# UNITED
STATES SECURITIES AND EXCHANGE COMMISSION

# WASHINGTON, D.C.
20549
FORM 10-KSB

|[X] | ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|--- | -----------------------------------------------------------------------------

For
The Fiscal Year Ended: December 31, 2005

OR

|[  ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
   SECURITIES EXCHANGE ACT OF 1934
|---- | -------------------------------------------------------------------------------------

| | For
The Transition Period From ___________ To __________
| | --------------------------------------------------------

COMMISSION FILE
NUMBER: 0 - 22083

GLOBAL
MED TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)

|Colorado                        |  | 84-1116894          | 
|------------------------------- |  | ------------------- | 
|(State or other jurisdiction of |  | (I.R.S. Employer    | 
|incorporation or organization)  |  | Identification No.) | 

12600
West Colfax, Suite C-420, Lakewood, Colorado 80215(Address of principal executive
offices) (Zip Code)

Registrants
telephone number: (303) 238-2000

Securities
to be registered under Section 12(b) of the Act: None

Securities
registered under 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
Securities Exchange Act of 1934 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 at least the past 90 days.

Yes   [X]     
No   [   ]

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

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).  Yes  [   ]    No  [X]

State issuers
revenues for its most recent fiscal year $11.204 million.

Aggregate
market value of voting stock held by non-affiliates as of March 28, $17,410,479
based on the closing bid priceof $0.95 per share as of that date.

Shares
of common stock, $.01 par value, outstanding as of March 28, 2006, 23,211,982.

Transitional
Small Business Disclosure Format (check one).   Yes  [   ]   No  [X]

Documents
incorporated by reference: See Part III, Item 13, and EXHIBIT INDEX on
page 33 for a listing of documents incorporated by reference into this Annual Report
on FORM 10-KSB.

---

# GLOBAL
MED TECHNOLOGIES, INC.FORM 10-KSBDECEMBER 31, 2005

# TABLE
OF CONTENTS

# PART
I

|Item |  | Page                                               
|---- |  | ---------------------------------------------------
|1.   |  | Business                                           
|2.   |  | Properties                                         
|3.   |  | Legal Proceedings                                  
|4.   |  | Submission of Matters to a Vote of Security Holders

# PART
II

|5.  |  | Market for Registrants Common Equity and Related Stockholder Matters |  |  | 11
|--- |  | --------------------------------------------------------------------- |  |  | --
|6.  |  | Managements Discussion and Analysis of Financial Condition and       |  |  |   
|    |  | Results of Operations                                                 |  |  | 14
|7.  |  | Financial Statements                                                  |  |  | 22
|8.  |  | Changes In and Disagreements with Accountants on Accounting and       |  |  |   
|    |  | Financial Disclosure                                                  |  |  | 23
|8A. |  | Controls and Procedures                                               |  |  | 23

# PART
III

|    |  |                                                                    
|--- |  | -------------------------------------------------------------------
|9.  |  | Directors and Executive Officers, Promoters and Control Persons,   
|    |  | Compliance with Section 16(a) of the Exchange Act of the Registrant
|10. |  | Executive Compensation                                             
|11. |  | Security Ownership of Certain Beneficial Owners and Management     
|    |  | and Related Stockholder Matters                                    
|12. |  | Certain Relationships and Related Transactions                     
|13. |  | Exhibits, Financial Statements, Schedules and Reports on Form 8-K  
|14. |  | Principal Accountant Fees and Services                             
|    |  | SIGNATURES                                                         

2

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# PART
I

ITEM
1. DESCRIPTION OF BUSINESS

GENERAL
DEVELOPMENT OF BUSINESS

Global
Med Technologies, Inc. was organized under the laws of the State of Colorado in December
1989.

In 1995,
Global Med Technologies, Inc. merged with the Wyndgate Group, Inc. (Wyndgate).
Wyndgate operates as a division of Global Med Technologies, Inc. and designs, develops,
markets and supports information management software products for blood banks, hospitals,
centralized transfusion services and other healthcare related facilities.

During
1999, Global Med Technologies, Inc. formed a majority-owned subsidiary, PeopleMed.com,
Inc. (PeopleMed), a Colorado corporation, to develop a software application
designed to give HMO providers and other third party payers, access to clinical information
for chronic disease patients. This application allows doctors and other medical employees
access to a patients history. PeopleMed offers chronic disease management as
an Application Service Provider (ASP). PeopleMeds system uses the
Internet to coordinate sources and users of a patients clinical information,
including laboratory, pharmacy, primary and specialty care providers, claims and
medical records.

PeopleMed
is owned 83% by Global Med Technologies, Inc. and 11% by certain executive officers
and directors of Global Med Technologies, Inc. and 6% owned by third parties. Global
Med Technologies, Inc. and PeopleMed are referred to collectively herein as the Company
or Global Med.

SALE OF
SERIES A CONVERTIBLE PREFERRED STOCK AND DETACHABLE WARRANTS

On
December 16, 2005, pursuant to the terms of the Securities Purchase Agreement,
the Company sold $9.975 million of Series A Convertible Preferred Stock
(Series A) to certain investors. The Company received net proceeds
of $9.590 million for the Preferred Stock. There are 100 thousand Series A
authorized and 9,975 shares of Series A outstanding with a stated value of $1
thousand per share. The $9.975 million in Series A is convertible at the holders
option into common shares at $0.72 per share based on the Series As stated
value. The Series A is presently convertible into 13.854 million shares of
common stock at any time. The Series A has preference in liquidation over the
Companys common stock. and does not have voting rights. After considering
the impact of the $8 million used from the Series A transaction to repay,
redeem, an repurchase certain financial instruments from the Companys
parent company, the Company had unused proceeds of approximately $1.56 million
which the Company used for the final payment of dividends and interest to its now
former parent company and for general working capital purposes. See item 6
Managements Discussion and Analysis of Financial Condition and
Results of Operations for disclosures related to the use of the proceeds
from the Series A transaction.

The
Series A shares are subject to redemption based on the occurrence of certain
conditional events. Some of which are outside the control of the Company.
Primarily based on these redemption features, the Series A has been recorded as
mezzanine equity. The Company, based on the terms of the Series A, cannot issue
dividends on the common stock while the Series A is outstanding unless an equal
dividend is declared on the Series A. The holders of the Series A also received
warrants to purchase 10.391 million common shares that can be exercised at $0.72
per share. These warrants have a cashless exercise feature and a five-year term.

Additionally,
as a condition  to the Series A preferred  the  following  individuals  resigned as
directors of the  Company on  December 16,  2005 as part of the Companys
repurchase of securities of the Company owned by GMIL: Fai  H. Chan, Kwok Jen Fong, Gary
L. Cook, Jr., Tony T.W. Chan, Robert H. Trapp, and David T. Chen.

The
following table summarizes the unregistered securities that were issued by the
Company in conjunction with the above transaction.

3

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|Security                             | Number | Common SharesEquivalents
|------------------------------------ | ------ | ------------------------
|Series A Convertible Preferred Stock |        | 9,975                   
|Detachable Warrants                  |        | 10,390,625              

The Company can
force conversion of the Series A provided the following have occurred:

|o |  | The Companys stock has traded at or above a weighted average price of
$3.50 per share for 20 consecutive trading days,
|- |  | -----------------------------------------------------------------------------------------------------------------------

|o |  | The trading volume of the Companys common stock has averaged at least 150
thousand shares per day for 20 consecutive days trading days, and
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The
common share ownership of the holder of the Series A after conversion would not
represent more than 4.99% of the Companys outstanding common stock after
conversion.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
number of common shares the Series A is convertible into will be included in the
calculation of diluted common shares outstanding in the event that the inclusion
of these common share equivalents has a dilutive effect. The agreement for the
purchase of Series A requires the Company to register the common shares
underlying the warrants and the Series A. The Series A does not have a dividend.
In the event the registration statement underlying the Series A and the related
securities is not declared effective within 240 days of issuance, the Company
may be required to pay a dividend of 18% on the Series A. As of the date this
Form 10-KSB was filed, the Company had received notification that the
registration statement for the common shares underlying the Series A and the
warrants had been declared effective. In addition to the conditions above, there
are certain circumstances which could require the Company to pay liquidated
damages on the Series A of up to 4% per month, but not to exceed 24%. These
circumstances include but are not limited to failure of the Company to obtain
registration of the common shares underlying the warrants and Series A within
155 days of the Series A transaction date which was December 16, 2005. The
Company believes that the penalties on the Series A of up to 24% do not exceed
the difference between the value of a registered and unregistered share of the
Companys common shares.

For a
period of one year from the effective date of the registration statement
underlying the common shares on the Series A and the warrants, the holders of
the Series A are entitled to up to 100% participation in any financing
arrangements. In addition, until the 90 days after the effective date of the
registration statement for the common shares underlying the Series A and related
warrants, the Company may not enter into equity sales or issue options unless
they are to employees, officers or directors of the Company.

Recent
Developments

On
March 29, 2006, the Company renegotiated certain terms related to the Series A
and the related warrants. From December 16, 2005 through March 28, 2006, the
date prior to the renegotiated terms, the Company classified the Series A as
mezzanine equity in the Companys balance sheet. As of March 29, 2006, the
Company believes equity classification for the Series A will be appropriate
based upon the renegotiated terms. The renegotiated terms resulted in the
elimination or addition of several terms that made mezzanine equity treatment
more appropriate for the period through March 28, 2006. The significant terms
that were eliminated or added are as follows:

|1. |  | Removal of cash payout for events that were outside the control of the Company
which included a change of control;
|-- |  | ------------------------------------------------------------------------------------------------------------------

|2. |  | Removal of a certain clauses that would result in the resetting of the
conversion price for the Series A and the related warrants in the event that the
Company issued common share equivalents at a price that was less than the
conversion price or exercise price of $0.72 per common share;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Removal of provisions that allowed for dividends to occur in the future under
certain circumstances;
|-- |  | ----------------------------------------------------------------------------------------------------

|4. |  | Removal of the preference in liquidation;
|-- |  | -----------------------------------------

|5. |  | Addition
of certain voting rights for preferred shareholders; and
|-- |  | -----------------------------------------------------------------

|6. |  | The ability for the Company to determine a maximum number of common shares that
the holders can convert the Series A and related warrants into.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

The
Company now believes that the revisions to the terms of the Series A will result
in the Series A being classified as equity as of March 29, 2006. In
addition, the revised terms have resulted in the Series A being closely and
clearly related to equity. As a result, the Company believes that the embedded
derivatives identified in note 8 of the accompanying audited financial
statements will no longer be treated as embedded derivative
financial instruments requiring separate accounting treatment under
Accounting for Derivative Instruments and Hedging Activities
(SFAS No. 133).

4

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RELATED
PARTIES

Pursuant
to a Stock Purchase Agreement, dated as of December 16, 2005 between the Company
and Global Med International Limited (GMIL), the Companys outstanding
debt with GMIL in the amount of $528,700, the outstanding Series AA Preferred Stock
in the amount of $3.5 million, outstanding common shares numbering 4.360 million
and the outstanding warrants to purchase 11.186 million shares of common stock were
paid off, redeemed, or repurchased, respectively, for $8 million using the proceeds of the Series A. In addition, certain
new investors purchased 6.350 million common shares from GMIL directly. In addition all
of the six members of the Companys Board of Directors nominated by GMIL resigned.
As a result of the above transaction, GMIL is no longer a considered a related party of the Company.
Prior to this, Global Med was financed primarily through lending arrangements with
GMIL. These lending arrangements were originated by eBanker USA.com, Inc., (eBanker)
transferred, along with eBankers ownership in Global Med, to Global Med China
& Asia Limited (GMCAL) in October 2002, and then the lending
arrangements were transferred to GMIL in September 2003. Until November 28,
2001, eBanker was a consolidated subsidiary of eVision International, Inc. (eVision).
eVision is majority owned by China Credit Holdings Limited (China Credit
formerly Heng Fung Holdings Limited) and its subsidiaries, Online Credit Limited
(Online Credit) and Heng Fung Singapore Pte. Limited (Heng Fung
Singapore). Until November 2001, eVision was also a shareholder of Global
Med. eBanker through its subsidiary, GMCAL, was a shareholder of Global Med. Additionally,
eVision and GMCAL each held warrants to acquire 1 million and 11.186 million shares,
respectively, of Global Meds common stock with exercise prices that range from
$0.25-$0.50 per share. In November 2000, eBanker and Global Med entered into
a series of equity transactions that resulted in Global Med becoming a consolidated
subsidiary of eBanker and eVision effective November 2000.

On November 28,
2001, the shareholders of eVision approved a transaction, which transferred certain
assets of eVision to Online Credit as satisfaction of certain obligations
eVision had with Online Credit. As a result, all of the shares of common stock of Global Med
owned by eVision and all eBankers common shares and warrants held by eVision
were transferred to Online Credit. Consequently, as of November 28, 2001, Global
Med remained a consolidated entity of eBanker for accounting purposes; however, eBanker
was then directly controlled by Online Credit instead of eVision. Additionally, eVision
Corporate Services, Inc. and certain other subsidiaries of China Credit provided
certain support services to Global Med.

As a result
of these transactions and relationships, the financial condition and results of operations
for Global Med may not have necessarily be indicative of those that would have resulted
if Global Med had been unaffiliated with these entities.

PRINCIPAL
PRODUCTS AND THEIR MARKETS

Global
Med designs, develops, markets and supports information management software products
for blood banks, hospitals, centralized transfusion centers and other health care
related facilities. Revenues are derived from the licensing of software, maintenance,
the provision of consulting and other value added support services, and the resale
of software obtained from vendors.

Global
Med has two main products in its Wyndgate division: SafeTrace® and SafeTrace
Tx®. Safe Trace is used to assist community blood centers, hospitals, plasma
centers and outpatient clinics in the U.S. in complying with the quality and safety
standards of the Food and Drug Administration (the FDA) for the collection and management of
blood and blood products. SafeTrace Tx is a transfusion management information system
that is designed to be used by hospitals and centralized transfusion centers to help
insure the quality of blood transfused into patient-recipients. SafeTrace Tx provides
electronic cross-matching capabilities to help insure blood compatibility with patient-recipients
and tracks, inventories, bills and documents all activities with blood products from
the time blood products are received in inventory to the time the blood products
are used or returned to blood centers. SafeTrace Tx complements SafeTrace, because
the combined SafeTrace Tx and SafeTrace software system is now able to integrate
hospitals with blood centers and provide a vein-to-vein® tracking
of the blood supply. SafeTrace Tx received FDA clearance on January 29, 1999.

Global
Med continues to concentrate its development efforts on enhancements to its existing
SafeTrace blood bank product and SafeTrace Tx. The FDA has cleared both products
for sale in the United States.

In 1999,
Global Med introduced PeopleMed. PeopleMed supports chronic disease management as
an ASP. PeopleMeds system uses the Internet to coordinate sources of information
and users of a patients clinical information, including laboratory, pharmacy,
primary and specialty care providers, claims, and medical records.

All of
Global Meds revenues were generated from providing products and services to
end users located throughout the United States, Canada, Puerto Rico and Africa.

5

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COMPETITION

There is
substantial competition in all aspects of the blood bank and hospital information
management industry. Numerous companies are developing technologies and marketing
products and services in the healthcare information management area. Many competitors
in the blood bank industry have received FDA clearance for their products. Many of
these competitors have been in business longer and have substantially greater personnel
and financial resources than Global Med. Global Med is aware of three primary competitors
to our SafeTrace software product: Mak-System Corp.; Blood Bank Computer Systems,
Inc. and Mediware Information Systems, Inc. There are five primary competitors in
the United States to our SafeTrace Tx product: Misys Hospital Systems, Inc. (Misys
is a channel partner that currently resells the Companys SafeTrace software);
Mediware Information Systems, Inc.; Meditech, Inc., SCC Soft Computer; and Cerner
Corp. Global Med believes it is able to compete based on the current technological
capabilities of SafeTrace and SafeTrace Tx.

DEPENDENCE
ON MAJOR CUSTOMERS

As of January 17,
2006, Global Med, through its Wyndgate division, had over 160 customers. It intends
to continue to target domestic and international blood centers, plasma centers and
hospital donor and transfusion centers. During the years ended December 31,
2005 and 2004, there were no customers accounting for more than 10% of revenues.

Royalty
And Commission Agreements

The
Royalty Group. Pursuant to a development agreement between Wyndgate
and the Royalty Group, Wyndgate developed SafeTrace and must make royalty payments
to the Royalty Group based on a percentage of Wyndgates SafeTrace license fees
collected, measured by cash received from SafeTrace licensees, net of certain fees
and charges. The royalty schedule is based upon the first date of SafeTrace license
invoicing, which was September 14, 1995. The royalty amounts are computed as
a percentage of software license fees collected. For the years ended December 31,
2005 and 2004, Global Med expensed $8 thousand and $0, respectively, and are included
in the cost of revenues in the statement of operations. Global Med has accrued but
not paid any royalties for the years ended December 31, 2005 and 2004. As of
December 31, 2005, the outstanding royalty obligation was approximately $132
thousand.

Siemens
Medical Solutions Health Services Corporation. During September of
1999, Global Med entered into a non-exclusive marketing and support agreement with
Shared Medical Systems Corporation (SMS). Under this agreement, SMS markets
Global Meds blood bank products on a preferred basis. Global Med will pay a
commission to SMS based on the software license fee for each sale SMS has facilitated.
This agreement was automatically renewed and is still in effect.

Sysmex
Infosystems America, Inc. Global Med entered into a non-exclusive
marketing and support agreement with Sysmex Infosystems America, Inc. (SIA).
Under this agreement, SIA will market Global Meds blood bank products on a
preferred basis. Global Med will pay a commission to SIA based on the software license
fee for each sale SIA has facilitated. This agreement was automatically renewed and
is still in effect.

GE
Medical (aka Triple G Systems Group, Inc.). Global Med entered into
a non-exclusive marketing and support agreement (the Non-Exclusive Agreement
#2) with GE Medical (aka Triple G Systems Group, Inc.) (Triple G).
Triple G, under the Non-Exclusive Agreement #2, markets Global Meds SafeTrace
Tx products on a preferred basis. Global Med will pay to Triple G a commission based
on a percentage of the software license fee that Triple G facilitates through their
marketing efforts. This agreement was automatically renewed and is still in effect.

National
Jewish Medical and Research Center. Global Med, through its PeopleMed
subsidiary, entered into a development and non-exclusive Marketing Agreement with
National Jewish Medical and Research Center (National Jewish). Under
the terms of this agreement, Global Med will pay National Jewish a royalty for all
sales of PeopleMeds products that use National Jewishs protocols. In
addition, in February 2002, PeopleMed signed a Sales and Marketing Agreement with
National Jewish, whereby National Jewish will be paid a commission for sales of PeopleMeds
products facilitated by National Jewish. The initial term of this agreement expired
and this agreement has been automatically renewed. During the term of this agreement,
there have been no royalties paid to National Jewish.

Cardiovascular
Disease Management, LLC. Global Med, through its PeopleMed subsidiary,
entered into a development and non-exclusive marketing agreement with Cardiovascular
Disease Management (CVDM). Under the terms of this agreement, Global
Med will pay CVDM a royalty for all sales of PeopleMeds products that use CVDMs
protocols. During the term of this agreement, there have been no royalties paid to
CVDM.

6

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Misys
Hospital Systems, Inc. Global Med entered into a non-exclusive marketing
and support agreement with Misys Hospital Systems, Inc. (Misys). In the
Agreement, Global Med granted to Misys the non-exclusive and non-transferable worldwide
rights, excluding the African continent and the following countries; India, Indonesia,
Bangladesh, Burma, Cambodia, Laos, Malaysia, Mongolia, Nepal, North Korea, Philippines,
Singapore, Shri Lanka, South Korea, Taiwan, Thailand, Vietnam, China (including Hong
Kong and Macau); non-exclusive and non-transferable right to market, promote, endorse
and assist Wyndgate in the sale and license of its blood donor product, SafeTrace,
to Misys clients. Global Med maintains all responsibilities for the licensure, delivery,
installation, warranty or support between Wyndgate and the Licensee for all contracts
facilitated under the terms of this agreement. Global Med will pay a commission to
Misys based on the software license fee for each sale Misys has facilitated. This
agreement was automatically renewed and is still in effect. During the term of this
agreement, there have been no royalties paid to Misys.

