FORM 10-KSB
				  
		 SECURITIES AND EXCHANGE COMMISSION
		       WASHINGTON, D.C. 20549
  
	   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
	       OF THE SECURITIES EXCHANGE ACT OF 1934
  (Mark One)
  [ x ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
  
       For the fiscal year ended June 30, 1997                
  
  [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
  
       For the transition period from ____________ to _____________
  
			Commission File No. 
			      0-18113
  
		  TENET INFORMATION SERVICES, INC.
       (Exact name of registrant as specified in its charter)
  
       UTAH                                        87-0405405
  (State or other jurisdiction                   (I.R.S.  Employer
  of incorporation or organization)             Identification No.)
  
       4885 SOUTH 900 EAST #107
       SALT LAKE CITY, UTAH                                 84117
  (Address of principal executive office)                     (Zip
  Code)
  
       Registrant's telephone number, including area code (801) 268-3480
  
       __________________________________________________________
  
    Securities Registered Pursuant to Section 12 (g) of the Act:
				  
			    Common Stock
			  (Title of Class)
  
  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 and
  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___
  
  Indicate by check mark if disclosure of delinquent filers pursuant to
  Item 405 of Regulation S-K is not contained herein, and will not be
  contained, to the best of Registrant's knowledge, in definitive proxy or
  information statements incorporated by reference in Part III of this
  Form 10-K, or any amendment to this Form 10-K [   ].
  
  The number of shares outstanding of the Registrant's Common Stock as of
  October 15, 1997 was 13,018,505.
  
  
			 TABLE OF CONTENTS
							       Page #
  PART I
  
       Item 1    Business                                           1
  
       Item 2    Properties                                        12
  
       Item 3    Legal Proceedings                                 12
  
       Item 4    Submission of Matters to a Vote of 
			       Security Holders                                            12
  
  
  PART II
  
       Item 5    Market for the Registrant's Common Equity
		  and Related Stockholder Matters                  13
  
       Item 6    Selected Financial Data                           13
  
       Item 7    Management's Discussion and Analysis of
		  Financial Condition and Results of Operations    14
  
       Item 8    Financial Statements                              22
  
       Item 9    Changes In and Disagreements with Accountants
		  on Accounting and Financial Disclosure           23
  
  
  PART III
  
       Item 10   Directors, Executive Officers, Promoters and
		   Control Persons of the Registrant: Compliance 
		     with Section 16(a) of the Exchange Act                      23
  
       Item 11   Executive Compensation                            26
  
       Item 12   Security Ownership of Certain Beneficial
		  Owners and Management                            28
  
       Item 13   Certain Relationships and Related Transactions    29
  
  
  PART IV
  
       Item 14   Exhibits and Reports on Form 8-K                  30
  
		 (a) List of Financial Statements, Schedules
			and Exhibits
		 (b) Reports on Form 8-K
			8-K Report for NMC Acquisition
  
  SIGNATURES     
  
  
  EXHIBITS                                                      Attached
  


  ITEM 1:   BUSINESS
  
  GENERAL
  
  In 1978, Telemed Cardio Pulmonary Systems ("Telemed") purchased
  a pulmonary testing business based in Salt Lake City, Utah. 
  Telemed's business was developed from research performed at the
  University of Utah on computer applications in medical data
  processing.  Telemed later became a division of Becton Dickinson
  & Co.  ("Becton"), a conglomerate of companies dealing primarily
  in disposable medical supplies.  Telemed's primary focus was in
  developing and marketing diagnostic computer systems used in
  pulmonary testing and analysis.
  
  In 1983, Becton's management decided to sell the high technology
  pulmonary and respiratory care business.  Tenet Information
  Services, Inc. (the Company) was organized on February 24, 1984
  by employees of Telemed to purchase Telemed's pulmonary and
  respiratory care information services business.  In March 1984,
  the Company purchased that business for cash and a promissory
  note payable to Becton.  The Company then repositioned its
  business to focus on providing the RCMS/X family of products,
  with a view to offering cost-effective information systems that
  allow health care institutions to provide better care at less
  cost.  The Company built and serviced much of its mini-computer
  based hardware and developed its own proprietary software, all
  state of the art for the mid-eighties.
  
  By 1988, annual revenue had grown to $2.4 million and the
  Company completed an initial public offering of its common stock
  in 1989. By September 15, 1989, 23 hospitals were using the
  Company's respiratory care management systems (then referred to
  as "RCMS") and the Company employed 23 full and part-time
  people.
  
  Over time, with improvements in computer hardware and
  performance, the mini-computer based product became dated.  With
  the entrance of two P.C. based competitors, the market shifted
  away from the Company's RCMS product.  The last RCMS sale was
  made in January 1991.  The Company launched a technical
  development effort to create a new generation of products and
  meet the competitive challenge.  New technology required new
  programmers, and in 1994 a new senior management team was put in
  place.
  
  A newly developed system, designated as the RCMS/X, was designed
  to use off-the-shelf P.C. hardware, commercially available
  software such as a UNIX operating system and the ORACLE
  relational data base.  The system's open architecture allows it
  to share information easily with other computers and networks. 
  In 1993, the first two Beta sites were installed and the system
  was thoroughly tested.  In the spring of 1995, after more than
  three years of development and testing, a production system
  RCMS/X, including handhelds and hospital interfaces was
  installed.  There have not been any further installations of the
  RCMS/X since 1995.
  

  
  
  International Healthcare Consulting Group Acquisition/HCG Acquisition
  ---------------------------------------------------------------------
  Effective September 5, 1995, the Company acquired certain assets
  of The International HealthCare Consulting Group ("HCG").  The
  assets acquired included certain accounts receivable, equipment,
  software products and other intangible assets.  In exchange for
  the assets acquired, the Company agreed to issue 50,000 shares
  of its common stock and assumed $30,000 of debt.  
  
  In connection with the assets purchased, the Company also
  entered into three-year employment agreements with HCG's two
  principal shareholders and consultants and agreed to issue
  certain warrants to purchase common stock and to grant certain
  options to purchase common stock based on future performance.
  
  HCG provides healthcare institutions, mainly hospitals, with
  professional high-quality, cost effective, consulting services
  which produce a more efficient, lower cost care delivery model
  while maintaining the highest quality of care standards. 
  Consulting services are provided in the following areas:
  
     . Nurse Staffing and Patient Classification
     . Cost Benefit Analysis for Computerized Patient Records (CPR)
     . Productivity
     . Cost Accounting
     . Operations Assessment
     . Modeling and Simulation
  
  National Microcomputer Corporation Merger/NMC Merger
  ----------------------------------------------------
  On September 29, 1995, the Company and National MicroComputer
  Corporation ("NMC") approved the terms of an Agreement and Plan
  of Reorganization (the "Agreement") pursuant to which NMC was
  merged with and into Tenet Merger Subsidiary, Inc., a wholly
  owned subsidiary of the Company incorporated for the purpose of
  effecting the merger.  NMC develops and markets an integrated
  information management/patient tracking system designed
  specifically for use in emergency departments.
  
  Emergency Department Network System/EDNet System
  ------------------------------------------------
  
  NMC was founded in California in 1979 by Dr. Richard Gwinn, an
  emergency medicine professional.  NMC originated the concept of
  a computerized patient tracking and information management
  system dedicated to emergency department operations.  The
  Emergency Department Network ("EDNet") was first developed in
  1989.  Early versions ran on highly proprietary hardware and
  software with limited flexibility and functionality.
  
  
  In 1991, a decision was reached to completely rewrite and expand
  the original EDNet software.  The first installation of EDNet,
  version 3, occurred in April 1992.  This version was designed
  for IBM compatible PCs and utilized standard operating systems
  and database software.  With this version the cost of ownership
  of EDNet was reduced substantially.
  
  EDNet is currently in its fourth release.  Recent enhancements
  include expansion of the discharge aftercare instructions
  database, a user-sortable patient tracking display and the
  ScriptMaster enhanced graphical report writer.  The Company
  anticipates that EDNet 32 for Windows will be released in the
  fall of 1997 for Beta testing at hospitals..
  
  EDNet, is an integrated information management/patient tracking
  system designed specifically for use in emergency departments. 
  It is a collaborative information management tool used in real
  time by clinical and management personnel to collect data and
  provide information at the most efficient points in the patient
  care process.  Demographic information is collected at
  registration either by way of an interface from the main
  hospital information system registration function or directly
  through the EDNet registration process.  Clinical flow
  information is generated and recorded through the tracking
  system and at the time of discharge through use of custom
  configured discharge routines.  Auxiliary data may be added at
  any time.  Information is stored in linked relational databases
  which are completely open and non-proprietary, accessible both
  within the system and through other compatible applications on
  a shared basis.
  
  System Architecture - EDNet is written in Borland C++ v.3.0 for
  DOS with the Borland Paradox engine. The server NLM is written
  in Novell WATCOM C with the advanced NLM development package. 
  All permanent databases and most control files use Paradox 4.5
  which NMC supplies with every EDNet System.  Files are
  compatible with Paradox for Windows.  EDNet is supplied complete
  with all necessary licenses.  EDNet may run as a DOS session
  under Windows 3.1 along with other applications.
  
  Hardware - EDNet Version 4.0 runs on a standard Novell network
  (3.11 or better) with DOS/Windows stations.  NMC recommends a
  Pentium-based server with at least 2 GB of disk storage
  capacity.  The server should be equipped with mirrored drives
  for data security.  Optical disk or tape drives are recommended
  for backup and archive storage.  The server should be supported
  by an Intelligent uninterruptible power supply (UPS).  The
  server must be suitable for use with Novell Network, v.3.1. 
  Network communications hardware (Ethernet, Token Ring, 10BaseT)
  should be certified by Novell.  NMC supplies a fully licensed
  copy of Paradox 4.5 with every EDNet system.
  
  Individual workstations should be 486 or better, with at least
  8MB of RAM.  Workstations must fully support VGA color
  graphics.  Stations should have DOS installed (5.0 or higher). 
  In addition to the appropriate number of end-user workstations,
  NMC recommends a dedicated station for remote access
  communication and a dedicated station for interfaces from the
  hospital-wide information system.  A 9600 baud modem (V.32bis
  protocol) is required.  Carbon Copy (6.0 or 6.1) should be
  installed on the communications station.
  
  Tracking Functions - The EDNet Patient Tracking module replaces
  the grease board, chalk board, magnets and markers with an on-
  screen display, continuously updated and distributed throughout
  the Emergency Department.
  
  The EDNet Patient Tracking module is the heart of the EDNet
  System.  EDNet status screens are distributed throughout the
  emergency department so up-to-the-second information on every
  patient is available at a glance from wherever providers are
  currently working.  There is no need to return to a central
  point to check on the status of orders, determine which patients
  have priority, or discover the types of problems that have just
  been presented at Triage.  Updates from Triage, Registration,
  Order Communications and Discharge are displayed immediately
  throughout the emergency department.
  
  EDNet provides color coded status screens for designated
  emergency department areas such as Triage, Registration,
  Treatment1, Treatment2, Trauma, Pediatrics, Major Medical, Fast
  Track, Holding, and Out in the Hall.  During system configuration
  customers determine how to designate emergency department areas
  on their EDNet System.
  
  Following installation of EDNet, the department becomes quieter
  and less hectic.  Communication among staff is facilitated by
  convenient interaction with the EDNet System and vital
  information is not erased, but instead, recorded.
  
  Time and Motion - EDNet Tracking Module keeps a time stamp
  record of every patient visit.  The system automatically records
  triage time, the time a patient is registered, the time when a
  patient is made ready to be seen, a patient is seen by a
  physician, orders are placed, orders acknowledged, results
  available, the order is cleared and three specific events in the
  discharge process.  Time stamps and all associated data become
  available for various analytical studies.  The goal is an
  accurate picture of emergency department operations, greater
  efficiency, lower waiting times, faster turn around on orders,
  and improved patient care.
  
  Triage Function - EDNet provides the ability to create triage
  procedures which meet requirements for intake and initial
  assessment of ambulatory patients.  This function is separate
  from but fully integrated with the Registration Module. Triage
  may take place either before or after patient registration as
  the patient's medical condition requires.  Data is merged when
  both functions have been completed.  The triage assessment
  function contributes to the EDNet database to improve the
  quality management, research and outcome tracking.
  
  Order Entry Module - Automating the order process while
  maintaining a database offers department managers improved turn
  around times and may significantly impact costs.  EDNet Order
  Entry Module (Optional) allows users to automate the order
  requisition process while simultaneously completing a detailed
  database entry for all departmental orders.  Physicians and
  nurses gain a simple, consistent means of entering order
  information and generating a requisition when appropriate.  Unit
  clerks and technicians receive consistent print or screen-based
  output.
  
  Order status indicators display on the EDNet Tracking Screens,
  and detailed query capability is always available.  Providers
  will know precisely the elapsed time between steps in the order
  process.  EDNet Order Entry software records four time stamps in
  the permanent database:  Order placed, Order acknowledged,
  Results available and Results reviewed.  EDNet Report Writers
  can be used to examine the order process in detail to improve
  turn around times, minimize unnecessary procedures and generate
  a wide variety of routine reports and ad hoc studies.
  
  The EDNet Order Entry Module can be interfaced with laboratory
  or other ancillary departmental systems or with the main
  hospital information system (HIS). The Standard Order Status
  Interface carries automated status notification flags from HIS
  order communications software to the EDNet Tracking Screens. 
  Additional interface capability is offered on a custom basis. 
  All EDNet interfaces are available in HL-7 format.
  
  Prescription Function - EDNet Prescription Writer generates
  printed, signature ready prescriptions at discharge or at any
  time during or after the patient visit.  Warnings and
  instructions relating to prescribed medication may be
  automatically incorporated into patient discharge instructions.
  
  The significance of an integrated prescription writer extends
  far beyond the printing of the prescription itself.  As the
  prescription information is input, database files are
  simultaneously completed.  These database files may be used for
  many important medical and quality management functions such as
  follow up of culture results, utilization summaries, formulary
  management, and analysis of patterns of antibiotic
  sensitivities.
  
  Data tables are established during system configuration. 
  Typically menus list physicians, drug category, formulary,
  quantity, dosage, frequency and special instructions.  Password
  security can be applied.  Charges for each medication may be
  indicated if desired.  Data tables can be updated easily by
  emergency department managers, information services personnel or
  by NMC support staff, using remote access capability.
  
  Charge Entry Module - Recording charges at the point of service
  reduces lost revenues and produces an accurate record which can
  be used to verify payments.
  
  EDNet Charge Entry Module (optional) allows users to enter
  charges at any time during the patient visit.  Charges may also
  be recorded during the discharge process or in a batch mode
  after a visit.  EDNet records charges in a specialized data base
  table that can be configured to generate a flexible report of
  charges for individual patients, all patients or special subsets
  of patients.  Reports can describe specific visits, a daily
  summary of all visits or various date and hourly ranges may be
  selected.  Reports are configured through a selection of menus
  by authorized personnel.  Reports may be viewed on the screen,
  printed or sent to a computer file in HL-7 format for
  transmission to the hospital billing function.
  
