FORM 10-K(SB)
                       
                          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, 1998
                       
                       [   ] 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____  No_X__   (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 November
                       30, 1998 was 18,833,717.

<PAGE>

                              TABLE OF CONTENTS
                       
                                                                
                                                                     Page #
                     
     PART I
                       
         Item 1   Business                                              2
         Item 2   Properties                                           13
         Item 3   Legal Proceedings                                    13
         Item 4   Submission of Matters to a Vote of Security Holders  13
                                                                     
                       
     PART II
                       
         Item 5   Market for the Registrant's Common Equity
                   and Related Stockholder Matters                     13
                    
         Item 6   Selected Financial Data                              14
                       
         Item 7   Management's Discussion and Analysis of Financial    
                   Condition and Results of Operation                  15
                       
         Item 8   Financial Statements                                 21
                       
         Item 9   Changes In and Disagreements with Accountants on 
                    Accounting and Financial Disclosure                22
                       
                       
     PART III
                       
         Item 10  Directors, Executive Officers, Promoters and
                   Control Persons of the Registrant: Compliance
                   with Section 16(a) of the Exchange Act              22
                       
         Item 11  Executive Compensation                               25
                       
         Item 12  Security Ownership of Certain Beneficial
                   Owners and Management                               27
                       
         Item 13  Certain Relationships and Related Transactions       28
                       
                 
     PART IV
                       
         Item 14  Exhibits and Reports on Form 8-K                    29
                       
                  (a) List of Financial Statements, Schedules
                       and Exhibits                                   29
                  (b) Reports on Form 8-K                             29
                  (c) Exhibits                                        29
                                  
     SIGNATURES                                                       31
                        
     SUPPLEMENTAL INFORMATION                                         32
                       
     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.  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 through
     Schneider Securities 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
     employees.
                       
     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 assume
    $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
    -----------------------------------------
    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
    -----------------------------------
    Dr. Richard Gwinn, an emergency medicine professional, founded NMC in
    California in 1979.  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 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.
    
    EDNet is currently in its fifth release, (EDNet 32) as a Windows 95/NT
    compliant product.  Recent enhancements include discharge aftercare
    instructions database, a user-sortable patient tracking display and the
    development of triage assessment protocols, auto faxing, and auto
    paging. EDNet 32 for Windows was released in the spring of 1998.
    
    System Architecture - EDNet32 is written in Borland C++ Builder using
    the Borland Database Engine.  All permanent databases and most control
    files use Paradox level 7 tables.  Files are compatible with either
    Borland Paradox 7 or Corel Paradox 8.  EDNet32 is supplied complete with
    all necessary licenses.  EDNet 32 runs under Microsoft Windows 95 or
    later along with other applications.  The system can be tied to multiple
    data bases such as Oracle, Sybase, Informix, Sequel Server and Paradox.
    
    Hardware - EDNet32 Version 5.x runs on a standard Novell network (3.11
    or better) or Microsoft NT Server with Windows 95 or later workstations.
     The Company 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.4.1.  Network communications
    hardware (Ethernet, Token Ring, 10BaseT) should be certified by Novell. 
    The Company supplies a fully licensed copy of Paradox 7.0 with every
    EDNet system.
    
    Individual workstations should be Pentium II's or better, with at least
    16MB of RAM.   Workstations must fully support VGA color graphics. 
    Stations should have Windows installed.  In addition to the appropriate
    number of end-user workstations, Tenet recommends a dedicated station
    for remote access communication and a dedicated station for interfaces
    from the hospital-wide information system.  A 56K baud modem  is
    required.  PC Anywhere 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, Out in the Hall,
    etc.  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 the Tenet 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 1,000 aftercare 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 Crystal
    Reports 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.
    
    Other Features of the latest version, EDNet32 include auto faxing, auto
    paging, industrial medicine components, forms management and the like.
    
    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 assignment, 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.  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.
    
    Marketing
    ---------
    The vice-president of Sales conducts the Company's sales and marketing. 
    For the current fiscal year, the position of Vice President sales is
    vacant and is being filled by the President of the Company.  The thrust
    of the marketing effort has been through advertising , exhibits at
    emergency department oriented shows and particularly through referrals
    from existing clients.  The company services clients nationwide but is
    especially strong in the western United States.
    
    As of November 30, 1998, the Company had sold its EDNet product to 27
    emergency department and urgent care 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 November 30, 1998 the
    Company was in the process of installing EDNet32 upgrade at three
    additional sites.  The Company has installed its new Windows 32 product
    at 4 sites and has received deposits from an additional 7 current users
    for upgrade in the 1999 fiscal year. 
    
    The Consulting division provides consulting support to major hospitals
    throughout the country.  These services consist primarily of cost
    benefit evaluations, patient classification for nursing, and
    productivity management for all other departments.  Consulting services
    are charged on a negotiated fee basis.  As of November 30, 1998 the
    Company was providing consulting services to four hospitals.
    
    As of November 30, 1998, the Company had sold or leased its RCMS product
    to two 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.
    
    EDNet 32 Product Development
    
    Development efforts are focused on the enhancement of the EDNet 32
    product.  Research is being conducted on the integration of nursing and
    physician documentation.  Voice recognition and radio frequency are
    being investigated as possible product enhancements.  An inpatient
    nursing application, building upon existing EDNet 32 software,  is being
    developed in conjunction with a major consulting client.
    
    Protection of Proprietary Rights
    
    The Company holds a registered trademark on the name "TRANSIT" and
    "Intellichart".  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.
    
    On August 24, 1994, a shareholder meeting was held which resulted in the
    authorized common stock of the Company being increased to 100,000,000 
    shares.
    
    
    
    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.
    
    In 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 $185,852, 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, Option, and Debt Conversions
    
    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.
    