McKesson
Information Solutions LLC. Global Med entered into a Value Added Marketing
Agreement (McKesson Agreement) with McKesson Information Solutions LLC,
a division of McKesson Corporation, to provide Wyndgates SafeTrace Tx (the
Software) advanced transfusion management system as Horizon Blood Bank,
as a privately-labeled (OEM) module to be separately licensed with McKessons
Horizon Lab solution. Horizon Blood Bank serves as a tool to help organizations
improve patient safety by automating the management and tracking of patient transfusion
services.

The McKesson
Agreement grants McKesson the right to privately brand SafeTrace Tx in the United
States, Canada, and Mexico. The McKesson Agreement also grants McKesson rights to
market the Software to McKessons hospital information system, clinical systems
and ancillary systems customers. This Agreement does not prevent Wyndgate from pursing
sales opportunities through its existing channel partner base as provided and/or
required by those agreements. Wyndgate is not required and will not inform McKesson
of the opportunities brought to Wyndgate by its channel partners.

The McKesson
Agreement requires Wyndgate and McKesson to integrate certain aspects of their respective
software products. Wyndgate and McKesson have agreed that certain aspects of their
joint software development will be unique to one another, and not available to any
other channel partner or non-McKesson customers. In light of these grants of exclusivity,
McKesson has agreed to certain revenue commitments in order to maintain their marketing
rights in terms of the increased software product functionality. The revenue commitments
include software license fees, implementation services fees, and maintenance fees.

In the
event that McKesson is unable to meet certain revenue commitments, McKesson has the
right to purchase prepaid license fees from Wyndgate in order to maintain its marketing
rights. In the McKesson Agreement, Wyndgate has agreed to notify McKesson, as soon
as reasonably possible, if any entity makes a proposal to acquire a majority share
in, or full ownership of, Global Med or the Software. McKesson would have the right
within ten (10) days to also make an offer after receipt of such notice. Global Med
has no obligation to accept such offer. The McKesson Agreement grants McKesson the
right to participate in meetings that relate to future development of the Software.
Wyndgate is required to provide frequent and timely communications on the path of
the Software. Wyndgate and McKesson have agreed to certain enhancements to the Software.
The McKesson Agreement provides for McKesson to pay Wyndgate certain fees for the
licensing of the Software, performance of implementation and maintenance services
by Wyndgate for McKessons customers using the Software.

Certain
terms of the McKesson Agreement are not provided because they are proprietary in
nature and are subject to confidentiality and non-disclosure provisions under the
McKesson Agreement.

Paratech,
LLC. Global Med, through its PeopleMed subsidiary, entered into a
non-exclusive marketing agreement with Paratech, LLC. (Paratech). Under
the terms of this agreement, Global Med will pay Paratech a commission for sales
of PeopleMeds products they facilitate.

Government
Approval And Regulation

The FDA
requires all blood tracking application software vendors to submit a 510(k) application
for review. The application process for FDA review and compliance with FDA guidelines
relates to computer software products regulated as medical devices. The FDA considers
software products intended for the following to be medical devices: (i) use in the
manufacture of blood and blood components; or (ii) maintenance of data used to evaluate
the suitability of donors and the release of blood or blood components for transfusion
or further manufacturing. As medical device manufacturers, Global Med and its competitors
are required to register with the Center for Biologics Evaluation and Research (CBER),
list their medical devices, and submit a pre-market notification or application for
pre-market review. In April 1997, Global Meds Wyndgate division received
notification from the FDA of its finding of substantial equivalence of
SafeTrace. This determination provides a 510(k) clearance and permits Global Med
to continue to market SafeTrace. On January 29, 1999, the 510(k) clearance was
received for SafeTrace Tx.

7

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Global
Meds products and services are subject to regulations adopted by governmental
authorities, including the FDA, which governs blood center computer software products
regulated as medical devices. Global Med is also required to follow applicable Quality
System Regulations (QSR) of the FDA, which include testing, control and
documentation requirements, as well as similar requirements in other countries, including
International Standards Organization (ISO) 9001 standards. In 1996 Congress
passed legislation that impacted the healthcare information management. The Healthcare
Information Portability and Accountability Act (HIPAA) requires the Department
of Health and Human Services (HHS) to enact standards for information sharing, security
and patient confidentiality. Although HHS has not issued clarification on many of
the topics under HIPAA, Global Med believes these regulations will have an important
impact on requiring advanced management information systems that will enable various
healthcare organizations to comply with emerging requirements.

HIPAA contains
provisions regarding the confidentiality and security of patient medical record information.
Standards for the electronic handling of health data and security of patient information
became effective in 2000. This legislation requires the Secretary of Health and Human
Services, or HHS, to (i) adopt national standards for electronic health information
transactions, (ii) adopt standards to ensure the integrity and confidentiality of
health information, and (iii) establish a schedule for implementing national health
data privacy legislation or regulations. The standards and legislation will impact
the customers ability to obtain, use or disseminate patient information, which
will extend to their use of Global Meds products. Global Med believes that
the proposed standards issued to date would not materially affect the business of
Global Med. Global Med cannot determine the potential impact of the standards that
might finally be adopted.

Financing
Agreements With Related Parties

Pursuant
to a Stock Purchase Agreement between the Company and GMIL, dated as of December 16,
2005, the Company paid off the outstanding debt in the amount of $529 thousand and
all accrued interest in the amount of $86 thousand it owed GMIL. In addition, on
December 16, 2005, the Company redeemed the $3.5 million Series AA Preferred Stock
held by GMIL in the amount of $3.5 million and paid all of the accrued dividends
in the amount of $226 thousand. As a result, all of the Companys financing
obligations to GMIL have been paid off or redeemed.

Debt
Conversion

Pursuant  to a
Stock  Purchase  Agreement,  dated as of  December 16,  2005  between  the  Company  and
Global Med  International  Limited  (GMIL),  the  Companys  outstanding
debt  with  GMIL in the  amount  of  $528,700,  the  outstanding  Series AA Preferred
Stock in the amount of $3.5 million,  outstanding  common shares  numbering 4.360
million and the  outstanding  warrants to purchase  11.186 million shares of common stock
were paid off,  redeemed,  or  repurchased,  respectively,  for $8 million  using the
proceeds  of the  Series A. In  addition,  certain  new  investors  purchased  6.350
million  common shares from GMIL directly.  In addition,  all of the six members of the
Companys Board of Directors  nominated by GMIL resigned.  As a result of the above
transaction,  GMIL is no longer considered a related party of the Company effective
December 16, 2005.

Pursuant
to a Loan Restructuring and Restatement Agreement between Global Med and eBanker
of which GMIL is a subsidiary, dated November 19, 2000, as amended (the Agreement),
Global Med was required to repay $3.829 million, which amount included all principal,
interest and other charges due under the Agreement (except for $96 thousand in extension
interest payments and accrued interest thereon due on July 1, 2004), on or before
March 1, 2004. By an Assignment dated July 4, 2002, eBanker assigned the
Agreement to Global Med International Holdings Limited (GMIHL), a subsidiary
of eBanker and parent company of GMIL. By an Assignment dated July 4, 2002,
GMIHL assigned the Agreement to GMIL. By an Assignment dated October 28, 2002,
GMIL assigned the Agreement to GMCAL, a subsidiary of GMIL. By an Assignment dated
September 19, 2003, GMCAL assigned the Agreement to GMIL. Pursuant to a Loan
and Promissory Note between Global Med and GMIHL dated June 18, 2002, as previously
amended (the Note), Global Med was required to repay GMIHL $200 thousand,
which amount included all principal, interest and other charges due under the Note
(except for $12 thousand in extension interest payments due on July 1, 2004),
on or before March 1, 2004. GMIHL has assigned the Note to GMIL. The total debt
owed by Global Med to GMIL under the Agreement and the Note (except for the $96 thousand
in extension interest payments and accrued interest thereon due on July 1, 2004
and the $12 thousand in extension interest payments due on July 1, 2004, referenced
above) (the Debt) was $4.029 million at December 31, 2003.

8

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On April 14,
2004, GMIL and Global Med amended their existing financing agreements and entered
into an agreement to combine the outstanding $3.829 million and $200 thousand debt
agreements. The combined loan of $4.029 million was then separated into two parts:
$529 thousand was converted into debt (Remaining Debt) and $3.5 million
was converted into $1 par value Series AA Convertible Redeemable Preferred Stock
(Preferred Stock). (See note 6 of the financial statements for further
discussion of the preferred stock.) The due date of the Remaining Debt was March 1,
2006. The interest rate on the Remaining Debt was 15% per year and interest on this
debt was due and payable quarterly on March 1, June 1, September 1,
and December 1 of each year until the Remaining Debt is paid in full. The Remaining
Debt was secured by all of Global Meds assets and is subject to the outstanding
terms of November 19, 2000 financing agreement (Loan Agreement).
As of April 14, 2004, Global Med had paid GMIL $287 thousand of the $287 thousand
extension fee. On December 31, 2004, principal of $529 thousand and accrued
interest of $69 thousand was outstanding under the terms of the Remaining Debt agreement.  The Remaining
Debt was paid off on December 16, 2005.

Under the
terms of the Remaining Debt and Preferred Stock Agreements, the personal guaranty
of Dr. Michael I. Ruxin, the Companys Chairman and CEO, remained in effect until
both the Preferred Stock and Remaining Debt and any related dividends or interest,
respectively, are paid. Unless Global Med is in default of the Remaining Debt or
Preferred Stock agreements, Dr. Ruxins personal guaranty is limited to the
debt and related interest and will not exceed $650 thousand and will remain in effect
until the total Remaining Debt has been fully paid or satisfied. The personal guaranty
was limited to certain of Dr. Ruxins assets.

As part
of these agreements, Global Med agreed to indemnify GMIL and its affiliates, including
but not limited to GMCAL, GMIHL, eBanker, Online Credit Limited, Heng Fung Singapore
Ltd., and China Credit, and their employees, officers, directors, and agents for
any legal proceeding that results or stems from GMILs conversion of this debt
to Preferred Stock.

In conjunction
with the signing of the Remaining Debt and the Preferred Stock Agreement, these agreements
preserved the right of GMIL to appoint 5 of 9 members of Global Meds Board
of Directors until the Remaining Debt and Preferred Stock have been satisfied. Further,
GMIL shall have the right to select a replacement director for any member of the
Borrowers Board of Directors that was selected by Lender who resigned or otherwise
fails to serve as a director. Global Med agrees not to increase the number of directors
above nine except with GMILs written consent. If Global Med defaults on the
repayment of any amount borrowed under the financing agreements initiated with eBanker,
all of the Board of Directors of Global Med will be required to resign and GMIL will
have the right to appoint all new members.

As of December 16,
2005, Dr. Ruxins personal guarantee of $650 thousand plus pro rata interest
of the outstanding loan balance with GMIL, originally associated with the November 19,
2000 eBanker Loan Agreement was terminated as a result of repayment of the debt and
all outstanding interest to GMIL on December 16, 2005.

Series
BB Preferred Stock. As of February 28, 2004, Dr. Ruxin had 1,692 hours
of accrued vacation and sick time with a book value, collectively, of approximately
$224 thousand (the Accrued PTO). In addition, Dr. Ruxin had approximately
$60 thousand of accrued wages. Dr. Ruxin agreed to convert the Accrued PTO and accrued
wages with a combined book value of $284 thousand into 675,386 shares of Series BB
Preferred Stock. The Series BB Preferred Stock had the following terms:

9

---

|o |  | The Series BB Preferred Stock was convertible, at the option of the holder thereof,
     at any time, in whole or in part, after the closing market price for Global Meds common stock for any day reaches $0.75 per share or more (regardless
     of whether the closing market price subsequently declines to below $0.75 per share), upon written notice to Global Med, at the rate of one (1) share of common
     stock per share of Series BB Preferred Stock.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The Series BB Preferred Stock was junior to the Series AA Preferred Stock and senior
     to Global Meds common stock and all other existing or future series of preferred stock and will have a liquidation preference of $0.42 per share. The
     Series BB Preferred Stock did not have voting rights.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In December 2004,
the Series BB Preferred Stock was converted into common stock.

Employees

As of February
1, 2006, Global Med had 74 full-time employees, consisting of 2 employees in the
corporate offices in Lakewood, Colorado and 46 employees at Wyndgates offices near Sacramento,
California and the remainder are spread throughout the United States. Global Med
has employment agreements with certain personnel. Global Meds employees are
not represented by a labor union or subject to collective bargaining agreements.
Global Med has never experienced a work stoppage and believes that its employee relations
are satisfactory. During the years ended December 31, 2005 and 2004, Global
Med had customers located in numerous locations across the United States, Africa,
Canada and Puerto Rico, and sales are not concentrated in any geographic or economic
region. PeopleMeds customer is located in the State of Colorado. For the year
ended December 31, 2005 and 2004, Global Med continued to recognize revenues
from the geographic areas above, but recognized approximately 3% and 5%, respectively,
of its revenues from international customers outside the areas mentioned above. The
results for the two years ended December 31, 2005 may not be indicative of the
current or future operations.

Our common
stock is currently trading on the OTC Bulletin Board. OTC Bulletin Board stocks are
not required to send annual reports directly to their shareholders. Our shareholders
have direct electronic access to all of our SEC filings via our website at www.globalmedtech.com
or via the SEC website at www.sec.gov. Global Med does send proxy filings to our
shareholders as matters are voted on by all of our shareholders. When Global Med
does send information to its shareholders that relates to our annual or interim results,
this annual financial information does contain audited information on which an opinion
has been issued or interim information that has been reviewed.

AVAILABLE
INFORMATION

Global
Meds Annual Report on Form 10-KSB, Quarterly Reports on Form 10-QSB, Current
Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and
15(d) of the Securities Exchange Act of 1934, as amended, are available on the Securities
and Exchange Commissions website: http:/www.sec.gov. Additional information
about the Company is available at Global Meds website at http://www.globalmedtech.com.

ITEM
2. DESCRIPTION OF PROPERTIES

As of February,
2006, the Company occupied two primary locations. The Company occupies approximately
1,252 square feet of office space in Lakewood, Colorado and the lease expires on
February 14, 2007. The Company leases approximately 15 thousand square feet of office
space in El Dorado Hills, California, expiring on May 31, 2006.

10

---

ITEM
3. LEGAL PROCEEDINGS

In September 2002,
Global Med filed a lawsuit against Donnie L. Jackson, Jr., Global Meds former
Vice President of Sales and Marketing. Global Med alleges, among other things, that
prior to his resignation in July 2002 Mr. Jackson misappropriated certain trade
secrets of Global Med. After leaving Global Med, Mr. Jackson became a management
employee of one of Global Meds competitors. On March 30, 2005, the Superior
Court of the State of California in and for the County of El Dorado granted the motion
for summary judgment for Donnie L. Jackson, Jr. On September 1, 2005, the Company
deposited $1.004 million with the Superior Court in the State of California in the
County of El Dorado. This deposit represents potential fees and attorneys costs
the Company could be required to pay in the event the Company does not prevail on
appeal. The $1.004 million is classified as a Deposit in escrow on the
Companys balance sheet as of December 31, 2005. Based on external evidence and the advice
of legal counsel, the Company has determined that it is more likely than not that the Company will
be required to pay the $1.004 million that is currently classified as a Deposit
in escrow. As a result, the Company expensed the amount of the Deposit
in escrow and set up a liability for $1.004 million in the form of Litigation
accrual as of December 31, 2005. The Company is currently appealing the judges
decision and in the event the Company prevails, the Company may be refunded the $1.004
million deposit or a portion thereof. In the event the Company prevails, the Company
could recognize a reduction in expenses ranging between $0 and $1.004 million.

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

There were
no matters submitted to a vote of the security holders.

# PART
II

ITEM
5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market
Information

The Companys
common stock commenced trading on the Nasdaq Small-Cap Market in 1997. In 1998, the
Companys common stock and warrants were delisted from the Nasdaq Small-Cap
Market, and commenced trading on the OTC Bulletin Board. OTC Bulletin Board Market
quotations reflect inter-dealer prices, without retail mark-up, markdown or commission,
and may not necessarily represent actual transactions.

The following
table sets forth the quarterly high and low bid prices for the Companys common
stock for the two years ended December 31, 2005 and 2004.

COMMON
STOCK

|                                               | FISCAL YEAR 2005 |        
|---------------------------------------------- | ---------------- | -------
|
|First Quarter (January 2005 to March 2005)     |                  | $  2.57
|Second Quarter (April 2005 to June 2005)       |                  | $  2.00
|Third Quarter (July 2005 to September 2005     |                  | $  1.80
|Fourth Quarter (October 2005 to December 2005) |                  | $  1.35
|
|
|First Quarter (January 2004 to March 2004)     |                  | $  0.70
|Second Quarter (April 2004 to June 2004)       |                  | $  0.64
|Third Quarter (July 2004 to September 2004     |                  | $  0.78
|Fourth Quarter (October 2004 to December 2004) |                  | $  1.30

Holders

As of December
31, 2005, the Company had approximately 140 holders of record of the Companys
common stock.

11

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Dividends

Common
Stock

The payment
of dividends by the Company is within the discretion of its Board of Directors and
depends in part upon the Companys earnings, capital requirements and financial
condition. Since its inception, the Company has not paid any dividends on its common
stock and does not anticipate paying such dividends in the foreseeable future. The
Company intends to retain earnings, if any, to finance its operations. In accordance
with the terms of the Companys Series A Convertible Preferred Stock, the Company
cannot issue dividends on the common stock while the Series A is outstanding unless
an equal dividend is declared on the Series A. The dividend on the Series A would
be calculated by determining the number of common shares the Series A is convertible
into and then applying the same dividend to the Series A that was provided to the
common shareholders.

Preferred
Stock

The Company
has 9,975 shares of Series A Preferred Stock that are outstanding as of January 17,
2006. There are currently no dividends on the preferred stock.

Recent
Sales of Unregistered Securities

During
the year ended December 31, 2005, Global Med issued unregistered common stock
or common stock equivalents. On December 16, 2005, the Company authorized the issuance
of 9,975 shares of Series A Preferred Stock that are convertible into 13,854,167 shares of
common stock. In addition, the recipients of the Series A Preferred Stock received
the rights to warrants to purchase 10,390,625 shares of common stock.

The Company
issued the following shares during the year ended December 31, 2004.

In October,
the Company issued 487 thousand shares of common stock to Fusion Capital in conjunction
with the execution of the Common Stock Purchase Agreement. This transaction is more
fully described in note 6 of the financial statements.

In August,
the Company issued 50 thousand shares of common stock to Fusion Capital in conjunction
with the signing of the letter of intent for their purchase of common stock. This
transaction is more fully described in note 6 of the financial statements.

The Company
authorized the issuance of 26 thousand shares of common stock to a third party in
conjunction with services performed by this third party. Approximately 24 thousand
shares were issued in October and the remaining 2 thousand were issued in December.

The Company
sold 1.525 million shares of unregistered common stock for an aggregate of $549 thousand
in a private placement to accredited investors. During May, 1.450 million shares
were issued and during August, the remaining 75 thousand shares were issued.

In December,
the Company sold 125 thousand shares of unregistered common stock for an aggregate
of $50 thousand. These common shares represented the exercise of the same number
of warrants that were issued in conjunction with the private placement that occurred
in 2004.