  
  Discharge Functions - EDNet aftercare instructions are selected
  from a database of more than 200 instructions and are printed
  individually for each patient.  Instructions are available in
  both English and Spanish.  English instructions may be selected
  for either a fifth grade reading level or a ninth grade reading
  level.
  
  EDNet Discharge Module is extremely flexible.  During
  configuration, various discharge procedures are created to
  handle standard discharge, hospital admission, transfer, workers
  compensation cases, trauma registry and other situations.  A
  comprehensive ICD-9 code database is available.  Various
  database menus may be included to record additional details of
  a patient visit.
  
  Hospitals may wish to accompany the discharge instructions with
  pertinent information about the facility.  Individual
  instructions are stored in an extensive database, and are chosen
  from a menu where they can be catalogued by physician, and
  related to ICD-9 codes.  Free-form instructions are fully
  supported and multiple instructions may be selected. 
  Instruction sets may be imported from other discharge
  instruction generating systems.
  
  Multiple languages are supported by the system.  Any set of
  discharge instructions kept in the database, in up to 26
  languages and variations, may be selected upon discharge.  The
  discharging personnel need not be familiar with that language.
  
  Management Report Writer - The EDNet system can be configured to
  exceed all applicable JCAHO requirements.  Data is collected
  consistently, for all patients, all the time, without the need
  for redundant entry or additional staff.
  
  EDNet contains an open, relational database configured to create
  a variety of standard and recurring reports and available for ad
  hoc inquiries as well.  EDNet will generate and recall logs,
  routinely run statistical and comparative analyses and with the
  recently added ScriptMaster feature, display graphical reports
  to answer management questions without paging through charts and
  medical records.  Virtually any type of report desired can be
  constructed from the standard report writing menus or by using
  the ad hoc report writing capability of the databases.
  
  At the present time, the Company is in the process of completing
  the conversion of the DOS based system to run in the Windows
  environment.  The Company plans that it will be able to start
  "beta testing" of the Windows product later in calendar 1997,
  and that the windows version will be available as an upgrade for
  present customers and new customers during calendar 1998.
  
  However, the Company is concerned that the capital outlay
  required by hospitals for enhanced hardware to run the windows
  product could cause delays in the hospital conversions.  The
  Company has no way of determining the significance of these
  potential delays to its business, if any.  The Company will
  offer its DOS product at an attractive price with upgrades in
  the future to help smooth the timing effects of the hospitals'
  capital requirements.
  
  The Company believes that this will be the first true 32 byte
  system for emergency rooms commercially available.
  
  Respiratory Care Management System 
  ----------------------------------
  The RCMS/X is a computer software and hardware system designed
  specifically for management of respiratory care department
  information in large hospitals.  The system offers automation of
  treatment orders, work assignments, charting, billing and
  management information.  RCMS/X automation recaptures a time
  resource that Tenet customers have used to provide significant
  savings and increased productivity to the labor-intensive
  respiratory care department.  Greater quantity and quality of
  information provided by RCMS/X aids the department in
  maintaining and improving standards of patient care.
  
  Software-  RCMS/X is built around a UNIX operating system and an
  Oracle relational data base.  The Company's software emphasizes
  flexibility, allowing users to define files for specific
  department information such as treatment, therapist and patient
  data.  The program also accommodates a diverse range of
  utilization strategies which allow it to work efficiently in
  sites with a variety of layouts, service offerings and
  management structures.
  
  Hardware-  Respiratory care places tremendous demands on a
  departmental computer system.  Tracking patient care and
  managing department activities requires instant access to a
  tremendous volume of information.  RCMS/X hardware components
  include: (i) a Pentium (100+ MHz) with at least 64 Mb of main
  memory and 2 or more gigabytes of disk storage, (ii) laser
  printer (iii) personal workstations; and (iv) portable
  workstations.  The hardware is designed to respond efficiently 
  to a myriad of information entries and requests. Orders, work
  assignments, charting, billing and management information are
  all accessible, simultaneously, from multiple locations.
  
  Personal Workstations-  Tenet personal computer workstation
  packages offer managers nearly limitless database access and
  analysis capability.  These may be configured with various
  levels of power and capacity to suit individual needs. 
  
  Portable Workstations-  The Tenet Transit Portable Workstation
  is a rugged handheld terminal that displays therapist work
  information and offers bedside charting and data entry
  capability.  Transit was developed in response to customer
  interest in allowing data collection during work performance,
  thereby eliminating much of the time spent in end of shift data
  entry using conventional terminals.  Information collected with
  the Transit is reviewed and printed remotely as needed, and is
  uploaded to the RCMS/X central computer database via RS232
  serial ports.  Transit achieves the critical objective for any
  product in the portable data collection market - cost-
  effectiveness through enhanced productivity.  Transit was
  initially introduced at an industry convention in November 1986,
  and this product has been upgraded several times. 
  
  Order Management-  Typically, respiratory care departments
  operate on a manual treatment ordering system, a system which
  consumes much time and which often fails to serve the
  department's needs.  The high volume of orders makes maintaining
  manual systems extremely burdensome.  Manual systems are also
  subject to losing charges because of poor tracking of related
  order items that accompany many respiratory procedures.  RCMS/X
  provides fast, comprehensive entry and review of respiratory
  care order information.  A fully detailed order may be entered
  in less than a minute.  From that point, the system will screen
  orders for medical appropriateness, automatically link related
  order items and charges, and prepare orders for therapist
  assignment.  RCMS/X offers on-request reports designed to meet
  the department's order documentation and review needs.
  
  Work Assignment-  Efficient assignment of work for each shift
  involves balancing treatment types, priorities and locations
  with various therapist workloads and abilities.  Limited time
  and information make this task difficult.  Typical assignment
  systems exact a toll in therapist efficiency by necessitating
  lengthy inter-shift reporting of work status.  RCMS/X uses order
  information, combined with department staff and treatment
  information, to create detailed therapist work assignments which
  reflect appropriate treatment type, therapist ability and
  workload levels.  These assignments can be quickly reviewed and
  altered by shift supervisors as necessary.  Therapists receive
  printed schedules and/or workload information downloaded to
  Tenet Transit Portable Workstations which they use as guides in
  performing their rounds.  Because RCMS/X treatment charting
  automatically updates the next shift's work assignments,
  intershift reporting time is minimized.
  
  Charting- Manual charting methods present a number of problems
  that can hinder productivity, quality of care, and reimbursement
  for services.  Charting results by hand is time-consuming,
  especially when a patient's chart must be found or is being used
  by other hospital personnel.  Detail, legibility and clarity are
  often compromised during peak work loads, resulting in incorrect
  medical service and audit disallowances.  Paper systems are also
  vulnerable to breaks between procedure charting and the billing
  process.  RCMS/X charting is designed to provide an accurate,
  flexible and efficient system for collecting, reporting and
  tracking treatment charting information.  The Tenet Transit
  Portable Workstation allows fast, accurate bedside charting. 
  Prompts defined for each procedure ask for specific items of
  charting information.  The therapist quickly selects the
  appropriate user-defined responses.  Free text may be easily
  entered when special comments are necessary.  Charting quality
  and presentation are significantly improved by standardization,
  prompting for complete information and clear report printing. 
  At shift's end, collected data is uploaded to the Tenet central
  system.  Transit charting information is used directly by RCMS/X
  to generate patient charts, billing and audit reports.  RCMS/X
  also offers a wide array of management reports for orders,
  treatments, workload, staffing, inventory and productivity.
  
  Billing-  Typical department billing processes are vulnerable to
  breaks in the paper trail started upon treatment completion. 
  Often, therapists spend valuable time laboriously filling out
  charge slips, which may be subsequently lost or left incomplete. 
  Finally, billing must be manually transformed from paper to
  electronic information usable by the hospital's billing system. 
  The results are costly in time, lost charges and in third-party
  audit disallowances.  RCMS/X provides billing information well
  suited for audits, generates reports for evaluation of
  department activities, and reduces lost charges significantly. 
  As soon as a treatment is scheduled, RCMS/X automatically
  records it in the billing files listing all charges, supplies
  and related services.  All treatments charted are automatically
  billed unless acknowledged as missed, with an explanation for
  the missed treatment.  This design ensures that nothing is
  inadvertently left off the patient's bill and provides an
  accurate means of tracking the daily activities of department
  personnel.
  
  Management Information- Respiratory care managers are often
  forced to make critical decisions on department operations
  without the benefit of accurate data.  In departments that
  employ a large therapist staff and bill millions of dollars
  annually, inadequate information limits effective management. 
  Effective management is even more crucial in a field which is
  under tightening regulatory pressure and which is experiencing
  severe shortages of trained therapists.  RCMS/X management
  reports and database access programs provide timely management
  information for a wide spectrum of department activities.  These
  tools assist managers in improving department efficiency,
  planning future operations and responding to rapid changes in
  staffing and service demands while ensuring quality respiratory
  care services.  In addition to a full complement of RCMS/X
  management reports, department managers may scrutinize
  department data utilizing interfaced personal computers running
  spreadsheets and other programs.  The Company's PC Management
  Workstation offers managers unlimited access to the RCMS/X
  database, which describes virtually every activity in the
  department.  The information is always timely because it is
  created by constant input of data from the department's
  activities.
  
  The Company evaluated the feasibility and marketability of
  converting the RCMS/X code to run in a small hospital situation
  utilizing a Windows environment for added flexibility.  This
  project is on hold, and it is doubtful that this project will go
  forward. The Company anticipates that it will lose a substantial
  portion of this line of business.
  
  MARKETING
  
  The Company's sales and marketing were previously conducted by
  the vice-president of Sales. Effective March 21, 1997, this
  individual resigned. This resignation and the disagreement
  with management over marketing methods has significantly
  reduced the number of potential sales leads for the Company.
  
  The Company had concerns about lack of marketing of its DOS
  based Emergency System and the lack of any concentrated effort
  to market RCMS/X. Since March 21, 1997, the Company's Chief
  Operating Officer has been responsible for marketing, in
  addition to his other duties which include ensuring that all
  leads and customers are coordinated in an effort to maximize
  results with a limited budget.
  
  Because the Company has changed its previous marketing methods
  as a result of the mergers and acquisitions, and because of
  the Company's limited financial resources, it may be difficult
  for the Company to properly pursue all sales contacts.
  
  As of October 15, 1997, the Company had sold or leased its RCMS
  product to six hospitals and its RCMS/X product to two hospitals
  at various locations throughout the United States.  Generally,
  the Company's customers purchase the computer hardware from the
  Company, lease the Company's software and enter into a service
  contract for the lease period.  The Company at this time is not
  actively marketing the RCMS/X product, and there is no present
  development program ongoing, however, the Company intends to
  reconsider additional development and marketing if or when
  additional operating funds become available.
  
  As of October 15, 1997, the Company had sold its EDNet product
  to 20 emergency department sites.  These sites have annual
  maintenance contracts for continued support and updates.  It
  is anticipated that a vast majority , if not all of these
  sites, will renew this maintenance on an annual basis.  As of
  June 30, 1997, the Company was in the process of installing
  EDNet at an additional site. The Company is continuing in its
  development of a EDNet32 windows based product and has
  scheduled two beta test sites for installation in November and
  December 1997. However, if sufficient operating funds are not
  received by the Company, the Company may not continue to
  develop, market or support EDNet32.
  
  Consulting services are charged based on negotiated rates.
  
  PRODUCT DEVELOPMENT
  
  The Company's present product development on the RCMS/X is
  under review.  However, the basic premise will be to convert
  the present software to run "single-user" in smaller
  hospitals, allowing the Company to reach a wider market.  This
  project is on hold, and there are no immediate plans to proceed.
 
  PROTECTION OF PROPRIETARY RIGHTS
  
  The Company holds a registered trademark on the name
  "TRANSIT".  In addition, the Company expects to seek certain
  patent, trademark and/or copyright protection in the further
  development of its new products, if appropriate.  The Company
  has entered into non-disclosure agreements with employees,
  consultants and customers to protect its proprietary
  technology.  
  
  CAPITAL STOCK
  
  The Company's Articles of Incorporation authorize the board of
  directors, without shareholder approval, to issue up to
  1,000,000 shares of preferred stock with such rights and
  preferences as the board of directors may determine in its
  discretion.  The board of directors has the authority to issue
  shares of preferred stock having rights prior to the common
  stock with respect to dividends, voting and liquidation.
	 
  
  PRIVATE PLACEMENTS
  ------------------
  During fiscal 1996, the Company entered into arrangements with
  several accredited investors to sell units at $.28 per unit. 
  Each unit consists of one share of common stock, one Class A
  Warrant and two Class B Warrants to purchase additional shares
  of common stock.  The Class A Warrants have an exercise price
  of $.42 per share and the Class B Warrants have an exercise
  price of $.07 per share for a three-year period.  A total of
  900,000 units were sold by the Company resulting in total
  proceeds of $252,000.  The Company also incurred $15,470 of
  offering costs in connection with the arrangements.
  
  
  During February 1996, the Company authorized a private
  placement of its common stock with a minimum of $201,000 and
  a maximum of $600,000 to be raised on a best efforts basis by
  Schneider Securities Inc.  This offering consists of a minimum
  of 670,000 units and a maximum of 2,000,000 units priced at
  $.30 per unit.  Each unit consists of (i) one share of common
  stock and (ii) a warrant to purchase an additional share at
  $.25 per share if exercised within one year of the placement
  closing and $.42 afterward until the termination date three
  years after the placement closing.  
  
  As of June 30, 1996, 688,833 units had been sold resulting in
  proceeds to the Company of $185,851, net of offering expenses
  of $20,799.  No additional amounts beyond the initial closing
  were received and the Private Placement Offering expired.
  
  As of June 30, 1996, the Company had outstanding bridge
  financing notes of $40,992 including accrued interest at 12
  percent per annum.  Subsequent to June 30,1996, the $40,992
  was repaid.  
  
  WARRANT CONVERSION
  
  On August 30, 1996, the board of directors authorized a
  reduction of the exercise price of the Company's Class B
  warrants to $.05 from $.07 per share, contingent upon
  conversion by September 30, 1996.  A total of 1,621,424
  warrants were exercised, leaving 178,575 Class B warrants
  outstanding.  Proceeds to the Company totaled $81,071, of
  which $10,643 was paid through the conversion of existing debt
  owing to the warrant holder.
  
  EMPLOYEES
  
  At September 30, 1997, the Company employed six full-time
  employees, two part-time employees and several independent
  service contractors.  The number of employees and their
  responsibilities are as follows:  two professional, three
  technical,  one full-time clerical.
  
