<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                       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 0-22743


                        VISTA MEDICAL TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


         DELAWARE                                        94-3184035
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

                          5451 AVENIDA ENCINAS, SUITE A
                               CARLSBAD, CA 92008
                    (Address of principal executive offices)
                                 (760) 603-9120
                (Registrant's phone number, including area code)

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

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:

                          (1)      YES [X]        NO [ ]
                          (2)      YES [X]        NO [ ]

As of July 31, 2000 there were 19,522,630 shares of $.01 par value common stock
outstanding.


                                       1
<PAGE>


                        VISTA MEDICAL TECHNOLOGIES, INC.
                                    FORM 10-Q
                                TABLE OF CONTENTS



<TABLE>

<S>                                                                                                 <C>
PART 1.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets ................................................................3
          Consolidated Statements of Operations.......................................................4
          Consolidated Statements of Cash Flows ......................................................5
          Notes to Consolidated Financial Statements .................................................6

Item 2.   Management's Discussion and Analysis
          of Financial Condition and Results of Operations ...........................................7

Item 3.   Quantitative and Qualitative Disclosures About Market Risk..................................9

Risks and Uncertainties..............................................................................10

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K...........................................................21

SIGNATURES...........................................................................................24

</TABLE>


                                       2
<PAGE>


PART 1.  FINANCIAL INFORMATION

Item 1. Financial Statements

                        VISTA MEDICAL TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                       June 30, 2000          December 31, 1999
                                                                                       -------------          -----------------
                                                                                        (Unaudited)
<S>                                                                                    <C>                    <C>
ASSETS
Current assets:
    Cash and cash equivalents.......................................................   $   4,000,714          $      1,368,910
    Short-term investments & securities available for sale .........................         307,832                   289,189
    Accounts receivable ............................................................       1,474,090                 1,177,109
    Inventories ....................................................................       2,036,046                 2,649,542
    Other current assets ...........................................................          73,686                   269,397
                                                                                       -------------          -----------------
Total current assets ...............................................................       7,892,368                 5,754,147
Property and equipment, net ........................................................       1,048,709                 1,320,397
Patents and other assets ...........................................................         214,963                   292,178
                                                                                       -------------          -----------------
TOTAL ASSETS .......................................................................   $   9,156,040          $      7,366,722
                                                                                       =============          =================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable ...............................................................   $     401,856          $        985,520
    Accrued compensation ...........................................................         181,493                   205,481
    Accrued liabilities ............................................................       1,106,883                 1,591,276
                                                                                       -------------          -----------------
Total current liabilities ..........................................................       1,690,232                 2,782,277

Commitments
Stockholders' equity:
    Convertible preferred stock, $01 par value:
      Authorized shares - 5,000,000
      Issued and outstanding shares - no shares outstanding
        on December 31, 1999 or March 31, 2000......................................               -                         -
    Common stock, $01 par value:
      Authorized shares - 35,000,000
      Issued and outstanding shares - 13,795,525 on
        December 31, 1999 and 19,522,630 on June 30, 2000...........................         195,226                   137,955
        Additional paid-in capital .................................................      67,657,475                63,042,737
        Notes receivable from stockholders .........................................         (78,375)                  (78,375)
        Deferred compensation ......................................................        (404,114)                 (576,738)
        Unrealized gain/(loss) on investments ......................................               0                         0
        Accumulated deficit ........................................................     (59,904,404)              (57,941,134)
                                                                                       -------------          -----------------
Total stockholders' equity .........................................................       7,465,808                 4,584,445
                                                                                       -------------          -----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .........................................   $   9,156,040          $      7,366,722
                                                                                       =============          =================

</TABLE>

Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

                             See accompanying notes


                                       3
<PAGE>


                        VISTA MEDICAL TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                  Three Months Ended June 30,                      Six Months Ended June 30,
                                           -----------------------------------------       ----------------------------------------
                                                 2000                     1999                    2000                    1999
                                           -----------------       -----------------       ----------------        ----------------
<S>                                        <C>                     <C>                     <C>                     <C>
Sales ..................................   $       1,521,997       $       1,328,623       $      3,318,883        $      2,190,664
Cost and expenses:
    Cost of sales ......................           1,447,812               2,166,525              2,987,658               3,232,868
    Research and development ...........             430,600               1,020,092                862,138               1,997,003
    Sales and marketing ................             415,972                 855,990                829,307               1,892,731
    General and aministrative ..........             546,095                 640,317                973,895               1,234,975
    Restructuring Expense ..............            (278,734)                      -               (278,734)                      -
                                           -----------------       -------------------     ----------------        ----------------
Total cost and expenses ................           2,561,745               4,682,924              5,374,264               8,357,577
                                           -----------------       -------------------     ----------------        ----------------

Loss from operations ....................         (1,039,748)             (3,354,301)            (2,055,381)             (6,166,913)
Interest income .........................             73,445                  65,162                 92,111                 157,818
Other gains/(losses) ....................                  -                       -                      -                  50,625
                                           -----------------       -------------------     ----------------        ----------------

Net loss ................................  $        (966,303)      $      (3,289,139)      $     (1,963,270)       $     (5,958,470)
                                           =================       ===================     ================        ================

Basic and diluted loss per share ........  $           (0.05)      $           (0.24)      $          (0.12)       $          (0.44)
                                           =================       ===================     ================        ================

Shares used in computing basic and
    diluted loss per share ..............         19,144,183              13,605,782            16,420,862               13,537,059

