FORM 10-K/A. - ANNUAL REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                  Amendment #1

(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the fiscal year ended  December 31, 1998 
                                  
                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the transition period from_____________________ to__________________________

Commission file number              0-22319                                     

                            PATIENT INFOSYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                              16-1476509     
                  --------                              ----------     
       (State or other jurisdiction of      (I.R.S. Employer Identification No.)
         incorporation or organization)

      46 Prince Street, Rochester, NY                      14607                
      -------------------------------                      -----                
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:    (716) 242-7200       
                                      

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class registered              Name of each exchange on which
                                                registered

                                                  None                      

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $.01 Par Value Per Share 
                                (Title of Class)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

         As  of  March  31,  1999,   8,033,002   shares  of  common  stock  were
outstanding,  and the  aggregate  market  value of the common  shares of Patient
Infosystems, Inc. held by non-affiliates was approximately $8 million.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None



<PAGE>
                                    PART III


Item 10. Directors and Executive Officers of the Registrant.

     The following table sets forth certain information concerning the Company's
directors and executive officers as of April 28, 1999.

            Name                       Age           Position
    
Derace L. Schaffer, M.D...........     51            Chairman of the Board
    
Donald A. Carlberg................     46            Director, President and 
                                                     Chief Executive Officer
    
John V. Crisan....................     54            Chief Financial Officer
    
Neal Westermeyer..................     55            Chief Operating Officer
    
Kent A. Tapper....................     42            Vice President, Financial 
                                                     Planning
    
Victoria Nelson Neidigh...........     39            Vice President, Sales
    
John Pappajohn....................     70            Director
    
Barbara J. McNeil, M.D., Ph.D.....     58            Director
    
Carl F. Kohrt, Ph.D...............     55            Director
    
David B. Nash, M.D. ..............     43            Director
    
     Derace L.  Schaffer,  M.D. has been Chairman of the Board and a Director of
the Company since its inception in February 1995.  Dr.  Schaffer is President of
the Ide Imaging Group,  P.C., as well as the Lan Group,  a venture  capital firm
specializing  in health  care and high  technology  investments.  He serves as a
director of the following public companies:  Allion Healthcare,  Inc.;  American
Physician  Partners,  Inc.;  and Oncor,  Inc.  He is also a director  of several
private  companies,   including   Analytika,   Inc.,  Card  Systems,   Inc.  and
Logisticare, Inc. Dr. Schaffer is a board certified radiologist. He received his
post graduate  radiology  training at Harvard  Medical School and  Massachusetts
General Hospital, where he served as Chief Resident. Dr. Schaffer is a member of
Alpha Omega Alpha, the national medical honor society, and is Clinical Professor
of Radiology at the University of Rochester School of Medicine.

     Donald A.  Carlberg  has been  President,  Chief  Executive  Officer  and a
Director of the Company since its inception. From February 1993 to December 1994
Mr.  Carlberg  served  as  Chief   Executive   Officer  of  Patient   Management
Technologies,  Inc., a medical services  consulting  company,  which he founded.
From  1992 to 1994 Mr.  Carlberg  served  as  Senior  Vice  President  Sales and
Marketing  for  Neurocare,  Inc./Paradigm  Health  Corp.  From  1990 to 1992 Mr.
Carlberg served as Director of Managed Care for Baxter Healthcare  International
where he started managed care initiatives for its Caremark  Division.  From 1985
to 1990 Mr. Carlberg held several senior level positions in managed care at Blue
Cross/Blue  Shield  of  Rochester,  New  York  and  Independence  Blue  Cross in
Philadelphia, Pennsylvania.

     John V. Crisan has been Chief  Financial  Officer  since  March 1999.  From
March  1994 to March  1999,  Mr.  Crisan  was Senior  Vice  President  and Chief
Financial  Officer of Access  Health,  Inc.  Previously,  Mr. Crisan held senior
positions with growth oriented  companies  including Value Behavioral  Health (a
division  of  Value   Health,   Inc.)  and  Partners   National   Health  Plans.
Additionally, Mr. Crisan served as Vice President, Health Affairs for Blue Cross
Blue Shield of Ohio, Inc. and began his career with Ernst & Young.

     Neal  Westermeyer has been Chief  Operating  Officer since March 1999. From
July 1998 to January  1999,  Mr.  Westermeyer  was Vice  President  and  General
Manager for HBOC, formerly National Health Enhancement Systems, where he managed
a health  information  systems and technology  based business unit. From January
1998 to July 1998, Mr.  Westermeyer served as Senior Vice President of Sales and
Services at HBOC.  From June 1993 to January  1998,  Mr.  Westermeyer  served as
Executive  Vice  President  and Chief  Operating  Officer  for  National  Health
Enhancement Systems, Inc. Previously, he has also held senior positions at Human
Inc., Nabisco Brands, Inc. and Ralston Purina Company.