The Company
authorized the issuance of 3.5 million shares of Series AA Preferred Stock to GMIL,
the Companys majority shareholder, in connection with GMILs conversion
of $3.5 million of debt. These shares are considered outstanding as of April 14,
2004. The Series AA Preferred Stock can be converted by GMIL into common stock of
the Company at any time at a conversion rate of (2.222) shares of common stock for
each share of Series AA Preferred Stock. Therefore, the Series AA Preferred Stock
is convertible into approximately 7.777 million common shares. The sales were not
underwritten and no commissions were paid in connection with the sales. The securities
were issued under the exemption(s) provided by Sections 4(2) and 4(6) of the Securities
Act. These shares were issued in September.

12

---

The Company
authorized the issuance of 675 thousand shares of Series BB Preferred Stock to Michael
I. Ruxin, M.D., the Companys Chairman of the Board and Chief Executive Officer,
in connection with his conversion of outstanding accrued vacation and accrued wages
as of February 29, 2004, with a recorded book value of approximately $284 thousand.
These shares are considered outstanding as of April 14, 2004. The Series BB Preferred
Stock was convertible at a rate of one share per common per one share of Series BB
at the option of the holder if the Companys common stock closing price reaches
$0.75 per share. Upon written notice by Dr. Ruxin, the Series BB was convertible
into common stock. The 675 thousand shares of Series BB Preferred Stock were converted
into the same number of common shares in December 2004. The sales were not underwritten
and no commissions were paid in connection with the sales. The securities were issued
under the exemption(s) provided by Sections 4(2) and 4(6) of the Securities Act.
These shares were issued in September and converted into common shares in December.

All investors
participating in private placements for cash were accredited investors
within the meaning of Regulation D. In addition, we note that there are several categories
of recipients of these shares. These include investors for cash, officers, directors,
consultants, litigants and former shareholders of private companies acquired by Global Med.
Global Med believes that these transactions complied in all respects with Section 4(2).
Global Med believes that this conclusion is true even if the transactions occurring
within each category are integrated with other transactions occurring within six
months or one year of a given transaction.

The
following table details equity securities authorized for issuance as of December
31, 2005.

|                                 | Number of securitiesto be issued upon exercise ofoutstanding options,warrants
     and rights(a) | Weighted averageexercise price ofoutstandingoptions, warrantsand
     rights(b) | Number of securitiesremaining available forfuture issuance underequity
     compensationplans (excludingsecurities reflected incolumn (a)(c)
|-------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------
|Plan
     Category               |                                                                                                  |                                                                                 |                                                                                                                                             
|Equity plans approved by the     |                                                                                                 
|shareholders                     |                                                                                                 
|2001 Stock Option Plan           |                                                                                                  | 5,905,500                                                                       |                                                                                                                                             
|Compensation Plan                |                                                                                                  | --                                                                              |                                                                                                                                             
|Equity plans not approved by the |                                                                                                 
|shareholders                     |                                                                                                 
|Stock Options                    |                                                                                                  | 5,896,689                                                                       |                                                                                                                                             
|Warrants                         |                                                                                                  | 12,393,926                                                                      |                                                                                                                                             
|                                 |                                                                                                  |                                                                                 |                                                                                                                                             
|Total                            |                                                                                                  | 24,196,115                                                                      |                                                                                                                                             
|                                 |                                                                                                  |                                                                                 |                                                                                                                                             

The number
of common shares available for issuance or already issued under the terms of the
existing stock option grants or under the stock option plan and stock compensation
plan are subject to adjustment under certain conditions that include the declaration
of stock dividends, or stock splits, etc.

13

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

FORWARD-LOOKING
STATEMENTS AND ASSOCIATED RISKS

This
Annual Report on Form 10-KSB contains certain forward-looking statements within the
meaning of Section 27A of the 1933 Act and Section 21E of the Securities Exchange
Act of 1934, as amended (1934 Act), and the Company intends that such
forward-looking statements be subject to the safe harbors for such statements under
such sections. The Companys forward-looking statements include the plans and
objectives of management for future operations, including plans and objectives relating
to the Companys planned marketing efforts and future economic performance of
the Company. The forward-looking statements and associated risks set forth in this
Annual Report on Form 10-KSB include or relate to among other things: (i) the ability
of the Company to obtain a meaningful degree of consumer acceptance for its software
products and proposed software products, (ii) the ability of the Company to market
its software products and proposed software products on a national and international
basis at competitive prices, (iii) the ability of the Companys software products
and proposed software products to meet government regulations and standards, (iv)
the ability of the Company to develop and maintain an effective national and international
sales network, (v) success of the Company in forecasting demand for its software
products and proposed software products, (vi) the ability of the Company to maintain
pricing and thereby maintain adequate profit margins, (vii) the ability of the Company
to achieve adequate intellectual property protection for the Companys software
products and proposed software products, and (viii) the ability of the Company and
its customers to successfully and timely implement the Companys software products.

The
forward-looking statements herein are based on current expectations that involve
a number of risk and uncertainties. Such forward-looking statements are based on
assumptions that, among other things, the Company will market and provide software
products on a timely basis, that there will be no material adverse competitive or
technological change in condition of the Companys business, that demand for
the Companys software products will significantly increase, that the Companys
Chief Executive Officer will remain employed as such by the Company, that the Companys
forecasts accurately anticipate market demand and that there will be no material
adverse change in the Companys operations, business or governmental regulation
affecting the Company or its suppliers. The foregoing assumptions are based on judgments
with respect to, among other things, future economic, competitive and market conditions,
and future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the Companys control. Accordingly,
although the Company believes that the assumptions underlying the forward-looking
statements are reasonable, any such assumption could prove to be inaccurate and therefore
there can be no assurance that the results contemplated in forward-looking statements
will be realized. In addition, as disclosed elsewhere in this Annual Report on Form
10-KSB, there are a number of other risks inherent in the Companys business
and operations which could cause the Companys operating results to vary markedly
and adversely from prior results or the results contemplated by the forward-looking
statements. Growth in absolute and relative amounts of cost of sales, research and
development, sales and marketing and other operating expenses or the occurrence of
other events could cause actual results to vary materially from the results contemplated
by the forward- looking statements. Management decisions, including budgeting, are
subjective in many respects and periodic revisions must be made to reflect actual
conditions and business developments, the impact of which may cause the Company to
alter its marketing, capital investment and other expenditures, may also materially
and adversely affect the Companys liquidity, financial position and results
of operations. In light of significant uncertainties inherent in the forward-looking
information included in this Annual Report on Form 10-KSB, the inclusion of such
information should not be regarded as a representation by the Company or any other
person that the Companys objectives or plans will be achieved.

GENERAL

The Company
designs, develops, markets and supports information management software products
for blood banks, hospitals, centralized transfusion centers and other health care
related facilities. Revenues for Wyndgate are derived from the licensing of software,
the provision of consulting and other value-added support services and the re-sale
of hardware and software obtained from vendors. Revenues for PeopleMed are derived,
generally, from providing ASP services. Revenues for PeopleMed were not significant.

Business
Strategy

The
Companys business strategy for marketing and selling its products and services
is two tiered:

|1. |  | The first tier is comprised of direct selling to customers through the Companys
     internal sales force, and
|-- |  | ---------------------------------------------------------------------------------------------------------------

|2. |  | The second tier is focused on marketing and selling directly through agreements with
     companies (Channel Partner Agreements) that are established in blood donor hospital markets.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Companys
ability to increase future revenues is highly dependent upon the Companys ability
to make further inroads in selling its products directly to potential customers.
These Channel Partner Agreements are more fully described in BUSINESS,
ROYALTY AND COMMISSION AGREEMENTS. In addition, the Companys success
is dependent upon the ability of its marketing partners to sell their complementary
products in conjunction with the Companys.

14

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Sale of
Series A and Repurchase and Redemption of Certain Financial Instruments

On
December 16, 2005, pursuant to the terms of the Securities Purchase Agreement,
the Company sold $9.975 million of Series A Convertible Preferred Stock
(Series A) to certain investors. The Company received net proceeds
of $9.590 million for the Preferred Stock. There are 100 thousand Series A
authorized and 9,975 shares of Series A outstanding with a stated value of $1
thousand per share. The $9.975 million in Series A is convertible at the holders
option into common shares at $0.72 per share based on the Series As stated
value.

The
following table summarizes the unregistered securities that were issued by the
Company in conjunction with the above transaction.

|Security                             | Number | CommonSharesEquivalents
|------------------------------------ | ------ | -----------------------
|Series A Convertible Preferred Stock |        | 9,975                  
|Detachable Warrants                  |        | 10,390,625             
|                                     |        |                        

On
December 16, 2005 with the proceeds of the Series A, the Company redeemed all of
the outstanding Series AA Convertible Preferred Stock.

The
Company used the proceeds from the sale of the Series A to repurchase or redeem
certain financial instruments. The following financial instruments held by GMIL
or their affiliates were repurchased by the Company for $8 million in
conjunction with the December 16, 2005 transaction:

|Instrument                | Value | CommonSharesEquivalents
|------------------------- | ----- | -----------------------
|Convertible Redeemable    |       |                        
|Series AA Preferred Stock |       | $3,500,000             
|Warrants                  |       | $   909,378            
|Common Shares             |       | $3,061,922             
|Debt                      |       | $   528,700            
|                          |       |                        

The
Company plans on using the remainder of the proceeds from the sale of the Series
A of $1.56 million for general working capital purposes and making the final
dividend payments due to GMIL. The repurchase or redemption of the Series AA
will result in an annual reduction of dividends and interest payments in the
amount of approximately $814 thousand.

Overview

Global
Med provides information management software products and services
to the health care industry. Wyndgate operates as a division of Global Med
and designs, develops, markets and supports information management software
products for blood banks, hospitals, centralized transfusion centers and other healthcare
related facilities. The Companys PeopleMed subsidiary offers chronic disease
management as an Application Service Provider (ASP). PeopleMeds
system uses the Internet to coordinate sources and users of a patients clinical
information, including laboratory, pharmacy, primary and specialty care providers,
claims and medical records. PeopleMed earns revenues primarily by providing ongoing
ASP services. PeopleMeds revenues were not significant during the years ended
December 31, 2005 and 2004.

The Company
has two main products in its Wyndgate division: SafeTrace and SafeTrace Tx. SafeTrace
is used by blood centers and hospitals to track blood donations. SafeTrace Tx is
used primarily by hospitals and centralized transfusion services to help insure the
quality of blood transfused into patient-recipients. Both products are designed to
help the users comply with quality and safety standards of the
FDA for the collection and management of blood and blood
products. The Companys Wyndgate division earns revenues primarily through the
sale of software licenses, implementation of the software systems sold, and by providing
maintenance for the SafeTrace and SafeTrace Tx software systems.

The decision
to purchase a new blood bank system is driven in large part by one or all of the
following: replacing antiquated technology, upgrading the laboratory information
system (LIS) of the hospital which typically includes the purchase of
a blood bank system, and replacing existing products that have been sunsetted. The
Company believes that because the purchase of an LIS by a hospital is a significant
driver in the decision to purchase a blood bank system, the Company is heavily reliant
on its relationships with its channel partners that sell their LIS systems in combination
with the Companys blood bank products. The Companys channel partner relationships
are more fully discussed in BUSINESS, ROYALTY AND COMMISSION AGREEMENTS.

Entities
that plan to purchase blood bank products primarily have two choices:

|1. |  | Upgrade their current system with their existing vendor, or
|-- |  | -----------------------------------------------------------

|2. |  | Select a replacement system from an alternative vendor.
|-- |  | -------------------------------------------------------

15

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The Companys
two primary locations are in Lakewood, Colorado, the corporate headquarters, and
El Dorado Hills, California. The Companys primary operations which include
research and development, implementation staff, support services, and certain administrative
staff, are located in the El Dorado Hills facility. Approximately 38% of the Companys
employees are not located in Lakewood, Colorado or El Dorado Hills. These employees
provide support for the Companys sales and marketing, research and development,
and implementation efforts.

Overall,
Global Meds revenues for the year ended December 31, 2005 increased $4.320
million to $11.204 million from $6.884 million from the prior year. Cost of revenues
increased $946 thousand or 38.8% for the year ended December 31, 2005 to $3.383 million
from $2.437 million for the prior year. For the year ended December 31, 2005 and
2004, Global Meds operating expenses were $8.691 million and $5.029 million,
respectively. Global Med had net losses of $10.819 million and $766 thousand during
the years ended December 31, 2005 and 2004, respectively. The increased net losses
were primarily associated with a $9.340 million charge for embedded derivatives in the Series A
Convertible Preferred Stock issued December 16, 2006, the expenses associated with a payment of $1.004 million
for a summary judgment related to certain outstanding litigation and the write down
of an outstanding note receivable and its accrued interest that totaled $565 thousand.

For the
year ended December 31, 2005, Global Meds operations used $984 thousand in
cash. For the comparable period in 2004 Global Meds operations provided $256
thousand. The use of cash in 2005 was primarily the result of a $1.004 million payment
the company made to the courts to be held in escrow as the company is awaiting a
decision on an appeal it has made, see Legal Proceedings for further
discussion. For 2006, Global Med believes that its cash flows from the sale of SafeTrace
and SafeTrace Tx to new customers and the current backlog of existing business will
be sufficient to fund its operations through the remainder of fiscal year 2006. If
Global Med is unable to meet its sales projections, Global Med may be required to
significantly reduce planned as well as existing levels of expenditures for all cost
categories which includes, cost of sales, sales and marketing, research and development,
and general and administrative. If Global Med substantially reduces its planned or
the existing levels of expenditures, this could significantly impact Global Meds
future viability in the blood bank software market.

Management
of the Company is focused on increasing its revenues and cash flows through direct
sales efforts, increasing its marketing footprint through adding additional channel
partners and strategic alliances, and developing new products and enhanced functionality
to its existing product mix to make them more attractive to potential customers.

During
the fourth quarter of 2005, the Company set up a 100% reserve of approximately $1.004
million in amounts that were classified as deposits in escrow on the Companys
balance sheet as of September 30, 2005. In addition, the Company will set up a 100%
reserve for $400 thousand in notes receivables and $165 thousand in accrued interest
that were on the Companys balance sheet as of December 31, 2005. The expenses
associated with setting up these reserves had a material impact on the Companys
financial statements for the quarter ended December 31, 2005 and the year then ended.

The Company
billed out approximately $10.9 million to our customers during 2005. Our cash inflows
from operations for this same period were approximately $10.5 million. In addition,
the Companys revenues have been increasing double-digit rates since the third
quarter of 2004 when compared with the prior years comparable quarters.

|              | In Thousands |        | 
|------------- | ------------ | ------ | 
|
|
|September 30, |              | $1,279 | 
|December 31,  |              | $1,417 | 
|
|March 31,     |              | $1,353 | 
|June 30,      |              | $1,460 | 
|September 30, |              | $1,794 | 
|December 31,  |              | $2,277 | 

16

---

Balance
Sheet Changes

As of December
31, 2005 and 2004, certain balance sheet account changes were significant. Accounts
receivable, net increased by $298 thousand, primarily as a result of increased billings.
Accrued revenues increased by $566 thousand primarily as a result of a single contract
for which the billing was sent out in January 2006. Notes receivable and the related
accrued interest decreased by $529 thousand as a result of the Company setting up
a reserve for the entire balance. Related party financing decreased $529 thousand
as a result of the Companys paying off its outstanding debt to GMIL. In addition,
the Company redeemed $3.493 million in Series AA Preferred Stock. In addition, the
Companys Series A Convertible Preferred Stock balance increased by $9.975 million as a result
of a transaction that occurred on December 16, 2005.  The Series A  Convertible
Preferred  Stock and the related  warrants  contained  features  which were deemed to be
embedded derivatives.  The Company valued these derivatives at $15.267 million as of December 31, 2005.

YEAR
ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

RESULTS
OF OPERATIONS

Revenues.
Revenues are comprised of software sales, maintenance and usage fees revenues, implementation
and consulting revenues, and the re-sale of hardware and software obtained from vendors.

Revenues
increased $4.320 million, or 62.8% to $11.204 million for the year ended December
31, 2005 compared to $6.884 million for the year ended December 31, 2004. The increase
in revenues was due primarily to a $2.033 million increase in license fees, a $1.640
million increase in implementation and consulting fees, and a $525 thousand increase
in usage fees.

Cost
of Revenues. Cost of revenues increased $946 thousand, or 38.8%, to $3.383 million
for the year ended December 31, 2005, from $2.437 million for the year ended December
31, 2004. The increase in costs was primarily the result of increased headcount that
was necessitated by the increased number of implementations and customization work.
As a result, labor-related expenses increased $577 thousand. In addition, travel
expenses increased $151 thousand, third party software costs increased $112 thousand,
and expenses associated primarily with accelerated stock option vesting increased
by $58 thousand.

The overall
gross profit as a percentage of revenues was 69.8% and 64.6% for the years ended
December 31, 2005 and 2004, respectively. The margins for 2004 were higher primarily
due to increased sales of software license fees.

General
and Administrative. General and administrative expenses increased $275 thousand,
or 11.3%, to $2.709 million for the year ended December 31, 2005 compared to $2.434
million for the year ended December 31, 2004. The primary reason for the increase
in general and administrative expenses was the $308 thousand charge associated primarily
with the acceleration of certain option grants from prior years.

Summary
Judgment. During 2005, the Company deposited $1.004 million with the Superior
Court in the State of California in the County of El Dorado as payment for a summary
judgment in its lawsuit against a former employee. These funds were for legal expenses and costs,
and were not punitive in nature.  The deposit was expensed in the
fourth quarter of 2005 and had a material impact on the financial statements of the
Company. There were no expenses related to this category during 2004. See the section
Legal Proceedings for further discussion.

Sales
and Marketing. Sales and marketing expenses increased $973 thousand or 60.9%
to $2.57 million for the year ended December 31, 2005 from $1.597 million for the
year ended December 31, 2004. The increases in sales and marketing expenses were
primarily attributable to a $642 thousand increase in labor-related expenses, a $201
thousand expense related primarily to the acceleration of stock option vesting, and
a $67 thousand charge related to marketing and advertising activities.

Research
and Development. Research and development expenses increased by $1.403 million,
or 167.4%, to $2.241 million for the year ended December 31, 2005 from $838 thousand
for the year ended December 31, 2004. The increases in research and development expenses
were primarily attributable to a $1.110 million increase in labor-related expenses,
a $115 thousand increase in overhead-related expenses, a $110 thousand expense related
primarily to the acceleration of stock option vesting, and, and a $55 thousand increase
in travel related-expenses.

Depreciation
and Software Amortization.Depreciation and software amortization costs increased
by $7 thousand to $167 thousand from $160 thousand for the periods ended December
31, 2005 and 2004, respectively.

17

---

Other
Financing Costs. The Company recognized $11.032 million in expenses related to
financing costs associated with the issuance of the Series A Convertible Preferred Stock on
December 16, 2005. See further discussion in Note 8 of the audited financial
statements.

Change
in Estimated Fair Value of Derivative. The Company recognized a gain of $1.692
million related to the change in value of certain derivatives associated with
the Companys Series A. The change in value was for the period from
December 16, 2005, the date the Series A was purchased, to December 31, 2005.

Interest
Income. Interest income decreased $42 thousand to $9 thousand in 2005 from $51
thousand in 2004. The primary reason for the decrease was due to the valuation reserve
in 2005 related to interest income the Company had been recognizing on the outstanding
note receivable balance.

Interest
Expense. Interest expense decreased $146 thousand to $89 thousand for the year
ended December 31, 2005 from $235 thousand for the year ended December 31, 2004.
The decrease in interest expense was mainly due to the decrease in debt related to
the conversion of $3.5 million of the $4.029 million in related party debt into convertible
Preferred Stock Series AA. This occurred on April 14, 2004.

