<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[x]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
                                       OR
[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                   EXCHANGE ACT


                         FOR THE QUARTERLY PERIOD ENDED

                               SEPTEMBER 30, 1997

                        Commission File Number 000-21157

                             C O M P U R A D, I N C.

        (Exact name of small business issuer as specified in its charter)

            Delaware                                  86-0710268
   (State or other jurisdiction                     (I.R.S.  Employer
   of incorporation or organization)                Identification No.)

                                 1350 North Kolb
                              Tucson, Arizona 85715
                    (Address of principal executive offices)

                                 (520) 298-1000
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                         Yes X                  No _____


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

At November 12, 1997 there were 3,973,880 shares, $.01 par value, outstanding.
<PAGE>   2
                                 COMPURAD, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS

                         Part I. - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                   Page
<S>                                                                                <C>
Item 1.           FINANCIAL STATEMENTS

   Condensed Balance Sheets - September 30, 1997 and December 31, 1996               3
   Condensed Statements of Operations - Three Months and Nine Months
         Ended September 30, 1997 and September 30, 1996                             4
   Condensed Statements of Cash Flows - Nine Months
         Ended September 30, 1997 and September 30, 1996                             5
   Notes to Condensed Financial Statements                                           6

Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS                      8


                          Part II. - OTHER INFORMATION


Item 1.           LEGAL PROCEEDINGS                                                 17

Item 2.           CHANGES IN SECURITIES                                             17

Item 3.           DEFAULTS UPON SENIOR SECURITIES                                   17

Item 4.           SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS                                                  17

Item 5.           OTHER INFORMATION                                                 17

Item 6.           EXHIBITS AND REPORTS ON FORM 8-K                                  17


SIGNATURES                                                                          19
</TABLE>


                                                                               2
<PAGE>   3
                                 COMPURAD, INC.
                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,     DECEMBER 31,
                                                                                      1997              1996
                                                                                 -----------        -----------
                                                                                  (Unaudited)
<S>                                                                              <C>                <C>        
ASSETS
Current assets:
   Cash and cash equivalents                                                     $ 1,635,268        $ 4,051,968
   Accounts receivable, net of $150,000 and $80,000 allowance at
     September  30, 1997 and December 31, 1996, respectively                       2,075,418          1,423,910
   Inventories                                                                       723,244            313,724
   Prepaid expenses and other                                                        197,460             75,789
   Deferred merger costs                                                             150,917                 --
                                                                                 -----------        -----------
Total current assets                                                               4,782,307          5,865,391

Property and equipment, net                                                          598,467            466,768
Purchased developed technology, net                                                  511,015             71,250
                                                                                 -----------        -----------
Total assets                                                                     $ 5,891,789        $ 6,403,409
                                                                                 ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                              $   839,253        $   558,290
   Accrued expenses                                                                  249,527            456,428
   Customer deposits and unearned revenue                                            256,765            227,329
                                                                                 -----------        -----------
Total current liabilities                                                          1,345,545          1,242,047
Note payable to related party                                                        125,923            117,969

Stockholders' equity:
   Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares
     issued or outstanding at September 30, 1997 and December 31,
     1996, respectively                                                                   --                 --
   Common stock, $.01 par value; 20,000,000 shares authorized, 3,962,750
     and  3,857,260 shares issued and outstanding at September 30, 1997
     and December 31, 1996, respectively                                           7,126,973          6,551,967
   Paid in capital--stock-based compensation and expenses                            476,500            467,500
   Accumulated deficit                                                            (3,183,152)        (1,976,074)
                                                                                 -----------        -----------
Total stockholders' equity                                                         4,420,321          5,043,393
                                                                                 -----------        -----------
Total liabilities and stockholders' equity                                       $ 5,891,789        $ 6,403,409
                                                                                 ===========        ===========
</TABLE>


                             See accompanying notes.




                                                                               3
<PAGE>   4
                                 COMPURAD, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                           SEPTEMBER 30,                        SEPTEMBER 30,
                                                                  -----------------------------       ----------------------------
                                                                       1997              1996              1997             1996
                                                                  -----------        ----------       -----------      -----------

<S>                                                               <C>                <C>              <C>              <C>        
Net revenues                                                      $ 2,046,706        $2,039,170       $ 6,729,126      $ 5,219,515
Cost of revenues                                                      978,675         1,024,451         3,437,296        2,903,632
                                                                  -----------        ----------       -----------      -----------
   Gross profit                                                     1,068,031         1,014,719         3,291,830        2,315,883

Operating expenses:
   Selling and marketing                                              479,588           294,979         1,591,424          735,807
   Research and development                                           468,421           399,190         1,543,382          898,165
   General and administrative                                         553,643           255,756         1,434,034          609,312
   Stock-based compensation and expenses                                3,000             3,000             9,000          364,500
                                                                  -----------        ----------       -----------      -----------
Income (loss) from operations                                        (436,621)           61,794        (1,286,010)        (291,901)
Other income                                                           16,430            11,477            78,932            4,266
                                                                  -----------        ----------       -----------      -----------
Net income (loss)                                                 $  (420,191)       $   73,271       $(1,207,078)     $  (287,635)
                                                                  ===========        ==========       ===========      =========== 

Net income (loss) per common share                                $     (0.11)       $     0.02       $     (0.31)     $     (0.11)
                                                                  ===========        ==========       ===========      =========== 

Shares used in computing net income (loss) per common share         3,927,241         3,256,826         3,882,031        2,725,464
                                                                    =========         =========         =========        =========
</TABLE>


                             See accompanying notes.


                                                                               4
<PAGE>   5
                                 COMPURAD, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED
                                                                       SEPTEMBER 30,
                                                             ------------------------------ 
                                                                  1997               1996
                                                             -----------        ----------- 
<S>                                                          <C>                <C>         
OPERATING ACTIVITIES:
Net loss                                                     $(1,207,078)       $  (287,635)
Adjustments to reconcile net loss  to net cash used in
   operating activities:
     Depreciation and amortization                               214,266             50,637
       Stock-based compensation and expenses                       9,000            364,500
       Provision for bad debt                                     70,000                 --
Changes in operating assets and liabilities:
     Accounts receivable                                        (721,508)          (895,817)
     Inventories                                                (393,938)           (16,798)
     Prepaid expenses and other                                 (121,671)           (35,313)
     Deferred merger costs                                      (150,917)                --
     Accounts payable and accrued expenses                        82,016            640,426
     Customer deposits and unearned revenue                       29,436           (316,163)
                                                             -----------        ----------- 

Net cash used in operating activities                         (2,190,394)          (496,163)
                                                             -----------        ----------- 

INVESTING ACTIVITIES:
Purchases of property and equipment                             (226,312)          (184,831)
                                                             -----------        ----------- 

Net cash used in investing activities                           (226,312)          (184,831)
                                                             -----------        ----------- 

FINANCING ACTIVITIES:
Proceeds from note payable                                            --            250,000
Principal payments on note payable                                    --           (250,000)
Proceeds from issuance of common stock                                 6          5,153,484
                                                             -----------        ----------- 

Net cash provided by financing activities                              6          5,153,484
                                                             -----------        ----------- 

Net increase (decrease) in cash and cash equivalents          (2,416,700)         4,472,490

Cash and cash equivalents, beginning of period                 4,051,968             36,024
                                                             -----------        ----------- 

Cash and cash equivalents, end of period                     $ 1,635,268        $ 4,508,514
                                                             ===========        ===========



SUPPLEMENTAL CASH FLOW INFORMATION:
Purchased developed technology, stock issued                 $   575,000                 --
</TABLE>



                             See accompanying notes.