</TABLE>

                             See accompanying notes
                                       4
<PAGE>


                        VISTA MEDICAL TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                             Six Months Ended June 30,
                                                                                      --------------------------------------
                                                                                           2000                    1999
                                                                                      ---------------       ----------------
<S>                                                                                   <C>                   <C>
OPERATING ACTIVITIES
Net loss ........................................................................          (1,963,270)            (5,958,470)
Adjustments to reconcile net loss to net cash used for
    operating activities:
        Depreciation and amortization ...........................................             322,659                516,613
        Amortization of premium on short term investments........................                   0                   (301)
        Amortization of deferred compensation ...................................             172,624                252,678
        Changes in operating assets and liabilities, net of effect of
            acquisitions:
                Accounts receivable .............................................            (296,982)              (200,820)
                Inventories .....................................................             613,496                294,122
                Other current assets ............................................             255,711                158,378
                Accounts payable ................................................            (583,665)               501,969
                Accrued compensation ............................................             (23,988)               124,919
                Accrued liabilities .............................................            (484,392)              (188,885)
                                                                                      ---------------       ----------------
Net cash flows used for operating activities ....................................          (1,987,807)            (4,499,797)

INVESTING ACTIVITIES
Purchases of short-term investments .............................................             (18,643)              (263,482)
Maturities of short-term investments ............................................                   0              1,000,000
Purchase of property and equipment ..............................................             (33,755)              (149,343)
                                                                                      ---------------       ----------------
Net cash flows provided by (used for) investing activities ......................             (52,398)               587,175

FINANCING ACTIVITIES
Issuance of common stock ........................................................           4,672,009                 64,339
                                                                                      ---------------       ----------------
Net cash flows provided by financing activities .................................           4,672,009                 64,339
Net (decrease) increase in cash and cash equivalents ............................           2,631,804             (3,848,283)
Cash and cash equivalents at beginning of period ................................           1,368,910              7,625,804
                                                                                      ---------------       ----------------
Cash and cash equivalents at end of period ......................................           4,000,714              3,777,521
                                                                                      ===============       ================

</TABLE>

                             See accompanying notes


                                       5
<PAGE>


                        VISTA MEDICAL TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   Basis of Presentation

         The Audited Financial Statements of Vista Medical Technologies, Inc.
(the "Company") and the notes thereto for the year ended December 31, 1999
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission, contain additional information about the Company, its
operations, and its financial statements and accounting practices, and should be
read in conjunction with this quarterly report on Form 10-Q. These unaudited
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and with the instructions on Form 10-Q
except that certain information and footnote disclosures normally contained in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.

         The accompanying unaudited consolidated financial statements of the
Company reflect all adjustments of a normal recurring nature which are, in the
opinion of management, necessary for a fair presentation of the financial
position, results of operations and cash flows for all periods presented. The
interim financial information contained herein is not necessarily indicative of
results for any future interim periods or for the full fiscal year ending
December 31, 2000.

2.   Inventories

<TABLE>
<CAPTION>

                                                            June 30, 2000          December 31, 1999
                                                            -------------          -----------------
                                                             (Unaudited)
              <S>                                           <C>                    <C>
              Parts and materials...................        $   3,522,290          $       3,574,107
              Work in process.......................              507,481                    334,437
              Finished goods........................            1,297,444                  1,360,068
                                                            -------------          -----------------
                                                                5,327,215                  5,268,612
                     Less: reserves                            (3,291,169)                (2,619,070)
                                                            -------------          -----------------
                                                            $   2,036,046          $       2,649,542
                                                            =============          =================

</TABLE>


                                       6
<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

         THIS QUARTERLY REPORT MAY CONTAIN PREDICTIONS, ESTIMATES AND OTHER
FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES,
INCLUDING THOSE DISCUSSED BELOW AT "RISKS AND UNCERTAINTIES." WHILE THIS OUTLOOK
REPRESENTS OUR CURRENT JUDGMENT ON THE FUTURE DIRECTION OF OUR BUSINESS, SUCH
RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY
FUTURE PERFORMANCE SUGGESTED BELOW. WE UNDERTAKE NO OBLIGATION TO RELEASE
PUBLICLY THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES ARISING AFTER THE DATE OF THIS QUARTERLY REPORT.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR CONSOLIDATED
FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED IN ITEM 1 OF THIS QUARTERLY
REPORT ON FORM 10-Q AND OUR 1999 ANNUAL REPORT ON FORM 10-K, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.

OVERVIEW OF OUR BUSINESS

         We develop, manufacture and market products that provide information to
doctors performing minimally invasive general surgical, heart, head, neck and
spine and other selected microsurgical procedures. Our products combine a head
mounted display with video cameras to provide surgeons with critical visual
information during these microsurgical procedures. Our product lines include the
ORPC Visualization and Information System for general surgery and other complex
endoscopic procedures, the Series 8000 Advanced Visualization and Information
System, for use in heart surgery and the StereoSite System, for use in
microscopic and endoscopic procedures in head, neck and spine surgery. In
general terms, endoscopic surgery involves a telescopic viewing device which is
inserted into an incision in the body and which allows the surgeon to better
view the internal part of the body being repaired. We expect to continue to
incur substantial losses for at least the next 6 - 9 months. As of June 30,
2000, our accumulated deficit was approximately $59,904,000. There can be no
assurance that our development efforts will result in commercially available
products, that we will be successful in introducing the products under
development, or that required regulatory approval of products will continue to
be obtained in a timely manner, if at all.

OUR RESULTS OF OPERATIONS

         Sales. We had revenue from product sales of $1,522,000 for the
three-months ended June 30, 2000, compared to revenues from product sales of
$1,329,000 for the same period in 1999. The increase in revenue during the
second quarter of 2000 compared to the corresponding period in 1999 was due to
increased sales of our OEM products, sales of our 3-D technology to our new


                                       7
<PAGE>


strategic partner, Richard Wolf GmbH, for the general surgery market, and
revenues derived from our Laparoscopic Bariatric Surgery Program launched during
the first quarter of 2000. These were partially offset by no sales to OEC
Medical for the medical imaging market during the second quarter of 2000 as
compared to the second quarter of 1999.

         Cost of Sales. Our cost of sales were $1,448,000 and $2,167,000 for the
three- months ended June 30, 2000 and 1999, respectively, a decrease of
$719,000. The decrease was primarily due to reduced manufacturing expenses
during the 2000 period as compared to 1999.