    On February 20, 1998 the Company's board of directors authorized a
    reduction in exercise price on all outstanding Class A, B, C & D
    Warrants and options to $.03/share contingent upon exercise by March 20,
    1998.  The original exercise prices ranged from $.05 to $.42 per share.
    A total of 2,578,430 warrants and 1,164,286 options were exercised.  As
    a result of the exercise, the Company received cash of $17,321 and
    extinguished $94,961 of debt held by the option and warrant holders.  In
    addition, the Company converted $62,174 of debt into 2,072,496 shares of
    common stock.
    
    Employees
    
    At November 30, 1998, the Company employed eight full-time employees,
    two part-time employees and several independent service contractors. 
    The number of employees and their responsibilities are as follows:  two
    professional, five technical,  one administrative.
    
    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 had developed its Windows version of the emergency room
    system (EDNet 32) to run under Windows95 or Windows NT, tied to multiple
    databses such as Informix, Oracle, Sybase, Sequel Server and Paradox.
    
    Year 2000
    
    The Company does not anticipate incurring any substantial expenses to
    modify its software or operations to adjust for the year 2000.


    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 $4,050 per month.  This is pursuant to a
    lease which expires on November 15, 2000.
    
    
    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."
    
    Just prior to its suspension from NASDAQ on November 1, 1991, the
    reported closing bid and asked prices of the Company's Common Stock were
    $.03125 and $.0625, respectively.  In 1996 limited public trading of the
    Company's Common Stock resumed with price quotations available on the
    over the counter "bulletin board".  During fiscal year ended June 30,
    1998 a limited number of shares traded on the bulletin board market at a
    price range of $0.05 to $0.10 (bid).  The number of shareholders of
    record for the Company's Common Stock as of November 30, 1998 was 334
    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, 1994 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 fiscal years ended June 30, 1997
    and 1998 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,        
                           ------------------------------------------------
                                (In thousands, except per share amounts)
                             1998      1997      1996      1995     1994
                           --------  --------  --------  --------  --------
    Revenues               $    676  $   757   $  1,054  $    369  $    392
    Loss from operations        (48)    (431)      (571)     (319)     (356)
    Net loss                    (41)    (435)    (1,132)     (335)     (375)
    Net loss per common 
      share                    (.00)    (.03)      (.11)     (.07)     (.09)
    
    
    Balance Sheet Data
    ------------------ 
                                            As of June 30, 
                           ------------------------------------------------
                             1998      1997      1996      1995      1994
                           --------  --------  --------  --------  --------
                                            (In thousands)  
    Working capital
     (deficit)             $   (292) $   (470) $  (319)  $    (60) $    164
    Total assets                101        95      573        406       570
    Long-term obligations        -         -         4         11       195
    Stockholders' equity
     (deficit)                 (286)     (453)    (106)       172       180
    
    
    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 six months ended December 31, 1995, the
    Company acquired certain assets of the International HealthCare
    Consulting Group ("HCG") and acquired National Microcomputer Corporation 
    ("NMC").
    
    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.  While this resignation initially reduced the
    number of potential sales leads for the Company, the President of the
    company took over the sales function.  Sales activity is strong and
    sales leads are recovering.
    
    On July 10, 1996, Fred J. Anderson resigned as Chairman of the Board of
    Directors but continued as the company's chief financial officer and
    remained a board member.  On December 31, 1997 Fred J. Anderson resigned
    as Director, Treasurer and Secretary to pursue other interests.
    
    The above resignations resulted in lower SG&A expenses and a decrease in
    consulting revenues of the company as the efforts of those involved with
    consulting have been focused on EDNet32.  The Company is concerned about
    the reduced level of consulting revenues and is considering marketing 
    alternatives.
    
    As of June 30, 1998, the Company had sold or leased its RCMS product to
    two 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.
    
    As of June 30, 1998, the Company had installed its EDNet product to 26
    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, 1998, the Company was in the process of
    installing EDNet32 upgrade at three additional sites and had firm orders
    from seven existing clients for upgrades to EDNet32. 
    
    On October 24, 1998 the Company signed a consulting contract with a
    client in the Southwest to develop and install Intellichart(R), an
    inpatient nursing product.
    
    Results of Operations
    ---------------------

    Fiscal 1998 Compared with Fiscal 1997
    
    During fiscal year 1998, the Company had revenues of $676,403, which
    represented a decrease of $80,854 (11%) from $757,257 for the prior
    fiscal year.  The following table presents the components of revenues
    for fiscal 1998 and 1997.
    
                                           ACTUAL
                      --------------------------------------------------
    REVENUES            FY 98        FY 97       Increase      Percent
                                                (Decrease)    Increase
                                                             (Decrease)
                      ----------   ----------   ----------   ----------
    EDNet             $  313,090   $  359,638   $  (46,548)       (13%)
    RCMS                 277,580      309,395      (31,815)       (10%)
    Consulting            85,733       88,224       (2,491)       (03%)
                      ----------   ----------   ----------   --------- 
    Total             $  676,403   $  757,257   $  (80,854)       (11%)
                      ==========   ==========   ==========   ==========

    The following table details cost of revenue by product, comparing the
    prior fiscal year as shown on financials.
    
                                                              Increase
                                     1998         1997       (Decrease)
                                   ----------   ----------   ----------
    Ednet System and RCMS &   
      RCMS/X systems               $  189,128   $  203,985   $  (14,857)
    Consulting                         89,759      116,518      (26,759)
    Amortization & Writedown                             
      of Deferred Software Costs           -       180,637     (180,637)
                                   ----------   ----------   ----------
    Total                          $  278,887   $  501,140   $ (222,253)
                                   ==========   ==========   ==========

    Cost of revenues decreased by $222,253 (44%) to $278,887 for fiscal year
    1998 compared with $501,140 for the previous fiscal year.  Cost of
    revenues related to the EDNet System and Respiratory System for fiscal
    year 1998 were $189,128, with a gross margin of 68%.  This compares to
    cost of revenues of $203,985 with a gross margin of 70% for the prior
    twelve month period.
    
    Amortization and write-downs of deferred software costs were 0 for
    fiscal year 1998 compared with $180,637 for the previous fiscal year. 
    Consulting cost of revenue decreased by 57% to $89,759 for fiscal year
    1998 from $116,518 for the fiscal year 1997.
    