                                                                               5
<PAGE>   6
                                       
                                 COMPURAD, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (UNAUDITED)


1.  BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements of CompuRAD, Inc. (the
"Company" or "CompuRAD") presented herein have been prepared in accordance with
generally accepted accounting principles for interim financial information,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, such unaudited interim information reflect all
adjustments, consisting of normal recurring adjustments, necessary to present
the Company's financial position and results of operations for the periods
presented. The results of operations for the three months and nine months ended
September 30, 1997 are not necessarily indicative of the results to be expected
for a full fiscal year or future operating periods. The Condensed Balance Sheet
as of December 31, 1996 was derived from audited financial statements as of that
date but does not include all of the information and footnotes required by
generally accepted accounting principles. The information included in this
report should be read in conjunction with the Company's audited financial
statements for the year ended December 31, 1996, which are contained in the
Company's 1996 Form 10-KSB, filed with the Securities and Exchange Commission.

2.  BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business: The Company develops, manufactures, and markets
computer software which captures, stores, distributes, and displays electronic
medical images and other types of clinical information and distributes this
information: (i) between hospitals and physicians' offices and homes; (ii)
between clinicians and healthcare delivery systems; and (iii) between various
departments within hospitals and clinics. The Company currently operates
primarily in North America and in only one business segment, the medical
software industry.

Inventories: The Company values its inventories at the lower of cost or market.
Cost is computed on a first-in, first-out basis. Substantially all inventories
are comprised of finished computer hardware goods purchased from computer
manufacturers. The Company does not modify any such computer hardware, but
integrates its software into the customer's ordered system.

Software Development Costs: Under Statement of Financial Accounting Standards
No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed, once technological feasibility is established related to
software development costs for new products or for enhancements to existing
products which extend the product's useful life, such costs are capitalized up
until the time the product or enhancement is available for release to customers,
after which the capitalized costs are amortized over the estimated life of the
products.

Income Taxes: The Company was a subchapter S-corporation for income tax purposes
until August 28, 1996 (the date of the Company's initial public offering). At
the date of the offering, deferred taxes were established for the difference in
the financial reporting and tax basis of the Company's assets and liabilities.

The Company's deferred tax assets at September 30, 1997 and December 31, 1996
approximate $805,000 and $322,000, respectively. The deferred tax assets at each
such date were fully offset by a valuation allowance due to uncertainties
regarding recoverability.

Revenue Recognition: Revenue from the sale of hardware and software is
recognized when the product has been shipped. Related costs of installation are
not significant and are accrued upon shipment. Revenue from maintenance,
service, and support agreements is recognized over the term of the agreement,
which in most instances is one year. Revenue from post-contract customer support
is recognized in the period the customer support services are provided. At the
request of certain customers, the Company acquires computer hardware for
purposes of configuration with its software products. The Company expects that
this service of acquiring hardware for resale will be phased out in the next
several years.

Loss per Common Share: Loss per common share is computed using the weighted
average number of shares of common stock outstanding, except as noted below.
Common equivalent shares from stock options are excluded from the computation
when their effect is antidilutive, except that, pursuant to the Securities and
Exchange Commission Staff 


                                                                               6
<PAGE>   7
Accounting Bulletins and Staff Policy, common shares, warrants, and options
issued during the period commencing 12 months prior to the initial filing of the
initial public offering at prices below the anticipated public offering price
are presumed to have been in contemplation of the public offering and have been
included in the calculation as if they were outstanding for all periods
presented prior to the initial public offering determined using the treasury
stock method.

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings per Share ("SFAS No. 128"),
which is required to be adopted on December 31, 1997. At that time, the Company
will be required to change the method currently used to compute earnings per
share and to restate all prior periods. Under the new requirements for
calculating primary earnings per share, the dilutive effect of stock options
will be excluded. Due to the Company's net losses for the three months and nine
months ended September 30, 1997 and 1996, the impact of SFAS No. 128 will not be
material.

3.   COMMON STOCK

On August 28, 1996, the Company completed an initial public offering (the
"Offering"), selling 1,000,000 shares of common stock at $6.00 per share. The
net proceeds to the Company were $5,130,000 after payment of underwriting
discounts and offering expenses. In conjunction with the Offering, the Company
effected a 150-for-1 stock split. All share and per share amounts have been
retroactively adjusted to reflect the stock split. On October 1, 1996 the
Company's underwriters exercised their overallotment option. The underwriters
purchased an additional 150,000 shares of Common Stock from the Company,
resulting in additional net proceeds of $837,000 to the Company after payment of
underwriting discounts and offering expenses.

4.    RELATED PARTY TRANSACTIONS

The Company's president, was, and certain of the Company's stockholders are,
stockholders of Arizona State Radiology, P.C. ("ASR"). Certain technology was
transferred to the Company at its inception by ASR. The terms and amount to be
paid to ASR for such technology were subject to negotiations between the
parties, which were finalized in July 1996. The final settlement, which is
reflected in the accompanying condensed financial statements as if it had
occurred on January 1, 1993, called for the Company to pay ASR a settlement
consisting of common stock, a note payable ($125,923 and $117,969 at September
30, 1997 and December 31, 1996, respectively), and a deferred payment of
$541,676 due either in cash or stock. The technology was valued at $610,000,
based on the value of consideration given, and was amortized over a three year
period beginning January 1, 1993. The technology is fully amortized on the
accompanying condensed balance sheets. The Company issued 93,480 shares of stock
to ASR in November 1996 in compensation of the deferred payment. Subsequently,
ASR requested mediation with the Company related to the number of shares
tendered. Should mediation be unsuccessful, ASR could file litigation against
the Company. While the outcome of such litigation is uncertain, the Company
believes it has meritorious defenses to the claims and intends to conduct a
vigorous defense.


