<PAGE>

                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                               FORM 10-KSB/A-1

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
     EXCHANGE ACT OF 1934

                      FOR THE FISCAL YEAR ENDED JUNE 30, 1998

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

         For the transition period from                      to

                       COMMISSION FILE NUMBER 000-24541

                         CORGENIX MEDICAL CORPORATION
                (Name of Small Business Issuer in its charter)

                  NEVADA                                93-1223466
    (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)


                12061 TEJON STREET, WESTMINSTER, COLORADO 80234
          (Address of principal executive offices, including zip code)

                                 (303) 457-4345
               (Issuer's telephone number, including area code)

    Securities registered pursuant to Section 12(b) of the Act:
    Securities registered pursuant to Section 12(g) of the Act:  COMMON STOCK,
    $.01 PAR VALUE

Check whether the issuer:  (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.
Yes / /  No /X/

Check if no disclosure of delinquent filers in response to Item 405 of 
Regulation S-B is contained in this form, and no disclosure will be 
contained, to the best of the issuer's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-KSB or any amendment to this Form 10-KSB. / /

The issuer's revenues for its most recent fiscal year were:   $2,592,175

The aggregate market value of the voting stock held by non-affiliates of the 
issuer was $5,272,187 as of September 30, 1998.

The number of shares of Common Stock outstanding was 12,027,259 as of 
September 30, 1998.

Transitional Small Business Disclosure Format.  Yes / /  No /X/

                     DOCUMENTS INCORPORATED BY REFERENCE


                                    None

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                                   PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

     CERTAIN TERMS USED HEREIN ARE DEFINED IN THE GLOSSARY THAT FOLLOWS AT THE
     END OF THIS PART.

     COMPANY OVERVIEW

     Corgenix Medical Corporation ("Corgenix" or the "Company") is a 
diagnostic biotechnology company whose principal focus has been the discovery 
and development of novel diagnostic markers for the detection and management 
of important immunological disorders. Until May 22, 1998, this business was 
conducted by and under the name of REAADS Medical Products, Inc., a Delaware 
corporation ("REAADS").   On May 22, 1998, REAADS became a subsidiary of 
Corgenix, and its name was changed to Corgenix, Inc., when a wholly owned 
subsidiary of the Company merged (the "Merger") with and into REAADS.  In 
connection with the Merger, the Company issued to the REAADS stockholders a 
total of 6,120,000 shares of the Company's common stock, $.001 par value (the 
"Common Stock"), together with the contingent obligation to issue up to 
4,000,000 additional shares of Common Stock upon the occurrence (or 
non-occurrence) of certain events.  In addition, the REAADS management  
assumed the management of the Company.  See "Part III. Item 12.  Certain  
Relationships and Related Transactions -- Contingent Common Stock."

     The Company was incorporated under the name Benjun Chemicals Inc. on  
April 22, 1994 as a wholly owned subsidiary of Superior Equities Limited   
(the "Predecessor").  The Predecessor was incorporated on April 9, 1985 under 
the laws of the Province of British Columbia, Canada.  In 1987 and 1991, the 
Predecessor issued a total of 1,957,259 shares of its common stock in two 
private placements to sophisticated investors in the Province of British 
Columbia, Canada.  On April 27, 1994, the shareholders of the Predecessor 
exchanged all of the outstanding shares of common stock of the Predecessor on 
a one-for-one basis for shares of common stock in the Company, and on March  
5, 1996, the Company changed its name to Gray Wolf Technologies, Inc. ("Gray 
Wolf").  During the three fiscal years prior to the Merger, Mike M.  
Mustafoglu, a current director of the Company, was a director and the  
president and treasurer of Gray Wolf.  However, from the time of the  
Predecessor's incorporation until the Merger, neither the Predecessor nor the 
Company engaged in any significant business activity other than the search  
for acquisition opportunities, and in the three fiscal years prior to the  
Merger, the Company did not have any significant assets or liabilities.

     In connection with the Merger, the Company offered and sold in a private 
transaction (the "Offering") 3,950,000 shares of Common Stock for gross 
proceeds of $1,000,000.  The net proceeds of such sale, which were 
approximately $720,000, were used by the Company to redeem certain preferred 
stock of REAADS in connection with the Merger, to repay debt, to reduce 
accounts payable and for working capital.

     Immediately following the Merger and the Offering, the Common Stock was 
held by the following groups of persons in the approximate percentages 
indicated:

<TABLE>
<CAPTION>
      STOCKHOLDERS(1)              NUMBER OF SHARES       PERCENTAGE OWNERSHIP(1)
 <S>                               <C>                    <C>
 Former REAADS Stockholders(2)        6,120,000                   50.3%

 Former Gray Wolf Stockholders        1,957,259                   16.1%

 Offering Stockholders                3,950,000                   32.4%
</TABLE>

(1)  Excludes 153,000 shares held by TransGlobal Financial Corporation ("TGF"),
     a consultant to the Company, which were received by TGF in consideration of
     financial advisory services provided to Gray Wolf in connection with the
     Merger.
(2)  Assumes that the former REAADS stockholders will not receive up to
     4,000,000 shares of contingent Common Stock.  Such contingent Common Stock
     is issuable to the former REAADS stockholders upon the occurrence or
     non-occurrence of certain events.  See "Part III. Item 12.  Certain
     Relationships and Related Transactions -- Contingent Common Stock."   If
     all of such contingent Common Stock had been issued to the former REAADS
     stockholders

                                      1
<PAGE>

     at the time of the Merger, the former REAADS Stockholders, the former 
     Gray Wolf Stockholders, and the Offering Stockholders would have held 
     approximately 62.5%, 12.1% and 24.4% of the outstanding shares of Common 
     Stock, respectively.

     The determination of the consideration, including the contingent Common 
Stock, paid or payable to the former REAADS stockholders and the 
determination of the purchase price of the Common Stock sold in the Offering 
was made in consultation with the Company's and REAADS' financial advisors.

     Also in connection with the Merger, the Company entered into a 
consulting agreement with TransGlobal Financial Corporation ("TGF").  The 
president and controlling shareholder of TGF is Mike M. Mustafoglu, who also 
serves as a director of the Company.  Under the terms of the consulting 
agreement, TGF provides advice to the Company regarding financial and 
business matters, including assistance with fundraising to implement the 
Company's business plans, review and assessment of capitalization, merger and 
acquisition prospects, and other transactions, on an exclusive basis.  The 
consulting agreement is effective for a three-year term ending May 22, 2001.  
TGF's fee for its financial and business advisory services is $180,000.00 
(payable in 36 monthly installments of $5,000) plus a transaction fee equal 
to a percentage of any funds committed to the Company, the value of any 
acquisition, or the income generated by any joint venture, in each case to 
the extent that TGF assisted the Company in obtaining such funds, acquisition 
or venture.   See "Part III. Item 12.  Certain Relationships and Related 
Transactions -- TGF Consulting Agreement."

     The Company's consulting agreement with TGF also requires the Company to 
nominate for election two designees selected by TGF to the Company's Board of 
Directors each year during the term of the agreement, and requires that there 
shall be no more than five directors of the Company unless TGF consents to a 
greater number.  The consulting agreement also requires the Company to obtain 
TGF's consent to the issuance of more than 5% of any class of its equity 
securities.  See "Part III. Item 12.  Certain Relationships and Related 
Transactions -- TGF Consulting Agreement."

     The Company is also a party to an option agreement with TGF, whereby TGF 
has the option to purchase 1,000,000 units, each unit comprised of one share 
of the Company's authorized but unissued Series A 5% Convertible Preferred 
Stock and one warrant to purchase one share of Common Stock at an exercise 
price of $2.00, for an aggregate purchase price of $1,000,000.  See "Part 
III. Item 12. Certain Relationships and Related Transactions -- Option 
Agreement."

     BUSINESS OVERVIEW

     The Company's research program has resulted in the successful 
development of 23 products currently used in clinical laboratories for the 
diagnosis and/or monitoring of four important areas of health care:

     -    Autoimmune disorders (diseases in which an individual creates
          antibodies to one's self, for example systemic lupus erythematosus
          ("SLE") and rheumatoid arthritis ("RA"));

     -    Vascular diseases (diseases associated with certain types of
          thrombosis or clot formation, for example antiphospholipid syndrome,
          deep vein thrombosis, stroke and coronary occlusion);

     -    Bone and joint diseases (such as osteoporosis and osteoarthritis); and

     -    Liver diseases (cirrhosis and transplanted organ rejection).

     In addition to its current products, the Company is actively developing 
new laboratory tests in other important diagnostic testing areas.  See "-- 
Chugai Strategic Relationship" and "-- Other Strategic Relationships."  In 
this connection, the Company manufactures and markets to clinical 
laboratories and other testing sites worldwide.  Its customers include large 
and emerging health care companies such as Chugai Diagnostics Science 
("Chugai"), a wholly owned subsidiary of Chugai Pharmaceuticals Co., Ltd. 
("Chugai Pharma"), which owns approximately 4.6% of the Common Stock of the 
Company.  See "-- Chugai Strategic Relationship."

     Corgenix products are based on its patented and proprietary application of
Enzyme Linked ImmunoSorbent Assay ("ELISA") technology, a clinical testing
methodology commonly used worldwide. All of the Company's current products are
based on this platform technology in a delivery format convenient for clinical
testing laboratories. The delivery format ("Microplate") allows the testing of
up to 96 samples per plate, and is one of the most commonly used formats,

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employing conventional testing equipment found in virtually all clinical 
laboratories. The  availability and broad acceptance of ELISA Microplate 
products reduces entry barriers worldwide for the Company's new products that 
employ this technology and delivery format. Corgenix's products are sold as 
"kits" that include all of the materials required to perform the test except 
for routine laboratory chemicals and instrumentation. A test using ELISA 
technology involves a series of reagent additions into the Microplate 
triggering a complex immunological reaction in which a resulting color 
occurs. The amount of color developed in the final step of the test is 
directly proportional to the amount of the specific marker being tested for 
in the patient or unknown sample. The amount of color is measured and the 
results calculated using laboratory instrumentation.  The Corgenix technology 
specifies a process by which biological materials are attached to the fixed 
surface of a diagnostic  test platform.

     Corgenix's diagnostic tests are intended to aid in the identification of 
the causes of illness and disease, enabling a physician to select appropriate 
patient therapy. Internally and through collaborative arrangements, the 
Company is developing additional products that are intended to broaden the 
range of applications for its existing products and to result in the 
introduction of new products.  Corgenix is specifically engaged in the 
development of a line of diagnostic products that applies the ELISA 
technology into a different testing format. This format involves the addition 
of a single patient sample into a test system in which color is developed in 
a very short period of time with a minimal number of reagents. This format, 
unlike the Microplate format, does not require instrumentation and is better 
suited for testing outside of a typical testing laboratory. Testing can be 
performed by medical personnel such as physicians and nurses, but also can be 
designed so that testing can by performed directly by the patient. This 
format is referred to as rapid testing ("Rapid Test") as the results are 
available in only a few minutes.

     Products developed in a Rapid Test format allow the prompt detection of 
a variety of medical conditions. Development of this product line will enable 
the Company to expand its product base beyond the conventional testing 
laboratory into point of care ("POC") market segments, which include 
physician's office laboratories ("POL"), and also directly to the medical 
consumer through retail distribution, referred to as over-the counter 
("OTC").  

     Since 1990, Corgenix's sales force and distribution partners have sold 
over 10 million tests worldwide under the REAADS label, as well as labels of 
other companies under private label, or original equipment manufacture 
("OEM"), agreements. An integral part of Corgenix's strategy is to work with 
corporate partners to develop market opportunities and access important 
resources. In this regard, Corgenix has established strategic relationships 
with a number of companies, including Chugai, Cambridge Life Sciences 
("Cambridge"), a division of Byk Gulden located in Cambridge, UK, and  Helena 
Laboratories Corporation ("Helena"), a privately held company located in 
Beaumont, Texas.  Corgenix believes that its relationships with these and 
other potential partners will enable Corgenix to enhance its menu of 
diagnostic products and accelerate its ability to penetrate the worldwide 
markets for new products 

     The Company currently uses the REAADS trademarks and tradenames in the 
sale of its products. 

     INDUSTRY OVERVIEW

     In vitro diagnostic ("IVD") testing is the process of analyzing the 
components of a wide variety of body fluids outside of the body to identify 
the presence of markers for diseases or other human health conditions. The 
worldwide human health IVD market consists of reference laboratory and 
hospital laboratory testing, testing in physician offices and the emerging 
OTC market, in which testing is done at home by the consumer. 

     Traditionally, diagnostic testing has been performed in large, 
high-volume commercial or hospital-based laboratories using instruments 
operated by skilled technicians. Corgenix products in a Microplate format are 
designed for such instrumentation and are marketed to these types of 
laboratories.  The instrumentation and supportive equipment required to use 
the Corgenix ELISA tests is relatively simple, and typically is used by a 
laboratory for many different products.

     One of the fastest growing segments of the human health IVD market is the
market for highly accurate tests that can be used logistically close to the
point of patient care (such as clinics,  physician offices, homes, patient
bedsides and emergency rooms) as well as in  laboratories. The growth in this
POC market is primarily due to pressure on  health care providers to reduce the
overall cost of health care as well as  the availability of technology that
enables health care providers to process  tests on-site, rather than sending
them to remote laboratories. POC testing  helps to reduce overall health care
delivery costs and can improve patient  outcomes by enabling the primary
caregiver to determine a diagnosis of the  medical condition during the
patient's initial visit, minimizing the time to  medical intervention and
reducing the

                                      3

<PAGE>
need for additional patient follow-up.

     The IVD industry has undergone major consolidation over the last few 
years. As a result, the industry is characterized by a small number of large 
companies or divisions of large companies that manufacture and sell numerous 
diagnostic products incorporating a variety of technologies. In addition, 
there are many small diagnostic companies, which generally have limited 
resources to commercialize new products. As a result of technological 
fragmentation and customer support requirements, Corgenix believes that there 
may be a substantial competitive advantage for companies with unique and 
differentiated technologies that can be used to generate a broad menu of 
diagnostic products and that have developed successful customer support 
systems.

     STRATEGY

     Corgenix's primary objective is to apply its proprietary ELISA 
technology to the development and commercialization of products for use in a 
variety of markets. Corgenix's strategies for achieving this objective 
include the following: 

     APPLY THE COMPANY'S ELISA TECHNOLOGY TO ADDITIONAL DIAGNOSTIC MARKETS.  
Corgenix has focused its resources on development of highly accurate tests in 
the Microplate format for sale to clinical testing laboratories. The Company 
believes it can expand its market focus with the addition of new tests 
complementary to the current product line. 

     DEVELOP A LINE OF RAPID TESTS USING THE COMPANY'S ELISA TECHNOLOGY. The 
Company intends to broaden the ELISA application into a line of Rapid Tests 
enabling expansion into new market areas including POC and OTC.  

     EXPAND INTO ADDITIONAL LARGE DIAGNOSTIC MARKET. Corgenix has focused its 
product development and sales efforts on the human diagnostic market in 
autoimmunity, bone and joint disease, vascular disease, and liver disease.  
The Company intends to target other large indication human health      
applications (such as cancer, infectious diseases and critical care 
diagnostic tests) through both expanded internal research and development     
efforts and collaborations with strategic partners. 

     LEVERAGE SALES AND MARKETING RESOURCES. Corgenix maintains a nationwide 
marketing and sales organization, which is experienced in selling diagnostic 
tests into the laboratory market. The Company expects to expand this sales 
organization, adding distribution channels into the outpatient market. The 
Company will also expand its product menu with more high value, quality 
products through internal development, acquisition or in-licensing of 
complementary products and technologies. 

     CONTINUE TO DEVELOP STRATEGIC ALLIANCES TO LEVERAGE COMPANY RESOURCES. 
Corgenix has developed, and expects to continue to develop, strategic 
alliances to access complementary resources (such as proprietary markers, 
funding, marketing expertise and research and development assistance), to 
leverage its technology, expand its product menu and maximize the use of  its 
sales force. 

     PURSUE SYNERGISTIC PRODUCT AND/OR TECHNOLOGY ACQUISITIONS. Corgenix 
intends to proactively evaluate strategic acquisitions of companies, 
technologies and product lines where the Company identifies a strategic 
opportunity to expand its core business while increasing revenues and 
earnings from these new technologies.  

     PRODUCTS AND MARKETS

     Corgenix and its distribution partners are currently selling ELISA tests 
in major markets worldwide. To date, Corgenix's sales force and distribution 
partners have sold over 10 million tests since Corgenix first received 
product marketing clearance from the United States Food and Drug 
Administration (the "FDA") for the first anti-cardiolipin antibody ("aCL") 
test in 1990. Several peer reviewed medical publications, abstracts and 
symposia have been presented on the favorable technical differentiation of 
Corgenix's tests over competitive products. 

     To extend the product offering for current product lines, and to 
complement its premium-priced, existing assays, Corgenix will continue to add 
products from strategic partners. Corgenix's current product menu, 
commercialized under the trademark "REAADS," includes the following:

     AUTOIMMUNE DISEASE PRODUCTS

                                      4
<PAGE>

     Corgenix's ELISA Autoimmune Disease Product line consists of nine 
products including a screening test for antinuclear antibodies (ANA), and 
specific tests to measure antibodies to rheumatoid factor, dsDNA, Sm, SM/RNP, 
SSA, SSB, Jo-1 and anti-Scl-70. The products are used for the diagnosis and 
monitoring of autoimmune diseases including RA, SLE, Mixed Connective Tissue 
Disease, Sjogren's Syndrome, Dermatopolymyositis and Scleroderma. 

     The Company's autoimmune disease products are formatted in the ELISA 
Microplate format, and are differentiated from the competition by their user 
convenience. Historically, diagnostic tests utilized antiquated technologies 
that presented significant limitations for the clinical laboratory 
environment, including greater labor requirements and the need for a 
subjective interpretation of the results. Corgenix's ELISA Autoimmune Tests 
overcome these technology shortfalls, permitting a clinical laboratory to 
automate its tests, lowering the laboratory's labor costs as well as 
providing objectivity to test result interpretation. 

     ANTIPHOSPHOLIPID ANTIBODY TESTING PRODUCTS

     The Company has five products for antiphospholipid antibody testing, 
which in 1997 represented over 58% of Corgenix's total product sales. These 
include aCL IgG, aCL IgA, aCL IgM, anti-phosphatidylserine ("aPS") IgG and 
aPS IgM. These tests are used in the diagnosis of SLE, antiphospholipid 
syndrome and thrombosis.  The Company has completed the development and 
clinical testing of three additional test kits that detect human antibodies 
to B2-Glycoprotein I, and has made Premarket Notification 510(k) submissions 
to the FDA with respect to these products.  Upon receipt of marketing 
clearance letters from the FDA, the Company expects to manufacture, 
distribute and market these three new tests to clinical laboratories 
worldwide.

     Antiphospholipid antibodies are measured in clinical laboratories 
primarily using ELISA technology with cardiolipin as the most commonly used 
antigen. High levels of these antibodies are seen in venous and arterial 
thrombosis, thrombocytopenia and/or recurrent abortion, now considered the 
main clinical criteria for the diagnosis of a clinical entity referred to as 
the antiphospholipid syndrome. The antiphospholipid syndrome may be seen in 
association with an underlying disease (i.e. autoimmune such as SLE or 
SLE-like disease), or may be seen in patients without any obvious or apparent 
disease. When high serum levels of antiphospholipid antibodies are found in 
individuals without any clinical manifestations, it is regarded as an 
important risk factor for the development of antiphospholipid syndrome.

     The importance of the antiphospholipid syndrome resides in its 
association with serious clinical manifestations such as chronic and 
recurrent venous (deep vein) thrombosis, as well as arterial thromboembolic 
disease including heart attacks, strokes and pulmonary embolism. 
Thrombocytopenia has been attributed to the temporary removal of platelets 
from circulation during a thrombotic episode (clot formation).

     VASCULAR DISEASE PRODUCTS

     The Company markets seven tests for vascular diseases. Three products 
(Protein C Antigen ELISA, Protein S Antigen ELISA and von Willebrand Factor 
Antigen ELISA) are manufactured by Corgenix, and four others (ABP von 
Willebrand Factor Activity Test, GTI Platelet Factor 4 Test, and the ABS 
Thrombus Precursor Protein and Functional Intact Fibrinogen kits) are 
manufactured for Corgenix by other companies.  These products are useful in 
the diagnosis of certain clotting and bleeding  disorders including von 
Willebrand's Disease (Hemophilia B).

     Hemostasis (the normal stable condition in which there is neither 
excessive bleeding nor excessive clotting) is maintained in the body by the 
complex interaction of the endothelial cells of blood vessels, coagulation 
cells such as platelets, coagulation factors, lipids (cholesterol) and 
antibodies (autoantibodies). All play important roles in maintaining this 
hemostasis. In clinical situations in which an individual demonstrates 
excessive clotting or bleeding, a group of laboratory tests is typically 
performed to assess the source of the disorder using the tests marketed by 
the Company.

     BONE AND JOINT DISEASE PRODUCTS; LIVER DISEASE PRODUCTS

     The Company developed and manufactures the Chugai Hyaluronic Acid 
("Hyaluronic Acid" or "HA") Test in a Microplate format in collaboration with 
Chugai. This product is currently distributed through the Chugai distribution 
network in Japan, and through the Company's United Kingdom subsidiary in the 
United Kingdom, and is used in the diagnosis and monitoring of rheumatoid 
arthritis and liver cirrhosis.