Net
Loss. The Companys net loss during 2005 as compared to 2004 increased $10.053
million to $10.819 million from $766 thousand, respectively. The increase in the
net loss was primarily associated with the $9.340 million net charge related to embedded derivatives
associated with the Series A Convertible Preferred Stock, $1.004 million charge related to creating
an accrual for the summary judgment deposit and the $529 thousand reserve the Company
set up during 2005 related to certain notes receivable.

CRITICAL
ACCOUNTING POLICIES AND ESTIMATES

Managements
Discussion and Analysis of Financial Condition and Results of Operations is based
upon our consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The preparation
of these financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. Management bases its estimates
on historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.

A critical
accounting policy is one that is both important to the portrayal of the Companys
financial condition or results of operations and requires significant judgment or
a complex estimation process. The Company believes the following fit that definition:

Revenue
Recognition

The Company
recognizes revenue in accordance with the American Institute of Certified Public
Accountants Statement of Position (SOP) No. 97-2, Software Revenue
Recognition. The Companys standard software license agreement for the
Companys products provides for an initial fee to use the product in perpetuity
up to a maximum number of users. Fees from software licenses are recognized as revenue
upon shipment, provided fees are fixed and determinable and collection is probable.
Fees from licenses sold together with consulting services are generally recognized
upon shipment provided that the above criteria have been met, payment of the license
fees is not dependent upon the performance of the consulting services and the consulting
services are not essential to the functionality of the licensed software. In instances
in which the consulting services are not essential to the functionality of the software
but payment of the license fee is due at the earlier of the performance of specific
consulting services or the passage of time, the license fee is recognized ratably
over the anticipated period of performance of the services or ratably over the license
fee billing period, whichever is more readily determinable.

For arrangements
with multiple elements, we allocate revenue to each element of a transaction based
upon its fair value as determined by vendor specific objective evidence.
Vendor specific objective evidence of fair value for all elements of an arrangement
is based upon the normal pricing and discounting practices for those products and
services when sold separately and for software license updates and product support
services, and is additionally measured by the renewal rate offered to the customer.
We may modify our pricing practices in the future, which could result in changes
in our vendor specific objective evidence of fair value for these undelivered elements.
As a result, our future revenue recognition for multi-element arrangements could
differ significantly from our historical results.

If an arrangement
does not qualify for separate accounting of the software license and consulting transactions,
then new software license revenue is generally recognized together with the consulting
services based on contract accounting using the percentage-of-completion method.
Contract accounting is generally applied to arrangements when services include significant
modification or customization of the software. Progress towards completion is generally
measured based on hours incurred versus projected total hours. The projected costs
associated with contract accounting are accrued at rates consistent with the revenue
recognized under percentage of completion.

18

---

Certain
of the Companys contracts include warranties that provide for refunds of all
or a portion of the software license and or other fees in the event that the Company
is unable to provide maintenance services, for which there is a separate fee, for
the contractually prescribed period. Contracts with these provisions are accounted
for in accordance with the policies above.

The Company
provides consulting services that include implementation, training and the performance
of other services to its customers. Revenue from such services is generally recognized
ratably over the period during which the applicable service is to be performed. In
addition, the Company may recognize certain implementation revenues based on hourly
rates in effect on the contract multiplied by the number of hours completed.

Support
agreements generally call for the Company to provide technical support and software
updates, on a when-and-if-available basis to customers. Revenue on technical
support and software update rights is recognized ratably over the term of the support
agreement.

PeopleMed
has contracts that include fixed fee and per-member fees. The Company recognizes
revenues from these contracts as services are provided.

Note
Receivable Collectibility

The Company
had outstanding notes receivable in the amount of $400 thousand and accrued interest
receivable of approximately $165 thousand outstanding as of September 30, 2005.
The Company lent money to the party to the notes receivable from 2001 to 2003. Consistent
with the terms of the notes receivable, the Company has received no interest or principal
payments and all accrued and unpaid interest and principal are due at various dates
during 2006. As of September 30, 2005, the notes receivable and accrued interest
in the amount of $565 thousand were classified an asset and there was no reserve.
Subsequent to the filing of the Companys Form 10-QSB for the period ended September 30,
2005, the Company received external information that made the Company believe that
setting up a reserve for the entire amount of the notes receivable and accrued interest
in the amount of $565 thousand was necessary. The Company recognized the expense
and set up the reserve for the $565 thousand in the fourth quarter of 2005. The establishment
of the reserve in the amount of $565 thousand had a material impact on the financial
statements of the Company for the quarter and year ended December 31, 2005.

Deposit
In Escrow Collectibility

In September 2002,
Global Med filed a lawsuit against Donnie L. Jackson, Jr., Global Meds former
Vice President of Sales and Marketing. Global Med alleges, among other things, that
prior to his resignation in July 2002 Mr. Jackson misappropriated certain trade
secrets of Global Med. After leaving Global Med, Mr. Jackson became a management
employee of one of Global Meds competitors. On March 30, 2005, the Superior
Court of the State of California in and for the County of El Dorado granted the motion
for summary judgment for Donnie L. Jackson, Jr. On September 1, 2005, the Company
deposited $1.004 million with the Superior Court in the State of California in the
County of El Dorado. This deposit represents potential fees and attorneys costs
the Company could be required to pay in the event the Company does not prevail on
appeal. The $1.004 million is classified as a Deposit in escrow on the
Companys balance sheet as of December 31, 2005. Based on external evidence,
the Company has determined that it is more likely than not that the Company will
be required to pay the $1.004 million that is currently classified as a Deposit
in escrow. As a result, the Company expensed the amount of the Deposit
in escrow and set up a liability for $1.004 million in the form of Litigation
accrual as of December 31, 2005. The Company is currently appealing the judges
decision and in the event the Company prevails, the Company may be refunded the $1.004
million deposit or a portion thereof. In the event the Company prevails, the Company
could recognize a reduction in expenses ranging between $0 and $1.004 million.

19

---

Derivative
Financial Instruments

The
Series A Convertible Preferred Stock and related warrants include certain terms,
conditions and features which are separately accounted for as embedded
derivative liabilities at estimated fair value. The determination of fair value
includes significant estimates by management including the term of the
instruments, volatility of the price of the Companys common stock,
interest rates and the probability of conversion, redemption or a future
dilutive financing transaction, among other items. The fluctuations in estimated
fair value may be significant from period-to-period which, in turn, may have a
significant impact on the Companys reported financial condition and
results of operations.

Income
Tax Valuation Allowance

On an annual
basis, the management of the Company evaluates the realizability of the net deferred
tax assets and assesses the need for a valuation allowance. In assessing the realizability
of deferred tax assets, management concluded that it is not more likely than not
that the deferred tax assets would not be realized. The ultimate realization of the
deferred tax assets is dependent on the generation of future taxable income in the
period in which the temporary differences become deductible. The Company has established
a full valuation allowance for deferred taxes due to the uncertainty that the deferred
tax assets will be utilized.

LIQUIDITY
AND CAPITAL RESOURCES

The Company
had cash and cash equivalents of $1.368 million and $1.633 million as of December
31, 2005 and 2004, respectively. Additionally, the Company had a net working capital
deficit of $849 thousand and $1.452 million as of December 31, 2005 and 2004, respectively.

On December
16, 2005, pursuant to the terms of the Securities Purchase Agreement, the Company
sold $9.975 million of Series A Convertible Preferred Stock to certain investors.
The Company received $9.85 million in gross cash proceeds for the Preferred Stock.
The Company used a portion of the proceeds from the sale of Series A
Preferred Stock to repurchase certain financial instruments and make final dividend and interest
payments to its now former parent company and the remainder will be used
for general working capital purposes. The following financial
instruments held by GMIL or their affiliates were repurchased
by the Company for $8 million in conjunction with this transaction:

|o |  | $3.5 million in Convertible Series AA Preferred Stock
|- |  | -----------------------------------------------------

|o |  | $528,700 in outstanding debt
|- |  | ----------------------------

|o |  | 11,186,430 warrants
|- |  | -------------------

|o |  | 4,860,195 common shares
|- |  | -----------------------

On
December 16, 2005,
the Company and Fusion Capital terminated their common stock purchase agreement and
entered into a new agreement to purchase Series A Preferred Stock which was part
of the $9.975 million in Series A Convertible Preferred Stock purchases.

It is expected
that cash flows from the Companys existing customer base, new sales and the
Companys current assets, including cash and accounts receivable, will be sufficient
to fund the Companys liquidity and capital requirements for the next twelve
months excluding acquisitions or major new product development initiatives. The Company
believes it will have positive cash flows from operations on an annual basis for
2006 and possibly thereafter. In the event the Companys projections do not
occur as anticipated, the Company may not generate sufficient revenues to operate
profitably in the future or generate sufficient operating cash flows to pay its liabilities
as they become due and may be forced to curtail our business operations or acquire
additional financing.

Net
cash used by operating activities was $984 thousand during 2005. During 2004,
operations provided $256 thousand. The cash used by operations of $984 thousand
during 2005 consisted primarily of the net loss of $10.819 million and changes
in operating assets and liabilities of $1.012 million, offset by non-cash
charges of $10.847 million. Of the $10.847 million in non-cash charges, $9.340
million related to charges associated with embedded derivatives resulting form
the issuance of the Series A Convertible Preferred Stock. During the year ended
2004, the Company received $265 thousand in cash proceeds related to the
termination of a contract with a significant customer. See Note 1 of the
consolidated financial statements for further discussion. During the years ended
2005 and 2004, the Company made cash interest payments of $145 thousand and $259
thousand, respectively, to its now former parent Company.

Net cash
used by investing activities was $178 thousand and $77 thousand, during 2005, and
2004, respectively. The Companys financing activities provided $897 thousand
and $471 thousand in 2005 and 2004, respectively. As of December 31, 2005, the Company
had the following contractual obligations or unrecorded obligations:

20

---

# Contractual
ObligationsExpected Maturity Dates ($000s)

|                 | 2006 | 2007 | 2008 | 2009
|---------------- | ---- | ---- | ---- | ----
|Operating leases |      | $97  |      | $  5
|Capital leases   |      | $28  |      | $29 

IMPACT
OF INFLATION

Although
it is difficult to predict the impact of inflation on our costs and revenues in connection
with our products, we do not anticipate that inflation will materially impact our
costs of operation or the profitability of our products when marketed.

RECENTLY
ISSUED FINANCIAL ACCOUNTING STANDARDS

In December
2004 the FASB issued revised SFAS No. 123 (revised 2004), Share-Based Payment
(SFAS No. 123R), which replaces SFAS No. 123, Accounting for Stock-Based
Compensation, (SFAS 123) and supercedes APB Opinion No. 25, Accounting
for Stock Issued to Employees. SFAS 123R requires all share-based payments
to employees, including grants of employee stock options, to be recognized in the
financial statements based on their fair values beginning with the first interim
or annual period after June 15, 2005, with early adoption encouraged. The pro forma
disclosures previously permitted under SFAS 123 no longer will be an alternative
to financial statement recognition. Global Med is currently required to adopt SFAS
123R in the third quarter of fiscal 2005, beginning July 1, 2005. Under SFAS 123R,
Global Med must determine the appropriate fair value model to be used for valuing
share-based payments, the amortization method for compensation cost and the transition
method to be used at date of adoption. The transition methods include prospective
and retroactive adoption options. Under the retroactive option, prior periods may
be restated either as of the beginning of the year of adoption or for all periods
presented. The prospective method requires that compensation expense be recorded
for all unvested stock options and restricted stock at the beginning of the first
quarter of adoption of SFAS 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the first
period restated. The Global Med is evaluating the requirements of SFAS 123R and expects
that the adoption of SFAS 123R will have a material impact on the Companys
consolidated results of operations and earnings per share. Global Med has not yet
determined the method of adoption or the effect of adopting SFAS 123R, and it has
not determined whether the adoption will result in amounts that are similar to the
current pro forma disclosures under SFAS 123.

In December
2004 the FASB issued SFAS No. 153 "Exchanges of Nonmonetary Assets - An Amendment
of APB Opinion No. 29." SFAS No. 153 amends APB Opinion No. 29 to eliminate
the exception for nonmonetary exchanges of similar productive assets and replaces
it with a general exception for exchanges of nonmonetary assets that do not have
commercial substance. SFAS No. 153 is to be applied prospectively for nonmonetary
exchanges occurring in fiscal periods beginning after June 15, 2005. Our adoption
of SFAS No. 153 is not expected to have a material impact on our financial position
or results of operations.

21

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Item
7. Financial Statements.

Reference
is made to the financial statements, the reports thereon and the notes thereto included
as a part of this Annual Report on Form 10-KSB, which financial statements, reports
and notes are incorporated herein by reference.

# INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                     | Page
|------------------------------------------------------------------------------------ | ----
|Report of Independent Registered Public Accounting Firm                              |     
|Consolidated Balance Sheets as of December 31, 2005 and 2004                         |     
|Consolidated Statements of Operations for the years ended December 31, 2005 and 2004 |     
|Consolidated Statements of Stockholders' Deficit for the years ended                 |     
|December 31, 2005 and 2004                                                           |     
|Consolidated Statements of Cash Flows for the years ended December 31, 2005 and 2004 |     
|Notes to Consolidated Financial Statements                                           |     

22

---

Report
of Independent Registered Public Accounting Firm

Board of
DirectorsGlobal Med Technologies, Inc. and subsidiary

We have
audited the accompanying consolidated balance sheets of Global Med Technologies,
Inc. and subsidiary as of December 31, 2005 and 2004, and the related consolidated
statements of operations, stockholders' deficit and cash flows for the two years
ended December 31, 2005 and 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. The Company is not required to have, nor were
we engaged to perform an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. 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 Global Med Technologies, Inc.
and subsidiary as of December 31, 2005 and 2004, and the results of their operations
and their cash flows for the two years ended December 31, 2005 and 2004 in conformity
with U.S. generally accepted accounting principles.

/s/
Ehrhardt Keefe Steiner & Hottman PCEhrhardt Keefe Steiner & Hottman
PCMarch 29, 2006Denver, Colorado

F-1

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(In thousands)

|                                                                       | December 31, |        
|---------------------------------------------------------------------- | ------------ | -------
|
|ASSETS                                                                 |              |        
|CURRENT ASSETS:                                                        |             
|Cash and cash equivalents                                              |              | $ 1,368
|Accounts receivable-trade, net of allowance for uncollectible accounts |             
|of $137 and $107, in 2005 and 2004, respectively                       |              | 1,029  
|Accrued revenues, net of allowance for uncollectible accounts of       |             
|$6, in 2005 and 2004                                                   |              | 754    
|Prepaid expenses and other assets                                      |              | 234    
|Deposit in escrow                                                      |              | 1,004  
|                                                                       |              |        
|Total current assets                                                   |              | 4,389  
|EQUIPMENT, FURNITURE AND FIXTURES, AT COST:                            |             
|Furniture and fixtures                                                 |              | 393    
|Machinery and equipment                                                |              | 448    
|Computer hardware and software                                         |              | 1,990  
|                                                                       |              |        
|                                                                       |              | 2,831  
|Less accumulated depreciation and amortization                         |              | (2,521 
|                                                                       |              |        
|Net equipment, furniture and fixtures                                  |              | 310    
|CAPITALIZED SOFTWARE DEVELOPMENT COSTS,                                |             
|net of accumulated amortization of $3,260 and $3,247,                  |             
|Respectively                                                           |              | 2      
|NOTES RECEIVABLE, and accrued interest, net of allowance for           |              | --     
|uncollectible amounts of $565 in 2005                                  |             
|                                                                       |              |        
|Total assets                                                           |              | $ 4,701
|                                                                       |              |        

See accompanying
notes to the consolidated financial statements.

F-2

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS (CONTINUED)(In
thousands)

|                                                            | December 31, |           
|----------------------------------------------------------- | ------------ | ----------
|
|LIABILITIES AND STOCKHOLDERS DEFICIT                       |              |           
|CURRENT LIABILITIES:                                        |             
|Accounts payable                                            |              | $      135
|Accrued expenses                                            |              | 733       
|Accrued payroll                                             |              | 236       
|Accrued compensated absences                                |              | 386       
|Noncompete accrual                                          |              | 35        
|Deferred revenue                                            |              | 2,690     
|Litigation accrual                                          |              | 1,004     
|Capital lease obligation, current portion                   |              | 19        
|Accrued dividend, related party                             |              | --        
|                                                            |              |           
|Total current liabilities                                   |              | 5,238     
|DERIVATIVE FINANCIAL INSTRUMENTS SERIES A AND               |             
|WARRANTS, at estimated fair value                           |              | 15,267    
|CAPITAL LEASE OBLIGATION, less current portion              |              | 54        
|FINANCING AGREEMENTS, RELATED PARTY                         |              | --        
|                                                            |              |           
|Total liabilities                                           |              | 20,559    
|                                                            |              |           
|COMMITMENTS AND CONTINGENCIES (Notes 2, 5 and 9)            |             
|CONVERTIBLE REDEEMABLE PREFERRED STOCK SERIES AA, $.01 par  |             
|value: Authorized shares - 3,500; 0 and 3,500 issued and    |             
|outstanding as of December 31, 2005 and 2004, respectively  |             
|(liquidation preference of $3,500)                          |              | --        
|CONVERTIBLE PREFERRED STOCK SERIES A, $.01 par value:       |             
|Authorized shares - 100, 10 outstanding (liquidation        |              | 9,975     
|preference of $9,975)                                       |             
|STOCKHOLDERS DEFICIT:                                      |             
|Convertible Preferred Stock Series BB, $.01 par value:      |              | --        
|Authorized shares - none outstanding                        |              | --        
|Preferred stock, $.01 par value: Authorized shares - 5,725; |              | --        
|none issued or outstanding                                  |              | --        
|Common stock, $.01 par value: Authorized shares - 90,000;   |             
|issued and outstanding shares- 22,955 and 27,465
     at    |              | 229       
|December 31, 2005 and 2004, respectively                    |             
|Additional paid-in capital                                  |              | 36,657    
|Accumulated deficit                                         |              | (62,719   
|                                                            |              |           
|Total stockholders deficit                                 |              | (25,833   
|                                                            |              |           
|Total liabilities and stockholders deficit                 |              | $   4,701 
|                                                            |              |           

See accompanying
notes to the consolidated financial statements.

F-3

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share information)

|                                                         | Year Ended December 31 |         
|-------------------------------------------------------- | ---------------------- | --------
|
|Revenues                                                 |                        | $ 11,204
|Cost of revenues                                         |                        | 3,383   
|                                                         |                        |         
|Gross profit                                             |                        | 7,821   
|                                                         |                        |         
|OPERATING EXPENSES:                                      |                       
|General and administrative                               |                        | 2,709   
|Summary judgment                                         |                        | 1,004   
|Sales and marketing                                      |                        | 2,570   
|Research and development                                 |                        | 2,241   
|Depreciation and software amortization                   |                        | 167     
|                                                         |                        |         
|Total operating expenses                                 |                        | 8,691   
|                                                         |                        |         
|Loss from operations                                     |                        | (870    
|OTHER INCOME (EXPENSES):                                 |                       
|Notes receivable allowance                               |                        | (529    
|Other financing costs                                    |                        | (11,032 
|Change in estimated fair value of derivative instruments |                        | 1,692   
|Interest income                                          |                        | 9       
|Interest expense                                         |                        | (13     
|Interest expense to related party                        |                        | (76     
|                                                         |                        |         
|Loss before taxes                                        |                        | $(10,819
|Provision for income taxes                               |                        | --      
|                                                         |                        |         
|Net loss                                                 |                        | $(10,819
|Preferred dividend, related party                        |                        | (698    
|                                                         |                        |         
|Deemed dividend, issuance of Series A                    |                       
|Preferred Stock                                          |                        | $(10,235
|                                                         |                        |         
|Net loss attributable to common                          |                       
|Stockholders                                             |                        | $(21,752
|                                                         |                        |         
|Basic and diluted loss per common share                  |                        | $  (0.79
|                                                         |                        |         
|Weighted average number of common shares                 |                       
|Outstanding: basic and diluted                           |                        | 27,528  
|                                                         |                        |         

See accompanying
notes to the consolidated financial statements.