                                                                               7
<PAGE>   8
                                 COMPURAD, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


IMPORTANT NOTE ABOUT FORWARD LOOKING STATEMENTS

         This quarterly report on Form 10-QSB contains forward looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Predictions of future events
are inherently uncertain. Actual events could differ materially from those
predicted in the forward looking statements as a result of the risks set forth
in the following discussion, and in particular, the risks discussed below under
the caption "Risk Factors that Could Effect Operating Results." Readers are also
encouraged to refer to the Company's 1996 Form 10-KSB for a further discussion
of the Company's business and the risks and opportunities attendant thereto.

GENERAL

         CompuRAD, Inc. is a leading provider of software that enables
healthcare clinicians to access medical images and clinical information at any
point of care. The Company pioneered the use of personal computer software in
the point-to-point, on call teleradiology market, with the introduction of its
PC Teleradiology product. In response to the increasing acceptance of
teleradiology and increasing demand for multi-user and multi-access off-site
teleradiology systems, the Company introduced its iNET product line in late
1994. Recently in 1997, CompuRAD introduced ClinicalWare, an Internet/Intranet
software solution which provides enterprise-wide, secure electronic access
through a Web browser to clinical information systems at any point of care.

         On July 30, 1997 CompuRAD acquired technology from Star Technologies,
Inc., a Delaware corporation, ("Star"). The technology acquired includes a DICOM
archive, formerly known as Image Management Server ("IMS"). Management believes
that this acquisition complements and extends the Company's existing iNETPro and
iVIEWPro DICOM image product lines allowing the Company to offer a
comprehensive, top-to-bottom, medical image networking solution to a wider
spectrum of customers. The product, which has received 510(k) clearance, will be
marketed by CompuRAD under the brand name iARCHIVE and is configurable for shelf
storage management as well as multi-terabyte, robotic archival of medical images
on jukeboxes of magneto-optical disks or digital linear tape. CompuRAD also
acquired certain assets of Medical Imaging Technology Associates, Inc. ("MITA")
related to nuclear medicine software. The MITA acquisition will close in April
1998.

         On September 28, 1997 CompuRAD entered into an Agreement and Plan of
Merger and Reorganization ("the Reorganization Agreement") among Lumisys
Incorporated (NASDAQ:LUMI), ("Lumisys"), SAC Acquisition Corporation, a
wholly-owned subsidiary of Lumisys ("Merger Sub") and CompuRAD providing for the
merger of Merger Sub with and into CompuRAD upon terms and subject to the
conditions of the Reorganization Agreement (the "Merger"). Upon the closing of
the proposed merger, CompuRAD will become a wholly-owned subsidiary of Lumisys.
Stockholders who were holders of record at the close of business on October 31,
1997 will be entitled to vote at the CompuRAD Special Meeting of Stockholders on
November 25, 1997. Proxy materials were mailed to such stockholders on or about
November 5, 1997.

THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH
THREE MONTHS ENDED SEPTEMBER 30, 1996

Net Revenues

         Net revenues for both the three months ended September 30, 1997 and
September 30, 1996 were $2.0 million. Hardware sales, software licenses and
maintenance and support services accounted for 47.7%, 42.2% and 10.1%,
respectively, of net revenues for the 1997 period and 46.7%, 45.4% and 7.9%,
respectively, for the 1996 period. Net revenues were flat primarily due to the
lack of market acceptance of ClinicalWare. One customer represented 8.7% and
22.2% of net revenues for the three months ended September 30, 1997 and 1996,
respectively. No other customer accounted for more than 10% of net revenues in
either period.

Gross Margin

         Gross margin increased to 52.2% for the three months ended September
30, 1997 from 49.8% for the three months ended September 30, 1996. This increase
in gross margin was attributable to the relative mix of higher margin 


                                                                               8
<PAGE>   9
direct, OEM and channel software sales. Cost of hardware sales for the three
months ended September 30, 1997 was $706,000 and for the three months ended
September 30, 1996 was $824,000. Cost of software licenses for the three months
ended September 30, 1997 was $211,000 and for the three months ended September
30, 1996 was $136,000. Cost of maintenance and support services for the three
months ended September 30, 1997 was $62,000 and for the three months ended
September 30, 1996 was $64,000.

Selling and Marketing Expense

         Selling and marketing expense for the three months ended September 30,
1997 was $480,000, or 23.4% of net revenues, compared with $295,000 or 14.5% of
net revenues, for the three months ended September 30, 1996, an increase of
62.6%. This increase was attributable primarily to increases in compensation
associated with a larger sales force and greater advertising and marketing
expenses.

Research and Development Expense

         Research and development expense for the three months ended September
30, 1997 was $468,000, or 22.9% of net revenues, compared with $399,000, or
19.6% of net revenues, for the three months ended September 30, 1996, an
increase of 17.3%. This increase was attributable primarily to the Company's
hiring and contracting of additional research and development staff and the
amortization of purchased developed technology from Star.

General and Administrative Expense

         General and administrative expense for the three months ended September
30, 1997 was $554,000, or 27.1% of net revenues, compared with $256,000, or
12.5% of net revenues, for the three months ended September 30, 1996, reflecting
an increase of 116.5%. This increase was attributable primarily to the Company's
hiring of additional administrative staff, additional legal and other
professional services in connection with the Company's acquisitions of Star and
MITA, and an increase in bad debt expense.


NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1996

Net Revenues

         Net revenues for the nine months ended September 30, 1997 were $6.7
million, compared with $5.2 million for the nine months ended September 30,
1996, reflecting an increase of 28.9%. Of these amounts, hardware sales,
software licenses and maintenance and support services accounted for 45.9%,
44.8% and 9.3%, respectively, for the 1997 period and 45.6%, 47.0% and 7.4%,
respectively, for the 1996 period. The overall increase in revenues was
attributable to an increase in revenues from sales of iNET software, partially
offset by a decrease in revenues from sales of the Company's PC Teleradiology
products. One customer represented 19.6% and 22.3% of net revenues for the nine
months ended September 30, 1997 and 1996, respectively. No other customer
accounted for more than 10% of net revenues in either period.

Gross Margin

         Gross margin increased to 48.9% for the nine months ended September 30,
1997 from 44.4% for the nine months ended September 30, 1996. This increase in
gross margin was attributable to a continued change in the relative mix of
higher margin direct, OEM and channel software sales. Cost of hardware sales for
the nine months ended September 30, 1997 was $2.6 million and for the nine
months ended September 30, 1996 was $2.2 million. Cost of software licenses for
the nine months ended September 30, 1997 was $577,000 and for the nine months
ended September 30, 1996 was $510,000. Cost of maintenance and support services
for the nine months ended September 30, 1997 was $228,000 and for the nine
months ended September 30, 1996 was $233,000.

