SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                   ----------

                                    Form 10-Q

  X    QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES
-----  EXCHANGE  ACT  OF  1934
       For  the  quarterly  period  ended  December  31,  1999
                                          ---------------------

                                       OR

       TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-----  EXCHANGE  ACT  OF  1934
       For  the  transition  period  from                to
                                           ------------      ------------
                         Commission file number -0-16061
                                                --------

                            CRITICARE SYSTEMS, INC.
                            -----------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                   39-1501563
       -----------------                               ----------
  (State or other jurisdiction               (IRS Employer Identification No.)
  of  incorporation  or  organization)

20925 Crossroads Circle, Waukesha, Wisconsin              53186
----------------------------------------------------------------------
 (Address of principal executive offices)               (Zip Code)

Registrant's  telephone  number  including  area  code  (414) 798-8282
                                                        ---------------

                                      N/A
-------------------------------------------------------------------------
  Former  name,  former  address  and  former fiscal year, if changed since last
report.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  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
                                                                  ---    ----

Number of shares outstanding of each class of the registrant's classes of common
stock  as  of  February  10,  2000:  Class  A  Common  Stock  8,736,151  shares.




<PAGE>
                             CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 1999 AND JUNE 30, 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>



                                                            December 31,     June 30,
ASSETS                                                          1999           1999
                                                           --------------  ------------
<S>                                                        <C>             <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . .  $   2,114,468   $ 2,511,078
Accounts receivable . . . . . . . . . . . . . . . . . . .      6,393,348     6,358,487
Other receivables . . . . . . . . . . . . . . . . . . . .          4,261        83,106
Inventory . . . . . . . . . . . . . . . . . . . . . . . .      8,350,562     8,510,975
Prepaid expenses. . . . . . . . . . . . . . . . . . . . .        407,345       192,290
---------------------------------------------------------  --------------  ------------
Total current assets. . . . . . . . . . . . . . . . . . .     17,269,984    17,665,936
---------------------------------------------------------  --------------  ------------

PROPERTY, PLANT AND EQUIPMENT - NET . . . . . . . . . . .      6,400,636     6,274,060
---------------------------------------------------------  --------------  ------------

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

LICENSE RIGHTS AND PATENTS. . . . . . . . . . . . . . . .        102,991       111,991
---------------------------------------------------------  --------------  ------------

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $  23,773,611   $24,041,987
---------------------------------------------------------  --------------  ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . .  $   2,484,663   $ 3,078,020
Accrued liabilities:
  Compensation and commissions. . . . . . . . . . . . . .      1,130,036     1,446,414
  Product warranties. . . . . . . . . . . . . . . . . . .        450,000       325,000
  Lawsuit settlement. . . . . . . . . . . . . . . . . . .        300,000     1,600,000
  Deferred income . . . . . . . . . . . . . . . . . . . .              -       380,000
  Other . . . . . . . . . . . . . . . . . . . . . . . . .        344,713       412,395
Current maturities of long-term debt. . . . . . . . . . .         76,279        73,893
---------------------------------------------------------  --------------  ------------
Total current liabilities . . . . . . . . . . . . . . . .      4,785,691     7,315,922
---------------------------------------------------------  --------------  ------------

LONG-TERM DEBT, less current maturities . . . . . . . . .      3,325,726     3,364,356
---------------------------------------------------------  --------------  ------------

OTHER LONG-TERM OBLIGATIONS . . . . . . . . . . . . . . .        571,571       650,000
---------------------------------------------------------  --------------  ------------

STOCKHOLDERS' EQUITY
Preferred stock . . . . . . . . . . . . . . . . . . . . .              -             -
Common stock. . . . . . . . . . . . . . . . . . . . . . .        348,246       348,246
Additional paid-in capital. . . . . . . . . . . . . . . .     17,960,363    17,960,363
Common stock held in treasury (103,840 shares) - at cost.       (193,430)     (193,430)
Retained earnings (accumulated deficit) . . . . . . . . .     (3,024,556)   (5,403,470)
---------------------------------------------------------  --------------  ------------
Total stockholders' equity. . . . . . . . . . . . . . . .     15,090,623    12,711,709
---------------------------------------------------------  --------------  ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . .  $  23,773,611   $24,041,987
---------------------------------------------------------  --------------  ------------
</TABLE>



See  condensed  notes  to  consolidated  financial  statements.