F-4

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENT
OF STOCKHOLDERS DEFICIT(In thousands)

|                                           | Common Stock | Additionalpaid-in | Accumulated |      | 
|------------------------------------------ | ------------ | ----------------- | ----------- | ---- | 
|
|Balances, December 31, 2003                |              | 24,545            |             | $245 | 
|Issuance of Series BB Preferred Stock,     |             
|conversion to common shares                |             
|related party (see note 6)                 |              | 675               |             | 7    | 
|Issuance of common shares of thousand (see |             
|note 6)                                    |              | 1,525             |             | 16   | 
|Issuance of options                        |              | --                |             | --   | 
|Issuance of common shares for services,    |             
|related party (see note 6)                 |              | 7                 |             | --   | 
|Dividends on Series AA Preferred Stock,    |             
|related party                              |              | --                |             | --   | 
|Dividend on Series BB Preferred Stock,     |             
|related party (see note 6)                 |              | --                |             | --   | 
|Issuance of common shares for entering     |             
|into a stock purchase agreement (see       |             
|note 6)                                    |              | 537               |             | 5    | 
|Exercise of warrants and options (see      |             
|note 6)                                    |              | 150               |             | 2    | 
|Issuance of common shares for services     |              | 26                |             | --   | 
|Issuance of warrants associated with       |             
|common stock purchase agreement            |              | --                |             | --   | 
|Net loss                                   |              | --                |             | --   | 
|                                           |              |                   |             |      | 
|Balances, December 31, 2004                |              | 27,465            |             | $275 | 
|                                           |              |                   |             |      | 

See accompanying
notes to consolidated financial statements.

F-5

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENT
OF STOCKHOLDERS DEFICIT(In thousands)

|                                         | Common Stock | Additionalpaid-in | Accumulated |       |  
|---------------------------------------- | ------------ | ----------------- | ----------- | ----- | -
|
|Balances, December 31, 2004              |              | 27,465            |             | $ 275 |  
|Issuance of options for services or      |             
|accelerated option vesting               |              | --                |             | --    |  
|Issuance of common stock for             |             
|services, related party (see Note 5)     |              | 7                 |             | --    |  
|Exercise of options                      |              | 232               |             | 2     |  
|Dividends on series AA Preferred         |             
|Stock, related party (see Note 6)        |              | --                |             | --    |  
|Issuance of common stock for cash,       |             
|net of issuance costs of                 |             
|thousand (see Note 6)                    |              | 111               |             | 1     |  
|Preferred dividend, Series A Convertible |             
|Preferred Stock, net of issuance         |             
|costs of $260 (see Note 6)               |              | --                |             | --    |  
|Issuance of detachable warrants          |             
|associated with Series A                 |             
|Convertible Preferred Stock              |              | --                |             | --    |  
|Repurchase of common shares and          |             
|warrants from GMIL                       |              | (4,860            | )           | (49   | )
|Net loss                                 |              | --                |             | --    |  
|                                         |              |                   |             |       |  
|Balances, December 31, 2005              |              | 22,955            |             | $ 229 |  
|                                         |              |                   |             |       |  

See accompanying
notes to unaudited condensed consolidated financial statements.

F-6

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)

|                                                          | Year Ended December 31, |         
|--------------------------------------------------------- | ----------------------- | --------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                     |                         |         
|Net loss                                                  |                         | $(10,819
|Adjustments to reconcile net loss to net cash provided by |                        
|operating activities:                                     |                        
|Depreciation                                              |                         | 155     
|Amortization of software development costs                |                         | 13      
|Issuance of common stock, options and warrants            |                        
|for services and other                                    |                         | 780     
|Fair value of derivatives financial instruments           |                         | (1,692  
|Other financing costs                                     |                         | 11,032  
|Bad debt expense, (credit)                                |                         | 30      
|Notes receivable allowance for uncollectible amounts      |                         | 529     
|Changes in operating assets and liabilities:              |                        
|Accounts receivable-trade                                 |                         | (328    
|Accrued revenues                                          |                         | (566    
|Prepaid expenses and other assets                         |                         | (53     
|Notes receivable, accrued interest                        |                         | --      
|Accounts payable                                          |                         | 13      
|Accrued expenses                                          |                         | (129    
|Accrued payroll                                           |                         | 73      
|Accrued compensated absences                              |                         | 73      
|Deferred revenue                                          |                         | (95     
|                                                          |                         |         
|Net cash provided by operating activities                 |                         | (984    
|                                                          |                         |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                     |                        
|Purchases of equipment and fixtures                       |                         | (178    
|                                                          |                         |         
|Net cash used in investing activities                     |                         | (178    
|                                                          |                         |         

See accompanying
notes to the consolidated financial statements

F-7

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)(In
thousands)

|                                                           | Year Ended December 31, |        
|---------------------------------------------------------- | ----------------------- | -------
|
|CASH FLOWS FROM FINANCING ACTIVITIES:                      |                         |        
|Debt repayment, related party                              |                         | $  (529
|Exercise of options and warrants for cash                  |                         | 171    
|Dividend payments Series AA Preferred Stock, related party |                         | (941   
|Principal payments under capital lease obligations         |                         | (15    
|Issuance of common stock for cash, net of offering costs   |                         | 93     
|Redemption of Series AA Preferred Stock                    |                         | (3,493 
|Repurchase of common stock and warrants                    |                         | (3,979 
|Issuance of Series A Preferred Stock, net                  |                         | 9,590  
|Costs associated with preferred stock                      |                         | --     
|                                                           |                         |        
|Net cash provided by financing activities                  |                         | 897    
|                                                           |                         |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       |                         | (265   
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR             |                         | 1,633  
|                                                           |                         |        
|CASH AND CASH EQUIVALENTS AT END OF YEAR                   |                         | $ 1,368
|                                                           |                         |        
|                                                           |                        

SUPPLEMENTAL
DISCLOSURES OF NONCASH TRANSACTIONS:

Cash paid
for interest in 2005 and 2004 was $158 thousand and $265 thousand, respectively.
Of the $158 thousand paid for interest in 2005, $145 thousand was paid to a related
party. Of the $265 thousand in cash paid for interest in 2004, $259 thousand was
paid to Global Med International Holdings Limited, a related party, on behalf of
Global Med China & Asia Limited.

The Company
recognized expenses of approximate $780 thousand and $9 thousand, for the years ended
December 31, 2005 and 2004, respectively. Of the option expense recognized in 2005,
approximately $521 thousand related to accelerated vesting or certain options that
were issued prior to January 1, 2005 and $8 thousand related to normal expenses associated
with the vesting of options. In addition, approximately $251 thousand related to
options issued to consultants during 2005.

The Company
issued common shares to a related party for services valued at $7 thousand, for the
years ended December 31, 2005 and 2004, respectively.

During
2004, the Company entered into a capital lease for equipment valued at $95 thousand.

The Company
issued 537 thousand restricted common shares valued at $309 thousand to a third party
for entering into a stock purchase agreement during 2004. See note 6 of the financial
statements for further discussion.

The Company
issued 50 thousand warrants to purchase the same number of restricted shares of common
stock to a third party for their assistance in helping the Company enter into the
stock purchase agreement during 2004. See note 6 of the financial statements for
further discussion.

The Company
issued approximately 26 thousand restricted common shares valued at $14 thousand
to a third party as consideration for consulting during 2004.

The Company
converted approximately $60 thousand of accrued payroll and approximately $224 thousand
of accrued compensated absences into approximately $284 thousand of Series BB Preferred
Stock. The Preferred Stock Series BB was converted into common shares in December
2004. See Note 6 of the financial statements for further discussion.

See accompanying
notes to the consolidated financial statements

F-8

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDESCRIPTION OF BUSINESS

On May
23, 1995, The Wyndgate Group, Limited (Wyndgate) merged with National
MRO, Inc. (National MRO) and National MRO changed its name to Global
Data Technologies, Inc., which subsequently changed its name to Global Med Technologies,
Inc. (Global Med or the Company). Global Med provides information
management software products and services to the health care industry. Wyndgate operates
as a division of Global Med and designs, develops, markets and supports information
management software products for blood banks, hospitals, centralized transfusion
centers and other healthcare related facilities.

During
1999, Global Med formed a subsidiary, PeopleMed.com, Inc. (PeopleMed),
a Colorado corporation, which is approximately 83% owned by the Company to develop
a software application designed to give HMO providers and other third party payers
access to clinical information for chronic disease patients. This application allows
doctors and other medical employees access to a patients history. Approximately
11% of PeopleMed is owned by certain officers and directors of Global Med. The remaining
6% of PeopleMed common shares are owned by unaffiliated shareholders.

RELATED
PARTIES AND RELATED PARTY ACTIVITY

Pursuant
to a Stock Purchase Agreement, dated as of December 16, 2005 between the Company
and Global Med International Limited (GMIL), the Companys outstanding
debt with GMIL in the amount of $528,700, the outstanding Series AA Preferred Stock
in the amount of $3.5 million, outstanding common shares numbering 4.360 million
and the outstanding warrants to purchase 11.186 million shares of common stock were
paid off, redeemed, or repurchased, respectively, for $8 million. In addition, the
investors purchased 6.350 million common shares from GMIL directly. In addition all
of the six members of the Companys Board of Directors nominated by GMIL resigned.
As a result of the above, effective December 16, 2005, GMIL is no longer a considered
a related party of the Company.

Prior to
this, Global Med was financed primarily through lending arrangements with Global
Med International Limited (GMIL). These lending arrangements were originated
by eBanker USA.com, Inc., (eBanker) transferred, along with eBankers
ownership in Global Med, to Global Med China & Asia Limited (GMCAL)
in October 2002, and then the lending arrangements were transferred to GMIL in September
2003. Until November 28, 2001, eBanker was a consolidated subsidiary of eVision International,
Inc. (eVision). eVision is majority owned by China Credit Holdings Limited
(China Credit formerly Heng Fung Holdings Limited) and its subsidiaries,
Online Credit Limited and Heng Fung Singapore Pte. Limited. Currently, GMCAL is a
shareholder of Global Med. Until November 2001, eVision was also a shareholder of
Global Med. eBanker through its subsidiary, GMCAL, is a shareholder of Global Med.
Additionally, eVision and GMCAL each hold warrants to acquire 1 million and 11.186
million shares, respectively, of Global Meds common stock with exercise prices
that range from $0.25-$0.50 per share. As discussed further below in the accompanying
financial statements, in November 2000, eBanker and Global Med entered into a series
of equity transactions that resulted in Global Med becoming a consolidated subsidiary
of eBanker and eVision effective November 2000.

On November
28, 2001, the shareholders of eVision approved a transaction which transferred certain
of the assets of eVision to Online Credit as satisfaction of the certain obligations
eVision had with Online Credit. As a result, all of Global Meds common shares
held by eVision and all eBankers common shares and warrants held by eVision
were transferred to Online Credit. Consequently, as of November 28, 2001, Global
Med remained a consolidated entity of eBanker for accounting purposes; however, eBanker
was then directly controlled by Online Credit instead of eVision.

F-9

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

During
2005 and 2004, eVision provided the Company with various support services. In December
2005, the Company paid eVision $45 thousand for these support services dating back
to February 2002. Prior to this, the Company had been accruing certain amounts related
to estimated charges. As a result of this payment, the Company reversed in 2005 approximately
$68 thousand in expenses associated with prior years estimated expenses. The
Company recognized $21 thousand in payment during the year ended December 31, 2004.
eVision expenses and the related credits were applied to general and administrative
activities. As of December 31, 2005 and 2004, the Company had accrued $0 and $113
thousand, respectively, on the balance sheets related to these periods. During 2005
and 2004, the Company incurred $145 thousand and $229 thousand, respectively, in
interest charges from related parties. Global Med International Holdings Limited
(GMIHL) is a subsidiary of eBanker.

As of June
21, 2002, the Companys Board of Directors had independently approved loans
to a related party totaling $370 thousand. During the year ended December 31, 2002,
the Companys Notes Receivable, related party balance, increased $290 thousand
to a total of $370 thousand as a result of funds advanced in the form of promissory
notes to this entity controlled by a director, now formerly a director, of the Company,
Jeff Busch. The notes bear interest at 12% per year and mature in 2006. During the
year ended December 31, 2001, the Company had lent $80 thousand to this entity. In
addition, the CEO and Chairman of Global Med, Michael I. Ruxin, was also on the board
of directors of this entity controlled by Jeff Busch. Dr. Ruxin resigned as a director
of the related entity effective December 12, 2002. Jeff Busch resigned his position
as a director of the Company and PeopleMed effective December 12, 2002. As a result,
Jeff Busch and the entity controlled by Jeff Busch are no longer related parties
of the Company. On March 10, 2003 the Companys Board of Directors approved
and subsequently funded additional loans to the entity controlled by Jeff Busch in
the amount of $30 thousand.

Prior to
the fourth quarter of 2003, the Company had a valuation allowance on all of the interest
income associated with the note receivable discussed above. Although the financial
status of the entity that was lent the $400 thousand notes receivable did not warrant
a reserve for the principal amount of the notes receivable because the Company believed
no impairment existed, no interest income was recognized prior to the fourth quarter
of 2003. Subsequent to the year ended December 31, 2003, the Company, which prior
to this had not received any monies from the entity to whom the note receivable was
lent, received $42 thousand from this entity for services to be performed. Based
on the improvements in the entities financial status and the receipt of monies from
the entity, the Company effectively removed the valuation allowance from the interest
income on the note receivable. The Company recognized $48 thousand in interest on
this note receivable during the year ended December 31, 2004. During 2005, the Company
received certain external information that made the Company believe that setting
up a reserve for the entire amount of the notes receivable and accrued interest was
necessary. As a result, the Company established a 100% reserve for $400 thousand
in notes receivables and $165 thousand in accrued interest that were on the Companys
balance sheet as of December 31, 2005.

As a result
of these transactions and relationships, the financial condition and results of operations
of Global Med may not necessarily be indicative of those that would have resulted
if Global Med were unaffiliated with the related party entities mentioned above.

BASIS OF
CONSOLIDATION

The consolidated
financial statements include the accounts of Global Med and its majority-owned subsidiary.
Intercompany accounts and transactions are eliminated in consolidation. There is
no minority interest reflected in the consolidated balance sheets at December 31,
2005 and 2004 because PeopleMed had a stockholders deficit.

USE OF
ESTIMATES

The preparation
of financial statements in conformity with accounting principles generally accepted
in the United States of America requires the Companys management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

F-10

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

CASH AND
CASH EQUIVALENTS

For purposes
of the accompanying financial statements, the Company considers all highly liquid
investments with original maturities of three months or less when purchased to be
cash equivalents.

CREDIT
RISK AND MARKET RISK

Accounts
receivable at December 31, 2005 and 2004 are derived primarily from SafeTrace and
from SafeTrace Tx sales and related services to blood centers and blood center service
providers located in the United States and internationally. The International amounts
are not material. Historically, the Company has not required collateral or other
security to support customer receivables. In order to reduce credit risk, the Company
requires substantial down payments and progress payments during the course of an
installation of its software products. The Company establishes allowances for doubtful
accounts based upon factors surrounding the credit risk specific to customers.

The Company
has customers located in numerous locations across the United States and Puerto Rico
and sales are not concentrated in any geographic or economic region. The Company
also has international customers in Africa and Canada. PeopleMeds customer
is located in the State of Colorado.

ALLOWANCE
FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLES AND ACCRUED REVENUES

The Company
regularly evaluates the collectibility of its trade accounts receivable and unbilled
receivables balances based on a combination of factors. The Company establishes a
general reserve for accounts receivable. In addition, when a customers account
becomes past due, the Company initiates dialogue with the customer to determine the
cause. If it is determined that the customer will be unable to meet its financial
obligation, such as in the case of a bankruptcy filing, deterioration in the customers
operating results or financial position or other material events impacting their
business, the Company records a specific reserve for bad debt to reduce the related
receivable to the amount it expects to recover given all information presently available.
The Company also records reserves for bad debt for all other customers based on certain
other factors including the length of time the receivables are past due and historical
collection experience with individual customers. If circumstances related to specific
customers change, our estimates of the recoverability of receivables could materially
change. The Companys allowance for uncollectible accounts receivable and unbilled
receivables totaled $143 thousand and $113 thousand respectively, at December 31,
2005 and 2004 and is included on the consolidated balance sheet as a reduction of
accounts receivable and accrued revenues.

ALLOWANCE
FOR NOTES RECEIVABLE AND ACCRUED INTEREST

The Company
evaluates the collectibility of its notes receivable and the related accrued interest.
During the three months ended December 31, 2005, the Company determined that its
notes receivable and the related accrued interest of $565 thousand were impaired.
As a result, the Company set up a reserve for the entire amount of the notes receivable
and accrued interest during this period. The Company is in the process of attempting
to renegotiate the notes receivable term and extend it for an additional five years.
In the event the parties to the notes receivable eventually are able to repay some
or all of the outstanding balance of the notes receivable and accrued interest, the
Company could potentially recognize a gain ranging between $0 and $565 thousand,
as of December 31, 2005.

SUMMARY
JUDGMENT DEPOSIT

In September
2002, Global Med filed a lawsuit against Donnie L. Jackson, Jr., Global Meds
former Vice President of Sales and Marketing. Global Med alleges, among other things,
that prior to his resignation in July 2002 Mr. Jackson misappropriated certain trade
secrets of Global Med. After leaving Global Med, Mr. Jackson became a management
employee of one of Global Meds competitors. On March 30, 2005, the Superior
Court of the State of California in and for the County of El Dorado granted the motion
for summary judgment for Donnie L. Jackson, Jr.

F-11

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

On September 1,
2005, the Company deposited $1.004 million with the Superior Court in the State of
California in the County of El Dorado. This deposit represents potential fees and
attorneys costs the Company could be required to pay in the event the Company
does not prevail on appeal. The $1.004 million is classified as a Deposit in
escrow on the Companys balance sheet as of December 31, 2005. Based on
external evidence, the Company has determined that it is more likely than not that
the Company will be required to pay the $1.004 million that is currently classified
as a Deposit in escrow. As a result, the Company expensed the amount
of the Deposit in escrow and set up a liability for $1.004 million in the form of
Litigation accrual as of December 31, 2005. The Company is currently
appealing the judges decision and in the event the Company prevails, the Company
may be refunded the $1.004 million deposit or a portion thereof. In the event the
Company prevails, the Company could recognize a reduction in expenses ranging between
$0 and $1.004 million, as of December 31, 2005.

EQUIPMENT,
FURNITURE AND FIXTURES

Equipment,
furniture and fixtures are stated at cost. Depreciation and amortization, which includes
amortization of assets under capital leases, is based on the straight-line method
over estimated useful lives ranging from three to five years.

SOFTWARE
DEVELOPMENT COSTS

In accordance
with the provisions of Statement of Financial Accounting Standard (SFAS)
No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed, the Company capitalizes software development and production costs once
technological feasibility has been achieved. Software development costs incurred
prior to achieving technological feasibility are included in research and development
expense in the accompanying statements of operations.

Capitalized
software development costs are reported at the lower of unamortized cost or net realizable
value. Commencing upon the initial product release or when software development revenue
has begun to be recognized, these costs are amortized, based on current and future
revenue for each product with an annual minimum equal to the straight-line amortization
over the remaining estimated economic life of the product, generally three to four
years. For the years ended December 31, 2005 and 2004, the Company recorded approximately
$13 thousand, and $37 thousand, of amortization, of software development costs, respectively.

During
the years ended December 31, 2005 and 2004, the Company did not capitalize any costs
related to SafeTrace Tx. The Company discontinued capitalizing costs related to this
product because the remaining period for amortizing software development costs was
less than one year. The Company does not expect to begin capitalizing software development
costs for its products in the near future.