  
  COMPETITION
  
  The health care information systems industry is highly
  competitive.  There are many companies of considerable size
  and expertise that could enter the Company's market for
  respiratory care and emergency management systems.  The
  Company is aware of competing respiratory care management
  systems and emergency room information systems.  
  
  The Company believes that it is imperative that it be
  competitive in service and product performance.  The Company
  stresses customer service wherever the product is placed.
  
  With the enhancements to the capabilities of networks, the
  Company  has determined it must adopt new technology in order
  to continue to compete effectively in the large hospital
  marketplace.  As discussed in Product Development, the Company
  is further developing and converting its products.  This
  effort is expected to enable the Company to compete in this
  marketplace.  
  
  
  The Company's RCMS/X system utilizes a UNIX operating system,
  and the Oracle relational data base.  This allows the system
  to operate on many platforms, and to be upgraded to take
  advantage of new technology made available to the marketplace. 
  The Company is developing its Windows version of the
  emergency room system to run under Windows95 or Windows NT.
  
  ITEM 2: PROPERTIES
  
  The Company's headquarters and operational facilities are
  located in Salt Lake City, Utah.  The Company leases
  approximately 3,490 square feet of office space at a cost
  $3,692 per month.  This is pursuant to a lease which expires
  on November 15, 1998.
  
  
  ITEM 3: LEGAL PROCEEDINGS
  
  The Company is not a party to any material pending legal
  proceedings, nor to the knowledge of management, is any
  litigation threatened against the Company.
  
  
  ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
    None
  
  
   
  PART II
  
  ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
	   STOCKHOLDER MATTERS
  
  The Company's Common Stock began trading in the over-the-
  counter market in May 1989.  Prices were quoted on the
  National Association of Security Dealers Automated Quotation
  System ("NASDAQ") under the symbol "TISI" until November 1,
  1991 at which time the Company was suspended from NASDAQ for
  untimely filings and inadequate financial resources.  On
  September 3, 1996, the symbol was changed to "TISV."
  
  On November 1, 1991, the reported closing bid and asked prices
  of the Company's Common Stock were $.03125 and $.0622,
  respectively.  Since November 1, 1991, there has been no
  reported trading market for the Company's Common Stock.  The
  number of shareholders of record for the Company's Common
  Stock as of September 30, 1997 was 325 which includes
  depositories and broker/dealers who hold shares of Common
  Stock in "nominee" or "street names".  
  
  
  
  ITEM 6: SELECTED FINANCIAL DATA
  
  The selected financial data as of and for each of the fiscal
  years ended June 30, 1993 through 1996 has been derived from
  the Company's financial statements which have been audited by
  Arthur Andersen, LLP, independent public accountants. 
  Financial Data for the fiscal year ended June 30, 1997 has
  been derived from the Company's financial statements which
  have been audited by Hansen Barnett & Maxwell, independent
  public accountants. The following selected financial data
  should be read in conjunction with the financial statements
  and accompanying notes appearing elsewhere in this Form 10-
  KSB.
  

Statement of Operations Data
				  Year Ended June 30,               
			 ---------------------------------------
			   1997    1996     1995    1994    1993
			 -------  -------  ------  ------  ------       
			 (In thousands, except per share amounts)

Revenues                 $  757   $1,054   $ 369   $ 392    $ 560
Loss from operations       (431)    (571)   (319)   (356)    (374)
Net loss                   (435)  (1,132)   (335)   (375)    (467)
Net loss per
 common share              (.03)    (.11)   (.07)   (.09)    (.14)



Balance Sheet Data
				    As of June 30,             
			 ---------------------------------------
			   1997    1996    1995    1994    1993
			 -------  ------  ------  ------  ------
				     (In thousands)
Working capital
  (deficit)              $ (470)  $ (319)  $ (60)  $ 164   $ 636
Total assets                 95      573     406     570     988
Long-term obligations       -          4      11     195     203
Stockholders' equity
  (deficit)                (452)    (106)    172     180     550

  
  ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
	   CONDITION AND RESULTS OF OPERATIONS
  
  General
  
  The Company was engaged in servicing specialized data processing
  information products used in the respiratory services departments
  of larger hospitals. During the fiscal year 1996, the Company
  acquired certain assets of the International HealthCare Consulting
  Group ("HCG") and acquired National Microcomputer Corporation
  ("NMC").
  
  As a result of the Company's decision to focus its limited time and
  monetary resources towards the development of an Emergency
  Department Windows product, the EDNet has become the Company's
  basic line.  Therefore, the Company's discussion to this resource
  allocation has resulted in the Company's lack of marketing and/or
  product development of its Respiratory Product.
  
  The Company's efforts to sell the Emergency DOS product have
  languished, however, and the development of the EDNet 32 system is
  behind management operating projections.
  
  Two members of the Board, Dr. Richard Gwinn and Dr. Robert Smith
  resigned as directors of the Company effective November 1, 1996 and
  December 12, 1996, respectively.  Dr. Gwinn resigned as an employee
  November 1, 1996.  However, both have continued to render services
  on an hourly basis for continued support of existing customers, as
  well as review and critique of the EDNet 32 product.
  
  Effective March 21, 1997, the Vice president of Marketing resigned
  on a mutually accepted basis.  This resignation and the
  disagreement with management over marketing methods has
  significantly reduced the number of potential sales leads for the
  Company.
  
  The net result of the resignations above is a dramatic decrease in
  consulting revenues of the Company as the efforts of those involved
  with consulting have been more focused on EDNet 32 than before. 
  Also, pending consulting contracts have not materialized.  The
  Company is concerned about the reduced level of consulting revenues
  and is considering marketing alternatives.
  
  As of June 30, 1997, the Company had sold or leased its RCMS product
  to six hospitals and its RCMS/X product to two hospitals at various
  locations throughout the United States.  Generally, the Company's
  customers purchase the computer hardware from the Company, lease the
  Company's software and enter into a service contract for the lease
  period.  The Company at this time is not actively marketing the
  RCMS/X product, and there is no present development program ongoing.
  However, the Company intends to reconsider additional development and
  marketing if or when additional operating funds become available.
  
  As of June 30, 1997, the Company had sold its EDNet product to 20
  emergency department sites.  These sites have annual maintenance
  contracts for continued support and updates.  It is anticipated
  that a vast majority , if not all of these sites, will renew this
  maintenance on an annual basis.  As of June 30, 1997, the Company
  was in the process of installing EDNet at two additional sites. 
  The Company is continuing in its development of the EDNet32 windows
  based product and has scheduled two beta test sites for
  installation in November and December 1997.  
  
  Based upon present operations, the Board of Directors authorized
  its Chairman to investigate the possibility of selling some or all
  of the Company's assets.  As of the date of this report, the
  Company has not signed any definitive agreements. Although all
  negotiations have not been terminated, it is the opinion of
  management that unless different opportunities evolve, the
  interests of shareholders will be best served by continuing with
  the present plan to launch EDNet 32.  There can be no assurances
  such efforts will be successful, given the present financial
  condition of the Company.
  
  The Company, however, intends to keep its options open, including
  sale or licensing of products, debt restructuring or other options
  which benefit the shareholder.
  
  Results of Operations
  
  Fiscal 1997 Compared with Fiscal 1996
  
  During fiscal year 1997, the Company had revenues of $757,257 which
  represented a decrease of $297,196 (28%) from $1,054,453 for the
  prior fiscal year. The following table presents the components of
  revenues for fiscal 1997 and 1996.
  
  <TABLE>
  <CAPTION>
                             				  ACTUAL                 
 <S>             <C>           <C>          <C>          <C>
  REVENUES            FY 97         FY 96    Increase      Percent
							                                      (Decrease)    Increase
					                                                    (Decrease)
  -----------------------------------------------------------------
  EDNet Systems   $  359,638   $  397,103   $ (37,465)     (10%)
   
  RCMS Systems       309,395      362,774     (53,379)     (15%)
  
  Consulting          88,224      294,576    (206,352)     (70%)
  
  Total           $  757,257   $1,054,453   $(297,196)     (28%)
  </TABLE>

  The following table details cost of revenue by product, comparing the 
  prior fiscal year as shown on financials.
  
  <TABLE>
  <S>                       <C>           <C>        <C>
                         				1997          1996       Increase
                                        						        (Decrease)
			                           ---------    ---------  -----------
  EDNet System                $  86,745    $  89,835  $   (3,090)
  
  RCMS Systems                  117,240      209,539     (92,299)
  
  Consulting                    208,275      194,101      14,174
  
  Amortization & Writedown
  of Deferred Software Costs    180,637       66,480     114,157
		                     	      ---------    ---------    --------                
  
  Total                       $ 592,897    $ 559,955    $ 32,942
</TABLE>

  Cost of revenues increased by $32,942 (6%) to $592,897 for fiscal
  year 1997 compared with $559,955 for the previous fiscal year. 
  Cost of revenues related to the EDNet System for fiscal year 1997
  were $86,745, with a gross margin of 76%.  This compares to cost of
  revenues of $ 89,835 with a gross margin of 77% for the prior
  twelve month period. Respiratory cost of revenues declined to
  $117,240 for fiscal year 1997 compared with $209,539 for the prior
  fiscal year as a result of a smaller installed base of systems to
  be maintained with a gross margin or 62%. This compares to Cost of
  revenues of $209,539 with a gross margin of 42% for the prior
  twelve month period..  Amortization and write-downs of deferred
  software costs increased by $114,157, or 172% to $180,637 for
  fiscal year 1997 compared with $66,480 for the previous fiscal
  year.  This is a result of the Company's review of remaining
  economic value and a writedown of its investment of RCMS/X. 
  Consulting cost increased by 7% to $208,275 for fiscal year 1997
  from $194,101 for the fiscal year 1996.
  
  Selling, general and administrative expenses decreased by $413,720,
  or 51%, to $402,335 for fiscal year 1997 compared with $816,055 for
  the previous fiscal year. The following expenses decreased from the
  prior year; marketing $41,000 sales travel $48,000, general and
  administrative salaries and employee benefit cost $71,000, building
  lease, telephone, and outside services by $58,000, and legal and
  accounting by $32,000.
  
  Software development expenses decreased by $59,591 or 24%, to
  $193,409 for fiscal year 1997 from $249,000 for fiscal 1996. This
  is the result of fewer personnel assigned to the Emergency
  Department Windows product, and use of outside contractors.
  
  Interest expense decreased to $3,785 for fiscal year 1997 compared
  with $14,929 for fiscal year 1996.  This is the result of lower
  interest rates and less interest bearing debt.
  
  The Company had a write-down of excess purchase price of $546,884
  for fiscal year 1996.  There was no similar write-down during the
  corresponding period of the prior fiscal year.  This write-down was
  the result of the fact that on September 5, 1995, the Company
  entered into an agreement to acquire certain assets consisting
  primarily of software products and intangible assets of the HCG
  located in Salt Lake City, Utah.  HCG provides consulting services
  and information systems to various hospital departments.  As
  consideration, the Company issued 50,000 shares of its common stock
  valued at $7,000 and assumed $30,000 of debt.  Due to the
  immaterial amount of tangible assets acquired and contingencies
  related to the realizability of the amount paid for the intangible
  assets, the entire purchase price of $37,000 was expensed during
  fiscal year 1996.
  
  As a result of the above factors, the net loss from operations
  decreased to $431,384 for fiscal year 1997 compared with a loss of
  $570,557 for fiscal year 1996.
  
  Net loss decreased to $435,169, or $.03 loss per share for fiscal
  year 1997 compared with loss of $1,132,370, or $.11 loss per share
  for fiscal year 1996.
  
  
  Fiscal 1996 Compared with Fiscal 1995
  -------------------------------------
  During fiscal year 1996, the Company had revenues of $1,054,453
  which represented an increase of $685,407 (186%) from $369,046 for
  the prior fiscal year.  The following table presents the actual
  components of revenues for fiscal 1996 and 1995 and the proforma
  revenues as if the HCG and NMC acquisitions had occurred at the
  beginning of fiscal 1995.  The proforma results are for comparative
  purposes only and do not purport to be indicative of what would
  have occurred had the acquisitions been made at the beginning of
  fiscal 1995.
  
  <TABLE>
  <CAPTION>
			     ACTUAL                         PROFORMA  
  <S>           <C>        <C>       <C>         <C>        <C>        <C>
  REVENUES       FY 96      FY 95    Increase     FY96      FY95      Increase   
                           				      (Decrease)                        (Decrease)
              		 ---------  ---------  ---------  ----------  ---------  ---------
  EDNet Systems  $ 397,103  $    -0-   $ 397,103  $  469,652  $ 326,473  $ 143,179
 
  RCMS Systems     362,774    369,046     (6,272)    362,774    369,046     (6,272)
  
  Consulting       294,576       -0-     294,576     308,366    212,570     95,796
	              	----------  ---------  ---------  ----------  ---------  ---------                                            
  Total         $1,054,453  $ 369,046  $ 685,407  $1,140,792  $ 908,089  $ 232,703
							      
  </TABLE>

  Total sales increased by $685,996 which was due to the Company's
  acquisition of HCG, with revenues of $294,576, and the merger with
  NMC, with revenues related to the EDNet System of $397,103. 
  Revenues related to the RCMS Systems in the aggregate declined
  slightly by $6,272.  On a proforma basis, revenues related to the
  EDNet System and Consulting revenues increased a toal of $232,703
  as a result of increased sales of the emergency system and an
  increase in consulting contracts.
  
  The following table details cost of revenue by product, comparing
  the prior fiscal year as shown on financials.
  
  <TABLE>
  <S>                 <C>         <C>         <C>
			                       1996       1995      Increase
					                                         (Decrease)
              		       ---------   ---------   ---------
  EDNet System         $  89,835   $   -0-     $  89,835
  
  RCMS Systems           209,539     234,970     (25,431)
  
  Consulting             194,101       -0-       194,101
  
  Amortization &                               
  Writedown if deferred              
  Software Costs          66,480      34,920      31,560  
              		       ---------   ---------   ---------                            
  Total                $ 559,955   $ 269,890   $ 290,065
  </TABLE>

  Cost of revenues increased by $290,065 (107%) to $559,955 for
  fiscal year 1996 compared with $269,890 for the previous fiscal
  year.  Cost of revenues related to the EDNet System for fiscal year
  1996 were $89,835, with a gross margin of 77%.  This compares to
  cost of revenues of $143,016 with a gross margin of 56% for the
  prior twelve month period.  This increase in margin results from
  economics of the merger,  and consolidation of software and
  support, as well as increased revenues.
  
  Respiratory cost of revenues declined to $209,539 for fiscal year
  1996 compared with $234,970 for the prior fiscal year as a result
  of a smaller installed base of systems to be maintained. 
  Consulting margins were 34% for fiscal year 1996.  As no cost of
  revenues amounts are available to the Company for the prior year no
  comparison between the years is made.  Amortization and write-downs
  of deferred software costs increased by $31,560, or 90% to $66,480
  for fiscal year 1996 compared with $34,920 for the previous fiscal
  year.  This is a result of the Company's review of remaining
  economic value and a writedown of its investment in deferred
  software of RCMS/X .
  