     Hyaluronic Acid is a component of the matrix of connective tissues, found
in synovial fluid of the joints where it

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acts as a lubricant and for water retention. It is produced in the synovial 
membrane and may leak into the circulation via the lymphatic system where it 
is quickly removed by specific receptors located in the liver. Increased 
serum levels of HA have been described in patients with rheumatoid arthritis 
due to increased production from synovial inflammation, and in patients with 
liver disease due to interference with the removal mechanism. Patients with 
cirrhosis will have the highest serum HA levels, which correlate with the 
degree of liver involvement.

     TECHNOLOGY

     The Corgenix ELISA application technology was developed to provide the 
clinical laboratory with a more sensitive, specific, and objective technology 
to measure clinically relevant antibodies in patient serum samples. High  
levels of these antibodies are frequently found in individuals suffering from 
various immunological diseases, and their serologic determination is useful  
not only for specific diagnosis but also for assessing disease activity  
and/or response to treatment. To accomplish these objectives, the current  
Corgenix product line applies the ELISA technology in a 96-Microplate format  
as a delivery system. ELISA provides a solid surface to which purified  
antigens are attached, allowing their interaction with specific  
autoantibodies during incubation. This antigen-antibody interaction is then  
objectively measured by reading the intensity of color generated by an  
enzyme-conjugated secondary antibody and a chemical substrate added to the  
system. 

     The Corgenix technology overcomes two basic problems seen in many other 
ELISA systems. First, the material coated onto the plate can be consistently 
coated without causing significant alteration of the molecular structure 
(which ensures maintenance of immunologic reactivity), and the stability of 
these coated antigens on the surface can be maintained (which provides a 
product shelf life acceptable for commercial purposes).  Corgenix's 
proprietary immunoassay technology is useful in the manufacture of ELISA test 
kits for the detection of many analytes for the diagnosis and management of 
immunological diseases. This same ELISA technology will also be applied to 
the Rapid Test products allowing entry into additional market segments.

     The Corgenix technology results in products demonstrating performance 
characteristics that exceed those of competitive testing procedures. Many 
testing laboratories worldwide subscribe to external quality control schemes 
or programs conducted by independent, third- party organizations. These 
programs typically involve the laboratory receiving unknown test samples on a 
routine basis, performing certain diagnostic tests on the samples, and 
providing results of their testing to the third party. Reports are generally 
provided by the third party that tells the testing laboratory how it compares 
to other testing laboratories in the program. Several of the Company's 
products are included in a third-party survey periodically conducted by an 
unaffiliated entity, and Corgenix's products routinely demonstrate the best 
standard deviation for its products when compared to other manufacturers 
included in such survey.

     A Corgenix product typically requires less hands-on time by laboratory 
personnel and provides an objective, quantitative or semi-quantitative 
interpretation to improve and standardize the clinical significance of 
results. The Corgenix proprietary technology will continue to be the mainstay 
for future Corgenix diagnostic products. Most of the products in development 
will incorporate the basic Corgenix technology, even in alternate delivery 
formats (including Rapid Test products).

     Additional technologies may be required for some of the newly identified 
tests, particularly for the POC business. Management believes that, in 
additional to internal expertise, most technology and delivery system 
requirements are available through joint venture or licensing arrangements or 
through acquisition.

     DELIVERY SYSTEMS

     All of the current Corgenix products employ the Microplate delivery 
system using ELISA technology. This format is universally accepted in 
clinical laboratory testing and requires routine equipment currently 
available in most clinical labs.  The Company is developing a line of Rapid 
Test products configured as single test delivery systems. These products will 
be intended for testing by a physician or other medical personnel at the 
patient's bedside, for example in an emergency room setting, a general care 
unit, or an ICU or specialized treatment site. In this case a sample is 
obtained from the patient and applied directly to a test module so that 
results can be read immediately. Rapid Tests can also be configured in a 
format for home testing for sale directly to the consumer through OTC retail 
outlets, such as pharmacies.

     SALES AND MARKETING

                                      6

<PAGE>

     Corgenix currently markets and sells its products to the traditional 
clinical laboratory market, both hospital based and free standing 
laboratories. The Company  utilizes a diverse distribution program for its 
products. Corgenix labeled products are sold directly to testing laboratories 
in the United States through 14 sales representatives. 
 
     Internationally, Corgenix labeled products are sold through established 
diagnostic companies in Austria, Belgium, Canada, Denmark, Egypt, France, 
Germany, Greece, Hong Kong, Hungary, India, Israel, Italy, Japan, Korea, 
Kuwait, Mexico, Norway, Peoples Republic of China, Peru, Portugal, Saudi 
Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan and the 
United Kingdom. Discussions are underway that are expected to provide access 
to additional markets in Europe, South America, Asia and the Pacific Rim. 

     Corgenix's agreements with its international distribution partners are 
on terms that are generally terminable by Corgenix if the distributor fails 
to achieve certain sales targets.  The Company also has established private 
labeled product agreements with several United States and European companies. 
The Company has international distribution headquarters in the United Kingdom 
and will add direct commercialization and distribution in selected additional 
countries as appropriate. 

     The Company has an active marketing and promotion program for its 
diagnostic testing products.  Corgenix publishes technical and marketing 
promotional materials, which it distributes to current and potential 
customers. The Company attends major industry trade shows and conferences, 
and the Company's scientific staff actively publishes articles and technical 
abstracts in peer review journals.

     With the planned expansion into a Rapid Test product line, Corgenix 
expects to expand its distribution network to sell into the outpatient 
primary care market. 

     MANUFACTURING

     Corgenix's manufacturing process for its products utilizes a 
semi-automated production line for the manufacturing, assembly and packaging 
of its ELISA Microplate products. Corgenix's current production capacity is 
10,000 tests per day with a single eight-hour shift. Since 1990, Corgenix's 
manufacturing group has successfully produced over 10 million tests in its 
Westminster, Colorado facility, and the Company expects that current 
manufacturing facilities will be sufficient to meet expected customer demand 
for the foreseeable future.  

     The Company's manufacturing operations are fully integrated and consist 
of reagent purification, reagent and Microplate processing, filling, 
labeling, packaging and distribution. The Company has considerable experience 
in manufacturing its products using its proprietary technology. The Company 
expects increases in the demand for its products, and plans to increase its 
manufacturing capability while remaining in compliance with regulatory 
requirements at acceptable costs to meet that increased demand. The Company 
also maintains ongoing investigation of scale-up opportunities for 
manufacturing to meet future requirements. Corgenix expects production costs  
to decline if more products are added to the product menu in the future, 
permitting the Company to achieve greater economies of scale as higher  
volumes are attained. Corgenix has registered its facility with the FDA and  
operates in compliance with the FDA Quality System Regulations ("QSR")  
requirements for its products. 

     The manufacturing process starts with the qualification of raw 
materials. The Microplates are then coated and bulk solutions prepared. The 
components and the Microplates are checked for performance by the Company's 
quality control department and adjustments in the bulk solutions are 
performed to provide optimal performance and lot-to-lot consistency. The bulk 
solutions are then dispensed and packaged into planned kit configurations. 
The final packaging step in the manufacturing process includes kit assembly, 
where all materials are packaged into finished product. The final kit has one 
final kit performance performed by the Company's quality control department. 
The final stage before product release for sale is quality assurance, 
verification that all quality control testing and manufacturing processes 
have been completed, documented and have met all performance specifications.

     The majority of raw materials and purchased components used to  manufacture
the Company's products are readily available. The Company has  established good
working relationships with its primary vendors, particularly  those that supply
unique or critical components for the Company's products.  Corgenix mitigates
the risk of a loss of supply by maintaining a sufficient  supply of antibodies
and critical components to ensure an uninterrupted  supply for at least three
months. Corgenix also believes that it can  substitute a new supplier with
regard to any of these components in a timely

                                     7

<PAGE>

manner. However, there can be no assurances that Corgenix will be able to  
substitute a new supplier in a timely manner, and failure to do so could have 
a material adverse effect on Corgenix's business, financial condition and  
results of operations.

     Corgenix purchases components for six products (anti-Sm, anti-SM/RNP, 
anti-SSA, anti-SSB, anti-Jo-1, and anti-Scl-70) from Cambridge and performs 
final assembly and shipping at the Company's United Kingdom facility. These 
products are warehoused at this facility until shipped directly to customers. 
The Company purchases four additional products from other manufacturers.  The 
von Willebrand Factor Activity Test is manufactured by American Biochemical & 
Pharmaceutical Corporation ("ABP"), the Platelet Factor 4 test is  
manufactured by GTI, Inc. ("GTI"), and the Thrombus Precursor Protein and  
Functional Intact Fibrinogen tests are manufactured by American Biogenic  
Science ("ABS"). 

     A significant percentage of the Company's product revenues are derived 
from sales outside of the United States.  International regulatory bodies 
often establish varying regulations governing product standards, packaging 
and labeling requirements, import restrictions, tariff regulations, duties 
and tax requirements.  As a result of the Company's sales in Europe, the 
Company intends to obtain ISO certification and to receive a "CE" mark 
certification, an international symbol of quality and compliance with 
applicable European medical device directives for certain of its products. 
The Company is currently preparing for ISO certification and also expects to 
receive CE mark certification.

     CHUGAI STRATEGIC RELATIONSHIP

     Chugai Diagnostics Science, Co. Ltd. is a wholly owned subsidiary of 
Chugai Pharmaceutical Co., Ltd.,  a Tokyo based pharmaceutical company. The 
relationship between Corgenix and Chugai was established in June 1993 with 
the execution of a letter of intent to negotiate and execute a series of 
agreements including a Manufacturing Memorandum, Stock Purchase Agreement and 
a Distribution Agreement.  The relationship is a multifaceted strategic 
affiliation that can be summarized as follows:

     EQUITY OWNERSHIP. In 1993, Chugai Pharma purchased common stock of 
REAADS and currently owns approximately 4.6% of the Common Stock. Under the 
terms of the September 1, 1993 stock purchase agreement, Chugai has certain 
rights, including antidilution rights and rights to a board seat on the 
Corgenix Board of Directors.  

     DISTRIBUTION OF CORGENIX PRODUCTS.  In 1993, Corgenix and Chugai 
executed a distribution agreement (the "Japanese Distribution Agreement") 
whereby Corgenix granted to Chugai certain  distribution rights in Japan of 
Corgenix products. The distribution rights  provide Chugai with non-exclusive 
rights for certain existing Corgenix  products, and exclusive rights for all 
future Corgenix products. The initial  term of the Japanese Distribution 
Agreement is for 7 years, expiring August  26, 2000, with successive one year 
extension options.

     JOINT DEVELOPMENT OF CORGENIX PRODUCTS. In 1993, Corgenix and Chugai 
executed a memorandum, which established a joint product development program 
whereby Corgenix, in collaboration with Chugai, developed a unique second 
generation immunodiagnostic assay for the measurement of HA. The product 
replaced a first generation HA product that was being manufactured and 
distributed in Japan by Chugai.  This product is used to measure HA in serum 
to aid in the diagnosis of certain liver diseases and the monitoring of 
rheumatoid arthritis patients. In 1997, Corgenix and Chugai executed a 
contract research agreement whereby Corgenix and Chugai made certain 
technical improvements to the HA product, and Chugai provided certain 
financial support. 

     MANUFACTURING OF CORGENIX PRODUCTS.  In 1994, Corgenix and Chugai 
executed a manufacturing agreement (the "HA Manufacturing Agreement") whereby 
Corgenix has the exclusive right to manufacture the HA product for Chugai for 
sale in Japan. Corgenix began the manufacture of the HA product in 1995 and 
sales of the product were initiated in Japan by Chugai. The HA Manufacturing 
Agreement has been amended several times, and Corgenix now manufactures the 
HA product for other distribution outlets to be designated by Chugai. In 
1997, sales of the HA product began in the United Kingdom through Corgenix's 
sales and distribution channels. In 1995, Corgenix and Chugai executed a 
letter agreement whereby Chugai agreed, under certain conditions, to 
reimburse Corgenix for the purchase of certain pieces of equipment required 
for HA manufacturing. 

     REGULATORY AFFAIRS.  In 1995, Corgenix and Chugai executed a regulatory
letter of understanding whereby Corgenix agreed to manage the regulatory
application prosecution of the HA kit in the United States for Chugai. Corgenix
managed the clinical trial testing of the HA product, and has filed a 510(k)
application on the HA product with the FDA on behalf

                                      8

<PAGE>

of Chugai.  See "-- Regulation."

     HA PRODUCT DISTRIBUTION.  In 1997, Corgenix and Chugai executed a 
distribution agreement (the "UK Agreement") whereby Corgenix was granted 
exclusive distribution rights for the Chugai HA product in the United 
Kingdom. The UK Agreement is initially for a two-year period expiring on 
November 17, 1999, with one-year extension rights. The UK Agreement 
establishes certain minimum sales target requirements for Corgenix, and 
provides early cancellation rights to Chugai if Corgenix does not meet annual 
sales targets. The UK Agreement is the only international distribution rights 
granted by Chugai.  

     OTHER STRATEGIC RELATIONSHIPS

     In addition to the Chugai strategic relationship, an integral part of 
Corgenix's strategy has been and will continue to be entering into other 
strategic alliances as a means of accessing unique technologies or resources 
or developing specific markets. The primary aspects of Corgenix's corporate 
partnering strategy with Chugai and other strategic affiliations include:  

     -    Companies that are interested in co-developing diagnostic tests that
          use the Corgenix technology;

     -    Companies with complementary technologies;

     -    Companies with complementary products and novel disease markers;
          and/or

     -    Companies with access to distribution channels that supplement
          Corgenix's existing distribution channels.

     In furtherance of the foregoing strategies, Corgenix has established 
strategic relationships with the following companies in addition to Chugai: 

     CAMBRIDGE LIFE SCIENCES. Cambridge, a division of Byk Gulden and located 
in Cambridge, United Kingdom, is a leading manufacturer of immunology and 
microbiology diagnostic tests. In  1993, Corgenix and Cambridge entered into 
an agreement by which the Company provides to Cambridge certain products that 
are sold worldwide under the  Cambridge label. These products are primarily 
sold in the United Kingdom, and  in the remainder of Europe through the Byk 
Gulden distribution network.  Cambridge also manufactures certain products 
for Corgenix under the Corgenix  label including the anti-Sm, anti-SM/RNP, 
anti-SSA, anti-SSB, anti-Jo-1, and  anti-Scl-70, all of which are distributed 
by Corgenix worldwide.

     HELENA LABORATORIES CORPORATION. Helena, a privately held company 
located in Beaumont, Texas, is one of the world market leaders in clinical 
electrophoresis instrumentation and technology. In 1993, Corgenix and Helena 
entered into a development and manufacturing agreement pursuant to which 
Corgenix developed a series of vascular disease products for joint 
distribution. Three of these received FDA clearance in 1997 and one is 
currently in development. Corgenix manufactures these products for worldwide 
distribution through the Helena network, as well as under the Corgenix label 
for distribution through the Corgenix network. Pursuant to the agreement, 
Helena has the right to incorporate several of the Company's current products 
and technology (both those jointly developed and also other Corgenix 
products) into a proprietary Helena instrumentation for sale to hospitals and 
clinical laboratories. Corgenix and Helena have also entered into an 
agreement under which the Company has agreed to provide additional products 
to be sold worldwide under the Helena label. There can be no assurance that 
the product development program will be successful, and if successful, that 
the products developed will achieve broad market acceptance. 

     AMERICAN BIOCHEMICAL & PHARMACEUTICAL CORPORATION.   ABP is a privately 
held company located in Marlton, New Jersey that sells a line of diagnostic 
products in coagulation and vascular medicine. In June 1998, Corgenix became 
a non-exclusive distributor of ABP's von Willebrand Factor Activity in the 
United States.  Corgenix distributes this product under the Corgenix label  
through Corgenix's distribution network, primarily in the United States. This 
product complements Corgenix's expanding line of vascular disease products. 
The initial term of the distribution arrangement with ABP will expire in June 
2001 and it may be renewed at Corgenix's election for additional successive 
one-year terms. ABP also sells this test under the Corgenix label through its 
own distribution network. Under the terms of a separate distribution 
agreement, ABP will sell the Corgenix von Willebrand Factor Antigen Kit 
worldwide under the Corgenix label through its distribution network.

                                      9
<PAGE>

     AMERICAN BIOGENETIC SCIENCE ("ABS").  ABS is a publicly traded company 
located in Boston, Massachusetts that has developed patented antigen-free 
technology. In June 1998, Corgenix became a non-exclusive distributor of 
ABS's Thrombus Precursor Protein and Functional Intact Fibrinogen products in 
the United States and North America, marketing them through the Corgenix 
distribution network. The initial term of the distribution agreement with ABS 
will expire in August 1999 and it may be renewed at Corgenix's election for 
two additional successive one-year terms. ABS also sells these tests under 
their own labeling through a small network of regional distributors.

     GTI, INC. GTI is a privately held company located in Brookfield, 
Wisconsin that manufactures ELISA diagnostic products. In April 1998, 
Corgenix and GTI signed an agreement by which Corgenix became a co-exclusive 
distributor of GTI's Platelet Factor 4 ELISA test kit in the United States. 
The initial term of the agreement is one year and may be renewed at 
Corgenix's option. This product is also part of Corgenix's vascular disease 
product strategy.

     The Company has established OEMs agreements with several international 
diagnostic companies. Under these agreements, Corgenix manufactures selected 
products under the partner's label for worldwide distribution. These 
partnerships include Meditech-BioPool ( United States), Chromogenix (Sweden), 
Medic (Italy), and Schiapparelli Biosystems (The Netherlands). 

     RESEARCH AND DEVELOPMENT

     Corgenix is directing its research and development efforts towards 
continuously improving its proprietary platform ELISA technology in the 
Microplate format, as well as applying the technology to a Rapid Test format 
to address operator ease-of-use and expand the Company's market 
opportunities.  In that regard, Corgenix has organized its research and 
development department into three major areas: (i) new product development, 
(ii) technology assessment, and (iii) technical and product support.   

     The product development group is responsible for research and 
development of new clinical diagnostic products for commercialization.  This 
group evaluates the performance of reagents (prepared internally or purchased 
commercially), creates working prototypes of potential products, performs 
internal studies, participates in clinical trials, produces pilot lots of new 
products, produces a validated method that can be consistently manufactured, 
creates documentation required for manufacturing and testing of new products, 
and works closely with the Company's quality assurance department to satisfy 
regulatory requirements and support regulatory clearance.  This group 
includes individuals skilled in immunology, assay development, protein 
biochemistry, biochemistry and basic sciences.  Group leaders are also 
skilled in planning and project management under FDA-mandated design control. 
 See "-- Regulation."  

     The technology assessment group is responsible for assessing the 
performance of new technologies and determining the technical feasibility of 
their introduction by Corgenix.  The technology assessment group investigates 
the patent / license issues associated with new technologies.  This group 
includes individuals skilled in immunology, assay development, protein 
biochemistry, biochemistry, basic sciences and intellectual property review.  

     The technical and product support group are responsible for supporting 
all products on the market through scientific investigation, and are 
responsible for design transfer to manufacturing for all new products 
developed.  This group also assesses the performance of and validates all 
externally-sourced products. This group includes individuals skilled in 
immunology, assay development, protein biochemistry, biochemistry and basic 
sciences.  Corgenix maintains facilities to support its development efforts 
at its Westminster, Colorado headquarters.

     PRODUCTS AND TECHNOLOGY IN DEVELOPMENT

     Corgenix intends to expand its product menu through internal 
development, development in collaboration with strategic partners and 
acquisition or licensing of new products and technologies.  Corgenix is 
currently working with partners to develop additional tests to supplement the 
existing product lines. The following summarizes Corgenix's current product 
and technology development programs: 

     ANTIPHOPHOLIPID ANTIBODY TESTING PRODUCTS

     The Company has completed the development of three additional 
antiphospholipid products to complement the existing line of five products in 
the ELISA Microplate format.  These new tests, anti- B2 Glycoprotein I - IgG, 
anti- B2

                                     10

<PAGE>

Glycoprotein I - IgM and anti- 2 Glycoprotein I - IgA, will be marketed for 
the diagnosis of antiphospholipid syndrome and related immunological 
disorders.  Corgenix is one of the market leaders in development of 
innovative tests in the antiphospholipid market, and these future products 
will help ensure the Company's strong position.  These new antiphospholipid 
products have been found to be more specific for thrombosis and the 
antiphospholipid syndrome over the conventional aCL and aPS tests, and will 
be configured for sale to hospital based and free-standing independent 
laboratories.  Filing of the 510(k) application on the new tests was made 
during the third quarter of 1998.  See "-- Regulation." 