     Kent A.  Tapper has been Vice  President,  Financial  Planning  since April
1999.  Prior to this, he was Vice  President,  Chief  Information  Officer since
April 1998 and was Vice President, Systems Engineering of the Company since July
1995.  Prior to joining  the  Company  and since  1992,  Mr.  Tapper was Product
Manager,  Audio Response and Call Center  Platforms for Northern  Telecom,  Inc.
From 1983 to 1992 Mr. Tapper held Product Manager,  Systems  Engineering Manager
and various engineering management positions with Northern Telecom.

     Victoria Nelson Neidigh has been Vice President,  Sales since January 1998.
Ms. Neidigh is responsible  for managing the Company's  national sales staff and
developing  strategies to increase the Company's presence in key market sectors,
including managed care organizations and pharmaceutical  companies,  as well as,
promoting  enrollment  growth in current  and new  clients.  Prior to this,  she
served as Vice President, Managed Care and National Accounts since January 1997.
From August 1995 to January 1997 Ms. Neidigh served as Regional  Account Manager
for Apria Healthcare, Inc. From September 1994 to August 1995 Ms. Neidigh served
as District  Sales Manager for Homedco,  Inc. From March 1994 to September  1994
Ms.  Neidigh  served as Vice  President of Sales and Marketing  for  Alternative
HomeCare, Inc.

     John Pappajohn has been a Director of the Company since its inception,  and
served as its Secretary and Treasurer  from  inception  through May 1995.  Since
1969 Mr.  Pappajohn has been the sole owner of Pappajohn  Capital  Resources,  a
venture capital firm specializing in health care  investments,  and President of
Equity Dynamics,  Inc., a financial consulting firm, both located in Des Moines,
Iowa.  He serves as a Director  for the  following  public  companies:  The Care
Group, Inc. (Allion,  Inc.),  MCInformatics,  Inc. (MCI), Pace Health Management
Systems, Inc. American Physician Partners.

     Barbara J. McNeil, M.D., Ph.D. has been a Director of the Company since May
1995. Dr. McNeil is Head of the Department of Health Care Policy and a Professor
of  Radiology  at  Harvard  Medical  School  where  she has  served  in  various
capacities  since 1971. For four years she has served as Chair of the Blue Cross
Massachusetts Hospital Association Fund for Cooperative Innovation and currently
she is a member of the National  Council on Radiation  Protection,  the American
College  of  Radiology  and its Board of  Chancellors,  the  Society  of Nuclear
Medicine,  the  Advisory  Council  for the  Agency for  Health  Care  Policy and
Research,  and the National Academy of Sciences' Institute of Medicine where she
is a Council member. She also serves as a Director of CV Therapeutics, Inc.

     Carl F. Kohrt,  Ph.D.  has been a Director of the Company since April 1996.
Dr. Kohrt is Executive Vice President and Assistant Chief  Operating  Officer of
the Eastman Kodak Company, where he has served in various capacities since 1971.
Dr.  Kohrt is a  recipient  of a Sloan  Fellowship  for  study at  Massachusetts
Institute of Technology.

     David B. Nash, M.D. has been Executive Vice  President,  Medical Affairs of
the Company  since April 1996.  Dr. Nash is currently  and has been for at least
the last five years,  Director of Health Policy and Clinical  Outcomes at Thomas
Jefferson  University  Hospital and Associate Professor of Medicine at Jefferson
Medical College.  Dr. Nash is the recipient of the 1995 Clifton  Latiolias Price
in Managed Care from the American  Managed Care  Pharmacy  Association.  He also
serves as a  scientific  advisory  board  member of iSTAT  Corp.  Dr.  Nash also
provides his services to the Company on a part-time consulting basis.

     No  family  relationship  exists  between  any of the  above  directors  or
executive officers.  The normal term of office for all executive officers listed
above runs from one Annual Meeting of  Stockholders  of the Company to the next,
or approximately one year.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's  executive  officers and directors,  and persons who own more than
10% of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange  Commission.
Based on a review of the copies of reports furnished to the Company, the Company
believes  that during the year ended  December 31, 1998 all filing  requirements
applicable to its officers,  directors  and ten percent  beneficial  owners were
met.

Committees of the Board of Directors

     The Board of Directors of the Company has  appointed  two  committees:  the
Audit Committee and the Compensation Committee. The Audit Committee periodically
reviews the Company's auditing practices and procedures,  makes  recommendations
to management  or to the Board of Directors as to any changes to such  practices
and  procedures  deemed  necessary  from time to time to comply with  applicable
auditing rules,  regulations and practices,  and recommends independent auditors
for the Company to be elected by the stockholders.  The Audit Committee consists
of John  Pappajohn,  Barbara  J.  McNeil  and Carl F.  Kohrt.  The  Compensation
Committee meets  periodically to make  recommendations to the Board of Directors
concerning  the  compensation  and benefits  payable to the Company's  executive
officers and other senior  executives.  The Compensation  Committee  consists of
Derace  Schaffer,  Barbara J. McNeil and Carl F. Kohrt.  The Company  reimburses
directors  for their  out-of-pocket  expenses  incurred in  attending  Board and
Committee meetings.