                                        2

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

                                   (UNAUDITED)
<TABLE>
<CAPTION>



                                                        1999          1998
                                                    ------------  ------------

<S>                                                 <C>           <C>
NET SALES. . . . . . . . . . . . . . . . . . . . .  $13,504,036   $14,014,480

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

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

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

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

OTHER INCOME (EXPENSE):
Interest expense . . . . . . . . . . . . . . . . .     (130,513)     (158,251)
Interest income. . . . . . . . . . . . . . . . . .       67,413        36,445
Equity in loss of investments. . . . . . . . . . .            -      (150,000)
Gain on sale of Immtech International, Inc. stock.    2,500,000             -
--------------------------------------------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . . . .    2,436,900      (271,806)
--------------------------------------------------  ------------  ------------

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

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

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

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

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

</TABLE>



See  condensed  notes  to  consolidated  financial  statements.


                                        3

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

                                   (UNAUDITED)
<TABLE>
<CAPTION>



                                                       1999         1998
                                                    -----------  -----------
<S>                                                 <C>          <C>
NET SALES. . . . . . . . . . . . . . . . . . . . .  $6,900,699   $7,290,056

COST OF GOODS SOLD . . . . . . . . . . . . . . . .   3,758,733    3,727,537
--------------------------------------------------  -----------  -----------

GROSS PROFIT . . . . . . . . . . . . . . . . . . .   3,141,966    3,562,519
--------------------------------------------------  -----------  -----------

OPERATING EXPENSES:
Marketing. . . . . . . . . . . . . . . . . . . . .   1,937,053    2,261,542
Research, development and engineering. . . . . . .     853,206      740,702
Administrative . . . . . . . . . . . . . . . . . .     566,670      712,669
Restructuring expense - severance pay. . . . . . .           -      728,000
--------------------------------------------------  -----------  -----------
Total. . . . . . . . . . . . . . . . . . . . . . .   3,356,929    4,442,913
--------------------------------------------------  -----------  -----------

(LOSS) FROM OPERATIONS . . . . . . . . . . . . . .    (214,963)    (880,394)
--------------------------------------------------  -----------  -----------

OTHER INCOME (EXPENSE):
Interest expense . . . . . . . . . . . . . . . . .     (64,732)     (79,877)
Interest income. . . . . . . . . . . . . . . . . .      38,131       13,701
Gain on sale of Immtech International, Inc. stock.     740,000            -
--------------------------------------------------  -----------  -----------
Total. . . . . . . . . . . . . . . . . . . . . . .     713,399      (66,176)
--------------------------------------------------  -----------  -----------

INCOME (LOSS) BEFORE INCOME TAXES. . . . . . . . .     498,436     (946,570)
--------------------------------------------------  -----------  -----------

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

NET INCOME (LOSS). . . . . . . . . . . . . . . . .  $  498,436   $ (946,570)
--------------------------------------------------  -----------  -----------

EARNINGS (LOSS) PER COMMON SHARE:
Basic. . . . . . . . . . . . . . . . . . . . . . .  $     0.06   $    (0.11)
Diluted. . . . . . . . . . . . . . . . . . . . . .        0.06        (0.11)
--------------------------------------------------  -----------  -----------

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




See  condensed  notes  to  consolidated  financial  statements.





                                        4

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


                                     (UNAUDITED)

                                                               1999          1998
                                                           ------------  ------------
OPERATING ACTIVITIES:
<S>                                                        <C>           <C>
Net income (loss) . . . . . . . . . . . . . . . . . . . .  $ 2,378,912   $(1,366,394)
Adjustments to reconcile net income to net
   cash (used in) provided by operating activities:
       Depreciation . . . . . . . . . . . . . . . . . . .      450,843       458,040
       Amortization . . . . . . . . . . . . . . . . . . .        9,000         9,000
       Equity in loss of investments. . . . . . . . . . .            -       150,000
       Gain on sale of Immtech International, Inc. stock.   (2,500,000)            -
       Changes in assets and liabilities:
          Accounts receivable . . . . . . . . . . . . . .      (34,861)     (230,045)
          Other receivables . . . . . . . . . . . . . . .       78,845       204,425
          Inventories . . . . . . . . . . . . . . . . . .      (99,794)   (1,274,859)
          Prepaid expenses. . . . . . . . . . . . . . . .     (215,055)      155,110
          Accounts payable. . . . . . . . . . . . . . . .     (593,357)    1,312,747
          Accrued liabilities . . . . . . . . . . . . . .   (2,017,687)      839,360
---------------------------------------------------------  ------------  ------------
Net cash (used in) provided by operating activities . . .   (2,543,154)      257,384
---------------------------------------------------------  ------------  ------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment. . . . . . . .     (317,212)     (148,403)
Proceeds from sale of Immtech International, Inc. stock .    2,500,000             -
Advances to Immtech International, Inc. . . . . . . . . .            -      (150,000)
---------------------------------------------------------  ------------  ------------
Net cash provided by (used in) investing activities . . .    2,182,788      (298,403)
---------------------------------------------------------  ------------  ------------

