consequently,
we  believe  our  research  and  development  activities  and  other capital and
liquidity  requirements for at least the next twelve months will be satisfied by
cash  generated  from  operations  and other borrowings.  There are currently no
significant  capital  expenditures planned for fiscal 2001.  During fiscal 2000,
we  also  had access to a commercial bank line of credit of up to $4,000,000. At
June  30,  2000, 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.


                                       10
<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 gain of $2,500,000 in the
quarter  ended  September  30,  1999  related to the sale of Immtech stock and a
charge  of  approximately  $1,800,000  for settlement costs related to a lawsuit
that was resolved in the quarter ended June 30, 1999.  These items were unusual,
nonrecurring  adjustments.
<TABLE>
<CAPTION>

                                                             QUARTERS ENDED
                     SEPT. 30,    JUNE 30,    MARCH 31,    DEC. 31,   SEPT. 30,    JUNE 30,    MARCH 31,    DEC. 31,    SEPT. 30,
                       2000         2000        2000         1999        1999        1999        1999         1998        1998
                                                     (in  thousands,  except  per  share  data)
<S>                 <C>          <C>         <C>          <C>         <C>         <C>         <C>          <C>         <C>
Net sales. . . . .  $    6,230   $   7,519   $    6,131   $   6,901   $    6,603  $   7,223   $    7,276   $   7,290   $    6,724
Gross profit . . .       2,511       2,326        2,235       3,142        2,989      2,784        3,379       3,562        3,259
(Loss) income from
  operations . . .        (108)     (1,317)      (1,143)       (215)         157     (2,308)        (486)       (880)        (214)
Net (loss)
  income . . . . .        (166)     (1,367)      (1,197)        489        1,880     (2,340)        (681)       (947)        (420)
Net (loss) income
  per common
  share-Basic. . .       (0.02)      (0.16)       (0.14)       0.06         0.22      (0.27)       (0.08)      (0.11)       (0.05)
       -Diluted. .       (0.02)      (0.16)       (0.14)       0.06         0.21      (0.27)       (0.08)      (0.11)       (0.05)
</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.


                                       11
<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  8100  Vital  Signs  Monitor.  The full-featured CSI 8100 Vital Signs
     ----------------------------------
Monitor provides maximum flexibility for hospital, transport and outpatient care
settings.  The  unit's  custom  configurations  include  ECG,  ComfortCuff
noninvasive  blood  pressure,  DOX  digital  oximetry,  heart rate, temperature,
respiration  and nurse call interface.  Optional features include CO2 and CO2/O2
monitoring  and  an  integrated  printer.  The  8100  is  well  suited  for busy
departments  that  require  basic  vital signs monitoring to conscious sedation.


                                       12
<PAGE>
     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.

     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.


                                       13
<PAGE>
     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.

     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 August 31, 2000, our domestic sales force consisted of
     ---------------
eight  employees  and  104 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,  VitalView  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  2000,  we  sold  our  products,  principally to
hospitals,  in  over  70 countries through over 70 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.


                                       14
<PAGE>
     In fiscal 2000, 41% of our net sales, or $11.0 million, was attributable to
international  sales,  of  which  approximately:

     -     49%  was  from  sales  in  Europe  and  the  Middle  East;
     -     24%  was  from  sales  to  Pacific  Rim  countries;  and
     -     27%  was  from  sales  to  Canada  and  Central  and  South  America.

     In  fiscal  1999,  37%  of  our net sales was attributable to international
sales.  In  fiscal  1998,  46% of our net sales was attributable to exports.  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 collectibility of accounts receivable from
international  customers.  We  analyze  this  risk  before  making  shipments to
countries  we  view  as  unstable.

     Clinical  Support.  At  August  31,  2000, we employed one clinical support
     -----------------
specialist  to  provide  customer  training and education, primarily to domestic
hospitals.  The  clinical  support  specialist  also  assists  in  the  periodic
training and education of the direct sales force.  In addition, the direct sales
force  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 are warranted against defects for one year
and  our  reusable  sensors are warranted for six months.  If a problem develops
with  one  of  our  products  while  under  warranty,  we  typically  provide  a
replacement  unit  until the product can be repaired at our facility.  At August
31,  2000,  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  certain  components.

     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."


                                       15
<PAGE>
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 August 31, 2000, we
had  an  in-house research, development and engineering staff of 20 people.  Our
research,  development  and engineering expenditures were $2.9 million in fiscal
2000,  $3.0  million  in  fiscal  1999  and  $3.3  million  in  fiscal  1998.

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.


                                       16
<PAGE>
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  Food, Drug and Cosmetic Act, 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.

     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 thirteen 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,"  "Scholar,"  "MPT,"  "REMOTEVIEW"  and  "MICROVIEW."


                                       17
<PAGE>
     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  August  31,  2000,  we  had  104  employees,  including:

     -     44  in  manufacturing  and  operations;
     -     6  in  quality  control;
     -     21  in  sales  and  marketing;
     -     13  in  administration;  and
     -     20  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 employees
are subject to a collective bargaining agreement.  We believe that our relations
with  our  employees  are  good.

BACKLOG

     Our backlog was approximately $1,833,000 on June 30, 2000 and approximately
$1,836,000  on June 30, 1999.  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.  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  the  normal  course  of  business  we  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.


                                       18
<PAGE>
                                   MANAGEMENT


DIRECTORS  AND  OFFICERS

     The  following  table  sets  forth  information regarding our directors and
executive  officers:
<TABLE>
<CAPTION>

NAME                       AGE                       TITLE
-------------------------  ---  ------------------------------------------------
<S>                        <C>  <C>
Karsten Houm (1)(2)         54  Chairman of the Board and Director

Emil H. Soika               62  President, Chief Executive Officer and Director

N.C. Joseph Lai, Ph.D.      58  Director

Milton Datsopoulos (1)(2)   60  Director

Jeffrey T. Barnes           46  Director

Mark S. Ruehle              39  Vice President-Finance and Secretary

Stephen D. Okland           58  Vice President-Domestic Sales

Drew M. Diaz                37  Vice President-International Sales

Michael T. Larsen           41  Vice President-Quality Control/Quality Assurance

Joseph P. Lester            50  Vice President-Operations

Dennis D. Hurlebaus         58  Vice President-U.S. Hospital Sales
______________________
<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
June 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, 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.

     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 one of our co-founders
and  served  as  our  Vice  Chairman  of  the  Board  and as an officer from our
inception  in  October  1984  until  November  1998.


                                       19
<PAGE>
     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.

     JEFFREY  T.  BARNES,  DIRECTOR.  Mr.  Barnes has served as a Director since
October  2000.  Mr.  Barnes  has  been a partner of Oxford Bioscience, a venture
capital  firm,  since October 1999.  From 1997 to October 1999, Mr. Barnes was a
principal  of Robertson Stephens, an investment banking firm.  From October 1993
to  January  1997,  Mr.  Barnes  was a principal of Needham & Co., an investment
banking  firm.

     MARK  S.  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.,  a  food  distribution  company, from December 1992 to June
1999.

     STEPHEN D. OKLAND, VICE PRESIDENT-DOMESTIC SALES.  Mr. Okland has served as
one  of  our  Vice  Presidents  since  April  1986.

     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  P. 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  April  1997,  Mr.  Lester  was  Senior
Director-Operations  for  Spacelabs  Medical,  a medical monitoring and clinical
information  systems  company.

     DENNIS D. HURLEBAUS, VICE PRESIDENT-U.S. HOSPITAL SALES.  Mr. Hurlebaus has
served  as  our  Vice  President-U.S.  Hospital  Sales since May 2000.  Prior to
joining  us,  Mr.  Hurlebaus  was Vice President-Sales for Team Rehab, a medical
software  company,  from  January 2000 to April 2000.  From October 1995 to June
1998,  Mr.  Hurlebaus  was Vice President-Sales of Hill-Rom, a medical equipment
company.  From  February  1981  to  October  1995,  Mr.  Hurlebaus  was  Vice
President-Sales  for  Datascope,  a  medical  equipment  company.

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, as nearly equal as
possible,  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  Datsopoulos will stand for re-election at the 2001 annual
meeting  of  stockholders.  N.C.  Joseph  Lai,  Ph.D. and Jeffrey T. Barnes will
stand  for  re-election  at  the  2002  annual  meeting  of  stockholders.


                                       20
<PAGE>
     Mr.  Barnes'  directorship  is connected with the investment of the selling
stockholders  in  our common stock pursuant to a Purchase Agreement, dated as of
October  17,  2000,  among  Criticare  and  the  selling  stockholders.

COMPENSATION  OF  DIRECTORS

     Our  directors  are  reimbursed  for  out-of-pocket  expenses  incurred  in
attending  meetings  of the Board of Directors.  Our directors historically have
not  received  cash directors' fees, although we have adopted a policy effective
November  1,  2000  to pay a retainer of $1,250 per month to our Chairman of the
Board  and $1,000 per month to each of our other non-employee directors.  During
fiscal  2000,  we  granted  50,000  stock  options  to  each of Mr. Houm and Mr.
Datsopoulos.

EXECUTIVE  COMPENSATION

     Cash  and  Other Compensation.  The following table sets forth compensation
information  for  the  three fiscal years ended June 30, 2000 to or on behalf of
the  person who served as our Chief Executive Officer during fiscal 2000 and our
two  other  executive  officers  whose salary exceeded $100,000 for fiscal 2000.
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,              2000  125,000                     1,280            --               434 (3)
  President, Chief          1999   78,125                        --       200,000                --
  Executive Officer and
  Director (2)

Stephen D. Okland,          2000  230,282 (4)                 6,000            --             3,517 (6)
  Vice President-           1999  277,576 (4)                 6,000        43,500 (5)         3,701 (6)
  Domestic Sales            1998  302,628 (4)                 6,000            --             3,690 (6)

Drew M. Diaz,               2000  160,100                     1,640        42,000             3,295 (8)
  Vice President-           1999  165,609                     1,915       100,000 (7)         1,882 (8)
  International Sales       1998  188,292                       638            --                86 (8)

_____________________
<FN>

(1)     The  amounts  represent  automobile  allowance  payments.

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

(3)     Represents  premiums  we  paid on a life insurance policy, the proceeds of which are payable to
the  beneficiary  of  Mr.  Soika.

(4)     Represents commissions we paid to Mr. Okland based on a percentage of certain domestic sales by
the  Company.  Mr.  Okland  receives  no  fixed  salary.


                                       21
<PAGE>
(5)     Represents  30,000  stock options granted in fiscal 1999 and 13,500 stock options regranted due
to  repricing  of  options  on  December  11,  1998.

(6)     For  fiscal  2000, represents $317 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 contributions made by us to our
401(k)  plan  on  behalf of Mr. Okland.  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
contributions  made by us to our 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  contributions  made  by  us  to our 401(k) plan on behalf of Mr. Okland.

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

(8)     For fiscal 2000, represents $95 of premiums we paid on a life insurance policy, the proceeds of
which  are payable to the beneficiary of Mr. Diaz, and $3,200 of contributions made by us to our 401(k)
plan  on  behalf of Mr. Diaz.  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 contributions
made  by  us  to our 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.
</TABLE>

     Options  Granted  During  Fiscal  2000.  The  following  table  provides
information  regarding  stock  options  granted  to our named executive officers
during  the  fiscal  year  ended  June  30,  2000.

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

                                                                                 POTENTIAL REALIZABLE
                    NUMBER OF    % OF TOTAL                                        VALUE AT ASSUMED
                   SECURITIES     OPTIONS                                           ANNUAL RATES OF
                   UNDERLYING    GRANTED TO                                           STOCK PRICE
                     OPTIONS    EMPLOYEES IN  EXERCISE PRICE      EXPIRATION         APPRECIATION
NAME               GRANTED (#)  FISCAL YEAR       ($/ SH)            DATE         FOR OPTION TERM ($)
-----------------  -----------  ------------  ---------------  ----------------  ---------------------
                                                                                     5%          10%
                                                                                 ----------  -----------
<S>                <C>          <C>           <C>              <C>               <C>         <C>
Emil H. Soika               --            --               --                --          --          --
Stephen D. Okland           --            --               --                --          --          --
Drew M. Diaz             2,000           0.6             2.25  January 25, 2002         461         945
                        40,000          12.2             2.25      May 15, 2005      24,865      54,946
</TABLE>

     Fiscal  Year-End  Option  Values.  The  following  table  shows the fiscal
year-end  value  of  unexercised  options  held by our named executive officers.
None  of  our  named  executive  officers  exercised  options  in  fiscal  2000.
<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                   60,000        140,000               45,941        104,070
Stephen D. Okland               23,500         20,000               11,017          9,376
Drew M. Diaz                    56,000         84,000               30,003         32,629
<FN>

(1)     Based  on the reported closing bid price of $2.3438 per share of common stock on June 30, 2000.
</TABLE>

                                       22
<PAGE>
     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
and  a  former  director.  Mr.  Von  der Ruhr also beneficially owns 5.2% of our
outstanding  common  stock  as  of October 31, 2000.  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)  allow  Mr.  Von  der  Ruhr  to continue to use office space and
secretarial  services  for a period of up to 12 months, (ii) continue to provide
fringe  benefits  to  Mr.  Von  der  Ruhr  through September 30, 2001, and (iii)
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  relating  to  fetal  monitoring, and 172,414 shares of Immtech
common  stock  to  Mr.  Von der Ruhr.  Mr. Von der Ruhr subsequently transferred
such  patent  rights  to  GU  Technologies which in turn transferred them to its
majority-owned subsidiary, O.B. Scientific, Inc., in exchange for the payment by
Mr.  Von  der  Ruhr  of $150,000 in ten semi-annual installments of $15,000 each
starting  on  June  1,  1999.  We  also  agreed  to supply our existing oximetry
monitors  to  Mr.  Von  der  Ruhr  at  a  formula price.  We received 12% of the
outstanding  shares  of GU Technologies and the right to elect one member of the
board  of  directors  of  GU  Technologies.

     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) allow Dr. Lai to continue to use
office  space  and  secretarial  services  for a period of up to 12 months, (ii)
continue  to  provide fringe benefits to Dr. Lai through September 30, 2001, and
(iii)  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  October  31,  2000  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 October 31, 2000 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>

NAME AND ADDRESS OF                             NUMBER OF
BENEFICIAL OWNER (1)                          SHARES OWNED     PERCENT
------------------------------------------  -----------------  -------
<S>                                         <C>                <C>
Emil H. Soika. . . . . . . . . . . . . . .         60,969 (2)        *

Jeffrey T. Barnes. . . . . . . . . . . . .      1,769,084 (3)     16.4

N.C. Joseph Lai, Ph.D. . . . . . . . . . .        577,290 (4)      5.4

Karsten Houm . . . . . . . . . . . . . . .        111,065 (5)      1.0

Milton Datsopoulos . . . . . . . . . . . .         85,300 (6)        *

Stephen D. Okland. . . . . . . . . . . . .         32,238 (7)        *

Drew M. Diaz . . . . . . . . . . . . . . .         58,414 (8)        *

Entities affiliated with Oxford
Bioscience Partners. . . . . . . . . . . .      1,786,273 (9)     16.6

Gerhard J. Von der Ruhr. . . . . . . . . .       555,075 (10)      5.2

All directors and executive officers as a
group (11 persons) . . . . . . . . . . . .  2,751,376 (3)(11)     24.7

_____________________
<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. Barnes and Oxford
Bioscience  Partners  is  31 St. James Avenue, Suite 905, Boston, MA 02116;  the
address  of Mr. Houm is Kristinelundvn 21, 0268 Oslo, Norway; the address of Mr.
Datsopoulos  is  Central Square Building, 201 West Main, Missoula, Montana 59802
and  the  address of Mr. Von der Ruhr is N112 W18741 Mequon Road, Germantown, WI
53022.


                                       24
<PAGE>
(2)     Includes  60,000  shares  which Mr. Soika has the right to acquire under
currently  exercisable  options  and 969 shares in Mr. Soika's account under our
Employee  Stock  Purchase  Plan.

(3)     Includes  1,000  shares  owned  directly  by  Mr. Barnes.  Also includes
1,547,529  shares  held  of  record  by  Oxford Bioscience Partners III L.P. and
220,555  shares  held  of  record  by  Oxford  Bioscience Partners (Bermuda) III
Limited  Partnership.  Mr. Barnes may be deemed to share beneficial ownership of
these shares, and he disclaims such beneficial ownership except to the extent of
his  pecuniary  interest  in  such  shares.

(4)     Includes  116,000  shares  owned of record by Helen Lai, Dr. Lai's 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.

(5)     Includes  95,000  shares  which  Mr. Houm has the right to acquire under
currently  exercisable  options.

(6)     Includes  85,000  shares  which Mr. Datsopoulos has the right to acquire
under  currently  exercisable  options.

(7)     Includes  23,500  shares which Mr. Okland has the right to acquire under
currently exercisable options and 5,238 shares in Mr. Okland's account under our
Employee  Stock  Purchase  Plan.

(8)     Includes  56,000  shares  which  Mr. Diaz has the right to acquire under
currently  exercisable  options and 2,414 shares in Mr. Diaz's account under our
Employee  Stock  Purchase  Plan.