Selling and Marketing Expense

         Selling and marketing expense for the nine months ended September 30,
1997 was $1.6 million, or 23.6% of net revenues, compared with $736,000 or 14.1%
of net revenues, for the nine months ended September 30, 1996, an increase of
116.3%. This increase was attributable primarily to increases in compensation
associated with a larger sales force and greater advertising and marketing
expenses.


                                                                               9
<PAGE>   10
Research and Development Expense

         Research and development expense for the nine months ended September
30, 1997 was $1.5 million, or 22.9% of net revenues, compared with $898,000, or
17.2% of net revenues, for the nine months ended September 30, 1996, an increase
of 71.8%. This increase was attributable primarily to the Company's hiring and
contracting of additional research and development staff.

General and Administrative Expense

         General and administrative expense for the nine months ended September
30, 1997 was $1.4 million, or 21.3% of net revenues, compared with $609,000, or
11.7% of net revenues, for the nine months ended September 30, 1996, reflecting
an increase of 135.4%. This increase was attributable primarily to the Company's
hiring of additional administrative staff, additional legal and other
professional services, and an increase in bad debt expense.

Stock-Based Compensation and Expenses

         Stock-based compensation and expenses for the 1996 period are comprised
of non-cash charges primarily associated with the Company's grant of options to
purchase 75,000 shares of the Company's Common Stock to the co-signer of the
Company's borrowing from BankOne Arizona, N.A. in May 1996 and the Company's
issuance of 150,000 shares of the Company's Common Stock to an executive officer
of the Company in March 1996. The difference between the exercise price of such
options (or in the case of the March 1996 issuance, the price paid for such
shares) and the deemed fair market value of the Company's Common Stock on the
dates of grant of $2.50 and $1.00 per share, respectively, was recognized
immediately as a $337,500 non-cash charge. Total stock-based compensation and
expenses for the nine months ended September 30, 1996 were $364,500.

LIQUIDITY AND CAPITAL RESOURCES

         Although there are no current capital commitments, the Company expects
its capital needs and operating expenditures to increase in the next few years.
There can be no assurance that the Company will not need additional capital. The
Company's need for additional financing will depend upon numerous factors,
including, but not limited to, the level of future revenues and expenditures,
market acceptance of new products, the results and scope of ongoing research and
development projects, competing technologies, market and regulatory developments
and increased working capital requirements. There can be no assurance that
additional financing will be available when needed or, if available, that it
will be available on acceptable terms. If additional funds are raised by issuing
equity securities, further dilution to then existing stockholders may result and
debt financing, if available, may involve restrictive covenants. If adequate
funds are not available, the Company's business, financial condition and results
of operations could be materially affected.

NEW ACCOUNTING STANDARD

         In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS
No. 128"), which is required to be adopted on December 31, 1997. At that time,
the Company will be required to change the method currently used to compute
earnings per share and to restate all prior periods. Under the new requirements
for calculating primary earnings per share, the dilutive effect of stock options
will be excluded. Due to the Company's net losses for the three months and nine
months ended September 30, 1997 and 1996, the impact of SFAS No. 128 will not be
material.

RISK FACTORS THAT COULD EFFECT OPERATING RESULTS

         The Company's future operating results are subject to a number of risks
and uncertainties including those listed below.

History of Operating Losses; Uncertain Profitability

         The Company incurred net losses of approximately $420,000 and $1.2
million for the three months and nine months ended September 30, 1997,
respectively, and net income of $73,000 and net loss of $288,000 for the three
months and nine months ended September 30, 1996, respectively, and, as of
September 30, 1997, had an accumulated deficit of 


                                                                              10
<PAGE>   11
$3.2 million. The development and marketing by the Company of new and existing
products will continue to require substantial product development and other
expenditures. The Company's prior operating history and dependence upon emerging
and developing markets and key personnel, as well as competition, uncertainty in
the consolidation of the healthcare industry, and general economic and other
factors make the prediction of future operating results difficult. There can be
no assurance that any of the Company's business strategies will be successful or
that the Company will be able to achieve consistent revenue growth or achieve
profitability on a quarterly or annual basis.

Variability in Quarterly Operating Results; Seasonality

         The Company's quarterly revenues and operating results have varied
significantly in the past and are likely to vary substantially from quarter to
quarter in the future. Quarterly revenues and operating results may fluctuate as
a result of a variety of factors, including the following: demand for the
Company's software, applications and services, including the relative mix of
hardware and software purchased by its customers; the number, timing and
significance of announcements and releases of software enhancements and new
applications by the Company and its competitors; the number, timing and
significance of announcements and releases of hardware and other related
peripherals by third party suppliers; the termination of, or a reduction in,
offerings of the Company's software, applications and services; the loss of
customers due to consolidation in the healthcare industry; delays in delivery
requested by customers or caused by other factors; customer budgeting cycles;
marketing and sales promotional activities; software defects and other system
quality factors; and general economic conditions. In addition, since purchases
of the Company's software generally involve a significant commitment of capital,
any downturn in a potential customer's business or the economy in general,
including changes in the healthcare market, could have a materially adverse
effect on the Company's business, financial condition and results of operations.
Moreover, the Company's operating expense levels are relatively fixed and, to a
large degree, are based on anticipated revenues. Therefore, if revenues are
below expectations, net income is likely to be disproportionately affected.
Further, it is likely that in some future quarter the Company's operating
results, including the Company's revenues, gross margins, expenses or backlog,
will be below the expectations of public market analysts and investors. In such
event, the trading price of the Company's Common Stock could be materially
adversely affected.

         The Company has historically experienced some seasonality. The Company
believes a number of its customers and potential customers defer making purchase
commitments in the fourth quarter and there can be no assurance that the Company
will not experience seasonality in the future. In addition to normal
seasonality, management has focused during the third and fourth quarters of 1997
on issues related to the pendency of the merger with Lumisys, the closing of
such merger and the Company's joint presentation at the Radiological Society of
North America Conference ("RSNA"). Downward seasonal fluctuations in the fourth
quarter may, in addition, be accentuated by market uncertainty related to the
pending merger.