         Research and Development Expenses. Our research and development
expenses decreased to $431,000 for the three-months ended June 30, 2000, from
$1,020,000 for the corresponding period in 1999. The decrease in research and
development expenses was primarily attributable to decreases in staffing and
related supply and occupancy costs and a decrease in contract services related
to development efforts. We expect our research and development expenses to
increase moderately over current levels in the next several quarters as we
upgrade our product for complex endoscopic surgery.

         Sales and Marketing Expenses. Sales and marketing expenses were
$416,000 and $856,000 for the three-months ended June 30, 2000 and 1999,
respectively. The decrease in sales and marketing expense reflects a reduction
in staffing and related expenses as a result of a completed restructuring in the
second half of 1999. We expect our sales and marketing expenses to increase
sequentially during the next several quarters as we launch a national campaign
to inform patients of surgical options and participating hospitals relating to
our Laparoscopic Bariatric Surgery Program.

         General and Administrative Expenses. Our general and administrative
expenses decreased to $546,000 for the three-months ended June 30, 2000, from
$640,000 for the corresponding period in 1999. This decrease was primarily due
to a reduction in staffing and related expenses following a restructuring during
the second half of 1999, a reduction in deferred compensation expense and lower
professional, legal and consulting service fees. We expect our general and
administrative expenses to remain at or near current levels for the next several
quarters.

         Restructuring Expenses. We had credits associated with restructuring
expenses of $279,000 for the three-months ended June 30, 2000 related to the
subletting of part of our facility in Westborough, MA. The partial recovery
represents the subletting of approximately one half of the facility space before
which a $690,000 restructuring charge was incurred in the three-months ended
September 30, 1999.

         Interest Income. Our net interest income was $73,000 for the
three-month period ended June 30, 2000 compared to $65,000 for the corresponding
period in 1999. This increase was due primarily to an increase in investment
balances of $4,800,000 from a recently completed sale of common stock to three
of our stockholders.


                                       8
<PAGE>


         Other Gains. We had no other gains for the three-month period ended
June 30, 2000 and for the corresponding period in 1999.

LIQUIDITY AND CAPITAL RESOURCES

         On April 7, 2000, we entered into a Securities Purchase Agreement with
three of our stockholders. Under the terms of this agreement, we sold 5,654,411
shares of our common stock to these stockholders. After deducting estimated
offering expenses, we realized net proceeds of approximately $4,591,000 from the
offering. We anticipate that these proceeds, together with our existing cash,
cash equivalents and short-term investments, and product revenues, will be
sufficient to fund our operations through the next 9-12 months. Additional
capital resources may be required to fund continuing expenditures related to our
research, development, manufacturing and commercialization of new products
beyond that point. There can be no assurance that the requisite fundings will be
consummated in the necessary time frame or on terms acceptable to us. Should we
be unable to raise sufficient funds if and when needed, we may be required to
curtail our operating plans and possibly relinquish rights to portions of our
technology or products.

         Net cash used for operating activities for the three-months ended June
30, 2000 was $1,379,000 compared to net cash used of $1,757,000 for the
corresponding three-month period in 1999. The decrease in net cash used in
operating activities was primarily attributable to decreasing net losses and
lower inventory purchases during the 2000 period, partially offset by lower
non-cash expense for depreciation and amortization and increasing payments on
accounts payable in the 2000 period compared to the 1999 period.

         Net cash used by investing activities was $159,000 for the three-months
ended June 30, 2000 compared to $39,000 of net cash provided in the same period
in 1999. The decrease in net cash provided by investing activities during the
2000 period was primarily attributable to declining balances of short term
investments reaching maturity offset by decreasing purchases of property and
equipment.

         Net cash provided by financing activities was $4,647,000 for the
three-months ended June 30, 2000 compared to $0 for the same period in 1999. The
increase in net cash provided by financing activities during the 2000 period was
primarily attributable to the closing of a Securities Purchase Agreement with
three of our stockholders netting proceeds of approximately $4,591,000 partially
offset by a reduction in purchases of stock by employees through our employee
stock purchase plan and a lower level of stock option exercises.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         At June 30, 2000, our investment portfolio included fixed-income
securities of $3.9 million. These securities are subject to interest rate risk
and will decline in value if interest rates increase. Due to the short duration
of our investment portfolio, an immediate 10 percent increase in interest rates
would have no material impact on our financial condition or results of
operations.

         We generally conduct business, including sales to foreign customers, in
U.S. dollars and as a result have limited foreign currency exchange rate risk.
The effect of an immediate 10 percent change in foreign exchange rates would not
have a material impact on our financial condition or results of operations.


                                       9
<PAGE>


RISKS AND UNCERTAINTIES

         You should consider the following factors carefully in evaluating an
investment in our common stock in addition to the other information in this
report. You are cautioned that the statements in this quarterly report that are
not descriptions of historical facts may be forward-looking statements that are
subject to risks and uncertainties. Our actual results could differ materially
from those currently anticipated due to a number of factors, including those
identified in this section and elsewhere in this quarterly report. We undertake
no obligation to release publicly the results of any revisions to these
forward-looking statements to reflect events or circumstances arising after the
date of this quarterly report. The following discussion should be read in
conjunction with our consolidated financial statements and notes thereto.

WE MAY NOT BE ABLE TO MAINTAIN THE LISTING OF OUR COMMON STOCK ON THE NASDAQ
SMALLCAP MARKET.

         On February 10, 2000, our common stock ceased to be quoted on the
Nasdaq National Market and began to be quoted on the Nasdaq SmallCap Market as a
result of Nasdaq's concern about our ability to maintain continued compliance
with some of the Nasdaq National Market requirements for continued quotation. We
presented Nasdaq with a compliance plan to address this and other concerns in an
effort to ensure that our common stock would continue to be quoted on the Nasdaq
SmallCap Market. The compliance plan consisted of obtaining additional capital
and effecting a reverse split of our common stock, if necessary. On April 4,
2000, we obtained approval for both of these proposals from a majority of
stockholders at a special meeting of the stockholders of our company. On April
7, 2000 we completed our financing with the raising of an additional $4.8
million in equity capital.