FINANCING ACTIVITIES:
Principal payments on long-term debt. . . . . . . . . . .      (36,244)      (53,368)
Repurchase of Company stock . . . . . . . . . . . . . . .            -      (103,549)
---------------------------------------------------------  ------------  ------------
Net cash used in financing activities . . . . . . . . . .      (36,244)     (156,917)
---------------------------------------------------------  ------------  ------------

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

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

CASH AND CASH EQUIVALENTS, END OF PERIOD. . . . . . . . .  $ 2,114,468   $ 2,532,062
---------------------------------------------------------  ------------  ------------

</TABLE>


See  condensed  notes  to  consolidated  financial  statements.


                                        5

<PAGE>
                             CRITICARE SYSTEMS, INC.
              Condensed Notes to Consolidated Financial Statements
                                   (Unaudited)

1.  BASIS  OF  PRESENTATION

The  accompanying unaudited financial statements have been prepared by Criticare
Systems,  Inc.  (the  "Company")  pursuant  to  the rules and regulations of the
Securities  and  Exchange Commission ("SEC") and, in the opinion of the Company,
include  all  adjustments  necessary  for  a  fair statement of results for each
period shown.  Certain information and footnote disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles  have  been  condensed  or  omitted  pursuant  to  such SEC rules and
regulations.  The  Company  believes  that  the disclosures made are adequate to
prevent  the financial information given from being misleading.  It is suggested
that  these  financial  statements  be  read  in  conjunction with the financial
statements  and notes thereto included in the Company's latest annual report and
previously  filed  Form  10-K.


2.  CASH  EQUIVALENTS

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


3.  INVENTORY  VALUATION

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

<TABLE>
<CAPTION>


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







                                        6

<PAGE>
                             CRITICARE SYSTEMS, INC.
              Condensed Notes to Consolidated Financial Statements
                                   (Unaudited)

4.  INVESTMENTS

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

5.  PROPERTY,  PLANT  AND  EQUIPMENT

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



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




6.  CONTINGENCIES

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



                                        7

<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition
                   Six Months Ended December 31, 1999 and 1998

RESULTS  OF  OPERATIONS
-----------------------

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

The  gross  profit  percentage  for  the  six months ended December 31, 1999 was
45.4%.  This  represents  a  decrease from the gross profit of 48.7% recorded in
the  same  period  of  fiscal 1999.  This decrease is due primarily to continued
price  competition.  The  Company expects to see improvement in its gross profit
percentage upon the release of the new products currently in development.  These
products  are expected to be released in the third and fourth quarters of fiscal
2000.  See  "Forward-Looking  Statements"  below.

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

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

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


                                        8

<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition
                  Three Months Ended December 31, 1999 and 1998

RESULTS  OF  OPERATIONS
-----------------------

Net  sales  for  the three months ended December 31, 1999 decreased 5.3% to $6.9
million  from  $7.3 million for the same period in fiscal 1999.  The decrease in
revenue is due to a reduction in OEM sales to a major customer, partially offset
by  an  increase in international sales.  The Company expects sales to the major
OEM  customer  to  improve  in  the  last  six  months  of  fiscal  2000.  See
"Forward-Looking  Statements."

The  gross  profit  percentage  of 45.5% for the three months ended December 31,
1999  represents  a  decrease from the 48.9% gross profit percentage reported in
the  same period of the previous fiscal year.  The decrease in margins is due to
continued  price  competition.  The Company expects to see improved margins upon
the  release  of  the  new  products currently being developed and scheduled for
release  in  the  third and fourth quarter of fiscal 2000.  See "Forward-Looking
Statements."