    Selling, general and administrative expenses decreased by $218,352, or
    47%, to $244,228 for fiscal year 1998 compared with $462,580 for the
    previous fiscal year. Software development expenses decreased by $23,628
    or 11%, to $201,293 for fiscal year 1998 from $224,921 for fiscal 1997. 
    This is the result of fewer administrative personnel, and the use of
    outside contractors to finish the development of EDNet 32.
    
    Net interest expense increased to $19,959 for fiscal year 1998 compared
    with $3,785 for fiscal year 1997.  This is the result of the conversion
    of debt and accumulated interest expense converted  into equity.
    
    As a result of the above factors, the net loss from operations decreased
    to $48,005 for fiscal year 1998 compared with a loss of $431,384 for
    fiscal year 1997.
    
    Net loss decreased to $40,556 or $.00 loss per share for fiscal year
    1998 compared with loss of $435,169 or $.03 loss per share for fiscal
    year 1997.
    
    Fiscal 1997 Compared with Fiscal 1996
    
    During fiscal year 1997, the Company had revenues of $757,257 which
    represented a decrease of $297,196 (37%) from $1,054,453 for the prior
    fiscal year.  The following table presents the components of revenues
    for fiscal 1997 and 1996. 
    
    
      REVENUES             FY 97        FY 96       Increase     Percent
                                                                 Increase
                                                   (Decrease)   (Decrease)
    --------------       ----------   ----------   ----------   ----------
    EDNet Systems        $  359,638   $  397,103   $  (37,465)        (9%)
    RCMS Systems            309,395      362,774      (53,339)       (15%)
    Consulting               88,224      294,576     (206,352)       (70%)
                         ----------   ----------   ----------   ----------
    Total                $  757,257   $1,054,453   $ (297,196)       (28%)
                         ==========   ==========   ==========   ==========

    The following table details cost of revenue by product, comparing the
    prior fiscal year as shown on financials.
    
                                                             Increase
                                      1997         1996     (Decrease)
                                    ---------    ---------   ---------
    EDNet System                    $  86,745    $  89,835   $  (3,040)
    RCMS Systems                      117,240      209,539     (92,294)
    Consulting                        116,518      194,101     (77,583)
    Amortization & Writedown                             
     of Deferred Software Costs       180,637       66,480     114,157
                                   ----------   ----------   ---------
    Total                          $  501,140   $  559,955   $ (58,815)
                                   ==========   ==========   =========
    
    Cost of revenues decreased by $58,815 (11%) to $501,140 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
    of 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 in deferred software of
    RCMS/X.  Consulting cost decreased by 40% to $116,518 for fiscal year
    1997 from $194,101 for the fiscal year 1996
    
    Selling, general and administrative expenses decreased by $353,475, or
    43%, to $462,580 for fiscal year 1997 compared with $816,055 for the
    previous fiscal year.  This is a result of decreased costs of marketing
    of $41,000, and decreased sales travel of $48,000.  The following
    expenses decreased from the prior year;  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 $24,079 or 10%, to $224,921
    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 $3,784 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.
    
    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 decreased
    to $412,541 for fiscal year 1997 compared with a loss of $570,557 for
    fiscal year 1996.
    
    Net loss decreased to $416,325, 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.
    
        
    Liquidity and Capital Resources
    -------------------------------

    The Company has suffered recurring losses from operations since fiscal
    year 1989, and as of June 30, 1998 had an accumulated deficit of
    $5,147,094.  The operating losses are due in part to significant
    decreases in revenues in fiscal years 1997, 1996, 1995, 1994, 1993 and
    1992 as the Company redeveloped and updated its emergency department and
    respiratory product and also as a result of the Company's expensing
    $546,884 of excess purchase price related to the  recent 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 consisted of a minimum of 670,000 units
    and a maximum of 2,000,000 units priced at $.30 per unit.  Each unit
    consisted 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 $185,852.
    
    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.
    
    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.
    
    On February 20, 1998 the Company's board of directors authorized a
    reduction in exercise price on all outstanding Class A, B, C & D
    Warrants and options to $.03/share contingent upon exercise by March 20,
    1998.  The original exercise prices ranged from $.05 to $.42 per share.
    A total of 2,578,430 warrants and 1,164,286 options were exercised.  As
    a result of the exercise, the Company received cash of $17,321 and
    extinguished $94,961 of debt held by the option and warrant holders.  In
    addition, the Company converted $62,174 of debt into 2,072,496 of common 
    stock.
    
    The Company's cash position decreased by $5,401 during the fiscal year
    ended June 30, 1998 to $21,937 as compared to $27,338 as of June 30,
    1997.  The Company had a working capital deficit of $292,487 as of June
    30, 1998 as compared with a deficit of $469,775 as of June 30, 1997. 
    Operating activities used $20,584 for the fiscal year ended June 30,
    1998 as compared with using $210,540 for the corresponding period of the
    previous year.  The principal sources of cash have been (i) proceeds
    from conversion of warrants of $17,321.  There were debt payments of
    $31,445 during the fiscal year ended June 30, 1998 as compared with
    $42,139 for the corresponding period of the previous year.
    
    While a portion of the current liabilities, approximately $4,000, 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.
    
    Inflation has not had a significant impact on the Company's operations.
    
    <PAGE>

    ITEM 8:    FINANCIAL STATEMENTS
    
             Index to Financial Statements
    
    
    Report of Independent Public Accountants                              F-1
    
    Balance Sheets as of June 30, 1998                                    F-2
    
    Statements of Operations for the Years Ended June 30, 1998 and 1997   F-3
    
    Statements of Shareholders' Equity for the Years Ended June 30,
    1998 and 1997                                                         F-4

    Statements of Cash Flows for the Years Ended June 30, 1998 and 1997   F-5
    
    Notes to Financial Statements                                         F-6

<PAGE>
    
    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 the 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, 1998, and the related consolidated statements of operations,
    shareholders' deficit and cash flows for the years ended June 30, 1998
    and 1997. 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 audits.
    