(9)     Oxford  Bioscience  Partners  III  and  related  entities  (collectively
"Oxford")  filed  a  Schedule  13D  dated October 27, 2000, reporting that as of
October  27,  2000  it  was  the  beneficial owner of 1,786,273 shares of common
stock.  The  shares  of  common  stock  beneficially owned by Oxford include (i)
1,547,529  shares  held  of record by Oxford Bioscience Partners III, L.P. ("OBP
Partners"),  with  shared  voting  and investment power as to all of such shares
(OBP  Management  III L.P. may be deemed to share voting and investment power as
to  all of such shares); (ii) 220,555 shares held of record by Oxford Bioscience
Partners  (Bermuda)  III  Limited  Partnership  ("OBP Partners (Bermuda)"), with
shared  voting  and  investment  power  as to all of such shares (OBP Management
(Bermuda)  III  Limited Partnership may be deemed to share voting and investment
power  as to all of such shares); and (iii) 18,189 shares held of record by mRNA
Fund,  L.P.,  with  shared  voting and investment power as to all of such shares
(mRNA  Partners,  L.P.  may be deemed to share voting and investment power as to
all  of  such  shares).  Jonathon J. Fleming and Alan G. Walton may be deemed to
share  voting  and  investment power as to all of the shares held by Oxford, and
they  disclaim  beneficial  ownership  of  such  shares.  Jeffrey  T. Barnes and
Michael  J. Brennan may be deemed to share voting and investment power as to all
of the shares held by OBP Partners and OBP Partners (Bermuda), and they disclaim
beneficial  ownership  of  such  shares.

(10)     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.

(11)     Includes 344,500 shares of common stock the members of the group have a
right  to  acquire  under currently exercisable options and 10,387 shares in the
accounts  of  the  members  of the group under our Employee Stock Purchase Plan.
</TABLE>


                                       25
<PAGE>
                              SELLING STOCKHOLDERS

     All  of  the  shares  of our common stock offered for sale pursuant to this
prospectus  are  being offered by the selling stockholders.  We issued 1,786,273
shares of our Company Stock to the selling stockholders on October 17, 2000 at a
price of $2.25 per share, as part of a private placement transaction between the
selling  stockholders  and  us.  We  appointed  Jeffrey  T. Barnes as one of our
directors  on October 17, 2000, in connection with the investment by the selling
stockholders.

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

                                      SHARES OF COMMON STOCK
                                        OWNED PRIOR TO THE    SHARES OFFERED   SHARES TO BE OWNED
                                             OFFERING         FOR SALE HEREBY  AFTER THE OFFERING*
                                     -----------------------  ---------------  -------------------
                                                                                 Number   Percent
                                                                               ---------  --------
<S>                                  <C>                      <C>              <C>        <C>
Oxford Bioscience Partners III L.P.                1,547,529        1,547,529         --        --
Oxford Bioscience Partners
  (Bermuda) III Limited Partnership                  220,555          220,555         --        --
mRNA Fund L.P.                                        18,189           18,189         --        --
<FN>

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

                              PLAN OF DISTRIBUTION

     The  selling  stockholders  may,  without limitation and from time to time,
sell all or a portion of their 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  stockholders  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
           stockholders will attempt to sell the shares as agent for the selling
           stockholders  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 stockholders may pledge their shares pursuant
to  the  margin provisions of the selling stockholders' customer agreements with
their brokers.  Upon a default by the selling stockholders, the broker may, from
time  to  time,  offer  and  sell  the  pledged  shares.


                                       26
<PAGE>
     In effecting sales, brokers-dealers engaged by the selling stockholders may
arrange  for other broker-dealers to participate in such sales.  Brokers-dealers
may  receive  commissions or discounts from the selling stockholders (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  stockholders  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 stockholders, to purchase as
principal  any  unsold shares at the price required to fulfill the broker-dealer
commitment  to  the  selling  stockholders.

     The  selling stockholders and any broker-dealers or agents that participate
with  the  selling  stockholders  in  sales  of  the  shares may be deemed to be
"underwriters"  within the meaning of the Securities Act of 1933, as amended, in
connection  with  such  sales.  In  such event, any commissions received by such
broker-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  of  1933,  as  amended.

     We  are  required to pay all fees and expenses incident to the registration
of  the  selling  stockholders' shares, other than the fees and disbursements of
counsel  to  the selling stockholders and underwriting discounts or commissions,
if any.  Additionally, we have agreed to indemnify the selling stockholders 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 October 31, 2000, 10,777,524 shares of common stock were outstanding,
held of record by 278 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.  Wisconsin
law,  however,  may make our shareholders personally liable for unpaid wages due
employees  for up to six months' services, but not in an amount greater than the
par  value  of  the  shares.

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."


                                       27
<PAGE>
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 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 66 2/3% 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.


                                       28
<PAGE>
     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;
     -     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),


                                       29
<PAGE>
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.

     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.


                                       30
<PAGE>
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.

                                  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 for the years ended June 30, 2000 and 1999
and schedules included in this prospectus and in the registration statement have
been  audited  by BDO Seidman, LLP, independent certified public accountants, to
the  extent  and  for the periods set forth in their reports appearing elsewhere
herein and in the registration statement, and are included in reliance upon such
reports  given  upon  the  authority  of  said  firm  as experts in auditing and
accounting.

     The  consolidated  financial  statements  for the year ended June 30, 1998,
included  in  this  prospectus,  the  related  consolidated  financial statement
schedule for the year ended June 30, 1998 included elsewhere in the registration
statement,  and  the  consolidated  financial  statement from which the Selected
Consolidated  Financial  Data  for the year ended June 30, 1998 included in this
prospectus  have  been  derived,  have  been  audited  by Deloitte & Touche LLP,
independent  auditors,  as stated in their report 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.  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  website  on  the  Internet  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.

                                       31
<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, 2000 and 1999. . . . . . . . . . . . . . . . .  F-4

  Consolidated Statements of Operations for the years ended
  June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

  Consolidated Statements of Stockholders' Equity for the years
  ended June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . .  F-7

  Consolidated Statements of Cash Flows for the years ended
  June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-8

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

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS:

  Unaudited Consolidated Balance Sheet as of September 30, 2000. . . . . . . . . . . . .  F-19

  Unaudited Consolidated Income Statements for the three months ended
  September 30, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-20

  Unaudited Consolidated Statements of Cash Flows for the three months ended
  September 30, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  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, 2000 and 1999, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
each  of  the  two  years  in  the  period ended June 30, 2000.  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  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  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.  and  subsidiaries  at June 30, 2000 and 1999, and the results of
their  operations  and  their cash flows for each of the two years in the period
ended  June  30,  2000,  in  conformity  with  generally  accepted  accounting
principles.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  15,  2000

                                      F-2
<PAGE>

INDEPENDENT  AUDITORS'  REPORT

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

     We  have  audited  the  accompanying consolidated statements of operations,
stockholders'  equity and cash flows of Criticare Systems, Inc. and subsidiaries
for  the  year  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  audit.

     We  conducted  our  audit  in  accordance with auditing standards generally
accepted  in the United States of America.  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,  such  consolidated  financial  statements  of  Criticare
Systems,  Inc.  and  subsidiaries  present fairly, in all material respects, the
results  of  their  operations  and their cash flows for the year ended June 30,
1998  in  conformity with accounting principles generally accepted in the United
States  of  America.

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

                                      F-3
<PAGE>

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS
JUNE  30,  2000  AND  1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

ASSETS                                                         2000         1999
<S>                                                         <C>          <C>
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $   114,830  $ 2,511,078
Accounts receivable, less allowance for doubtful accounts
  of $1,300,000 and $375,000, respectively . . . . . . . .    6,782,765    6,358,487
Investments (Notes 1, 3 and 5) . . . . . . . . . . . . . .    5,704,675            -
Other receivables. . . . . . . . . . . . . . . . . . . . .      116,773       83,106
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,178,326    8,510,975
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      219,852      192,290
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   21,117,221   17,655,936

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,009,312    2,051,442
Furniture and fixtures . . . . . . . . . . . . . . . . . .      763,282      819,579
Demonstration and loaner monitors. . . . . . . . . . . . .    1,407,587    1,416,893
Production tooling . . . . . . . . . . . . . . . . . . . .    2,651,145    2,158,378
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   11,356,326   10,971,292
Less accumulated depreciation. . . . . . . . . . . . . . .    5,367,670    4,697,232
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    5,988,656    6,274,060

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      104,990      111,991
                                                            -----------  -----------
Total other assets . . . . . . . . . . . . . . . . . . . .      104,990      111,991
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867  $24,041,987
                                                            ===========  ===========
</TABLE>

See  notes  to  consolidated  financial  statements.


                                      F-4
<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS  (CONTINUED)
JUNE  30,  2000  AND  1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                         2000          1999
<S>                                                                      <C>           <C>
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,635,344   $ 3,078,020
Accrued liabilities:
  Compensation and commissions. . . . . . . . . . . . . . . . . . . . .    1,243,839     1,446,614
  Product warranties (Note 1) . . . . . . . . . . . . . . . . . . . . .      325,000       325,000
  Lawsuit settlement. . . . . . . . . . . . . . . . . . . . . . . . . .            -     1,600,000
  Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . .            -       380,000
  Other (Note 7). . . . . . . . . . . . . . . . . . . . . . . . . . . .      574,826       412,395
Current maturities of long-term debt (Note 5) . . . . . . . . . . . . .       80,432        73,893
                                                                         ------------  ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . .    4,859,441     7,315,922

LONG-TERM DEBT, less current maturities (Note 5). . . . . . . . . . . .    3,283,892     3,364,356

OTHER LONG-TERM OBLIGATIONS (Note 12) . . . . . . . . . . . . . . . . .      268,582       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,
  8,976,251 and 8,706,151 shares issued
  and outstanding, respectively . . . . . . . . . . . . . . . . . . . .      359,050       348,246
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . .   18,478,040    17,960,363
Common stock held in treasury
  (81,122 and 103,840 shares, respectively) . . . . . . . . . . . . . .     (151,111)     (193,430)
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . .   (5,591,702)   (5,403,470)
Accumulated comprehensive income. . . . . . . . . . . . . . . . . . . .    5,704,675             -
                                                                         ------------  ------------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . .   18,798,952    12,711,709
                                                                         ------------  ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867   $24,041,987
                                                                         ============  ============
</TABLE>

See  notes  to  consolidated  financial  statements.


                                      F-5
<PAGE>

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  OPERATIONS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                    2000          1999          1998
<S>                                             <C>           <C>           <C>
NET SALES (Note 10). . . . . . . . . . . . . .  $27,154,236   $28,512,507   $27,908,364

COST OF GOODS SOLD . . . . . . . . . . . . . .   16,462,477    15,528,314    14,870,453
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   10,691,759    12,984,193    13,037,911

OPERATING EXPENSES:
Marketing (Note 1) . . . . . . . . . . . . . .    8,014,129     8,941,036     7,454,619
Research, development and
  engineering (Note 8) . . . . . . . . . . . .    2,861,733     2,963,134     3,278,714
Administrative (Note 7). . . . . . . . . . . .    2,333,445     4,157,811     1,998,362
Severance pay (Note 12). . . . . . . . . . . .            -       810,000             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   13,209,307    16,871,981    12,731,695

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (2,517,548)   (3,887,788)      306,216

OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (259,280)     (432,477)     (797,376)
Interest income. . . . . . . . . . . . . . . .       90,440        82,094       111,884
Equity in loss of investments
  (Notes 1 and 3). . . . . . . . . . . . . . .            -      (150,000)     (120,000)
Gain on sale of stock. . . . . . . . . . . . .    2,500,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .    2,331,160      (500,383)     (805,492)

LOSS BEFORE INCOME TAXES
  AND EXTRAORDINARY GAIN . . . . . . . . . . .     (186,388)   (4,388,171)     (499,276)

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

NET LOSS . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $  (499,276)
                                                ============  ============  ============

NET LOSS PER COMMON SHARE
Basic. . . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)
Diluted. . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING (Note 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
Diluted. . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
</TABLE>

See  notes  to  consolidated  financial  statements.


                                      F-6
<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                RETAINED
                                                          ADDITIONAL       COMMON STOCK         EARNINGS     ACCUMULATED
                                         COMMON STOCK      PAID-IN           TREASURY         (ACCUMULATED  COMPREHENSIVE
                                      SHARES     AMOUNT     CAPITAL      SHARES      COST       DEFICIT)     INCOME/LOSS
<S>                                  <C>        <C>       <C>           <C>       <C>         <C>           <C>
BALANCE, JUNE 30, 1997. . . . . . .  7,796,465  $311,859  $14,469,406                         $  (516,023)  $    (38,107)
Net loss. . . . . . . . . . . . . .                                                              (499,276)
Foreign currency translation. . . .                                                                               38,107
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) . . . .
Issuance of common stock for
  patented technology . . . . . . .    350,000    14,000      (14,000)
Exercise of options and warrants. .      5,000       200       10,113
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)             -
Net loss. . . . . . . . . . . . . .                                                              (186,388)
Unrealized gain on investment . . .                                                                            5,704,675
Comprehensive income/loss . . . . .
Common stock issued in
  settlement of lawsuit . . . . . .     30,000     1,200       68,175
Exercise of options . . . . . . . .    240,100     9,604      448,746
Employee common stock
  purchased from treasury . . . . .                               756   (22,718)     42,319        (1,844)

BALANCE, JUNE 30, 2000. . . . . . .  8,976,251  $359,050  $18,478,040    81,122   $(151,111)  $(5,591,702)  $  5,704,675

                                        TOTAL
                                     STOCKHOLDERS'
                                        EQUITY
<S>                                  <C>
BALANCE, JUNE 30, 1997. . . . . . .  $14,227,135
Net loss. . . . . . . . . . . . . .     (499,276)
Foreign currency translation. . . .       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
Net loss. . . . . . . . . . . . . .     (186,388)
Unrealized gain on investment . . .    5,704,675
Comprehensive income/loss . . . . .    5,518,287
Common stock issued in
  settlement of lawsuit . . . . . .       69,375
Exercise of options . . . . . . . .      458,350
Employee common stock
  purchased from treasury . . . . .       41,231

BALANCE, JUNE 30, 2000. . . . . . .  $18,798,952
</TABLE>

See  notes  to  consolidated  financial  statements.

                                      F-7
<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

OPERATING ACTIVITIES:                                                 2000          1999         1998
<S>                                                               <C>           <C>           <C>
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $ (499,276)
Adjustments to reconcile net loss to net cash
  (used in) provided by operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . .      871,510       486,610      721,476
    Amortization . . . . . . . . . . . . . . . . . . . . . . . .        7,001         7,002       21,440
    Interest and discount accrued on convertible debentures. . .            -             -      462,034
    Provision for doubtful accounts. . . . . . . . . . . . . . .      925,000       380,004       99,000
    Expense related to equity in loss of investments . . . . . .            -             -      120,000
    Expense related to issuance of warrants for services . . . .            -             -       23,065
    Expense related to commitment to issue common stock
      for patented technology. . . . . . . . . . . . . . . . . .            -             -      900,000
    Gain on sale of Immtech stock. . . . . . . . . . . . . . . .   (2,500,000)            -            -
    Litigation settled with common stock . . . . . . . . . . . .       69,375             -            -
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . . . . .   (1,349,278)      183,222      161,524
      Other receivables. . . . . . . . . . . . . . . . . . . . .      (33,667)      239,870      (86,121)
      Inventories. . . . . . . . . . . . . . . . . . . . . . . .      341,955      (461,786)      46,207
      Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      (27,562)      146,007      (68,677)
      Accounts payable . . . . . . . . . . . . . . . . . . . . .     (442,676)      772,299     (768,284)
      Accrued liabilities. . . . . . . . . . . . . . . . . . . .   (2,401,762)    2,950,520     (683,954)
                                                                  ------------  ------------  -----------
Net cash (used in) provided by  operating activities . . . . . .   (4,726,492)      315,577      448,434

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . . . .     (595,412)     (515,017)    (287,205)
Purchase of license rights . . . . . . . . . . . . . . . . . . .            -             -       (1,080)
Advances to Immtech International, Inc.. . . . . . . . . . . . .            -             -     (120,000)
Proceeds from Sale of Immtech Stock. . . . . . . . . . . . . . .    2,500,000             -            -
                                                                  ------------  ------------  -----------
Net cash provide by (used in) investing activities . . . . . . .    1,904,588      (515,017)    (408,285)

FINANCING ACTIVITIES:
Net proceeds from mortgage refinancing . . . . . . . . . . . . .            -       256,413            -
Repurchase of Company stock. . . . . . . . . . . . . . . . . . .            -      (193,430)           -
Principal payments on long-term debt . . . . . . . . . . . . . .      (73,925)      (92,776)    (147,441)
Proceeds from issuance of common stock . . . . . . . . . . . . .      499,581        10,313      396,431
                                                                  ------------  ------------  -----------
Net cash provided by (used in) financing activities. . . . . . .      425,656       (19,480)     248,990

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS . . . . . .   (2,396,248)     (218,920)     289,139
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . . . . . . .    2,511,078     2,729,998    2,440,859
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . . . . . . .  $   114,830   $ 2,511,078   $2,729,998

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
  Income taxes paid-net. . . . . . . . . . . . . . . . . . . . .  $     7,535   $     8,010   $    8,525
  Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      259,590       437,401      335,342
Noncash investing and financing activities:
  Common stock issued upon conversion of convertible debentures,
    net of $100,822 of unamortized issuance costs. . . . . . . .            -             -    2,197,535
  Issuance of warrants for services. . . . . . . . . . . . . . .            -             -       23,065
  Commitment to issue common stock for patented technology . . .            -             -      900,000
  Litigation settled with common stock . . . . . . . . . . . . .       69,375             -            -
  Cost of fixed asset disposals. . . . . . . . . . . . . . . . .      201,072             -            -
  Unrealized gain on investment in Immtech . . . . . . . . . . .    5,704,675             -            -
</TABLE>

See  notes  to  consolidated  financial  statements.