Item 11.  Executive Compensation.

Director Compensation

     During 1998, the Company paid Derace  Schaffer  $62,500 in connection  with
the part-time  performance  of his duties as Chairman of the Board of Directors.
From July 1998 through the date hereof, the Company has been compensating Derace
Schaffer at the annual rate of $125,000 for his  services.  All  Directors  were
also  reimbursed for expenses  incurred in connection  with attending  meetings,
including travel expenses to such meetings.

Executive Compensation

     The  following  table  sets  forth  information  concerning  the annual and
long-term  compensation  for services in all  capacities  to the Company and its
subsidiary for each of the fiscal years ended  December 31, 1998,  1997 and 1996
for those persons who were at December 31, 1998, (i) the Chief Executive Officer
and (ii) the other  three most  highly  compensated  executive  officers  of the
Company who received  compensation  in excess of $100,000 during the fiscal year
ended December 31, 1998 (the "named executive officers").
                         
<TABLE>
<CAPTION>

                                                             Summary Compensation Table
                                                             --------------------------
                                                                                             Long-Term
                                                                                           Compensation
                                                                                              Awards
                                                       Annual Compensation                  Securities
Name and Principal Position                    Year         Salary            Bonus    Underlying Options (#)
---------------------------                    ----         ------            -----    ----------------------
<S>                                           <C>           <C>              <C>                <C>   

                                             
Donald A. Carlberg, President and Chief      1998          $194,231          $25,000             20,000
Executive Officer                            1997          $161,538          $25,000                  0
                                             1996          $131,731          $25,000             18,000

Kent A. Tapper, Vice President, Financial    1998          $118,039               $0                  0
Planning                                     1997          $101,923          $10,000                  0
                                             1996           $86,298           $5,000                  0

Marion B. LaVigne, Ph.D., Vice President,
Clinical Services (1)                        1998          $110,772               $0             50,000

Victoria Nelson Neidigh, Vice President,
Sales                                        1998          $139,646               $0             50,000
</TABLE>

(1) Ms. LaVigne resigned her position as Vice President, Clinical Services as of
March 19, 1999.

     The  following  table  sets forth  certain  information  regarding  options
granted to the Chief Executive  Officer and the named executive  officers of the
Company during 1998.
<TABLE>
<CAPTION>

                                              Option Grants During 1998
                                              -------------------------

                                                   Individual Grants
                                                   -----------------
                                                                                         Potential Realizable Value
                                Number of     % of Total Options                         at Assumed Annual Rates of
                               Securities        Granted to       Exercise                Stock Price Appreciation
                           Underlying Options   Employees in       Price     Expiration      for Option Term (3)
                             Granted (#)(1)    Fiscal Year (2)    $/Share       Date        5% ($)        10% ($)
                             --------------    ---------------    -------    ----------     ------        -------
  Name                                                    
  ----                                    
<S>                              <C>                   <C>          <C>        <C>          <C>           <C>           
Donald A. Carlberg               20,000                5.0%         $1.38      6/25/08      $17,357        $43,987
Kent A. Tapper                      -                   -              -          -            -               -             
Marion B. LaVigne                50,000               12.5%         $1.38      3/17/08      $43,394       $109,968
Victoria Nelson Neidigh          50,000               12.5%         $1.38      3/17/08      $43,394       $109,968
</TABLE>



(1) All  options  will become  exercisable  at the rate of 20% per year from the
date of grant and have ten year terms as long as the optionee's  employment with
the Company  continues.  The exercise  price of each option is equal to the fair
market  value  of the  underlying  Common  Stock on the  date of the  grant,  as
determined by the Board of Directors.

(2) Total number of options granted during fiscal year 1998 was 399,200.

(3) Future value of current year grants assumes appreciation in the market value
of the Common  Stock of 5% and 10% per year over the ten-year  option  period as
required  by the rules of the  Securities  and  Exchange  Commission  and do not
represent the Company's  estimate or  projection  of actual  values.  The actual
value realized may be greater than or less than the potential  realizable values
set forth in the table.
<PAGE>

     No stock options were exercised by the Chief Executive Officer or the named
executive  officers of the Company during 1998.  The following  table sets forth
certain  information  regarding  unexercised options held by the Chief Executive
Officer and the named executive officers of the Company at December 31, 1998.