    We conducted our audits in accordance with generally accepted auditing
    standards. Those standards require that we plan and perform the audits
    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, 1998, and
    the results of their operations and their cash flows for the years ended
    June 30, 1998 and 1997 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. 
    
    
                   
                                                HANSEN, BARNETT & MAXWELL
            
    Salt Lake City, Utah
    September 22, 1998

                                        F-1
    <PAGE>

                   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
                              CONSOLIDATED BALANCE SHEET
                                    JUNE 30, 1998
    
                                        ASSETS
    
    Current Assets
      Cash                                                         $  21,937
      Accounts receivable, net of allowance for                    
        doubtful accounts of $7,500                                   72,181
                                                                   ---------
          Total Current Assets                                        94,118
                                                                   ---------
    Furniture, Fixtures and Equipment                                119,302
      Less: Accumulated depreciation                                (114,092)
                                                                   ---------
                                                                       5,210
                                                                   ---------
    Other Assets, Net                                                  1,425
                                                                   ---------
    Total Assets                                                   $ 100,753
                                                                   ---------
                        LIABILITIES AND SHAREHOLDERS' DEFICIT
    
    
    Current Liabilities
      Notes payable                                              $    31,185
      Accounts payable                                               103,251
      Accrued expenses                                                43,360
      Deferred revenue                                               163,197
      Payable to officers/shareholders                                41,305
      Related-party debt                                               4,307
                                                                 -----------
          Total Current Liabilities                                  386,605
                                                                 -----------
    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, 18,833,717 shares issued                  18,834
      Additional paid-in capital                                   4,834,421
      Warrants outstanding                                             7,987
      Accumulated deficit                                         (5,147,094)
                                                                 -----------
          Total Shareholders' Deficit                               (285,852)
                                                                 -----------
    Total Liabilities and Shareholders' Deficit                  $   100,753
                                                                 ===========

    The accompanying notes are an integral part of these consolidated
       financial statements.
                                        F-2
  <PAGE>


                   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
    
                                                           1998        1997
                                                        ----------  ----------
    Revenues
     Software license fees and maintenance              $  590,670  $  669,033
     Consulting services                                    85,733      88,224
                                                        ----------  ----------
       Total Revenues                                      676,403     757,257
                                                        ----------  ----------
    Cost of Revenues
       Software license fees and maintenance               189,128     203,985
       Consulting services                                  89,759     116,518
       Amortization and write-downs of                  
        deferred software costs                                 -      180,637
                                                        ----------  ----------
       Total Cost of Revenues                              278,887     501,140
                                                        ----------  ----------
    Gross Profit                                           397,516     256,117
     
    Operating Expenses                                  
     Selling, general and administrative                   244,228     462,580
     Software development                                  201,293     224,921
                                                        ----------  ----------
       Total Operating Expenses                            445,521     687,501
                                                        ----------  ----------
    Loss From Operations                                   (48,005)   (431,384)
     
    Other Income and Expense
     Interest income                                           757       1,385
     Interest expense                                      (20,716)     (5,170)
                                                        ----------  ----------
    Total Other Income and Expenses                        (19,959)     (3,785)
                                                        ----------  ----------
    Loss Before Extraordinary Item                         (67,964)   (435,169)
    
    Extraordinary Item - Forgiveness of Debt 
      (Net of $0 Tax Benefit)                               27,408          - 
                                                        ----------  ----------
    Net Loss                                            $  (40,556) $ (435,169)
                                                        ==========  ==========
     
    Basic and Diluted Loss Per Common Share             $    (0.00) $    (0.03)
                                                        ==========  ==========
    Weighted Average Number of Common
      Shares Outstanding                                14,643,578  12,747,444
                                                        ==========  ==========

       The accompanying notes are an integral part of these consolidated
         financial statements.
                                        F-3
   <PAGE>


                   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                      FOR THE YEARS ENDED JUNE 30, 1997 AND 1998
    
   <TABLE>
   <CAPTION>
                                     Common Stock
                                 ----------------------
                                   Shares                Paid-In     Warrants    Accumulated    Common     Deferred
                                   Issued      Amount     Capital   Outstanding    Deficit      Stock    Compensation   Total
                                 ----------  ----------  ----------  ----------  -----------  ----------  ----------  ----------
   <S>                          <C>         <C>         <C>         <C>         <C>          <C>         <C>         <C> 
    Balance, June 30, 1996       11,397,081  $   11,397  $4,418,568  $  143,221  $(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 
     compensation                        -           -           -           -            -           -        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)

    Conversion of options and
     warrants to common stock 
     at discounted rate for 
     cash and conversion of 
     liabilities                  3,742,716       3,743     130,273     (21,734)          -           -           -      112,282

    Issuance of common stock 
     to satisfy amounts owed      2,072,496       2,072      60,102          -            -           -           -       62,174
       
    Shares returned to Company   (1,084,286)     (1,084)      1,084          -            -           -           -           -
  
    Shares issued to employees 
     as compensation and to 
     third parties as
     interest expense             1,084,286       1,084      31,445          -            -           -           -       32,529

    Net loss                             -           -           -           -       (40,556)         -           -      (40,556)
                                 ----------  ----------  ----------  ----------  -----------  ----------  ----------  ----------
    
    Balance, June 30, 1998       18,833,717  $   18,834  $4,834,421  $    7,987  $(5,147,094) $       -   $       -   $ (285,852)
                                 ==========  ==========  ==========  ==========  ===========  ==========  ==========  ========== 
<FN> 
    The accompanying notes are an integral part of these consolidated
                                financial statements.
</FN>
</TABLE>                                         F-4
<PAGE>