                                      F-8
<PAGE>
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
-----------------------------------------------

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 Blatz House Offices Limited Partnership (the "Blatz Partnership")
on  the  equity  method.  In  Fiscal 2000, the Company ceased accounting for its
investment  in  Immtech  International, Inc. ("Immtech") under the equity method
and  recorded  the  asset  on  the  balance  sheet  at  its fair market value in
accordance  with  SFAS  No. 115, "Accounting for Certain Investments in Debt and
Equity  Securities."  (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  of  amortization  was  charged to
operations  in  fiscal  years  ended  June 30, 2000, 1999 and 1998.  Accumulated
amortization  approximated  $92,000  and  $85,000  at  June  30,  2000 and 1999,
respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
of  amortization  was  charged  to  operations  in 1998.  The pro rata 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 during
1998.  (See  Note  6.)

     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.

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


                                      F-9
<PAGE>
     MARKETING  EXPENSES  -  Marketing  expenses  include  all  of the Company's
sales-related  costs.  The  amount  incurred  in fiscal 2000 includes a $900,000
charge to bad debt expense related to the accounts receivable balance of certain
international  customers.  Total  bad  debt expense was $1,160,614, $380,004 and
$99,000  for  the  years  ended  June  30,  2000,  1999  and 1998, respectively.

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,696,000,
$2,798,000,  $3,156,000  in  2000, 1999 and 1998, 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."  This  statement  establishes  rules for the
reporting  of  comprehensive  income  and  its components.  Comprehensive income
consists of net income, foreign currency translation adjustments, and unrealized
gains  on  investments  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 - Statement of Financial Accounting Standards
No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133)  issued  by  the  FASB  is  effective  for financial statements with fiscal
quarters  of  fiscal  years  beginning  after  June 15, 2000.  SFAS 133 requires
companies to recognize all derivatives contracts as either assets or liabilities
in  the  balance sheet and to measure them at fair value.  If certain conditions
are  met,  a derivative may be specifically designated as a hedge, the objective
of  which  is  to  match  the  timing of gain or loss recognition on the hedging
derivative  with  the  recognition  of  (i) the changes in the fair value of the
hedged  asset  or liability that are attributable to the hedged risk or (ii) the
earnings  effect  of  the  hedged  forecasted transaction.  For a derivative not
designated  as a hedging instrument, the gain or loss is recognized in income in
the  period  of  change.

     Historically, the Company has not entered into derivatives contracts either
to  hedge  existing risks or for speculative purposes.  Accordingly, the Company
does not expect adoption of the new standard to affect its financial statements.


                                      F-10
<PAGE>
     In  1999  the  Securities  and  Exchange Commission issued Staff Accounting
Bulletin  No.  101  "Revenue  Recognition in Financial Statements" (SAB No. 101)
dealing  with  revenue  recognition  which is effective in the fourth quarter of
fiscal  2000.  The Company does not expect its adoption of SAB No. 101 to have a
material  effect  on  the  Company's  financial  statements.

     In  March 2000, the FASB issued FASB interpretation No. 44, "Accounting for
Certain  Transactions Involving Stock Compensation ("FIN 44") which is effective
July  1,  2000.  This interpretation clarifies the application of APB Opinion 25
for  certain  issues related to stock issued to employees.  The Company believes
its  existing stock based compensation policies and procedures are in compliance
with FIN 44 and, therefore, that the adoption of FIN 44 will not have a material
effect  on  the  Company's  financial  statements.

     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.

2.     INVENTORIES

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

                                    2000        1999
<S>                              <C>         <C>
Component parts . . . . . . . .  $3,721,474  $3,790,728
Work in process . . . . . . . .   1,169,609   1,261,709
Finished units. . . . . . . . .   3,687,243   4,018,142
                                 ----------  ----------
Total inventories . . . . . . .   8,578,326   9,070,579
Less:  reserve for
  obsolescence. . . . . . . . .     400,000     559,604
                                 ----------  ----------
Net inventory . . . . . . . . .  $8,178,326  $8,510,975
</TABLE>

3.     INVESTMENTS

     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.

     During  the  first  and  second quarters of fiscal 2000, the Company sold a
portion  of  its  Immtech  stock in a Private Placement.  The proceeds from this
sale  were  $2,500,000.

     As  a  result,  the  Company  owns  less  than  20% of Immtech's issued and
outstanding  common  stock  as  of June 30, 2000.  Therefore, in accordance with
SFAS  No.  115,  "Accounting  for  Certain  Investments  in  Debt  and  Equity
Securities,"  the Company ceased accounting for the Immtech investment under the
equity  method  and  recorded  the asset on the balance sheet at the fair market
value  of  $5,704,675.  An  unrealized  gain was also recorded as a component of
stockholder's  equity.  The Company held 456,374 shares of Immtech common stock,
which  was  trading  at  $12.50  per  share,  on  June  30,  2000.


                                      F-11
<PAGE>
     The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999:

<TABLE>
<CAPTION>

                                         1999
<S>                                  <C>
Investment in Immtech . . . . . . .  $ 2,736,000
Advances to Immtech . . . . . . . .      863,940
                                     ------------
Total . . . . . . . . . . . . . . .    3,599,940
Less:  investment losses
  recognized. . . . . . . . . . . .   (3,599,940)
                                     ------------
Net investment. . . . . . . . . . .  $         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  12).

     The  Company  has recognized investment losses related to the investment in
Immtech  of  $150,000  and  $120,000  in  1999  and  1998,  respectively.

     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.  At June 30, 2000, the lock-up provisions have been
satisfied.

     The  following  is summarized financial information for Immtech at June 30,
1999  for  the  twelve  months  then  ended.
<TABLE>
<CAPTION>

                                                   1999
<S>                                            <C>
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000
Noncurrent assets . . . . . . . . . . . . . .       68,000
Current liabilities . . . . . . . . . . . . .      253,000
Noncurrent liabilities. . . . . . . . . . . .            -
Redeemable preferred stock. . . . . . . . . .            -
Common stockholders' equity (deficit) . . . .    8,356,000
Revenues. . . . . . . . . . . . . . . . . . .      136,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)
Net loss attributable to
  common stockholders . . . . . . . . . . . .   (4,657,000)
</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.

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.


                                      F-12
<PAGE>
     Significant  components  of  the  Company's  deferred income tax assets and
deferred  income  tax  liabilities  are  as  follows:
<TABLE>
<CAPTION>

                                                              JUNE 30, 2000    JUNE 30, 1999    JUNE 30, 1998
<S>                                                          <C>              <C>              <C>
Deferred income tax assets:
   Accounts receivable and sales allowances . . . . . . . .  $      533,000   $      170,000   $      156,000
   Inventory allowances . . . . . . . . . . . . . . . . . .         191,000          254,000          110,000
   Product warranties . . . . . . . . . . . . . . . . . . .         128,000          128,000          128,000
   Other accrued liabilities. . . . . . . . . . . . . . . .         246,000          392,000           86,000
   Severance pay accrual. . . . . . . . . . . . . . . . . .         145,000          279,000                -
   Lawsuit settlement . . . . . . . . . . . . . . . . . . .               -          626,000                -
   Federal net operating loss carryforwards . . . . . . . .       3,320,000        2,014,000        1,870,000
   State net operating loss carryforwards . . . . . . . . .         483,000          291,000          270,000
   Federal tax credit carryforwards . . . . . . . . . . . .         152,000          152,000          152,000
   Investment losses not deducted . . . . . . . . . . . . .         709,000        1,532,000        1,481,000
                                                             ---------------  ---------------  ---------------
   Total deferred income tax assets . . . . . . . . . . . .       5,907,000        5,838,000        4,253,000

                                                             JUNE 30, 2000    JUNE 30, 1999    JUNE 30, 1998
Deferred income tax liabilities:
   Excess of tax over book depreciation and amortization. .        (616,000)        (620,000)        (596,000)
   Prepaid expenses . . . . . . . . . . . . . . . . . . . .         (13,000)          (7,000)          (3,000)
   Unrealized gain on investments . . . . . . . . . . . . .      (2,237,000)               -                -
                                                             ---------------  ---------------  ---------------
   Total deferred income tax liabilities. . . . . . . . . .      (2,866,000)        (627,000)        (599,000)

   Valuation allowance. . . . . . . . . . . . . . . . . . .      (3,041,000)      (5,211,000)      (3,654,000)

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

     At  June 30, 2000, the Company had federal net operating loss carryforwards
of  approximately  $9,765,000  which  expire  in 2008 through 2020.  At June 30,
2000,  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 $9,667,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2015,
available  to  offset  certain  future  state  taxable  income.

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

                               2000   1999   1998
<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>

                                              2000     1999     1998
<S>                                          <C>      <C>      <C>
   Federal statutory income tax rate. . . .  (34.0)%  (34.0)%  (34.0)%
   Losses for which no benefit
     was provided . . . . . . . . . . . . .   35.3     29.3     30.9
   Non-deductible losses of subsidiaries. .   27.6      3.2        -
   Other-net. . . . . . . . . . . . . . . .  (28.9)     1.5      3.1
   Effective income tax rate. . . . . . . .      0 %      0 %      0 %
</TABLE>


                                      F-13
<PAGE>

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

                                                                              2000        1999
<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
     $3,844,000 at June 30, 2000. . . . . . . . . . . . . . . . . . . . .  $3,364,324  $3,438,249
   Less current maturities. . . . . . . . . . . . . . . . . . . . . . . .      80,432      73,893
   Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,283,892  $3,364,356
</TABLE>

     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>
2001. . . . . . . . .  $            80,432
2002. . . . . . . . .               86,766
2003. . . . . . . . .               93,599
2004. . . . . . . . .            3,103,526
2005. . . . . . . . .                    0
                       -------------------
Total . . . . . . . .  $         3,364,324
</TABLE>

     At  June  30,  2000,  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% (9.75% as of June 30, 2000).  As of June
30,  2000, 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, 2000.  This non-compliance was waived by the lending
institution.

     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.

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, $1,650,000 of debentures
were  converted  to  407,761  shares of common stock with a fair market value of
$2,298,357  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.

     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  constituted  full  repayment  of  one of these grants in 1999 and
constituted  full  repayment of one of these grants.  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,  2000.

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 139,350 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 2000.  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  1998,  1999  and  2000  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, 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
  Granted. . . . . . . . . . . . . . . . . .     489,100       2.00-2.25            2.24
  Cancelled. . . . . . . . . . . . . . . . .    (287,700)      1.63-3.63            1.99
  Exercised. . . . . . . . . . . . . . . . .    (240,100)      1.50-2.75            1.91
Outstanding at June 30, 2000 . . . . . . . .   1,152,900       1.50-2.75            1.96

Exercisable at June 30, 2000 . . . . . . . .     502,500       1.50-2.75            1.98

Weighted average fair market value of
options granted during the fiscal year ended
June 30, 2000. . . . . . . . . . . . . . . .  $     0.38
</TABLE>


                                      F-15
<PAGE>
     The  following table summarizes information about stock options outstanding
as  of  June  30,  2000:
<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, 2000    LIFE-YEARS        PRICE       | AT JUNE 30, 2000   EXERCISE PRICE
<S>                   <C>                  <C>          <C>                <C>               <C>
1.50-1.875 . . . . .              622,400         2.71              1.71 |          284,000              1.76
2.00-3.00. . . . . .              530,500         3.39              2.25 |          218,500              2.28
1.50-3.00. . . . . .            1,152,900         3.02              1.96 |          502,500              1.98
</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.

     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,  2000, 1999 and 1998, 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,
                                           2000         1999         1998
<S>                                     <C>         <C>           <C>
Net loss-as reported . . . . . . . . .  $(186,388)  $(4,388,171)  $(499,276)
Net loss-pro forma . . . . . . . . . .  $(365,626)  $(4,555,200)  $(779,276)
Net loss per common
  share-as reported. . . . . . . . . .  $   (0.02)  $     (0.51)  $   (0.06)
Net loss per common share-pro forma. .  $   (0.04)  $     (0.53)  $   (0.09)
Assumptions used:
   Expected volatility . . . . . . . .         23%           15%         14%
   Risk-free interest rate . . . . . .          6%            5%          5%
   Expected option life (in years) . .          4             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.

     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.  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 year ended June 30, 1998.  Warrants to purchase
15,000 shares of common stock at $2.00 per share were exercisable as of June 30,
2000.  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, 2000, 30,000 warrants were exercisable.
Such  warrants  expire  in  February  2003.


                                      F-16
<PAGE>
     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.  The 400,000 shares to be
issued  have  been considered to be outstanding shares for purposes of computing
basic  and  diluted  income  (loss)  per common share in 1998.  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.

     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  $77,000,  $84,000,  and  $77,000  in  2000,  1999  and  1998,
respectively.

10.     BUSINESS  AND  CREDIT  CONCENTRATIONS

     The  Company is a manufacturer of medical monitoring and telemetry products
whose  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  credit  risk  with  respect  to  trade  accounts
receivable  are limited due to the Company's large number of customers and their
geographic  dispersion.  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>

                                         2000         1999         1998
<S>                                   <C>          <C>          <C>
Europe and Middle East . . . . . . .  $ 5,437,000  $ 4,635,000  $ 5,464,000
Pacific Rim. . . . . . . . . . . . .    2,662,000    2,243,000    3,895,000
Canada and Central
  and South America. . . . . . . . .    3,035,000    3,634,000    3,414,000
Export net sales . . . . . . . . . .  $11,134,000  $10,512,000  $12,773,000
U.S. net sales . . . . . . . . . . .   16,020,000   18,001,000   15,135,000
Total net sales. . . . . . . . . . .   27,154,000   28,513,000   27,908,000
</TABLE>


                                      F-17
<PAGE>
11.     SIGNIFICANT  CUSTOMER

     During  1999, a customer entered into an OEM agreement with the Company and
purchased  approximately  $4,360,000 of the Company's products.  This represents
approximately  15% of the Company's total sales.  This customer had a receivable
balance of $448,546 on June 30, 1999, which represents 7% of the Company's total
receivables as of this date.  During 2000, purchases approximated $1,988,000 and
a  receivable  balance of $944,326, which represented 14% of accounts receivable
on  June  30,  2000.

12.     SEVERANCE  PAY

     During November 1998, the two cofounders 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.


                                      F-18
<PAGE>
                             CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2000
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                SEPTEMBER 30,
ASSETS                                                              2000
                                                               ---------------
<S>                                                            <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . .  $      212,840
Accounts receivable, less allowance for doubtful accounts
   of $1,400,000. . . . . . . . . . . . . . . . . . . . . . .       6,451,657
Investments . . . . . . . . . . . . . . . . . . . . . . . . .       7,558,694
Other receivables . . . . . . . . . . . . . . . . . . . . . .         123,903
Inventories . . . . . . . . . . . . . . . . . . . . . . . . .       7,788,891
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . .         491,480
                                                               ---------------
Total current assets. . . . . . . . . . . . . . . . . . . . .      22,627,465

Property, plant and equipment - net . . . . . . . . . . . . .       5,936,119

License rights and patents - net. . . . . . . . . . . . . . .         101,390
                                                               ---------------

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974
                                                               ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . .  $    2,386,134
Accrued liabilities:
    Compensation and commissions. . . . . . . . . . . . . . .       1,264,811
    Product warranties. . . . . . . . . . . . . . . . . . . .         325,000
    Other . . . . . . . . . . . . . . . . . . . . . . . . . .         585,298
Current maturities of long-term debt. . . . . . . . . . . . .          81,984
                                                               ---------------
Total current liabilities . . . . . . . . . . . . . . . . . .       4,643,227

LONG-TERM DEBT, less current maturities . . . . . . . . . . .       3,263,317

OTHER LONG-TERM OBLIGATIONS . . . . . . . . . . . . . . . . .         232,171

STOCKHOLDERS' EQUITY:
Preferred stock . . . . . . . . . . . . . . . . . . . . . . .               -
Common stock - $.04 par value, 15,000,000 shares authorized,
    8,991,251 shares issued and outstanding . . . . . . . . .         359,650
Additional paid-in capital. . . . . . . . . . . . . . . . . .      18,507,981
Common stock held in treasury (76,439 shares) . . . . . . . .        (142,388)
Retained earnings (accumulated deficit) . . . . . . . . . . .      (5,757,678)
Accumulated comprehensive income. . . . . . . . . . . . . . .       7,558,694
                                                               ---------------
Total stockholders' equity. . . . . . . . . . . . . . . . . .      20,526,259
                                                               ---------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974
                                                               ===============
</TABLE>

See  notes  to  consolidated  financial  statements.