<TABLE>
<CAPTION>

                                   Aggregated Option Exercises during 1998
                                   and Option Values on December 31, 1998

                                   Number of Securities Underlying            Value of Unexercised
                                       Unexercised Options at                In-the-Money Options at
                                        December 31, 1998(#)                 December 31, 1998($)(1)
                                        --------------------                 -----------------------
  Name                             Exercisable       Unexercisable          Exercisable      Unexercisable
  ----                             -----------       -------------          -----------      -------------
<S>                                <C>               <C>                    <C>              <C>   
  Donald A. Carlberg                 151,200            102,800              $283,500             $192,750
  Kent A. Tapper                      21,600             14,400               $40,500              $27,000
  Marion B. LaVigne (2)               10,440             57,560               $19,575             $107,925
  Victoria Nelson Neidigh             3,000              62,000               $ 5,625             $116,250
</TABLE>


(1) Calculated based upon $1.88 market value of the underlying  securities as of
December 31, 1998. The  Compensation  Committee  approved  repricing of employee
stock options on March 17, 1998 and December 10, 1998.

(2) At the time of Ms.  LaVigne's  resignation  on March 19, 1999, the number of
securities  underlying  unexercised  options that were  exercisable  amounted to
23,680 and the  unexercisable  options amounted to 44,320.  All of Ms. LaVigne's
unexercised  options as of March 19,  1999,  the date of her  resignation,  were
forfeited.

Repricing Report of the Board of Directors

     In March 1998 and again in December 1998, the Board of Directors considered
a  proposal  from  management  for  significant  changes  to  existing  employee
programs,  including  options held by the  Company's  executive  officers.  This
proposal  arose largely from a broad decline in the price of the Common Stock of
the Company that had resulted in a substantial  number of stock options  granted
pursuant to the Company's existing option plan having exercise prices well above
the recent historical  trading prices of the Common Stock. This decline together
with the resulting equity disparity  between new hires who receive option grants
at the  current  fair  market  value and  existing  employees'  exercise  prices
prompted  the  proposal.  The Board was advised by  management  that  management
believed that employee and executive  turnover was likely to increase.  In large
part,  this  increase  was expected  because the  Company's  total  compensation
package for long-term  employees,  which included  options with exercise  prices
well above the  then-current  trading  price,  no longer  provided an  effective
retention incentive,  particularly when combined with job security concerns.  In
addition,  the  Company's  existing  option  grants  were not  competitive  with
competing  offers from other  companies,  since options  granted to new hires at
other companies would be granted at current trading prices.

     The Board also reviewed  independent data obtained by management  regarding
equity and other compensation  offered by competitors as well as other companies
in the  health  care  industry.  The  Board  considered  both  cash  and  equity
compensation  as  possibilities  to aid employee and executive  retention by the
Company.  The Board  recognized  that an  amendment  of  existing  options  with
exercise prices higher than fair market value to provide exercise prices at fair
market value would provide  additional  incentives  to employees  because of the
increased potential for appreciation. Such additional incentives were necessary,
the Board decided,  in order for the Company's  employee programs to continue to
meet their objectives,  including  driving  operating  performance in accordance
with the Company's plans and targets,  promoting employee retention,  addressing
stockholder  concerns for  dilution,  and  preserving  the  reserved  shares for
employee stock programs.

     Considering  these  factors,  the  Board  determined  it to be in the  best
interests of the Company and its stockholders to amend outstanding stock options
under its option plan to set the  exercise  prices  equal to the current  market
value with the same  vesting  and  expiration  terms as existing  options,  thus
restoring the incentives for employees to remain as employees of the Company and
to exert their  maximum  efforts on behalf of the Company and focus on achieving
the Company's  operating  plans. The Board determined not to impose any exercise
restrictions  or to defer the date of the  repricing,  even though  management's
proposal had included certain of these restrictions,  because of the competitive
situation  that the  Company  faced as well as  concerns  that  external  market
factors could affect the repricing.

     Accordingly,  in March 1998 and again in December  1998, the Board approved
an amendment of each outstanding  option held by all current executive  officers
of the Company with  exercise  prices above the  then-current  trading  price to
provide an exercise  price equal to the current  trading  price.  The  exchanged
options  will  continue  to vest at the same  rate and on the same  terms as the
original  options and will  terminate on the same date and terms as the original
options.  The first option amendments were completed on March 17, 1998;  options
held by executive  officers for 16,800 shares with exercise  prices ranging from
$8.50 to $10.00 were  exchanged  for options for an equal number of shares at an
exercise price of $3.13,  the fair market value of the Company's Common Stock on
March 17, 1998, the effective date of the initial  repricing.  The second option
amendments  were  completed  on December  10,  1998;  options  held by executive
officers for 154,800  shares with  exercise  prices  ranging from $2.08 to $3.13
were exchanged for options for an equal number of shares at an exercise price of
$1.38, the fair market value of the Company's Common Stock on December 10, 1998,
the effective date of the second repricing.