         On April 19, 2000, Nasdaq advised us that we were not in compliance
with the $1.00 minimum bid price requirement with respect to our Common Stock
quoted on the Nasdaq SmallCap Market and that if, prior to July 19, 2000, we
were unable to maintain a closing bid price of at least $1.00 with respect to
our Common Stock, for a minimum of ten consecutive days, our Common Stock would
cease to be quoted on the Nasdaq SmallCap Market. During this period, Nasdaq
allowed our Common Stock to be quoted on the Nasdaq SmallCap Market under an
exception and appended a fifth character, "C", to our regular trading symbol
"VMTI". On July 10, 2000, Nasdaq announced that as a result of maintaining a
closing bid price of at least $1.00 with respect to our Common Stock, for a
minimum of ten consecutive days, the fifth character then appended to our
trading symbol was removed and we were allowed to continue having our Common
Stock quoted on The Nasdaq SmallCap Market.

         We cannot assure you that we will continue to comply with the $1.00
minimum bid price requirement or that we will continue to comply with the other
requirements of having our Common Stock quoted on the Nasdaq SmallCap Market. If
we are unable to maintain our status on the Nasdaq SmallCap Market, we may be
listed on the OTC Bulletin Board and there may not continue to be an active
trading market for our common stock. If this occurs, you may not be able to sell
your shares quickly or at the market price if trading in our stock is not
active.


                                       10
<PAGE>


WE HAVE A HISTORY OF LOSSES AND MAY NOT BECOME PROFITABLE.

         Since our formation in July 1993, and as of June 30, 2000, we had
incurred cumulative net losses of $59.9 million. We expect to incur substantial
losses for at least the next 6-9 months. We may never achieve or sustain
profitability in the future.
Even if we achieve profitability, we may not be able to sustain it on an ongoing
basis.

WE ARE, TO A SIGNIFICANT EXTENT, DEPENDENT ON DISTRIBUTION PARTNERS TO SELL OUR
PRODUCTS.

         We do not have a sales force and, in the past, have been primarily
dependent on our agreements with Medtronic and Sofamor Danek for sales of the
majority of products derived from our core three-dimensional technology. Both of
these agreements have recently been terminated. We have signed an exclusive
distribution agreement with Jomed International to transition distribution of
our products with applications in heart surgery and to continue support to our
heart customer base. However, this transition may not be achieved without
operational disruption and unplanned cost, or at all. If we are unable to make
this transition, we may be unsuccessful in distributing our heart surgery
products and may lose significant revenues as a result thereof.

         In addition, we have changed recently our strategic emphasis for our
core three-dimensional technology to general surgery, gynecology and urology.
Although we have signed an exclusive agreement for international distribution in
those market segments and a non-exclusive co-marketing arrangement in the United
States with Richard Wolf, GmbH, we cannot assure you that we will be successful
in these areas of sales. Even if we are successful, we cannot assure you that
the revenue achieved in these areas of emphasis will be sufficient to compensate
for the loss of sales revenue from the termination of our agreements with
Medtronic and Sofamor Danek. Either of these results could have an adverse
affect on our financial condition and results of operations.

OUR PROFITABILITY IS DEPENDENT UPON THE SUCCESSFUL DEVELOPMENT AND
COMMERCIALIZATION OF OUR PRODUCTS BASED ON OUR CORE THREE-DIMENSIONAL
TECHNOLOGY.

         Products derived from our core technology - the ORPC for general
surgery, the Series 8000 for minimally invasive heart surgery and StereoSite
systems for head, neck and spine microsurgery - are expected to account for the
majority of our revenues over the next several years. The demand for these
products may not be sufficient to allow us to achieve profitable operations.

         Our development efforts for improvements to these products may not be
successful. In addition, other products under development may not be shown to be
safe or effective, capable of being manufactured in commercial quantities at
acceptable costs, acquire appropriate regulatory clearances or be successfully
marketed.


                                       11
<PAGE>


OUR SUCCESS IS DEPENDENT UPON ACCEPTANCE OF MINIMALLY INVASIVE MICROSURGICAL
PROCEDURES BY THE MEDICAL COMMUNITY AS A RELIABLE, SAFE AND COST EFFECTIVE
ALTERNATIVE TO EXISTING TREATMENTS.

         To date, minimally invasive microsurgical procedures have only been
performed on a very limited basis by a small number of highly skilled surgeons.
We are unable to predict how quickly, if at all, minimally invasive
microsurgical procedures will be adopted by the medical community or, if they
are adopted, the number of procedures that will be performed.

         Most patients with heart disease first consult with a cardiologist, who
then may treat the patient with drugs or non-surgical interventions, such as
angioplasty, the insertion of a balloon-type device in a heart vessel, and
intravascular stents, or refer the patient to a heart surgeon for open-chest
coronary artery bypass surgery. Cardiologists may not recommend minimally
invasive procedures until such time, if at all, as such procedures can
successfully be demonstrated to be as safe and cost-effective as other accepted
treatments. In addition, heart surgeons may choose not to recommend minimally
invasive procedures until such time, if at all, as such procedures are proven to
be as safe, effective and technically viable as conventional, open-chest surgery
methods, which have become widely adopted by heart surgeons since the initial
use of such surgery in the mid-1950s.

         Even if the clinical safety and effectiveness of minimally invasive
procedures is established in heart and other specialties, surgeons, specialists
and other physicians may choose not to recommend the procedures for any number
of other reasons. Adoption of these procedures by doctors will depend, for
example, upon our ability to facilitate training of surgeons to perform
minimally invasive microsurgery and the willingness of such surgeons to perform
such procedures. Doctors may also elect not to recommend the minimally invasive
procedures based on possible unavailability of acceptable reimbursement from
health care payors. Health care payor acceptance may require evidence of the
cost effectiveness of minimally invasive procedures as compared to other
currently available treatments. We believe that physician endorsements will be
essential for clinical adoption of minimally invasive procedures. To date, these
endorsements have not been obtained and they may not be obtained in the near
future, if at all. Patient acceptance of the procedure will depend upon doctor
recommendations, as well as other factors, including the effectiveness of, and
the rate and severity of complications associated with, the procedure as
compared to other treatments.