NONCOMPETE
AGREEMENTS

In 1996,
the Company entered into non-compete agreements with certain key employees. The provisions
of these non-compete agreements with these employees have expired. At December 31,
2005 and 2004, $35 thousand remains payable whenever sufficient cash flow, as defined,
is available as determined by the Companys Board of Directors.

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. A valuation
allowance is required to the extent any deferred tax assets may not be realizable.

F-12

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

FINANCIAL
INSTRUMENTS

The fair
value of a financial instrument represents the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced
sale or liquidation. Significant differences can arise between the fair value and
carrying amount of financial instruments that are recognized at historical cost amounts.
The fair value of the Companys debt instruments approximates fair value based
on the Companys current incremental borrowing rates for similar types of borrowing
arrangements. Also, the carrying amounts of the Companys financial assets approximate
fair value due to the short-term maturities of these items.

The fair value
of derivative  financial  instruments,  all of which relate to the issuance of the Companys
common  stock upon  conversion  or redemption  of  convertible  preferred  stock and the
exercise of related  warrants,  is  estimated  using  the  Black  Scholes  pricing  model
and  assumptions  related  to the  estimated  term of  those  instruments,  the
volatility of the price of the Companys  common stock,  interest  rates and the
probability of  such conversion or redemption.

DERIVATIVE
FINANCIAL INTSTRUMENTS

The Series A
Convertible  Preferred  Stock and related  warrants  include  certain  terms,  conditions
and features  which are separately  accounted for as embedded  derivative  liabilities at
estimated fair value. The determination  of fair value includes  significant  estimates
by management  including the term of the instruments,  volatility of  the price of the
Companys common stock,  interest rates and the probability of conversion,
redemption or a future  dilutive  financing  transaction,  among other items.  The
fluctuations in estimated fair value may be significant  from  period-to-period  which,
in turn, may have a significant impact on the Companys reported financial condition
and results of operations.

REVENUE
RECOGNITION

The Company
recognizes revenue in accordance with the American Institute of Certified Public
Accountants Statement of Position (SOP) No. 97-2, Software Revenue
Recognition.

The Companys
standard software license agreement for the Companys products provides for
an initial fee to use the product in perpetuity up to a maximum number of users.
Fees from software licenses are recognized as revenue upon shipment, provided fees
are fixed and determinable and collection is probable. Fees from licenses sold together
with consulting services are generally recognized upon shipment provided that the
above criteria have been met, payment of the license fees is not dependent upon the
performance of the consulting services and the consulting services are not essential
to the functionality of the licensed software. In instances in which the consulting
services are not essential to the functionality of the software but payment of the
license fee is due at the earlier of the performance of specific consulting services
or the passage of time, the license fee is recognized ratably over the anticipated
period of performance of the services or ratably over the license fee billing period,
whichever is more readily determinable.

For arrangements
with multiple elements, we allocate revenue to each element of a transaction based
upon its fair value as determined by vendor specific objective evidence.
Vendor specific objective evidence of fair value for all elements of an arrangement
is based upon the normal pricing and discounting practices for those products and
services when sold separately. We may modify our pricing practices in the future,
which could result in changes in our vendor specific objective evidence of fair value
for these undelivered elements. As a result, our future revenue recognition for multi-element
arrangements could differ significantly from our historical results.

If an arrangement
does not qualify for separate accounting of the software license and consulting transactions,
then new software license revenue is generally recognized together with the consulting
services based on contract accounting using the percentage-of-completion method.
Contract accounting is generally applied to arrangements when services include significant
modification or customization of the software. Progress towards completion is generally
measured based on hours incurred versus projected total hours. The projected costs
associated with contract accounting are accrued at rates consistent with the revenue
recognized under percentage of completion.

Certain
of the Companys contracts include warranties that provide for refunds of all
or a portion of the software license and or other fees in the event that the Company
is unable to provide maintenance services, for which there is a separate fee, for
the contractually prescribed period. Contracts with these provisions are accounted
for in accordance with the policies above.

The Company
provides consulting services that include implementation, training and the performance
of other services to its customers. Revenue from such services is generally recognized
ratably over the period during which the applicable service is to be performed. In
addition, the Company may recognize certain implementation revenues based on the
hourly rates in effect on the contract multiplied by the number of hours completed.

F-13

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Support
agreements generally call for the Company to provide technical support and software
updates, on a when-and-if-available basis to customers. Revenue on technical
support and software update rights is recognized ratably over the term of the support
agreement.

Revenues
from the re-sale of hardware and software, obtained from vendors, are recognized
at the time the hardware and software are delivered to customers.

PeopleMed
has contracts that include fixed fee and per-member fees. The Company recognizes
revenues from these contracts as services are provided.

During
the year ended December 31, 2004, the Company signed an agreement whereby the Company
was paid $265 thousand to terminate an agreement. The Company recognized approximately
$145 thousand in maintenance revenue during the year ended December 31, 2004, as
a result of this agreement. In addition, general and administrative expenses were
reduced by the remainder.

RESEARCH
AND DEVELOPMENT

Research
and development costs are charged to expense as incurred. Research and development
funding by others is deferred and offset against capitalizable costs. Funded research
and development in excess of capitalizable costs is recognized as contract research
and development when the related product is ready for commercial release.

SIGNIFICANT
CUSTOMERS

During
the years ended December 31, 2005 and 2004, there were no customers who accounted
for more than 10% of the Companys revenues.

LOSS PER
COMMON SHARE

Basic loss
per common share excludes dilution and is computed by dividing the net loss by the
weighted-average number of common shares outstanding during the periods presented.
Diluted net loss per common share reflects the potential dilution of securities that
could participate in the earnings unless their effort is antidilutive. Stock options,
warrants outstanding and their equivalents are included in diluted computations through
the treasury stock method unless they are antidilutive. Convertible securities
are included in diluted computations through the if converted method
unless they are antidilutive. Common share equivalents are excluded from the computation,
as their effect would be antidilutive. For the years ended December 31, 2005 and
2004 approximately 21.6 million and 9.6 million, equivalent dilutive securities (primarily
convertible preferred stock, common stock options, and warrants), respectively, have
been excluded from the weighted-average number of common shares outstanding for the
diluted net loss per share computations as they are antidilutive.

STOCK BASED
COMPENSATION

At December
31, 2005 the Company has several stock-based compensation plans, which are described
more fully in Notes 6 and 7. The Company has adopted the disclosure method
provisions of SFAS No. 123, Accounting for Stock-Based Compensation.As permitted
under SFAS No. 123, the Company continues to account for stock-based compensation
for awards to employees under the intrinsic value based method of accounting as prescribed
by Accounting Principles Board Opinion No. 25 (APB No. 25), Accounting for Stock
Issued to Employees.Stock based compensation paid to consultants and other non-employees
is accounted for at fair value under the provisions of SFAS No. 123. In December
2002, the FASB issued Statement of Financial Accounting Standards No. 148, Accounting
for Stock-Based CompensationTransition and Disclosure (SFAS 148), which
provides for alternative methods to transition to the fair value method of accounting
for stock options in accordance with provisions of FASB Statement No. 123, Accounting
for Stock Based Compensation. In addition, SFAS 148 requires disclosure of
the effects of an entitys accounting policy with respect to stock-based compensation
on reported net income and earnings per share in annual and interim financial statements.
The transition provisions of SFAS 148 are currently not applicable to us as we continue
to account for stock-based compensation in accordance with Accounting Principles
Board Opinion No. 25.

F-14

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Had
compensation cost for the Companys stock-based compensation plans been
determined consistent with SFAS No. 123, the Companys pro forma amounts
would have been as indicated in $(000s) except per share data:

|                                               | Year Ended December 31, |         
|---------------------------------------------- | ----------------------- | --------
|
|Net loss as reported                           |                         | $(10,819
|Preferred dividends related party              |                         | (698    
|Deemed dividend, issue of Series A Convertible |                         | (10,235 
|Preferred Stock                                |                         |         
|Total  stock-based compensation expenses       |                         |         
|determined under fair value accounting, net of |                         |         
|tax effects                                    |                         | (2,536  
|                                               |                         |         
|Pro forma net loss available to common         |                         | $(24,288
|stockholders                                   |                        
|                                               |                         |         
|Net loss per common share                      |                         |         
|As reported                                    |                         | $  (0.79
|Pro forma                                      |                         | $  (0.88
|                                               |                         |         
|Assumptions:                                   |                         |         
|Dividend Yield                                 |                         |        
|Volatility factor                              |                         | 363     
|Risk free interest rate                        |                         | 4.42    
|Expected Life of Option (in years)             |                         | 7       
|                                               |                         |         

The estimated
value of the total options granted during the years ended December 31, 2005 and 2004
were $3.9 million and $165 thousand, respectively.

The estimated
fair value compensation expense associated with the options granted during 2005 and
2004, and their respective portions vesting were $2.409 million and $13 thousand,
respectively, for the years ended December 31, 2005 and 2004.

The weighted-average
estimated fair value of employee stock options granted during 2005 and 2004 were
$1.18 and $0.55 per share, respectively. For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense during the vesting period
which could range from immediate vesting to nine years.

RECENTLY
ISSUED FINANCIAL ACCOUNTING STANDARDS

In December
2004 the FASB issued revised SFAS No. 123 (revised 2004), "Share-Based Payment"
("SFAS No. 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123") and supercedes APB Opinion No. 25, "Accounting
for Stock Issued to Employees." SFAS 123R requires all share-based payments
to employees, including grants of employee stock options, to be recognized in the
financial statements based on their fair values beginning with the first interim
or annual period after June 15, 2005, with early adoption encouraged. The pro forma
disclosures previously permitted under SFAS 123 no longer will be an alternative
to financial statement recognition. Global Med is currently required to adopt SFAS
123R in the third quarter of fiscal 2005, beginning July 1, 2005. Under SFAS 123R,
Global Med must determine the appropriate fair value model to be used for valuing
share-based payments, the amortization method for compensation cost and the transition
method to be used at date of adoption. The transition methods include prospective
and retroactive adoption options. Under the retroactive option, prior periods may
be restated either as of the beginning of the year of adoption or for all periods
presented. The prospective method requires that compensation expense be recorded
for all unvested stock options and restricted stock at the beginning of the first
quarter of adoption of SFAS 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the first
period restated. Global Med is evaluating the requirements of SFAS 123R and expects
that the adoption of SFAS 123R will have a material impact on the Companys
consolidated results of operations and earnings per share.

F-15

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Global
Med has not yet determined the method of adoption for SFAS 123R. The Company currently
estimates that the adoption of SFAS 123R will have a material impact on the financial
results for the next several years. The Company currently estimates that for options
granted as of December 31, 2005 that the Company will recognize expenses related
to grants to employees, officers, and directors that range from $100 thousand to
$150 thousand for 2006 and 2007, respectively, and approximately $250 thousand in
2008. Additional option grants to employees, directors or officers after December
31, 2005 could significantly increase the expenses associated with recognizing option
grants in accordance with SFAS 123R. Actual results could vary materially from these
current estimates.

Reclassifications

Certain
reclassifications have been made to the 2004 financial statement to conform to the
2005 presentation.

NOTE
2. FINANCING AGREEMENTS, RELATED PARTY

Financing
Agreements with Related Parties

Debt
Conversion

Pursuant
to a Stock Purchase Agreement, dated as of December 16, 2005 between the Company
and Global Med International Limited ("GMIL"), the Companys outstanding
debt with GMIL in the amount of $528,700 was paid off, the outstanding Series AA
Preferred Stock in the amount of $3.5 million were redeemed, and outstanding common
shares numbering 4,860,195 and warrants numbering 11,186,430 were redeemed. A table
outlining the instruments acquired from GMIL is located in footnote 6.

A history
of the financing agreements with related parties is located in the Company's audited
financial statements on Form 10-K for the year ended December 31, 2004.

NOTE
3. RISKS AND UNCERTAINTIES

Global
Med designs, develops, markets and supports information management software products
for blood banks, hospitals, centralized transfusion centers and other healthcare
related facilities. Global Med currently has customers and recognizes revenues from
its proprietary products. However, the number of customers and levels of revenue
have not been sufficient for Global Med to attain profitable operations. Global Med
has incurred significant cumulative operating losses. Additionally, Global Med currently
has an accumulated shareholders' deficit. Although the Company believes that it may
be profitable in 2006 and beyond and have positive cash flows from operations on
an annual basis, the ultimate success of Global Med is dependent upon a number of
factors such as increasing market acceptance of its products, the addition of significant
new customers and maintaining effective cost controls, none of which is assured.

NOTE
4. INCOME TAXES

The Company
has net operating loss carry forwards of approximately $23.5 million which expire
in the years 2008 to 2025, all of which is
subject to limitation under Section 382 of the Internal Revenue Code
due to the various changes in equity ownership during 2005, 2000 and 1999.

F-16

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Actual
income tax benefit differs from the amount calculated using the Federal statutory
tax rate as follows:

|                                                      | in ($000s) |           
|----------------------------------------------------- | ---------- | ----------
|
|Expected tax benefit                                  |            | $(3,678   
|Effect of permanent differences                       |            | 3,316     
|Change in valuation allowance for deferred tax assets |            | 415       
|State tax benefit, net of federal provision (benefit) |            | (35       
|Other                                                 |            | (18       
|                                                      |            |           
|Income tax expense                                    |            | $       --
|                                                      |            |           

The components
of the deferred tax assets and liabilities as of December 31, 2005 and 2004 are as
follows:

|                                               | in ($000s) |                 
|---------------------------------------------- | ---------- | ----------------
|
|Deferred tax assets:                           |            |                 
|Net operating loss carry forwards              |            | $   9,290       
|Allowance for uncollectible accounts and notes |           
|Receivable                                     |            | 279             
|Unearned revenue and accrued expenses          |            | 1,215           
|                                               |            |                 
|Gross deferred tax assets                      |            | 10,784          
|Valuation allowance                            |            | (10,784         
|                                               |            |                 
|Net deferred tax assets                        |            | --              
|Deferred tax liabilities:                      |           
|Capitalized software development costs         |            | --              
|                                               |            |                 
|Gross deferred tax liabilities                 |            | --              
|                                               |            |                 
|Deferred tax assets, net                       |            | $             --
|                                               |            |                 

The components
of income tax expense are as follows for the year ended December 31, 2005:

|                    | December 31, 2005 | December 31, 2004                    
|------------------- | ----------------- | -------------------------------------
|Current             |                   |                                      
|Federal             |                   | $                                   0
|State               |                   | 0                                    
|Deferred            |                   |                                      
|Federal             |                   | 327                                  
|State               |                   | 88                                   
|Valuation allowance |                   | (415                                 
|                    |                   |                                      
|Total taxes         |                   | $                                   0
|                    |                   |                                      

In assessing
the realizability of deferred tax assets, management concluded that it is not more
likely than not that the deferred tax assets would not be realized. The ultimate
realization of the deferred tax assets is dependent on the generation of future taxable
income in the period in which the temporary differences become deductible. The Company
has established a valuation allowance for deferred taxes due to the uncertainty that
the deferred tax assets will be utilized.

F-17

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

NOTE
5. LEASES

The Company
leases equipment and office space. Rental expense under operating leases was approximately
$253 thousand and $244 thousand for the years ended December 31, 2005 and 2004, respectively.

The following
represents the future minimum lease payments for all capital leases as well as the
non-cancelable operating leases at December 31, 2005 in ($000s):

|                                                        | CapitalLeases | OperatingLeases
|------------------------------------------------------- | ------------- | ---------------
|2006                                                    |               | $   28         
|2007                                                    |               | 29             
|2008                                                    |               | 31             
|2009                                                    |               | 19             
|Total minimum lease payments                            |               | $  107         
|                                                        |               |                
|Less amount representing interest                       |               | (34            
|                                                        |               |                
|Present value of minimum lease payments                 |               | $   73         
|Less current portion of obligation under capital leases |               | (19            
|                                                        |               |                
|Obligation under capital lease, less current portion    |               | $   54         
|                                                        |               |                

As of December
31, 2005, the value of the Companys outstanding capital leases included in
the Companys balance sheet in equipment, furniture, and fixtures, had an underlying
cost of $95 thousand and accumulated depreciation of $27 thousand.

NOTE
6. STOCKHOLDERS EQUITY AND MEZZANINE EQUITY

Sale
of Series A Convertible Preferred Stock and Detachable Warrants

On December
16, 2005, pursuant to the terms of the Securities Purchase Agreement, the Company
sold $9.975 million of Series A Convertible Preferred Stock (Series A) and warrants
to certain investors. The Company received net proceeds of $9.590 million for the
Series A. There are 100 thousand Series A authorized and 9,975 shares of Series
A outstanding with a stated value of $1 thousand per share.
The $9.975 million in Series A is convertible at the holders
option into common shares at $0.72 per share based on the Series As stated value.
The conversion price of the Series A and the related warrants is subject to reset,
under certain circumstances, if the Company issues common stock or common stock
equivalents at a price below $0.72 per share.
The Series A is presently convertible into 13.854 million shares of common stock at
any time and does not have voting rights.  The
Series A has preference in liquidation over the Companys common stock. The
stated value represents the liquidation value. The Series A shares are subject
to redemption based on the occurrence of certain conditional events, some of
which are considered to be outside of the Companys control. Primarily
based on these redemption features, the Series A has been recorded as mezzanine
equity.   The Company cannot issue dividends on the
common stock while the Series A is outstanding unless an equal dividend is declared
on the Series A. The dividend on the Series A would be calculated by determining
the number of common shares the Series A is convertible into and then applying the
same dividend to the Series A that was provided to the common shareholders. The holders
of the Series A also received warrants to purchase 10.391 million common shares that
can be exercised at $0.72 per share. These warrants have a cashless exercise feature
and have a five-year term.

The following
table summarizes the unregistered securities that were issued by the Company in conjunction
with the above transaction.

|Security                             | Number | Common SharesEquivalents
|------------------------------------ | ------ | ------------------------
|Series A Convertible Preferred Stock |        | 9,975                   
|Detachable Warrants                  |        | 10,390,625              

The Company
can force conversion of the Series A provided the following have occurred:

|o |  | The Companys stock has traded at or above a weighted average price of $3.50
     per share for 20 consecutive trading days,
|- |  | ----------------------------------------------------------------------------------------------------------------------------

F-18

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

|o |  | The trading volume of the Companys common stock has averaged at least 150 thousand shares
     per day for 20 consecutive days trading days, and
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The common share ownership of the holder of the Series A after conversion would not
     represent more than 4.99% of the Companys outstanding common stock after conversion.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The number
of common shares the Series A is convertible into will be included in the calculation
of diluted common shares outstanding in the event that the inclusion of these common
share equivalents has a dilutive effect. The agreement for the purchase of Series
A requires the Company to register the common shares underlying the warrants and
the Series A. The Series A does not have a dividend. In the event the registration
statement underlying the Series A and the related securities is not declared effective
within 240 days, the Company may be required to pay a dividend of 18% on the Series
A. As of the date this Form 10-KSB was filed, the Company had received notification
that the registration statement for the common shares underlying the Series A and
the warrants had been declared effective. In addition to the conditions above, there
are certain circumstances which could require the Company to pay a penalty on the
Series A of up to 4% per month, but not to exceed 24%. These circumstances include
but are not limited to failure of the Company to obtain registration of the common
shares underlying the warrants and Series A within 155 days of the Series A transaction
date which was December 16, 2005. The Company believes that the penalties on the
Series A of up to 24% do not exceed the difference between the value of a registered
and unregistered share of the Companys common shares.

The Company
accounted for the Series A based on its stated value. The Company accounted for the
warrants based on an allocation of their relative value from the stated value of the Series
A. In addition, the Company recognized  financing costs of $11.032 million associated
with the embedded derivatives of the Series A and the related  warrants.

On December
16, 2005, the date the Company entered into the transaction to sell the Series A,
the price of the Companys common stock was $1.15 per share and the conversion
price was $0.72 per share. As a result of the conversion feature on the Series A, the
Company recognized a deemed dividend to the Series A holders in the amount of approximately
$9.975 million.