     VASCULAR DISEASE TESTS

     The Company has entered into a joint development agreement to develop 
additional assays for the measurement of selected coagulation factors that 
are significant in the diagnosis and treatment of certain clotting and 
bleeding disorders.  The measurement of Free Protein S using a monoclonal 
antibody provides a more direct and specific assay for the functionally 
active "free" form of Protein S in the assessment of thrombosis.  This 
project is currently at the preclinical stage with FDA filing expected during 
the fourth quarter of 1998.  These tests will use the Company's ELISA format 
and will provide significant improvement over existing technology in the 
market.  These assays will also be formatted as Rapid Tests for the POC 
market.  The Company is also is early stage development of several unique 
immunological tests to measure risk of coronary artery disease and stroke.  
These markers may prove to be far more specific and functional than 
conventional cholesterol or lipid testing, and could significantly change the 
risk assessment market worldwide. 

     Two of the products in early stage development are anti-oxidized LDL and 
Lp(a). Atherosclerotic cardiovascular disease is the leading cause of death 
in the industrialized world and in the United States alone there are over 1.5 
million individuals suffering a heart attack every year. Application  of 
Corgenix technology to the measurement of anti-oxidized LDL antibodies and 
Lp(a) will provide more clinically relevant tests compared with current 
conventional tests for cholesterol. 

     RAPID TEST DELIVERY SYSTEM

     Corgenix believes that the Rapid Test delivery technology will 
significantly expand the POC market opportunity.  This technology will allow 
the introduction of next generation products, which will require a 
substantially shorter period to develop, test and submit for regulatory 
approval.  Each test piece will contain all of the reagents necessary to 
conduct the assay, following the simple step of sample addition.  If 
successful, this technology could enable the Company to make products that 
are easier to use and provide immediate analysis of biological samples.  
Initial development will focus on qualitative measurement of markers that aid 
in the establishment of the diagnosis or prognosis of disease conditions.  
Products in early stage development include tests for pregnancy, diagnosis of 
certain infectious diseases, and tests to measure cardiac markers.           

     LIVER DISEASE MARKERS

     The Company has a letter of intent with a medical university that, if 
consummated, would grant Corgenix  exclusive worldwide marketing rights to a 
recently discovered, very sensitive liver enzyme. In early clinical testing, 
this enzyme appears to be a unique indicator of the pending rejection of a 
transplanted liver, and could also be a sensitive indicator of other causes 
of cellular damage to liver tissue. Corgenix expects that development of a 
diagnostic test for this enzyme, in multiple formats to address many market 
segments, may begin in late 1998.

     Corgenix's goal is to continue to develop and bring to the marketplace 
innovative, unique diagnostic products with significant market potential, 
resulting in more effective and less costly health care delivery. The Company 
will take advantage of the many advances in biotechnology by developing new 
products for the diagnosis and treatment of immunological disease.  As 
discussed above, future projects will include expansion into additional high 
growth areas including infectious diseases. 

     ACQUISITIONS

     On September 17, 1998, the Company executed a letter of intent to  acquire
all of the assets of Integrated Diagnostics, Inc., a privately held,  Baltimore,
Maryland diagnostics company, for cash and restricted Common Stock  valued at
approximately $2.2 million.  The closing of the transaction is  dependent upon
the results of the Company's

                                     11

<PAGE>

due diligence and upon the  negotiation and execution of a definitive 
agreement.  There can be no  assurance that this transaction will be 
successfully consummated.  See "Part  II.  Item 6. Management's Discussion 
and Analysis of Financial Condition and  Results of Operations -- Forward 
Looking Statements and Risk Factors -- Risks  Regarding Potential Future 
Acquisitions."

     The Company continually evaluates a variety of company, product and/or 
technology acquisition opportunities.  Although the Company intends to pursue 
acquisitions that provide strategic opportunities to expand the Company's   
core business while increasing revenues and earnings from these new  
technologies, there can be no assurance that it will be successful in doing  
so.  See "Part II. Item 6.  Management's Discussion and Analysis of Financial 
 Condition and Results of Operations -- Forward Looking Statements and Risk  
Factors -- Risks Regarding Potential Future Acquisitions."
 
     COMPETITION

     Competition in the human medical diagnostics industry is significant. 
The Company's competitors range from development stage diagnostics companies 
to major domestic and international pharmaceutical companies. Many of these 
companies have financial, technical, marketing, sales, manufacturing, 
distribution and other resources significantly greater than Corgenix. In 
addition, many of these companies have name recognition, established 
positions in the market and long standing relationships with customers and 
distributors. The diagnostics industry has recently experienced a period of 
consolidation during which many of the large domestic and international 
pharmaceutical companies have been acquiring mid-sized diagnostics companies, 
further increasing the concentration of resources. However, competition in 
diagnostic medicine is highly fragmented, with no company holding a dominant  
position in autoimmune, vascular diseases or bone and joint disease. There  
can be no assurance that new, superior technologies will not be introduced  
that could be directly competitive with or superior to Corgenix's  
technologies. 

     Corgenix's competitors include Inova Diagnostics, Inc., Sanofi 
Diagnostics Pasteur (a licensee of Corgenix technology under a paid up 
license), INCSTAR Corporation, Pharmacia Upjohn, Diagnostica Stago, American 
Bioproducts, Helena Laboratories Corporation (an existing licensee of 
Corgenix technology), Organon Teknika, Helix Diagnostics, Hemagen 
Diagnostics, Sigma Diagnostics and Diamedix Corporation. Some of these 
companies are larger than Corgenix and have substantial resources and market 
presence. Corgenix competes against these companies on the basis of product 
performance and customer service.  

     PATENTS, TRADE SECRETS AND TRADEMARKS

     Corgenix has built a strong patent and intellectual property position 
around its proprietary application of ELISA technology. Corgenix holds five 
United States patents that expire beginning in 2004 and ending in 2010. 
Corgenix has no pending patent applications.  The Hyaluronic Acid product is 
protected by U.S., Japanese and European patents held by Chugai. As part of 
the agreement with Chugai, Corgenix has a license to use the Chugai patents 
to manufacture this product. 

     Patent applications in the United States are maintained in secrecy until 
patents issue. There can be no assurance that Corgenix's patents, and any 
patents that may be issued to it in the future, will afford protection 
against competitors with similar technology. In addition, no assurances can 
be given that patents issued to Corgenix will not be infringed upon or 
designed around by others or that others will not obtain patents that 
Corgenix would need to license or design around. If the courts uphold 
existing or future patents containing broad claims over technology used by 
Corgenix, the holders of such patents could require Corgenix to obtain 
licenses to use such technology.   See "Part II. Item 6.  Management's 
Discussion and Analysis --  Forward-Looking Statements and Risk Factors -- 
Uncertainty of Protection of Patents, Trade Secrets and Trademarks."

     Corgenix has registered its trademark "REAADS" on the principal federal 
trademark register and with the trademark registries in many countries of the 
world.  This trademark is eligible for renewal in 2006 and will expire in 
2007. The Company has a federal trademark registration pending for the name 
"Corgenix."

     The Company intends to obtain patent protection for its products and
processes, to preserve its trade secrets and to operate without infringing the
proprietary rights of third parties.  Corgenix also relies on trade secrets and
proprietary know-how in its manufacturing processes.  The Company requires each
of its employees, consultants and advisors to

                                     12

<PAGE>

execute a confidentiality agreement upon the commencement of any employment, 
consulting or advisory relationship with the Company.  Each agreement 
provides that all confidential information developed or made known to the 
individual during the course of the relationship will be kept confidential 
and not disclosed to third parties except in specified circumstances.  In the 
case of employees, the agreements provide that all inventions conceived of by 
an employee shall be the exclusive property of the Company. 

     REGULATION

     The testing, manufacturing and sale of Corgenix's products are subject 
to regulation by numerous governmental authorities, principally the FDA and 
foreign regulatory agencies. The FDA regulates the clinical testing, 
manufacture, labeling, distribution and promotion of medical devices, which 
includes diagnostic products. Corgenix is restricted from marketing or 
selling diagnostic products in the United States until clearance is received 
from the FDA. In addition, various foreign countries in which Corgenix's 
products are or may be sold impose local regulatory requirements. The 
preparation and filing of documentation for FDA and foreign regulatory review 
can be a lengthy, expensive and uncertain process.        

     In the United States, medical devices are classified by the FDA into one 
of three classes (Class I, II or III) on the basis of the controls deemed 
necessary by the FDA to ensure their safety and effectiveness in a reasonable 
manner. Class I devices are subject to general controls (e.g., labeling, 
premarket notification and adherence to QSR requirements).  Class II devices 
are subject to general and special controls (e.g.,  performance standards, 
post-market surveillance, patient registries and FDA  guidelines). Generally, 
Class III devices are those that must receive  premarket approval by the FDA 
to ensure their safety and effectiveness (e.g.,  life-sustaining, 
life-supporting and implantable devices or new devices that  have been found 
not to be substantially equivalent to legally marketed  devices). All of 
Corgenix's current products and products under development  are or are 
expected to be classified as Class I or Class II devices.  

     Before a new device can be introduced in the market, the Company must 
obtain FDA clearance or approval through either clearance of a 510(k) 
premarket notification or approval of a product marketing approval ("PMA") 
application, which is a more extensive and costly application. All of the 
Company's products have been cleared using a 510(k) application, and the 
Company expects that most, if not all, future products will also qualify for 
clearance using a 510(k) application.  

     It generally takes from four to 12 months from submission to obtain 
510(k) premarket clearance but may take longer. The FDA may determine that a 
proposed device is not substantially equivalent to a legally marketed device 
or that additional information is needed before a substantial equivalence 
determination can be made.  A "not substantially equivalent" determination, 
or a request for additional information, could prevent or delay the market 
introduction of new products that fall into this category. For any devices 
that are cleared through the 510(k) process, modifications or enhancements 
that could significantly affect safety or effectiveness, or constitute a 
major change in the intended use of the device, will require new 510(k) 
submissions. There can be no assurance that Corgenix will be able to obtain 
necessary regulatory approvals or clearances for its products on a timely 
basis, if at all, and delays in receipt of or failure to receive such 
approvals or clearances, the loss of previously received approvals or 
clearances, limitations on intended use imposed as a condition of such 
approvals or clearances, or failure to comply with existing or future 
regulatory requirements could have a material adverse effect on Corgenix's 
business, financial condition and results of operations.  See "Part II. Item 
6.  Management's Discussion and Analysis -- Forward-Looking Statements and 
Risk Factors  -- Governmental Regulation of Diagnostic Products."

     Corgenix's customers using diagnostic tests for clinical purposes in the
United States are also regulated under the Clinical Laboratory Information Act
of 1988 (the "CLIA"). The CLIA is intended to ensure the quality and reliability
of all medical testing in laboratories in the United States by requiring that
any health care facility in which testing is performed meets specified standards
in the areas of personnel qualification, administration, participation in
proficiency testing, patient test management, quality control, quality assurance
and inspections. The regulations have established three levels of regulatory
control based on test complexity: "waived," "moderately complex" and "highly
complex." Corgenix's current ELISA tests are categorized as  "moderately
complex" tests for clinical use in the United States. Under the CLIA
regulations, all laboratories performing high or moderately complex tests are
required to obtain either a registration certificate or certification of
accreditation from the United States Health Care Financing Administration
("HCFA"). There can be no assurance that the CLIA regulations and future
administrative interpretations of CLIA will not have an adverse impact on the
potential market for Corgenix's future products. Corgenix expects that the to be

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<PAGE>

developed Rapid Tests will be categorized as CLIA "waived" tests. 
Laboratories performing CLIA "waived" tests face less stringent registration 
and certification requirements. 

     Corgenix also is subject to numerous federal, state and local laws 
relating to such matters as safe working conditions, manufacturing practices, 
environmental protection, fire hazard control and disposal of hazardous or 
potentially hazardous substances. There can be no assurance that Corgenix 
will not incur significant costs to comply with laws and regulations in the 
future or that such laws or regulations will not have a material adverse 
effect upon Corgenix's business, financial condition and results of 
operations.

     REIMBURSEMENT

     Corgenix's largest market segment is the hospital based and free 
standing independent laboratory market. Payment for testing in this segment 
is largely based on third party payor reimbursement. The site, which performs 
the test, will submit an invoice to the patient's insurance provider (or the 
patient if not covered by a program). Each diagnostic procedure (and in some 
instances, specific technologies) is assigned a current procedural 
terminology ("CPT") code by the American Medical Association. Each CPT code 
is then assigned a reimbursement level by HCFA. Third party insurance payors 
typically establish a specific fee to be paid for each code submitted. Third 
party payor reimbursement policies are generally determined with reference to 
the reimbursement for CPT codes for Medicare patients, which themselves are 
determined on a national basis by HCFA.  

     EMPLOYEES

     As of June 18, 1998, Corgenix employed 32 employees, 27 full time and 5 
part-time. Of these, 6 hold advanced scientific or medical degrees. None of 
Corgenix's employees is covered by a collective bargaining agreement. 
Corgenix believes that it maintains good relations with its employees.

ITEM 2.  DESCRIPTION OF PROPERTY.

     Corgenix currently leases approximately 12,000 square feet of space in 
one building in Westminster, Colorado, which is used for its administrative 
offices, research and development facilities and manufacturing operations. 
The lease expires May 30, 2001 with renewal options. Corgenix also leases 
approximately 1,400 square feet of office space in Peterborough, 
Cambridgeshire, United Kingdom under a lease that expires September 25, 2001. 
Corgenix believes that suitable additional or alternative space will be 
available on commercially reasonable terms as needed, but that its existing 
facilities will be sufficient for its operational purposes through the end of 
the leases.

ITEM 3.  LEGAL PROCEEDINGS

     Corgenix is not a party to any material litigation or legal proceedings.

ITEM 4.  SUBMISSION OR MATTERS TO A VOTE OF SECURITY HOLDERS.

     In April 1998, an information statement (the "Gray Wolf Information 
Statement") and a Statement of Majority Consent of Shareholders of Gray Wolf 
(the "Statement of Consent") was mailed to all stockholders of record of Gray 
Wolf.  The purpose of the Statement of Consent was to obtain the former Gray 
Wolf stockholders' authorization and to adopt resolutions pertaining to the 
Merger.  Of the 1,957,259 shares of Gray Wolf common stock outstanding, 
consents were returned representing 1,167,125 shares.  Of these shares, 
1,167, 125 shares, or 59.6% of the total shares outstanding, voted for the 
Merger, 0 shares voted against the Merger, and 790,134, or 40.4%, abstained 
from voting.

     On April 8, 1998, an information statement (the "REAADS Information
Statement") was mailed to all stockholders of record of REAADS.  The REAADS
Information Statement provided information regarding the Merger and related to a
special meeting of the REAADS stockholders held on April 28, 1998.  On April 23,
1998, a supplement to the REAADS Information Statement (the "First Supplement")
was mailed to stockholders of record providing additional information regarding
the Merger.  On April 28, 1998, a special meeting of the stockholders of REAADS
was held to vote on the Merger.  At the meeting, votes were recorded of two
classes of REAADS stockholders: (i) holders of shares of Preferred A Convertible
Redeemable Stock ("Series A Preferred Stock"), voting as a class, and (ii)
holders of shares of REAADS common stock voting as a class together with the
Series A Preferred Stock, as if converted to shares of

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<PAGE>

common stock.  Of the 113.2 shares of Series A Preferred Stock then 
outstanding, 113.2 shares voted for the Merger,  0 shares voted against the 
Merger, and 0 shares abstained from voting.  Of the shares of REAADS common 
stock then outstanding and the Series A Preferred Stock as converted to 
common stock, voting together as a class for total of 175,535 shares, 
139,700, or 79.6%, voted for the Merger, 0 shares voted against the Merger, 
and 35,835 shares abstained from voting. 

     On May 7, 1998, a second supplement to the REAADS Information Statement 
(the "Second Supplement"), together with a written consent, was mailed to 
REAADS stockholders of record providing additional information regarding the 
merger. Written consents were received and recorded for the holders of shares 
of Series A Preferred Stock, voting as a class, and the holders of shares of 
REAADS common stock voting as a class together with the Series A Preferred 
Stock on an as-converted basis.  Of the 113.2 shares of Series A Preferred 
Stock then outstanding, 113.2 shares voted for the Merger,  0 shares voted 
against the Merger, and 0 shares abstained from voting.  Of the shares of 
REAADS common stock then outstanding and the Series A Preferred Stock as 
converted to common stock, voting together as a class for total of 175,535 
shares, 156,753, or 89.3%, voted for the Merger, 0 shares voted against the 
Merger, and 18,782 shares abstained from voting. 

                                     15

<PAGE>

                                  GLOSSARY

     ANTIBODY -- a protein produced by the body in response to contact with 
an antigen, and having the specific capacity of neutralizing, hence creating 
immunity to, the antigen.

     ANTI-CARDIOLIPIN ANTIBODIES (aCL) -- a class of antiphospholipid 
antibody which reacts with a negatively-charged phospholipid called 
cardiolipin; frequently found in patients with SLE and other autoimmune 
diseases; also reported to be significantly associated with the presence of 
both arterial and venous thrombosis, thrombocytopenia, and recurrent fetal 
loss.

     ANTIGEN -- an enzyme, toxin, or other substance, usually of high 
molecular weight, to which the body reacts by producing antibodies.

     ANTI-PHOSPHATIDYLSERINE ANTIBODIES (aPS) -- a class of antiphospholipid 
antibody which reacts to phosphatidylserine;  similar to aCL; believed to be 
more specific for thrombosis. 

     ANTI-OXIDIZED LDL CHOLESTEROL ANTIBODIES --  antibodies to the oxidized 
form of LDL cholesterol.

     ANTIPHOSPHOLIPID ANTIBODIES -- a family of autoantibodies with 
specificity against negatively charged phospholipids, that are frequently 
associated with recurrent venous or arterial thrombosis, thrombocytopenia, or 
spontaneous fetal abortion in individuals with SLE or other autoimmune 
disease.

     ANTIPHOSPHOLIPID SYNDROME -- a clinical condition characterized by 
venous or arterial thrombosis, thrombocytopenia, or spontaneous fetal 
abortion, in association with elevated levels of antiphospholipid antibodies 
and/or lupus anticoagulant.

     ASSAY -- a laboratory test; to examine or subject to analysis.

     AUTOANTIBODY -- an antibody with specific reactivity against a component 
substance of the body in which it is produced; a disease marker.

     AUTOIMMUNE DISEASES -- a group of diseases resulting from reaction of 
the immune system against self components.

     BETA 2 GLYCOPROTEIN I (Beta2GPI) --  a serum protein (cofactor) that 
participates in the binding of antiphospholipid antibodies.

     COAGULATION -- the process by which blood clots.

     COFACTOR -- a serum protein that participates in the binding of 
antiphospholipid antibodies, for example Beta2GPI.

     DELIVERY FORMAT -- the configuration of the product. Current Corgenix 
products utilize a 96-well microplate system for its delivery format.

     HEMOSTASIS -- mechanisms in the body to maintain the normal liquid state 
of blood; a balance between clotting and bleeding.

     HYALURONIC ACID (HA) -- a polysaccharide found in synovial fluid, serum 
and other body fluids and tissues, elevated in certain rheumatological and 
hepatic (liver) disorders.

     HDL CHOLESTEROL -- high density lipoprotein associated with cholesterol.

     IMMUNOASSAY -- a technique for analyzing and measuring the concentration 
of disease markers using antibodies; for example, ELISA.

     IMMUNOGLOBULIN -- a globulin protein that participates in the immune 
reaction as the antibody for a specific antigen.

                                     16

<PAGE>

     IMMUNOLOGY --  the branch of medicine dealing with (a) antigens and 
antibodies, esp. immunity to disease, and (b) hypersensitive biological 
reactions (such as allergies), the rejection of foreign tissues, etc.

     IN VITRO -- isolated from the living organism and artificially 
maintained, as in a test tube.
     
     IN VIVO -- occurring within the living organism.

     LDL CHOLESTEROL -- low density lipoprotein associated with cholesterol.

     LIPIDS -- a group of organic compounds consisting of the fats and other 
substances of similar properties.

     LP(a) -- abnormal form of LDL cholesterol.

     OXIDIZED LDL CHOLESTEROL -- chemical modification (oxidized form) of LDL 
cholesterol; the most damaging form.

     PLATELETS -- small cells in the blood which play an integral role in 
coagulation (blood clotting).

     PLATFORM TECHNOLOGY -- the basic technology in use for a majority of the 
Company's products, in essence the "platform" for new products. In the case 
of Corgenix, the platform technology is ELISA (enzyme linked immunosorbent 
assay).

     PHOSPHOLIPIDS --  a group of fatty compounds found in animal and plant 
cells which are complex triglyceride esters containing long chain fatty 
acids, phosphoric acid and nitrogenous bases.

     PROTEIN C -- normal blood protein that regulates hemostasis; decreased 
levels lead to thrombosis.

     PROTEIN S -- normal blood protein that regulates hemostasis; decreased 
levels lead to thrombosis.

     RHEUMATIC DISEASES --  a group of diseases of the connective tissue, of 
uncertain cause and including rheumatoid arthritis (RA), rheumatic fever, 
etc., usually characterized by inflammation, pain and swelling of the joints 
and/or muscles.

     SERUM --  the clear yellowish fluid which separates from a blood clot 
after coagulation and centrifugation.

     SYSTEMIC LUPUS ERYTHEMATOSUS (SLE) -- a usually chronic disease of 
unknown cause, characterized by red, scaly patches that tend to produce 
scars, frequently affecting connective tissue and involving the kidneys, 
spleen, etc.

     THROMBIN -- the enzyme of the blood, formed from prothrombin, that 
causes clotting by converting fibrinogen to fibrin.