WIDESPREAD USE OF OUR PRODUCTS WILL REQUIRE TRAINING OF A LARGE NUMBER OF
SURGEONS, AND THE TIME REQUIRED TO INSTITUTE A TRAINING PROGRAM AND TO TRAIN
SUCH SURGEONS COULD ADVERSELY AFFECT NEAR TERM MARKET ACCEPTANCE.

         Evaluations of visualization technology such as ours conducted to date
have shown that there is a learning process involved for surgeons and other
members of the surgery team to become proficient with the use of the systems.
Based on the clinical and laboratory procedures performed to date, we cannot
assure you that visualization and information system enhancements incorporated,
or to be incorporated, in our products will prove suitable for use by a
substantial


                                       12
<PAGE>


number of surgeons. If they prove unsuitable for a large number of surgeons to
use, the potential markets and applications for our products would be
significantly limited.

WE LACK COMMERCIAL MANUFACTURING EXPERIENCE AND THERE ARE SIGNIFICANT RISKS
ASSOCIATED WITH OUR SCALE-UP OF MANUFACTURING.

         We lack long term experience in manufacturing our products in the
quantities that are necessary for us to achieve significant commercial sales. We
may not be able to establish or maintain reliable, high-volume manufacturing at
commercially reasonable costs. We may also require additional manufacturing
facilities if production volumes increase; acquisition of new manufacturing
facilities will likely involve relocation. The manufacture of our products
primarily involves the assembly of a number of sub-assemblies and components.
Companies such as ours often encounter difficulties in scaling up manufacturing
of products, which difficulties could include problems involving:

         -        quality control and assurance,
         -        component and service availability,
         -        adequacy of control policies and procedures,
         -        lack of qualified personnel,
         -        compliance with FDA regulations and the need for further FDA
                  approval of new manufacturing processes and facilities and
         -        other production constraints.

         We have considered and will continue to consider as appropriate, the
internal manufacture of sub-assemblies currently provided by third-party
subcontractors, as well as the implementation of new production processes. Our
manufacturing yields or costs may increase as a result of the transition to
in-house production or to new production processes when such efforts are
undertaken. In addition, costs in complying with FDA good manufacturing
practices or changes in such practices may exceed our expectations.

WE MAY FACE COMPONENT SHORTAGES AND ARE DEPENDENT IN SOME INSTANCES ON SINGLE
SOURCES OF SUPPLY.

         Any significant supply interruption, or inventory shortage or overage,
would negatively impact our ability to manufacture our products. We use and rely
on specific components and services used in our systems for which we have only a
single source of supply. The manufacture of our products in larger commercial
quantities will require a substantial increase in component supplies and will
likely necessitate the replacement of current suppliers or the addition of new
suppliers. The qualification of additional or replacement vendors for specified
components or services is a lengthy process. In addition, the substitution of
replacement vendors may entail re-engineering time and cost and could delay the
supply of our products.

         We expect to manufacture our products based on forecasted product
orders and intend to purchase subassemblies and components prior to receipt of
purchase orders from customers.


                                       13
<PAGE>


Lead times for ordered materials and components vary significantly and depend on
factors such as the business practices of the specific supplier, contract terms
and general demand for a component at a given time. Some components used in our
products have long lead times. As a result, there is a risk of excess or
inadequate inventory if orders do not match forecasts.

WE ARE SUBJECT TO SIGNIFICANT DOMESTIC AND INTERNATIONAL REGULATION AND MAY NOT
BE ABLE TO OBTAIN NECESSARY REGULATORY CLEARANCES TO SELL OUR PRODUCTS.

         The manufacture and sale of medical devices intended for commercial
distribution are subject to extensive governmental regulation. Our failure to
comply with regulatory requirements would jeopardize our ability to market our
products. Noncompliance with applicable requirements can result in failure of
the regulatory agency to grant pre-market clearance or approval for devices,
withdrawal or suspension of approval, total or partial suspension of production,
fines, injunctions, civil penalties, refunds, recall or seizure of products and
criminal prosecution.

         Medical devices are regulated in the United States primarily by the FDA
and, to a lesser extent, by state agencies. Sales of medical device products
outside the United States are subject to foreign regulatory requirements that
vary from country to country. Generally, medical devices require pre-market
clearance or pre-market approval prior to commercial distribution. A
determination that information available on the medical device is not sufficient
to grant the needed clearance or approval will delay market introduction of the
product. In addition, material changes or modifications to, and changes in
intended use of, medical devices also are subject to FDA review and clearance or
approval. The FDA regulates the research, testing, manufacture, safety,
effectiveness, labeling, storage, record keeping, promotion and distribution of
medical devices in the United States and the export of unapproved medical
devices from the United States to other countries. The time required to obtain
approvals required by foreign countries may be longer or shorter than that
required for FDA clearance, and requirements for licensing may differ from FDA
requirements. The current regulatory environment in Europe for medical devices
differs significantly from that in the United States.

WE EXPECT TO ENCOUNTER RAPID TECHNOLOGICAL CHANGE AND SIGNIFICANT COMPETITION.

         The medical device market in which we compete is characterized by
intensive development efforts and rapidly advancing technology. Our future
success will depend, in large part, upon our ability to anticipate and keep pace
with advancing technology and competing innovations. We may not be successful in
identifying, developing and marketing new products or enhancing our existing
products.