     The Chief Executive  Officer and the named executive  officers in 1998 that
had their  options  repriced are listed below in the Ten Year Option  Repricings
table.

<TABLE>
<CAPTION>

                                                      Ten-Year Option Repricings
                                                      --------------------------


                                                                                                         Length of
                                         Number of                                                       original
                                         securities      Market price                                   option term
                                         underlying      of stock at   Exercise price                   remaining at
                                        options/SARs       time of       at time of         New           date of
                                        repriced or      repricing or   repricing or      exercise      repricing or
          Name               Date       amended (#)      amendment($)    amendment($)      price ($)      amendment
          ----               ----       -----------      -----------     -----------      ---------       ---------
<S>                         <C>         <C>                  <C>              <C>            <C>         <C>         
Donald Carlberg,            12/10/98       18,000            $1.38             $2.08         $1.38       27 months
Director, President and     12/10/98       20,000            $1.38             $2.75         $1.38       54 months
Chief Executive Officer

Kent A. Tapper, Vice           -              -                 -                -              -             -
President, Financial
Planning

Marion B. LaVigne,  Ph.D.,   3/17/98        1,800            $3.13            $10.00         $3.13       44 months
Vice President, Clinical    12/10/98        1,800            $1.38             $3.13         $1.38       35 months
Services                    12/10/98       50,000            $1.38             $3.13         $1.38       50 months

Victoria Nelson              3/17/98       15,000            $3.13             $8.50         $3.13       47 months
Neidigh, Vice               12/10/98       15,000            $1.38             $3.13         $1.38       38 months
President, Sales            12/10/98       50,000            $1.38             $3.13         $1.38       50 months
                            12/10/98        1,800            $1.38            $10.00         $1.38       35 months
</TABLE>


Stock Option Plan

     The Company's Stock Option Plan (the "Plan") was originally  adopted by the
Board of Directors  and  stockholders  in June 1995.  Up to 1,080,000  shares of
Common Stock have been  authorized  and  reserved  for issuance  under the Plan.
Under the Plan,  options may be granted in the form of incentive  stock  options
("ISOs") or  non-qualified  stock options ("NQOs") from time to time to salaried
employees,  officers, directors and consultants of the Company, as determined by
the Compensation Committee of the Board of Directors. The Compensation Committee
determines the terms and conditions of options granted under the Plan, including
the exercise  price.  The Plan  provides that the  Committee  must  establish an
exercise price for ISOs that is not less than the fair market value per share at
the date of the grant.  However, if ISOs are granted to persons owning more than
10% of the voting  stock of the  Company,  the Plan  provides  that the exercise
price must not be less than 110% of the fair market  value per share at the date
of the grant. The Plan also provides for a non-employee  director to be entitled
to receive a one-time  grant of a NQO to purchase  36,000  shares at an exercise
price equal to fair market value per share on the date of their initial election
to the Company's  Board of Directors.  Such NQO is  exercisable  only during the
non-employee  director's  term  and  automatically  expires  on  the  date  such
director's service terminates.  Each option,  whether an ISO or NQO, must expire
within ten years of the date of the grant.

     As of December 31, 1998 there were 867,920  options  outstanding  under the
Plan, the following table sets forth information regarding the number of options
outstanding and the exercise price of these options.


                      Number of Options
                        Outstanding at
                      December 31, 1998                Exercise Price
                      -----------------                --------------

                            268,200                         $0.14
                            108,000                         $0.69
                              3,600                         $1.04
                            485,140                         $1.38
                              2,880                         $3.13
                                100                         $4.00

     Of these options,  36,000 were granted as of March 1, 1995 to Mr.  Carlberg
and vested  immediately.  The remainder of Mr. Carlberg's  options and all other
options  granted  under the plan vest as to 20% of the option grant on the first
anniversary of the grant, and 20% on each subsequent anniversary.