  
  Selling, general and administrative expenses increased by $492,102,
  or 152%, to $816,055 for fiscal year 1996 compared with $323,953
  for the previous fiscal year.  This is a result of increased costs
  of marketing of $272,272 resulting from increased sales travel,
  commissions, trade shows and associated costs of the combined
  entities.  General and Administrative salaries increased by
  $40,720, employee benefit cost by $72,546, travel increased by
  $10,466, building lease increased by $18,070, telephone increased
  by $8,484, outside services increased by $30,857, legal and
  accounting increased by $32,613.  Other miscellaneous cost
  increased by $6,074.
  
  Software development expenses increased by $155,207 or 165%, to
  $249,000 for fiscal year 1996 from $93,793 for fiscal 1995.  This
  is the result of increased personnel assigned to the Emergency
  Department Windows product, use of outside contractors and no
  capitalization of software costs.
  
  Interest expense decreased to $14,929 for fiscal year 1996 compared
  with $16,834 for fiscal year 1995.  This is the result of lower
  interest rates and less interest bearing debt.
  
  The Company had a write-down of excess purchase price of $546,884
  for fiscal year 1996.  There was no similar write-down during the
  corresponding period of the prior fiscal year.  This write-down was
  the result of the fact that on September 5, 1995, the Company
  entered into an agreement to acquire certain assets consisting
  primarily of software products and intangible assets of the HCG
  located in Salt Lake City, Utah.  HCG provides consulting services
  and information systems to various hospital departments.  As
  consideration, the Company issued 50,000 shares of its common stock
  valued at $7,000 and assumed $30,000 of debt.  Due to the
  immaterial amount of tangible assets acquired and contingencies
  related to the realizability of the amount paid for the intangible
  assets, the entire purchase price of $37,000 was expensed during
  fiscal year 1996.
  
  Effective September 29, 1995, the Company and NMC, with locations
  in San Diego and San Jose, California, approved a Plan of
  Reorganization in which NMC was merged with and into Tenet Merger
  Subsidiary, a wholly-owned subsidiary of the Company incorporated
  for the purpose of effecting the merger.  NMC develops and markets
  information systems to hospital emergency departments.  Three
  million shares of the Company's common stock were exchanged for all
  outstanding stock of NMC.  The three million shares were valued at
  $420,000.  The merger has been accounted for as a purchase with the
  results of operations of NMC being combined with those of the
  Company from the date of acquisition.  The total purchase price was
  allocated to the assets and liabilities acquired or assumed as
  follows:
  
  Assets acquired at estimated fair value:
       Cash                           $   19,553
       Accounts receivable, net           88,946
       Other current assets               16,665
       Furniture and equipment             2,660
       Deferred software costs            47,913
                            				      ----------
                                   					 175,737
  
  Liabilities assumed:
       Accounts payable                  (19,143)
       Accrued liabilities                (4,284)
       Deferred revenue                 (215,194)
		                            		      ----------         
                                   					(238,621)
                            				      ----------
  Legal and accounting fees directly
    related to the acquisition           (27,000)
                            				      ----------
  Value of common stock issued          (420,000)
                            				      ----------
  Excess purchase price               $  509,884
                            				      ==========

  Due to NMC's lack of historical profitability and contingencies
  related to the future realizability of the excess purchase price,
  the Company expensed the entire $509,884 during the fiscal year
  1996.
  
  Management believes that the amount of common stock issued for NMC
  and HCG was fair and reasonable based on expected synergies to be
  achieved by combining NMC with the Company.  In addition, NMC
  brings a customer base of 24 sites and a backlog of four
  installations.
  
  As a result of the above factors, the net loss from operations
  increased to $570,557 for fiscal year 1996 compared with a loss of
  $318,590 for fiscal year 1995.
  
  Net loss increased to $1,132,370, or $.11 loss per share for fiscal
  year 1996 compared with loss of $335,424, or $.07 loss per share
  for fiscal year 1995.
  
  
  LIQUIDITY AND CAPITAL RESOURCES
  -------------------------------
  The Company has suffered recurring losses from operations since
  fiscal year 1989, and as of June 30, 1997 had an accumulated deficit
  of $5,106,538.  The operating losses are due in part to significant
  decreases in revenues in fiscal years 1997, 1996, 1995, 1994 and 1993
  as the Company redeveloped and updated its respiratory product and
  also as a result of the Company's expensing $546,884 of excess
  purchase price related to the  NMC and HCG acquisitions.  Management
  believes that those arrangements were fair, and represent a valuable
  addition to the Company.
  
  
  During the fiscal year ended June 30, 1996, the Company signed a
  letter of intent to raise an additional minimum of $201,000 in equity
  funding and is proceeding with a private placement of its common
  stock with a minimum of $201,000 and a maximum of $600,000 to be
  raised on a best efforts basis.  This offering consists of a
  minimum of 670,000 units and a maximum of 2,000,000 units priced at
  $.30 per unit.  Each unit consists of (i) one share of common stock
  and (ii) a warrant to purchase an additional share at $.25 per
  share if exercised within one year of the placement closing and
  $.42 afterward until the termination date three years after the
  placement closing.  This offering closed on June 28, 1996 raising
  for the Company a net amount of $185,851.
  
  The Company also accelerated conversion of its Class B warrants by
  offering a discount to $.05 from $.07 if exercised prior to September
  30, 1996.  A total of 1,621,424 warrants were exercised, creating
  $70,429 in cash and $10,643 in debt reduction.
  
  At June 30, 1996, the Company had $40,000 in bridge financing. This
  was repaid from the Private Placement Offering.
  
  On September 29, 1995, the Company and NMC approved the terms of an
  Agreement and Plan of Reorganization (the "Agreement") pursuant to
  which NMC was merged with and into Tenet Merger Subsidiary, Inc., a
  wholly owned subsidiary of the Company incorporated for the purpose
  of effecting the merger.  NMC develops and markets an integrated
  information management/patient tracking system designed specifically
  for use in emergency departments.
 
  The Company's cash position decreased by $184,593 during the fiscal
  year ended June 30, 1997 to $27,338 as compared to $209,589 as of
  June 30, 1996.  The Company had a working capital deficit of $469,775
  as of June 30, 1997 as compared with a deficit of $318,884 as of June
  30, 1996.  Operating activities used $210,540 for the fiscal year
  ended June 30, 1997 as compared with using $219,835 for the
  corresponding period of the previous year.  The principal sources of
  cash have been (i) proceeds from conversion of warrants of $70,428,
  and the $185,852 net raised in the above mentioned private placement. 
  There were debt payments of $42,139 during the fiscal year ended
  June 30, 1997 as compared with $6,273 for the corresponding period of
  the previous year.
  
  While a significant portion of the current liabilities, approximately
  $160,000, is owed to present officers and/or directors, there can be
  no assurances that these officers/directors will not seek payment in
  the near term.  In addition, it appears that certain directors and/or
  officers intend to expand their amounts due with claims of penalties
  and for interest, the viability of such is contested by the Company.
  
  The Company has contingency plans should cash flows decrease to a
  significant degree.  At the present time, the Company believes that
  these contingency plans, which include slowing the continued
  development of the new system, will not have to be implemented
  during fiscal year 1998. Continued installations require financing
  arrangements, which the Company hopes can be obtained.
  
  The Company is also considering the potential sale of some or all
  of its product lines in the event development is not timely for the
  EDNet32 system, sales of systems do not increase and that the
  Company has sufficient working capital.
  
  The Company is continuing in its development of EDNet32 windows
  based product and is hopeful of a product launch in the later
  part of calendar 1997. Based upon present operations, the Board
  of Directors authorized its Chairman to investigate the
  possibility of selling some or all of the Company's assets. As
  of the date of this report, the Company has not signed any
  definitive agreements. Although all negotiations have not been
  terminated, it is the opinion of management that unless
  different opportunities evolve, the interest of the shareholders 
  will be best served by continuing with the present plan to launch
  EDNet 32.  There can be no assurances such efforts will be
  successful, given the present financial condition of the
  Company.
  
  Inflation has not had a significant impact on the Company's
  operations.
  
  
  
  ITEM 8:   FINANCIAL STATEMENTS
  
	  Index to Financial Statements
  
  
  Reports of Independent Certified Public Accountants           F-1
  
  
  Consolidated Balance Sheets as of June 30, 1997 and 1996      F-3
  
  Consolidated Statements of Operations for the Years Ended 
    June 30, 1997, 1996 and 1995                                F-5
  
  Consolidated Statements of Shareholders' Deficit for the  
    Years Ended June 30, 1997, 1996 and 1995                    F-6
  
  Consolidated Statements of Cash Flows for the Years Ended 
    June 30, 1997, 1996 and 1995                                F-7
  
  Notes to Consolidated Financial Statements                    F-9
  


     


HANSEN, BARNETT & MAXWELL     
  A Professional Corporation
 CERTIFIED PUBLIC ACCOUNTANTS

					      (801) 532-2200
Member of AICPA Division of Firms             Fax (801) 532-7944
       Member of SECPS                        345 East 300 South, Suite 200
Member of Summit International Associates     Salt Lake City, Utah 84111-2693




	  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
Tenet Information Services, Inc.


We have audited the accompanying consolidated balance sheet of Tenet 
Information Services, Inc. (a Utah corporation) and subsidiary as of 
June 30, 1997, and the related consolidated statements of operations, 
shareholders' deficit and cash flows for the year then ended. These 
financial statements are the responsibility of the Company's management. 
Our responsibility is to express an opinion on these financial statements 
based on our audit.

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit 
to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a 
test basis, evidence supporting the amounts and disclosures in the 
financial statements. An audit also includes assessing the accounting 
principles used and significant estimates made by management, as well 
as evaluating the overall financial statement presentation. We believe 
that our audit provides a reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Tenet 
Information Services, Inc. and subsidiary as of June 30, 1997, and the 
results of their operations and their cash flows for the year then ended 
in conformity with generally accepted accounting principles. 

The accompanying financial statements have been prepared assuming that 
the Company will continue as a going concern. As discussed in Note 1 to 
the financial statements, the Company has experienced recurring losses 
from operations, has a working capital deficit and a net capital deficiency 
which raise substantial doubt about its ability to continue as a going 
concern. Management's plans regarding those matters are also described 
in Note 1. The financial statements do not include any adjustments that 
might result from the outcome of this uncertainty. 



								      
Salt Lake City, Utah
October 2, 1997



			ARTHUR ANDERSEN LLP



	      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Tenet Information Services, Inc.:

We have audited the accompanying consolidated balance sheet of Tenet
Information Services, Inc. (a Utah corporation) and subsidiary as of
June 30, 1996, and the related consolidated statements of operations,
shareholders' deficit and cash flows for each of the two years in the 
period ended June 30, 1996. These financial statements are the 
responsibility of the Company's management. Our responsibility is to 
express an opinion on these financial statements based o n our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation. We believe that our audits 
provide a reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Tenet
Information Services, Inc. and subsidiary as of June 30, 1996, and the 
results of their operations and their cash flows for each of the two 
years in the period ended june 30, 1996 in conformity with generally 
accepted accounting principles. 

The accompanying financial statements have been prepared assuming that 
the Company will continue as a going concern. As discussed in Note 1, 
the Company has experienced recurring losses from operations, has a 
working capital deficit and a anet capital deficiency that raise
substantial doubt about its ability to continue as a going concern. 
Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments 
relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might 
result should the Company be unable to continue as a going concern.



ARTHUR ANDERSEN LLP

Salt Lake City, Utah
    September 5, 1996

 




	   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
		     CONSOLIDATED BALANCE SHEETS
			JUNE 30, 1997 AND 1996



				ASSETS

					                                          1997        1996
                                   					    ---------   ---------
Current Assets
   Cash                                     $  27,338   $ 209,589
   Accounts receivable, net of allowance 
    for doubtful accounts of $7,500 at 
    June 30, 1997 and 1996                     49,994     114,495
   Contracts receivable                           -        27,939       
   Inventories                                    -         5,000
                                   					    ---------   ---------
       Total Current Assets                    77,332     357,023
                                   					    ---------   ---------
Capitalized Software Costs, Net                   -       180,637
                                   					    ---------   ---------
Furniture, Fixtures and Equipment             119,302     119,302
   Less: Accumulated depreciation 
    and amortization                         (103,233)    (84,945)
                                   					    ---------   ---------
	                                   				       16,069      34,357
                                   					    ---------   ---------

Other Assets, Net                               1,425       1,425
                                   					    ---------   ---------
Total Assets                                $  94,826   $ 573,442               
                                   					    =========   =========
							     
The accompanying notes are an integral part of these consolidated
financial statements.


 
	   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
	       CONSOLIDATED BALANCE SHEETS (CONTINUED)
          			JUNE 30, 1997 AND 1996



		LIABILITIES AND SHAREHOLDERS' DEFICIT

					                                          1997        1996
                                   					    ---------   ---------
Current Liabilities
   Notes payable                            $  28,090   $  66,998
   Current portion of related-party
      long-term debt                           10,889       7,046
   Accounts payable                           127,813     206,971
   Payable to officers/shareholders           159,810     117,868
   Accrued salaries and benefits               81,883     140,633
   Deferred revenue                           131,412     128,891
   Accrued interest                             7,210       7,500
                                   					    ---------   ---------       
       Total Current Liabilities              547,107     675,907
                                   					    ---------   ---------
Related-Party Long-Term Debt, 
   net of current portion                        -          3,843
                                   					    ---------   ---------
Commitments and Contingencies - 
   Notes 1, 3 and 5

Shareholders' Deficit
   Preferred stock, $0.01 par value; 
    1,000,000 shares authorized, no 
    shares issued                                -          -
   Common stock, $.001 par value; 
    100,000,000 shares authorized, 
    13,018,505 and 11,397,081 
    shares issued, respectively                13,019      11,397
   Additional paid-in capital               4,611,517   4,418,568
   Warrants outstanding                        29,721     143,221
   Accumulated deficit                     (5,106,538) (4,671,369)
   Deferred compensation                         -         (8,125)
                                   					   ----------   ---------
       Total Shareholders' Deficit           (452,281)   (106,308)
                                   					   ----------   ---------
Total Liabilities and Shareholders'    
  Deficit                                  $   94,826   $ 573,442       
                                   					   ==========   =========



	     TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
		  CONSOLIDATED STATEMENTS OF OPERATIONS
	    FOR THE YEARS ENDED JUNE 30, 1997, 1996 AND 1995


                                   					1997         1996         1995
                           				     -----------  -----------  ----------
Revenues
  Software license fees and 
    maintenance                     $   669,033  $   688,751  $  325,435
  Sales of computer hardware 
     and components                        -          71,126      43,611
  Consulting services                    88,224      294,576        -  
                            				    -----------  -----------  ----------
     Total Revenues                     757,257    1,054,453     369,046 
                            				    -----------  -----------  ----------
Costs and Expenses
  Cost of revenues                 
    Software license fees 
     and maintenance                    203,985      242,056     141,544
    Amortization and write-downs 
     of deferred software costs         180,637       66,480      34,920
    Computer hardware and 
     components                            -          57,318      93,426
     Consulting services                208,275      194,101        -  
                            				    -----------  -----------  ----------
     Total Cost of Revenues             592,897      559,955     269,890 
                            				    -----------  -----------  ----------
Gross Profit                            164,360      494,498      99,156
                            				    -----------  -----------  ----------
Operating Expenses
  Selling, general and 
   administrative                       402,335      816,055     323,953
  Software development                  193,409      249,000      93,793 
                            				    -----------  -----------  ----------
     Total Operating Expenses           595,744    1,065,055     417,746
                            				    -----------  -----------  ----------
Loss From Operations                   (431,384)    (570,557)   (318,590)

Write-Off of Excess Purchase 
 Price                                     -        (546,884)       -         

Interest Expense                         (3,785)     (14,929)    (16,834)
                            				    -----------  -----------  ----------
Net Loss                            $  (435,169) $(1,132,370) $ (335,424)
                            				    ===========  ===========  ==========

Net Loss Per Common Share           $     (0.03) $     (0.11) $    (0.07)
                            				    ===========  ===========  ==========
Weighted Average Number of
   Common Shares Outstanding         12,747,444    9,850,367   5,123,662
                            				    ===========  ===========  ==========

The accompanying notes are an integral part of these consolidated
financial statements.