     THROMBOCYTOPENIA -- a condition in which there is an abnormally small 
number of platelets in the circulating blood.

     THROMBOEMBOLISM -- the obstruction or occlusion of a blood vessel by a 
thrombus.

     THROMBOSIS  --  coagulation of the blood within a blood vessel of any 
organ, forming a blood clot.

     TUMOR MARKERS --- serum proteins or molecules found in high 
concentrations in patients with selected cancers.

     VASCULAR -- of or pertaining to blood vessels.

     VON WILLEBRAND'S FACTOR (vWF) -- normal blood protein that regulates 
hemostasis; decreased levels lead to abnormal bleeding and increased levels 
may produce thrombosis.

                                     17

<PAGE>

                                   PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Common Stock is currently traded on the OTC Bulletin 
Board-Registered Trademark-under the symbol "COGX".  From February 27, 1998 
until the Merger on May 22, 1998, the Common Stock was quoted on the OTC 
Bulletin Board-Registered Trademark- under the symbol "GRWT." On October 27, 
1998, the last bid price of the Common Stock on the OTC Bulletin 
Board-Registered Trademark- as reported by the OTC Bulletin Board-Registered 
Trademark- was $0.22. 

     The following table sets forth, for the periods indicated, the high and 
low bid prices of the Common Stock as reported on the OTC Bulletin 
Board-Registered Trademark-.  The following quotations reflect inter-dealer 
prices, without retail mark-up, mark-down or commissions, and may not 
represent actual transactions.

<TABLE>
<CAPTION>
                                                             High         Low
   <S>                                                       <C>         <C>
   Year Ended June 30, 1998

      First Quarter  . . . . . . . . . . . . . . . . .       $--         $-- 

      Second Quarter . . . . . . . . . . . . . . . . .        --          -- 

      Third Quarter  . . . . . . . . . . . . . . . . .        --          -- 

      Fourth Quarter . . . . . . . . . . . . . . . . .       $1.55       $0.31

   Year Ended June 30, 1999

      First Quarter  . . . . . . . . . . . . . . . . .       $1.75       $0.53

      Second Quarter (through October 27, 1998)  . . .        0.50        0.19

</TABLE>

     On September 30, 1998 there were approximately 52 holders of record of 
the Common Stock.

     To date, the Company has not paid any dividends on its Common Stock, and 
the Board of Directors of the Company does not currently intend to declare 
cash dividends on the Common Stock.  The Company instead intends to retain 
its earnings to support the growth of the Company's business.  Any future 
cash dividends would depend on future earnings, capital requirements and the 
Company's financial condition and other factors deemed relevant by the Board 
of Directors. The Company is restricted from paying dividends without the 
approval of its financial advisor, pursuant to the terms of the Consulting 
Agreement with TGF.  See "Part III. Item 12.  Certain Relationships and 
Related Transactions -- Consulting Agreement." In addition, under the terms of 
a promissory note in favor of Eagle Bank, the Company is prohibited from 
paying dividends on the Common Stock without the consent of Eagle Bank.  The 
Series A Preferred Stock, if and when issued, also would prohibit the Company 
from paying cash dividends on the Company's Common Stock under certain 
circumstances. 

     MERGER TRANSACTION

     In May 1998, the Company issued in a private transaction 6,120,000 
shares of Common Stock and 4,000,000 contingent shares of Common Stock in 
connection with the merger of a wholly owned subsidiary of the Company with 
and into REAADS.  Such shares were issued to former securityholders of REAADS 
in exchange for all of the outstanding securities of REAADS.  Such shares 
were issued in reliance upon exemptions from the registration requirements of 
Section 5 of the Act provided by Rule 506 of Regulation D under the Act, 
complying with each of the following requirements of Rule 506:

     LIMITED NUMBER OF PURCHASERS.  The Merger involved less than 35 
purchasers. 


                                     18

<PAGE>

     NATURE OF PURCHASERS.  Each of the shareholder purchasers was fully 
versed in the business affairs and financial condition of REAADS, being 
either an officer, director, long-time shareholder or long-time employee of 
REAADS.  Each such shareholder had received regular quarterly financial 
reports from management regarding REAADS performance, and to management's 
knowledge and belief based on reasonable inquiry, each was capable of 
evaluating the merits and risks of the Merger based on his or her business 
and financial experience. Because the Company had no significant business 
activity prior to the Merger, an investment in the post-Merger Company was 
essentially an investment in REAADS and its business. All shareholder 
purchasers were given the opportunity to ask questions of management 
regarding the terms of the Merger. 

     Seven REAADS shareholders received their shares of Common Stock as a 
compensatory stock bonus in cancellation of outstanding vested and unvested 
REAADS incentive stock options, which otherwise were without market value 
(due to their strike price being in excess of the estimated per share value 
of the merger consideration).  The REAADS Board of Directors and 
shareholders, by unanimous vote, authorized the stock grants in cancellation 
of outstanding options as consideration for past service and commitment to 
REAADS and as incentive for each of the recipients to remain with the 
post-Merger Company, each stock grant being coupled with a one-year vesting 
provision. 

     GENERAL CONDITIONS OF RULE 506 SATISFIED.  Each of the general 
conditions to the availability of Rule 506 was satisfied by the Merger. 
Request for approval of the Merger was accompanied by a detailed information 
statement describing the material terms and conditions of the Merger and 
containing the information specified by Rule 502(b)(2)(i) of Regulation D to 
the extent material to the an understanding of the issuer, its business and 
the securities being offered.  The Merger  was not offered by any form of 
general solicitation or general advertising.  Finally, each of the shares 
issued in the Merger to REAADS shareholders were made subject to strict 
limitations on resale, including a mandatory one-year holding period, written 
disclosure to each recipient that the shares to be received had not been 
registered under the Securities Act and therefore could not be resold absent 
registration or availability of an exemption from registration under the Act, 
and placement of a restrictive legend setting forth the foregoing 
restrictions on transfer.

     STATUTORY DISSENTER'S RIGHTS PROVIDED.  In addition to complying with 
the strict provisions of Rule 506, pursuant to state law statutory 
requirement, each REAADS shareholder was provided with the opportunity to 
dissent from the Merger and receive the fair value of his or her REAADS 
common stock.  The information statement included a detailed description of 
the statutory procedure for exercising one's dissenter's rights.  No REAADS 
shareholder exercised dissenter's rights. 

     RULE 504 PRIVATE PLACEMENT

     Also in May 1998, the Company sold in a private placement transaction a 
total of 3,950,000 shares of Common Stock at a weighted average price of 
$.2532 per share to 28 investors, the majority of which were U.S. persons. 
These sales were made in reliance upon exemptions from the registration 
requirements of Section 5 of the Act provided by Rule 504 of Regulation D 
under the Act. 

     The issuance of the shares of Common Stock in the Offering met the 
requirements of Rule 504 of Regulation D under the Act.  At the time of the 
Offering, the Company was not a reporting company under either the Act or the 
Securities and Exchange Act of 1934, as amended.  In addition, the Company is 
not an "investment company" or "development company," as evidenced by the 
active business and over five year operating results of the Company's wholly 
owned operating subsidiary Corgenix, Inc.  Finally, the amount of securities 
offered and sold was within the regulatory maximum permitted by Rule 504.  


                                     19

<PAGE>


     ADDITIONAL PRIVATE PLACEMENTS

     Also in May 1998, the Company issued 153,000 shares of Common Stock to 
TGF, a financial advisor to the Company, in partial consideration of services 
rendered to the Company.  This sale was made in reliance upon an exemption 
from the registration requirements of Section 5 of the Act provided by Rule 
506 of Regulation D under the Act.  Based on information provided by TGF to 
the Company, TGF is an "accredited investor" as defined at Rule 501(a)(8) of 
Regulation D under the Act.

                                     20

<PAGE>

     In October 1995, the Company sold in a private placement transaction 
4,000,000 shares of Common Stock at a price of $.001 per share for total 
gross proceeds of approximately $4,000.  This sale was made to an affiliate 
of the Company in reliance upon exemptions from the registration requirements 
of Section 5 of the Act provided by Section 4(2) of the Act.  The Company 
repurchased such shares in January 1998 for a purchase price of $8,000, which 
was paid for by the issuance of a note in the amount of the purchase price.

     In April 1996, REAADS sold in a private placement transaction a total of 
113.2 shares of its preferred stock and 29,300 warrants to purchase shares of 
REAADS common stock at an exercise price of $30.00 per share.  These 
securities were sold to six individuals for total gross proceeds of 
approximately $340,000. Based upon information provided by each of the 
investors, the Company believes that each was either an "accredited investor" 
or was sophisticated in transactions of this nature.  At the time of the 
purchase, each of the investors was either a founder, a senior management 
employee or a director of the Company, each was involved in the day-to-day 
operations of the Company and each had access to all relevant financial 
information regarding the business and affairs of the Company. These sales 
were made in reliance upon exemptions from the registration requirements of 
Section 5 of the Act provided by Section 4(2) of the Act. 

     In February 1998, REAADS sold 250 shares of its common stock to a 
consultant to REAADS in consideration for services valued at $7,500.  Based 
upon information provided by the investor, the Company believes that the 
investor was an "accredited investor."  At the time of the purchase, the 
investor was a member of the Company's scientific advisory board and had 
access to all relevant financial information regarding the business and 
affairs of the Company.  This sale was made in reliance upon exemptions from 
the registration requirements of Section 5 of the Act provided by Section 
4(2) of the Act.

     In November 1997, REAADS issued 6,660 warrants to purchase shares of 
REAADS common stock at an exercise price of $30.00 per share in connection 
with the making of a loan to REAADS. The investor is a founder of the Company 
and, based upon information provided to the Company by the investor, the 
Company believes that the investor was an "accredited investor."  The 
investor also served as a consultant to the Company and had access to all 
relevant financial information regarding the business and affairs of the 
Company.  This sale was made in reliance upon exemptions from the 
registration requirements of Section 5 of the Act provided by Section 4(2) of 
the Act.

     Between May 23, 1995 and May 22, 1998, REAADS granted options and 
warrants to purchase its common stock to a total of four of its employees, 
which options were exercisable at a price of $30.00 per share.  During such 
period, one REAADS employee exercised options previously granted to her and 
purchased two shares of REAADS common stock for $15 per share.  The option 
grants were made to employees of REAADS in reliance upon exemptions from the 
registration requirements of Section 5 of the Act provided by Rule 701 under 
the Act.

     As part of the Merger, all of REAADS options and warrants then 
outstanding were exchanged for shares of REAADS common stock at a ratio of 
 .3692 shares of REAADS common stock per share of REAADS common stock 
underlying such option or warrant.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     The following discussion should be read in conjunction with the 
financial statements and accompanying notes included elsewhere in this 
Registration Statement.

     GENERAL

     Since the Company's inception, Corgenix has been primarily involved in 
the research, development, manufacturing and marketing of diagnostic tests 
for sale to clinical laboratories. Corgenix currently markets 23 products 
covering autoimmune disorders, vascular diseases, bone and joint diseases and 
liver disease. Corgenix's products are sold in the United States through the 
Company's marketing and sales organization that includes 14 sales 
representatives, internationally through an extensive distributor network, 
and to several significant OEM partners.

     Corgenix manufactures products for inventory based upon expected sales 
demand, shipping products to customers, usually within 24 hours of receipt of 
orders.  Accordingly, Corgenix does not operate with a backlog, and the 
Company anticipates that its inventory will increase significantly in the 
future. 

                                     21

<PAGE>

     Except for the fiscal year ending June 30, 1997, the Company has 
experienced revenue growth since its inception, primarily from sales of 
products and contract revenues from strategic partners. Contract revenues 
consist of licensing fees, milestone payments, and royalty payments from 
research and development agreements with strategic partners.

     Beginning in fiscal year 1996, Corgenix added third-party OEM licensed 
products to its diagnostic product line, licensing six diagnostic products 
from Cambridge. In 1998, the Company added four additional products to its 
product line through OEM licenses from other third party manufacturers. 
Corgenix expects to expand its relationships with other companies in the 
future to gain access to additional products. 

     Although Corgenix has experienced growth in revenues every year since 
1990 except for 1997, there can be no assurance that, in the future, Corgenix 
will sustain revenue growth or achieve profitability. Corgenix's results of 
operations may fluctuate significantly from period-to-period as the result of 
several factors, including: (i) whether and when new products are 
successfully developed and introduced, (ii) market acceptance of current or 
new products, (iii) seasonal customer demand, (iv) whether and when Corgenix 
receives R&D milestone payments and license fees from strategic partners, (v) 
changes in reimbursement policies for the products that Corgenix sells;,(vi) 
competitive pressures on average selling prices for the products that 
Corgenix sells, and (vii) changes in the mix of products that Corgenix sells. 

     RESULTS OF OPERATIONS

     YEARS ENDED JUNE 30, 1998 AND 1997

     NET SALES.  From its inception in 1990, the Company has achieved average 
annual net sales growth of 30.9%. Net sales for the year ended June 30, 1998 
was $2.59 million, a 6.4% increase from $2.44 million in 1997. A component of 
net sales, product sales, increased 13.7% to $2.58 million in 1998 from $2.27 
million in 1997. Sales of Hyaluronic Acid product (HA) to Chugai for 
distribution in Japan increased 14.3% from $671,000 in 1997 to $767,000 in 
1998, due to an increased marketing effort by Chugai following resolution of 
a component design flaw in 1997.
 
     Also included in net sales are partnership payments from strategic 
alliances that decreased from $200,000 in 1997 to $46,000 in 1998 due to 
timing of ongoing development projects.

     COST OF SALES.  Cost of sales decreased 31.6% to $902,000 in 1998 from 
$1,318,000 in 1997, due primarily to resolution of the design flaw in a 
critical raw material component used in the HA product. In 1997, an 
additional $479,000 was charged to cost of sales because of this problem. The 
gross profit increased from 45.9% in 1997 to 65.2% in 1998 due to this 
resolution. Excluding $479,000 in expense to correct the design flaw, gross 
profit would have been approximately 65.5% in 1997. 

     RESEARCH AND DEVELOPMENT. Research and development expenses were flat, 
increasing only 2.0% to $387,000 in 1998 from $380,000 in 1997. During 1998, 
several ongoing projects remained in development but no new projects were 
added during this period.

     SELLING AND MARKETING. Selling and marketing expenses were also flat, 
$751,000 in 1998 versus $742,000 in 1997. 

     GENERAL AND ADMINISTRATIVE. General and administrative expenses 
increased 82.6% to $1,322,000 in 1998 from $724,000 in 1997, due in part to 
legal, accounting and other costs relating to strategic partnering 
activities, financing activities and the costs of transforming into a public 
company. Transaction costs of $342,000 for merger expenses and success fees 
are included in general and administrative expenses in 1998. These costs are 
expensed due to the assets of both entities being reflected in the financial 
statements at their historical carrying amounts, due to the merger 
transaction with a "shell" company.

     OTHER EXPENSES. Other expenses increased 60.5% to $152,000 in 1998 from 
$95,000 in 1997 due primarily to higher interest expense resulting from 
higher debt levels throughout the year. Interest expense increased to 
$150,000 in 1998 from $50,000 in 1997, while factoring expenses decreased to 
$2,000 in 1998 from $45,000 in 1997.

     LIQUIDITY AND CAPITAL RESOURCES

     Historically, the Company has financed its operations primarily through
sales of common and preferred stock, raising

                                     22

<PAGE>

net proceeds of approximately $2.7 million from sales of these securities. In 
1998, the Company raised $1,000,000 before offering expenses through a Reg. 
504 offering related to the Merger Transaction.

     Corgenix has also received financing for operations from sales of 
diagnostic products and agreements with strategic partners. At June 30, 1998 
and June 30, 1997, Corgenix had invested $215,084 and $349,427, respectively, 
(net of accumulated depreciation) in leasehold improvements, laboratory and 
computer equipment and office furnishings and equipment to support its 
development and administrative activities. 

     Corgenix's principal sources of liquidity are short and long term debt 
financing, of which $1,141,114 remained outstanding as of June 30, 1998. 
Management believes that the Company needs to enter into new debt agreements 
and/or sell additional equity securities in fiscal year 1999 to maintain 
appropriate liquidity.

     RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board (the "FASB") 
issued Statement of Financial Accounting Standards, No. 130, REPORTING 
COMPREHENSIVE INCOME ("Statement No. 130"), effective for years beginning 
after December 15, 1997.  Statement No. 130 establishes standards for 
reporting and displaying comprehensive income and its components in a full 
set of general-purpose financial statements.  The Company is not required and 
therefore has not yet adopted Statement No. 130.  The Company will comply 
with the reporting and display requirements under this statement when 
required.

     In June 1997, the FASB issued Statement of Financial Accounting 
Standards, No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED 
INFORMATION ("Statement No. 131"), effective for years beginning after 
December 15, 1997. Statement No. 131 establishes standards for reporting 
information about operating segments and the methods by which such segments 
were determined.  The Company is not required and therefore has not yet 
adopted Statement No. 131. The Company will comply with the reporting 
requirements under this statement when required.

     In February 1998, the FASB issued Statement of Financial Accounting 
Standards No. 132, EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER 
POSTRETIREMENT BENEFITS ("Statement No. 132"), effective for fiscal years 
beginning after December 15, 1997.  Statement No. 132 revises disclosures 
about pension and other postretirement benefit plans.  It does not change the 
measurement or recognition of those plans.  Statement No. 132 standardizes 
the disclosure requirements and suggests combined formats for presentations 
of such disclosures.  The Company is not required and therefore has not yet 
adopted Statement No. 132.  The Company will comply with the reporting 
requirements under this statement when required.

     In April 1998, the American Institute of Certified Public Accountants 
issued Statement of Position 98-5 (the "SOP") REPORTING ON THE COSTS OF 
START-UP ACTIVITIES, effective for fiscal years beginning after December 15, 
1998 and encouraging earlier adoption.  The SOP broadly defines start-up 
activities as those one time activities related to, among other things, 
opening a new facility.  In general, the SOP requires the Company to expense 
as incurred those costs.  Currently, the Company expenses such costs.

     In June 1998, FASB issued Statement of Financial Accounting Standards 
No. 133, Accounting for Derivative Instruments and Hedging Activities 
(Statement No. 133), effective for fiscal years beginning after June 15, 
1999.  Statement No. 133 establishes accounting and reporting standards for 
derivative instruments and requires companies to recognize all derivatives as 
either assets or liabilities in the statement of financial position and 
measure those instruments at fair value.  The Company has not yet adopted 
Statement No. 133.  The Company believes the accounting and reporting 
standards required by this statement will not be significant.  The Company 
will comply with the accounting and reporting requirements under this 
statement when required. 

     YEAR 2000 EFFECT

     The Year 2000 will impact computer programs written using two digits rather
than four to define the applicable year. Any programs with time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operation, including a temporary inability to process
transactions, send invoices or engage in other ordinary activities. This problem
largely affects software programs written years ago, before the issue came to
prominence. Corgenix recently reviewed all of its software

                                     23

<PAGE>

for exposure to Year 2000 issues, including network and workstation software, 
and does not believe that such software poses significant risks associated  
with the Year 2000 problem. Corgenix primarily uses third-party software 
programs written and updated by outside firms, each of whom has stated that  
its software is Year 2000 compliant. To assure that all software programs can 
successfully work in conjunction with each other using the Company's computer 
hardware after the year 1999, Corgenix tested all of its software and  
hardware during the third quarter of 1998 using a combination of past and 
future dates. Such testing revealed that some of the Company's computer 
hardware could not correctly process dates after December 31, 1999.  The 
Company will be required to replace such equipment, at a cost not expected to 
exceed $20,000, before December 31, 1999.

     The Company has set in motion an effort to obtain written assurances 
from the Company's material suppliers regarding their Year 2000 compliance.  
As a result of this effort, the Company expects to generate by the second 
quarter of 1999 a validated list of suppliers that are Year 2000 compliant, 
and will use the entities on this list to obtain its supplies.  If any of the 
Company's single-source suppliers are not Year 2000 compliant by the third 
quarter of 1999, the Company plans to increase its inventories of the 
materials provided by such suppliers and to carry a one-year supply of such 
materials.  

     The Company has also begun the process of obtaining written assurances 
from the Company's material customers regarding their Year 2000 compliance.  
In addition, the Company has instituted a requirement that all new customers 
placing standing orders of the Company's products must certify in writing 
that they are Year 2000 compliant or provide written assurances as to the 
steps they are taking to become Year 2000 compliant.  The Company's goal is 
to obtain by the second quarter of 1999 written assurances from customers 
representing at least 85% of its revenues that such customers are Year 2000 
compliant or that they are expecting to become Year 2000 compliant before 
December 31, 1999.

     Although the Company has taken significant steps to address the Year 
2000 problem, there can be no assurance that the failure of the Company 
and/or its material customers or suppliers to timely attain Year 2000 
compliance will not materially reduce the Company's revenues or income, or 
that these failures and/or the impacts of broader compliance failures by 
telephone, mail, data transfer or other utility or general service providers 
or government or private entities will not have a material adverse effect on 
the Company.