                                      F-19
<PAGE>
                             CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                          2000         1999
                                       -----------  -----------
<S>                                    <C>          <C>
NET SALES . . . . . . . . . . . . . .  $6,229,877   $6,603,337

COST OF GOODS SOLD. . . . . . . . . .   3,718,831    3,614,526
                                       -----------  -----------

GROSS PROFIT. . . . . . . . . . . . .   2,511,046    2,988,811

OPERATING EXPENSES:
Marketing . . . . . . . . . . . . . .   1,475,109    1,606,379
Research, development
  and engineering . . . . . . . . . .     581,282      711,456
Administrative. . . . . . . . . . . .     562,238      514,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .   2,618,629    2,831,835

(LOSS) INCOME FROM OPERATIONS . . . .    (107,583)     156,976

OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . .     (64,806)     (65,781)
Interest income . . . . . . . . . . .       6,419       29,281
Gain on sale of stock . . . . . . . .           -    1,760,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .     (58,387)   1,723,500

(LOSS) INCOME BEFORE INCOME TAXES . .    (165,970)   1,880,476

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

NET (LOSS) INCOME . . . . . . . . . .  $ (165,970)  $1,880,476
                                       ===========  ===========

NET (LOSS) INCOME PER COMMON SHARE
Basic . . . . . . . . . . . . . . . .  $    (0.02)  $     0.22
Diluted . . . . . . . . . . . . . . .  $    (0.02)  $     0.21

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . .   8,898,607    8,706,151
Diluted . . . . . . . . . . . . . . .   8,898,607    8,921,806
</TABLE>

See  notes  to  consolidated  financial  statements.

                                      F-20
<PAGE>
                             CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                           2000         1999
                                                        ----------  ------------
<S>                                                     <C>         <C>
OPERATING ACTIVITIES:
Net (loss) income. . . . . . . . . . . . . . . . . . .  $(165,970)  $ 1,880,476
Adjustments to reconcile net (loss) income to net cash
  provided by (used in) operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . .    127,499       231,784
    Amortization . . . . . . . . . . . . . . . . . . .      3,600         4,499
    Provision for doubtful accounts. . . . . . . . . .    100,000        57,838
    Gain on sale of Immtech stock. . . . . . . . . . .          -    (1,760,000)

    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . .    231,108       471,819
      Other receivables. . . . . . . . . . . . . . . .     (7,130)       27,157
      Inventories. . . . . . . . . . . . . . . . . . .    430,907       (68,690)
      Prepaid expenses . . . . . . . . . . . . . . . .   (271,628)      (51,536)
      Accounts payable . . . . . . . . . . . . . . . .   (249,210)     (872,997)
      Accrued liabilities. . . . . . . . . . . . . . .     (4,967)   (1,668,965)
                                                        ----------  ------------
Net cash provided by (used in) operating activities. .    194,209    (1,748,615)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . .   (116,434)      (78,583)
Proceeds from sale of Immtech stock. . . . . . . . . .          -     1,760,000
                                                        ----------  ------------
Net cash (used in) provide by investing activities . .   (116,434)    1,681,417

FINANCING ACTIVITIES:
Principal payments on long-term debt . . . . . . . . .    (19,023)      (17,596)
Proceeds from issuance of common stock . . . . . . . .     39,258             -
                                                        ----------  ------------
Net cash provided by (used in) financing activities. .     20,235       (17,596)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .     98,010       (84,794)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . .    114,830     2,511,078
                                                        ----------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . .  $ 212,840   $ 2,426,284
                                                        ==========  ============
</TABLE>

See  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  elsewhere  in  this  Prospectus.

2.  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  September  30,  2000  and  June  30,  2000,  respectively:
<TABLE>
<CAPTION>

                                 SEPTEMBER 30, 2000   JUNE 30, 2000
                                 -------------------  --------------
<S>                              <C>                  <C>
Component parts . . . . . . . .  $         3,705,418  $    3,721,474
Work in process . . . . . . . .            1,167,141       1,169,609
Finished units. . . . . . . . .            3,316,332       3,687,243
                                 -------------------  --------------
Total inventories . . . . . . .            8,188,891       8,578,326
Less:  reserve for
  obsolescence. . . . . . . . .              400,000         400,000
                                 -------------------  --------------
Net inventory . . . . . . . . .  $         7,788,891  $    8,178,326
</TABLE>

3.  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 held 456,374 shares of Immtech
stock,  which  was  trading  at  $16  9/16 per share, on September 30, 2000. The
market  value  of  these shares could change substantially due to overall market
risk.


                                      F-22
<PAGE>
4.  PROPERTY,  PLANT  AND  EQUIPMENT

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

                                      SEPTEMBER 30, 2000   JUNE 30, 2000
                                      -------------------  --------------
<S>                                   <C>                  <C>
Land and building. . . . . . . . . .  $         4,525,000  $    4,525,000
Machinery and equipment. . . . . . .            2,037,639       2,009,312
Furniture and fixtures . . . . . . .              805,055         763,282
Demonstration and loaner monitors. .            1,366,115       2,651,145
Production tooling . . . . . . . . .            2,697,479       1,407,587
                                      -------------------  --------------
Property, plant and
  equipment - cost . . . . . . . . .           11,431,288      11,356,326
Less:  accumulated depreciation. . .            5,495,169       5,367,670
                                      -------------------  --------------
Property, plant and
  equipment - net. . . . . . . . . .  $         5,936,119  $    5,988,656
</TABLE>


                                      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 May Prove to be
    be Inaccurate. . . . . . . . . . . . .    5
Market Information and Dividend Policy . .    5
Use of Proceeds. . . . . . . . . . . . . .    6
Determination of Offering Price. . . . . .    6
Selected Consolidated Financial Data . . .    7
Management's Discussion and Analysis
    of Financial Condition and Results
    of Operations. . . . . . . . . . . . .    8
Business . . . . . . . . . . . . . . . . .   12
Management . . . . . . . . . . . . . . . .   19
Principal Stockholders . . . . . . . . . .   24
Selling Stockholders . . . . . . . . . . .   26
Plan of Distribution . . . . . . . . . . .   26
Description of Capital Stock . . . . . . .   27
Legal Matters. . . . . . . . . . . . . . .   31
Experts. . . . . . . . . . . . . . . . . .   31
Where You Can Find More Information. . . .   31
Consolidated Financial Statements. . . . .  F-1
</TABLE>

                             CRITICARE SYSTEMS, INC.


                        1,786,273 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 . . . . . . . . .  $ 1,146

Nasdaq Listing Fees. . . . . . . .   17,500

Printing and Engraving Fees. . . .    5,000

Legal Fees and Expenses. . . . . .   20,000

Accounting Fees and Expenses . . .    5,000

Miscellaneous Expenses . . . . . .    1,354
                                    -------

   Total                            $50,000
                                    =======
</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.

     Effective  March  3, 2000, the Company issued 30,000 shares of Common Stock
to one investor in settlement of pending litigation. These shares were issued in
a  private  placement  exempt  from  the  registration  requirements  of the Act
pursuant  to  Section  4(2)  of  the  Act.

     On October 17, 2000, the Company issued an aggregate of 1,786,273 shares of
common stock to Oxford Bioscience Partners III, L.P., Oxford Bioscience Partners
(Bermuda)  III  Limited  Partnership  and mRNA Fund L.P. at a price of $2.25 per
share.  These  shares  were  issued  in  a  private  placement  exempt  from the
registration  requirements  of  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.


                                      II-2
<PAGE>
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).

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

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).


                                      II-3
<PAGE>
10.18      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).

10.19      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).

10.20      Purchase  Agreement, dated as of October 17, 2000, among the Company,
           Oxford  Bioscience  Partners  III  L.P.,  Oxford  Bioscience Partners
           (Bermuda)  III  Limited  Partnership  and  mRNA  Fund  L.P.

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, 2000, 1999
and  1998:

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,  as  amended;

               (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% change in the maximum
aggregate  offering  price  set  forth  in the "Calculation of Registration Fee"
table  in  the  effective  Registration  Statement,  and


                                      II-4
<PAGE>
               (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.

          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.     Insofar  as  indemnification  for liabilities arising under the
Securities  Act  of 1933, as amended, 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, as amended, 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  28th  day  of  November,  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  S.  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, as amended,
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    November 28, 2000
---------------------------
Emil H. Soika                Officer and Director

 /s/ Mark S. Ruehle          Vice President-Finance and    November 28, 2000
---------------------------
Mark S. Ruehle               Secretary (Principal
                             Accounting Officer and
                             Principal Financial Officer)

 /s/ Karsten Houm            Chairman of the Board and     November 28, 2000
---------------------------
Karsten Houm                 Director

 /s/ Milton Datsopoulos      Director                      November 28, 2000
---------------------------
Milton Datsopoulos

                              Director                     November 28, 2000
---------------------------
N.C. Joseph Lai, Ph.D.

 /s/ Jeffrey T. Barnes       Director                      November 28, 2000
---------------------------
Jeffrey T. Barnes
</TABLE>

                                      II-6
<PAGE>

INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

The  audits  referred  to  in  our  report dated August 15, 2000 relating to the
consolidated financial statements of Criticare Systems, Inc., which is contained
in  this  Registration Statement on Form S-1 included the audit of the financial
statement  schedules listed in Item 16.  These financial statement schedules are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express an opinion on these financial statement schedules based upon our audits.

In  our  opinion  such  financial  statement  schedules  present  fairly, in all
material  respects,  the  information  set  forth  therein.


/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  15,  2000


<PAGE>

INDEPENDENT  AUDITORS'  REPORT

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

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  for  the year ended June 30, 1998, and have issued our report
thereon  dated  August  20,  1998;  such  report  is  included elsewhere in this
Registration  Statement  on  Form S-1.  Our audit also included the consolidated
financial statement schedule information of Criticare Systems, Inc. for the year
ended  June  30, 1998, listed in Item 16.  This consolidated financial statement
schedule  information  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/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998

<PAGE>


                                   SCHEDULE II
                             CRITICARE SYSTEMS, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

COLUMN A                                      COLUMN B      COLUMN C     COLUMN D       COLUMN E
------------------------------------------  -------------  -----------  -----------  ---------------
                                             BALANCE AT    CHARGED TO
                                            BEGINNING OF    COSTS AND                BALANCE AT END
    DESCRIPTION                                PERIOD       EXPENSES    DEDUCTIONS      OF PERIOD
------------------------------------------  -------------  -----------  -----------  ---------------
<S>                                         <C>            <C>          <C>          <C>

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

YEAR ENDED JUNE 30, 2000:
  Allowance for doubtful accounts. . . . .  $     375,000  $ 1,160,614  $   235,614  $     1,300,000

  Reserve for sales returns
    and allowances . . . . . . . . . . . .  $      60,000  $   554,101  $   554,101  $        60,000
</TABLE>
[{"type": "S-1", "sequence": "1", "filename": "0001.txt", "secsgml_size_bytes": 213684}]
{"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": "333-50884", "film-number": "780153"}, "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 NOVEMBER 28, 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           AGGREGATE          AMOUNT OF
SECURITIES TO BE REGISTERED     REGISTERED    OFFERING PRICE PER SHARE    OFFERING PRICE    REGISTRATION FEE
-----------------------------  ------------  --------------------------  -----------------  -----------------
Common Stock, $0.04 par value     1,786,273  $                 2.43 (1)  $       4,340,643  $           1,146
=============================  ============  ==========================  =================  =================
(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 November 20, 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.

                                        2
PROSPECTUS

                 PRELIMINARY PROSPECTUS DATED NOVEMBER 28, 2000
                              SUBJECT TO COMPLETION

                                1,786,273 SHARES

                             CRITICARE SYSTEMS, INC.

                                  COMMON STOCK

     The  selling  stockholders  listed  under  the  section  entitled  "Selling
Stockholders"  are offering for sale up to 1,786,273 shares of our common stock.
Because  the  shares  offered  under this prospectus will be sold by the selling
stockholders,  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 November 27, 2000:  $2.38 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
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 (262)
798-8282.

THE  OFFERING

Common  stock  offered  by  the     1,786,273  shares
  selling  stockholders
Common  stock  outstanding  as      10,777,524  shares
  of  October  31,  2000
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 $4,388,171 in fiscal 1999, $186,388 in fiscal 2000,
and  $165,970  in  the first quarter of fiscal 2001.  Our results in fiscal 1999
included  a charge of approximately $1,800,000 for settlement costs related to a
lawsuit  and  our results for fiscal 2000 included a gain of $2,500,000 from our
private  placement  sale  of  500,000  shares of Immtech International, Inc.  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  experienced  a severe shortage of LC monitors
during the third quarter of fiscal 2000 which delayed international shipments of
a  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 41% of our total net sales for the 2000
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 closing sale prices for
our  common  stock  as  reported  by  Nasdaq.
Common Stock
                ------------
Quarter        High      Low
------------  -------  -------
FISCAL 1999
First. . . .  2-15/16    1-1/4
Second . . .    2-3/4    1-5/8
Third. . . .    2-1/8   1-7/16
Fourth . . .    3-3/8  1-11/16

FISCAL 2000
First. . . .    2-7/8    1-7/8
Second(1). .    2-3/4        2
Third. . . .   5-1/16    2-1/4
Fourth . . .   3-7/16  1-31/32

FISCAL 2001
First. . . .    3-3/8   2-5/16
(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  October 31, 2000, there were approximately 278 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
stockholders.

                         DETERMINATION OF OFFERING PRICE

     The  common stock offered by this prospectus may be offered for sale by the
selling  stockholders  from  time to time in transactions on the Nasdaq National
Market,  in  negotiated transactions, or otherwise, or by a combination of these
methods,  at  fixed prices which may be changed, at market prices at the time of
sale,  at prices related to market prices or at negotiated prices.  As such, the
offering price is indeterminate as of the date of this prospectus.  See "Plan of
Distribution."

                                        6
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, 2000 and 1999 and the
statements  of operations data for the fiscal years ended June 30, 2000 and 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 statement of operations data for the fiscal year ended June 30,
1998  is  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, 1998, 1997
and  1996 and the statement of operations data for the fiscal years end June 30,
1998,  1997  and  1996  are  derived  from  our  audited  consolidated financial
statements  which  are  not  included elsewhere in this prospectus.  The balance
sheet  data  as  of  September 30, 2000 and 1999 and the statement of operations
data for the three months ended September 30, 2000 and 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  September  30,  2000  and 1999 and for the three months then
ended.  Actual  results  are  not  necessarily  indicative  of  future  results.
THREE MONTHS ENDED
                                        SEPTEMBER 30,                             YEARS ENDED JUNE 30,
                                        -------------                             --------------------
                                     2000         1999          2000          1999          1998          1997          1996
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
STATEMENT OF OPERATIONS DATA:
Net sales . . . . . . . . . . .  $ 6,229,877   $ 6,603,337  $27,154,236   $28,512,507   $27,908,364   $26,235,355   $31,528,266
(Loss) income before income
  taxes and
  extraordinary gain. . . . . .     (165,970)    1,880,476     (186,388)   (4,388,171)     (499,276)   (2,749,435)   (4,280,989)
Net (loss) income . . . . . . .     (165,970)    1,880,476     (186,388)   (4,388,171)     (499,276)   (2,179,489)   (4,330,989)
Net (loss) income per
  common share--Basic . . . . .  $     (0.02)  $      0.22  $     (0.02)  $     (0.51)  $     (0.06)  $     (0.30)  $     (0.63)
              --Diluted . . . .  $     (0.02)  $      0.21  $     (0.02)  $     (0.51)  $     (0.06)  $     (0.30)  $     (0.63)
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
Average shares outstanding
  --Basic . . . . . . . . . . .    8,898,607     8,706,151    8,694,918     8,581,863     8,309,240     7,267,184     6,913,557
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
  --Diluted . . . . . . . . . .    8,898,607     8,921,806    8,694,918     8,581,863     8,309,240     7,267,184     6,913,557
                                 ------------  -----------  ------------  ------------  ------------  ------------  ------------
BALANCE SHEET DATA:
Long-term obligations . . . . .  $ 3,495,488   $ 3,979,687  $ 3,552,474   $ 4,014,356   $ 3,165,258   $ 5,110,934   $ 4,669,975
Working capital . . . . . . . .   17,984,238    12,188,902   16,257,780    10,340,014    13,716,891    12,053,165    10,282,033
Total assets. . . . . . . . . .   28,664,974    23,362,905   27,210,867    24,041,987    24,726,819    25,145,066    27,075,922
Stockholders' equity. . . . . .   20,526,259    14,592,186   18,798,952    12,711,709    17,282,997    14,227,135    13,917,549
7
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.
PERCENTAGE OF NET SALES
                                               -----------------------
                                       THREE MONTHS
                                          ENDED
                                       SEPTEMBER  30,  YEARS  ENDED  JUNE  30,
                                       --------------  -----------------------
                                        2000    1999    2000    1999     1998
                                       ------  ------  ------  -------  ------
Net sales . . . . . . . . . . . . . .  100.0%  100.0%  100.0%   100.0%  100.0%
Cost of goods sold. . . . . . . . . .   59.7    54.7    60.6     54.5    53.3
Gross profit. . . . . . . . . . . . .   40.3    45.3    39.4     45.5    46.7

Operating expenses:
Marketing . . . . . . . . . . . . . .   23.7    24.3    29.5     31.4    26.7
Research, development
  and engineering . . . . . . . . . .    9.3    10.8    10.5     10.4    11.7
Administrative. . . . . . . . . . . .    9.0     7.8     8.6     14.6     7.2
Severance pay . . . . . . . . . . . .     --      --      --      2.8      --
Total . . . . . . . . . . . . . . . .   42.0    42.9    48.6     59.2    45.6

(Loss) income  from operations. . . .   (1.7)    2.4    (9.2)   (13.7)    1.1
Interest expense. . . . . . . . . . .   (1.0)   (1.0)   (1.0)    (1.5)   (2.9)
Interest income . . . . . . . . . . .    0.1     0.4     0.3      0.3     0.4
Equity in loss of investments . . . .     --      --      --     (0.5)   (0.4)
Gain on sale of stock . . . . . . . .     --    26.7     9.2       --      --
(Loss) income before income taxes . .   (2.7)   28.5    (0.7)   (15.4)   (1.8)
Income tax provision. . . . . . . . .     --      --      --       --      --
Net (loss) income . . . . . . . . . .  (2.7)%   28.5%  (0.7)%  (15.4)%  (1.8)%
COMPARISON  OF  THREE  MONTHS  ENDED  SEPTEMBER  30,  2000  AND  1999

     Sales  volume  (number  of units sold) for the three months ended September
30,  2000  rose  15%  from  the  same  period in fiscal 1999, however, net sales
revenue  fell  by approximately $400,000, or approximately 6.1%, from $6,600,000
in the first quarter of fiscal 2000 to $6,200,000 in the first quarter of fiscal
2001.  One  of the reasons for this result is the large systems sale recorded in
the first quarter of the prior year.  Resulting hospital sales in the prior year
were  $1,500,000  higher  than that of the current year.  Another reason for the
overall  decrease  in revenue is the decline in the selling price of some of our
older  product  line.  Prices have fallen, in part, due to increased competition
and,  in  part, due to our willingness to accept a lower margin during the phase
out  period  of  some  of  these  products,  rather than absorb future inventory
obsolescence  costs.  However, OEM sales in the current year have rebounded from
a  sluggish  start in fiscal 1999, posting an $800,000 gain over the same period
last  year.