As discussed
more fully in Note 8, the Series A and the related warrants have certain freestanding
embedded  derivative financial instruments requiring separate accounting treatment under
Statement of Financial Accounting  Standards No. 133 Accounting for Derivative
Instruments and Hedging Activities (SFAS 133).  The total fair  value
of the derivatives on December 16, 2005 was determined to be approximately $16.959
million and,  accordingly, the entire $9.975 stated value of the Series A has been
allocated to those derivative instruments.  In addition, because the fair value of the
derivatives exceeded the carrying value of the Series A, the Company  recorded a charge
for other financing costs equal to the excess value, in the amount of $11.032 million,
upon  consummation of the Series A transaction.

For a period
of one year from the effective date of the registration statement underlying the
common shares on the Series A and the warrants, the holders of the Series A are entitled
to up to 100% participation in any financing arrangements. In addition, until the
90 days after the effective date of the registration statement for the common shares
underlying the Series A and related warrants, the Company may not enter into equity
sales or issue options unless they are to employees, officers or directors of the
Company.

Sales
of Common Stock

Private
Placements

During
the year ended December 31, 2004, the Company received net proceeds of $549 thousand
from the sale of 1.525 million shares of unregistered common stock. The price per
share price was $0.40. The Company filed a Form S-1 registration statement to register
these shares on December 6, 2004 and this registration statement went effective in
May 2005. As a result of the private placement, the Company incurred issuance costs
of approximately $61 thousand. In addition, the Company issued 125 thousand warrants
to purchase unregistered common shares of the Companys stock at $0.40 per share
as part of this transaction. The Company used the proceeds of the private placement
for general working capital purposes.

F-19

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Preferred
Stock

Series
AA

On December
16, 2005, the Company redeemed all of the outstanding Series AA Convertible Redeemable Preferred
Stock. The Series AA Convertible Preferred Stock was redeemed using the proceeds
from the sale of the Series A.

The following
financial instruments held by GMIL or their affiliates were repurchased by the Company
for $8 million in conjunction with this transaction:

|Instrument                | Value | Common SharesEquivalents
|------------------------- | ----- | ------------------------
|Convertible Redeemable    |       |                         
|Series AA Preferred Stock |       | $3,500,000              
|Warrants                  |       | $   909,378             
|Common Shares             |       | $3,061,922              
|Debt                      |       | $   528,700             

On December
16, 2005, in conjunction with the purchase of the Series A, the investors purchased
6,350,000 registered common shares directly from GMIL for $4 million.

On April
14, 2004 GMIL and Global Med amended their existing financing agreements and entered
into an agreement to convert a portion of the outstanding debt totaling $3.5 million
into 3.5 million shares of Series AA Convertible Redeemable Preferred Stock, as discussed
in Note 11 in the Form 10-K in the audited financial statements for the period ended
December 31, 2003. For the period from March 1, 2004 through February 28, 2005, the
Series AA Preferred Stock has a dividend yield of 15%. On March 1, 2005, the dividend
rate on the Series AA Preferred Stock increases from 15% to 21%. During October 2004,
the Company made one dividend payment in the amount of approximately $131,000. The
remainder of the accrued dividend for the period from March 1, 2004 through February
28, 2005 will be paid in 2005. During 2005, the cash dividends are mandatory and
due and payable on March 1, June 1, September 1, and December 1 during each
quarter the Series AA Preferred Stock is outstanding. The Series AA Preferred Stock
can be converted by GMIL into common stock of the Company at any time at a conversion
rate of (2.222) shares of common stock for each share of Series AA Preferred Stock.
Therefore, the Series AA Preferred Stock is convertible into approximately 7.777
million common shares. At any time after March 1, 2006, the Series AA Preferred Stock
is redeemable at GMILs option at $1 per share. The Series AA Preferred Stock
is mandatorily redeemable on March 1, 2009. If the cash dividends on the Series AA
Preferred Stock are not paid within thirty (30) days after the end of the quarter,
at GMILs option, GMIL will be paid in additional Series AA Preferred Stock
equal to the value of the outstanding dividend, or common stock at the closing market
price for ten (10) days preceding GMILs election.

The Series
AA Preferred Stock can be converted into common stock at GMILs option, and
GMIL is not able to force redemption of the Series AA Preferred Stock until March
1, 2006. The Company has classified the Series AA Preferred Stock as Mezzanine
Equity in these financial statements. The Company will be required to review
the classification of the Series AA Preferred Stock on a quarterly basis to determine
if the classification as Mezzanine Equity remains appropriate. Such review could
result in the Preferred Stock being reclassified as debt prior to March 1, 2006.

F-20

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Series
BB

On April
14, 2004, the Companys Chairman and CEO, Michael I. Ruxin, M.D., agreed to
convert his outstanding accrued vacation and accrued wages as of February 29, 2004,
with a book value of approximately $284 thousand, into approximately 675 thousand
shares of Series BB Preferred Stock (Series BB). The Series BB has the
following terms:

|o |  | Each Series BB share is convertible into one common share at the option of the holder
     if Global Meds common stock closing price reaches $0.75 per share on any day. During the third quarter ended September 30, 2004, the Companys stock
     closed above $0.75 per share, and the Series BB became convertible into the Companys common stock upon written notice by Dr. Ruxin. As a result, the Company
     recorded a dividend of $28 thousand associated with the beneficial conversion feature associated with the Series BB.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | The Series BB is junior to the Series AA and senior to the common stock of the Company
     and has a liquidation preference of $0.42 per share.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

All of
the Series BB Preferred Stock were converted into 675 thousand shares of common stock
on December 13, 2004.

Common
Stock Purchase Agreement

On December
16, 2005, the Company entered into a Termination Agreement with Fusion Capital Fund
II, LLC, pursuant to which the Company and Fusion Capital mutually agreed to terminate
the Common Stock Purchase Agreement, dated March 16, 2005, by and between the Company
and Fusion Capital. As part of the termination of the Common Stock Purchase Agreement,
Fusion Capital received $575 thousand in Series A. Fusion Capital had provided the
Company with $450 thousand in cash proceeds during the nine months ended September
30, 2005, and these proceeds were originally to be applied towards the purchase of
common stock in conjunction with the Common Stock Purchase Agreement. As a result,
the Company allocated the $ 450 thousand in proceeds previously received from Fusion
Capital towards the purchase of the $575 thousand in Series A.

On October
8, 2004, the Company entered into a common stock purchase agreement (Purchase
Agreement) with Fusion Capital Fund II, LLC (Fusion Capital), a
Chicago based institutional investor, whereby Fusion Capital has agreed to purchase
up to $8.0 million of common stock over a 32-month period. Specifically, after the
Securities & Exchange Commission has declared effective a registration statement,
each month Global Med has the right to sell to Fusion Capital $12,500 of its common
stock, per trading day, at a purchase price based upon the market price of Global
Meds common stock on the date of each sale without any fixed discount to the
market price. The Purchase Agreement with Fusion Capital allows the Company to increase
Fusions daily purchase of common stock beyond the $12,500 amount under certain
circumstances. For each $0.10 increase in the price of the Companys common
stock over $0.75, the Company will have the right but not obligation, to increase
the amount purchased by Fusion Capital by $2,500 per day. At the Companys sole
option, Fusion Capital can be required to purchase lesser or greater amounts of common
stock, within certain ranges, each month up to $8.0 million in the aggregate. The
Company has the right to control the timing and the amount of stock sold to Fusion
Capital. Global Med also has the right to terminate the agreement at any time without
any additional cost. Fusion Capital has agreed not to engage in any direct or indirect
short selling or hedging of the common stock in any manner whatsoever.

As part
of the execution of the Purchase Agreement, the Company issued approximately 487
thousand shares of restricted common stock to Fusion Capital prior to the any purchase
of registered shares. In addition, under the terms of the Purchase Agreement, the
Company is required to reserve 10 million shares for issuance to Fusion Capital.
As Fusion Capital purchases the 10 million shares, the Company will be required to
issue an additional 487 thousand shares of common stock ratably as these shares are
purchased. The Board of Directors of the Company approved this transaction on September
28, 2004.

F-21

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

On July
7, 2004, the Company executed a preliminary agreement (Preliminary Agreement)
with Fusion Capital as a precursor to the Purchase Agreement. As part of the Preliminary
Agreement, the Company issued 50 thousand restricted shares of common stock. In addition,
the Company agreed to reimburse Fusion Capital for $15 thousand in expenses associated
with the transaction discussed above. The Company paid Fusion Capital the $15 thousand
in October 2004. The 487 thousand common shares due to Fusion Capital were considered
constructively issued on October 8, 2004. The 537 thousand common shares issued to
Fusion Capital were valued at $309 thousand based on the market value of the common
shares on the constructive date of issuance. In conjunction with the termination
of Fusion Capitals common stock purchase agreement, the Company netted the
value of the remaining shares in prepaid expenses against the proceeds received.
This amount was in prepaid expenses and other assets and was considered deferred
offering costs on the Companys December 31, 2004 balance sheet. Originally,
the Company intended on reducing the value of these common shares on a pro rata basis
as Fusion Capital purchased common shares under the terms of the Purchase Agreement.
In conjunction with the termination of Fusion Capitals common stock purchase
agreement, the Company netted the value of the remaining shares in prepaid expenses
against the proceeds received from Fusion for the Series A.

The Company
agreed to provide a third party with 50 thousand warrants to purchase the same number
of common shares of the Company with the execution of the Purchase Agreement. The
warrants are priced at $0.57 per share, the closing price of the Companys stock
on the date of execution of the Purchase Agreement, October 8, 2004, and expire on
October 8, 2009. These warrants were valued at $29 thousand. In addition, the Company
issued five-year warrants to purchase 400 thousand shares of the Companys common
stock at $0.49 per share. These warrants were exercisable after the Company begins
to receive funding under the Purchase Agreement, and then only on a pro rata basis
as the Company received up to $4 million in equity funding. In conjunction with the
termination of Fusion Capitals Purchase Agreement, the Company cancelled 392,500
of the 400,000 warrants.

Options
and Warrants Exercised

During
the year ended December 31, 2005, 232 thousand options were exercised and the Company
received $171 thousand in cash proceeds. No warrants were exercised during 2005.
During the year ended December 31, 2004, 25 thousand options and 125 thousand warrants
were exercised to purchase the same number of the Companys common shares. The
Company received $67 thousand related to the exercise of these options and warrants.

NOTE
7. STOCK OPTION PLANS, WARRANTS, AND STOCK COMPENSATION PLAN

The Second
Amended and Restated 1997 Stock Option Plan (Plan) provides for the issuance of options
to purchase up to 2.2 million registered shares of common stock to employees, officers,
directors and consultants of the Company. Options may be granted as incentive stock
or as nonqualified stock options.

Only employees
of the Company are eligible to receive incentive options. As of May 31, 2000, options
could no longer be issued under this Plan. As of December 31, 2005, options to purchase
1.077 million shares of the Companys common stock at a weighted average exercise
price of $1.16 per share were outstanding under the Plan, of which all of the options
to purchase shares were exercisable at December 31, 2005.

In the
second quarter of 2001, the Company adopted the 2001 Stock Option Plan (2001
Plan). The 2001 Plan as amended provides for the issuance of options to purchase
up to 10 million registered shares of common stock to employees, officers, directors
and consultants of the Company. Options may be granted as incentive stock options
or as nonqualified stock options. Only employees of the Company are eligible to receive
incentive options. The 2001 Plan expires on December 28, 2010. As of December 31,
2005, options to purchase 5.906 million shares of the Companys common stock
at a weighted average exercise price of $0.89 per share were outstanding under the
2001 Plan, of which 4.762 million options to purchase shares were exercisable at
December 31, 2005. Options granted under the Plan vest on a straight-line basis,
based on schedules as determined by the Board of Directors upon grant and generally
expire 10 years after grant. During 2005, the Company issued 3.131 million stock
options, 35 thousand were exercised, and 20 thousand options were cancelled under
the 2001 Plan.

F-22

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

In June
2003, the Companys Board of Directors approved the 2003 Stock Option Plan (2003
Plan). The 2003 Plan provides for the issuance of stock options exercisable
to purchase up to 5 million shares of the Companys common stock to employees,
officers, directors and consultants. As of December 31, 2005, there were options
to purchase 4.435 million shares under the 2003 Plan that were issued to such persons.
The Company filed an S-8 registration statement to register the 5 million shares
issuable under the 2003 Plan in May 2004. The range of the exercise prices for these
options is $0.45 to $1.50 per share. The weighted-average exercise price of these
options is $0.68 per share. All of these options were exercisable as of December
31, 2005.

The Company
also periodically grants options to purchase shares of restricted common stock. The
shares underlying these options are not registered under the 1933 Act. As of December
31, 2005, there were options to purchase 385 thousand shares of common stock at a
weighted average exercise price of $1.90 per share through 2005 were outstanding,
of which all were exercisable at December 31, 2005.

During
2005, the Company issued approximately 563 thousand options to consultants and recognized
approximately $251 thousand in expenses associated with these grants.

The following
table presents the activity for options for the years ended as of December 31:

|                               | 2005 | 2004       |  
|------------------------------ | ---- | ---------- | -
|
|Outstanding, beginning of year |      | 8,893,442  |  
|Granted                        |      | 3,331,000  |  
|Forfeited/cancelled            |      | (187,753   | )
|Exercised                      |      | (234,500   | )
|                               |      |            |  
|Outstanding, end of year       |      | 11,802,189 |  
|                               |      |            |  

* Price
reflects the weighted average exercise price.

The following
table presents the composition of options outstanding and exercisable as of December
31, 2005:

|                        | Options Outstanding |            | Exercisable Options |         |    
|----------------------- | ------------------- | ---------- | ------------------- | ------- | ---
|
|$   0.45 - 0.55         |                     | 128,247    |                     | $     0 | .71
|0.56- 1.00              |                     | 7,578,498  |                     | 0       | .65
|1.01 - 1.50             |                     | 3,592,500  |                     | 1       | .18
|1.51 - 2.00             |                     | 313,694    |                     | 1       | .78
|2.45 - 3.00             |                     | 175,750    |                     | 2       | .52
|3.75 - 3.75             |                     | 13,500     |                     | 3       | .75
|                        |                     |            |                     |         |    
|Total December 31, 2005 |                     | 11,802,189 |                     | 0       | .87
|                        |                     |            |                     |         |    

*Price
and life reflect the weighted average exercise price and weighted average remaining
contractual life, respectively.

F-23

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Acceleration
of Option Vesting

On December
16, 2005, the Company elected to accelerate the vesting on certain employee options
that were to vest in 2006 and 2007. As a result of this accelerated vesting, the
Company recognized approximately $521 thousand in compensation expense during the
fourth quarter of 2005. The decision to accelerate the vesting was done in order
to reward the Companys existing employees for their loyalty and hard work.
In the event these options are exercised, this will result in additional cash for
the Company. In addition, by accelerating the vesting on these options in 2005, the
Company will be expensing these options under the rules in effect when these options
were granted versus the accounting rules that are effect in 2006.

During
2005, the Company recognized approximately $8 thousand in expenses related to stock
options issued as of December 31, 2004.

Warrants

The following
summarizes the outstanding warrants to purchase shares of common stock of Global
Med for the years ended December 31, 2005 and 2004:

|                             | Number ofWarrants | WeightedAverageExercise Price
|---------------------------- | ----------------- | -----------------------------
|Balance at December 31, 2003 |                   | 13,027,530                   
|Issued                       |                   | 575,000                      
|Exercised                    |                   | (125,000                     
|Cancelled                    |                   | (187,800                     
|                             |                   |                              
|Balance at December 31, 2004 |                   | 13,289,730                   
|Issued                       |                   | 10,675,626                   
|Repurchased                  |                   | (11,186,430                  
|Cancelled                    |                   | (385,000                     
|                             |                   |                              
|Balance at December 31, 2005 |                   | 12,393,926                   
|                             |                   |                              

All of
the outstanding warrants are exercisable with exercise prices that range from $0.25
to $1.25 per share and expire in the years 2007 to 2010.

In conjunction
with the December 16, 2005 sale of the Series A, the Company issued 10,390,625
warrants to the investors to purchase the same number of common shares with a term
of five years and an exercise price of $0.72 per common share. In addition, the Company
issued 285 thousand warrants to purchase the same number of common shares with an
exercise price of $1 per share and a term of 5 years. These warrants were issued
as fees for assistance in facilitating the Series A Preferred Stock purchase.

The Company
cancelled 392,500 warrants that were issued in association with the sale of certain
common stock.

F-24

---

# GLOBAL
MED TECHNOLOGIES, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

During
2004, the Company issued 575 thousand warrants in conjunction with the sale of common
stock. See note 6 for further discussion.

During
2004, 125 thousand warrants were exercised for cash proceeds of $50 thousand.

Stock
Compensation Plan

In 
2000, the Company issued 30 thousand shares of common stock to a third party for
services under the stock compensation plan and authorized the issuance of 35 thousand
shares to a Director of the Company in his role as active Acting Principal Financial
and Accounting Officer and Treasurer. Of the 35 thousand authorized shares as of
December 31, 2000, 35 thousand were issued as of December 31, 2005. The market value
of the shares that had been issued or authorized was $65 thousand, based on quoted
market prices. During the years ended December 31, 2005 and 2004, the Company recognized
$0 and $8 thousand, respectively, in the statement of operations associated with
the 35 thousand shares authorized in the year ended December 31, 2000 to be issued
to a director in his role as Acting Principal Financial and Accounting Officer and
Treasurer. Mr. Cook resigned as Acting Principal Financial and Accounting Officer
and Treasurer in February of 2004.

NOTE
8. DERIVATIVE FINANCIAL INSTRUMENTS

In
connection with the issuance of the Series A and the related warrants (see Note
6), the Company evaluated the terms and conditions of both instruments, and the
related warrants, in order to determine whether such terms and conditions and
warrants represent embedded or freestanding derivative instruments under the
provisions of SFAS 133 and Emerging Issues Task Force issue No. 00-19,
Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in a Companys Own Stock (EITF 00-19). As a
result of these evaluations, the Company has determined that certain features of
the Series A that are deemed to be embedded derivatives. These features are as
follows:

|o |  | Conversion
feature;
|- |  | -------------------

|o |  | Variable number of shares to be issued upon certain triggering events;
|- |  | ----------------------------------------------------------------------

|o |  | Anti-dilution
clause, and
|- |  | -------------------------

|o |  | Change in control redemption premium clause
|- |  | -------------------------------------------

The
warrants related to the Series A contain an anti-dilution clause which is deemed
to be an embedded derivative. The embedded derivatives are accounted for on a
bundled basis in accordance with SFAS 133 Implementation Issue No.
B-15.

The
estimated fair value of the derivative instruments at inception (the date at
which all significant financial terms were finalized) and December 31, 2005 are
as follows:

|                          | December 16, 2005 | December 31, 2005
|------------------------- | ----------------- | -----------------
|
|Series A:                 |                   |                  
|                          |                   |                  
|Conversion Feature        |                   | $15,932          
|                          |                   |                  
|Variable Number of Shares |                   | 283              
|                          |                   |                  
|Anti-Dilution             |                   | 321              
|                          |                   |                  
|Change in Control         |                   | 125              
|                          |                   |                  
|                          |                   |                  
|                          |                   | 16,661           
|Warrants:                 |                  
|                          |                   |                  
|Anti-Dilution             |                   | 298              
|                          |                   |                  
|                          |                   |                  
|Total                     |                   | $16,959          
|                          |                   |                  

The net change
in  estimated  fair value for the period from  December 16, 2005 to December 31, 2005 is
included as  a benefit in the statement of operations and totaled $1.692 million for the
year ended December 31, 2005.