     FORWARD-LOOKING STATEMENTS AND RISK FACTORS

     This Registration Statement includes statements that are not purely 
historical and are "forward-looking statements" within the meaning of Section 
27A of the Securities Act of 1934, as amended, including statements regarding 
the Company's expectations, beliefs, intentions or strategies regarding the 
future.  All statements other than historical fact contained in this 
Registration Statement, including, without limitation, statements regarding 
future product developments, acquisition strategies, strategic partnership 
expectations, technological developments, the availability of necessary 
components, research and development programs  and distribution plans, are 
forward-looking statements.  All forward-looking statements included in this 
Registration Statement are based on information available to the Company on 
the date hereof, and the Company assumes no obligation to update such 
forward-looking statements.  Although the Company believes that the 
assumptions and expectations reflected in such forward-looking statements are 
reasonable, it can give no assurance that such expectations will prove to 
have been correct or that the Company will take any actions that may 
presently be planned.  

     Certain factors that could cause actual results to differ materially 
from those expected include the following:

     LOSSES INCURRED; FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING

     The Company has  incurred operating losses and negative cash flow from 
operations for the last two fiscal years and the first nine months of the 
current fiscal year.  Losses incurred by the Company since its inception have 
aggregated over $3 million, and there can be no assurance that the Company 
will be able to generate positive cash flow to fund its operations in the 
near future.  Assuming no significant uses of cash in acquisition activities 
or other significant changes, the Company believes it will have sufficient 
cash to satisfy its funding needs for at least the next four months.  If the 
Company is not able to operate profitably and generate a positive cash flow, 
however, it may need to raise additional  capital to fund its continuing 
operations.  If the Company needs additional  financing to meet its 
requirements, there can be no assurance that it will be able to obtain such 
financing on terms satisfactory to it, if at all.  Alternatively, any

                                     24

<PAGE>

additional equity financing may be dilutive to existing stockholders, and 
debt financing, if available, may include restrictive covenants.  If adequate 
funds are not available, the Company might be required to limit its research 
and development activities, which could have a material adverse effect on the 
future of the Company's business.

     DEPENDENCE ON COLLABORATIVE RELATIONSHIPS AND THIRD PARTIES FOR PRODUCT 
     DEVELOPMENT AND COMMERCIALIZATION 

     The Company has entered into licensing and research and development 
agreements with collaborative partners, from which it derived a significant 
percentage of its revenues in 1997.  Pursuant to these agreements, the 
Company's collaborative partners have specific responsibilities for the costs 
of development, promotion, regulatory approval and/or sale of the Company's 
products.  The Company will continue to rely on present and future 
collaborative partners for the development of products and technologies.  
There can be no assurance that the Company will be able to negotiate future 
such collaborative arrangements on acceptable terms, if at all, or that 
current or future collaborative arrangements will be successful.  To the 
extent that the Company is not able to establish such arrangements, it could 
experience increased capital requirements or be forced to undertake such 
activities at its own expense.  The amount and timing of resources that any 
of these partners devotes to these activities will generally be based on 
progress by the Company in its product development efforts.  Usually, 
collaborative arrangements may be terminated by the partner upon prior notice 
without cause and there can be no assurance that any of these partners will 
perform its contractual obligations or that it will not terminate its 
agreement.  With respect to any products manufactured by third parties, there 
can be no assurance that any third-party manufacturer will perform acceptably 
or that failures by third parties will not delay clinical trials or the 
submission of products for regulatory approval or impair the Company's 
ability to deliver products on a timely basis.  See "--Dependance on 
Distribution Partners for Sales of Diagnostic Products in International 
Markets," "Part I. Item 1.  Description of Business -- Chugai Strategic 
Relationship" and "-- Other Strategic Relationships."  

     NO ASSURANCE OF SUCCESSFUL OR TIMELY DEVELOPMENT OF ADDITIONAL PRODUCTS

     The Company's business strategy includes the development of additional 
diagnostic products.  The Company's success in developing new products will 
depend on its ability to achieve scientific and technological advances and to 
translate these advances into commercially competitive products on a timely 
basis.  Development of new products requires significant research, 
development and testing efforts.  The Company will have limited resources to 
devote to the development of products and, consequently, a delay in the 
development of one product or the use of resources for product development 
efforts that prove unsuccessful may delay or jeopardize the development of 
other products.  Any delay in the development, introduction and marketing of 
future products could result in such products being marketed at a time when 
their cost and performance characteristics would not enable them to compete 
effectively in their respective markets.  If the Company is unable, for 
technological or other reasons, to complete the development and introduction 
of any new product or if any new product is not approved or cleared for 
marketing or does not achieve a significant level of market acceptance, the 
Company's results of operation could be materially and adversely affected.  
See "Part I. Item 1.  Description of Business -- Products and Markets" and 
"-- Regulation." 

     COMPETITION IN THE DIAGNOSTICS INDUSTRY

     Competition in the human medical diagnostics industry is, and is 
expected to remain, significant.  The Company's competitors range from 
development stage diagnostics companies to major domestic and international 
pharmaceutical companies.  Many of these companies have financial, technical, 
marketing, sales, manufacturing, distribution and other resources 
significantly greater than those of the Company.  In addition, many of these 
companies have name recognition, established positions in the market and long 
standing relationships with customers and distributors.  Moreover, the 
diagnostics industry has recently experienced a period of consolidation, 
during which many of the large domestic and international pharmaceutical 
companies have been acquiring mid-sized diagnostics companies, further 
increasing the concentration of resources.  There can be no assurance that 
technologies will not be introduced that could be directly competitive with 
or superior to the Company's  technologies.  See "Part I. Item 1. Description 
of Business -- Competition."

     GOVERNMENTAL REGULATION OF DIAGNOSTICS PRODUCTS

     The testing, manufacture and sale of the Company's products is subject to
regulation by numerous governmental authorities, principally the FDA and certain
foreign regulatory agencies.  Pursuant to the Federal Food, Drug, and Cosmetic
Act, and the regulations promulgated thereunder, the FDA regulates the
preclinical and clinical testing,


                                     25

<PAGE>

manufacture, labeling, distribution and promotion of medical devices.  The 
Company will not be able to commence marketing or commercial sales in the 
United States of new products under development until it receives clearance 
from the FDA. The testing for, preparation of and subsequent FDA regulatory 
review of required filings can be a lengthy, expensive and uncertain process. 
 Noncompliance with applicable requirements can result in, among other 
consequences, fines, injunctions, civil penalties, recall or seizure of 
products, repair, replacement or refund of the cost of products, total or 
partial suspension of production, failure of the government to grant 
premarket clearance or premarket approval for devices, withdrawal of 
marketing clearances or approvals, and criminal prosecution.  See "Part I.  
Item 1.  Description of Business -- Regulation."

     There can be no assurance that the Company will be able to obtain 
necessary regulatory approvals or clearances for its products on a timely 
basis, if at all, and delays in receipt of or failure to receive such 
approvals or clearances, the loss of previously received approvals or 
clearances, limitations on intended use imposed as a condition of such 
approvals or clearances or failure to comply with existing or future 
regulatory requirements could have a material adverse effect on the Company's 
business.

     DEPENDENCE ON DISTRIBUTION PARTNERS FOR SALES OF DIAGNOSTIC PRODUCTS IN 
     INTERNATIONAL MARKETS

     The Company has entered into distribution agreements with collaborative 
partners in which Corgenix has granted distribution rights for certain 
Corgenix products to these partners within specific international geographic 
areas. Pursuant to these agreements, the Company's collaborative partners 
have certain responsibilities for market development, promotion, and sales of 
the products. If any of these partners fails to perform its contractual 
obligations or terminates its agreement, this could have a material adverse 
effect on the Company's business, financial condition and results of 
operation.

     Additionally, the Company intends to expand  its distribution network 
into additional countries and into different market segments including the 
POC market. There can be no assurance that Corgenix will be successful in the 
expansion of the distribution network, and the failure to do so would have a 
material adverse effect on the Company's business, financial condition and 
results of operation.

     GOVERNMENTAL REGULATION OF MANUFACTURING AND OTHER ACTIVITIES

     As a manufacturer of medical devices for marketing in the United States, 
the Company is required to adhere to applicable regulations setting forth 
detailed good manufacturing practice requirements, which include testing, 
control and documentation requirements.  The Company must also comply with 
Medical Device Report ("MDR") requirements, which require that a manufacturer 
report to the FDA any incident in which its product may have caused or 
contributed to a death or serious injury, or in which its product 
malfunctioned and, if the malfunction were to recur, it would be likely to 
cause or contribute to a death or serious injury.  The Company is also 
subject to routine inspection by the FDA for compliance with QSR 
requirements, MDR requirements and other applicable regulations.  The FDA has 
recently implemented new QSR requirements, including the addition of design 
controls that will likely increase the cost of compliance.  Labeling and 
promotional activities are subject to scrutiny by the FDA and, in certain 
circumstances, by the Federal Trade Commission.  The Company may incur 
significant costs to comply with laws and regulations in the future, which 
may have a material adverse effect upon the Company's business, financial 
condition and results of operations.

     REGULATION RELATED TO FOREIGN MARKETS

     Distribution of diagnostic products outside the United States is subject 
to extensive government regulation.  These regulations, including the 
requirements for approvals or clearance to market, the time required for 
regulatory review and the sanctions imposed for violations, vary from country 
to country.  The Company may be required to incur significant costs in 
obtaining or maintaining its foreign regulatory approvals.  In addition, the 
export by the Company of certain of its products that have not yet been 
cleared for domestic commercial distribution may be subject to FDA export 
restrictions.  Failure to obtain necessary regulatory or the failure to 
comply with regulatory requirements could have a material adverse effect on 
the Company's business, financial condition and results of operations.

     UNCERTAIN AVAILABILITY OF THIRD PARTY REIMBURSEMENT FOR DIAGNOSTIC 
     PRODUCTS

                                     26

<PAGE>

     In the United States, health care providers that purchase diagnostic 
products, such as hospitals and physicians, generally rely on third party 
payors, principally private health insurance plans, federal Medicare and 
state Medicaid, to reimburse all or part of the cost of the procedure.  Third 
party payors are increasingly scrutinizing and challenging the prices charged 
for medical products and services and they can affect the pricing or the 
relative attractiveness of the Decreases in reimbursement amounts for tests 
performed using the Company's diagnostic products, failure by physicians and 
other users to obtain reimbursement from third party payors, or changes in 
government and private third party payors' policies regarding reimbursement 
of tests utilizing diagnostic products, may affect the Company's ability to 
sell its diagnostic products profitably.  See "Part I. Item 1.  Description 
of Business -- Regulation" and "-- Reimbursement."  Market acceptance of the 
Company's products in international markets is also dependent, in part, upon 
the availability of reimbursement within prevailing health care payment 
systems. 

     UNCERTAINTY OF PROTECTION OF PATENTS, TRADE SECRETS AND TRADEMARKS

     The Company's success depends, in part, on its ability to obtain patents 
and license patent rights, to maintain trade secret protection and to operate 
without infringing on the proprietary rights of others.  There can be no 
assurance that the Company's issued patents will afford meaningful protection 
against a competitor, or that patents issued to the Company will not be 
infringed upon or designed around by others, or that others will not obtain 
patents that the Company would need to license or design around.  The Company 
could incur substantial costs in defending itself or its licensees in 
litigation brought by others or prosecuting infringement claims against third 
parties.  If the outcome of any such litigation is unfavorable to the 
Company, the Company's business could be adversely affected.   See "Part I. 
Item 1.  Description of Business -- Patents, Trade Secrets and Trademarks."

     RISKS REGARDING POTENTIAL FUTURE ACQUISITIONS

     The Company's growth strategy includes as a material element the desire 
to acquire complementary companies, products or technologies.  Except as 
disclosed in "Item 1.  Description of Business -- Acquisitions," the Company 
has not targeted any acquisition candidates and there is no assurance that 
the Company will be able to identify appropriate companies or technologies to 
be acquired, or to negotiate satisfactory terms for such an acquisition.  
Moreover, because of limited cash resources, the Company will be unable to 
acquire any significant companies or technologies for cash and the Company's 
ability to effect acquisitions in exchange for the Company's capital stock 
may depend upon the market prices for the Common Stock.  If the Company does 
complete one or more acquisitions, a number of risks arise, such as 
short-term negative effects on the Company's reported operating results, 
diversion of management's attention, unanticipated problems or legal 
liabilities, and difficulties in the integration of potentially dissimilar 
operations.  The occurrence of some or all of these risks could have a 
material adverse effect on the Company's business, financial condition and 
results of operations.  See "Part I. Item 1.  Description of Business -- 
Strategy."

     NO ASSURANCE OF MARKET ACCEPTANCE OF POINT-OF-CARE DIAGNOSTIC PRODUCTS

     Another growth strategy of the Company is to seek to develop, 
manufacture and market POC diagnostic products.  Presently, the Company has 
no products used in the POC market and there is no assurance that it will be 
successful in developing and penetrating the POC market for diagnostic 
testing.  Approximately 75% of diagnostic testing is currently performed at 
large clinical laboratories rather than POC sites, and there can be no 
assurance that caregivers, laboratories or the medical community in general 
will accept and utilize the POC testing system in general or products that 
may be developed in particular. Market acceptance of any POC products of the 
Company will depend on the Company's ability to develop such products and 
then demonstrate the accuracy and value of its products and to persuade 
caregivers to perform the Company's tests in the caregivers' own facilities 
rather than send those tests to clinical laboratories.  In addition, market 
acceptance of new POC products will depend on all of the factors that affect 
other new products.  See "Part I. Item 1. Description of Business -- Industry 
Overview," "-- Strategy" and "-- Products and Markets."

     DEPENDENCE ON SUPPLIERS

     The components of the Company's products include chemical and packaging
supplies that are generally available from several suppliers, except certain
antibodies, which the Company purchases from single suppliers.  The Company
mitigates the risk of a loss of supply by maintaining a sufficient supply of
such antibodies to ensure an uninterrupted supply for at least six months. 
Although the Company believes that it can substitute a new supplier with respect
to any of these components in a timely manner, there can be no assurances that
the Company will be able to substitute a new


                                     27

<PAGE>

supplier in a timely manner and failure to do so could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.

     LIMITED MANUFACTURING EXPERIENCE WITH CERTAIN PRODUCTS

     Although the Company has manufactured over ten million diagnostic tests 
based on its proprietary applications of ELISA technology, certain of the 
Company's diagnostic products in development, particularly POC tests, 
incorporate technologies with which the Company has no manufacturing 
experience. Assuming successful development and receipt of required 
regulatory approvals, significant work may be required to scale up production 
for each new product prior to such product's commercialization.  There can be 
no assurance that such work can be completed in a timely manner and that such 
new products can be manufactured cost-effectively, to regulatory standards or 
in sufficient volume.

     SEASONALITY OF PRODUCTS; QUARTERLY FLUCTUATIONS IN RESULTS OF OPERATIONS

     The Company's revenue and operating results have historically been 
minimally subject to quarterly fluctuations.  Certain of the Company's 
diagnostic products in development, particularly POC tests for infectious 
disease, may demonstrate a higher degree of seasonality.  There can be no 
assurance that such seasonality in the Company's results of operations will 
not have a material adverse effect on the Company's business.

     DEPENDENCE ON KEY PERSONNEL

     Because of the specialized nature of the Company's business, the success 
of the Company will be highly dependent upon its ability to attract and 
retain qualified scientific and executive personnel.  In particular, the 
Company believes its success will depend to a significant extent on the 
efforts and abilities of Dr. Luis R. Lopez and Douglass T. Simpson, who would 
be difficult to replace.  There can be no assurance that the Company will be 
successful in attracting and retaining such skilled personnel, who are 
generally in high demand by other companies.  The loss of, inability to 
attract, or poor performance by key scientific and executive personnel may 
have a material adverse effect on the Company's business, financial condition 
and results of operations.

     PRODUCT LIABILITY EXPOSURE AND LIMITED INSURANCE

     The testing, manufacturing and marketing of medical diagnostic devices 
entails an inherent risk of product liability claims.  To date, the Company  
has experienced no product liability claims, but any such claims arising in 
the future could have a material adverse effect on the Company's business, 
financial condition and results of operations.  The Company's product 
liability insurance coverage is currently limited to $2 million.   Potential 
product liability claims may exceed the amount of the Company's insurance 
coverage or may be excluded from coverage under the terms of the Company's 
policy or limited by other claims under the Company's umbrella insurance 
policy.  Additionally, there can be no assurance that the Company's existing 
insurance can be renewed by the Company at a cost and level of coverage 
comparable to that presently in effect, if at all.  In the event that the 
Company is held liable for a claim against which it is not insured or for 
damages exceeding the limits of its insurance coverage, such claim could have 
a material adverse effect on the Company's business, financial condition and 
results of operations.

     LIMITED PUBLIC MARKET; POSSIBLE VOLATILITY IN STOCK PRICES; PENNY STOCK
     RULES

     There has, to date, been no active public market for the Company's 
Common Stock, and there can be no assurance that an active public market will 
develop or be sustained.   Although the Company's Common Stock has been 
traded on the OTC Bulletin Board-Registered Trademark- since February 1998, 
the trading has been sporadic with insignificant volume. 

     Moreover, the over-the-counter markets for securities of very small 
companies such as the Company historically have experienced extreme price and 
volume fluctuations during certain periods, and the Company's stock price has 
experienced significant price and volume fluctuations in the past.  These 
broad market fluctuations and other factors, such as new product developments 
and trends in the Company's industry and the investment markets and economic 
conditions generally, as well as quarterly variation in the Company's results 
of operations, may adversely affect the market price of the Company's Common 
Stock. In addition, the Company's Common Stock is subject to rules adopted by 
the Securities and Exchange Commission regulating broker-dealer practices in 
connection with transactions in "penny


                                     28

<PAGE>

stocks."  As a result, many brokers are unwilling to engage in transactions 
in the Company's Common Stock because of the added disclosure requirements.

ITEM 7.  FINANCIAL STATEMENTS.

     The financial statements listed in the accompanying index to the 
consolidated financial statements are filed as part of this Annual Report on 
Form 10-KSB. 

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     None.


                                     29

<PAGE>

                                  PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The following table sets forth certain information with respect to the 
executive officers, certain other management, certain consultants to the 
Company and members of the Board of Directors of the Company as of September 
30, 1998:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
 NAME                               AGE     POSITION
------------------------------------------------------------------------------------------------
 <S>                                <C>     <C>
 Luis R. Lopez, M.D. (1)            50      Chief Executive Officer and Chairman of the Board

 Douglass T. Simpson (1)(2)         50      President, Chief Operating Officer

 W. George Fleming, Ph.D. (1)(3)    67      Vice President, International Operations

 Ann L Steinbarger (1)              45      Vice President, Sales and Marketing

 Taryn G. Reynolds (1)              38      Vice President, Operations

 Catherine A. Fink, Ph.D.           33      Executive Scientific Director

 Nanci B. Dexter                    33      Director of Quality and Regulatory Affairs

 Brian E. Johnson (2)(4)            48      Director

 Mike M. Mustafoglu (2) (4)         48      Director
      
 Alev T. Lewis                      36      Director

 Douglass A. Triplett, M.D.(3)      45      Chairman, Scientific Advisor Board
</TABLE>

------------------
(1)  Executive Officer 
(2)  Member of the Audit Committee 
(3)  Consultant to the Company
(4)  Member of the Compensation Committee

     LUIS R. LOPEZ, M.D., has served as the Chief Executive Officer and 
Chairman of the Board of Directors of the Company since May 1998 and of the 
Company's operating subsidiary ("REAADS") since it was founded in July 1990.  
From 1987 to 1990, Dr. Lopez was Vice President of Clinical Affairs at 
BioStar Medical Products, Inc., a Boulder, Colorado diagnostic firm.  From 
1986 to 1987 he served as Research Associate with the Rheumatology Division 
of the University of Colorado Health Sciences Center, Denver, Colorado.  From 
1980 to 1986 he was Professor of Immunology at Cayetano Heredia University 
School of Medicine in Lima, Peru, during which time he also maintained a 
medical practice with the Allergy and Clinical Immunology group at Clinica 
Ricardo Palma in Lima.  From 1978 to 1980 Dr. Lopez held a fellowship in 
Clinical Immunology at the University of Colorado Health Sciences Center.  He 
received his M.D. degree in 1974 from Cayetano Heredia University School of 
Medicine in Lima, Peru.  He is a clinical member of the American College of 
Rheumatology, and a corresponding member of the American Academy of Allergy, 
Asthma and Immunology.  Dr. Lopez is licensed to practice medicine in 
Colorado, and is widely published in the areas of immunology and autoimmune 
disease.  He currently serves on the Board of Directors of DDx, Inc., a 
Denver, Colorado privately-held biotechnology firm.

     DOUGLASS T. SIMPSON has been the President of the Company since May 1998. 
Mr. Simpson joined the Company's operating subsidiary as Vice President of
Business Development in 1992, was promoted to Vice President, General Manager in
1995, to Executive Vice President in 1996 and then to President in February
1998.  Prior to joining the Company's operating subsidiary, he was a Managing
Partner at Venture Marketing Group in Austin, Texas, a health care and
biotechnology marketing firm, and in that capacity, served as a consultant to
REAADS from 1990 until 1992.  From 1984 to 1990 Mr. Simpson was employed by
Kallestad Diagnostics, Inc. (now Sanofi Diagnostics Pasteur), one


                                     30

<PAGE>

of the largest diagnostic companies in the world, where he served as Vice 
President of Marketing, in charge of all marketing and business development 
for this $200 million medical diagnostics company.  Mr. Simpson holds B.S. 
and M.S. degrees in Biology and Chemistry from Lamar University in Beaumont, 
Texas.