     The gross profit percentage of 40% in the first quarter of the current year
represents  a  decrease of 11% from the same period in fiscal 2000, but shows an
improvement over both of the previous two quarters.  A comparison of the current
year  cost  of  sales  to that of the prior year (after adjusting for the higher
margin  systems  sale)  shows  that  the  cost  per unit has remained relatively
constant.  Therefore,  the  lower  margin  in  fiscal  2000 is attributed to the
profitable systems sale in the prior year, the lower sales prices on established
products  as  discussed  above, and introductory pricing on our newly introduced
products  being  sold as demonstration units.  We expect to see some improvement
in  its  margins, as most of the demonstration units have been moved through the
backlog,  and  future  sales of the newer products are expected to be subject to
less  discounting.

                                       8
In  the  prior  year,  we made great strides in reducing operating expenses
from  that of the year before, and that emphasis has continued into fiscal 2001.
Current  year  operating  expenses  decreased $200,000 in the first quarter from
that  of  the  prior  year.  Approximately $100,000 is attributed to the service
area  in  the  form of higher warranty sales and better control of materials and
supplies.  Research and development accounts for another $100,000 in reductions,
as  there was a significant amount of activity in the first quarter of the prior
year  related  to  the  development  of the new products released in late fiscal
2000.

     Income  from  operations  fell  approximately $250,000 for the three months
ended  September 30, 2000 when compared to the same period in fiscal 2000 due to
the  decrease  in  revenue  and  gross  profit,  which  offset  the reduction in
operating  expense.

     Net  non-operating  expenses  were  approximately  $60,000, the majority of
which relates to interest expense on the building mortgage, and is comparable to
the amount spent on interest in the prior year.  However, offsetting last year's
interest  expense  was  a  $1,800,000  gain  on the sale of Immtech stock, which
accounts  for  the  difference  in  the  non-operating  expense  totals.

COMPARISON  OF  YEARS  ENDED  JUNE  30,  2000  AND  1999

     For  the  twelve  months  ended  June  30,  2000,  international sales rose
approximately $600,000, but were offset by a decrease in total domestic sales of
approximately  $2,000,000.  The  net  result was a decline in net sales of 4.8%,
from  $28,512,507  to  $27,154,236,  which  resulted  primarily  from decreasing
product  prices.

     The  gross  profit percentage declined from 45.5% in 1999 to 39.4% in 2000.
This  decrease  is  due  primarily  to  continued price erosion on products in a
portion  of  our  older  product  line.

     Total  operating  expenses  were  reduced by $3,700,000, which represents a
21.7%  cost  reduction  during  fiscal 2000.  Marketing expenses were lowered by
approximately  $900,000  due to a variety of factors.  These include a reduction
in  service  labor  and  materials,  a  decrease  in  payroll and related travel
expenses  due  to a reduction in direct sales people as more dealers were added,
and  a  decrease in commissions associated with the lower sales.  Offsetting the
$1,800,000  of  reductions  was  a $900,000 increase in the reserve for doubtful
accounts  related to the receivable balances of certain international customers.
Research  and  development  expenses  decreased  approximately  $100,000, as the
design  phase  of  the  8100  product  was  completed  and production commenced.
Administration  expenses  decreased  approximately  $2,000,000.  The majority of
this  reduction  is  due  to the non-reoccurring litigation and settlement costs
associated with a lawsuit in the prior year.  In addition, $810,000 of severance
costs  were  recorded  in  1999.

     Interest  expense was reduced $170,000 from 1999 levels due to the mortgage
that  was refinanced in March 1999.  However, the more significant change is the
$2,500,000 gain recorded on the private placement sale of 500,000 Immtech shares
in  fiscal  2000.

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.

     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.

                                       9
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 as no purchase discount related to convertible
debentures  was recorded in 1999.  All debentures were converted to common stock
during  1998.

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  September 30, 2000, we had a cash balance of approximately $200,000
and  no  short-term  borrowings.  In  the three months ended September 30, 2000,
approximately  $200,000  was  provided  by  operations,  of  which  $100,000 was
reinvested  in  property,  plant and equipment.  In the same period of the prior
year,  approximately  $1,700,000  was used in operations, of which a significant
portion  was  attributed to the settlement of a long-standing lawsuit.  Proceeds
for  this settlement were obtained from the sale of shares of Immtech stock in a
private placement sale. Subsequent to September 30, 2000, we received $4,000,000
in  proceeds  from the private placement of 1,786,273 shares of our common stock
to  the  selling  stockholders.  The  primary intended use of these funds is for
additional  research  and  development  and  an  expanded marketing program.  We
believe  all  other capital and liquidity requirements will be satisfied by cash
generated  from  operations  and  periodic  utilization  of a $4,000,000 line of
credit  currently  in place, if necessary.  At September 30, 2000, there were no
borrowings  outstanding  under  the  line  of  credit.

     In  fiscal  2000,  we  generated $2.5 million through the private placement
sale  of  Immtech  stock  and  $499,581  from  the exercise of stock options and
employee stock purchases from the treasury.  We used $73,925 to retire long-term
debt,  $595,412  for  capital  expenditures  and  $4,726,492 to fund operations.
These  sources and uses of cash resulted in net negative cash flow of $2,396,248
for  the  2000  fiscal  year.

     In  fiscal  1999, we generated $315,577 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, and $193,430 for the repurchase of our stock.  These
sources  and uses of cash resulted in net negative cash flow of $218,920 for the
1999  fiscal  year.

     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
$3,000,000  due  in  December  2002.

     We  expect  our  continued  programs  to  increase  accounts  receivable
collections,  decrease  inventory  levels,  reduce  product  development tooling
requirements  and  stabilize  sales  demonstration  equipment levels will have a
positive  effect on cash flow activities in the next fiscal year.  Consequently,
we  believe  our  research  and  development  activities  and  other capital and
liquidity  requirements for at least the next twelve months will be satisfied by
cash  generated  from  operations  and other borrowings.  There are currently no
significant  capital  expenditures planned for fiscal 2001.  During fiscal 2000,
we  also  had access to a commercial bank line of credit of up to $4,000,000. At
June  30,  2000, 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.

                                       10
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 gain of $2,500,000 in the
quarter  ended  September  30,  1999  related to the sale of Immtech stock and a
charge  of  approximately  $1,800,000  for settlement costs related to a lawsuit
that was resolved in the quarter ended June 30, 1999.  These items were unusual,
nonrecurring  adjustments.
QUARTERS ENDED
                     SEPT. 30,    JUNE 30,    MARCH 31,    DEC. 31,   SEPT. 30,    JUNE 30,    MARCH 31,    DEC. 31,    SEPT. 30,
                       2000         2000        2000         1999        1999        1999        1999         1998        1998
                                                     (in  thousands,  except  per  share  data)
Net sales. . . . .  $    6,230   $   7,519   $    6,131   $   6,901   $    6,603  $   7,223   $    7,276   $   7,290   $    6,724
Gross profit . . .       2,511       2,326        2,235       3,142        2,989      2,784        3,379       3,562        3,259
(Loss) income from
  operations . . .        (108)     (1,317)      (1,143)       (215)         157     (2,308)        (486)       (880)        (214)
Net (loss)
  income . . . . .        (166)     (1,367)      (1,197)        489        1,880     (2,340)        (681)       (947)        (420)
Net (loss) income
  per common
  share-Basic. . .       (0.02)      (0.16)       (0.14)       0.06         0.22      (0.27)       (0.08)      (0.11)       (0.05)
       -Diluted. .       (0.02)      (0.16)       (0.14)       0.06         0.21      (0.27)       (0.08)      (0.11)       (0.05)
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.

                                       11
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  8100  Vital  Signs  Monitor.  The full-featured CSI 8100 Vital Signs
     ----------------------------------
Monitor provides maximum flexibility for hospital, transport and outpatient care
settings.  The  unit's  custom  configurations  include  ECG,  ComfortCuff
noninvasive  blood  pressure,  DOX  digital  oximetry,  heart rate, temperature,
respiration  and nurse call interface.  Optional features include CO2 and CO2/O2
monitoring  and  an  integrated  printer.  The  8100  is  well  suited  for busy
departments  that  require  basic  vital signs monitoring to conscious sedation.

                                       12
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.

     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.

                                       13
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.

     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 August 31, 2000, our domestic sales force consisted of
     ---------------
eight  employees  and  104 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,  VitalView  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  2000,  we  sold  our  products,  principally to
hospitals,  in  over  70 countries through over 70 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.

                                       14
In fiscal 2000, 41% of our net sales, or $11.0 million, was attributable to
international  sales,  of  which  approximately:

     -     49%  was  from  sales  in  Europe  and  the  Middle  East;
     -     24%  was  from  sales  to  Pacific  Rim  countries;  and
     -     27%  was  from  sales  to  Canada  and  Central  and  South  America.

     In  fiscal  1999,  37%  of  our net sales was attributable to international
sales.  In  fiscal  1998,  46% of our net sales was attributable to exports.  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 collectibility of accounts receivable from
international  customers.  We  analyze  this  risk  before  making  shipments to
countries  we  view  as  unstable.

     Clinical  Support.  At  August  31,  2000, we employed one clinical support
     -----------------
specialist  to  provide  customer  training and education, primarily to domestic
hospitals.  The  clinical  support  specialist  also  assists  in  the  periodic
training and education of the direct sales force.  In addition, the direct sales
force  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 are warranted against defects for one year
and  our  reusable  sensors are warranted for six months.  If a problem develops
with  one  of  our  products  while  under  warranty,  we  typically  provide  a
replacement  unit  until the product can be repaired at our facility.  At August
31,  2000,  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  certain  components.

     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."

                                       15
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 August 31, 2000, we
had  an  in-house research, development and engineering staff of 20 people.  Our
research,  development  and engineering expenditures were $2.9 million in fiscal
2000,  $3.0  million  in  fiscal  1999  and  $3.3  million  in  fiscal  1998.

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.

                                       16
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  Food, Drug and Cosmetic Act, 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.

     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 thirteen 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,"  "Scholar,"  "MPT,"  "REMOTEVIEW"  and  "MICROVIEW."

                                       17
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  August  31,  2000,  we  had  104  employees,  including:

     -     44  in  manufacturing  and  operations;
     -     6  in  quality  control;
     -     21  in  sales  and  marketing;
     -     13  in  administration;  and
     -     20  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 employees
are subject to a collective bargaining agreement.  We believe that our relations
with  our  employees  are  good.

BACKLOG

     Our backlog was approximately $1,833,000 on June 30, 2000 and approximately
$1,836,000  on June 30, 1999.  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.  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  the  normal  course  of  business  we  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.

                                       18
MANAGEMENT

DIRECTORS  AND  OFFICERS

     The  following  table  sets  forth  information regarding our directors and
executive  officers:
NAME                       AGE                       TITLE
-------------------------  ---  ------------------------------------------------
Karsten Houm (1)(2)         54  Chairman of the Board and Director

Emil H. Soika               62  President, Chief Executive Officer and Director

N.C. Joseph Lai, Ph.D.      58  Director

Milton Datsopoulos (1)(2)   60  Director

Jeffrey T. Barnes           46  Director

Mark S. Ruehle              39  Vice President-Finance and Secretary

Stephen D. Okland           58  Vice President-Domestic Sales

Drew M. Diaz                37  Vice President-International Sales

Michael T. Larsen           41  Vice President-Quality Control/Quality Assurance

Joseph P. Lester            50  Vice President-Operations

Dennis D. Hurlebaus         58  Vice President-U.S. Hospital Sales
______________________
(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
June 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, 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.

     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 one of our co-founders
and  served  as  our  Vice  Chairman  of  the  Board  and as an officer from our
inception  in  October  1984  until  November  1998.

                                       19
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.

     JEFFREY  T.  BARNES,  DIRECTOR.  Mr.  Barnes has served as a Director since
October  2000.  Mr.  Barnes  has  been a partner of Oxford Bioscience, a venture
capital  firm,  since October 1999.  From 1997 to October 1999, Mr. Barnes was a
principal  of Robertson Stephens, an investment banking firm.  From October 1993
to  January  1997,  Mr.  Barnes  was a principal of Needham & Co., an investment
banking  firm.

     MARK  S.  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.,  a  food  distribution  company, from December 1992 to June
1999.

     STEPHEN D. OKLAND, VICE PRESIDENT-DOMESTIC SALES.  Mr. Okland has served as
one  of  our  Vice  Presidents  since  April  1986.

     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  P. 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  April  1997,  Mr.  Lester  was  Senior
Director-Operations  for  Spacelabs  Medical,  a medical monitoring and clinical
information  systems  company.

     DENNIS D. HURLEBAUS, VICE PRESIDENT-U.S. HOSPITAL SALES.  Mr. Hurlebaus has
served  as  our  Vice  President-U.S.  Hospital  Sales since May 2000.  Prior to
joining  us,  Mr.  Hurlebaus  was Vice President-Sales for Team Rehab, a medical
software  company,  from  January 2000 to April 2000.  From October 1995 to June
1998,  Mr.  Hurlebaus  was Vice President-Sales of Hill-Rom, a medical equipment
company.  From  February  1981  to  October  1995,  Mr.  Hurlebaus  was  Vice
President-Sales  for  Datascope,  a  medical  equipment  company.

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, as nearly equal as
possible,  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  Datsopoulos will stand for re-election at the 2001 annual
meeting  of  stockholders.  N.C.  Joseph  Lai,  Ph.D. and Jeffrey T. Barnes will
stand  for  re-election  at  the  2002  annual  meeting  of  stockholders.

                                       20
Mr.  Barnes'  directorship  is connected with the investment of the selling
stockholders  in  our common stock pursuant to a Purchase Agreement, dated as of
October  17,  2000,  among  Criticare  and  the  selling  stockholders.

COMPENSATION  OF  DIRECTORS

     Our  directors  are  reimbursed  for  out-of-pocket  expenses  incurred  in
attending  meetings  of the Board of Directors.  Our directors historically have
not  received  cash directors' fees, although we have adopted a policy effective
November  1,  2000  to pay a retainer of $1,250 per month to our Chairman of the
Board  and $1,000 per month to each of our other non-employee directors.  During
fiscal  2000,  we  granted  50,000  stock  options  to  each of Mr. Houm and Mr.
Datsopoulos.

EXECUTIVE  COMPENSATION

     Cash  and  Other Compensation.  The following table sets forth compensation
information  for  the  three fiscal years ended June 30, 2000 to or on behalf of
the  person who served as our Chief Executive Officer during fiscal 2000 and our
two  other  executive  officers  whose salary exceeded $100,000 for fiscal 2000.
The  persons  listed  below  are sometimes referred to in this prospectus as the
"named  executive  officers."
SUMMARY COMPENSATION TABLE
                                                                        LONG-TERM
                                     ANNUAL  COMPENSATION              COMPENSATION
                                     ---------------------            --------------
                                                                          AWARDS:
                                                                        SECURITIES
NAME AND                                           OTHER ANNUAL         UNDERLYING        ALL OTHER
PRINCIPAL POSITION          YEAR  SALARY ($)   COMPENSATION ($) (1)  OPTIONS/SARS (#)  COMPENSATION ($)
--------------------------  ----  -----------  --------------------  ----------------  ----------------
Emil H. Soika,              2000  125,000                     1,280            --               434 (3)
  President, Chief          1999   78,125                        --       200,000                --
  Executive Officer and
  Director (2)

Stephen D. Okland,          2000  230,282 (4)                 6,000            --             3,517 (6)
  Vice President-           1999  277,576 (4)                 6,000        43,500 (5)         3,701 (6)
  Domestic Sales            1998  302,628 (4)                 6,000            --             3,690 (6)

Drew M. Diaz,               2000  160,100                     1,640        42,000             3,295 (8)
  Vice President-           1999  165,609                     1,915       100,000 (7)         1,882 (8)
  International Sales       1998  188,292                       638            --                86 (8)

_____________________
(1)     The  amounts  represent  automobile  allowance  payments.

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

(3)     Represents  premiums  we  paid on a life insurance policy, the proceeds of which are payable to
the  beneficiary  of  Mr.  Soika.