			 TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
			 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
			 FOR THE YEARS ENDED JUNE 30, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
			                Preferred Stock      Common Stock                          
              		  -----------------  ------------------ Additional                          Treasury   Deferred
              		  Shares               Shares             Paid-In    Warrants  Accumulated    Common     Comp-
	              	  Issued    Amount     Issued     Amount    Capital  Outstanding   Deficit    Stock    ensation    Total
              		  -------  ---------  ----------  -------  ----------  -------  -----------  --------  ---------  ----------      
<S>              <C>     <C>         <C>         <C>      <C>         <C>      <C>          <C>       <C>        <C> 
BALANCE, 
 June 30, 1994    70,177  $ 701,768   4,328,184  $ 4,328  $2,725,064  $   -    $(3,203,575) $(48,000) $   -       $  179,585
			       
Issuance of common 
 stock in lieu of
 cash compensation   -         -        100,000      100      13,900      -          -           -         -          14,000
Conversion of 
 related-party 
 debt to common 
 stock              -          -      1,072,317    1,072     298,573      -          -           -         -         299,645
Conversion of 
 Series A preferred 
 stock to common 
 stock           (66,485)  (664,848)  1,189,624    1,190     663,658      -          -           -         -           -      
Conversion of 
 Series B 
 preferred stock 
 to common stock  (3,692)   (36,920)    132,123      132      36,788      -            -           -         -         -   
Issuance of stock
 options to 
 employees          -          -           -        -         27,000      -          -           -      (13,000)     14,000
Net loss            -          -           -        -           -         -       (335,424)      -         -       (335,424)
              		 -------  --------   ----------  -------  ----------  -------  -----------  --------  ---------  ---------- 
BALANCE, 
 June 30, 1995      -          -      6,822,248    6,822   3,764,983      -     (3,538,999)  (48,000)   (13,000)    171,806
			       
Issuance of common 
 stock for cash,      
 net of offering 
 costs of $16,269   -          -      1,588,833    1,589     277,571  143,221        -          -          -        422,381
Issuance of common 
 stock in 
 acquisitions       -          -      3,050,000   3,0504     423,950      -          -          -          -        427,000
Retirement of 
 treasury shares    -          -        (64,000)     (64)    (47,936)     -          -        48,000       -           -
Amortization of
 deferred compen-
 sation             -          -           -        -            -        -          -          -         4,875       4,875
Net loss            -          -           -        -            -        -     (1,132,370)     -          -     (1,132,370)
              		 -------  ---------  ----------  -------  ----------  -------  -----------  --------  ---------  ---------- 
BALANCE, 
 June 30, 1996      -          -     11,397,081   11,397   4,418,568   43,221   (4,671,369)     -        (8,125)   (106,308)
			       
Conversion of 
 warrants to common        
 stock at discounted 
 rate               -          -     1,621,424     1,622     192,949 (113,500)       -          -          -         81,071
Amortization of 
 deferred compen-
 sation             -          -          -         -           -        -           -          -         8,125       8,125
Net loss            -          -          -         -           -        -       (435,169)      -          -       (435,169)
              		 -------  ---------  ----------  -------  ----------  -------  -----------  --------  ---------  ----------
BALANCE, 
 June 30, 1997      -     $    -     13,018,505  $13,019  $4,611,517  $29,721  $(5,106,538) $   -     $   -      $ (452,281)
              		 =======  =========  ==========  =======  ==========  =======  ===========  ========  =========  ==========
      
<FN>
The accompanying notes are an integral part of these consolidated 
financial statements.
</FN>
</TABLE>



	      TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
     		   CONSOLIDATED STATEMENTS OF CASH FLOWS
	     FOR THE YEARS ENDED JUNE 30, 1997, 1996 AND 1995


		  
                                  					1997        1996        1995
                           				    -----------  -----------  ----------
Cash Flows From Operating 
Activities
  Net loss                          $  (435,169) $(1,132,370) $ (335,424)
  Adjustments to reconcile net 
   loss to net cash provided by 
   (used in) operating activities:
     Write-off of excess purchase 
      price                                -         546,884        -    
     Depreciation and amortization       83,493       85,774      35,363
     Write-down of deferred  
      software costs                    115,432       47,913        -  
     Compensation related to the 
      issuance of stock and stock 
      options                             8,125        4,875      28,000
     Increase in allowances for 
      doubtful accounts and 
      contracts receivable                 -           7,500        -   
     Change in assets and 
      liabilities, net of 
      effects of acquisitions:
       Accounts receivable               64,501      (14,475)     24,103
       Contracts receivable              27,939       22,794     183,161
       Inventories                        5,000       28,260      23,720
       Other assets                        -          17,359         (79)
       Accounts payable                 (26,573)     156,698      82,152
       Accrued liabilities              (55,809)      98,050      19,108
       Deferred revenue                   2,521      (86,303)       -         
       Amounts due to related 
       	parties                            -          (2,794)     (3,275)
                            				    -----------  -----------  ----------
     Net Cash Provided By (Used 
      In) Operating Activities         (210,540)    (219,835)     56,829
                            				    -----------  -----------  ----------
Cash Flows From Investing 
 Activities
  Additions to capitalized 
   software costs                          -            -       (137,730)
  Acquisition of furniture, 
   fixtures and equipment                  -          (9,727)    (25,923)
                            				    -----------  -----------  ----------
Net Cash Used In Investing 
 Activities                                -          (9,727)   (163,653)
                            				    -----------  -----------  ----------
							(Continued)

The accompanying notes are an integral part of these consolidated
financial statements.



	      TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
	     CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
	     FOR THE YEARS ENDED JUNE 30, 1997, 1996 AND 1995



                                  					1997         1996        1995
                            				    -----------  -----------  ----------  
Cash Flows From Financing Activities
  Proceeds from the sale of common 
    stock and warrants to purchase 
     common stock                   $    70,428  $   372,381  $     - 
  Proceeds from borrowings                 -          40,992        -         
  Cash received in acquisition             -          19,553        -  
  Proceeds from bridge financing           -            -         50,000
  Principal payments on long-
   term debt                            (42,139)      (6,273)     (5,583)
                            				    -----------  -----------  ----------
     Net Cash Provided by 
       Financing Activities              28,289      426,653      44,417
                            				    -----------  -----------  ----------
Net Increase (Decrease) In Cash        (182,251)     197,091     (62,407)

Cash at Beginning of the Year           209,589       12,498      74,905
                            				    -----------  -----------  ----------
Cash at End of the Year             $    27,338  $   209,589  $   12,498 
                            				    ===========  ===========  ==========
Supplemental Disclosures of Cash
  Flow Information:
  Cash paid for interest            $     1,577  $     7,511  $   15,419 
                            				    ===========  ===========  ==========

Supplemental Schedule of Noncash Investing and
 Financing Activities - Note 10.

The accompanying notes are an integral part of these consolidated
financial statements.



	   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
	     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 



NOTE 1--NATURE OF OPERATIONS

    Tenet Information Services, Inc. ("Tenet"), a Utah corporation, has
    designed and markets a computer-based medical and health information
    system related primarily to respiratory therapy and pulmonary function
    analysis (the "RCMS/X system"). As discussed in Note 3, during fiscal 
    1996 Tenet expanded its operations by merging with National Microcomputer
    Corporation ("NMC") and acquiring certain assets of The International
    Healthcare Consulting Group, Inc. ("HCG"). NMC has designed and markets 
    an integrated information management/patient tracking system for use in
    emergency departments of hospitals and urgent care centers (the "EDNet
    System"). HCG has provided healthcare institutions, mainly hospitals, 
    with consulting services to assist the institutions in achieving a more
    efficient, lower cost care delivery model while maintaining the highest
    quality of care standards. 

    Tenet and its wholly owned subsidiary, NMC, (collectively, "the Company")
    sell and lease computer hardware and computer software license rights to
    hospitals throughout the United States. In addition, the Company sells
    maintenance contracts for these information systems. Substantially all of
    the Company's revenues are generated from hospitals and therefore, the
    Company's financial performance is partially dependent upon the viability
    of the healthcare economic sector. 

    The Company is subject to various risks associated with companies in a
    similar stage of operations including dependence on key individuals,
    potential competition from larger and more established companies and the
    need to obtain adequate sources of financing.

    The Company has experienced recurring losses from operations and as of
    June 30, 1997 has a working capital deficit of $469,775 and a net capital
    deficiency of $452,281. These matters raise substantial doubt about the
    Company's ability to continue as a going concern. In order for the Company
    to recover from its present financial situation, management is considering
    selling the tangible and intangible assets of the Company and seeking a 
    future merger or restructuring the debt to the shareholders and officers
    to allow the Company to continue operations. However, there can be no
    assurance that the sale of assets will be successful or  additional debt
    or equity capital will be available on terms acceptable to the Company. 

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Principles of Consolidation - The accompanying consolidated financial
    statements include the accounts of Tenet and its wholly owned subsidiary, 
    NMC. All significant intercompany transactions and account balances have
    been eliminated in consolidation.

    Use of Estimates in the Preparation of Financial Statements -  The
    preparation of financial statements in conformity with generally accepted
    accounting principles requires management to make estimates and 
    assumptions that affect the reported amounts of assets and liabilities 
    and disclosure of contingent assets and liabilities at the date of the 
    financial statements and the reported amounts of revenues and expenses 
    during the reporting period. Actual results could differ from those 
    estimates. 

    Revenue Recognition - The Company recognizes revenue in accordance with 
    the provisions of Statement of Position No. 91-1 Software Revenue
    Recognition as follows:

    The Company's customers for the RCMS/X system generally pay cash for their
    purchases of computer hardware and finance the purchase of license rights
    to the software by entering into long-term, installment contracts with the
    Company. Revenue from software licensing arrangements with customers,
    which licenses include the rights to use the Company's software and
    ongoing maintenance, is recognized on a monthly basis as billed under the
    contracts. Revenues from the sale of computer hardware and components is
    recognized upon installation and acceptance by the customer. 

    Revenues related to the EDNet System consist of sales of software
    licenses, installation of information systems and related software
    customization and enhancements. In addition, revenues are generated from
    annual software support and maintenance. Sales of software licenses and
    installation revenues are recognized upon completion and customer
    acceptance. Revenues from annual software and maintenance are recognized
    ratably over the term of each contract. Amounts billed in advance of
    revenue recognition are recorded as deferred revenue.

    Revenues from consulting services are recognized when the services have
    been provided. 

    Inventories - Inventories are stated at the lower of cost (first-in,
    first-out method) or market value and consist of service parts. The
    Company had no inventories as of June 30, 1997.
 
    Furniture, Fixtures and Equipment - Furniture, fixtures and equipment 
    are stated at cost. Depreciation is computed using the straight-line 
    method over the estimated useful lives of the related assets, generally 
    3 to 10 years. Depreciation expense was $18,288, $27,774 and $28,157 for 
    the periods ended June 30, 1997, 1996 and 1995. Maintenance and repairs 
    are charged to expense as incurred and major improvements or betterments 
    are capitalized. Gains or losses on sales or retirements are included 
    in the statement of operations in the year of disposition. Furniture, 
    fixtures and equipment include $110,692 of computer equipment used in 
    operations and $8,610 of furniture, fixtures and other equipment as of 
    June 30, 1997 and 1996.

    Fair Value of Financial Instruments - The carrying amounts reported in 
    the accompanying balance sheets for cash, accounts and contracts 
    receivable, and accounts payable approximate fair values because of the
    immediate or short-term maturities of these financial instruments. The 
    carrying amounts of the Company's notes payable and long-term debt also 
    approximate fair values based on current rates for similar debt. 

    Income Taxes - The Company recognizes a liability or asset for the 
    deferred tax consequences of all temporary differences between the tax
    bases of assets or liabilities and their reported amounts in the 
    financial statements that will result in taxable or deductible amounts
    in future years when the reported amounts of the assets or liabilities
    are recovered or settled.

    Warranty Costs - A 90-day limited warranty is provided on sales of
    hardware and software licenses. Warranty costs incurred on hardware are
    passed through to the manufacturer. Warranty costs have not been material
    in any year presented, accordingly, these costs are expensed when 
    incurred. 

    Net Loss Per Common Share - Net loss per common share is based on the 
    weighted average number of common shares outstanding during each year.
    Warrants and options outstanding have not been included in the 
    computations since any assumption of conversion would have an 
    antidilutive effect thereby decreasing the net loss per common share.

    Recent Accounting Pronouncements - In March 1995, the Financial 
    Accounting Standards Board issued Statement of Financial Accounting
    Standards No. 121, Accounting for the Impairment of Long-Lived
    Assets and for Long-Lived Assets to be Disposed of (SFAS No. 121).
    SFAS No. 121 was required to be adopted on July 1, 1996. See Note 6 for
    discussion of the effects of implementing this pronouncement.

    In October 1995, the Financial Accounting Standards Board issued Statement
    of Financial Accounting Standards No. 123, Accounting for Stock-Based
    Compensation (SFAS No. 123). The Company was required to adopt SFAS No.
    123 on July 1, 1996. As allowed by SFAS No. 123, the Company will continue
    to account for the cost of compensation from stock options and awards to
    employees based upon their intrinsic value on the date granted or awarded
    pursuant to Accounting Principles Board Opinion 25, Accounting for Stock
    Issued to Employees. The Company provides pro forma results of operations
    as if the compensation from granting stock options and awards was based on
    their fair values. The adoption of SFAS No. 123 did not have a material
    impact on the financial statements of the Company. 
 