     W. GEORGE FLEMING, Ph.D., has been the Vice President, International 
Operations, of the Company pursuant to a consulting agreement since May 1998. 
Dr. Fleming joined the Company's operating subsidiary as Director of European 
Operations in 1992, after serving as a consultant in international 
distribution to REAADS from 1990 to 1992.  He was promoted to Managing 
Director, European Operations, and in 1996 to Vice President, International.  
Prior to joining the Company's operating subsidiary, Dr. Fleming was a 
director of Unilever's Medical Products Group in the UK, a L41 million health 
care company.  He joined Oxoid, a subsidiary of Brooke Bond in 1968, serving 
in a number of management positions leading to his appointment as Director of 
Marketing in 1976, managing their growth up to L31 million in 1985, when it 
was acquired by Unilever.  Dr. Fleming received a B.Sc. degree from Queens 
University, Belfast, Northern Ireland, and a Ph.D. in Business Administration 
from Fairfax University, Baton Rouge, Louisiana.

     ANN L. STEINBARGER has been the Vice President, Sales and Marketing, of 
the Company since May 1998.  Ms. Steinbarger joined the Company's operating 
subsidiary in January 1996 as Vice President, Sales and Marketing with 
responsibility for its worldwide marketing and distribution strategies.  
Prior to joining REAADS, Ms. Steinbarger was with Boehringer Mannheim 
Corporation, Indianapolis, Indiana, a $200 million IVD company.  At 
Boehringer from 1976 to 1996, she served in a series of increasingly 
important sales management positions.  Ms. Steinbarger holds a B.S. degree in 
Microbiology from Purdue University in West Lafayette, Indiana.

     TARYN G. REYNOLDS has been the Vice President, Operations, of the 
Company since May 1998.  Mr. Reynolds joined the Company's operating 
subsidiary in 1992, serving first as Director of Administration, then as 
Managing Director, U.S. Operations, and then from October 1996 onward as Vice 
President, Operations with overall management responsibility for the 
Company's headquarters facility, including R&D, Quality, Administration and 
Manufacturing.  Prior to joining REAADS, Mr. Reynolds held executive 
positions at Brinker International, MJAR Corporation and M&S Incorporated, 
all Colorado-based property, operational and financial management firms.

     CATHERINE A. FINK, Ph.D., has been the Company's Executive Scientific 
Director since May 1998.  Dr. Fink joined the Company's operating subsidiary 
in 1996 as Director of Research and Development with responsibility for 
product development, and in 1997 was promoted to Executive Scientific 
Director with additional responsibilities for Quality Control.  She chairs 
the Company's technical committee.  Prior to joining REAADS, Dr. Fink was 
with DDx, Inc., a Denver, Colorado based privately-held biotechnology firm 
from 1994 until 1996, and from 1993 to 1994 was Product Development Manager 
at Trinity Biotech plc., an Irish biotechnology company which develops and 
manufactures rapid saliva and blood based diagnostic tests.  From 1990 to 
1993, she was with Biosyn Ltd. (Belfast), a manufacturer of diagnostic tests 
for medical and veterinary applications.  Dr. Fink received a B.Sc. (with 
Honors) from University College Dublin, and a Ph.D. in immunology from the 
National University at Ireland.

     NANCI B. DEXTER has been the Company's Director of Quality and 
Regulatory Affairs since May 1998.  Ms. Dexter joined REAADS as Director of 
Quality and Regulatory Affairs in 1997.  From 1996 to 1997, she was Director 
of Regulatory Affairs and Quality Assurance at In-X Corporation, a Denver 
based medical device company, and from 1993 to 1996, was Manager of Quality 
Assurance and Quality Control at Cortech, Inc., a Denver biopharmaceutical 
company.  From 1987 to 1993, Ms. Dexter was with Marquest Medical Products, 
Inc. (Englewood, Colorado) where she held several positions, including 
Manager of Corporate Document Control.  She has a BS degree in Business 
Administration from Colorado State University (Ft. Collins, Colorado), and is 
a member of numerous professional organizations including the American 
Society for Quality Control, Regulatory Affairs Professionals Society, 
Society of Quality Assurance and the Colorado Medical Device Association.  
Ms. Dexter is a Certified Quality Auditor.

     BRIAN E. JOHNSON was appointed as a Director of the Company in May 1998. 
Mr. Johnson has served as a director of the Company's operating subsidiary 
since 1993.  He served as Senior Vice President -- Field Service and Senior 
Vice President -- Dealer Development and Acquisitions at ADT Security 
Systems, then the world's largest provider of electronic security services, 
from 1996 to 1997. From 1993 to 1995 he was Executive Vice President and 
Chief Financial Officer of Alert Centre, Inc., a Denver-based, publicly 
traded electronic security services company, which was acquired by ADT in 
December 1995.  From 1990 through 1993 Mr. Johnson was Managing Partner at 
Barnes Johnson & Associates, a small investment banking and consulting firm 
specializing in corporate finance and acquisitions. 


                                     31

<PAGE>

Previously, he served as chief financial officer and a director of two 
publicly traded companies involved in oil and gas exploration and cable 
television.  Mr. Johnson began his career with Arthur Andersen & Company in 
Denver.  He received a B.A. in Economics from Muskingum College in Ohio, a 
J.D. from the University of Colorado School of Law and an LL.M. in Taxation 
from the University of Denver Graduate Program in Taxation.  Mr. Johnson 
currently serves as the Executive Vice President and Chief Operating Officer 
of UltimateCom, a Denver-based Internet technology company.

     MIKE M. MUSTAFOGLU has been a Director of the Company since September 
1996. Mr. Mustafoglu is the President and principal of TGF, a firm engaged in 
providing consulting services to emerging small cap companies.  Prior to 
establishing TGF in 1991, Mr. Mustafoglu served in executive positions with 
the Oxbow Group, which is ranked by Forbes as one of the top 100 privately 
held companies in the United States.  The Oxbow group of companies are 
engaged in venture capital investing, commodities trading, electricity, oil 
and coal production, petroleum refining and industrial manufacturing.  Prior 
to joining Oxbow in 1984, Mr. Mustafoglu was with Getty Oil, where he had 
executive positions in corporate finance and Planning.  Mr. Mustafoglu was a 
director of Serv-Tech, Inc., a Nasdaq National Market System firm engaged in 
environmental and maintenance services to the petro-chemical plants 
worldwide, until its acquisition by Phillips Environmental in July 1997, and 
has been a director of TransContinental Waste Industries, Inc. since July 1, 
1997.  Mr. Mustafoglu has a bachelor's degree in engineering and a masters in 
business administration in finance and quantitative science.  Mr. Mustafoglu 
is the brother of Alev T. Lewis, another director of the Company.

     ALEV T. LEWIS has been a Director of the Company since May 1998.  Ms. 
Lewis has been a Tax Manager with Ernst & Young since 1996, consulting in the 
areas of individual taxation, personal finance and estate planning.  From 
1991 to 1996, Ms. Lewis was a corporate tax manager for Amwest Insurance, 
where she handled all tax matters and compliance functions.  Ms. Lewis is the 
sister of Mike M. Mustafoglu, another director of the Company.

     DOUGLAS A. TRIPLETT, M.D., has been an advisor to the Company's 
operating subsidiary  since 1991.  He is Vice President and Director of 
Medical Education and Director of Hematology for Ball Memorial Hospital in 
Muncie, Indiana.  Since 1980 he has also been a Professor of Pathology, and 
since 1981 Assistant Dean, of Indiana University School of Medicine.  He 
previously served as the Director of the Hematopathology Program at Ball 
Memorial Hospital, Associate Professor of Pathology at Indiana University 
School of Medicine and Chief of Pathology at the Raymond W. Bliss Army 
Hospital.  A graduate of Indiana University School of Medicine, Dr. Triplett 
is Chairman of the Coagulation Resource Committee of the College of American 
Pathologists and Co-Chairman of the Scientific Subcommittee of the 
International Committee on Thrombosis and Hemostasis: Lupus Anticoagulants.  
He is certified by the American Board of Pathology in Anatomic and Clinical 
Pathology, Hematology and Transfusion Medicine.  Dr. Triplett received the 
1989 Medal of the American Society of Clinical Pathologists.

     TERM OF DIRECTORS

     Each director serves for a term of one year or until the director's 
successor is duly elected, appointed or seated.

     TECHNICAL AND SCIENTIFIC ADVISORS

     Corgenix periodically draws on the expertise of several advisors and 
consultants in fields related to Corgenix's technology and markets. The 
Company is establishing a Scientific Advisory Board ("SAB") whose members 
will be available to the Company as needed on an individual basis to advise 
the Company with respect to clinical medicine and other matters requiring 
scientific and clinical expertise. Members of the Scientific Advisory Board 
who are not employees of the Company will be compensated for their 
participation on this board.  The Scientific Advisory Board will be chaired 
by Dr. Triplett.

     COMMITTEES

     The Audit Committee consists of Messrs. Johnson, Mustafoglu and Simpson. 
The Audit Committee makes recommendations to the Board regarding the 
selection of independent auditors, reviews the results and scope of the audit 
and other services provided by the Company's independent auditors and reviews 
and evaluates the Company's audit and control functions.

     The Compensation Committee consists of Messrs. Johnson and Mustafoglu.  The
Compensation Committee


                                     32

<PAGE>

reviews and recommends for Board approval compensation for executive officers 
and makes policy decisions concerning salaries and incentive compensation for 
employees and consultants of the Company.

     DIRECTORS COMPENSATION

     Members of the Board of Directors currently do not receive any 
compensation for service on the Board of Directors or any committee thereof. 
Directors may be reimbursed for certain expenses in connection with 
attendance at Board and committee meetings.

     EMPLOYMENT AGREEMENTS

     The Company has entered into three-year  employment agreements with each 
of Dr. Luis R. Lopez, Douglass T. Simpson, Ann L. Steinbarger, Taryn G. 
Reynolds and Catherine A. Fink, Ph.D., pursuant to which the Company pays 
annual salaries of $160,000, $140,000, $100,000, $90,000 and $80,000, 
respectively, in 1998 and 1999.   In addition, the Company has executed a 
three-year consulting contract with Wm. George Fleming, Ph.D., who serves as 
the Company's Vice President, International Operations in consideration for 
an annual fee of $60,000 in 1998 and 1999. These agreements provide for 
severance payments equal to the salary due during the term of the agreement 
if the employment of the individual is terminated without cause (as defined 
in the respective agreements). 

     COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934

     The Company's directors and executive officers and persons who are 
beneficial owners of more than 10% of the Common Stock ("10% beneficial 
owners") are required to file reports of the holdings and transactions in 
Common Stock with the Securities and Exchange Commission (the "Commission") 
and to furnish the Company with such reports. Based solely upon its review of 
the copies of such reports the Company has received or upon written 
representations it has obtained from certain of these persons, the Company 
believes that each of the Company's directors and executive officers were 10 
days late in filing their Initial Statement of Beneficial Ownership of 
Securities on Form 3. Except for these late filings, as of September 10, 1998, 
the Company believes that all of the executive officers and 10% beneficial 
owners had complied with all applicable Section 16(a) filing requirements.

ITEM 10.  EXECUTIVE COMPENSATION.

The following table sets forth the compensation paid by the Company's 
operating subsidiary for the three fiscal years ended June 30, 1998, 1997 and 
1996 to the Company's Chief Executive Officer and the two other executive 
officers whose total annual salary and bonus exceeded $100,000 for services 
rendered to the subsidiary during such fiscal years (collectively, the "Named 
Executive Officers").


                        EXECUTIVE COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                            ANNUAL                LONG-TERM
                                                                         COMPENSATION            COMPENSATION
                                                                       ---------------          --------------
                                                                                                   SECURITIES
                                                          FISCAL                                  UNDERLYING
              NAME AND PRINCIPAL POSITION                  YEAR             SALARY                 OPTIONS(1)
     <S>                                                  <C>          <C>                      <C>
     Luis R. Lopez . . . . . . . . . . . . . . . . . .     1998            $160,000                     --
     Chairman, Chief Executive Officer                     1997             143,333                     --
                                                           1996             133,333                     --


     Douglass T. Simpson . . . . . . . . . . . . . . .     1998            $140,000                     --
     President, Chief Operating Officer                    1997             123,333                     --
                                                           1996             113,333                   38,766


     Ann L. Steinbarger(2) . . . . . . . . . . . . . .     1998            $100,000                     --
     Vice President                                        1997             100,000                     --
                                                           1996              50,000                   55,380
</TABLE>

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

     (1)  All awards have been adjusted to reflect the number of shares of
          Common Stock of the Company received by the optionholder in 
          consideration of the cancellation of such options in connection 
          with the merger of REAADS with and into a wholly-owned subsidiary 
          of the Company (the "Merger").
     (2)  Ms. Steinbarger joined the Company in January 1996.

     The Company has employment agreements with each of the Named Executive 
Officers.  See "Part III. Item 9.  Directors, Executive Officers, Promoters 
and Control Persons -- Employment Agreements." The Company currently does not 
have any equity incentive or stock purchase plans in place.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

                                     33
<PAGE>

     The following table sets forth certain information with respect to the 
beneficial ownership of the Company's Common Stock as of September 30, 1998 
for (a) each person (or group of affiliated persons) is known by the Company 
to own beneficially more than 5% of the Common Stock, (b) each of the 
Company's directors, (c) each of the Named Executive Officers (as set forth 
in "Part III. Item 10. Executive Compensation"), and (d) all directors and 
current executive officers of the Company as a group.  Except as otherwise 
noted, the Company believes that the persons or entities in this table have 
sole voting and investing power with respect to all the shares of Common 
Stock owned by them.  The information appearing below concerning persons 
other than officers and directors of the Company is to the Company's best 
knowledge based on information obtained from the Company's transfer agent.

<TABLE>
<CAPTION>
                                                                        SHARES BENEFICIALLY OWNED
------------------------------------------------------------    ---------------------------------------
 NAME OF BENEFICIAL OWNER                                            NUMBER               PERCENT
------------------------------------------------------------    -------------------     ---------------
 <S>                                                            <C>                     <C>
 Dr. Luis R. Lopez(1)(2)(3)  . . . . . . . . . . . . . . .          1,460,310              12.14%
 Corgenix Medical Corporation
 12061 Tejon Street
 Westminster, Colorado 80234

 Raul Diez Canseco(2)(3) . . . . . . . . . . . . . . . . .            679,260               5.64%
 Corgenix Medical Corporation
 12061 Tejon Street
 Westminster, Colorado 80234

 Jana Hartinger Mazzini(2)(3)  . . . . . . . . . . . . . .            662,670               5.51%
 Corgenix Medical Corporation
 12061 Tejon Street
 Westminster, Colorado 80234

 Leland P. Snyder(2)(3)  . . . . . . . . . . . . . . . . .            631,350               5.25%
 Corgenix Medical Corporation
 12061 Tejon Street
 Westminster, Colorado 80234

 Brian E. Johnson(2)(3)  . . . . . . . . . . . . . . . . .             16,620                 *

 Mike M. Mustafoglu(3)(4)  . . . . . . . . . . . . . . . .            217,265               1.81%

 Alev T. Lewis . . . . . . . . . . . . . . . . . . . . . .                  0                 *

 Douglass T. Simpson(2)(3) . . . . . . . . . . . . . . . .            155,340               1.29%

 Ann L. Steinbarger(2)(3)  . . . . . . . . . . . . . . . .             55,380                 *

 All Directors and current executive officers
     as a group (8 persons)(1)(2)(3)(4)  . . . . . . . . .          2,079,735              17.28%
</TABLE>
----------------
*    Less than 1%
(1)  Includes 153,000 shares held of record by Transition Partners Limited, as
     to which Dr. Lopez has power to vote.  Dr. Lopez disclaims beneficial
     ownership of such shares.
(2)  Excludes shares of contingent Common Stock that may be issued to such
     holders under certain conditions.  See "Item 7.  Certain Relationships and
     Related Transactions -- Contingent Common Stock."
(3)  Except for 64,265 shares of Common Stock held by TGF (See Note 4), all of
     such shares are restricted and cannot be transferred by the holder thereof
     until May 23, 1999.
(4)  Consists solely of shares held by TGF, of which Mr. Mustafoglu is the
     president and controlling shareholder.  Mr. Mustafoglu disclaims beneficial
     ownership of such shares.


                                     34

<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company has the following relationships with certain of its 
stockholders, directors and affiliates.

     TGF CONSULTING AGREEMENT

     The Company is party to a Consulting Agreement dated May 22, 1998 with 
TGF. The Consulting Agreement was entered into in connection with closing of 
the Merger.  The president and controlling shareholder of TGF is Mike M. 
Mustafoglu, who also serves as a director of the Company.  

     Under the terms of the Consulting Agreement, TGF provides advice to the 
Company regarding financial and business matters, including but not limited 
to, identifying sources of capital to implement the Company's business plans, 
review and assessment of capitalization, merger and acquisition prospects, 
and other transactions, on an exclusive basis.  The Consulting Agreement is 
effective for a three-year term ending May 22, 2001.  TGF's fee for its 
financial and business advisory services is $180,000.00 (payable in 36 
monthly installments of $5,000) plus a transaction fee equal to (i) 5% of any 
funds committed and available to the Company in an equity financing secured 
through TGF and (ii) 3% of any funds committed and available to the Company 
in any debt financing secured through TGF.  In addition, in the event TGF 
represents the Company with respect to a merger, acquisition or other 
transaction involving the disposition or exchange of securities or assets of 
the Company, TGF is entitled to a transaction fee equal to 5% of the total 
market value of the stock, cash, assets or other property exchanged by the 
Company or any of its security holders in connection with the transaction, 
such fee payable in the same form as the consideration payable to the Company 
or its security holders in the transaction.  Finally, in the event TGF 
introduces the Company to a joint venture partner or customer and sales 
develop as a result of the introduction, TGF is entitled to a fee equal to 5% 
of the before-tax income generated from the introduction, such fee payable 
for the life of the venture or relationship developed. 

     In addition to the foregoing fees, TGF is entitled to reimbursement of 
its fees and disbursements incurred in providing its advisory services to the 
Company, including without limitation, travel, hotels, food and associated 
expenses.  The Consulting Agreement includes a number of covenants for the 
benefit of TGF.  The Company agrees to promptly furnish TGF a copy of all 
periodic reports filed by the Company with the Securities and Exchange 
Commission, a copy of all press releases released by the Company, copies of 
financial statements and other periodic or special reports as and when 
provided from time to time to holders of any class of the Company's 
securities or to its directors and officers.  The Company also agrees to 
provide such additional documents and information with respect to the Company 
as TGF my from time to time reasonably request. 

     The Consulting Agreement requires the Company to cause two designees 
selected by TGF to be nominated to the Company's Board of Directors during 
each year of the term of the Agreement, and to notify TGF of each meeting of 
the Board.  In connection with this right, the Company agrees that the Board 
of Directors shall number five members, which number will not be changed 
without the prior written consent of TGF, and that the Company will schedule 
not less than four regular meetings of the Board of Directors.  The right to 
designate members to the Company's Board of Directors under the Consulting 
Agreement terminates upon the issuance by the Company of an aggregate of 
250,000 or more shares of the Company's Series A Preferred Stock and warrants 
to purchase in aggregate of 250,000 or more shares of the Company's Common 
Stock.  Thereafter, TGF is entitled to have an observer designated by it 
present at all meetings of the Board of Directors.  The Company agrees to 
indemnify and hold TGF and its Board representatives harmless against any 
claims, damages, costs and expenses arising solely out of attendance and 
participation at any Board meeting, and to include such representatives on 
any liability insurance policy providing coverage for the acts of the 
Company's officers and directors.

     During the term of the Consulting Agreement, the Company is required to 
obtain the written consent of TGF (not to be unreasonably withheld) prior to 
issuing more than 5% of any class of its Common Stock or preferred stock (or 
warrants, options or rights to purchase Common Stock or preferred stock).

     The Consulting Agreement requires the Company to indemnify and hold TGF
harmless from any and all liabilities, claims, lawsuits or other judgments or
awards which it may become subject to ( a "Claim") insofar as such Claim arises
out of or is in connection with services rendered by TGF under the Consulting
Agreement or any transactions in connection therewith.  Such indemnity excludes,
however, indemnification for Claims arising out of the reckless acts or
omissions of TGF.  In turn, TGF agrees to indemnify and hold the Company
harmless against any and all Claims which


                                     35

<PAGE>

arise out of or are based upon any misstatement or omission made by the 
Company in reliance upon information furnished in writing to the Company by 
TGF for inclusion in any registration statement or prospectus in connection 
with a transaction to which the Consulting Agreement applies.