<PAGE>

Employment Contracts and Change-In-Control Provisions

     The Company has entered into an employment  agreement with Mr.  Carlberg as
its President  and Chief  Executive  Officer dated March 1, 1995.  The agreement
with  Mr.  Carlberg  has a term of one  year and is  automatically  renewed  for
successive one-year periods unless either party receives written notice from the
other  party  of such  party's  intention  not to  renew  within  60 days of the
agreement's  expiration  date. The agreement calls for Mr. Carlberg to receive a
base salary of $125,000  per year,  which was  increased to $150,000 per year in
September  1996,  $175,000  in June  1997 and  $200,000  in June of  1998.  Upon
execution of the agreement, Mr. Carlberg received a $15,000 signing bonus and an
option to  purchase  up to 180,000  shares of Common  Stock of the Company at an
exercise  price of $.14 per  share,  and in 1996,  1997 and  1998,  he  received
bonuses of $25,000.  The option has a ten-year  term,  vests over five years and
was 20% vested upon grant.  The  remainder  of the option vests at a rate of 20%
per year,  and the option is therefore  fully  exercisable  after the first five
years of employment.  Mr. Carlberg is eligible for any discretionary bonuses and
additional  option grants in amounts to be determined by the Company's  Board of
Directors  based upon the  performance  of the  Company  and Mr.  Carlberg.  The
agreement  prohibits  Mr.  Carlberg  from  engaging  in  any  business  activity
involving  the  measurement  of clinical  outcomes  for  patients  with acute or
chronic  diseases,  or the  measurement of patient  compliance  with  prescribed
treatments for acute or chronic  diseases  within one year of the termination of
his  employment  with the  Company.  If the Company  terminates  Mr.  Carlberg's
employment for reasons other than for cause,  the Company is required to pay Mr.
Carlberg's compensation and fringe benefits for a period of six months following
the date of termination.

     The Company has entered  into a  consulting  agreement  with John V. Crisan
dated  March 8, 1999  pursuant  to which Mr.  Crisan  serves as Chief  Financial
Officer and a member of the Board of Directors.  The  agreement  with Mr. Crisan
has a term of two years. Either party may terminate the agreement for any reason
and without  liability  for a period of 90 days from the date of the  agreement.
Pursuant to the agreement,  Mr. Crisan receives a basic consulting fee of $5,000
per week that he renders  services for the Company.  Mr. Crisan is not obligated
to perform  services on a full-time basis for the Company.  The Company must pay
or reimburse Mr. Crisan for all reasonable  business  expenses actually incurred
or paid by him in the performance of his services under the agreement, including
business-related  travel expenses and temporary housing expenses. Upon execution
of the  agreement,  Mr. Crisan  received  options to purchase  150,000 shares of
Common Stock of the Company at an exercise price of $1.50 per share. The options
have a ten-year term, vest over three years,  with 50% of the options vesting on
the first  anniversary of the grant date and 25% on each of the second and third
anniversaries  of the grant  date.  In the event of a change of  control  of the
Company,  all options immediately vest. If Mr. Crisan is terminated for cause or
resigns prior to March 8, 2001, Mr. Crisan is prohibited from competing with the
Company for one year from the  termination or  resignation  date. If the Company
terminates Mr. Crisan without cause,  the Company must pay Mr. Crisan  severance
equal to the  amount  of the  basic  consulting  fee in effect as of the date of
termination,  but not to  exceed  $100,000,  such  payments  to be made in equal
monthly installments of not more than $20,000.

     The Company has entered into an employment  agreement with Mr.  Westermeyer
as its Chief  Operating  Officer  dated  March 8, 1999,  which has a term of two
years.  The  agreement  calls for Mr.  Westermeyer  to receive a base  salary of
$175,000  with  compensation  reviews  annually  and may be  adjusted to reflect
increased responsibilities, capabilities and performance. Mr. Westermeyer may be
eligible  for a bonus up to 30% of his base  salary.  The  Company  shall pay or
reimburse Mr. Westermeyer for all reasonable business expenses actually incurred
or paid by him, including business-related travel expenses and temporary housing
expenses.  Mr.  Westermeyer  received  an option to purchase  150,000  shares of
Common Stock of the Company at an exercise price of $1.50 per share.  The option
has a ten year term, vests over three years, with 40,000 shares that vested upon
grant.  The  remaining  options  vest at a rate of 25% over three years from the
date of grant.  Either party can terminate the agreement  with written notice of
not less than 60 days from the date of termination. In the event Mr. Westermeyer
is  terminated  without  cause  prior to a Change in  Control,  Mr.  Westermeyer
receives one year's worth of his annual salary,  as in effect on the termination
date. Generally,  in the event Mr. Westermeyer is terminated without cause after
a Change in  Control,  Mr.  Westermeyer  will be  entitled  to receive up to two
year's worth of annual  salary as in effect on the date of the Change in Control
as adjusted thereafter from time to time.

Board Compensation Committee Report on Executive Compensation

     Compensation for the Company's  executive  officers was determined in light
of  the   responsibilities   involved  in  commencing  the  Company's   business
operations,   developing  its  initial  and  ongoing   customer   relationships,
commencing  patient  information  programs and  negotiating  with the  Company's
investment  bankers.  During  1998,  Mr.  Carlberg  received  a bonus of $25,000
reflecting  Mr.  Carlberg's  efforts in  connection  with the  expansion  of the
Company's  operations  and the  substantial  roll-out of the  Company's  patient
information systems.