                   TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
    
      
                                                           1998        1997
                                                        ---------   ----------
    Cash Flows From Operating Activities
      Net loss                                          $ (40,556)  $ (435,169)
      Adjustments to reconcile net loss to net             
       cash provided by operating activities:              
         Write-off of excess purchase price                    -            - 
         Depreciation and amortization                     10,859       83,493
         Write-down of deferred software costs                 -       115,432
         Expenses related to the issuance of               
           stock and stock options                         32,529        8,125
         Increase in allowances for doubtful accounts          -            -
         Gain on extinguishment of debt                   (27,408)          - 
         Change in assets and liabilities, net of          
           effects of acquisitions:                        
            Accounts and contracts receivable             (22,188)      92,440
            Inventories                                        -         5,000
            Other assets                                       -            - 
            Accounts payable                               (7,087)     (26,573
            Accrued liabilities                             1,482      (55,809)
            Deferred revenue                               31,785        2,521
            Amounts due to related parties                     -            - 
                                                        ---------   ----------

         Net Cash Used In Operating Activities            (20,584)    (210,540)
                                                        ---------   ----------
    Cash Flows From Investing Activities                   
      Acquisition of furniture, fixtures and equipment         -            - 
                                                        ---------   ----------
    Net Cash Used In Investing Activities                      -            - 
                                                        ---------   ----------
    Cash Flows From Financing Activities
      Proceeds from the sale of common stock and
       warrants to purchase common stock                   17,321       70,428
      Proceeds from borrowings                             29,307           - 
      Principal payments on long-term debt                (31,445)     (42,139)
                                                        
         Net Cash Provided by  Financing Activities        15,183       28,289
                                                        ---------   ----------
      
    Net Increase (Decrease) In Cash                        (5,401)    (182,251)
    
    Cash at Beginning of the Year                          27,338      209,589
                                                        ---------   ----------
    Cash at End of the Year                             $  21,937   $   27,338
                                                        =========   ==========
      
    Supplemental Disclosures of Cash                       
       Flow Information:                                   

      Cash paid for interest                            $     488   $    1,577
                                                        =========   ==========
    
    The accompanying notes are an integral part of these consolidated
      financial statements.
                                        F-5
   <PAGE>


               TENET INFORMATION SERVICES, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    
    
    NOTE 1--NATURE OF OPERATIONS
    
    Organization - Tenet Information Services, Inc. ("Tenet"), a
    Utah corporation, designs and markets a computer-based medical
    and health information system related primarily to emergency
    departments (the "EDNet System"). 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
    designed and marketed the 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. Tenent
    has elected to phase out its respiratory therapy product line.
    
    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.
    
    Basis of Presentation - The accompanying financial statements
    have been prepared on a going concern basis, which contemplates
    the realization of assets and the satisfaction of liabilities
    in the normal course of business. However, the Company has
    experienced recurring losses from operations and as of June 30,
    1998 has a working capital deficit of $292,487 and a net
    capital deficiency of $285,852. As shown in the financial
    statements, during the years ended June 30, 1998 and 1997, the
    Company incurred net losses of $40,556 and $435,169,
    respectively. These factors, raise substantial doubt about the
    Company's ability to continue as a going concern for a
    reasonable period of time. The financial statements do not
    include any adjustments relating to the recoverability and
    classification of recorded asset amounts or the amount and
    classification of liabilities that might be necessary should
    the Company be unable to continue as a going concern. The
    Company's ability to continue as a going concern is dependent
    upon its ability to generate sufficient cash flow to meet its
    obligations on a timely basis and to obtain additional
    financing as may be required. The Company has phased out its
    respiratory therapy product line and replaced it with the EDNet
    System which is deemed to be a more marketable and profitable
    product line. Management is also negotiating various sales
    agreements and is continuing to better manage its cash flow.
    The Company is in the process of discussing joint ventures with
    software companies that would enhance and expand the product
    line now available. Management is also considering raising
    capital through the issuance of warrants and other equity
    instruments. The Company has restructured its management
    personnel in an effort to streamline operations. The Company is
    not expected to incur additional software development
    write-offs which contributed to the 1997 fiscal year loss.
    Also, management has been able to substantially reduce losses
    compared to prior periods.
    
    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. 
    
    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 $10,859 and $18,288 for the periods ended June 30, 1998 and
    1997. 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, 1998 and 1997.
    
    Software Development Costs - Costs incurred in creating
    computer software products are charged to operations as
    software development expense prior to the development of a
    detailed program design or a working model. After the detailed
    program design or working model is established, costs of
    producing product masters are capitalized as software
    development costs.
    Costs of maintenance and customer support are recognized as
    expense when the related revenue is recognized or when those
    costs are incurred, whichever occurrs first. Amortization of
    capitalized costs relating to each software product began when
    the product was released for sale to customers. Amortization
    was computed using the straight-line method over the remaining
    estimated economic life of the software, which was four to five
    years. Unamortized costs were carried at the lower of cost or
    net realizable value. Due to uncertainty regarding realization
    of capitalized software costs, those costs were fully
    recognized as amortization of software development costs during 
    1997.
    
    Impairment - The Company records impairment losses on property
    and equipment when indicators of impairment are present and
    undiscounted cash flows estimated to be generated by those
    assets are less than the assets' carrying amount.
    
    Fair Value of Financial Instruments - The estimated fair value
    of financial instruments is not presented because, in
    Management's opinion, there is no material difference between
    carrying amounts and estimated fair values of financial
    instruments as presented in the accompanying balance sheet.
    
    Income Taxes - The Company recognizes the amount of income
    taxes payable or refundable for the current year and recognizes
    deferred tax assets and liabilities for the future tax
    consequences attributable to differences between the financial
    statement amounts of certain assets and liabilities and their
    respective tax bases. Deferred tax assets and deferred
    liabilities are measured using enacted tax rates expected to
    apply to taxable income in the years those temporary
    differences are expected to be recovered or settled. Deferred
    tax assets are reduced by a valuation allowance to the extent
    that uncertainty exists as to whether the deferred tax assets
    will ultimately be realized.
    
    Advertising Costs - Advertising costs are charged to expense in
    the period incurred. Advertising expense for the years ended
    June 30, 1998 and 1997 was $10,675 and $1,779, respectively.
    