     Pursuant to the Consulting Agreement, TGF has named Mike M. Mustafoglu 
and Alev Lewis as its designees to be nominated as members of the Company's 
Board of Directors.  To date, TGF has provided general financial advisory 
services to the Company pursuant to the Consulting Agreement.  Such services 
have included financial planning and review, business plan development, 
identification of financing sources, identification of and due diligence on 
acquisition opportunities, assistance in negotiating agreements, and 
evaluation of strategic partner opportunities.  TGF has informed the Company 
that it does not engage in the business of  buying and selling securities for 
others or for its own account or advising others, for compensation, as to the 
value of securities or the advisability of investing in, purchasing or 
selling, securities.  TGF has further informed the Company that it is not 
currently licensed as a broker-dealer or investment advisor and that TGF is 
not required to be so licensed to perform the activities called for under the 
Consulting Agreement. TGF has agreed with the Company that if any such 
activities are required to be performed by a licensed broker-dealer or 
investment advisor, TGF will take the appropriate steps to obtain such 
licenses or will inform the Company that it must retain a licensed 
broker-dealer or investment company, as appropriate, to perform such 
activities.

     OPTION AGREEMENT

     The Company also is party to an Option Agreement dated May 22, 1998 with 
TGF.  Under the Option Agreement, TGF has the option to purchase 1,000,000 
units (the "Units"), each unit comprised of one share of the Company's 
authorized but unissued Series A 5% Convertible Preferred Stock and one 
warrant to purchase one share of Common Stock at an exercise price of $2.00, 
for an aggregate purchase price of $1,000,000.  The option is exercisable by 
written notice to the Company on or prior to the expiration of a period of 90 
days after the date on which the Securities and Exchange Commission declares 
effective a registration statement covering the Units and the shares of 
Common Stock issuable upon conversion or exercise thereof.  The option is 
assignable, in whole or in part, by TGF; however the option must be exercised 
collectively as to all of the Units subject thereto.  TGF may not, however, 
assign, sell, transfer, pledge or otherwise dispose of any of the Units or 
any other securities of the Company without the prior written consent of the 
Company.

     CONTINGENT COMMON STOCK

     Under the terms of the Merger Agreement, the former shareholders of 
REAADS are entitled to receive up to an additional 4,000,000 shares of Common 
Stock upon the occurrence (or non-occurrence) of certain events, as described 
below (the "Contingent Shares").

     The Contingent Shares are issuable from time to time on each of the 
following events: (i) the conversion of one or more shares of the Company's 
authorized but unissued Series A 5% Convertible Preferred Stock (the "Series 
A Preferred Stock") to Common Stock or the exercise of one or more common 
stock purchase warrants issued in connection with the Series A Preferred 
Stock ("Preferred Warrants") (the foregoing being referred to as a "Preferred 
Issue Event"), in which case the maximum number of Contingent Shares issuable 
is 2,000,000 shares, (ii) November 23, 1998, if as of such date the Company 
has sold less than $1,000,000 of Series A Preferred Stock (the "November 23, 
1998 Issue Event"), in which case the maximum number of Contingent Shares 
issuable is 4,000,000 shares less (a) the number of shares of Common Stock 
issuable upon conversion of all then outstanding Series A Preferred Stock and 
exercise of all Preferred Warrants and less (b) four times the dollar amount 
of Series A Preferred Stock sold by the Company as of such date.
               
     The Contingent Shares are issuable to the former shareholders of REAADS 
without payment of additional consideration.  The former shareholders of 
REAADS may not assign, sell, transfer, pledge or otherwise hypothecate or 
encumber their right to receive Contingent Shares; they may, however, 
transfer their right to receive Contingent Shares by will, gift and laws of 
descent and intestacy.

     The following table sets forth the number of shares of Common Stock that 
would have been held by the persons indicated as of September 30, 1998, 
assuming that all of the 4,000,000 shares of contingent Common Stock had been 
issued on such date to the former REAADS stockholders.

                                     36

<PAGE>

<TABLE>
<CAPTION>
                                                                        SHARES BENEFICIALLY OWNED
                                                                    AFTER CONTINGENT STOCK ISSUANCE
------------------------------------------------------------    ---------------------------------------
 NAME OF BENEFICIAL OWNER                                            NUMBER               PERCENT
------------------------------------------------------------    -------------------     ---------------
<S>                                                             <C>                     <C>
Dr. Luis R. Lopez(1)(2). . . . . . . . . . . . . . . . . .          2,414,761             23.86%

Raul Diez Canseco(2) . . . . . . . . . . . . . . . . . . .          1,123,221             11.10%

Jana Hartinger Mazzini(2). . . . . . . . . . . . . . . . .          1,095,788             10.83%

Leland P. Snyder(2). . . . . . . . . . . . . . . . . . . .          1,043,997             10.32%

Brian E. Johnson(2). . . . . . . . . . . . . . . . . . . .             27,483                *

Mike M. Mustafoglu(2)(3) . . . . . . . . . . . . . . . . .            217,265              2.15%

Alev T. Lewis. . . . . . . . . . . . . . . . . . . . . . .                  0                *

Douglass T. Simpson(2) . . . . . . . . . . . . . . . . . .            256,869              2.54%

Ann L. Steinbarger(2). . . . . . . . . . . . . . . . . . .             91,576                *

All directors and current executive officers
  as a group (8 persons)(1)(2)(3). . . . . . . . . . . . .          3,295,381             32.56%
</TABLE>
-----------------
*    Less than 1%
(1)  Includes 153,000 shares held of record by and 100,000 contingent shares
     issuable to Transition Partners Limited, as to which Dr. Lopez has power to
     vote.  Dr. Lopez disclaims beneficial ownership of such shares.
(2)  Except for 64,265 shares of Common Stock held by TGF (see Note 3), all of
     such shares are restricted and cannot be transferred by the holder thereof
     until May 23, 1999.
(3)  Consists solely of shares held by TGF, of which Mr. Mustafoglu is the
     president and controlling shareholder.  Mr. Mustafoglu disclaims beneficial
     ownership of such shares.

     CORPORATE RELATIONS AGREEMENT

     The Company is a party to an agreement dated April 14, 1998 with 
Corporate Relations Group, a Florida corporation ("CRG"). Pursuant to this 
agreement and a related payment agreement, CRG provides corporate relations 
services to the Company for a period of one year for a fee of $75,000. In 
connection with the execution of this Agreement, Gulf Atlantic Publishing, 
Inc. purchased 950,000 shares of the Company's Common Stock for total 
consideration of $50,000.  CRG and Gulf Atlantic Publishing, Inc. are both 
corporations that are wholly owned by Strattcom Media, Ltd, a publicly-held 
corporation.

     To date, CRG has provided the Company with investor relations services, 
including assistance with the preparation and dissemination of press releases 
and the preparation of articles regarding the Company and its products. CRG 
has also assisted the Company in placing such articles in various magazines 
and brochures published by certain of CRG's affiliates. CRG has informed the 
Company that CRG is not a licensed broker-dealer or investment advisor, and 
that it is not required to be so licensed to perform the activities called 
for under the corporate relations agreement described above.



                                     37

<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.


<TABLE>
<CAPTION>

 EXHIBIT
 NUMBER                          DESCRIPTION OF EXHIBIT
 -------                         ----------------------
 <C>       <S>

 2.1       Agreement and Plan of Merger dated as of May 12, 1998 by and among 
           Gray Wolf Technologies, Inc., Gray Wolf Acquisition Corp. And 
           REAADS Medical Products, Inc. (filed as Exhibit 2.1 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 2.2       First Amendment to Agreement and Plan of Merger dated as of May 
           22, 1998 by and among Gray Wolf Technologies, Inc., Gray Wolf 
           Acquisition Corp. And REAADS Medical Products, Inc. (filed as 
           Exhibit 2.2 to the Company's Registration Statement on Form 10-SB 
           filed June 29, 1998, and incorporated herein by reference).
 2.3       Second Amendment to Agreement and Plan of Merger dated as of June 
           17, 1998 by and among the Company and TransGlobal Financial 
           Corporation (filed as Exhibit 2.3 to the Company's Registration 
           Statement on Form 10-SB filed June 29, 1998, and incorporated 
           herein by reference).
 3.1       Articles of Incorporation, as amended (filed as Exhibit 3.1 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 3.2       Bylaws (filed as Exhibit 3.2 to the Company's Registration 
           Statement on Form 10-SB filed June 29, 1998, and incorporated 
           herein by reference).
 4.1       Certificate of Designations for Series A Preferred Stock (filed as 
           Exhibit 4.1 to the Company's Registration Statement on Form 10-SB 
           filed June 29, 1998, and incorporated herein by reference).
 10.1      Manufacturing Agreement dated September 1, 1994 between Chugai 
           Pharmaceutical Co., Ltd. and REAADS Medical Products, Inc.(filed 
           as Exhibit 10.1 to the Company's Registration Statement on Form 
           10-SB filed June 29, 1998, and incorporated herein by reference).
 10.2      Amendment to the Manufacturing Agreement dated as of January 17, 
           1995 between Chugai Pharmaceutical Co., Ltd. and REAADS Medical 
           Products, Inc.(filed as Exhibit 10.2 to the Company's Registration 
           Statement on Form 10-SB filed June 29, 1998, and incorporated 
           herein by reference).
 10.3      Amendment Agreement dated November 17, 1997 between Chugai 
           Diagnostic Science, Co., Ltd. and REAADS Medical Products, 
           Inc.(filed as Exhibit 10.3 to the Company's Registration Statement 
           on Form 10-SB filed June 29, 1998, and incorporated herein by 
           reference).
 10.4      Distribution Agreement dated August 26, 1993 between Chugai 
           Pharmaceutical Co., Ltd. and REAADS Medical Products, Inc.(filed 
           as Exhibit 10.4 to the Company's Registration Statement on Form 
           10-SB filed June 29, 1998, and incorporated herein by reference).
 10.5      Amendment to the Distribution Agreement dated September 7, 1994 
           between Chugai Pharmaceutical Co., Ltd. and REAADS Medical 
           Products, Inc. (filed as Exhibit 10.5 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.6      Distribution Agreement dated November 14, 1997 between Chugai 
           Diagnostics Science Co, Ltd. and REAADS Bio-Medical Products (UK) 
           Ltd. (filed as Exhibit 10.6 to the Company's Registration Statement
 10.7      Product Development and Manufacturing Agreement dated September 
           12, 1994 between REAADS Medical Products, Inc. and Helena 
           Laboratories Corporation (filed as Exhibit 10.7 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.8      Amendment to Product Development and Manufacturing Agreement 
           effective December 15, 1997 between REAADS Medical Products, Inc. 
           and Helena Laboratories Corporation (filed as Exhibit 10.8 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
</TABLE>

                                     38

<PAGE>

<TABLE>
 <C>       <S>
 10.9      Office Lease dated February 6, 1996 between Stream Associates, 
           Inc. And REAADS Medical Products, Inc. (filed as Exhibit 10.9 to 
           the Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 10.10     Guarantee dated November 1, 1997 between William George Flemming, 
           Douglass Simpson and Geoffrey Vernon Callen (filed as Exhibit 
           10.10 to the Company's Registration Statement on Form 10-SB filed 
           June 29, 1998, and incorporated herein by reference).
 10.11     Employment Agreement dated May 22, 1998 between Luis R. Lopez and 
           the Company (filed as Exhibit 10.11 to the Company's Registration 
           Statement on Form 10-SB filed June 29, 1998, and incorporated 
           herein by reference).
 10.12     Employment Agreement dated May 22, 1998 between Douglass T. 
           Simpson and the Company (filed as Exhibit 10.12 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.13     Employment Agreement dated May 22, 1998 between Ann L. Steinbarger 
           and the Company (filed as Exhibit 10.13 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.14     Employment Agreement dated May 22, 1998 between Taryn G. Reynolds 
           and the Company (filed as Exhibit 10.14 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.15     Employment Agreement dated May 22, 1998 between Catherine 
           (O'Sullivan) Fink and the Company (filed as Exhibit 10.15 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 10.16     Consulting Contract dated May 22, 1998 between Wm. George Fleming, 
           Bond Bio-Tech, Ltd. and the Company (filed as Exhibit 10.16 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 10.17     Stock Purchase Agreement dated September 1, 1993 between Chugai 
           Pharmaceutical Co., Ltd. and REAADS Medical Products, Inc. (filed 
           as Exhibit 10.17 to the Company's Registration Statement on Form 
           10-SB filed June 29, 1998, and incorporated herein by reference).
 10.18     Lead Generation/Corporate Relations Agreement dated April 14, 1998 
           between the Company and Corporate Relations Group, Inc. (filed as 
           Exhibit 10.18 to the Company's Registration Statement on Form 
           10-SB filed June 29, 1998, and incorporated herein by reference).
 10.19     Note dated January 6, 1997 between REAADS Medical Products, Inc. 
           and Eagle Bank (filed as Exhibit 10.19 to the Company's 
           Registration Statement on Form 10-SB filed June 29, 1998, and 
           incorporated herein by reference).
 10.20     Deed of Guarantee Sterling and Currency dated May 14, 1997 by 
           REAADS Bio-Medical Products (UK) Limited (filed as Exhibit 10.20 
           to the Company's Registration Statement on Form 10-SB filed June 
           29, 1998, and incorporated herein by reference).
 10.21     Option Agreement dated as of May 22, 1998 between TransGlobal
 10.22     Consulting Agreement dated May 22, 1998 between TransGlobal 
           Financial Corporation and the Company (filed as Exhibit 10.22 to 
           the Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).
 10.23     Distributor Agreement dated as of August 3, 1998 by and between 
           American Biogenetic Sciences, Inc. and the Company  (filed as 
           Exhibit 10.23 to the Company's Registration Statement on Form 
           10-SB/A-1 filed September 24, 1998, and incorporated herein by 
           reference) (certain portions of Exhibit 10.23 have been omitted 
           based upon a request for confidential treatment; the omitted 
           portions have been filed with the Commission).
 10.24     Form of Indemnification Agreement between the Company and its 
           directors and officers (filed as Exhibit 10.24 to the Company's 
           Registration Statement on Form 10-SB/A-1 filed September 24, 1998, 
           and incorporated herein by reference).
 11.1      Statement Regarding Computation of Net Income per Share (filed as 
           Exhibit 11.1 to the Company's  Annual Report on Form 10-KSB filed 
           September 28, 1998, and incorporated herein by reference).
 21.1      Subsidiaries of the Registrant (filed as Exhibit 21.1 to the 
           Company's Registration Statement on Form 10-SB filed June 29, 
           1998, and incorporated herein by reference).

</TABLE>
                                     39

<PAGE>
<TABLE>
 <C>     <S> 
 27*     Financial Data Schedule
</TABLE>
--------------------------------
*    Filed herewith.


      (b) Financial Statement Schedules

          None



                                    40
<PAGE>


                            CORGENIX MEDICAL CORPORATION
                                   AND SUBSIDIARY

                         CONSOLIDATED FINANCIAL STATEMENTS

                               JUNE 30, 1998 AND 1997


                    (WITH INDEPENDENT AUDITORS' REPORT THEREON)


<PAGE>

                             CORGENIX MEDICAL CORPORATION

                            INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                           ITEM                                PAGE NUMBER
 <S>                                                           <C>
 Independent Auditors' Report                                       F-1

 Consolidated Balance Sheets as of June 30, 1998 and 1997           F-2

 Consolidated Statement of Operations for Years Ended       
 June 30, 1998 and 1997                                             F-3

 Consolidated Statements of Stockholders' Equity (Deficit)  
 for the Years Ended June 30, 1998 and 1997                         F-4

 Consolidated Statements of Cash Flows for the Years Ended  
 June 30, 1998 and 1997                                             F-5

 Notes to Consolidated Financial Statements                         F-6
</TABLE>
<PAGE>

                        INDEPENDENT AUDITORS' REPORT




The Board of Directors of Corgenix Medical Corporation:


     We have audited the accompanying consolidated balance sheets of Corgenix 
Medical Corporation and subsidiary (Company) as of June 30, 1998 and 1997, 
and the related consolidated statements of operations, stockholders' equity 
(deficit) and cash flows for the years then ended. These consolidated 
financial statements are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these consolidated 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 audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Corgenix 
Medical Corporation and subsidiary as of June 30, 1998 and 1997, and the 
results of their operations and their cash flows for the years then ended, in 
conformity with generally accepted accounting principles.




                                 KPMG PEAT MARWICK LLP



Boulder, Colorado
October 23, 1998



                                     F-1

<PAGE>


CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
ASSETS                                                                                  1998             1997
------                                                                                  ----             ----
<S>                                                                                <C>                 <C>
Current assets:
   Cash and cash equivalents                                                       $   216,314         141,086
   Accounts receivable, less allowance for doubtful accounts of $6,600 and $3,400
            in 1998 and 1997, respectively                                             369,710         601,939
   Note receivable                                                                      27,425               -
   Inventories                                                                         511,408         234,761
   Prepaid expenses                                                                     16,876          12,492
                                                                                     ---------       ---------
                     Total current assets                                            1,141,733         990,278
                                                                                     ---------       ---------
Equipment:
   Machinery and laboratory equipment                                                  304,744         368,660
   Furniture, fixtures and office equipment                                            238,761         224,521
                                                                                     ---------       ---------
                                                                                       543,505         593,181
   Accumulated depreciation and amortization                                          (328,421)       (243,754)
                                                                                     ---------       ---------
                     Net equipment                                                     215,084         349,427
                                                                                     ---------       ---------

Intangible assets:
   Patents, net of accumulated amortization of $572,484 and $498,682
            in 1998 and 1997, respectively                                             545,060         618,862
   Goodwill, net of accumulated amortization of $32,523 and $28,969
            in 1998 and 1997, respectively                                              29,065          32,619
                                                                                     ---------       ---------
                                                                                       574,125         651,481
                                                                                     ---------       ---------
Due from officer                                                                        12,000          12,000
Other assets                                                                            22,652          98,209
                                                                                     ---------       ---------

                     Total assets                                                  $ 1,965,594       2,101,395
                                                                                     ---------       ---------
                                                                                     ---------       ---------

</TABLE>
                                      F-2

<PAGE>
<TABLE>
<S>                                                                                <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Current portion of notes payable                                                $   287,765         124,703
   Accounts payable                                                                    427,809         529,546
   Accrued payroll and related liabilities                                             106,757         109,038
   Other liabilities                                                                   116,054         116,754
                                                                                     ---------       ---------
                     Total current liabilities                                         938,385         880,041
Notes payable, excluding current portion                                               853,349         915,641
                                                                                     ---------       ---------
                     Total liabilities                                               1,791,734       1,795,682
                                                                                     ---------       ---------

Mandatorily redeemable 12%, Class A Preferred stock, 2,000 shares authorized and
   113.2 shares issued and outstanding in 1997, liquidation preference of $388,431           -         388,431
Stockholders' equity (deficit):
   Preferred stock, $.001 par value.  Authorized 5,000,000 shares, none issued
            or outstanding                                                                   -               -
   Common stock, $0.001 par value.  Authorized 20,000,000 shares; issued
            and outstanding 12,102,494 shares in 1998                                   12,102               -
   Common stock, $0.01 par value.  Authorized 500,000 shares; issued and
            outstanding 164,000 shares in 1997                                               -           1,640
   Additional paid-in capital                                                        3,610,798       2,337,313
   Stock subscription receivable                                                       (25,651)              -
   Accumulated deficit                                                              (3,423,389)     (2,421,671)
                                                                                     ---------       ---------
                     Total stockholders' equity (deficit)                              173,860         (82,718)
                                                                                     ---------       ---------
Commitments and contingencies (notes 5, 7, 9 and 11)
                     Total liabilities and stockholders' equity (deficit)          $ 1,965,594       2,101,395
                                                                                     ---------       ---------
                                                                                     ---------       ---------
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-2 (cont)


<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>
 
--------------------------------------------------------------------------------------------------
                                                             1998                       1997
                                                             ----                       ----
<S>                                                      <C>                          <C>

Net sales                                                $ 2,592,175                  2,435,965
Cost of sales                                                901,699                  1,318,256
                                                           ---------                  ---------

                  Gross profit                             1,690,476                  1,117,709

Operating expenses:
         Selling and marketing                               751,244                    742,200
         Research and development                            387,260                    379,518
         General and administrative                        1,321,990                    723,805
                                                           ---------                  ---------
                                                           2,460,494                  1,845,523
                                                           ---------                  ---------

                  Operating loss                            (770,018)                  (727,814)

Other expenses:
         Interest expense, net                              (150,148)                   (49,922)
         Factoring expense                                    (2,132)                   (44,977)
                                                           ---------                  ---------
                                                            (152,280)                   (94,899)
                                                           ---------                  ---------

                  Net loss                               $  (922,298)                  (822,713)
                                                           ---------                  ---------
                                                           ---------                  ---------

Net loss per share basic and diluted                           $(.15)                      (.17)
                                                                 ---                        ---

Weighted average shares outstanding basic and diluted      6,343,133                  4,920,000
 
</TABLE>


See accompanying notes to consolidated financial statements.