     The  Compensation  Committee  evaluates the  performance  of each executive
officer of the  Company  in the  context  of the goals and  challenges  that the
Company faces over the next year. The  determinations as to salary and bonus are
made in a  context  of the  challenges  faced  in the  Company,  the  individual
performance  of the  individual  and the salaries of executives  at  comparative
companies in the Company's  industry.  Compensation for the Company's  Executive
Officers was determined in light of the responsibilities  involved in commencing
the Company's business  operations,  developing its initial and ongoing customer
relationships and negotiating with the Company's investment bankers.

Compensation Committee Interlocks and Insider Participation

     The Compensation Committee consisted of Derace Schaffer,  Barbara J. McNeil
and Carl F. Kohrt for the fiscal year ended  December  31,  1998.  None of these
individuals was at any time during fiscal year 1998 or any other time an officer
or employee of the  Company.  No  executive  officer of the Company  serves as a
member of the board of directors or  compensation  committee of any other entity
that has one or more  executive  officers  serving as a member of the  Company's
Board of Directors or Compensation Committee.

Company Performance Graph

     The following graph compares the cumulative total stockholder return on the
Common Stock of Patient  Infosystems,  Inc. from December 19, 1996 (the date the
Common Stock was first offered to the public at an initial public offering price
of $8.00 per share) through  December 31, 1998 with the cumulative  total return
on the NASDAQ Stock Market - U.S. Index and the  cumulative  total return on the
NASDAQ Health Services Index.  The Company did not pay any dividends during this
period.  The NASDAQ Stock  Market - U.S.  Index and the NASDAQ  Health  Services
Index are published daily.
         
     The graph  assumes an  investment  of $100 in each of Patient  Infosystems,
Inc., the NASDAQ Stock Market - U.S. Index and the NASDAQ Health  Services Index
on December 31, 1998 and 1997.  The Comparison  also assumes that all dividends
are reinvested.
<TABLE>
<CAPTION>


                               COMPARISON OF CUMULATIVE TOTAL RETURN
                         AMONG PATIENT INFOSYSTEMS, INC., THE NASDAQ STOCK
                    MARKET - U.S. INDEX AND THE NASDAQ HEALTH SERVICES INDEX

                                          12/19/96         12/31/96        12/31/97          12/31/98
                                          --------         --------        --------          --------
<S>                                        <C>              <C>              <C>               <C>  
 Patient Infosystems, Inc.                 100.00           115.63           33.13             23.44
 NASDAQ Stock Market - U.S. Index          100.00            99.49          122.15            171.40
 NASDAQ Health Services Index              100.00           100.55          103.16             88.13
</TABLE>


The  comparisons  in this table are required by the rules of the  Securities and
Exchange  Commission  and are not  intended  to  forecast  or be  indicative  of
possible  future  performance  of the Company's  Common  Stock.  The stock price
performance  graph shall not be deemed to be incorporated  into any filing under
the Securities Act or the Exchange Act,  notwithstanding  any general  statement
contained in any such filing  incorporating  this Proxy  Statement by reference,
except to the extent that the Company specifically incorporates this information
by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth certain information regarding the beneficial
ownership of the shares of the Company's  Common Stock as of April 28, 1999, (i)
by each person the Company knows to be the beneficial owner of 5% or more of the
outstanding  shares of Common Stock,  (ii) the Chief  Executive  Officer and the
named executive  officers listed in the Summary  Compensation  Table, (iii) each
director of the Company and (iv) all  executive  officers  and  directors of the
Company as a group.

         
                              Shares Beneficially        Percentage Beneficially
  Beneficial Owner (1)             Owned                         Owned
  --------------------             -----                         -----
         
 Derace L. Schaffer (2)........................ 1,726,100        21.5%
         
 John Pappajohn (3)...........................  1,514,080        18.8%
         
 Edgewater Private Equity Fund II, L.P.,
 666 Grand Avenue, Suite 200
 Des Moines, IA 50309 .........................   970,000        12.1%
         
 Donald A. Carlberg (4)........................   188,600         2.3%
         
 John V. Crisan (5)............................    20,000          *
         
 Neal Westermeyer (5)..........................    17,835          *
        
 Kent A. Tapper (6)............................    21,700          *
         
 Victoria Nelson Neidigh (7)...................    16,720          *
            
 Barbara J. McNeil (6).........................    21,600          *
         
 Carl F. Kohrt (6).............................    21,600          *
         
 David B. Nash (8) ............................    19,840          *

 All directors and executive officers as a      
 group (10 persons) (9)........................ 3,568,075        44.4%
        
 *  Less than one percent.

(1) Unless otherwise noted, the address of each of the listed persons is c/o the
Company at 46 Prince Street, Rochester, New York 14607.

(2) Includes 288,000 shares held by Dr. Schaffer's minor children. Also includes
21,600  shares which are  issuable  upon the exercise of options that are either
currently  exercisable  or  which  become  exercisable  within  60 days of April
28,1999. Does not include 14,400 shares subject to outstanding options which are
not exercisable within 60 days of April 28, 1999.