         We believe that a number of large companies, with significantly greater
financial, manufacturing, marketing, distribution and technical resources and
experience than ours, are focusing on the development of visualization products
for minimally invasive microsurgery. Several companies are currently developing
and marketing visualization products for minimally


                                       14
<PAGE>


invasive microsurgery which could be applied to heart surgery, to general
surgery or to head, neck and spine microsurgery.

         Technological advances with other therapies such as drugs,
interventional procedures or future innovations in surgical techniques could
make such other therapies more effective or lower in cost than minimally
invasive microsurgery procedures and could render minimally invasive
microsurgery obsolete.

WE EXPECT FLUCTUATIONS IN OUR OPERATING RESULTS.

         Our results of operations may vary significantly from quarter to
quarter depending upon numerous factors, including the following:

         -        timing and results of product evaluations,
         -        delays associated with the FDA and other regulatory approval
                  processes,
         -        demand for and utilization of our products,
         -        changes in our pricing policies or those of our competitors,
         -        changes in third-party payment guidelines,
         -        the number, timing and significance of product enhancements
                  and new product announcements by us or our competitors,
         -        our ability to develop, introduce and market new and enhanced
                  versions of our products on a timely basis,
         -        customer order deferrals in anticipation of enhancements or of
                  new product introductions by us or our competitors,
         -        product quality problems,
         -        personnel changes and
         -        the level of international sales.

OUR PROFITABILITY IS DIRECTLY RELATED TO THE LEVEL OF REIMBURSEMENTS FOR
SURGICAL PROCEDURES USING OUR PRODUCTS.

         Our profitability is directly related to the level of payments for the
surgical procedures in which our products are involved, either by Medicare or
private insurance companies. We could be adversely affected by changes in
payment policies of government or private health care payors, particularly to
the extent any such changes affect payment for the procedure in which our
products are intended to be used. It is a continuing trend in U.S. health care
for such payments to be under continual scrutiny and downward pressure. We
believe that reimbursement in the future will be subject to increased
restrictions, both in the United States and in foreign markets and that the
overall escalating cost of medical products and services has led to and will
continue to lead to increased pressures on the health care industry, both
foreign and domestic, to reduce the cost of products and services, including
products which we offer.


                                       15
<PAGE>


         We expect that our products typically will be used by hospitals and
surgical centers, which bill various third-party payors, such as governmental
programs and private insurance plans, for the health care services provided to
their patients. Third-party payors carefully review and increasingly challenge
the prices charged for medical products and services or negotiate a flat rate
fee in advance. Payment rates from private companies also vary depending on the
procedure performed, the third-party payor, the insurance plan and other
factors. Medicare compensates hospitals at a pre determined fixed amount for the
costs associated with an in-patient hospitalization based on the patient's
discharge diagnosis and compensates physicians at a pre determined fixed amount
based on the procedure performed, regardless of the actual costs incurred by the
hospital or physician in furnishing the care and unrelated to the specific
devices or systems used in that procedure. Medicare and other third-party payors
are increasingly scrutinizing whether to cover new products and the level of
payment for new procedures. The flat fee reimbursement trend is causing
hospitals to control costs strictly in the context of a managed care system in
which health care providers contract to provide comprehensive health care for a
fixed cost per person. We are unable to predict what changes will be made in the
reimbursement methods utilized by such third-party payors.

         If we obtain the necessary foreign regulatory registrations or
approvals, market acceptance of our products in international markets would be
dependent, in part, upon the acceptance by the prevailing health care financing
system in each country. Health care financing systems in international markets
vary significantly by country and include both government sponsored health care
programs and private insurance. There can be no assurance that these financing
systems will endorse the use of our products.

WE HAVE LIMITED EXPERIENCE MARKETING OUR PRODUCTS OVERSEAS AND MAY NOT BE
SUCCESSFUL IN EXPANDING INTO INTERNATIONAL MARKETS.

         We have limited experience in marketing our products overseas. Changes
in overseas economic conditions, currency exchange rates, foreign tax laws or
tariffs or other trade regulations could negatively impact our business. The
anticipated international nature of our business is also expected to subject our
representatives, agents and distributors to laws and regulations of the foreign
jurisdictions in which they operate or in which our products are sold, including
laws regulating manufacture and sale of medical devices. In addition, the laws
of some foreign countries do not protect our intellectual property rights to the
same extent as do the laws of the United States.

WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS AND HAVE LIMITED INSURANCE
COVERAGE.

         We face an inherent and significant business risk of exposure to
product liability claims in the event that the use of our products results in
personal injury or death. Also, in the event that any of our products proves to
be defective, we may be required to recall or redesign such products. Our
current product liability insurance coverage limit is $10.0 million per
occurrence and in the aggregate. Our coverage limits may not be adequate to
protect us from any liabilities we might incur in connection with the
development, manufacture and sale of our products. In


                                       16
<PAGE>


addition, increased product liability coverage may be required if additional
products are used in clinical evaluations or successfully commercialized.
Product liability insurance is expensive and in the future may not be available
to us on acceptable terms, if at all. A successful product liability claim or
series of claims brought against us in excess of our insurance coverage or a
product recall would negatively impact our business.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY BE UNABLE TO
PREVENT OTHER COMPANIES FROM USING OUR TECHNOLOGY IN COMPETITIVE PRODUCTS.

         Our future success will depend, in part, on our ability to continue to
develop patentable products, enforce our patents and obtain patent protection
for our products both in the United States and in other countries. The patent
positions of medical device companies, however, are generally uncertain and
involve complex legal and factual questions. Patents may never issue from any
patent applications owned by or licensed to us. Even if patents do issue, the
claims allowed may not be sufficiently broad to protect our technology. In
addition, issued patents owned by or licensed to us may be challenged,
invalidated or circumvented, or the rights granted thereunder may not provide us
with competitive advantages.