Risk Associated with Delay or Failure to Complete Merger with Lumisys

         The Company expects its proposed merger with Lumisys to be consummated
during the fourth quarter of 1997, at which time the Company will become a
wholly-owned subsidiary of Lumisys. If the merger fails to be consummated during
the fourth quarter of 1997 or at all, the Company's business, operating results
and financial condition would be adversely affected. Certain of the Company's
suppliers compete with Lumisys and these suppliers and other existing direct and
new customers may delay delivery of supplies and orders during the pendency of
the proposed merger with Lumisys given the uncertainties surrounding the merger,
including the product and customer support plans of Lumisys for the combined
enterprise. While the Company is working closely with its suppliers and
customers to maintain these relationships, there can be no assurance that such
relationships will not be adversely affected during the pendency of the proposed
merger, or if the merger were not to be completed. In addition, management of
the Company has dedicated significant time and attention to working with Lumisys
on plans designed to integrate a number of products, marketing strategies and
efforts, and operational functions during the pendency of the merger, and if the
merger failed to be completed, these efforts may be of questionable value to the
Company operating as an independent enterprise. Subject to stockholder approval
at special meetings of both Lumisys and the Company currently scheduled for
November 25, 1997, the Company currently expects to consummate the merger prior
to the RSNA in December 1997, at which Lumisys and the Company currently are
planning to appear jointly. If the merger failed to close before the conference
or failed to close at all, the Company's business may be adversely affected by
having appeared jointly with Lumisys at the conference.

Possible Need for Additional Funds; Uncertainty of Additional Financing

         The Company expects its capital needs and operating expenditures to
increase in the next few years. There can be no assurance that the Company will
not need additional capital. The Company's need for additional financing will
depend upon numerous factors, including, but not limited to, the level of future
revenues and expenditures, market acceptance of new products, the results and
scope of ongoing research and development projects, competing technologies,
market and regulatory developments and increased working capital requirements.
There can be no assurance that additional financing will be available when
needed or, if available, that it will be available on acceptable terms. If
additional funds are raised by issuing equity securities, further dilution to
then existing stockholders may result and debt financing, if available, may
involve restrictive covenants. If adequate funds are not available, the
Company's business, financial condition and results of operations could be
materially adversely affected.

Dependence on Emerging Medical Image Management and Teleradiology Systems
Markets; Uncertainty of Market Acceptance

         The Company's success is dependent on the development of the medical
image management and teleradiology systems markets and on market acceptance of
its existing software, as well as software it is currently developing. To date,
substantially all of the Company's revenues have been derived from the sale of
software and related hardware for the teleradiology market. The markets for the
Company's software are still relatively undeveloped and may not grow in the near
future, if at all. In the event that the medical image management and
teleradiology systems markets do not develop as anticipated by the Company, the
Company's business, financial condition and results of operations would be
materially adversely affected.


                                                                              11
<PAGE>   12
Risks Associated with Products

         Software and systems as complex as those offered by the Company
frequently contain undetected errors or failures when first introduced or when
new versions are released. The Company has in the past discovered bugs and
system errors in certain of its software enhancements, both before and after
initial shipment. There can be no assurance that, despite testing by the
Company, errors will not occur in the Company's products resulting in loss of,
or delay in, market acceptance. Any such loss or delay could have a materially
adverse effect on the Company's business, financial condition and results of
operations. Peripherals and hardware from third party manufacturers may contain
defects and incompatibilities which could adversely affect market acceptance of
the Company's software products.

         In addition, the markets for the Company's software are characterized
by rapid technological advances, changes in customer requirements and frequent
new product introductions and enhancements of products, operating systems and
environments. The Company's future success will depend upon its ability to
enhance its current product line, to complete products currently under
development, to develop and introduce new products that keep pace with
technological developments and to respond to evolving customer requirements. Any
failure by the Company to anticipate or respond adequately to technological
developments by its competitors or to changes in customer requirements, or any
significant delays in product development or introduction could have a
materially adverse effect on the Company's business, financial condition and
results of operations. In the past, the Company has occasionally experienced
delays in the development and introduction of new software and software
enhancements, and there can be no assurance that the Company will not experience
such delays in the future. Timeliness of delivery is of critical importance to
certain customers, and the Company's failure to successfully develop and ship
such products in a timely manner could result in cancellation of customer orders
which could have a materially adverse affect on the Company's business,
financial condition and results of operations.

New Product Development; Technological Change

         The market for Internet/Intranet-related software designed for use in
healthcare environments is in the early stages of development. Since this market
is new, and because current and future competitors are likely to introduce
competing Internet/Intranet software, it is difficult to predict the rate at
which the market will grow, if at all, or the rate at which new or increased
competition will result in market saturation. The Company's ClinicalWare product
was only recently introduced in 1997 and is highly dependent upon the market
acceptance of the Internet/Intranet technologies for healthcare environments. If
the market for such Internet/Intranet software fails to grow or grows more
slowly than anticipated, the Company's business, financial condition and results
of operations would be materially adversely affected. The Company has had only
limited shipments of ClinicalWare, and it expects that the sales cycle for
ClinicalWare will be longer than that for its other existing products and that
the price for ClinicalWare will be higher than that for many of the Company's
other current products. Accordingly, the Company's quarterly revenues and
operating results may be subject to greater fluctuation as the Company begins to
market and sell ClinicalWare. Additionally, the Company faces greater challenges
in installing and supporting ClinicalWare because of the complexity of
Internet/Intranet related software and systems. The Company has limited
experience in marketing, installing and supporting Internet/Intranet clinical
information systems, and there can be no assurance that the Company can obtain
the necessary resources to market, install and support ClinicalWare in an
efficient, cost-effective and competitive manner. The failure of ClinicalWare to
achieve market acceptance for any reason could have a materially adverse affect
on the Company's business, financial condition and results of operations.

Integration of Acquisitions

         The Company acquired the IMS archive and Film Image Scan System and
software products from Star in July 1997 in exchange for 100,000 shares of the
Company's Common Stock and future royalties on software sales. The Company also
acquired certain assets of MITA related to nuclear medicine software in exchange
for 17,500 shares of the Company's Common Stock. The MITA acquisition will close
in April 1998.

         The Company intends to continue to evaluate potential acquisitions of,
or investments in, companies which the Company believes will complement or
enhance its existing business. In connection with any future acquisitions or
strategic investments, the Company may incur debt or issue debt or equity
securities depending on market conditions and other factors. There can be no
assurances that the Company will consummate any acquisition in the future or, if
consummated, that any such acquisition will ultimately be beneficial to the
Company.


                                                                              12
<PAGE>   13
         The integration of acquired companies is typically difficult, time
consuming and subject to a number of inherent risks. In particular, the success
of acquisitions is often dependent upon the integration and retention of
existing employees. There can be no assurance that employees of an acquired
enterprise will remain with the Company after an acquisition. The success of
acquisitions will also be dependent upon the Company's ability to fully
integrate the management information and accounting systems and procedures of
acquired companies with those of the Company. The Company's management will be
required to devote substantial time and attention to the integration of these
businesses and to any material operational or financial problems which may occur
as a result of the acquisitions. Failure to effectively integrate acquired
businesses could have a material adverse affect on the Company's business,
results of operations and financial condition.