(4)     Represents commissions we paid to Mr. Okland based on a percentage of certain domestic sales by
the  Company.  Mr.  Okland  receives  no  fixed  salary.

                                       21
(5)     Represents  30,000  stock options granted in fiscal 1999 and 13,500 stock options regranted due
to  repricing  of  options  on  December  11,  1998.

(6)     For  fiscal  2000, represents $317 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 contributions made by us to our
401(k)  plan  on  behalf of Mr. Okland.  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
contributions  made by us to our 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  contributions  made  by  us  to our 401(k) plan on behalf of Mr. Okland.

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

(8)     For fiscal 2000, represents $95 of premiums we paid on a life insurance policy, the proceeds of
which  are payable to the beneficiary of Mr. Diaz, and $3,200 of contributions made by us to our 401(k)
plan  on  behalf of Mr. Diaz.  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 contributions
made  by  us  to our 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.
Options  Granted  During  Fiscal  2000.  The  following  table  provides
information  regarding  stock  options  granted  to our named executive officers
during  the  fiscal  year  ended  June  30,  2000.

                        OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
                    NUMBER OF    % OF TOTAL                                        VALUE AT ASSUMED
                   SECURITIES     OPTIONS                                           ANNUAL RATES OF
                   UNDERLYING    GRANTED TO                                           STOCK PRICE
                     OPTIONS    EMPLOYEES IN  EXERCISE PRICE      EXPIRATION         APPRECIATION
NAME               GRANTED (#)  FISCAL YEAR       ($/ SH)            DATE         FOR OPTION TERM ($)
-----------------  -----------  ------------  ---------------  ----------------  ---------------------
                                                                                     5%          10%
                                                                                 ----------  -----------
Emil H. Soika               --            --               --                --          --          --
Stephen D. Okland           --            --               --                --          --          --
Drew M. Diaz             2,000           0.6             2.25  January 25, 2002         461         945
                        40,000          12.2             2.25      May 15, 2005      24,865      54,946
Fiscal  Year-End  Option  Values.  The  following  table  shows the fiscal
year-end  value  of  unexercised  options  held by our named executive officers.
None  of  our  named  executive  officers  exercised  options  in  fiscal  2000.
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                   60,000        140,000               45,941        104,070
Stephen D. Okland               23,500         20,000               11,017          9,376
Drew M. Diaz                    56,000         84,000               30,003         32,629
(1)     Based  on the reported closing bid price of $2.3438 per share of common stock on June 30, 2000.
22
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
and  a  former  director.  Mr.  Von  der Ruhr also beneficially owns 5.2% of our
outstanding  common  stock  as  of October 31, 2000.  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)  allow  Mr.  Von  der  Ruhr  to continue to use office space and
secretarial  services  for a period of up to 12 months, (ii) continue to provide
fringe  benefits  to  Mr.  Von  der  Ruhr  through September 30, 2001, and (iii)
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  relating  to  fetal  monitoring, and 172,414 shares of Immtech
common  stock  to  Mr.  Von der Ruhr.  Mr. Von der Ruhr subsequently transferred
such  patent  rights  to  GU  Technologies which in turn transferred them to its
majority-owned subsidiary, O.B. Scientific, Inc., in exchange for the payment by
Mr.  Von  der  Ruhr  of $150,000 in ten semi-annual installments of $15,000 each
starting  on  June  1,  1999.  We  also  agreed  to supply our existing oximetry
monitors  to  Mr.  Von  der  Ruhr  at  a  formula price.  We received 12% of the
outstanding  shares  of GU Technologies and the right to elect one member of the
board  of  directors  of  GU  Technologies.

     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) allow Dr. Lai to continue to use
office  space  and  secretarial  services  for a period of up to 12 months, (ii)
continue  to  provide fringe benefits to Dr. Lai through September 30, 2001, and
(iii)  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  October  31,  2000  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 October 31, 2000 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.
NAME AND ADDRESS OF                             NUMBER OF
BENEFICIAL OWNER (1)                          SHARES OWNED     PERCENT
------------------------------------------  -----------------  -------
Emil H. Soika. . . . . . . . . . . . . . .         60,969 (2)        *

Jeffrey T. Barnes. . . . . . . . . . . . .      1,769,084 (3)     16.4

N.C. Joseph Lai, Ph.D. . . . . . . . . . .        577,290 (4)      5.4

Karsten Houm . . . . . . . . . . . . . . .        111,065 (5)      1.0

Milton Datsopoulos . . . . . . . . . . . .         85,300 (6)        *

Stephen D. Okland. . . . . . . . . . . . .         32,238 (7)        *

Drew M. Diaz . . . . . . . . . . . . . . .         58,414 (8)        *

Entities affiliated with Oxford
Bioscience Partners. . . . . . . . . . . .      1,786,273 (9)     16.6

Gerhard J. Von der Ruhr. . . . . . . . . .       555,075 (10)      5.2

All directors and executive officers as a
group (11 persons) . . . . . . . . . . . .  2,751,376 (3)(11)     24.7

_____________________
*     Less  than  1%

(1)     Unless otherwise indicated, the address of the beneficial owner is 20925
Crossroads  Circle,  Waukesha,  WI  53186;  the address of Mr. Barnes and Oxford
Bioscience  Partners  is  31 St. James Avenue, Suite 905, Boston, MA 02116;  the
address  of Mr. Houm is Kristinelundvn 21, 0268 Oslo, Norway; the address of Mr.
Datsopoulos  is  Central Square Building, 201 West Main, Missoula, Montana 59802
and  the  address of Mr. Von der Ruhr is N112 W18741 Mequon Road, Germantown, WI
53022.

                                       24
(2)     Includes  60,000  shares  which Mr. Soika has the right to acquire under
currently  exercisable  options  and 969 shares in Mr. Soika's account under our
Employee  Stock  Purchase  Plan.

(3)     Includes  1,000  shares  owned  directly  by  Mr. Barnes.  Also includes
1,547,529  shares  held  of  record  by  Oxford Bioscience Partners III L.P. and
220,555  shares  held  of  record  by  Oxford  Bioscience Partners (Bermuda) III
Limited  Partnership.  Mr. Barnes may be deemed to share beneficial ownership of
these shares, and he disclaims such beneficial ownership except to the extent of
his  pecuniary  interest  in  such  shares.

(4)     Includes  116,000  shares  owned of record by Helen Lai, Dr. Lai's 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.

(5)     Includes  95,000  shares  which  Mr. Houm has the right to acquire under
currently  exercisable  options.

(6)     Includes  85,000  shares  which Mr. Datsopoulos has the right to acquire
under  currently  exercisable  options.

(7)     Includes  23,500  shares which Mr. Okland has the right to acquire under
currently exercisable options and 5,238 shares in Mr. Okland's account under our
Employee  Stock  Purchase  Plan.

(8)     Includes  56,000  shares  which  Mr. Diaz has the right to acquire under
currently  exercisable  options and 2,414 shares in Mr. Diaz's account under our
Employee  Stock  Purchase  Plan.

(9)     Oxford  Bioscience  Partners  III  and  related  entities  (collectively
"Oxford")  filed  a  Schedule  13D  dated October 27, 2000, reporting that as of
October  27,  2000  it  was  the  beneficial owner of 1,786,273 shares of common
stock.  The  shares  of  common  stock  beneficially owned by Oxford include (i)
1,547,529  shares  held  of record by Oxford Bioscience Partners III, L.P. ("OBP
Partners"),  with  shared  voting  and investment power as to all of such shares
(OBP  Management  III L.P. may be deemed to share voting and investment power as
to  all of such shares); (ii) 220,555 shares held of record by Oxford Bioscience
Partners  (Bermuda)  III  Limited  Partnership  ("OBP Partners (Bermuda)"), with
shared  voting  and  investment  power  as to all of such shares (OBP Management
(Bermuda)  III  Limited Partnership may be deemed to share voting and investment
power  as to all of such shares); and (iii) 18,189 shares held of record by mRNA
Fund,  L.P.,  with  shared  voting and investment power as to all of such shares
(mRNA  Partners,  L.P.  may be deemed to share voting and investment power as to
all  of  such  shares).  Jonathon J. Fleming and Alan G. Walton may be deemed to
share  voting  and  investment power as to all of the shares held by Oxford, and
they  disclaim  beneficial  ownership  of  such  shares.  Jeffrey  T. Barnes and
Michael  J. Brennan may be deemed to share voting and investment power as to all
of the shares held by OBP Partners and OBP Partners (Bermuda), and they disclaim
beneficial  ownership  of  such  shares.

(10)     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.

(11)     Includes 344,500 shares of common stock the members of the group have a
right  to  acquire  under currently exercisable options and 10,387 shares in the
accounts  of  the  members  of the group under our Employee Stock Purchase Plan.
25
SELLING STOCKHOLDERS

     All  of  the  shares  of our common stock offered for sale pursuant to this
prospectus  are  being offered by the selling stockholders.  We issued 1,786,273
shares of our Company Stock to the selling stockholders on October 17, 2000 at a
price of $2.25 per share, as part of a private placement transaction between the
selling  stockholders  and  us.  We  appointed  Jeffrey  T. Barnes as one of our
directors  on October 17, 2000, in connection with the investment by the selling
stockholders.

     Information  with  respect  to  the shares of our common stock beneficially
owned  by  the  selling  stockholders  follows.
SHARES OF COMMON STOCK
                                        OWNED PRIOR TO THE    SHARES OFFERED   SHARES TO BE OWNED
                                             OFFERING         FOR SALE HEREBY  AFTER THE OFFERING*
                                     -----------------------  ---------------  -------------------
                                                                                 Number   Percent
                                                                               ---------  --------
Oxford Bioscience Partners III L.P.                1,547,529        1,547,529         --        --
Oxford Bioscience Partners
  (Bermuda) III Limited Partnership                  220,555          220,555         --        --
mRNA Fund L.P.                                        18,189           18,189         --        --
*Assumes  sale  of  all  shares  offered  by  this  prospectus.
PLAN OF DISTRIBUTION

     The  selling  stockholders  may,  without limitation and from time to time,
sell all or a portion of their 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  stockholders  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
           stockholders will attempt to sell the shares as agent for the selling
           stockholders  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 stockholders may pledge their shares pursuant
to  the  margin provisions of the selling stockholders' customer agreements with
their brokers.  Upon a default by the selling stockholders, the broker may, from
time  to  time,  offer  and  sell  the  pledged  shares.

                                       26
In effecting sales, brokers-dealers engaged by the selling stockholders may
arrange  for other broker-dealers to participate in such sales.  Brokers-dealers
may  receive  commissions or discounts from the selling stockholders (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  stockholders  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 stockholders, to purchase as
principal  any  unsold shares at the price required to fulfill the broker-dealer
commitment  to  the  selling  stockholders.

     The  selling stockholders and any broker-dealers or agents that participate
with  the  selling  stockholders  in  sales  of  the  shares may be deemed to be
"underwriters"  within the meaning of the Securities Act of 1933, as amended, in
connection  with  such  sales.  In  such event, any commissions received by such
broker-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  of  1933,  as  amended.

     We  are  required to pay all fees and expenses incident to the registration
of  the  selling  stockholders' shares, other than the fees and disbursements of
counsel  to  the selling stockholders and underwriting discounts or commissions,
if any.  Additionally, we have agreed to indemnify the selling stockholders 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 October 31, 2000, 10,777,524 shares of common stock were outstanding,
held of record by 278 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.  Wisconsin
law,  however,  may make our shareholders personally liable for unpaid wages due
employees  for up to six months' services, but not in an amount greater than the
par  value  of  the  shares.

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."

                                       27
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 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 66 2/3% 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.

                                       28
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;
     -     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),

                                       29
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.

     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.

                                       30
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.

                                  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 for the years ended June 30, 2000 and 1999
and schedules included in this prospectus and in the registration statement have
been  audited  by BDO Seidman, LLP, independent certified public accountants, to
the  extent  and  for the periods set forth in their reports appearing elsewhere
herein and in the registration statement, and are included in reliance upon such
reports  given  upon  the  authority  of  said  firm  as experts in auditing and
accounting.

     The  consolidated  financial  statements  for the year ended June 30, 1998,
included  in  this  prospectus,  the  related  consolidated  financial statement
schedule for the year ended June 30, 1998 included elsewhere in the registration
statement,  and  the  consolidated  financial  statement from which the Selected
Consolidated  Financial  Data  for the year ended June 30, 1998 included in this
prospectus  have  been  derived,  have  been  audited  by Deloitte & Touche LLP,
independent  auditors,  as stated in their report 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.  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  website  on  the  Internet  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.

                                       31
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

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

AUDITED CONSOLIDATED FINANCIAL STATEMENTS:

  Consolidated Balance Sheets of June 30, 2000 and 1999. . . . . . . . . . . . . . . . .  F-4

  Consolidated Statements of Operations for the years ended
  June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6

  Consolidated Statements of Stockholders' Equity for the years
  ended June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . .  F-7

  Consolidated Statements of Cash Flows for the years ended
  June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-8

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

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS:

  Unaudited Consolidated Balance Sheet as of September 30, 2000. . . . . . . . . . . . .  F-19

  Unaudited Consolidated Income Statements for the three months ended
  September 30, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-20

  Unaudited Consolidated Statements of Cash Flows for the three months ended
  September 30, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  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, 2000 and 1999, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
each  of  the  two  years  in  the  period ended June 30, 2000.  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  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  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.  and  subsidiaries  at June 30, 2000 and 1999, and the results of
their  operations  and  their cash flows for each of the two years in the period
ended  June  30,  2000,  in  conformity  with  generally  accepted  accounting
principles.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  15,  2000

                                      F-2
INDEPENDENT  AUDITORS'  REPORT

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

     We  have  audited  the  accompanying consolidated statements of operations,
stockholders'  equity and cash flows of Criticare Systems, Inc. and subsidiaries
for  the  year  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  audit.

     We  conducted  our  audit  in  accordance with auditing standards generally
accepted  in the United States of America.  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,  such  consolidated  financial  statements  of  Criticare
Systems,  Inc.  and  subsidiaries  present fairly, in all material respects, the
results  of  their  operations  and their cash flows for the year ended June 30,
1998  in  conformity with accounting principles generally accepted in the United
States  of  America.

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

                                      F-3
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS
JUNE  30,  2000  AND  1999
--------------------------------------------------------------------------------
ASSETS                                                         2000         1999
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $   114,830  $ 2,511,078
Accounts receivable, less allowance for doubtful accounts
  of $1,300,000 and $375,000, respectively . . . . . . . .    6,782,765    6,358,487
Investments (Notes 1, 3 and 5) . . . . . . . . . . . . . .    5,704,675            -
Other receivables. . . . . . . . . . . . . . . . . . . . .      116,773       83,106
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,178,326    8,510,975
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      219,852      192,290
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   21,117,221   17,655,936

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,009,312    2,051,442
Furniture and fixtures . . . . . . . . . . . . . . . . . .      763,282      819,579
Demonstration and loaner monitors. . . . . . . . . . . . .    1,407,587    1,416,893
Production tooling . . . . . . . . . . . . . . . . . . . .    2,651,145    2,158,378
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   11,356,326   10,971,292
Less accumulated depreciation. . . . . . . . . . . . . . .    5,367,670    4,697,232
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    5,988,656    6,274,060

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      104,990      111,991
                                                            -----------  -----------
Total other assets . . . . . . . . . . . . . . . . . . . .      104,990      111,991
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867  $24,041,987
                                                            ===========  ===========
See  notes  to  consolidated  financial  statements.

                                      F-4
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS  (CONTINUED)
JUNE  30,  2000  AND  1999
--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY                                         2000          1999
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,635,344   $ 3,078,020
Accrued liabilities:
  Compensation and commissions. . . . . . . . . . . . . . . . . . . . .    1,243,839     1,446,614
  Product warranties (Note 1) . . . . . . . . . . . . . . . . . . . . .      325,000       325,000
  Lawsuit settlement. . . . . . . . . . . . . . . . . . . . . . . . . .            -     1,600,000
  Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . .            -       380,000
  Other (Note 7). . . . . . . . . . . . . . . . . . . . . . . . . . . .      574,826       412,395
Current maturities of long-term debt (Note 5) . . . . . . . . . . . . .       80,432        73,893
                                                                         ------------  ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . .    4,859,441     7,315,922

LONG-TERM DEBT, less current maturities (Note 5). . . . . . . . . . . .    3,283,892     3,364,356

OTHER LONG-TERM OBLIGATIONS (Note 12) . . . . . . . . . . . . . . . . .      268,582       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,
  8,976,251 and 8,706,151 shares issued
  and outstanding, respectively . . . . . . . . . . . . . . . . . . . .      359,050       348,246
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . .   18,478,040    17,960,363
Common stock held in treasury
  (81,122 and 103,840 shares, respectively) . . . . . . . . . . . . . .     (151,111)     (193,430)
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . .   (5,591,702)   (5,403,470)
Accumulated comprehensive income. . . . . . . . . . . . . . . . . . . .    5,704,675             -
                                                                         ------------  ------------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . .   18,798,952    12,711,709
                                                                         ------------  ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867   $24,041,987
                                                                         ============  ============
See  notes  to  consolidated  financial  statements.