    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. 
    
    Loss Per Share - In 1997, the Company adopted Statement of
    Financial Accounting Standards (SFAS) N0. 128, Earnings Per
    Share. Under SFAS 128, loss per common share is computed by
    dividing net loss available to common stockholders  by the
    weighted-average number of common shares outstanding during the
    period. Diluted loss per share reflects the potential dilution
    which could occur if all contracts to issue common stock were
    exercised or converted into common stock or resulted in the
    issuance of common stock. In the Company's present position,
    diluted loss per share is the same as basic loss per share
    because potentially issuable common shares, which include
    688,075  warrants and 50,000 options, would decrease the loss
    per share and have been excluded from the calculation. The
    effect of the new standard on prior years was immaterial;
    accordingly, prior periods have not been restated.
    
    New Accounting Standards - The Financial Accounting Standard
    Board issued SFAS No. 130, Reporting Comprehensive Income and
    SFAS No. 131, Disclosures About Segments of an Enterprise and
    Related Information in 1997. These statements, which are
    effective for fiscal years beginning after December 15, 1997,
    expand or modify disclosures and will have no impact on the
    Company's financial position, results of operations or cash flows.
    
    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 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 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 $546,884.
    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 $546,884 in fiscal 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.
    
    NOTE 4-NOTES PAYABLE AND RELATED-PARTY LONG-TERM DEBT
    
    Notes payable consist of the following at June 30, 1998:
    
          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, 1998), 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 1998 balance sheet.               $  31,185
                                                                   ---------
    
             Total Notes Payable                                   $  31,185
                                                                   =========
    
     Related-party long-term debt consists of the following at June
    30, 1998:
    
     Note payable to a related party (Healthcare
        Consulting Group). No specified interest rate,
        balance is due on demand                                   $   4,307
                                                                   ---------

          Total Related Party Debt                                 $   4,307
                                                                   =========
    
    
    NOTE 5-OPERATING LEASE
    
    The Company occupies its facilities and uses equipment under
    non-cancelable operating leases which expire in fiscal year
    1999. Lease expense for fiscal 1998 and 1997 was $47,896 and
    $50,833, respectively.
    
    Minimum future lease payments under non-cancelable operating
    leases having remaining terms in excess of one year as of June
    30, 1998 are as follows:
    
              Year Ended June 30,
                     1999                              $  22,450
                                                       =========
    NOTE 6-SOFTWARE DEVELOPMENT COSTS
    
    During the period ended June 30, 1997, it was determined that
    the probability of any future recovery of the software
    development costs were remote, and the Company concluded that
    this asset was impaired. Accordingly, the carrying value of the
    software was reduced to zero at June 30, 1997 by recognizing an
    additional $115,432 of amortization during the year ended June
    30, 1997. Total amortization expense for the period ended June
    30, 1997 was $180,637.
    
    NOTE 7-INCOME TAXES
    
    No benefit for income taxes has been recorded during the years
    ended June 30, 1998. 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.
    
       The components of the net deferred tax assets at June 30,
       1998 are as follows:
                                                            
                                                              1998
                                                           -----------
          Deferred Tax Assets:                                        
          Tax net operating loss carry forward              
                                                           $ 1,597,691
          Tax credits carry forward                            103,000
          Reserves and accrued liabilities                       8,493
                                                           ----------- 
          Total Deferred Tax Assets                          1,709,184
                                                           -----------
          Valuation allowance                               
                                                            (1,709,184)
                                                           -----------
          Net Deferred Tax Asset                           $        - 
                                                           ===========

    During the years ended June 30, 1998 and 1997, the valuation
    allowance increased by $13,184 and $127,000, respectively. 
    
    As of June 30, 1998, the Company has net operating loss
    carryforwards for federal income tax reporting purposes of
    approximately $4,284,358. 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. 
    
    The following is a reconciliation of the income tax at the
    federal statutory rate of 34% with the provision for income
    taxes for the years ended June 30, 1998 and 1997:
        
                                                         1998        1997
                                                      ----------  ----------
          Income tax benefit at statutory rate        $  (13,789) $ (147,957)
          Change in deferred tax valuation account        13,184     127,000
          Non deductible taxes                             1,943       5,595
          State taxes, net of federal benefit             (1,338)    (14,361)
          Change in effective rates                           -      (29,723)
                                                      ----------  ----------
          Provision for Income Taxes                  $       -   $       -
                                                      ==========  ==========
    
    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 1998, the Company converted $62,174 of debt into
    2,072,496 shares of common stock. As described in Notes 10 and
    11, $2,578,430 warrants and 1,164,286 stock options were
    exercised at $0.03 per share. As a result of the exercise, the
    Company received cash of $17,321 and extinguished $94,961 of
    debt held by the option and warrant holders. 
    
    In 1998, two officers returned 1,084,286 shares of common stock
    to the treasury. These shares were then reissued to employees
    and creditors as additional compensation of  $25,951 and
    interest expense of $6,578.
    
    NOTE 9-STOCK OPTIONS
    
    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 from
    immediately to 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.
    A summary of the status of the Company's option plan as of June
    30, 1998 and 1997, and changes during the years then ended is
    presented below:

  <TABLE>
  <CAPTION>
                                                1998                    1997
                                     ------------------------   ----------------------
                                              Weighted-Average         Weighted-Average
                                                  Exercise                   Exercise
                                        Shares      Price         Shares       Price
                                    -----------   ----------    ----------  ----------
 <S>                               <C>           <C>           <C>         <C>     
  Outstanding at beginning of year    1,014,286   $     0.14       620,000  $     0.09
  Granted                               200,000         0.05       814,286        0.14
  Exercised                          (1,164,286)        0.03            -           - 
  Canceled                                   -          -         (420,000)       0.08
                                    -----------   ----------    ----------   ---------
  Outstanding at end of  year            50,000         0.14     1,014,286        0.14
                                    ===========   ==========    ==========   =========
       
  Options exercisable at year-end        50,000         0.14       924,286        0.14
                                    ===========   ==========    ==========   =========
       
  Weighted-average fair value of
   options granted during the year  $     0.05                  $     0.04
                                    ==========                  ==========
 </TABLE>                      
    
    On February 20, 1998, the Company's board of directors
    authorized a reduction of the exercise price on all outstanding
    options to $0.03 per share contingent upon exercise by March
    20, 1998. A total of 1,164,286 options with original exercise
    prices from $0.05 to $0.14 per share were exercised.
    