Consolidation and Uncertainty in the Healthcare Industry

         Many healthcare providers are consolidating to create larger healthcare
networks with greater market concentration. Such consolidation could erode the
Company's existing customer base and reduce the size of the Company's target
markets. In addition, the resulting enterprises could have greater bargaining
power, which could lead to price erosion of the Company's software and services.
The reduction in the size of the Company's target market or the failure of the
Company to maintain adequate price levels could have a materially adverse effect
on the Company's business, financial condition and results of operations. The
healthcare industry also is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operation of
healthcare industry participants. During the past several years, the United
States healthcare industry has been subject to an increase in governmental
regulation and reform proposals. These proposed reforms, if adopted, may
increase governmental involvement in healthcare, lower reimbursement rates and
otherwise change the operating environment for the Company's customers.
Healthcare industry participants may react to these proposals and the
uncertainty surrounding such proposals by curtailing or deferring investments,
including those for the Company's software and services. This could have a
materially adverse affect on the Company's business, financial condition and
results of operations.

Long Sales Cycles

         The sales cycle for medical image management systems is lengthy. The
sales cycle of the Company's products is subject to delays associated with
changes or the anticipation of changes in the regulatory environment affecting
healthcare enterprises, changes in the customer's strategic system initiatives,
competing information systems projects within the customer organization,
consolidation in the healthcare industry in general, the highly sophisticated
nature of the Company's software and competition in the medical image management
and healthcare information systems markets in general. The time required from
initial contact to purchase order typically ranges from one to six months, and
the time from purchase order to delivery and recognition of revenue typically
ranges from one to six months. During the sales process, the Company expends
substantial time, effort and funds preparing a contract proposal, demonstrating
the software and negotiating the purchase order. For these and other reasons,
the Company cannot predict when or if the sales process with a prospective
customer will result in a purchase order.

Need to Manage Anticipated Growth in Operations; Dependence Upon Key Personnel

         The Company intends to expand its operations which may place a strain
on its management systems and resources. In addition, planned increases in the
number of products sold by the Company and an increased number of distributors
requiring training and support may place additional strains on the Company's
installation and support services requiring the Company to train and manage
additional customer service personnel. There can be no assurance that the
Company will be able to effectively manage these tasks, and the failure to do so
could have a materially adverse affect on the Company's business, financial
condition and results of operations.

         The Company's future success also depends to a significant part upon
the continued service of its executive officers and other key sales, marketing,
development and installation employees. The loss of the services of any of its
executive officers or other key employees could have a materially adverse affect
on the Company's business, financial condition and results of operations.

Product Liability

         The Company's software captures, stores, distributes and displays
clinical information used by clinicians in the diagnosis and treatment of
patients. Any failure by the Company's software to provide accurate, reliable
and timely information, or to adequately protect the confidentiality of the
information, could result in claims against the Company. The Company maintains
insurance to protect against claims associated with the use of its software or
systems, but there 


                                                                              13
<PAGE>   14
can be no assurance that its insurance coverage would adequately cover any
claims asserted against the Company. A successful claim brought against the
Company in excess of its insurance coverage could have a materially adverse
effect on the Company's business, financial condition and results of operations.
Even unsuccessful claims could result in the Company's expenditure of funds in
litigation and diversion of management time and resources. There can be no
assurance that the Company's insurance will cover such claims, that the Company
will not be subject to product liability claims that will result in liability in
excess of its insurance coverage or that appropriate insurance will continue to
be available to the Company in the future at commercially reasonable rates.


International Sales

         To date, the Company's international sales have been insignificant. The
Company intends to increase its marketing efforts in the international markets.
To the extent that international sales become significant, the Company's results
of operations may be subject to the risks inherent in international
transactions, including difficulties in staffing and managing foreign sales
operations, changes in regulatory requirements, exchange rates and tariffs or
other barriers. The Company has limited experience in business operations
outside the United States, and there can be no assurance that the Company's
software will be accepted in international markets or that the Company can
compete successfully in such markets.

Customer Concentration

         CompuRAD presently has licensed its products to hospitals, clinics,
other healthcare facilities and physician groups. The Company's customers
include New York University Medical Center, Alliant Health Systems, Symphony
Mobilex and the Nursing Home Group plus many other leading healthcare facilities
and organizations.

         For the three months and nine months ended September 30, 1997 and 1996,
one customer, Symphony Mobilex, accounted for 8.7% and 19.6% and 22.2% and
22.3%, respectively, of the Company's revenues. The Company has agreements with
OEMs and some of these agreements require OEMs to purchase a minimum amount of
the Company's products each year. A significant reduction in sales volume
attributable to the loss of any of the Company's customers, losses arising from
customer disputes regarding shipments or license, installation and service fees
or the Company's inability to collect accounts receivable from any major
customer could have a materially adverse affect on the Company's business,
financial condition and results of operations.

         To date, sales of the Company's teleradiology products, including PC
Teleradiology and its successor iNET, accounted for a substantial majority of
its revenues. Sales of the iNET product line could decline for a number of
reasons including consolidation in the healthcare market and changes in
government regulation that reduce or eliminate reimbursement for teleradiology
services. If sales of the Company's iNET product line decline for any reason,
the Company's business, financial condition and results of operations would be
materially adversely affected.

Competition

         The Company believes that the principal competitive factors for
selecting medical image management software and systems are the reputation and
market position of the vendor and the price, reliability, ease of use,
functionality and performance of the product or system. The Company believes it
competes effectively with respect to these factors.

         Competition in the markets for medical image management products and
healthcare information systems and services is intense and is expected to
increase. The Company's competitors include other providers of medical image
management and healthcare information products. The Company's principal
competitors in the medical image management industry are E-Med, CEMAX, Applicare
Medical Imaging B.V. and Access Radiology Corporation. Furthermore, other major
healthcare information and equipment companies not presently offering competing
products may enter the Company's markets. In addition, the emerging market for
Internet/Intranet clinical information systems is expected to be highly
competitive, and the Company's competitors in this market could include many of
its competitors in the medical image management systems market as well as other
providers of healthcare information systems and new entrants into the
marketplace. Increased competition could result in price reductions, reduced
gross margins and loss of market share, any of which could materially adversely
affect the Company's business, financial condition and results of operations. In
addition, many of the Company's competitors and potential competitors have
significantly greater financial, technical, product development, marketing and
other resources and market recognition than the Company. Many of the Company's
competitors also currently have, or may develop or acquire, substantial
installed customer bases in the healthcare industry. As a result of these
factors, the Company's competitors may be able to respond more quickly to new


                                                                              14
<PAGE>   15
or emerging technologies and changes in customer requirements or to devote
greater resources to the development, promotion and sale of their products than
the Company. There can be no assurances that the Company will be able to compete
successfully against current and future competitors or that competitive
pressures faced by the Company will not have a materially adverse affect on its
business, financial condition or results of operations.