                                      F-5
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  OPERATIONS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------
2000          1999          1998
NET SALES (Note 10). . . . . . . . . . . . . .  $27,154,236   $28,512,507   $27,908,364

COST OF GOODS SOLD . . . . . . . . . . . . . .   16,462,477    15,528,314    14,870,453
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   10,691,759    12,984,193    13,037,911

OPERATING EXPENSES:
Marketing (Note 1) . . . . . . . . . . . . . .    8,014,129     8,941,036     7,454,619
Research, development and
  engineering (Note 8) . . . . . . . . . . . .    2,861,733     2,963,134     3,278,714
Administrative (Note 7). . . . . . . . . . . .    2,333,445     4,157,811     1,998,362
Severance pay (Note 12). . . . . . . . . . . .            -       810,000             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   13,209,307    16,871,981    12,731,695

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (2,517,548)   (3,887,788)      306,216

OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (259,280)     (432,477)     (797,376)
Interest income. . . . . . . . . . . . . . . .       90,440        82,094       111,884
Equity in loss of investments
  (Notes 1 and 3). . . . . . . . . . . . . . .            -      (150,000)     (120,000)
Gain on sale of stock. . . . . . . . . . . . .    2,500,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .    2,331,160      (500,383)     (805,492)

LOSS BEFORE INCOME TAXES
  AND EXTRAORDINARY GAIN . . . . . . . . . . .     (186,388)   (4,388,171)     (499,276)

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

NET LOSS . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $  (499,276)
                                                ============  ============  ============

NET LOSS PER COMMON SHARE
Basic. . . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)
Diluted. . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING (Note 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
Diluted. . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
See  notes  to  consolidated  financial  statements.

                                      F-6
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------
RETAINED
                                                          ADDITIONAL       COMMON STOCK         EARNINGS     ACCUMULATED
                                         COMMON STOCK      PAID-IN           TREASURY         (ACCUMULATED  COMPREHENSIVE
                                      SHARES     AMOUNT     CAPITAL      SHARES      COST       DEFICIT)     INCOME/LOSS
BALANCE, JUNE 30, 1997. . . . . . .  7,796,465  $311,859  $14,469,406                         $  (516,023)  $    (38,107)
Net loss. . . . . . . . . . . . . .                                                              (499,276)
Foreign currency translation. . . .                                                                               38,107
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) . . . .
Issuance of common stock for
  patented technology . . . . . . .    350,000    14,000      (14,000)
Exercise of options and warrants. .      5,000       200       10,113
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)             -
Net loss. . . . . . . . . . . . . .                                                              (186,388)
Unrealized gain on investment . . .                                                                            5,704,675
Comprehensive income/loss . . . . .
Common stock issued in
  settlement of lawsuit . . . . . .     30,000     1,200       68,175
Exercise of options . . . . . . . .    240,100     9,604      448,746
Employee common stock
  purchased from treasury . . . . .                               756   (22,718)     42,319        (1,844)

BALANCE, JUNE 30, 2000. . . . . . .  8,976,251  $359,050  $18,478,040    81,122   $(151,111)  $(5,591,702)  $  5,704,675

                                        TOTAL
                                     STOCKHOLDERS'
                                        EQUITY
BALANCE, JUNE 30, 1997. . . . . . .  $14,227,135
Net loss. . . . . . . . . . . . . .     (499,276)
Foreign currency translation. . . .       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
Net loss. . . . . . . . . . . . . .     (186,388)
Unrealized gain on investment . . .    5,704,675
Comprehensive income/loss . . . . .    5,518,287
Common stock issued in
  settlement of lawsuit . . . . . .       69,375
Exercise of options . . . . . . . .      458,350
Employee common stock
  purchased from treasury . . . . .       41,231

BALANCE, JUNE 30, 2000. . . . . . .  $18,798,952
See  notes  to  consolidated  financial  statements.

                                      F-7
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
--------------------------------------------------------------------------------
OPERATING ACTIVITIES:                                                 2000          1999         1998
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $ (499,276)
Adjustments to reconcile net loss to net cash
  (used in) provided by operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . .      871,510       486,610      721,476
    Amortization . . . . . . . . . . . . . . . . . . . . . . . .        7,001         7,002       21,440
    Interest and discount accrued on convertible debentures. . .            -             -      462,034
    Provision for doubtful accounts. . . . . . . . . . . . . . .      925,000       380,004       99,000
    Expense related to equity in loss of investments . . . . . .            -             -      120,000
    Expense related to issuance of warrants for services . . . .            -             -       23,065
    Expense related to commitment to issue common stock
      for patented technology. . . . . . . . . . . . . . . . . .            -             -      900,000
    Gain on sale of Immtech stock. . . . . . . . . . . . . . . .   (2,500,000)            -            -
    Litigation settled with common stock . . . . . . . . . . . .       69,375             -            -
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . . . . .   (1,349,278)      183,222      161,524
      Other receivables. . . . . . . . . . . . . . . . . . . . .      (33,667)      239,870      (86,121)
      Inventories. . . . . . . . . . . . . . . . . . . . . . . .      341,955      (461,786)      46,207
      Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      (27,562)      146,007      (68,677)
      Accounts payable . . . . . . . . . . . . . . . . . . . . .     (442,676)      772,299     (768,284)
      Accrued liabilities. . . . . . . . . . . . . . . . . . . .   (2,401,762)    2,950,520     (683,954)
                                                                  ------------  ------------  -----------
Net cash (used in) provided by  operating activities . . . . . .   (4,726,492)      315,577      448,434

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . . . .     (595,412)     (515,017)    (287,205)
Purchase of license rights . . . . . . . . . . . . . . . . . . .            -             -       (1,080)
Advances to Immtech International, Inc.. . . . . . . . . . . . .            -             -     (120,000)
Proceeds from Sale of Immtech Stock. . . . . . . . . . . . . . .    2,500,000             -            -
                                                                  ------------  ------------  -----------
Net cash provide by (used in) investing activities . . . . . . .    1,904,588      (515,017)    (408,285)

FINANCING ACTIVITIES:
Net proceeds from mortgage refinancing . . . . . . . . . . . . .            -       256,413            -
Repurchase of Company stock. . . . . . . . . . . . . . . . . . .            -      (193,430)           -
Principal payments on long-term debt . . . . . . . . . . . . . .      (73,925)      (92,776)    (147,441)
Proceeds from issuance of common stock . . . . . . . . . . . . .      499,581        10,313      396,431
                                                                  ------------  ------------  -----------
Net cash provided by (used in) financing activities. . . . . . .      425,656       (19,480)     248,990

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS . . . . . .   (2,396,248)     (218,920)     289,139
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . . . . . . .    2,511,078     2,729,998    2,440,859
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . . . . . . .  $   114,830   $ 2,511,078   $2,729,998

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
  Income taxes paid-net. . . . . . . . . . . . . . . . . . . . .  $     7,535   $     8,010   $    8,525
  Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      259,590       437,401      335,342
Noncash investing and financing activities:
  Common stock issued upon conversion of convertible debentures,
    net of $100,822 of unamortized issuance costs. . . . . . . .            -             -    2,197,535
  Issuance of warrants for services. . . . . . . . . . . . . . .            -             -       23,065
  Commitment to issue common stock for patented technology . . .            -             -      900,000
  Litigation settled with common stock . . . . . . . . . . . . .       69,375             -            -
  Cost of fixed asset disposals. . . . . . . . . . . . . . . . .      201,072             -            -
  Unrealized gain on investment in Immtech . . . . . . . . . . .    5,704,675             -            -
See  notes  to  consolidated  financial  statements.

                                      F-8
CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998
-----------------------------------------------

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 Blatz House Offices Limited Partnership (the "Blatz Partnership")
on  the  equity  method.  In  Fiscal 2000, the Company ceased accounting for its
investment  in  Immtech  International, Inc. ("Immtech") under the equity method
and  recorded  the  asset  on  the  balance  sheet  at  its fair market value in
accordance  with  SFAS  No. 115, "Accounting for Certain Investments in Debt and
Equity  Securities."  (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  of  amortization  was  charged to
operations  in  fiscal  years  ended  June 30, 2000, 1999 and 1998.  Accumulated
amortization  approximated  $92,000  and  $85,000  at  June  30,  2000 and 1999,
respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
of  amortization  was  charged  to  operations  in 1998.  The pro rata 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 during
1998.  (See  Note  6.)

     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.

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

                                      F-9
MARKETING  EXPENSES  -  Marketing  expenses  include  all  of the Company's
sales-related  costs.  The  amount  incurred  in fiscal 2000 includes a $900,000
charge to bad debt expense related to the accounts receivable balance of certain
international  customers.  Total  bad  debt expense was $1,160,614, $380,004 and
$99,000  for  the  years  ended  June  30,  2000,  1999  and 1998, respectively.

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,696,000,
$2,798,000,  $3,156,000  in  2000, 1999 and 1998, 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."  This  statement  establishes  rules for the
reporting  of  comprehensive  income  and  its components.  Comprehensive income
consists of net income, foreign currency translation adjustments, and unrealized
gains  on  investments  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 - Statement of Financial Accounting Standards
No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133)  issued  by  the  FASB  is  effective  for financial statements with fiscal
quarters  of  fiscal  years  beginning  after  June 15, 2000.  SFAS 133 requires
companies to recognize all derivatives contracts as either assets or liabilities
in  the  balance sheet and to measure them at fair value.  If certain conditions
are  met,  a derivative may be specifically designated as a hedge, the objective
of  which  is  to  match  the  timing of gain or loss recognition on the hedging
derivative  with  the  recognition  of  (i) the changes in the fair value of the
hedged  asset  or liability that are attributable to the hedged risk or (ii) the
earnings  effect  of  the  hedged  forecasted transaction.  For a derivative not
designated  as a hedging instrument, the gain or loss is recognized in income in
the  period  of  change.

     Historically, the Company has not entered into derivatives contracts either
to  hedge  existing risks or for speculative purposes.  Accordingly, the Company
does not expect adoption of the new standard to affect its financial statements.

                                      F-10
In  1999  the  Securities  and  Exchange Commission issued Staff Accounting
Bulletin  No.  101  "Revenue  Recognition in Financial Statements" (SAB No. 101)
dealing  with  revenue  recognition  which is effective in the fourth quarter of
fiscal  2000.  The Company does not expect its adoption of SAB No. 101 to have a
material  effect  on  the  Company's  financial  statements.

     In  March 2000, the FASB issued FASB interpretation No. 44, "Accounting for
Certain  Transactions Involving Stock Compensation ("FIN 44") which is effective
July  1,  2000.  This interpretation clarifies the application of APB Opinion 25
for  certain  issues related to stock issued to employees.  The Company believes
its  existing stock based compensation policies and procedures are in compliance
with FIN 44 and, therefore, that the adoption of FIN 44 will not have a material
effect  on  the  Company's  financial  statements.

     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.

2.     INVENTORIES

     Inventories  consist  of  the  following  as  of  June  30:
2000        1999
Component parts . . . . . . . .  $3,721,474  $3,790,728
Work in process . . . . . . . .   1,169,609   1,261,709
Finished units. . . . . . . . .   3,687,243   4,018,142
                                 ----------  ----------
Total inventories . . . . . . .   8,578,326   9,070,579
Less:  reserve for
  obsolescence. . . . . . . . .     400,000     559,604
                                 ----------  ----------
Net inventory . . . . . . . . .  $8,178,326  $8,510,975
3.     INVESTMENTS

     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.

     During  the  first  and  second quarters of fiscal 2000, the Company sold a
portion  of  its  Immtech  stock in a Private Placement.  The proceeds from this
sale  were  $2,500,000.

     As  a  result,  the  Company  owns  less  than  20% of Immtech's issued and
outstanding  common  stock  as  of June 30, 2000.  Therefore, in accordance with
SFAS  No.  115,  "Accounting  for  Certain  Investments  in  Debt  and  Equity
Securities,"  the Company ceased accounting for the Immtech investment under the
equity  method  and  recorded  the asset on the balance sheet at the fair market
value  of  $5,704,675.  An  unrealized  gain was also recorded as a component of
stockholder's  equity.  The Company held 456,374 shares of Immtech common stock,
which  was  trading  at  $12.50  per  share,  on  June  30,  2000.

                                      F-11
The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999:
1999
Investment in Immtech . . . . . . .  $ 2,736,000
Advances to Immtech . . . . . . . .      863,940
                                     ------------
Total . . . . . . . . . . . . . . .    3,599,940
Less:  investment losses
  recognized. . . . . . . . . . . .   (3,599,940)
                                     ------------
Net investment. . . . . . . . . . .  $         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  12).

     The  Company  has recognized investment losses related to the investment in
Immtech  of  $150,000  and  $120,000  in  1999  and  1998,  respectively.

     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.  At June 30, 2000, the lock-up provisions have been
satisfied.

     The  following  is summarized financial information for Immtech at June 30,
1999  for  the  twelve  months  then  ended.
1999
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000
Noncurrent assets . . . . . . . . . . . . . .       68,000
Current liabilities . . . . . . . . . . . . .      253,000
Noncurrent liabilities. . . . . . . . . . . .            -
Redeemable preferred stock. . . . . . . . . .            -
Common stockholders' equity (deficit) . . . .    8,356,000
Revenues. . . . . . . . . . . . . . . . . . .      136,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)
Net loss attributable to
  common stockholders . . . . . . . . . . . .   (4,657,000)
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.

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.

                                      F-12
Significant  components  of  the  Company's  deferred income tax assets and
deferred  income  tax  liabilities  are  as  follows:
JUNE 30, 2000    JUNE 30, 1999    JUNE 30, 1998
Deferred income tax assets:
   Accounts receivable and sales allowances . . . . . . . .  $      533,000   $      170,000   $      156,000
   Inventory allowances . . . . . . . . . . . . . . . . . .         191,000          254,000          110,000
   Product warranties . . . . . . . . . . . . . . . . . . .         128,000          128,000          128,000
   Other accrued liabilities. . . . . . . . . . . . . . . .         246,000          392,000           86,000
   Severance pay accrual. . . . . . . . . . . . . . . . . .         145,000          279,000                -
   Lawsuit settlement . . . . . . . . . . . . . . . . . . .               -          626,000                -
   Federal net operating loss carryforwards . . . . . . . .       3,320,000        2,014,000        1,870,000
   State net operating loss carryforwards . . . . . . . . .         483,000          291,000          270,000
   Federal tax credit carryforwards . . . . . . . . . . . .         152,000          152,000          152,000
   Investment losses not deducted . . . . . . . . . . . . .         709,000        1,532,000        1,481,000
                                                             ---------------  ---------------  ---------------
   Total deferred income tax assets . . . . . . . . . . . .       5,907,000        5,838,000        4,253,000

                                                             JUNE 30, 2000    JUNE 30, 1999    JUNE 30, 1998
Deferred income tax liabilities:
   Excess of tax over book depreciation and amortization. .        (616,000)        (620,000)        (596,000)
   Prepaid expenses . . . . . . . . . . . . . . . . . . . .         (13,000)          (7,000)          (3,000)
   Unrealized gain on investments . . . . . . . . . . . . .      (2,237,000)               -                -
                                                             ---------------  ---------------  ---------------
   Total deferred income tax liabilities. . . . . . . . . .      (2,866,000)        (627,000)        (599,000)

   Valuation allowance. . . . . . . . . . . . . . . . . . .      (3,041,000)      (5,211,000)      (3,654,000)

   Net deferred income taxes recognized in the consolidated
     balance sheets . . . . . . . . . . . . . . . . . . . .  $            0   $            0   $            0
At  June 30, 2000, the Company had federal net operating loss carryforwards
of  approximately  $9,765,000  which  expire  in 2008 through 2020.  At June 30,
2000,  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 $9,667,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2015,
available  to  offset  certain  future  state  taxable  income.

     The  income  tax  provision  consists  of  the  following:
2000   1999   1998
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:
2000     1999     1998
Federal statutory income tax rate. . . .  (34.0)%  (34.0)%  (34.0)%
   Losses for which no benefit
     was provided . . . . . . . . . . . . .   35.3     29.3     30.9
   Non-deductible losses of subsidiaries. .   27.6      3.2        -
   Other-net. . . . . . . . . . . . . . . .  (28.9)     1.5      3.1
   Effective income tax rate. . . . . . . .      0 %      0 %      0 %
F-13
5.     LINE  OF  CREDIT  FACILITY  AND  LONG-TERM  DEBT
2000        1999
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
     $3,844,000 at June 30, 2000. . . . . . . . . . . . . . . . . . . . .  $3,364,324  $3,438,249
   Less current maturities. . . . . . . . . . . . . . . . . . . . . . . .      80,432      73,893
   Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,283,892  $3,364,356
Aggregate  annual  principal payments required under terms of the long-term
debt  agreements  are  as  follows:
YEARS ENDING JUNE 30,  PRINCIPAL PAYMENTS
2001. . . . . . . . .  $            80,432
2002. . . . . . . . .               86,766
2003. . . . . . . . .               93,599
2004. . . . . . . . .            3,103,526
2005. . . . . . . . .                    0
                       -------------------
Total . . . . . . . .  $         3,364,324
At  June  30,  2000,  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% (9.75% as of June 30, 2000).  As of June
30,  2000, 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, 2000.  This non-compliance was waived by the lending
institution.