                                         F-3

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

YEARS ENDED JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>
 
---------------------------------------------------------------------------------------------------------------------------------
                                         Common        Common                                                         Total
                                         stock,        stock,     Additional        Stock                         stockholders'
                                          $.01         $.001        paid-in      subscription     Accumulated        equity
                                           par          par         capital       receivable        deficit         (deficit)
                                           ---          ---         -------       ----------        -------         ---------
<S>                                     <C>           <C>        <C>            <C>            <C>               <C>
BALANCES AT JUNE 30, 1996               $ 1,640          -        2,337,313            -        (1,555,152)          783,801

Preferred stock dividend                    -            -              -              -           (43,806)          (43,806)
  requirement
Net loss                                    -            -              -              -          (822,713)         (822,713)
                                          -----       ------      ---------          -----       ---------           -------

BALANCES AT JUNE 30, 1997                 1,640          -        2,337,313            -        (2,421,671)          (82,718)

Preferred stock dividend
  requirement                               -            -              -              -           (36,330)          (36,330)
Issuance of common stock                     54          153        165,423            -                -            165,630
Issuance of warrants to purchase
  common stock                              -            -           10,000            -                -             10,000
Conversion of preferred stock
  to common stock                            56          -          169,744            -                -            169,800
Conversion of options and
  warrants to common stock                  290          -           28,735            -                -             29,025
Conversion of REAADS common
  stock to Corgenix common               (2,040)       6,120         (4,080)           -                -              -
  stock
Issuance of common stock in
  connection with merger                    -          1,957            -              -           (43,090)          (41,133)
Issuance of common stock in
  private placement offering                -          3,872        878,012            -                -            881,884
Common stock subscription                   -            -           25,651        (25,651)             -              -
Net loss                                    -            -              -              -          (922,298)         (922,298)
                                          -----       ------      ---------          -----       ---------           -------

BALANCES AT JUNE 30, 1998               $   -         12,102      3,610,798        (25,651)     (3,423,389)          173,860
                                          -----       ------      ---------          -----       ---------           -------
                                          -----       ------      ---------          -----       ---------           -------
 
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4

<PAGE>

CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>
 
------------------------------------------------------------------------------------------------------------------------------
                                                                                   1998                 1997
                                                                                   ----                 ----
<S>                                                                            <C>                   <C>
Cash flows from operating activities:
  Net loss                                                                     $ (922,298)           (822,713)
  Adjustments to reconcile net loss to net cash
     used by operating activities:
       Depreciation and amortization                                              162,023             132,576
       Common stock issued for services                                           194,625               -
       Accretion of interest                                                        7,375               -
       Provision (credit) for doubtful accounts                                     3,147             (28,216)
       Changes in operating assets and liabilities, net of acquisition:
          Accounts receivable                                                     229,082            (104,302)
          Inventories                                                            (276,647)            109,885
          Prepaid expenses and other assets                                        71,173             (33,911)
          Accounts payable                                                       (132,295)            226,437
          Accrued payroll and related liabilities                                  (2,281)             76,774
          Other liabilities                                                          (700)             (9,055)
                                                                                 --------            --------
               Net cash used by operating activities                             (666,796)           (452,525)
                                                                                 --------            --------

Cash flows from investing activities:
  Purchases of equipment                                                          (14,240)           (283,905)
  Proceeds from return of equipment                                                63,916              -
                                                                                 --------            --------
               Net cash provided (used) by investing activities                   (49,676)           (283,905)
                                                                                 --------            --------

Cash flows from financing activities:
  Proceeds from issuance of common stock                                          881,914              -
  Proceeds from issuance of notes payable                                         293,995           1,110,891
  Payments on notes payable                                                      (483,561)           (120,305)
  Factor payables                                                                    -               (128,985)
                                                                                 --------            --------
               Net cash provided by financing activities                          692,348             861,601
                                                                                 --------            --------
               Net increase in cash and cash equivalents                           75,228             125,171
Cash and cash equivalents at beginning of year                                    141,086              15,915
                                                                                 --------            --------
Cash and cash equivalents at end of year                                       $  216,314             141,086
                                                                                 --------            --------
                                                                                 --------            --------

Supplemental disclosures:
  Cash paid for interest                                                       $  156,940              49,922
                                                                                 --------            --------
                                                                                 --------            --------
Acquisition:
  Assets acquired                                                              $   27,425              -
  Accumulated deficit                                                              43,090              -
  Liabilities assumed                                                             (68,558)             -
  Common stock issued                                                              (1,957)             -
                                                                                 --------            --------
               Net cash paid for acquisition                                   $     -                 -
                                                                                 --------            --------
                                                                                 --------            --------
Noncash financing activities:
  Common stock warrants issued with note payable                               $   10,000              -
                                                                                 --------            --------
                                                                                 --------            --------
  Conversion of preferred stock to notes payable                               $  254,961              -
                                                                                 --------            --------
                                                                                 --------            --------
  Common stock subscription                                                    $   25,651              -
                                                                                 --------            --------
                                                                                 --------            --------
 
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1998 AND 1997

-------------------------------------------------------------------------------
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BUSINESS, BASIS OF PRESENTATION AND MERGER

     On May 22, 1998, REAADS Medical Products (REAADS) completed a merger with a
     subsidiary of Gray Wolf Technologies, Inc., an inactive corporation with no
     significant assets or operations.  The resulting merged corporation was
     named Corgenix, Inc.  The parent corporation was renamed Corgenix Medical
     Corporation (Corgenix or the Company).  Effective with the merger, all
     previously outstanding common stock, preferred stock, options and warrants
     of REAADS were exchanged for common stock of Corgenix in an exchange ratio
     of 1 share of REAADS in exchange for 30 shares of Corgenix, resulting in
     the previous stockholders of REAADS owning approximately 76% of the common
     stock of Corgenix.

     Corgenix develops, manufactures and markets diagnostic products for the
     serologic diagnosis of certain vascular diseases and autoimmune disorders
     using proprietary technology.  The Company markets its products to
     hospitals and free-standing laboratories worldwide through a network of
     sales representatives, distributors and private label (OEM) agreements.
     The Company's offices and manufacturing facility are located in
     Westminster, Colorado.

     The consolidated financial statements include the accounts of the Company
     and its wholly-owned subsidiary, REAADS Bio-medical Products (UK) Limited
     (REAADS UK).  REAADS UK was established as a United Kingdom company during
     1996 to market the Company's products in Europe.  The operations of REAADS
     UK were not significant for the years ended June 30, 1998 and 1997.

     USE OF ESTIMATES

     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 revenue and expenses
     during the reporting period.  Actual results could differ significantly
     from those estimates.

     CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid debt instruments, purchased with
     maturities of three months or less to be cash equivalents.


                                      F-6


<PAGE>

CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     INVENTORIES

     Inventories are recorded at the lower of cost or market, using the
     first-in, first-out method.  Components of inventories as of June 30, are
     as follows:

<TABLE>
<CAPTION>
                                       1998        1997
                                       ----        ----
<S>                                 <C>           <C>
              Raw materials         $ 131,709      59,851
              Work-in-process         210,307     138,080
              Finished goods          169,392      36,830
                                      -------     -------
                                    $ 511,408     234,761
                                      -------     -------
                                      -------     -------
</TABLE>

     EQUIPMENT

     Equipment is recorded at cost.  Depreciation, which totaled $84,667 and
     $57,984 for the years ended June 30, 1998 and 1997, respectively, is
     calculated primarily using the straight-line method over the estimated
     useful lives of the assets which range from 3 to 7 years.

     INTANGIBLE ASSETS

     Intangible assets consist of purchased patents and goodwill, which are
     amortized using the straight-line method over 15 years.

     INCOME TAXES

     Under the asset and liability method of recording income taxes, deferred
     tax assets and liabilities are recognized for the future tax consequences
     attributable to differences between the financial statement carrying
     amounts of existing assets and liabilities and their respective tax bases.
     Deferred tax assets and liabilities are measured using enacted tax rates
     expected to apply to taxable income in the years in which those temporary
     differences are expected to be recovered or settled.  The effect on
     deferred tax assets and liabilities of a change in tax rates is recognized
     in the consolidated statements of operations in the period that includes
     the enactment date.

     REVENUE RECOGNITION

     Revenue is recognized upon shipment of products.

     RESEARCH AND DEVELOPMENT

     Research and development costs and any costs associated with internally
     developed patents, formulas or other proprietary technology are expensed as
     incurred.


                                      F-7



<PAGE>

CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

     LONG-LIVED ASSETS

     The Company's long-lived assets are reviewed for impairment whenever events
     or changes in circumstances indicate that the carrying amount of such
     assets may not be recoverable.  Events relating to recoverability may
     include significant unfavorable changes in business conditions, recurring
     losses, or a forecasted inability to achieve break-even operating results
     over an extended period.  The Company evaluates the recoverability of
     long-lived assets based upon forecasted undiscounted cash flows.  Should an
     impairment in value be indicated, the carrying value of intangible assets
     will be adjusted, based on estimates of future discounted cash flows
     resulting from the use and ultimate disposition of the asset.

     STOCK-BASED COMPENSATION

     In accounting for its stock purchase and option plan, the Company records
     compensation expense on the date of grant only if the current market price
     of the underlying stock exceeds the exercise price.  Pro forma net income
     (loss) disclosures for employee stock option grants as if the fair value
     based method had been applied are also provided.

(2)  BUSINESS COMBINATION

     On May 22, 1998, REAADS purchased, in an exchange of common stock, a
     subsidiary of Gray Wolf Technologies, Inc. (Gray Wolf) in a transaction
     accounted for using the purchase method of accounting.  The total purchase
     price and carrying value of net assets acquired of Gray Wolf was $1,957.
     Net assets acquired are as follows:

<TABLE>
<S>                                              <C>
               Net current assets                $ 27,425
               Accumulated deficit                 43,090
               Net current liabilities            (68,558)
                                                  -------

                                                 $  1,957
                                                  -------
                                                  -------
</TABLE>

     As Gray Wolf was an inactive corporation with no significant operations,
     the Company recorded the carryover historical basis of net tangible assets
     acquired.  The results of operations subsequent to the date of acquisition
     are included in the Company's consolidated operations.


                                         F-8

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(3)  NOTES PAYABLE

     Notes payable consist of the following at June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                              1998      1997
                                                              ----      ----
<S>                                                     <C>           <C>
    Note payable to Eagle Bank, with interest at prime
       plus 2.75% (11.25% at June 30, 1998), due in
       monthly installments of $14,000 through
       January 2007, collateralized by the Company's
       common stock, commercial security agreements
       and a key man life insurance policy              $   918,603     976,532

    Note payable to Eagle Bank, with interest at the
       bank's base lending rate plus 2% (11.25% at
       June 30, 1998) due in monthly installments of
       $2,000 and a balloon payment due December 30,
       1998, collateralized by accounts receivable           40,000      50,000

    Notes payable to former preferred stockholders,
       with interest at 12%, due November 8, 1998           144,511       -

    Note payable, with interest at prime plus 3%
       (11.50% at June 30, 1998), due on demand              38,000       -

    Notes payable to officers of the Company with
       interest rates ranging from 8% to 22%, repaid
       in 1998                                               -           13,812
                                                          ---------   ---------
                                                          1,141,114   1,040,344

    Less current portion                                   (287,765)   (124,703)
                                                          ---------   ---------

       Notes payable, excluding current portion         $   853,349     915,641
                                                          ---------   ---------
                                                          ---------   ---------
</TABLE>

     Aggregate maturities of notes payable by year as of June 30, 1998, are as
     follows:

<TABLE>
<CAPTION>
<S>                                        <C>
           Years ending June 30:
                1999                       $  287,765
                2000                           72,986
                2001                           81,634
                2002                           91,303
                2003                          102,125
                Thereafter                    505,301
                                            ---------

                                           $1,141,114
                                            ---------
                                            ---------
</TABLE>

     The carrying values of notes payable approximate fair value based on their
     terms and floating market based interest rates.

                                      F-9

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(4)  COST OF SALES

     During the year ended June 30, 1997, the Company included a charge of
     $479,000 in cost of sales due to a product design flaw of a raw material
     component used in one of the Company's products.  A sole source
     manufacturer in Japan provided the raw material component.  The Company was
     contractually obligated to purchase the raw material from this manufacturer
     through a contract with the Company's largest customer, Chugai
     Pharmaceutical Co., Ltd.  The product design flaw has been resolved to the
     satisfaction of the customer.

(5)  STOCKHOLDERS' EQUITY

     PREFERRED STOCK

     The Company previously issued 113.2 shares of mandatorily redeemable Class
     A voting preferred stock, which was recorded at liquidation value which
     approximated fair market value at the date of issuance.  Pursuant to the
     purchase of Gray Wolf, one-half of the shares of preferred stock were
     converted into common stock and one-half of the shares of preferred stock
     plus all unpaid dividends were converted into notes payable.

     COMMON STOCK

     In connection with the merger, the Company may have an obligation to issue
     4,000,000 shares of contingent common stock to former REAADS stockholders.
     The contingent shares are issuable upon the occurrence of the following
     events: (i) the conversion of one or more shares of the Company's
     authorized but unissued Series A 5% convertible preferred stock to common
     stock or the exercise of one or more common stock purchase warrants issued
     in connection with the Series A Preferred Stock, in which case the maximum
     number of contingent shares issuable is 2,000,000 shares, (ii) November 23,
     1998, if as of such date the Company has sold less than $1,000,000 of
     Series A Preferred Stock, in which case the maximum number of contingent
     shares issuable is 4,000,000 shares less (a) the number of shares of common
     stock issuable upon conversion of all then outstanding Series A preferred
     stock and exercise of all preferred stock less (b) four times the dollar
     amount of Series A preferred stock sold by the Company as of such date.
     The contingent shares are issuable to the former stockholders of REAADS
     without payment of additional consideration.

     Effective with the purchase of Gray Wolf, 3,872,235 shares of Corgenix
     common stock were issued at a weighted average price of $.2532 per share.
     Proceeds of $881,884 were recorded net of commissions and expenses.  An
     additional 77,765 shares of Corgenix common stock were subscribed, and a
     subscription receivable was recorded of $25,651.

(6)  STOCK PURCHASE AND OPTION PLAN

     Prior to the purchase of Gray Wolf, the Company had a stock purchase and
     option plan, whereby, the Company sold shares of its stock, and/or granted
     options to purchase shares of its common stock to key employees, officers,
     directors and consultants, as determined by


                                     F-10

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(6)  STOCK PURCHASE AND OPTION PLAN (CONTINUED)

     the Company's Board of Directors.  Options under this plan were granted at
     not less than exercisable over 5 to 10 year periods.   All such options
     were converted to shares of common stock pursuant to the merger agreement
     entered into with the purchase of Gray Wolf with no monetary consideration
     received by the Company.  Accordingly, no options are outstanding at June
     30, 1998.

     As the Company granted options at fair value, no compensation cost has been
     recognized for its stock options in the consolidated financial statements.
     Had compensation cost for the Company's stock-based compensation plan been
     determined as fair value at the grant dates for awards under the plan, the
     Company's net loss would have been increased to the proforma amount
     indicated below:

<TABLE>
<CAPTION>
                                                             June 30, 1997
                                                             -------------
<S>                                                          <C>
                    Net loss:
                         As reported                           $ 822,713
                         Pro forma                               840,637
</TABLE>

     The fair value of each option grant was estimated on the date of grant
     using the Black-Scholes option-pricing model with the following
     weighted-average assumptions used for grants in the year ended June 30,
     1997; no dividend yield, no volatility, risk-free interest rate of 5.6
     percent, and expected life of 4 years.

     A summary of the status of the Company's fixed stock options plan for the
     year ended June 30, 1997, is presented below:

<TABLE>
<CAPTION>
                                                                    Weighted
                                                                     average
                                                         Shares  exercise price
                                                         ------  --------------
<S>                                                     <C>      <C>

      Outstanding at beginning of year                   44,500       $ 22
      Granted                                             4,300         30
      Exercised                                              -           -
      Forfeited                                          (1,300)        30
                                                         ------         --
      Outstanding at June 30, 1997                       47,500         23
                                                         ------         --
                                                         ------         --
      Options exercisable at June 30, 1997               32,550

      Weighted-average fair value of options granted
      during the year                                                 $ 30
</TABLE>


                                     F-11

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(7)  COMMITMENTS AND CONTINGENCIES

     ROYALTY AGREEMENT

     The Company has a royalty agreement with BioStar Medical Products, Inc.
     (BioStar) whereby the Company pays 5% of certain product sales, up to an
     aggregate of $600,000, in royalties.  As of June 30, 1998, $538,962 of
     cumulative royalties have been paid to BioStar.  Royalty expense under this
     agreement totaled $91,574 and $99,521 for the years ended June 30, 1998 and
     1997, respectively.

     LEASES

     The Company is obligated under various noncancelable operating leases
     primarily for its operating facility and certain office equipment.  The
     leases generally require the Company to pay related insurance costs,
     maintenance costs and taxes.  Future minimum lease payments under
     noncancelable operating leases with initial or remaining terms in excess of
     one year as of June 30, 1998 are as follows:

<TABLE>
<CAPTION>
                Years ending June 30:
<S>                                                           <C>
                  1999                                        $ 135,000
                  2000                                          133,000
                  2001                                          135,000
                  2002                                           11,000
                                                                -------

                     Total future minimum lease payments      $ 414,000
                                                                -------
                                                                -------
</TABLE>


     Rent expense totaled $115,311 and $121,235 for the years ended June 30,
     1998 and 1997, respectively.

     EMPLOYMENT AGREEMENTS

     The Company has employment agreements with certain key employees, certain
     of whom are also stockholders.  In addition to salary and benefit
     provisions, these agreements include defined commitments should the
     employees terminate their employment with or without cause.

(8)  INCOME TAXES

     At June 30, 1998, the Company has a net operating loss carryforward for
     income tax purposes of approximately $3,068,000 expiring during the period
     from 2006 to 2013.  Research and development tax credit carryforwards
     approximate $135,220.  The future utilization of the operating loss
     carryforwards or the time period in which the carryforwards could be
     utilized could be limited if certain historical stockholders of REAADS sell
     their shares within two years of the purchase of Gray Wolf.


                                     F-12

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

     As of June 30, 1998, the Company had a gross deferred tax asset of
     approximately $338,400 relating primarily to the Company's net operating
     losses and research and development credit carryforwards. A valuation
     allowance in the amount of the deferred tax asset has been recorded due to
     management's determination that it's not more likely than not that the tax
     assets will be utilized.

(9)  RELATED PARTY TRANSACTIONS

     The Company has a consulting agreement with TransGlobal Financial
     Corporation (TGF), a company whose president also serves as a director of
     Corgenix.  TGF is to provide business and financial advice in return for a
     monthly fee of $5,000 through May 22, 2001, plus a percentage of funds
     committed and available to the Company through debt or equity financing.
     TGF is also entitled to a transaction fee for any business combination or
     joint venture it represents for Corgenix.  Two of Corgenix's directors will
     be nominated by TGF for the term of the agreement unless the Company issues
     an aggregate of 250,000 or more shares of Series A preferred stock and
     warrants to purchase an aggregate of 250,000 or more shares of common
     stock.  Thereafter, TGF is entitled to have a designated observer present
     at all board meetings.  During the term of the agreement, the Company is
     required to obtain TGF's written consent prior to issuing more than 5% of
     any class of common or preferred stock.

     The Company has issued options to TGF for the purchase of 1,000,000 units
     of Series A 5% convertible preferred stock and warrants to purchase one
     share of common stock at an exercise price of $2.00, for an aggregate
     purchase price of $1,000,000.

     The Company has entered into product development, manufacturing and
     distribution agreements with Chugai, which provide certain rights for
     Chugai to distribute the Company's products in Japan.

     In November 1997, the Company borrowed $100,000 under a note payable from a
     stockholder.  The note and related interest was repaid in May 1998.

     Amounts due from an officer are due on June 6, 1999, and do not bear
     interest.

(10) CONCENTRATION OF CREDIT RISK

     The Company's customers are principally located in the United States,
     although it has some foreign customers.  The Company has a distribution
     agreement with Cambridge Life Sciences plc to distribute the Company's
     products in Europe.  The Company performs periodic credit evaluations of
     its customers' financial condition but generally does not require
     collateral for receivables.

     Chugai is the Company's largest customer, representing approximately 30%
     and 40% of sales in the years ended June 30, 1998 and 1997, respectively,
     and approximately 21% and 37% of accounts receivable at June 30, 1998 and
     1997, respectively.


                                     F-13

<PAGE>



CORGENIX MEDICAL CORPORATION
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

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

(11) SUBSEQUENT EVENT

     In July 1998, the Company received proceeds of $25,651 under its common
     stock subscription and the related common shares were issued.



                                         F-14

<PAGE>

                                  SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the 
Registrant caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized, on this 28th day of October, 1998.  
     
                                      CORGENIX MEDICAL CORPORATION




                                       By:   /s/ Luis R. Lopez
                                          --------------------------------
                                       Luis R. Lopez, M.D. 
                                       Chairman and Chief Executive Officer


     In accordance with the Exchange Act, this report has been signed below 
by the following persons on behalf of the Registrant and in the capacities 
and on the dates indicated.

<TABLE>
<CAPTION>

 Signatures                   Title                                    Date
 <S>                          <C>                                      <C>
 /s/ Luis R. Lopez            Chairman of the Board, Chief             October 28, 1998
 -----------------------      Executive Officer and Director
 Luis R. Lopez, M.D.          (principal executive officer)

 /s/ Douglass T. Simpson      President (principal financial and       October 28, 1998
 -----------------------      accounting officer) and Director
 Douglass T. Simpson

 /s/ Brian E. Johnson          Director                                October 28, 1998
 -----------------------
 Brian E. Johnson

 /s/ Mike M. Mustafoglu        Director                                October 28, 1998
 -----------------------
 Mike M. Mustafoglu

 /s/ Alev Lewis                Director                                October 28, 1998
 -----------------------
 Alev Lewis

</TABLE>