         The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property rights. Litigation,
which would result in substantial expense, may be necessary to enforce any
patents issued or licensed to us and/or to determine the scope and validity of
proprietary rights of third parties or whether our products, processes or
procedures infringe any such third-party proprietary rights. We may also have to
participate in interference proceedings declared by the United States Patent and
Trademark Office, which could result in substantial expense, to determine the
priority of inventions covered by our issued United States patents or pending
patent applications. Furthermore, we may have to participate at substantial cost
in International Trade Commission proceedings to enjoin importation of products
which would compete unfairly with our products. Any adverse outcome of any
patent litigation, including interference proceedings, could subject us to
significant liabilities to third parties, require disputed rights to be licensed
from or to third parties or require us to cease using the technology in dispute.
Any such licenses may not be available on acceptable terms, if at all.
Furthermore, parties making such claims may be able to obtain injunctive or
other equitable relief that could effectively block our ability to make, use,
sell or otherwise practice our intellectual property, whether or not patented or
described in pending patent applications, or to further develop or commercialize
our products in the United States and abroad and could result in the award of
substantial damages. Defense of any lawsuit or failure to obtain any such
license could damage our business.

         We rely on unpatented trade secrets to protect our proprietary
technology. Others may independently develop or otherwise acquire the same or
substantially equivalent technologies or otherwise gain access to our
proprietary technology or disclose such technology. It is difficult to protect
rights to such unpatented proprietary technology. Third parties may obtain
patent rights to such unpatented trade secrets, which patent rights could be
used to assert infringement claims against us. We also rely on confidentiality
agreements with our collaborators, employees,


                                       17
<PAGE>


advisors, vendors and consultants to protect our proprietary technology. These
agreements may be breached, we may not have adequate remedies for any breach and
our trade secrets may otherwise become known or be independently developed by
competitors. In addition, our agreements with employees and consultants require
disclosure of ideas, developments, discoveries or inventions conceived during
employment or consulting, as the case may be, and assignment to us of
proprietary rights to such matters related to our business and technology. The
extent to which efforts by others will result in patents and the effect on us of
the issuance of such patents is unknown.

WE HAVE LICENSED SOME ASPECTS OF OUR PRODUCTS FROM THIRD PARTIES AND MAY LOSE
THE RIGHTS TO THESE ESSENTIAL ASPECTS UNDER THE AGREEMENTS WHICH GOVERN THOSE
RELATIONSHIPS.

         We have licensed some aspects of our technology from third parties. The
rights under the governing agreements may be terminated if we breach our
obligations or in other circumstances. Our failure to retain rights to these
licensed rights could negatively impact our business.

IF WE ARE NOT ABLE TO ATTRACT AND RETAIN KEY TECHNICAL AND SENIOR MANAGEMENT
PERSONNEL AND DOCTORS TO PARTICIPATE IN OUR ADVISORY BOARDS, IT MAY ADVERSELY
AFFECT OUR ABILITY TO OBTAIN FINANCING OR DEVELOP OUR PRODUCTS.

         Our future business and operating results depend in significant part
upon the continued contributions of our key technical and senior management
personnel, many of whom would be difficult to replace and some of whom perform
important functions beyond those suggested by their job titles or descriptions.
Our business and future operating results also depend in significant part upon
our ability to attract and retain qualified management, manufacturing,
technical, marketing and sales and support personnel for our operations.
Competition for such personnel is intense, and we may not be successful in
attracting or retaining such personnel.

         Members of our clinical advisory boards consult with us exclusively in
the field of visualization, but are free to consult with other non-competing
instrumentation companies and are employed elsewhere on a full-time basis. As a
result, they only spend a limited amount of time on our business. Although we
have entered into consulting agreements, with terms ranging from 12 months to
two years, including confidentiality provisions with each of the members of our
clinical advisory boards, the consulting and confidentiality agreements between
us and each of the members of our clinical advisory boards may be terminated or
breached. In addition, such agreements may not be renewed upon termination.

OUR STOCK PRICE COULD CONTINUE TO BE VOLATILE AND YOUR INVESTMENT IN OUR COMMON
STOCK COULD SUFFER A DECLINE IN VALUE, ADVERSELY AFFECTING OUR ABILITY TO RAISE
ADDITIONAL CAPITAL.

         The market prices and trading volumes for securities of emerging
companies, like ours, have historically been highly volatile and have
experienced significant fluctuations unrelated to the operating performance. The
market price of our common stock has historically been highly volatile and may
be significantly affected by factors such as:


                                       18
<PAGE>


         -        actual or anticipated fluctuations in our operating results,
         -        changes in financial estimates by securities analysts,
         -        announcements of technological innovations,
         -        new products or new contracts by us or our competitors,
         -        regulatory announcements,
         -        developments with respect to patents or proprietary rights,
         -        conditions and trends in the medical device and other
                  technology industries,
         -        adoption of new accounting standards affecting the medical
                  device industry, and
         -        general market conditions.

         In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have particularly affected the
market prices for shares of early stage companies. These broad market
fluctuations may adversely affect the market price of our common stock. In the
past, following periods of volatility in the market price of a particular
company's securities, securities class action litigation has often been brought
against that company. Such litigation, if brought against us, could result in
substantial costs and a diversion of management's attention and resources.

OUR USE OF HAZARDOUS MATERIALS MAY RESULT IN UNEXPECTED AND SUBSTANTIAL CLAIMS
AGAINST US FOR WHICH WE DO NOT HAVE SUFFICIENT FINANCIAL RESOURCES.

         Our research and development activities may involve the controlled use
of hazardous materials and chemicals. The risk of accidental contamination or
injury from these materials cannot be completely eliminated. In the event of
such an accident, we could be held liable for any resultant damages, and any
such liability could exceed our resources. We may incur substantial cost to
comply with environmental regulations.

WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS AND ANY GAINS FROM YOUR INVESTMENT IN
OUR STOCK WILL HAVE TO COME FROM INCREASES IN THE PRICE OF SUCH STOCK.

         We currently intend to retain any future earnings for use in our
business and do not anticipate paying any cash dividends in the foreseeable
future.

OUR CHARTER DOCUMENTS MAY PREVENT US FROM PARTICIPATING IN TRANSACTIONS THAT
COULD BE BENEFICIAL TO YOU.