Operating  expenses  decreased  approximately  $1.1 million.  Marketing expenses
decreased approximately $324,000 when compared to the same period in fiscal 1999
due  primarily  to  a  reduction in payroll and related travel and entertainment
costs  due  a  reduction  in  direct  sales  people  as  more dealers are added.
Research,  development  and engineering expense increased approximately $113,000
related  to  outside  contract and project expense which are all associated with
the  new  products  under  development.  Administrative  expenses  decreased
approximately $146,000 in the three months ended December 31, 1999 when compared
to  the same period in fiscal 1999.  This decrease is due primarily to decreased
legal  fees  resulting  from  the  settlement  of  a long-standing lawsuit.  The
decrease in legal fees was partially offset by reaudit fees incurred as a result
of  the resignation of the Company's former auditors.  The Company also recorded
a  restructuring  charge  of  $728,000  during the six months ended December 31,
1998.  This  restructuring  charge  relates  to severance pay and other benefits
payable  to  the  two  co-founders  of  the  Company.  Both of these individuals
resigned from their positions with the Company in November, 1998.  The severance
accrual includes a portion of  their respective salary and fringe benefits for a
period  which  approximates  three  years.

The  loss  from operations decreased approximately $665,000 for the three months
ended  December  31, 1999 when compared to the same period in fiscal 1999 due to
the restructuring charge for severance pay and other benefits recorded in fiscal
1999  and  reduced  spending in fiscal 2000, partially offset by the decrease in
revenue  and  gross  profit.

Net  non-operating  income was approximately $713,000 for the three months ended
December  31, 1999 compared to net non-operating expenses of $66,000 recorded in
the  same  period  of fiscal 1999.  The significant change is due to the private
placement  sale  of  148,000  Immtech  shares  for  $740,000.

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


                                        9

<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition


LIQUIDITY
---------

During  the  six  months  ended December 31, 1999, the Company recorded negative
cash  flow  from operations of approximately $2.5 million and had a cash balance
of approximately $2.1 and no short term borrowings.  The Company's negative cash
flow  resulted  primarily  from  the  settlement  of  a  long-standing  lawsuit.
Proceeds  for  this  settlement were obtained from the sale of 500,000 shares of
Immtech stock for $2.5 million in a private placement sale. The Company believes
its  marketing  and  research  and  development activities and 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.

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

YEAR  2000  COMPLIANCE
----------------------

The Company's internal systems have experienced no material Year 2000 compliance
related  problems.  In  addition,  the  Company  is  not  aware of any Year 2000
related  issues with any of its customers, suppliers or other third parties with
whom  the  Company  has business relationships.  The Company does not believe at
this  time  that potential Year 2000 issues will materially affect the Company's
business,  although  no  assurance  can  be  given  that  this will be the case.

FORWARD  LOOKING  STATEMENTS
----------------------------

This  report contains certain forward-looking statements.  Such statements refer
to the Company's opinion, belief or expectation.  Forward-looking are subject to
certain  risk  and  uncertainties  that  could  cause  actual future results and
developments  to  differ  materially from those currently projected.  Such risks
and uncertainties include, but are not limited to, the uncertainties inherent in
litigation,  the timing of new product introductions, the ability of the Company
to realize expected improvements in gross margin from new product introductions,
competition  in  the  Company's  markets,  the  Company's ability to achieve the
expected  improvement  in  sales  from  a major OEM customer, delays in customer
delivery  requirements  and  general economic conditions in the Company's market
segments.


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<PAGE>
                           PART II - OTHER INFORMATION

Item  6.  Exhibits  and  Reports  on  Form  8-K.
          --------------------------------------

(a)     Exhibits:

          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).

          27     Financial  Data  Schedule.


(b)     Reports on Form 8-K.  The Company filed three reports on Form 8-K during
the  quarter  ended  December  31,  1999.

The Company filed a Form 8-K on October 6, 1999, to report pursuant to Item 5 of
Form  8-K  that  the Company had issued a press release to notify investors that
the  Company  did  not  have  an  audit  report  with  respect  to the financial
statements  contained  in  its  Form  10-K  filed  on  September  28,  1999.

The  Company  filed a Form 8-K on October 13, 1999, to report pursuant to Item 4
of  Form  8-K that Deloitte & Touche LLP had resigned as independent accountants
for the Company on October 5, 1999.  The Company filed an amendment to this Form
8-K  on  October  25,  1999,  to  include  the letter from Deloitte & Touche LLP
regarding  the  change  in  accountants  as  Exhibit  16.1.

The  Company  filed a Form 8-K on November 5, 1999, to report pursuant to Item 4
of  Form  8-K the appointment of BDO Seidman, LLP as independent accountants for
the  Company  on  November  1,  1999.




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<PAGE>
                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                              CRITICARE  SYSTEMS,  INC.
                                      (Registrant)

Date       02/11/00                    BY /s/ Joseph M. Siekierski
-------------------                      -------------------------
                                         Joseph  M.  Siekierski
                                         Vice  President  -  Finance
                                         (Chief  Accounting  Officer  and
                                         Duly  Authorized  Officer)



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