NOTE 3--ACQUISITIONS    

    Acquisition of Certain Assets of HCG and Related Employment Agreements -
    Effective September 5, 1995, the Company acquired certain assets of HCG.
    The assets acquired consisted principally of software products and other 
    intangible assets. HCG provides consulting services and information 
    systems to various hospital departments. As consideration, the Company 
    issued 50,000 shares of common stock valued at $7,000 and assumed 
    $30,000 of debt. Due to the immaterial amount of tangible assets 
    acquired and contingencies related to the realizability of the amount 
    paid for the intangible assets, the entire purchase price of $37,000 
    was expensed in fiscal 1996 and included in the write-off of excess 
    purchase price in the accompanying 1996 statement of operations. The 
    acquisition has been accounted for under the purchase method of 
    accounting with the operating results of HCG being included with 
    those of Tenet from the date of acquisition.

    In connection with the asset purchase, the Company also entered into     
    three-year employment agreements with HCG's two principal shareholders and
    consultants (the "Employees"). The Company issued the Employees warrants  
    to purchase 664,286 shares of the common stock at a price of $0.14 per
    share for a three-year period upon signing the employment agreements.The
    employment agreements provided for base annual salaries and incentive     
    stock options or bonuses during the first two years of the agreements.
    Based on the terms of the employment agreements, the Company met minimum    
    consulting revenue requirements for the period ended September 5, 1996 and
    in an October 1996 Board resolution, the Employees were granted five-year
    options to purchase 714,286 shares of the company's common stock at $0.14
    per share. In addition, the Company assumed $26,355 of additional debt as
    additional compensation to the employees. The Company did not meet the     
    minimum consulting revenue requirements under the employee agreements for
    the second term ended September 5, 1997; therefore, the employees were 
    not granted additional stock options for that period.

    The employment agreements may be terminated by the Company for cause,
    as defined, or the event of death or disability of the Employees. The
    agreements also include noncompetition provisions for a one-year period     
    after termination of employment. 

    Agreement and Plan of Reorganization - Effective September 29, 1996,
    Tenet and NMC aproved the terms of an Agreement and Plan of 
    Reorganization (the "Agreement") pursuant to which NMC was merged with
    and into Tenet Merger Subsidiary, Inc. a wholly owned subsidiary of 
    Tenet for the purpose of effecting the merger. Three million shares of
    Tenet's common stock were exchanged for all outstanding shares of NMC
    and NMC became a wholly owned subsidiary of Tenet. The three million
    shares were valued at $420,000. Tenet also paid $27,000 in acquisition
    costs, making the total purchase price $447,000. The merger has been
    accounted for under the purchase method of accounting with the operating
    results of NMC being included with those of Tenet from the date of
    acquisition. The purchase price was in excess of the net liabilities 
    assumed by $509,884.

 
    Due to NMC's lack of historical profitability and contingencies related 
    to the future realizability of theexcess purchase price, the Company
    expensed the entire $509,884 infiscal 1996. Management believes that the
    amount of common stock issued for NMC was fair and reasonable based on
    expected synergies to be achieved by combining NMC with the Company. In
    addition, NMC brought a customer base of 24 sites and a backlog of four
    installations. 

    In connection with the merger, the Company entered into  three-year    
    employment agreements with NMC's major shareholder and a key employee. 
    The employment agreements provide for base annual salaries, bonuses and 
    the grant of warrants to purchase 50,000 shares and incentive stock 
    options to purchase 50,000 shares of the Company's common stock at $0.14 
    per share to the individuals, respectively. The employment agreements 
    may be terminated by the Company for cause, as defined, or in the event 
    of death or disability of the employees. The agreements also include 
    non-competition provisions for minimum periods of five and three years, 
    respectively. The Company entered into consulting agreements with two 
    additional shareholders of NMC. The consulting agreements provide for 
    services to be rendered as needed by the Company and provide for the 
    issuance of warrants to purchase 50,000 shares of the Company's common 
    stock at $0.14 per share to each consultant.

    Pro Forma Acquisition Information (Unaudited) - The following unaudited
    pro forma acquisition information for fiscal 1996 and 1995 presents the
    results of operations as if the HCG and NMC acquisitions described above
    had occurred at the beginning of fiscal 1995, after giving effect to the 
    write-off of the excess purchase price totaling $546,884. The write-off 
    of excess purchase price is a nonrecurring charge which resulted directly
    from the transactions and therefore has been excluded from the following
    pro forma information. The pro forma results have been prepared for
    comparative purposes only and do not purport to be indicative of what
    would have occurred had the acquisitions been made at the beginning of 
    the fiscal 1995 as described above or of the results which may occur 
    in the future. 

                           					     Unaudited Pro Forma 
                            					    Results of Operations
                            					     Years Ended June 30,
                           					     ----------------------- 
                             					       1996        1995    
                            					    -----------  ----------
	  Revenues                          $ 1,140,792  $  908,089
	  Loss from operations                 (634,363)   (332,469)
	  Net loss                           (1,197,972)   (362,348)
	  Net loss per common share               (0.11)      (0.04)



NOTE 4-NOTES PAYABLE AND RELATED-PARTY LONG-TERM DEBT

 Notes payable consist of the following as of June 30:

                                         						  1997      1996    
                                    					      ---------  ---------
 Notes payable to a shareholder including 
  accrued interest, interest at 12 percent, 
  unsecured, due July 31, 1996 and paid in 
  full subsequent to June 30, 1996             $    -     $  40,992

 Note payable to Utah Technology Finance 
  Corporation which was assumed in the 
  HCG acquisition (see Note 3), interest 
  at prime plus 2 percent (10.50 percent 
  at June 30, 1997), secured by essentially
  all assets of HCG, was due in varying 
  monthly payments based on certain revenues, 
  loan is in default due to HCG and the 
  Company not making scheduled monthly 
  payments, the total amount due under the 
  agreement has been classified as current
  in the accompanying 1997 and 1996 balance 
  sheets                                          28,090     24,859

 Other                                              -         1,147
                                   					       ---------  ---------
    Total Notes Payable                        $  28,090  $  66,998
                                   					       =========  =========

 Related-party long-term debt consists of the following as of June 30:

                                         						  1997      1996    
                                   					       ---------  --------- 
 Capital lease obligation, payable in
  monthly installments of $704, interest 
  at 11.7 percent, maturing in fiscal 1998,
  secured by computer equipment. Currently
  in default, all amounts currently owed       $  10,889  $  10,889

 Less:  Current Portion                          (10,889)    (7,046)
                                   					       ---------  ---------
 Related party long-term debt, net of 
  current portion                              $    -     $   3,843
                                   					       =========  =========


NOTE 5--OPERATING LEASE

   The Company occupies its facilities and uses equipment under non-
   cancelable operating leases which expire between 1998 and 1999. Lease
   expense for fiscal 1997, 1996 and 1995 was $50,833, $49,500 and $31,000,
   respectively.

   Minimum future lease payments under non-cancelable operating leases having
   remaining terms in excess of one year as of June 30, 1997 are as follows:

	  Year Ended June 30,
		1998                          $  53,936
		1999                             25,457
                     					      ---------
                     					      $  79,393 
                     					      =========

NOTE 6--CAPITALIZED SOFTWARE COSTS

    The Company capitalizes computer software development costs upon the
    establishment of technological feasibility. Technological feasibility 
    for the Company's computer software products is based upon achievement 
    of a detail program design free of high-risk development issues. The
    establishment of technological feasibility and the ongoing assessment 
    of recoverability of capitalized computer software development costs 
    requires considerable judgment by management with respect to certain 
    external factors, including, but not limited to, technological 
    feasibility, anticipated future gross revenues, estimated economic 
    life and changes in technology. It is reasonably possible that those 
    estimates of anticipated future gross revenues, the remaining estimated 
    economic lives of the products, or both will be reduced significantly 
    in the near term. Costs incurred prior to the establishment of 
    technological feasibility are expensed as software development costs 
    in the accompanying statements of operations. 

    Amortization of software costs begins when the product is first sold and
    is calculated on a product-by-product basis using the straight-line method
    over the remaining estimated economic life of the product. Estimated
    economic lives of four to five years have been assigned to software costs.
    Amortization amounted to $65,205, $58,000 and $7,206 in fiscal 1997, 1996
    and 1995, respectively. Amortization is a component of cost of revenues in
    the  accompanying statements of operations.  In fiscal year 1997, it was
    determined that the probability of any future recovery of these costs was
    remote, and the Company concluded that this asset was impaired. The
    Company elected to expense all remaining software costs  totaling $115,432.


 NOTE 7--INCOME TAXES 

    The components of the net deferred tax assets are as follows:

                                         						       June 30,              
                                         						   1997        1996    
                                  					       -----------  -----------
    Deferred Tax Liabilities:
      Deferred software costs                         -         (67,000)
                                   										  -----------  -----------
    Deferred Tax Assets:
      Tax net operating loss carry forward     $ 1,581,690  $ 1,516,000
      Tax credits carry forward                    103,000      103,000
      Reserves and accrued liabilities              11,310       17,000
                                   					       -----------  -----------
                                          						 1,696,000    1,636,000
					   
Total Deferred Tax Assets                        1,696,000    1,569,000
					                                          -----------  -----------
    Valuation Allowance                         (1,696,000)  (1,569,000) 
                                   					       -----------  -----------
      Net Deferred Tax Asset                   $      -     $      -  
                                   					       ===========  ===========

   During the years ended June 30, 1997, 1996 and 1995, the valuation
   allowance has increased $127,000, $366,000 and $63,108, respectively.

   As of June 30, 1997, the Company had net operating loss carryforwards for
   federal income tax reporting purposes of approximately $4,240,000. For
   federal income tax purposes, utilization of these carryforwards is limited
   if the Company has had more than a 50 percent change in ownership (as
   defined by Section 382 of the Internal Revenue Code) or, under certain
   conditions, if such a change occurs in the future. The tax net operating
   losses will begin to expire in fiscal 1999.

   The Company has research and development tax credit and investment tax
   credit carryforwards of approximately $95,000 and $8,000, respectively,
   which will begin to expire in fiscal 1999. 

   No benefit for income taxes has been recorded during the years ended June
   30, 1997, 1996 and 1995. As discussed in note 1, certain risks exist with
   respect to the Company's future profitability, and management has
   concluded that, due to these uncertainties, the related net deferred tax
   asset may not be realized. Accordingly, a valuation allowance has been
   recorded to offset the deferred tax asset in its entirety.

NOTE 8--CAPITAL STOCK

   The Company's articles of incorporation authorize the board of directors,
   without shareholder approval, to issue up to 1,000,000 shares of preferred
   stock with such rights and preferences as the board of directors may
   determine at its discretion. The board of directors has the authority to
   issue shares of preferred stock having rights prior to the common stock
   with respect to dividends, voting and liquidation. 

   During fiscal 1995, the Company: (1) issued 100,000 shares of common stock
   valued at $.14 per share to an officer in lieu of cash compensation; (2)
   converted $119,645 of amounts due to related parties to 428,165 shares of
   common stock at approximately $0.28 per share; (3) converted $180,000 of
   related-party long-term debt to 644,152 shares of common stock at
   approximately $0.28 per share; (4) converted 66,485 shares of Series A
   preferred stock to 1,189,624 shares of common stock at approximately $0.56
   per share; and (5) converted 3,692 shares of Series B preferred stock to
   132,123 shares of common stock at approximately $0.28 per share. As
   consideration for the holder of the Series A preferred stock to accept a
   lower exchange rate, the Company granted to the holder of Series A
   preferred stock a three-year warrant to purchase 594,812 shares of common
   stock at $0.42 per share. 

   Private Placements of Common Stock - In March 1995, the Company signed
   a letter of intent with Schneider Securities, Inc. ("SSI") to raise a 
   minimum of $252,000 or a maximum of $756,000 under a best efforts private 
   placement offering of common stock. Under the contemplated arrangement, 
   SSI was to receive commissions of ten percent of the proceeds and warrants
   dependent upon the amount of capital raised. The Company and SSI did not
   proceed with the private placement offering; however, the Company issued
   three-year warrants to purchase 90,000 shares of the Company's common
   stock at $0.42 per share to SSI and paid $12,600 as consideration for
   services rendered. 

   During fiscal 1996, the Company entered into arrangements with several
   accredited investors to sell units at $0.28 per unit. Each unit consists
   of one share of common stock, one Class A warrant and two Class B warrants
   to purchase additional shares of common stock. The Class A warrants have
   an exercise price of $0.42 per share and the Class B warrants have an
   exercise price of $0.07 per share for a three-year period. As of June 30,
   1995, the Company had received $50,000 of bridge debt financing in
   connection with these arrangements. During fiscal 1996, the bridge loan
   was converted to 178,571 units as described above and an additional
   $202,000 was received in exchange for 721,429 units. The proceeds from the
   sale of the units have been allocated $126,000 to the shares of common
   stock issued and $126,000 to the Class B warrants issued based on relative
   fair values. The Company also incurred $15,470 of offering costs that 
   have been netted against the proceeds. 

   In June 1996, the Company closed a best-efforts private-placement offering
   with SSI under which the Company sold 688,833 units at $0.30 per unit
   amounting to $206,650 in total proceeds. Each unit consists of one share
   of common stock and a three-year warrant to purchase one share of common
   stock at a price of $0.25 per share for the first year of the warrant and
   at $0.42 per share for the final two years of the warrant. A portion of
   the proceeds has been allocated to the warrants issued based on relative
   fair values, which amounted to $17,221. The Company also incurred $20,799
   of offering costs, consisting principally of a 10 percent commission to
   SSI, which have been netted against the proceeds. 

 NOTE 9--STOCK OPTION PLANS AND WARRANTS TO PURCHASE COMMON STOCK

   The Company has adopted an incentive stock option plan and a nonqualified
   stock option plan. Stock options for an aggregate of 600,000 shares of
   common stock may be granted under these plans. Stock options under both
   option plans may be granted at a price per share not less than 100 percent
   of the fair market value of the common stock, as determined at the date of
   grant. Employees vest in the right to exercise their options on the third
   anniversary date following the date of grant. The options expire five
   years from the vesting date. Incentive stock options are forfeited unless
   exercised within three months following termination of employment or
   twelve months if termination is due to death or disability. 

   The Company has also granted options to purchase shares of common stock to
   officers outside of the plans.

   The fair value of each option granted was estimated on the date of grant
   using the Black-Scholes option-pricing model with the following weighted-
   average assumptions used for grants in 1997 and 1996, respectively:
   expected volatility of 34.6 percent for both years, risk-free interest
   rates of 6.1 and 6.2 percent, and expected lives of 5 and 7 years.
				   