         Our charter documents contain provisions that may make it more
difficult or discourage a change in control. This may adversely affect the
market price of our common stock.

FUTURE OFFERINGS COULD DILUTE YOUR INTEREST IN YOUR STOCK.

         If the net proceeds of the offering we completed in April 2000,
together with available


                                       19
<PAGE>


funds and cash generated from operations, are insufficient to satisfy our cash
needs, we may be required to sell additional equity or convertible debt
securities. The sale of additional equity or convertible debt securities could
result in additional dilution to our stockholders.


                                       20
<PAGE>


PART II.  OTHER INFORMATION

Item 1.   Not Applicable

Item 2.   Not Applicable

Item 3.   Not Applicable

Item 4.   Submission of Matters to a Vote of Security Holders

I.       2000 Annual Meeting of Stockholders held on June 9, 2000.

         a.       The 2000 Annual Meeting of Stockholders of Vista Medical
                  Technologies, Inc.(the "Annual Meeting") was held on June 9,
                  2000. The holders of 10,708,573 of the 19,506,486 shares of
                  our Common Stock outstanding on March 30, 2000, the record
                  date for the Annual Meeting (approximately 54.89%) were
                  present at the Annual Meeting in person or by proxy.

         b.       At the Annual Meeting, Olav B. Bergheim and Daniel Holland
                  were duly nominated and properly elected as Directors of our
                  company to serve until the 2003 Annual Meeting of stockholders
                  or until their respective successors are elected and
                  qualified. The number of votes cast for and withheld with
                  respect to each nominee for office, as well as broker
                  non-votes are indicated below:

<TABLE>
<CAPTION>

                                                          Against/    Broker
                                            For           Withheld    Non-Votes
                                            ---           --------    ---------
                  <S>                       <C>           <C>         <C>
                  Olav B. Bergheim          10,607,790     100,783        0
                  Daniel J. Holland         10,607,590     100,983        0

</TABLE>

                  James C. Blair and John R, Lyon, whose terms as Directors of
                  our company expire at our 2001 Annual Meeting of Stockholders,
                  and Nicholas B. Binkley and Larry M. Osterink, whose terms as
                  Directors of our company expire at our 2002 Annual Meeting of
                  Stockholders continue to serve as Directors of our company
                  until their respective terms expire and were not voted upon at
                  the Annual Meeting,

         c.       At the Annual Meeting, a proposal to amend the Company's 1997
                  Employee Stock Purchase Plan (the "Purchase Plan") which will
                  increase the number of shares of Common Stock authorized for
                  issuance over the term of the Purchase Plan by an additional
                  200,000 shares was approved. The number of votes cast for and
                  against, as well as the number of abstentions and broker
                  non-votes relating to such proposal, are indicated below:


                                       21
<PAGE>


<TABLE>
<CAPTION>

                  For               Against          Abstentions        Broker Non-Votes
                  ---               -------          -----------        ----------------
                  <S>               <C>              <C>                <C>
                  9,897,666         797,693          13,214             0

</TABLE>

         d.       At the Annual Meeting, a proposal to ratify the appointment of
                  Ernst & Young LLP as our independent auditors for fiscal 2000
                  was approved. The number of votes cast for and against, as
                  well as the number of abstentions and broker non-votes
                  relating to such proposal, are indicated below: Broker FOR
                  AGAINST ABSTENTIONS NON-VOTES 10,685,338 10,721 12,514 0

II.      Special Meeting of Stockholders held on April 3, 2000.

         a.       A Special Meeting of Stockholders of Vista Medical
                  Technologies, Inc. was held on April 3, 2000. The holders of
                  10,658,890 of the 13,805,493 shares of our Common Stock
                  outstanding on March 13, 2000, the record date for the Special
                  Meeting(approximately 77.21%) were present at the Special
                  Meeting in person or by proxy.

         b.       At the Special Meeting, a proposal to issue and sell up to
                  7,000,000 shares of the Company's Common Stock to certain
                  investors, which may include officers and/or directors of the
                  Company, or their affiliates, was approved. The number of
                  votes cast for and against, as well as the number of
                  abstentions and broker non-votes relating to such proposal,
                  are indicated below:

<TABLE>
<CAPTION>

                                                                       Broker
                  For               Against          Abstentions       Non-Votes
                  ---               -------          -----------       ---------
                  <S>               <C>              <C>               <C>
                  10,457,290        174,583          27,017            0

</TABLE>

         c.       At the Special Meeting, a proposal to give the Board of
                  Directors the authority, at it's discretion, to effect a
                  reverse stock split of the Company's Common Stock, was
                  approved. The number of votes cast for and against, as well as
                  the number of abstentions and broker non-votes relating to
                  such proposal, are indicated below:

<TABLE>
<CAPTION>

                                                                       Broker
                  For               Against          Abstentions       Non-Votes
                  ---               -------          -----------       ---------
                  <S>               <C>              <C>               <C>
                  10,439,557        210,466          8,867             0

</TABLE>

Item 5.   Not Applicable


                                       22
<PAGE>


Item 6.   Exhibits and Reports on Form 8-K

A)      Exhibits

        11.1     Statement Regarding Computation of Per Share Earnings

        27.1     Financial Data Schedule

B)      Reports on Form 8-K

        No reports on Form 8-K were filed by the Company during the three
        months ended June 30, 2000.


                                       23
<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.


                                      VISTA MEDICAL TECHNOLOGIES,INC.


Date:     August 2, 2000                        /s/ John R. Lyon
         ------------------------      -----------------------------------------
                                       John R. Lyon
                                       President, Chief Executive Officer, Chief
                                       Financial Officer and Director(Principal
                                       financial and accounting officer)

Date:     August 2, 2000                        /s/ Stephen A. Gorgol
         ------------------------       ----------------------------------------
                                        Stephen A. Gorgol
                                        Director of Finance & Administration and
                                        Secretary


                                       24