Proprietary Rights

         The Company relies on a combination of trade secrets, copyright and
trademark laws, nondisclosure and other contractual provisions to protect its
proprietary rights. The Company currently has no patents covering its technology
and it has not registered its trademarks. There can be no assurance that
measures taken by the Company to protect its intellectual property will be
adequate or that the Company's competitors will not independently develop
systems and services that are substantially equivalent or superior to those of
the Company. Substantial litigation regarding intellectual property rights
exists in the software industry, and the Company expects that software products
may be increasingly subject to third party infringement claims as the number of
competitors in the Company's industry segment grows and the functionality of
systems overlap. Although the Company believes that its systems and applications
do not infringe upon the proprietary rights of third parties, there can be no
assurance that third parties will not assert infringement claims against the
Company in the future, that the Company would prevail in any such dispute or
that a license or similar agreement will be available on reasonable terms in the
event of an unfavorable ruling on any such claim. In addition, any such claim
may require the Company to incur substantial litigation expenses or subject the
Company to significant liabilities and could have a material adverse affect on
the Company's business, financial condition and results of operations.

Government Regulation

         Medical image management software is subject to extensive government
regulation as a medical device in the United States by the Food and Drug
Administration ("FDA") and in other countries by corresponding foreign
regulatory authorities. The process of obtaining and maintaining required
regulatory clearances and approvals is lengthy, expensive and uncertain.
Generally, before a new medical device can be introduced into the market in the
United States, the manufacturer or distributor must obtain FDA clearance of a
510(k) premarket notification or approval of a Premarket Approval ("PMA")
application. If a medical device manufacturer or distributor can establish,
among other things, that a device is "substantially equivalent" in intended use
and technological characteristics to certain legally marketed devices, for which
the FDA has not required a PMA, the manufacturer or distributor may seek
clearance from the FDA to market the device by filing a 510(k). In recent years,
the FDA has been requiring a more rigorous demonstration of substantial
equivalence. Material changes to legally marketed medical devices are also
subject to FDA review and clearance or approval prior to commercialization in
the United States.

         The Company relies on 510(k) pre-market notification for its current
internally developed products. Additionally, the Company relies on 510(k)
clearance and the finding by the FDA of substantial equivalence for the IMS and
the Film Image Scan Software technologies acquired from Star in July 1997.
However, the Company believes that its success depends upon commercial sales of
new versions of its medical image management software which may be subject to
clearance or approval from the FDA and its foreign counterparts. There can be no
assurance that a similar 510(k) clearance for any future product or enhancement
of an existing product will be granted or that the process will not be lengthy.
If the Company cannot establish that a product is "substantially equivalent" to
certain legally marketed devices, the 510(k) clearance procedure may be
unavailable and the Company may be required to utilize the longer and more
expensive PMA process. Failure to receive or delays in receipt of FDA clearances
or approvals, including the need for additional data as a prerequisite to
clearance or approval, could have a materially adverse affect on the Company's
business, operating results and financial condition.

         The process of obtaining a 510(k) clearance generally requires
supporting data, which can be extensive and extend the regulatory review process
for a considerable length of time. FDA enforcement policy strictly prohibits the
marketing of cleared or approved medical devices for uncleared or unapproved
uses. The Company has been inspected once and will continue to be inspected on a
routine basis by the FDA for compliance with the FDA's Quality System Regulation
("QSR") and other applicable regulations. The Company will be required to adhere
to applicable FDA QSR regulations and similar regulations in other countries,
which include testing, control, and documentation requirements. Failure to
comply with applicable regulatory requirements could result in the failure of
the government to grant market clearance or premarket approval, withdrawal of
approvals or criminal prosecution. The Company is also subject to other federal,
state and local laws and regulations relating to safe working conditions and
manufacturing practices. The extent of government regulation that might result
from any future legislation or administrative action cannot be predicted.


                                                                              15
<PAGE>   16
Failure to comply with regulatory requirements could have a materially adverse
effect on the Company's business, financial condition and results of operations.

         Sales of the Company's software outside the United States are subject
to foreign regulatory requirements that vary from country to country. Additional
approvals from foreign regulatory authorities may be required, and there can be
no assurance that the Company will be able to obtain foreign marketing approvals
on a timely basis or at all, or that it will not be required to incur
significant costs in obtaining or maintaining its foreign regulatory approvals.
In Europe, the Company will be required to obtain certifications necessary to
enable the "CE" mark to be affixed to the Company's products by mid 1998 to
continue commercial sales in member countries of the European Union. The CE mark
is an international symbol of quality and complies with applicable European
medical device directives. The Company has not obtained such certifications, and
there can be no assurance it will be able to obtain such certifications or any
other international regulatory approvals in a timely manner, or at all. Failure
to comply with regulatory requirements could have a materially adverse affect on
the Company's business, financial condition and results of operations.


                                                                              16
<PAGE>   17
                                 COMPURAD, INC.
                          PART II. - OTHER INFORMATION


Item 1.           LEGAL PROCEEDINGS

                  The Company is not involved in any material legal proceedings
                  at this time. However, there can be no assurances that the
                  Company will not be subject to legal proceedings in the
                  future, which could have a material effect on the Company's
                  financial position. In addition, even if the ultimate outcome
                  of such legal proceedings is resolved in favor of the Company,
                  the defense of such litigation could entail considerable costs
                  and the diversion of efforts of management, either of which
                  could have a material adverse effect on the Company's results
                  of operations.

Item 2.           CHANGES IN SECURITIES - None.

Item 3.           DEFAULTS UPON SENIOR SECURITIES - None.

Item 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.

Item 5.           OTHER INFORMATION - None.