   A summary of the status of the Company's option plan as of June 30, 1997,
   1996 and 1995, and changes during the years then ended is presented below:

<TABLE>
<CAPTION>
                           				1997               1996            1995    
                    			  ----------------   ---------------  ------------- 
                 				    Weighted-       Weighted-         Weighted-
                   				    Average          Average          Average
                  				    Exercise         Exercise         Exercise
                     			   Shares    Price   Shares   Price    Shares   Price
                     			 ---------  ------  --------  ------  -------  ------- 
<S>                     <C>        <C>     <C>       <C>     <C>      <C>      
  Outstanding at  
  beginning of year        620,000  $ 0.09   335,000  $ 0.05   45,000  $ 0.05
   Granted                 814,286    0.14   285,000    0.14  300,000    0.05
   Canceled               (420,000)   0.08      -        -    (10,000)   0.05
                     			 ---------  ------  --------  ------  -------  ------
   Outstanding at 
    end of year          1,014,286    0.14   620,000    0.09  335,000    0.05
                     			 =========  ======  ========  ======  =======  ======  
   Options exercisable 
    at year-end            924,286    0.14   145,000    0.05     -        - 
                     			 =========  ======  ========  ======  =======  ======
			 
  Weighted-average 
    fair value of 
    options granted
    during the year      $   0.04           $  0.07            N/A
 
 </TABLE>

   At June 30, 1997, exercise prices for options outstanding ranged from
   $0.05 to $0.14, and the weighted average remaining contractual life was
   4.5 years.

   The Company applies APB Opinion 25, Accounting For Stock Issued To
   Employees, and related interpretations in accounting for its plans.
   Accordingly, no compensation cost has been recognized for its stock option
   plans. Had compensation cost for the Company's stock-based compensation
   plans been determined based on the fair value at the grant dates for
   awards under those plans consistent with the method of FASB Statement 123,
   Accounting For Stock-Based Compensation, the Company's net loss and loss
   per share would have been increased to the pro forma amounts indicated
   below:
                    				       1997        1996
                     				  ----------   -----------
      Net Loss
	 As reported              $ (435,169)  $(1,132,370)
	 Pro forma                  (473,636)   (1,138,736)

      Loss Per Share
	 As reported                   (0.03)        (0.11)
	 Pro forma                     (0.04)        (0.12)
						    
   Otion pricing models require the input of highly subjective assumptions
   including the expected stock price volatility. Also, the Company's
   employee stock options have characteristics significantly different from
   those of traded options, and changes in the subjective input assumptions
   can materially affect the fair value estimate. Management believes the
   best input assumptions available were used to value the options and the
   resulting values are reasonable.

   As discussed in Notes 3 and 8, the Company has issued warrants to purchase
   common stock in connection with various transactions. The following table
   summarizes the warrants to purchase common stock issued and outstanding,
   together with their respective exercise price ranges:

                                 					   Years Ended June 30,               
                           				       1997         1996        1995    
                            				   -----------  -----------  ----------
    Warrants to purchase 
     common shares, beginning 
     of the year, at prices 
     ranging from $0.07
     to $0.42 per share               4,887,931       594,812       -         

    Warrants issued at prices
     ranging from $0.07 to 
     $0.42 per share                  4,293,119      594,812        -

    Warrants exercised at $0.05 
     per share                        (1,621,424)       -           -
                            				     -----------  -----------  ---------- 
    Warrants to purchase common 
     shares, end of the year, at
     prices ranging from $0.07 
     to $0.42 per share               3,266,507    4,887,931     594,812
                            				    ===========  ===========  ==========    

   During fiscal 1997, the Company's board of directors authorized a
   reduction of the exercise price of the Company's Class B warrants to $.05
   from $.07 per share, contingent upon exercise by September 30, 1996. A
   total of 1,621,424 warrants were exercised. The resulting debt conversion
   expense due to the discount was immaterial.

NOTE 10--SUPPLEMENTAL CASH FLOW INFORMATION ACTIVITIES

   As discussed in Note 9, 1,621,424 warrants were exercised at $0.05 per
   share during the year ended June 30, 1997. As a result of the exercise,
   the Company received $70,428 in cash and notes payable in the amount of 
   $10,643 were extinguished through the conversion of existing debt owing 
   to a warrant holder.

   Also during fiscal 1997, $3,231 of accrued interest was converted to long-
   term debt.

   During fiscal 1996, the Company acquired certain assets of HCG in exchange
   for 50,000 shares of common stock valued at $7,000 and the assumption of
   $30,000 of liabilities (see Note 3). The Company merged with NMC and
   exchanged 3,000,000 shares of common stock of the Company for all
   outstanding shares of NMC. In the merger, the Company acquired $175,737 of
   assets and assumed $238,621 of liabilities (see Note 3). In addition, the
   Company converted $50,000 of bridge financing notes payable to common
   stock (see Note 8).

   During fiscal 1995, the Company converted $180,000 of related-party long-
   term debt and $119,645 of amounts due to related parties into 1,072,317
   shares of common stock at approximately $0.28 per share. Also during
   fiscal 1995, 66,485 shares of Series A preferred stock we converted into
   1,189,624 shares of common stock at approximately $0.56 per share and
   3,692 shares of Series B preferred stock were converted into 132,123
   shares of common stock at approximately $0.28 per share.


  
ITEM 9:   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
	   ACCOUNTING AND FINANCIAL DISCLOSURE
  
  
  On May 30, 1997, the Registrant dismissed Arthur Andersen LLP,
  ("Andersen") as its certifying accountant.  Andersen's reports on
  the Registrant's financial statements for the years ended June
  30, 1995 and 1996 did not contain an adverse opinion or a
  disclaimer of opinion and were not qualified as to audit scope or
  accounting principles. However, such report included an
  explanatory paragraph that described certain factors discussed in
  Note 1 to the financial statements that raised substantial doubt
  about the ability of the Company to continue as a going concern.
  The Registrant's board of directors unanimously approved
  dismissal of Andersen.
  
  During the two most recent fiscal years ended June 30, 1996 and
  1995 and the interim period subsequent to June 30, 1996, there
  were no disagreements, as defined in Regulation S-K Item 304,
  with Andersen on any matter of accounting principles or
  practices, financial statement disclosure, or auditing scope or
  procedure, which disagreements would have caused Andersen to make
  a reference to the subject matter of the disagreement in
  connection with its reports.
  
  On July 30, 1997, the Registrant engaged Hansen, Barnett &
  Maxwell ("Hansen") to perform its audits and provide various
  accounting services thereafter.  The Registrant did not consult
  with Hansen prior to such date regarding any reportable matter.
  
				PART III
  
  ITEM 10:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
  PERSONS OF THE REGISTRANT; COMPLIANCE WITH SECTION 16(A) OF THE 
  EXCHANGE ACT
  
  The names of the executive officers and directors of the Company,
  their respective ages and positions with the Company, and the
  dates of their elections to the Board of Directors or as officers
  are as follows:
			     Position with
  Name                Age     The Company              Date of Election
  ----               ----  ------------------       ----------------------
  Jerald L. Nelson    54   President(resigned)      December 1, 1993 (July
                                         						     10, 1996)
                     			   Chairman of the Board    July 10, 1996
                     			   Director                 January 24, 1994
  
  Frank Overfelt      54   Director                 September 29, 1995
		                     	   Chief Operations         July 10, 1996
                    			    Officer (acting)
  Eric J. Nickerson   44   Director                 June 29, 1990
   
  Fred J. Anderson    51   Chairman of the Board    May 21, 1992*
                    			    (resigned)               (July 10, 1996)
                     			   Director,               July 18, 1986*
                     			   Treasurer,              May 16, 1985*
                     			   Secretary               January 11, 1989*
  
  Richard Gwinn       54   Director                September 29, 1995
		                     	   (resigned)                         
   
  Robert Smith        54   Director                September 29, 1995
		                      	  (resigned)                         
  
  All directors hold office until the next annual meeting of
  shareholders of the Company or until their successors have been
  elected and qualified.  The number of authorized directors may be
  varied by the Board of Directors, but may not be less than three. 
  Executive officers serve at the discretion of the Board of Directors. 
  The directors are entitled to certain limitations on their liabilities
  as directors of the Company as permitted under Utah law and as
  included in the Company's Articles of Incorporation.
  
  The Company's stock option plans permit the administration of the
  plans through a Stock Option Plan Committee, composed of at least
  three members of the Board of Directors.  No such committee has been
  appointed, and no other committees of the Board of Directors have been
  formed.
  
  On July 10, 1996, Fred J. Anderson resigned as Chairman of the Board
  of Directors.  Jerald L. Nelson resigned as President and Chief
  Operating Officer and was appointed Chairman of the Board of
  Directors.  Frank C. Overfelt was appointed Chief Operating Officer
  on an interim basis.  Mr. Anderson continues to serve as a director
  and as the Company's Chief Financial Officer.
  
  BUSINESS BIOGRAPHIES
  
       Jerald L. Nelson. -  Jerald L. Nelson has served as a director,
  president and chief operating officer of the Company since December
  1993.  Effective July 10, 1996, Dr. Nelson was appointed Chairman of
  the Board of Directors and relinquished his position as President
  and Chief Operating Officer.  Dr. Nelson received his Ph.D. in
  Economics from North Carolina State University in 1974.  From 1974
  to 1984, Mr. Nelson worked or consulted with several Fortune 500
  firms, including US Industries, TransWorld Airlines, GTE, Xerox,
  Pitney Bowes and General Foods.  From 1984 until December 1993, 
  Mr. Nelson worked with various businesses as an investment banker
  and business advisor.  He has also consulted with or served on the
  Board of Directors of numerous Utah firms including Arrow Dynamics,
  Beacon Financial, Gentner Communications and One-2-One
  Communications, where he also served as chairman and chief
  executive officer.  
  
       Frank C. Overfelt. -  Frank Overfelt was elected to the Board on
  September 29, 1995.  As of July 10, 1996, Mr. Overfelt was
  appointed interim Chief Operating Officer.  Mr. Overfelt has been
  the managing partner the International HealthCare Consulting Group,
  Inc. since its inception in 1984.  He is a recognized authority in
  workload measurement systems for health care institutions.  Prior
  to founding the consulting company, Mr. Overfelt was a senior
  manager in the Healthcare Cost Accounting and Productivity Practice
  of Peat Martwick.  He holds an MBA from the University of Utah.
  
       Fred J. Anderson. -  Fred J. Anderson has served as a director
  and Chief Financial Officer since 1986 and Chairman of the Board
  from May of 1992 until July 10, 1996.  From 1985 to May of 1992,
  Mr. Anderson served as the Company's Treasurer and from May 1988
  until January 1989, he served as the Company's Assistant Secretary. 
  At that time, he was named the Company's Secretary, and he
  currently serves in that position.  Mr. Anderson has also served as
  the Company's controller from 1984 to 1991.  From 1980 until 1984, 
  Mr. Anderson was Vice President Finance for Mountain States Resources.  
  Mr. Anderson received a  BS in accounting and an MBA from Utah State 
  University.  
  
       Eric J. Nickerson. -  Eric J. Nickerson has served as a director
  since June of 1990.  Mr. Nickerson was a member of the faculty of
  the United States Military Academy at West Point, New York from
  1989 to 1993.  In June 1993, Mr. Nickerson retired as a United
  States Air Force officer.  Currently, Mr. Nickerson is a private
  investor and directs personal accounts and two investing
  partnerships - "Third Century II" and "Z Fund."  He also serves as
  a director of CSM Environmental Systems, Inc. and Urinette
  Incorporated.   
  
  
  OTHER KEY PERSONNEL
  
       The Company's other key personnel include the following:
  
       Donald W. Ballash. -  Mr. Ballash has over 14 years of experience
  in the health care field in which he has specialized in management
  engineering at two large multi-hospital systems - Intermountain Health
  Care and Kaiser Permanente.  Most recently he was a partner in the
  International HealthCare Consulting Group.
  
       Douglas H. Burns. -  Mr. Burns has worked in clinical medicine as
  a Respiratory Therapist for the past 19 years.  During this time he
  has worked as a staff therapist, shift supervisor, and most recently
  as Assistant Director of Respiratory Care.  These hospitals ranged
  from 200 to 700 beds in size.  Mr. Burns received his undergraduate
  degrees from Allegheny Community College and La Roche College both
  located in Pittsburgh, PA.
  
  
  ITEM 11:  EXECUTIVE COMPENSATION
  
  The following table sets forth all cash compensation for services
  rendered in all capacities to the Company during the fiscal years ending
  June 30, 1997, 1996 and 1995 paid to (i) the Company's president and each 
  executive officer whose cash compensation exceeded $100,000, and (ii) all
  executive officers of the Company as a group.  No executive officers
  salary exceeded $100,000 for the fiscal year.
  
 <TABLE>
<CAPTION> 
  
		      Annual Compensation          /Long Term Compensation         /
		 --------------------------------------------------------------------
                                            						  /    Awards            /Payouts /
		                                            				  ---------------------------------
  Name               Year  Salary   Bonus   Other  Restricted  Securities  LTIP  All Other
  and                       ($)      ($)   Annual    Stock     Underlying  Pay-   Compen-
  Principal                                Compen-  Awards      Options/   outs   sation
  Position                                  ($)       ($)       SARs(#)    ($)      ($)    
 ----------------------------------------------------------------------------------------  
<S>                 <C>   <C>      <C>    <C>      <C>        <C>       <C>      <C> 
 Frank C. Overfelt   1996  42,082    -0-     -0-       -0-         -0-      -0-      -0-
              		     1997  76,797    -0-     -0-       -0-         -0-      -0-      -0-
  
 Jerald L. Nelson    1995  60,000    -0-     -0-       -0-         -0-      -0-      -0-
  President          1996     -0-    -0-     -0-       -0-         -0-      -0-      -0-
		 
  
 All Executive Officers
  
  (3 persons)       1995  105,000    -0-     -0-       -0-         -0-      -0-     -0-
  (5 persons)       1996  308,200    -0-   21,800      -0-         -0-      -0-     -0-
  (3 persons)       1997  145,690    -0-     -0-       -0-         -0-      -0-     -0-
  
</TABLE>

  The Company also may pay discretionary cash bonuses to management and
  employees based on meritorious performance.
  
  STOCK OPTION PLANS
  
  On October 15, 1984, the Company adopted an Incentive Stock Option
  Plan (the "ISO Plan"), pursuant to which only "incentive stock
  options"  ("ISO's"), as defined in the Internal Revenue Code (the
  "Code"), may be granted.  On the same date, the Company adopted a
  Nonqualified Stock Option Plan ("NQSO Plan"), pursuant to which only
  "nonqualified stock options" ("NQSOs"), as defined in the Code, may
  be granted.  Stock options for an aggregate of 600,000 shares of
  common stock may be granted under both Plans.  ISOs may be granted
  under the ISO Plan to employees owning less that 10% of the Company's
  voting stock (as defined by Sections 422A and 425 of the Code).  NQSOs
  may be granted under the NQSO Plan to employees who are ineligible to
  receive options under the ISO Plan.
  