    At June 30, 1998, the exercise price for options outstanding
    was $0.14 per share and the weighted-average remaining
    contractual life was 3.5 years.
    
    At June 30, 1997, exercise prices for options outstanding
    ranged from $0.05 to $0.14 per share, 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:
    
                                                        1998        1997
                                                     ---------   ----------
          Net loss
             As reported                             $ (40,556)  $ (435,169)
             Pro forma                                 (50,963)    (473,636)
    
          Loss per share
             As reported                                 (0.00)       (0.03)
             Pro forma                                   (0.00)       (0.04)
    
    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 1998
    and 1997, respectively: expected volatility of 34.0 and 34.6
    percent, respectively, risk-free interest rates of 5.7 and 6.1
    percent, respectively,  and expected lives of  5 years. 
    
    Option 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.
    
    NOTE 10-WARRANTS TO PURCHASE COMMON STOCK
    
    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,
                                                   ------------------------
                                                       1998        1997 
                                                   -----------   ----------
       Warrants to purchase common
          shares, beginning of the year,           
          at prices ranging from $0.07
          to $0.42 per share                         3,266,507    4,887,931
                                                                 
       Warrants exercised at prices ranging
         from $0.03 to $0.05 per share              (2,578,430)  (1,621,424)
                                                    ----------   ----------
       Warrants to purchase common                   
          shares, end of the year, at                
          prices ranging from $0.07                  
          to $0.42 per share                           688,077    3,266,507
                                                    ==========   ========== 
    
    On February 20, 1998, the Company's board of directors
    authorized a reduction of the exercise price on all outstanding
    Class A, B, C and D warrants to $0.03 per share contingent upon
    exercise by March 20, 1998. The original exercise prices ranged
    from $0.05 to $0.42 per share. A total of 2,578,430 warrants
    were exercised.
    
    During fiscal 1997, the Company's board of directors authorized
    a reduction of the exercise price of the Company's Class B
    warrants to $0.05 from $0.07 per share, contingent upon
    exercise by September 30, 1996. A total of 1,621,424 warrants
    were exercised.
    
    NOTE 11--SUPPLEMENTAL CASH FLOW INFORMATION ACTIVITIES
    
    As described in Note 8, the Company converted $62,174 of debt
    into 2,072,496 shares of common stock. In addition, 2,578,430
    warrants and 1,164,286 stock options were exercised at $0.03
    per share resulting in 3,742,716 shares of common stock. As a
    result of the exercise the Company received cash of $17,321 and
    extinguished $94,961 of debt held by the option and warrant
    holders. Also during fiscal 1998, $7,869 of accrued interest
    was converted to long term debt.
    
    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.
    
    NOTE 12 -- EXTRAORDINARY ITEM 
                                      
    During the year ended June 30, 1998, an officer forgave $9,933
    of debt. In addition the Company eliminated $17,475 worth of
    payables between one and three years old for which the Company
    believes it is no longer liable. The total write off of $27,408
    has been recorded as an extraordinary gain on the forgiveness
    of debt.
    
    
    ITEM 9:    CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    On May 30, 1997, the Registrant dismissed Arthur Anderson 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 uncertainty,
    audit scope or accounting principles.  The Registrant's board
    of directors unanimously approved dismissal of Arthur Anderson.
    
    During the fiscal years ended June 30, 1996 and 1995 and the
    interim period subsequent to June 30, 1997, 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 Anderson 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:
    
        Name          Age   Position with The Company     Date of Election
    ---------------  -----  -------------------------     -----------------
   Jerald L. Nelson   55    President(resigned)           December 1, 1993
                                                           (July 10, 1996)
                            Chairman of the Board         July 10, 1996
                            Director                      January 24, 1994
                                                  
   Frank Overfelt     55    Director                      September 29, 1995
                            Chief Operations Officer
                             (acting)                     July 10, 1996
                            President & Chief Operating 
                              Officer                     August 31, 1998
    
  Eric J. Nickerson   45    Director                      June 29, 1990
    
    
  Fred J. Anderson    51   Chairman of the Board 
                            (resigned)                    May 21, 1992
                                                          *(July 10, 1996)
                           Director (resigned),           July 18, 1986* 
                                                          (December 31, 1997)
                           Treasurer (resigned)           May 16, 1985* 
                                                          (December 31, 1997)
                           Secretary (resigned)           January 11, 1989* 
                                                          (December 31, 1997)
    
    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 but continued as the company's chief
    financial officer and remained a board member.  On December 31,
    1997 Fred J. Anderson resigned as Director, Treasurer and
    Secretary.  On July 10, 1996 Jerald L. Nelson resigned as
    President and Chief Operating Officer and was elected Chairman
    of the Board of Directors.  Frank C. Overfelt was also
    appointed Chief Operating Officer on an interim basis.  At a
    board of directors meeting held on August 31, 1998 Frank
    Overfelt was elected to the position of President and Chief
    Operating 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, Interwest Home Medical,
    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 1986.  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.  His total healthcare
    experience is 23 years.
    
         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.   
    
    
    Other Key Personnel
    -------------------
         The Company's other key personnel include the following:
    
         Donald W. Ballash.  Mr. Ballash has over 19 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.  He holds a B.S. Degree in Operations and Systems
    Analysis from BYU.
    