(3) Includes 360,000 shares held by Halkis, Ltd., a sole proprietorship owned by
Mr. Pappajohn,  360,000 shares held by Thebes, Ltd., a sole proprietorship owned
by Mr.  Pappajohn's  spouse and 360,000 shares held directly by Mr.  Pappajohn's
spouse.  Mr.  Pappajohn  disclaims  beneficial  ownership of the shares owned by
Thebes, Ltd. and by his spouse. Includes options to purchase 21,600 shares which
are either currently  exercisable or which become  exercisable within 60 days of
April 28, 1999.  Does not include 14,400 shares  subject to outstanding  options
which are not exercisable within 60 days of April 28, 1999.

(4)  Includes  options to purchase  187,600  shares  which are either  currently
exercisable or which become  exercisable within 60 days of the date of April 28,
1999.  Does not include 66,400 shares  subject to outstanding  options which are
not exercisable within 60 days of April 28,1 1999.

(5) Does not include 150,000 shares subject to outstanding options which are not
exercisable within 60 days of April 28, 1999.

(6)  Includes  options to  purchase  21,600  shares  which are either  currently
exercisable or which become  exercisable  within 60 days of April 28, 1999. Does
not  include  14,400  shares  subject  to  outstanding  options  which  are  not
exercisable within 60 days of April 28, 1999.

(7)  Includes  options and warrants to purchase  16,720  shares which are either
currently  exercisable or which become  exercisable  within 60 days of April 28,
1999. Does not include 50,080 shares subject to outstanding options and warrants
which are not exercisable within 60 days of April 28, 1999.

(8)  Includes  options and warrants to purchase  19,480  shares which are either
currently  exercisable or which become  exercisable  within 60 days of April 28,
1999. Does not include 50,560 shares subject to outstanding options and warrants
which are not exercisable within 60 days of April 28, 1999.

(9) Includes  options and warrants to purchase  332,160  shares which are either
currently  exercisable or which become  exercisable  within 60 days of April 28,
1999.  Does not  include  539,040  shares  subject to  outstanding  options  and
warrants which are not exercisable within 60 days of April 28, 1999.


Item 13.  Certain Relationships and Related Transactions

     The Company was initially capitalized on February 22, 1995 through the sale
of 3,600,000  shares of its Common Stock for $.14 per share.  Included among the
participants  in that  transaction  were Dr.  Derace  Schaffer,  Chairman of the
Board,  who purchased  1,656,000  shares,  Dr.  Schaffer's  spouse who purchased
144,000 shares, John Pappajohn, a director, who purchased 541,800 shares, a sole
proprietorship  owned by Mr.  Pappajohn  which  purchased  360,000  shares.  Mr.
Pappajohn's  spouse,  who purchased  360,000 shares,  and a sole  proprietorship
owned by Mr. Pappajohn's spouse which purchased 360,000 shares.

     In August and  September of 1995 the Company sold  1,800,000  shares of its
Series A Preferred  Stock in a private  placement for $1.00 per share.  Included
among the  participants  in that  transaction  were  Gregory D. Brown,  Sr. Vice
President,  Chief  Financial  Officer,  Secretary and  Treasurer,  who purchased
10,000  shares,  and Mr.  Pappajohn who purchased  10,000  shares.  In addition,
Edgewater Private Equity Fund II, L.P.,  ("Edgewater"),  a five percent owner of
the Common Stock of the Company, acquired 1,000,000 shares of Series A Preferred
Stock in the Series A Preferred Stock offering.

     In May and June of 1996,  the Company sold  600,000  shares of its Series B
Preferred Stock in a private  placement for $5.00 per share.  Included among the
participants in that transaction were Dr. Schaffer, who purchased 20,000 shares,
Mr.  Pappajohn,  who purchased  40,000  shares,  and Edgewater  which  purchased
200,000 shares.

     On February 26, 1999, the Company,  through its newly formed,  wholly-owned
subsidiary, Patient Infosystems Acquisition Corp., acquired substantially all of
the assets of HealthDesk  Corporation,  a consumer  healthcare  software company
primarily  engaged in the business of designing and  developing  Internet  based
products in the  healthcare,  wellness and disease  management  industries.  The
acquired assets include inventory, intellectual property, hardware and software.
The principal  consideration paid for the transaction was $761,463.  The Company
paid for the acquisition  using its available cash. John Pappajohn,  a member of
the Board of Directors of the Company, was a member of the Board of Directors of
HealthDesk Corporation at the time of the acquisition of HealthDesk.

<PAGE>




                                   SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

PATIENT INFOSYSTEMS, INC.

/s/ Donald A. Carlberg
----------------------
President and Chief Executive Officer

April 30, 1999
--------------
Dated