     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.

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, $1,650,000 of debentures
were  converted  to  407,761  shares of common stock with a fair market value of
$2,298,357  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.

     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  constituted  full  repayment  of  one of these grants in 1999 and
constituted  full  repayment of one of these grants.  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,  2000.

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 139,350 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 2000.  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  1998,  1999  and  2000  for  the  above  plans are
summarized  as  follows:
NUMBER OF   STOCK OPTIONS  WEIGHTED AVG.
                                                SHARES      PRICE RANGE   EXERCISE PRICE
Outstanding at July 1, 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
  Granted. . . . . . . . . . . . . . . . . .     489,100       2.00-2.25            2.24
  Cancelled. . . . . . . . . . . . . . . . .    (287,700)      1.63-3.63            1.99
  Exercised. . . . . . . . . . . . . . . . .    (240,100)      1.50-2.75            1.91
Outstanding at June 30, 2000 . . . . . . . .   1,152,900       1.50-2.75            1.96

Exercisable at June 30, 2000 . . . . . . . .     502,500       1.50-2.75            1.98

Weighted average fair market value of
options granted during the fiscal year ended
June 30, 2000. . . . . . . . . . . . . . . .  $     0.38
F-15
The  following table summarizes information about stock options outstanding
as  of  June  30,  2000:
OPTIONS OUTSTANDING                          |        OPTIONS EXERCISABLE
                                            WEIGHTED                     |
                                             AVERAGE                     |
                            SHARES          REMAINING       WEIGHTED     |      SHARES
RANGE OF                  OUTSTANDING      CONTRACTUAL  AVERAGE EXERCISE |   EXERCISABLE     WEIGHTED AVERAGE
EXERCISE PRICES        AT JUNE 30, 2000    LIFE-YEARS        PRICE       | AT JUNE 30, 2000   EXERCISE PRICE
1.50-1.875 . . . . .              622,400         2.71              1.71 |          284,000              1.76
2.00-3.00. . . . . .              530,500         3.39              2.25 |          218,500              2.28
1.50-3.00. . . . . .            1,152,900         3.02              1.96 |          502,500              1.98
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.

     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,  2000, 1999 and 1998, 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,
                                           2000         1999         1998
Net loss-as reported . . . . . . . . .  $(186,388)  $(4,388,171)  $(499,276)
Net loss-pro forma . . . . . . . . . .  $(365,626)  $(4,555,200)  $(779,276)
Net loss per common
  share-as reported. . . . . . . . . .  $   (0.02)  $     (0.51)  $   (0.06)
Net loss per common share-pro forma. .  $   (0.04)  $     (0.53)  $   (0.09)
Assumptions used:
   Expected volatility . . . . . . . .         23%           15%         14%
   Risk-free interest rate . . . . . .          6%            5%          5%
   Expected option life (in years) . .          4             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.

     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.  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 year ended June 30, 1998.  Warrants to purchase
15,000 shares of common stock at $2.00 per share were exercisable as of June 30,
2000.  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, 2000, 30,000 warrants were exercisable.
Such  warrants  expire  in  February  2003.

                                      F-16
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.  The 400,000 shares to be
issued  have  been considered to be outstanding shares for purposes of computing
basic  and  diluted  income  (loss)  per common share in 1998.  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.

     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  $77,000,  $84,000,  and  $77,000  in  2000,  1999  and  1998,
respectively.

10.     BUSINESS  AND  CREDIT  CONCENTRATIONS

     The  Company is a manufacturer of medical monitoring and telemetry products
whose  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  credit  risk  with  respect  to  trade  accounts
receivable  are limited due to the Company's large number of customers and their
geographic  dispersion.  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:
2000         1999         1998
Europe and Middle East . . . . . . .  $ 5,437,000  $ 4,635,000  $ 5,464,000
Pacific Rim. . . . . . . . . . . . .    2,662,000    2,243,000    3,895,000
Canada and Central
  and South America. . . . . . . . .    3,035,000    3,634,000    3,414,000
Export net sales . . . . . . . . . .  $11,134,000  $10,512,000  $12,773,000
U.S. net sales . . . . . . . . . . .   16,020,000   18,001,000   15,135,000
Total net sales. . . . . . . . . . .   27,154,000   28,513,000   27,908,000
F-17
11.     SIGNIFICANT  CUSTOMER

     During  1999, a customer entered into an OEM agreement with the Company and
purchased  approximately  $4,360,000 of the Company's products.  This represents
approximately  15% of the Company's total sales.  This customer had a receivable
balance of $448,546 on June 30, 1999, which represents 7% of the Company's total
receivables as of this date.  During 2000, purchases approximated $1,988,000 and
a  receivable  balance of $944,326, which represented 14% of accounts receivable
on  June  30,  2000.

12.     SEVERANCE  PAY

     During November 1998, the two cofounders 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.

                                      F-18
CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2000
                                   (UNAUDITED)
SEPTEMBER 30,
ASSETS                                                              2000
                                                               ---------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . .  $      212,840
Accounts receivable, less allowance for doubtful accounts
   of $1,400,000. . . . . . . . . . . . . . . . . . . . . . .       6,451,657
Investments . . . . . . . . . . . . . . . . . . . . . . . . .       7,558,694
Other receivables . . . . . . . . . . . . . . . . . . . . . .         123,903
Inventories . . . . . . . . . . . . . . . . . . . . . . . . .       7,788,891
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . .         491,480
                                                               ---------------
Total current assets. . . . . . . . . . . . . . . . . . . . .      22,627,465

Property, plant and equipment - net . . . . . . . . . . . . .       5,936,119

License rights and patents - net. . . . . . . . . . . . . . .         101,390
                                                               ---------------

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974
                                                               ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . .  $    2,386,134
Accrued liabilities:
    Compensation and commissions. . . . . . . . . . . . . . .       1,264,811
    Product warranties. . . . . . . . . . . . . . . . . . . .         325,000
    Other . . . . . . . . . . . . . . . . . . . . . . . . . .         585,298
Current maturities of long-term debt. . . . . . . . . . . . .          81,984
                                                               ---------------
Total current liabilities . . . . . . . . . . . . . . . . . .       4,643,227

LONG-TERM DEBT, less current maturities . . . . . . . . . . .       3,263,317

OTHER LONG-TERM OBLIGATIONS . . . . . . . . . . . . . . . . .         232,171

STOCKHOLDERS' EQUITY:
Preferred stock . . . . . . . . . . . . . . . . . . . . . . .               -
Common stock - $.04 par value, 15,000,000 shares authorized,
    8,991,251 shares issued and outstanding . . . . . . . . .         359,650
Additional paid-in capital. . . . . . . . . . . . . . . . . .      18,507,981
Common stock held in treasury (76,439 shares) . . . . . . . .        (142,388)
Retained earnings (accumulated deficit) . . . . . . . . . . .      (5,757,678)
Accumulated comprehensive income. . . . . . . . . . . . . . .       7,558,694
                                                               ---------------
Total stockholders' equity. . . . . . . . . . . . . . . . . .      20,526,259
                                                               ---------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974
                                                               ===============
See  notes  to  consolidated  financial  statements.

                                      F-19
CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
2000         1999
                                       -----------  -----------
NET SALES . . . . . . . . . . . . . .  $6,229,877   $6,603,337

COST OF GOODS SOLD. . . . . . . . . .   3,718,831    3,614,526
                                       -----------  -----------

GROSS PROFIT. . . . . . . . . . . . .   2,511,046    2,988,811

OPERATING EXPENSES:
Marketing . . . . . . . . . . . . . .   1,475,109    1,606,379
Research, development
  and engineering . . . . . . . . . .     581,282      711,456
Administrative. . . . . . . . . . . .     562,238      514,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .   2,618,629    2,831,835

(LOSS) INCOME FROM OPERATIONS . . . .    (107,583)     156,976

OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . .     (64,806)     (65,781)
Interest income . . . . . . . . . . .       6,419       29,281
Gain on sale of stock . . . . . . . .           -    1,760,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .     (58,387)   1,723,500

(LOSS) INCOME BEFORE INCOME TAXES . .    (165,970)   1,880,476

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

NET (LOSS) INCOME . . . . . . . . . .  $ (165,970)  $1,880,476
                                       ===========  ===========

NET (LOSS) INCOME PER COMMON SHARE
Basic . . . . . . . . . . . . . . . .  $    (0.02)  $     0.22
Diluted . . . . . . . . . . . . . . .  $    (0.02)  $     0.21

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . .   8,898,607    8,706,151
Diluted . . . . . . . . . . . . . . .   8,898,607    8,921,806
See  notes  to  consolidated  financial  statements.

                                      F-20
CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
2000         1999
                                                        ----------  ------------
OPERATING ACTIVITIES:
Net (loss) income. . . . . . . . . . . . . . . . . . .  $(165,970)  $ 1,880,476
Adjustments to reconcile net (loss) income to net cash
  provided by (used in) operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . .    127,499       231,784
    Amortization . . . . . . . . . . . . . . . . . . .      3,600         4,499
    Provision for doubtful accounts. . . . . . . . . .    100,000        57,838
    Gain on sale of Immtech stock. . . . . . . . . . .          -    (1,760,000)

    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . .    231,108       471,819
      Other receivables. . . . . . . . . . . . . . . .     (7,130)       27,157
      Inventories. . . . . . . . . . . . . . . . . . .    430,907       (68,690)
      Prepaid expenses . . . . . . . . . . . . . . . .   (271,628)      (51,536)
      Accounts payable . . . . . . . . . . . . . . . .   (249,210)     (872,997)
      Accrued liabilities. . . . . . . . . . . . . . .     (4,967)   (1,668,965)
                                                        ----------  ------------
Net cash provided by (used in) operating activities. .    194,209    (1,748,615)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . .   (116,434)      (78,583)
Proceeds from sale of Immtech stock. . . . . . . . . .          -     1,760,000
                                                        ----------  ------------
Net cash (used in) provide by investing activities . .   (116,434)    1,681,417

FINANCING ACTIVITIES:
Principal payments on long-term debt . . . . . . . . .    (19,023)      (17,596)
Proceeds from issuance of common stock . . . . . . . .     39,258             -
                                                        ----------  ------------
Net cash provided by (used in) financing activities. .     20,235       (17,596)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .     98,010       (84,794)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . .    114,830     2,511,078
                                                        ----------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . .  $ 212,840   $ 2,426,284
                                                        ==========  ============
See  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  elsewhere  in  this  Prospectus.

2.  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  September  30,  2000  and  June  30,  2000,  respectively:
SEPTEMBER 30, 2000   JUNE 30, 2000
                                 -------------------  --------------
Component parts . . . . . . . .  $         3,705,418  $    3,721,474
Work in process . . . . . . . .            1,167,141       1,169,609
Finished units. . . . . . . . .            3,316,332       3,687,243
                                 -------------------  --------------
Total inventories . . . . . . .            8,188,891       8,578,326
Less:  reserve for
  obsolescence. . . . . . . . .              400,000         400,000
                                 -------------------  --------------
Net inventory . . . . . . . . .  $         7,788,891  $    8,178,326
3.  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 held 456,374 shares of Immtech
stock,  which  was  trading  at  $16  9/16 per share, on September 30, 2000. The
market  value  of  these shares could change substantially due to overall market
risk.

                                      F-22
4.  PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant  and  equipment  consist  of  the  following:
SEPTEMBER 30, 2000   JUNE 30, 2000
                                      -------------------  --------------
Land and building. . . . . . . . . .  $         4,525,000  $    4,525,000
Machinery and equipment. . . . . . .            2,037,639       2,009,312
Furniture and fixtures . . . . . . .              805,055         763,282
Demonstration and loaner monitors. .            1,366,115       2,651,145
Production tooling . . . . . . . . .            2,697,479       1,407,587
                                      -------------------  --------------
Property, plant and
  equipment - cost . . . . . . . . .           11,431,288      11,356,326
Less:  accumulated depreciation. . .            5,495,169       5,367,670
                                      -------------------  --------------
Property, plant and
  equipment - net. . . . . . . . . .  $         5,936,119  $    5,988,656
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.

                                TABLE OF CONTENTS
Page
------------------------------------------------
Summary. . . . . . . . . . . . . . . . . .    2
Risk Factors . . . . . . . . . . . . . . .    3
Forward Looking Statements May Prove to be
    be Inaccurate. . . . . . . . . . . . .    5
Market Information and Dividend Policy . .    5
Use of Proceeds. . . . . . . . . . . . . .    6
Determination of Offering Price. . . . . .    6
Selected Consolidated Financial Data . . .    7
Management's Discussion and Analysis
    of Financial Condition and Results
    of Operations. . . . . . . . . . . . .    8
Business . . . . . . . . . . . . . . . . .   12
Management . . . . . . . . . . . . . . . .   19
Principal Stockholders . . . . . . . . . .   24
Selling Stockholders . . . . . . . . . . .   26
Plan of Distribution . . . . . . . . . . .   26
Description of Capital Stock . . . . . . .   27
Legal Matters. . . . . . . . . . . . . . .   31
Experts. . . . . . . . . . . . . . . . . .   31
Where You Can Find More Information. . . .   31
Consolidated Financial Statements. . . . .  F-1
CRITICARE SYSTEMS, INC.

                        1,786,273 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 . . . . . . . . .  $ 1,146

Nasdaq Listing Fees. . . . . . . .   17,500

Printing and Engraving Fees. . . .    5,000

Legal Fees and Expenses. . . . . .   20,000

Accounting Fees and Expenses . . .    5,000

Miscellaneous Expenses . . . . . .    1,354
                                    -------

   Total                            $50,000
                                    =======
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.

     Effective  March  3, 2000, the Company issued 30,000 shares of Common Stock
to one investor in settlement of pending litigation. These shares were issued in
a  private  placement  exempt  from  the  registration  requirements  of the Act
pursuant  to  Section  4(2)  of  the  Act.

     On October 17, 2000, the Company issued an aggregate of 1,786,273 shares of
common stock to Oxford Bioscience Partners III, L.P., Oxford Bioscience Partners
(Bermuda)  III  Limited  Partnership  and mRNA Fund L.P. at a price of $2.25 per
share.  These  shares  were  issued  in  a  private  placement  exempt  from the
registration  requirements  of  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.

                                      II-2
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).

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

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).

                                      II-3
10.18      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).

10.19      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).

10.20      Purchase  Agreement, dated as of October 17, 2000, among the Company,
           Oxford  Bioscience  Partners  III  L.P.,  Oxford  Bioscience Partners
           (Bermuda)  III  Limited  Partnership  and  mRNA  Fund  L.P.

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, 2000, 1999
and  1998:

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,  as  amended;

               (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% change in the maximum
aggregate  offering  price  set  forth  in the "Calculation of Registration Fee"
table  in  the  effective  Registration  Statement,  and

                                      II-4
(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.

          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.     Insofar  as  indemnification  for liabilities arising under the
Securities  Act  of 1933, as amended, 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, as amended, 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  28th  day  of  November,  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  S.  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, as amended,
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    November 28, 2000
---------------------------
Emil H. Soika                Officer and Director

 /s/ Mark S. Ruehle          Vice President-Finance and    November 28, 2000
---------------------------
Mark S. Ruehle               Secretary (Principal
                             Accounting Officer and
                             Principal Financial Officer)

 /s/ Karsten Houm            Chairman of the Board and     November 28, 2000
---------------------------
Karsten Houm                 Director

 /s/ Milton Datsopoulos      Director                      November 28, 2000
---------------------------
Milton Datsopoulos

                              Director                     November 28, 2000
---------------------------
N.C. Joseph Lai, Ph.D.

 /s/ Jeffrey T. Barnes       Director                      November 28, 2000
---------------------------
Jeffrey T. Barnes
II-6
INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

The  audits  referred  to  in  our  report dated August 15, 2000 relating to the
consolidated financial statements of Criticare Systems, Inc., which is contained
in  this  Registration Statement on Form S-1 included the audit of the financial
statement  schedules listed in Item 16.  These financial statement schedules are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express an opinion on these financial statement schedules based upon our audits.

In  our  opinion  such  financial  statement  schedules  present  fairly, in all
material  respects,  the  information  set  forth  therein.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  15,  2000
INDEPENDENT  AUDITORS'  REPORT

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

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  for  the year ended June 30, 1998, and have issued our report
thereon  dated  August  20,  1998;  such  report  is  included elsewhere in this
Registration  Statement  on  Form S-1.  Our audit also included the consolidated
financial statement schedule information of Criticare Systems, Inc. for the year
ended  June  30, 1998, listed in Item 16.  This consolidated financial statement
schedule  information  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/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998
SCHEDULE II
                             CRITICARE SYSTEMS, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 2000, 1999 AND 1998
COLUMN A                                      COLUMN B      COLUMN C     COLUMN D       COLUMN E
------------------------------------------  -------------  -----------  -----------  ---------------
                                             BALANCE AT    CHARGED TO
                                            BEGINNING OF    COSTS AND                BALANCE AT END
    DESCRIPTION                                PERIOD       EXPENSES    DEDUCTIONS      OF PERIOD
------------------------------------------  -------------  -----------  -----------  ---------------
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

YEAR ENDED JUNE 30, 2000:
  Allowance for doubtful accounts. . . . .  $     375,000  $ 1,160,614  $   235,614  $     1,300,000

  Reserve for sales returns
    and allowances . . . . . . . . . . . .  $      60,000  $   554,101  $   554,101  $        60,000