  Stock options may be granted under the Plans at a price per share not
  less than 100% of the "fair market value" (as defined by the Plans)
  of the common stock on the date of grant.
  

  The Plans limit grants of stock options to any one employee to 60,000
  shares of stock per plan year, with an aggregate option price ceiling
  of $100,000 under the ISO Plan in any year.  Each stock option, unless
  sooner terminated, expires five years from the "date of
  effectiveness", which is three years from the date of grant.
  
  ISOs are exercisable until three months following termination of
  employment (twelve months if termination is due to death or
  disability).  Termination of employment for any reason does not affect
  the exercisability of NQSOs, regardless of whether the option's
  effective date has been reached.  Under both Plans, options are
  exercisable during an optionee's lifetime only by such optionee and
  are transferable only upon death by the laws of decent or
  distribution.
  
  The Board of Directors has the right to modify or amend the Plans at
  any time, provided, however, that, unless ratified by the Company's
  shareholders, no amendment will be effective which (i) changes the
  number of shares which may be issued under the Plans, (ii) changes the
  option price, other than the manner of determining the fair market
  value of the shares, (iii) changes the periods during which options
  may be granted or exercised, (iv) changes the provisions relating to
  the determination of employees to whom options may be granted and the
  number of shares to be covered by such options, or (v) changes the
  provisions relating to adjustments to be made upon changes in
  capitalization.  Shareholder action is also required to terminate the
  Plans.
  
  As of June 30, 1996, the Company had granted 335,000 options to key
  employees exercisable at the rates ranging from $.05 to $.14 per
  share.  During the present fiscal year, no options were exercised,
  420,000 were canceled, and 100,000 NQSOs were issued at an exercise
  price of $.14.  Therefore, as of June 30, 1997, there were 100,000
  ISOs outstanding and 200,000 NQSOs outstanding.  No single employee
  has in excess of 100,000 ISOs outstanding.
  
  The following table sets forth, as to officers and directors of the
  Company and all employees as a group, certain information relating to
  options currently outstanding under the Plans.
  
       Individual or Group           ISOs       NQSOs      OTHER
       -------------------          ------    --------    ------- 
       All Employees as a Group
       (including executive
       officers)                    100,000    200,000    714,286
  
  Tables of options are not included as there are no options
  outstanding subject to reporting requirements.
  
  In connection with the HCG acquisition the Company granted 714,286
  options with an exercise price of $0.14.
  
  
 
  
  ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
	    AND MANAGEMENT
  
  The following table sets forth the holdings of common stock as of
  September 30, 1997 (i) by each person who held of record, or was known
  by the Company to own beneficially, more than five percent of the
  outstanding common stock of the Company, (ii) by each Director, and
  (iii) by all Directors and officers as a group.  Unless otherwise
  indicated, all shares are owned directly.  The percentage calculations
  for any individual stockholder assume that all outstanding options and
  warrants held by that stockholder have been exercised in full and that
  no other stockholder has exercised any outstanding options or
  warrants.
  
  Name and Address of Beneficial Owner as of September 30, 1997
  
                     			     Common (1)       Percent of Shares Outstanding
                     			     ----------       ----------------------------- 
  Michael R. Carlston 2       4,082,868                31.14%
  Dennis C. Peterson 3        3,823,471                29.32%
  Mark Oldroyd 4              3,578,588                27.44%
  Scott Staker 5              3,578,588                27.44%
  T-Acquisition 6             3,378,588                25.91%
  Eric J. Nickerson 7         2,413,469                17.92%
  Third Century II 7          2,413,469                17.92%
  Richard Gwinn 8             1,054,920                 8.06%
  Robert Smith 9                803,997                 6.13%
  M. Oppenheimer 10             784,300                 5.92%
  Ira Goodberg 11               676,507                 5.02%
  Frank Overfelt 12             448,571                 3.33%
  Donald W. Ballash 13          315,715                 2.34%
  Jerald L. Nelson 14           435,700                 3.23%
  Fred J. Anderson 15           264,345                 2.01%
  
  All Officers and 
     Directors                5,736,717                39.82%
  
  1.  Based on 13,018,505 common shares outstanding, 3,266,507 warrants to
purchase common shares at $0.07 - $0.42 and options to acquire 1,014,286 
shares of Common Stock at $0.05-$0.14  per share.
  2.  The shares indicated include:  (i) 704,280 shares of Common Stock
beneficially   owned by Mr. Carlston (including shares owned by his wife 
and held in trust for the benefit of   his children); (ii)  2,783,776 \
shares of Common Stock and warrants to acquire 594,812 shares of Common   
Stock at $.042 per share held by T-Acquisition. Mr. Carlson's address is 
855 Harwood Dr., Murray, UT   84107
  3.  Includes 444,883 shares of Common Stock beneficially owned by Mr.
Peterson,  and 2,783,776 shares of Common Stock and warrants to acquire 
594,812 shares of Common Stock at $.042   per share held by T  Acquisition 
L.L.C. Mr. Peterson's address is 2508 W. Bueno Vista Dr., W. Jordan, UT 84088
  4.  Includes 200,000 shares of Common Stock beneficially held by Mr. Oldroyd,
including  shares held in trust for the Violet Johnson Brown Family Trust.  
Also includes 2,783,776 shares  of Common Stock  and warrants to acquire 
594,812 shares of Common Stock at $.042 per share held by  T-Acquisition. 
Mr. Oldroyd address is 55 North 800 West, Provo, UT 84601
  5.  Includes 200,000 shares of Common Stock held by Mr. Staker and also
includes   2,783,776 shares of Common Stock and warrants to acquire 594,812 
shares of Common Stock at $.042 per share held by T-Acquisition. Mr. Stakers 
address is 880 North 98 West #9, Provo, UT 84604
  6.  A Utah Limited Liability company of which Michael R. Carlston owns or
controls   56.7%, Mark Oldroyd owns or controls 32.1%, Dennis C. Peterson 
owns or controls 6.4% and Scott Staker owns or controls 4.8%.  The shares
indicated consist of 2,783,776 shares of Common Stock issued as of 
December 31, 1995, and a warrant to acquire 594,812 shares of Common Stock, 
at a price of $0.42 per share. The address of T-Acquisition is 855 Harwood Dr., 
Murray, UT 84107.
  7.  Includes 1,982,699 shares of Common Stock and warrants to acquire  
430,770 shares of common stock at a price  of  $0.42 per share held by Third 
Century Fund II.  Mr. Nickerson is Senior Partner of Third Century Fund II. 
Mr. Nickerson is also a director of the Company. Mr. Nickerson and Third
Century Fund II's address is 1711 Chateau CT., Fallston, MD 21047
  8.  Includes 1,004,920 shares of Common Stock held by Dr. Gwinn and 
warrants to acquire 50,000 shares of Common Stock at a price of $.14 per 
share exercisable through September 29, 1998.  Dr. Gwinns address is 
304 W. Thorn, San Diego, CA 92103
  9.  Includes 753,497 shares of Common Stock held by Dr. Smith and warrants 
to acquire 50,000 share of Common Stock at a price of $.14 per share 
exercisable through September 29, 1998.  Dr. Smiths address is 2291 Greer Rd.,
Palo Alto CA 94303
  10.  Reflects 210,575 shares of Common Stock, and (ii) a warrant to acquire
178,575 shares of Common Stock at a price of $.42 per share. Mr. Oppenheimers
address is 31 Crescent Avenue, Summit, NJ  07901
  11.  Includes 676,507 shares of Common Stock beneficially held by Mr.
Goodberg.   Mr. Goodbergs address is c/o 304 W. Thorn, San Diego, CA 92103
  12.  Includes 50,000 shares of Common Stock held by IHCG, and also includes
Warrants to acquire 398,571 shares of Common Stock at $0.14 per share, 
warrants exercisable through September 5, 1997.  Mr. Overfelts address is
4634 So. Ledgemont Dr., Holladay UT 84124
  13.  Includes 50,000 shares of Common Stock held by IHCG, and also includes
Warrants to acquire  265,715 shares of Common Stock at $0.14 per share, 
warrants exercisable through September 5, 1997.  Mr. Ballash's address 
is 9777 So. Dunsinsame Dr., So. Jordan, UT 84095
  14.  Includes 314,275 shares of Common Stock ,and warrants to acquire 
71,425 shares of Common Stock at a price of $0.42 per share and options 
to acquire 50,000 shares of common stock at $.14 per share. Mr. Nelsons 
address is 10242 Ashley Hills Circle, Sandy, UT 84092
  15.  Includes 214,345 shares of Common stock and options to acquire 50,000
shares of common stock at $.14 per share.  Mr. Andersons address is 
343 West 4125 North, Pleasant View, UT  84414
  
  
  
  ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
  Since the beginning of the Company's last fiscal year, there have been
  no transactions or series of transactions between the Company and any
  executive officer, director or 5% beneficial owner of the Company's
  common stock in which one of the foregoing individuals had an interest
  of more than $60,000 except the transactions identified below.
  
  The Company believes that all transactions between the Company and
  related parties have been on terms and conditions no less favorable
  to the Company than those available from third parties.  Each
  transaction was entered into to provide operating capital for the
  Company.  All future transactions between the Company and any related
  party will be on terms and conditions no less favorable to the Company
  than those available from third parties and will be approved by a
  majority of the Company's disinterested directors.
  
  Section 16(a) of the Securities Exchange Act of 1934 required the
  Company's directors and executive officers, and persons who own more
  than ten percent of a registered class of the Company's equity
  securities, to file with the Securities and Exchange Commission
  initial reports of ownership and reports of changes in ownership of
  Common Stock and other equity securities of the Company.  Executive
  officers, directors and holders of ten percent or more of the
  Company's equity securities are required to furnish the Company with
  copies of all Section 16(a) reports they file.  However, because of
  the recent mergers and conversions, these reports have not been
  provided.  
  
				     
				  PART IV
  
  ITEM 14:  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)  The following financial statements are included in Part II Item 8:
  
	     Reports of Independent Certified Public Accountants
  
	     Consolidated Balance Sheets as of June 30, 1997 and 1996
  
	     Consolidated Statements of Operations for the Years Ended 
	     June 30, 1997, 1996, and 1995 
  
	     Consolidated Statements of Shareholders' Deficit
	     for the Years Ended June 30, 1997, 1996 and 1995
  
	     Consolidated Statements of Cash Flows for the Years Ended 
	     June 30, 1997, 1996, and 1995
  
	     Notes to Consolidated Financial Statements
  
  
  (b)       Reports on Form 8-K
  
	    No reports on Form 8-K have been filed by the Registrant
	    during the last quarter of the period covered by this
	    report.
  
  (c)       Exhibits
  
  
  
  The following documents are incorporated by reference to the
  Company's Registration Statement on Form S-18, filed with the
  Commission on January 17, 1989, and as amended on February 10, 1989
  and March 7, 1989, as declared effective on March 9, 1989:
  
  3.1       Articles of Incorporation and all amendments thereto
  3.2       Bylaws
  10.1      Nonqualified Stock Option Plan
  10.2      Incentive Stock Option Plan
  10.3      Form of common stock Purchase Warrant issued to Rogers & Anderson
  10.4      Form of Rental Agreement
  10.5      Form of 60 Month Lease Agreement
  10.6      Form of Purchase Agreement
  10.7      Form of Proprietary Information and Inventions Agreement
      	     between all employees and consultants and the Company
  10.8      Facilities Lease between the Company and J & V Management
	           Company
  
  The following documents are incorporated by reference to the
  Company's Annual report on Form 10-K dated September 25, 1989:
  
  10.9      Underwriting Agreement, dated March 10 1989, between the
	           Company and Schnieder Securities, Inc.
  10.10     Hemotech Purchase Agreement
  
  The following documents are incorporated by reference to the
  Company's report on Form 10-K dated October 12, 1993

  10.11     Settlement Agreement between Tenet Information Services,
      	     Inc., and Hewlett Packard
  10.12     Release and Consent Agreement between Tenet Information
	           Services Inc., and First Security Bank.
  10.13     Assignment of Note and Related Documents by First
	           Security Bank in favor of T Acquisition L.C.
  10.14     Facility Lease
  10.15     Debt Conversion
  10.16     Series A Preferred Stock
  10.17     Series B Preferred Stock
  
  The following documents are incorporated by reference to the
  Company's report on Form 10-K dated October 14, 1995 for the year
  ended June 30, 1995.
  
  2.1       Form of International Health Care Consulting Group
	           Acquisition
  2.2       Agreement and Plan of Reorganization
  4.1       Conversion of Series A Preferred Stock
  4.2       Conversion of Series B Preferred Stock
  4.3       Conversion of T-Acquisition Debt
  4.4       Conversion of Anderson Debt
  4.5       Conversion of Carlston Debt
  4.6       Form of Private Placement
  4.7       Form of Class A Warrant
  4.8       Form of Class B Warrant
  4.9       Form of Class C Warrant
  10.18     Form of F. Overfelt Employment Agreement
  10.19     Form of D. Ballash Employment Agreement
  
  
  
				  SIGNATURES
  
  
  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
  Act of 1934, the Company has duly caused this annual report to be signed on 
  its behalf by the undersigned, thereunto duly authorized.
  
				     TENENT INFORMATION SERVICES, INC.
  

  October 13, 1997                   By:/s/Fred J. Anderson
                            				     Fred J. Anderson, 
                            				     Chief Financial Officer
  
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, this 
  report has been signed below by the following person, which include the 
  Chief Executive Office, Chief Financial Officer, and a majority of the 
  Board of Directors, on behalf of the Company and in the capacities and 
  on the dates indicated:
  
			       POWER OF ATTORNEY
  
  Known All Men By These Presents, that each person whose signature appears 
  below constitutes and appoints each of Jerald L. Nelson and Fred J. 
  Anderson, jointly and severally, his true and lawful attorney in fact and 
  agent, with full powers of substitution for him and in him name, place and 
  stead, in any and all capacities, to sign any or all amendments to this 
  Report on Form 10-K and to file the same, with all exhibits thereto, and 
  all other documents in connection therewith, with the Securities and 
  Exchange Commission, hereby ratifying and confirming all that each of 
  said attorney in fact, or his substitute or substitutes, may do or cause 
  to be done by virtue hereof.
  
  
  /s/ Jerald L. Nelson    Director and Chairman of      October 13, 1997
  Jerald L. Nelson
  
  /s/ Frank C. Overfelt   Director and Acting           October 13, 1997
  Frank C. Overfelt
  
  /s/ Fred J. Anderson    Corporate Secretary, Director  October 13, 1997
  Fred J. Anderson        Chief Financial Officer       
  
  /s/ Eric J. Nickerson   Director                       October 13, 1997
  Eric J. Nickerson