Item 6.           EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBITS

<TABLE>
<CAPTION>
       Exhibit No.                        Description
       -----------                        ----------

<S>                   <C>
         2.0 (7)      Agreement and Plan of Merger and Reorganization dated September 28, 1997.
         2.1 (1)      Technology Purchase Agreement.
         2.2          Agreement for Purchase and Sale of Assets.
         3.1 (2)      Restated Certificate of Incorporation, as amended, of Registrant.
         3.2 (2)      Bylaws, as amended, of Registrant.
         3.3 (5)      Certificate of Amendment of Bylaws of Registrant.
         4.1 (2)      Form of Common Stock certificate.
         4.2 (2)      Form of Warrant.
         10.1 (2)     Stock Option Plan and form of option agreement thereunder.
         10.2 (2)     1996 Stock Plan and form of option agreement thereunder.
         10.3 (2)     1996 Employee Stock Purchase Plan and form of subscription agreement thereunder.
         10.4 (2)     Form of Indemnification Agreement to be entered into between Registrant and its directors and
                      officers.
         10.5 (2)     Shareholder Agreement dated January 15, 1993 between Registrant and certain holders of
                      Common Stock, amended by Settlement Agreement - See Exhibit 10.10.
         10.6 (3)     Lease dated August 24, 1996, relating to facility located at Tucson, Arizona.
         10.7 (3)     Amendment one to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.8 (3)     Amendment two to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.9 (4)     Amendment three to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.10 (2)    Settlement Agreement dated as of July 14, 1996 among the Company, Arizona State Radiology, P.C.
                      et al.
         10.11 (6)    Employment Agreement between Registrant and Phillip Berman.
         10.12 (6)    Employment Agreement between Registrant and Cary Cole.
         10.13 (5)    Amendment four to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.14 (6)    Employment Agreement between Registrant and Henky Wibowo.
         11.1         Statement Regarding Computation of Net Loss Per Share.
         27.1         Financial Data Schedule.
         99.1 (7)     Joint Press Release.
         99.2 (7)     Form of Voting Agreement.
</TABLE>

(1)  Incorporated by reference to the Company's Form 8-K (File No. 0000-21157)
     and its exhibits for the report dated July 30, 1997.

(2)  Incorporated by reference to exhibits filed with the Company's Registration
     Statement on Form SB-2 (File No. 333-5296-LA), in the form declared
     effective on August 27, 1996.

(3)  Incorporated by reference to the Company's Form 10-QSB (File No. 000-21157)
     and its exhibits filed for the quarterly period ended September 30, 1996.


                                                                              17
<PAGE>   18
(4)  Incorporated by reference to the Company's Form 10-KSB (File No.
     0000-21157) and its exhibits filed for the year ended December 31, 1996.

(5)  Incorporated by reference to the Company's Form 10-QSB (File No.
     0000-21157) and its exhibits filed for the quarterly period ended March 31,
     1997.

(6)  Incorporated by reference to the Company's Form 10-QSB (File No.
     0000-21157) and its exhibits filed for the quarterly period ended June 30,
     1997.

(7)  Incorporated by reference to the Company's Form 8-K (File No. 0000-21157)
     and its exhibits filed for the report dated September 28, 1997.


         (b)      REPORTS ON FORM 8-K

                  A Form 8-K was filed during the quarter for which this report
                  is filed for item 2, acquisition of assets, dated July 30,
                  1997.

                  A Form 8-K was filed during the quarter for which this report
                  is filed for item 5, other events, dated September 28, 1997.


                                                                              18
<PAGE>   19
                                 COMPURAD, INC.
                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


CompuRAD, Inc.


Date:  November 12, 1997                     /s/ Phillip Berman
       -----------------                     ---------------------------------
                                             Phillip Berman, M.D.
                                             Chairman, Chief Executive Officer
                                             and President




Date:  November 12, 1997                     /s/ Kevin Donovan
       -----------------                     ---------------------------------
                                             Kevin Donovan
                                             Vice President, Finance and Chief
                                             Financial Officer


                                                                              19
<PAGE>   20
                                 COMPURAD, INC.
                                    EXHIBITS


<TABLE>
<CAPTION>
       Exhibit No.                        Description
       -----------                        -----------
<S>                   <C>
         2.0 (7)      Agreement and Plan of Merger and Reorganization dated September 28, 1997.
         2.1 (1)      Technology Purchase Agreement.
         2.2          Agreement for Purchase and Sale of Assets.
         3.1 (2)      Restated Certificate of Incorporation, as amended, of Registrant.
         3.2 (2)      Bylaws, as amended, of Registrant.
         3.3 (5)      Certificate of Amendment of Bylaws of Registrant.
         4.1 (2)      Form of Common Stock certificate.
         4.2 (2)      Form of Warrant.
         10.1 (2)     Stock Option Plan and form of option agreement thereunder.
         10.2 (2)     1996 Stock Plan and form of option agreement thereunder.
         10.3 (2)     1996 Employee Stock Purchase Plan and form of subscription agreement thereunder.
         10.4 (2)     Form of Indemnification Agreement to be entered into between Registrant and its directors and
                      officers.
         10.5 (2)     Shareholder Agreement dated January 15, 1993 between Registrant and certain holders of
                      Common Stock, amended by Settlement Agreement - See Exhibit 10.10.
         10.6 (3)     Lease dated August 24, 1996, relating to facility located at Tucson, Arizona.
         10.7 (3)     Amendment one to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.8 (3)     Amendment two to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.9 (4)     Amendment three to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.10 (2)    Settlement Agreement dated as of July 14, 1996 among the Company, Arizona State Radiology, P.C.
                      et al.
         10.11 (6)    Employment Agreement between Registrant and Phillip Berman.
         10.12 (6)    Employment Agreement between Registrant and Cary Cole.
         10.13 (5)    Amendment four to the lease dated August 24, 1996, relating to facility located at Tucson,
                      Arizona.
         10.14 (6)    Employment Agreement between Registrant and Henky Wibowo.
         11.1         Statement Regarding Computation of Net Loss Per Share.
         27.1         Financial Data Schedule.
         99.1 (7)     Joint Press Release.
         99.2 (7)     Form of Voting Agreement.
</TABLE>


(1)  Incorporated by reference to the Company's Form 8-K (File No. 0000-21157)
     and its exhibits for the report dated July 30, 1997.

(2)  Incorporated by reference to exhibits filed with the Company's Registration
     Statement on Form SB-2 (File No. 333-5296-LA), in the form declared
     effective on August 27, 1996.

(3)  Incorporated by reference to the Company's Form 10-QSB (File No. 000-21157)
     and its exhibits filed for the quarterly period ended September 30, 1996.

(4)  Incorporated by reference to the Company's Form 10-KSB (File No.
     0000-21157) and its exhibits filed for the year ended December 31, 1996.

(5)  Incorporated by reference to the Company's Form 10-QSB (File No.
     0000-21157) and its exhibits filed for the quarterly period ended March 31,
     1997.

(6)  Incorporated by reference to the Company's Form 10-QSB (File No. 000-21157)
     and its exhibits filed for the quarterly period ended June 30, 1997.

(7)  Incorporated by reference to the Company's Form 8-K (File No. 0000-21157)
     and its exhibits for the report date September 28, 1997.


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