         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 year ended June 30, 1996 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  /
                                                                  ---------------------------
                                                                  Securities
    Name                 Year    Salary    Bonus  Other Restricted   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-
    Chief Operating
     Officer              1997   76,797     -0-    -0-     -0-        -0-       -0-    -0-
                          1998   76,797     -0-    -0-     -0-        -0-       -0-    -0-
                                 
    Jerald L. Nelson      1996   27,500     -0-    -0-     -0-        -0-       -0-    -0-
    Chairman of 
     the Board            1997    -0-       -0-    -0-    -0-         -0-       -0-    -0-
                          1998    -0-       -0-    -0-    -0-         -0-       -0-    -0-
    
    All Executive Officers
    
     (5 persons)          1996  308,200    -0-   21,800   -0-         -0-       -0-    -0-
      3 persons)          1997  145,690    -0-     -0-    -0-         -0-       -0-    -0-
     (1 person)           1998   76,797    -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.
    
    During the fiscal year ended June 30, 1998, the Company granted
    200,000 options to key employees exercisable at the rate of
    $.05 per share.  Also, during the fiscal year ended June 30,
    1998, 300,000 ISO options were exercised and 150,000 NQSO's
    were exercised at a price of $.03 per share.  In addition,
    714,286 options were exercised at a price of $.03 per share. 
    The options were granted in 1996 pursuant to the acquisition of
    the assets of the International Healthcare Consulting Group.
    
        
    
    ITEM 12:   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT
    
    The following table sets forth the holdings of common stock as
    of November 30, 1998 (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 November 30, 1998
    ------------------------------------------------------------
                                  Common (1)  Percent of Shares Outstanding
                                  ---------   -----------------------------
    Michael R. Carlston 2         5,278,115             26.97%
    Dennis C. Peterson 3          4,220,442             21.56%
    Mark Oldroyd 4                3,975,559             20.31%
    Scott Staker 5                3,975,559             20.31%
    T-Acquisition 6               3,775,559             19.29%
    Eric J. Nickerson 7           2,602,044             13.29%
    Third Century II 7            2,602,044             13.29%
    Robert Smith 8                1,166,246              5.96%
    Richard Gwinn 9               1,054,920              5.39%
    Frank Overfelt 10             1,102,143              5.63%
    Donald W. Ballash 11            776,429              3.97%
    Jerald L. Nelson 12             435,700              2.23%
    
    All Officers and 
       Directors                  4,916,316             25.12%



    1.  Based on 18,833,717 common shares outstanding,   688,075
    warrants to purchase common shares at $0.07 - $0.42 and options
    to acquire 50,000 shares of Common Stock at $0.05 per share.
    2.  The shares indicated include:  (i) 1,502,556 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) 3,775,559 shares of Common Stock 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 3,775,559 shares of Common Stock  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 3,775,559 shares of
    Common Stock 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 3,775,559 shares of Common Stock  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
    3,775,559 shares of Common Stock   The address of T-Acquisition
    is 855 Harwood Dr., Murray, UT 84107.
    7.  Includes 2,602,044 shares of Common Stock  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 803,497 shares of Common Stock held by Dr. Smith .
     Dr. Smiths address is 2291 Greer Rd., Palo Alto CA 94303
    9.  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
    10.  Includes 50,000 shares of Common Stock held by IHCG and
    1,052,142 shares of Common Stock held by Mr. Overfelt,  Mr.
    Overfelts address is 4634 So. Ledgemont Dr., Holladay UT 84124
    11.  Includes 50,000 shares of Common Stock held by IHCG, and
    726,429 shares of Common Stock held by Mr. Ballash.  Mr.
    Ballash's address is 9777 So. Dunsinsame Dr., So. Jordan, UT 84095
    12.  Includes 735,706 shares of Common Stock . Mr. Nelsons
    address is 207 W. Clarendon #3B, Phoenix, AZ 85013
    
    
    
    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 transaction identified below.
    
    In accordance with the Board resolution of February 20, 1998
    Frank C. Overfelt, a director and officer of the Company
    converted $12,446 of debt into common stock by exercising his
    options (428,572 shares) and warrants (398,571 shares). He also
    received an additional 225,000 shares as a gift from other
    shareholders. Consequently he became a beneficial owner of more
    than 5% of the common stock of the company.
    
    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:
    
            Report of Independent Public Accountants
    
            Balance Sheet as of June 30, 1998.
    
            Statements of Operations for the Years Ended 
            June 30, 1998 and 1997.
    
            Statements of Shareholders' Equity 
            for the Years Ended June 30, 1998 and 1997. 
    
            Statements of Cash Flows for the Years ended June 30,
               1998 and 1997.
    
          Notes to 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

<PAGE>

                             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.
    
                     TENET INFORMATION SERVICES, INC.
    
    February 2, 1999              By:  /s/ Jerald L. Nelson
                                  ---------------------------------------
                                  Jerald L. Nelson, Chairman of the Board
    
    
    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 Officer, 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
    
    Know 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 his 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.

    
         Signature                  Title                     Date
         ---------                 -------                   ------


    /s/ Jerald L. Nelson     Director and Chairman of    February 5, 1999
    --------------------     the Board of Directors
    Jerald L. Nelson    
    
    /s/ Frank C. Overfelt    Director, President and     February 5, 1999
    ---------------------     Chief Operations Officer
    Frank C. Overfelt  
    
    /s/ Eric J. Nickerson    Director                    February 5, 1999
    ---------------------   
    Eric J. Nickerson 
    
  <PAGE>    
    
                                  
                                  
    Supplemental Information to be Furnished With Reports Filed
    Pursuant to Section 15(d) of the Act by Companies Which Have
    Not Registered Securities Pursuant to Section 12 of the Act.
                                  
    
    The Company has not prepared or distributed any annual report
    to security holders covering the last fiscal year nor any proxy
    statement, form for proxy or other proxy soliciting material to
    more than ten of the Company's security holders with respect to
    any annual or other meeting of security holders.  In the event
    the Company's management elects to distribute such an annual
    report or proxy  material subsequent to the filing of this
    annual report on Form 10-K, the Company will furnish four
    copies of such materials to the Commission when it is sent to
    security holders.