The embedded
derivatives  for the  conversion  feature and the issuance of a variable  number of
shares related to  the Series A were valued using the  Black-Scholes  option-pricing
model in a manner  similar to a call option.  The  anti-dilution  feature for the Series
A and the  warrants  were valued using the Black  Scholes put  valuation  model.  The
following  assumptions were used for valuing the Black Scholes option and put pricing
models and then a  probability weight was added to each embedded derivative:

|                                       | Series A Embedded Derivative |    
|-------------------------------------- | ---------------------------- | ---
|
|Estimated dividends                    |                              |   
|Expected volatility                    |                              | 320
|Risk-free interest rate                |                              | 4.4
|Estimated term (years)                 |                              | 10 
|Probability Weights                    |                              |    
|                                       |                              |    
|Beneficial conversion                  |                              | 100
|Variable number of shares to be issued |                              |    
|upon certain triggering events         |                              | 6  
|Anti-dilution clause                   |                              | 5  
|
|
|Estimated dividends                    |                              |   
|Expected volatility                    |                              | 243
|Risk-free interest rate                |                              | 4.3
|Contractual term (years)               |                              | 5  
|Probability Weights                    |                              |    
|Anti-dilution clause                   |                              | 5  
|                                       |                              |    

The
probability of the beneficial conversion was weighted as 100% because conversion
is completely within the control of the Series A holders. The probability for
the issuance of a variable number was assessed by reviewing the specific events
that would lead to the issuance of a variable number of additional shares and
then accumulating the probability weights of these items. The anti-dilution
clause probability was assessed by reviewing the specific circumstances that
would require the issuance of common stock equivalents at a price below $0.72
per share. The Company believes that this is highly unlikely given the
Companys current circumstances. The change in control provision was valued
using the premium attached to the change in control provision and then
probability weighted at 5%.

F-25

---

NOTE
9. CONTRIBUTIONS TO RETIREMENT PLAN

The Company
has a 401(k) retirement plan which covers eligible employees, as defined, of the
Company (the 401(k) Plan). Employees may defer up to fifteen percent of their annual
compensation up to the maximum amount as determined by the Internal Revenue Service.
Under the 401(k) Plan, the Company, at its discretion, may make contributions to
the plan. No Company contributions were made to the 401(k) Plan in 2005 or 2004.

NOTE
10. COMMITMENTS AND CONTINGENCIES

The Company
has certain operating and capital lease obligations outstanding as of December 31,
2005. The obligations associated with these operating and capital leases are more
fully described in note 5.

In September 2002,
Global Med filed a lawsuit against Donnie L. Jackson, Jr., Global Meds former
Vice President of Sales and Marketing. Global Med alleges, among other things, that
prior to his resignation in July 2002 Mr. Jackson misappropriated certain trade
secrets of Global Med. After leaving Global Med, Mr. Jackson became a management
employee of one of Global Meds competitors. On March 30, 2005, the Superior
Court of the State of California in and for the County of El Dorado granted the motion
for summary judgment for Donnie L. Jackson, Jr. On September 1, 2005, the Company
deposited $1.004 million with the Superior Court in the State of California in the
County of El Dorado. This deposit represents potential fees and attorneys costs
the Company could be required to pay in the event the Company does not prevail on
appeal. The $1.004 million is classified as a Deposit in escrow on the
Companys balance sheet as of December 31, 2005. Based on external evidence,
the Company has determined that it is more likely than not that the Company will
be required to pay the $1.004 million that is currently classified as a Deposit
in escrow. As a result, the Company expensed the amount of the Deposit
in escrow and set up a liability for $1.004 million in the form of Litigation
accrual as of December 31, 2005. The Company is currently appealing the judges
decision and in the event the Company prevails, the Company may be refunded the $1.004
million deposit or a portion thereof. In the event the Company prevails, the Company
could recognize a reduction in expenses ranging between $0 and $1.004 million, as
of December 31, 2005.

NOTE 11.
SUBSEQUENT EVENT

On
March 29, 2006, the Company renegotiated certain terms related to the Series A
and the related warrants. From December 16, 2005 through March 28, 2006, the
date prior to the renegotiated terms, the Company classified the Series A as
mezzanine equity in the Companys balance sheet. As of March 29, 2006, the
Company believes equity classification for the Series A will be appropriate
based upon the renegotiated terms. The renegotiated terms resulted in the
elimination or addition of several terms that made mezzanine equity treatment
more appropriate for the period through March 28, 2006. The significant terms
that were eliminated or added are as follows:

|1. |  | Removal of cash payout for events that were outside the control of the Company
which included a change of control;
|-- |  | ------------------------------------------------------------------------------------------------------------------

|2. |  | Removal of a certain clauses that would result in the resetting of the
conversion price for the Series A and the related warrants in the event that the
Company issued common share equivalents at a price that was less than the
conversion price or exercise price of $0.72 per common share;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Removal of provisions that allowed for dividends to occur in the future under
certain circumstances;
|-- |  | ----------------------------------------------------------------------------------------------------

|4. |  | Removal
of preference in liquidation;
|-- |  | -------------------------------------

|5. |  | Addition of certain voting rights for preferred shareholders; and
|-- |  | -----------------------------------------------------------------

|6. |  | The
ability  for the Company to  determine  a maximum  number of common  shares that the
holders can convert the Series A and  related warrants into.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

The
Company now believes that the revisions to the terms of the Series A will result
in the Series A being properly classified as equity. In addition, the revised
terms have resulted in the Series A being closely and clearly related to equity.
As a result, the Company believes that the embedded derivatives identified in
note 8 of the accompanying audited financial statements will no longer treatment
as freestanding embedded derivative financial instruments requiring separate
accounting treatment under SFAS 133.

F-26

---

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

None not
previously reported.

ITEM
8A. CONTROLS AND PROCEDURES

(A)     
Evaluation Of Disclosure Controls And Procedures.

As of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of the Companys Principal
Executive Officer and Principal Financial Officer, of the effectiveness of the design
and operation of the Companys disclosure controls and procedures. The Companys
disclosure controls and procedures are designed to provide a reasonable level of
assurance of achieving the Companys disclosure control objectives. The Companys
Principal Executive Officer and Principal Accounting Officer have concluded that
the Companys disclosure controls and procedures are, in fact, effective at
this reasonable assurance level as of the period covered.

(B)     
Changes In Internal Controls Over Financial Reporting.

In connection
with the evaluation of the Companys internal controls during the Companys
last fiscal quarter, the Companys Principal Executive Officer and Principal
Financial Officer have determined that there are no changes to the Companys
internal controls over financial reporting that has materially affected, or is reasonably
likely to materially effect, the Companys internal controls over financial
reporting.

(C)     
Internal Controls Over Financial Reporting.

As a result
of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules issued hereunder,
we will be required to include in our Annual Report on Form 10-KSB for the year ending
December 31, 2007 a report on managements assessment of the effectiveness of
our internal controls over financial reporting. Our independent registered public
accounting firm, Ehrhardt Keefe Steiner & Hottman PC (EKS&H),
will also be required to attest to and report on managements assessment. The
Company has not begun the necessary compliance work related to Section 404, and as
a result we have not yet evaluated or tested our compliance with this Section. Although
we believe that the controls and procedures that were in place for the year ended
December 31, 2005 provide reasonable assurance the Companys control objectives
are being met, neither we nor our auditors have confirmed this objective as will
be required under Section 404. As a result, there is the possibility that material
deficiencies as defined in Section 404 could exist.

# PART
III

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

Identification
of Directors and Executive Officers

The following
sets forth certain information with respect to the officers and directors of the
Company.

# MANAGEMENT

Our directors
and executive officers and their ages as of the date of this filing are as follows:

23

---

|Name                   | Age | Position | Officer orDirector Since
|---------------------- | --- | -------- | ------------------------
|Michael I. Ruxin, M.D  |     | 60       |                         
|                       |     |          |                         
|                       |     |          |                         
|                       |     |          |                         
|Gerald F. Willman, Jr. |     | 48       |                         
|                       |     |          |                         
|                       |     |          |                         
|                       |     |          |                         
|Thomas F. Marcinek     |     | 52       |                         
|                       |     |          |                         

The following
individuals resigned as directors of the Company on December 16, 2005 as part of
the Companys repurchase of securities of the Company owned by GMIL: Fai H.
Chan, Kwok Jen Fong, Gary L. Cook, Jr., Tony T.W. Chan, Robert H. Trapp, and David
T. Chen.

The directors
of Global Med are elected to hold office until the next annual meeting of shareholders
and until their respective successors have been elected and qualified. Officers of
Global Med are elected by the Board of Directors and hold office until their successors
are elected and qualified.

The following
sets forth biographical information concerning Global Meds directors and executive
officers for at least the past five years. All of the following persons who are executive
officers of Global Med are full time employees of Global Med.

Michael
I. Ruxin, M.D., the founder of Global Med, has been
an officer and director of Global Med since its incorporation in 1989 and is currently
the Chairman and Chief Executive Officer of Global Med. Dr. Ruxin received a B.A.
degree from the University of Pittsburgh and a M.D. degree from the University of
Southern California. Dr. Ruxin is a licensed physician in California and Colorado.

Gerald
F. Willman, Jr.has been a Director of and is now the
Senior Vice President of International Business Development for Wyndgate Technologies.
Mr. Willman has been a Vice President of the Wyndgate division since May 1995 and
Chief Financial Officer from April through August 1998. Mr. Willman was director
and then a Vice President of The Wyndgate Group, Ltd., from 1984 to 1995 and was
responsible for the overall design and development of the products developed by The
Wyndgate Group, Ltd., including research of new technologies. Prior to his employment
at The Wyndgate Group, Ltd., he was employed as a development team leader at Systems
Research, Inc. Mr. Willman received a B.S. degree from Hampden Sydney College and
M.B.A. degree from National University.

Thomas
F. Marcinek, has been the President and Chief Operating
Officer since March 1998, and was the President of the Data Technologies Group, a
division of Henry Schein, Inc., Melville, New York. Mr. Marcinek was the president
and owner of a practice management software consulting firm prior to joining Global
Med. Mr. Marcinek received his BA Degree in Management with Honors from St. Mary's
College of California and has nearly two decades' experience as an MIS specialist.

Involvement
In Certain Legal Proceedings

In September 2002,
Global Med filed a lawsuit against Donnie L. Jackson, Jr., Global Meds former
Vice President of Sales and Marketing. Global Med alleges, among other things, that
prior to his resignation in July 2002 Mr. Jackson misappropriated certain trade
secrets of Global Med. After leaving Global Med, Mr. Jackson became a management
employee of one of Global Meds competitors. On March 30, 2005, the Superior
Court of the State of California in and for the County of El Dorado granted the motion
for summary judgment for Donnie L. Jackson, Jr.

24

---

On September 1,
2005, the Company deposited $1.004 million with the Superior Court in the State of
California in the County of El Dorado. This deposit represents potential fees and
attorneys costs the Company could be required to pay in the event the Company
does not prevail on appeal. The $1.004 million is classified as a Deposit in
escrow on the Companys balance sheet as of December 31, 2005. Based on
external evidence, the Company has determined that it is more likely than not that
the Company will be required to pay the $1.004 million that is currently classified
as a Deposit in escrow. As a result, the Company expensed the amount
of the Deposit in escrow and set up a liability for $1.004 million in
the form of Litigation accrual as of December 31, 2005. The Company is
currently appealing the judges decision and in the event the Company prevails,
the Company may be refunded the $1.004 million deposit or a portion thereof. In the
event the Company prevails, the Company could recognize a reduction in expenses ranging
between $0 and $1.004 million.

Audit
Committee

In February
2004, Gary Cook, a director of the Company and the former Acting Principal Financial
Officer and Treasurer of the Company, replaced Michael I. Ruxin, the Companys
CEO and Chairman, as the Chairman of the Audit Committee. The remaining members of
the Audit Committee are Robert H. Trapp and Kwok Jen Fong. The audit committee met
four times during 2005 and once during 2004. Mr. Cook is considered a financial expert.
None of the Audit Committees members are considered independent.

All of
the audit committee members resigned their positions as audit committee members and
as members of the Companys Board of Directors on December 16, 2005 in
conjunction with the Companys repurchase of GMILs securities and repayment
of the debt due to GMIL. The Company is currently performing a search for audit committee
members to fill these vacancies.

Compliance
With Section 16(a) Of The Exchange Act

Based on
information provided to the Company, it is believed that all of the Companys
directors, executive officers and persons who own more than 10% of the Companys
common stock were in compliance with Section 16(a) of the Exchange Act of 1934 during
the last fiscal year. During the year ended December 31, 2005, all of the Companys
directors, executive officers and Companys common stock were in compliance
with section 16(a) of the Exchange Act of 1934, except as follows: Michael I. Ruxin,
Gerald Willman, and Thomas Marcinek, all failed to timely file Form 4s with respect
to the receipt of stock options. Michael I. Ruxin failed to timely file a Form 4
with respect to the purchase of common shares.

Code
of Ethics

The Company
has a code of ethics that has been approved by the Board of Directors. The Code of
Ethics was filed as an exhibit to the Companys Form S-1 Registration Statement that was filed on December 6,
2004. The Code of Ethics was filed as Exhibit 10.72 to the Form S-1.

ITEM
10. EXECUTIVE COMPENSATION

Summary
Compensation Table

The 
following table sets forth information regarding compensation paid to the Companys
CEO and the other executive officers of the Company who received in excess of $100
thousand of salary and bonus from the Company during the three years ended December
31, 2005:

25

---

|                          | Annual Compensation | Long-Term Compensation |  |           |  |   
|------------------------- | ------------------- | ---------------------- |  | --------- |  | --
|
|Michael I. Ruxin,         |                     | 2005                   |  | $ 290,866 |  | --
|Chairman and CEO          |                     | 2004                   |  | 275,000   |  | --
|                          |                     | 2003                   |  | 259,711   |  | --
|Thomas F. Marcinek,       |                     | 2005                   |  | 204,616   |  | --
|President and COO         |                     | 2004                   |  | 175,000   |  | --
|                          |                     | 2003                   |  | 175,000   |  | --
|Gerald F. Willman, Jr.    |                     | 2005                   |  | 165,000   |  | --
|Director and              |                     | 2004                   |  | 110,385   |  | --
|Senior Vice President     |                     | 2003                   |  | 105,000   |  | --
|of International Business |                    
|Development for           |                    
|Wyndgate Technologies     |                    

|(1) |  | Dr. Ruxin received $5,912 in life insurance premiums and an annual car allowance of
     $9,810.
|--- |  | ------------------------------------------------------------------------------------------------

|(2) |  | Dr. Ruxin was issued Series BB Preferred Stock valued at $35,120. See Note 6 of the
     financial statements. Dr. Ruxin also received $5,912 per annum in life insurance premiums and an annual car allowance of $10,917.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Dr. Ruxin received $5,912 per annum in life insurance premiums and an annual car allowance
     of $8,459.
|--- |  | ----------------------------------------------------------------------------------------------------------

|(4) |  | Mr. Marcinek received a $5,400 per year car allowance during 2004, 2003, and 2002.
|--- |  | ----------------------------------------------------------------------------------

Stock
Option Plans and Other Issuances

In the
second quarter of 2001, Global Med adopted the 2001 Stock Option Plan (2001
Plan). The 2001 Plan provided for the issuance of options to purchase up to
15 million registered shares of common stock to employees, officers, directors and
consultants of Global Med. Options may be granted as incentive stock options or as
nonqualified stock options. Only employees of Global Med are eligible to receive
Incentive Options. The 2001 Plan expires on December 28, 2010. In June 2003, the
Board of Directors of Global Med approved a change in the 2001 Plan. The Board of
Directors of Global Med authorized an amendment to the 2001 Plan reducing the number
of common shares reserved and authorized for issuance by 5 million. Effective in
June 2003, the total number of common shares approved for issuance under the 2001
Plan as authorized by the Board was reduced from 15 million to 10 million. Global
Med filed an amendment to the existing S-8 registration statement for the 2001 Plan
to effect this change on May 20, 2004. As of December 31, 2005, options to purchase
5.906 million shares of Global Meds common stock at a weighted average exercise
price of $0.89 per share were outstanding under the 2001 Plan, of which 4.762 million
options to purchase shares were exercisable at December 31, 2005. Options granted
under the Plan typically vest on a straight-line basis, based on schedules as determined
by the Board of Directors upon grant and generally expire 10 years after grant. During
the year ended December 31, 2005, Global Med issued 3.131 million stock options under
the 2001 Plan.

In June
2003, Global Meds Board of Directors approved the 2003 Stock Option Plan (2003
Plan). The 2003 Plan provides for the issuance of stock options exercisable
to purchase up to 5 million shares of Global Meds common stock to employees,
officers, directors and consultants. The Board of Directors also approved the inclusion
of options to purchase approximately 4.707 million shares under the 2003 Plan that
were issued to such persons prior to the adoption of the 2003 Plan and lacked registration
rights. Global Med filed an S-8 registration statement to register the 5 million
shares issuable under the 2003 Plan on May 20, 2004. As of December 31, 2005 there
were approximately 4.435 million options outstanding under this plan with exercise
prices ranging from $0.45 to $1.50 per share. The weighted- average exercise price
of these options is $0.68. As of December 31, 2005, all of issued options under the
2003 Plan were exercisable.

26

---

The Second
Amended and Restated Stock Option Plan (Plan) provides for the issuance of options
to purchase up to 2.2 million registered shares of common stock to employees, officers,
directors and consultants of Global Med. Options may be granted as incentive stock
or as nonqualified stock options. Only employees of Global Med are eligible to receive
Incentive Options. As of May 31, 2000, options could no longer be issued under this
Plan. As of December 31, 2005, options to purchase 1.077 million shares of Global
Meds common stock at a weighted average exercise price of $1.16 per share were
outstanding under the Plan, of which 1.077 million options to purchase shares were
exercisable at December 31, 2005.

Global
Med also periodically grants options to purchase shares of registered common stock.
The shares underlying these options are not registered under the 1933 Act. As of
December 31, 2005, there were outstanding options to purchase 385 thousand shares
of common stock at a weighted-average exercise price of $1.90 per share through December
31, 2005, of which 368 thousand were exercisable at December 31, 2004.

In February
of 2005, the Companys Board of Directors approved documentation changes related
to option grants to certain employees and a director that occurred in December of
1999 and June of 2000. The Board of Directors determined that the term of the options
as originally granted, five years, was documented incorrectly and should have been
ten years. This determination was based on the fact that the five year term was inconsistent
with the Companys defacto policies and practices at the time to grant ten year
options to directors and employees. As the Company views this Board action as a correction
of a documentation deficiency, the Company has no plans to recognize compensation
expense associated with this documentation correction.

Option
Grants Table

During
2005, 700 thousand stock options were granted to the Companys Executive Officers.
None were granted during 2004.

|Name                   | SharesAcquiredon Exercise | Realized | Number ofUnexercisedOptions atYear-endExercisable/Unexercisable | Value of UnexercisedIn-the-Money Options atyear-end($)Exercisable/Unexercisable
     (1)
|---------------------- | ------------------------- | -------- | --------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|Michael I. Ruxin, M.D. |                           | --       |                                                                 | --                                                                                      
|Thomas F. Marcinek     |                           | --       |                                                                 | --                                                                                      
|Gerald F. Willman      |                           | --       |                                                                 | --                                                                                      

(1) Based
on the closing price of the Company's Stock of $1.03 per share on December 30, 2005.

Long-Term
Incentive Plan ("LTIP") Awards Table

During
2005, the Company granted 250 thousand options to Dr. Ruxin and Mr. Marcinek. In
addition, the Company granted 200 thousand options to Mr. Willman. All of these options
were granted at $1.15 per share, the closing price of the Company's stock on the
date of grant, December 16, 2005. The options vested immediately and have a term
of ten years.

27

---

Compensation
Of Directors

Standard
Arrangements. The Company pays the directors, who are not also employees of the Company,
a fee of $500 for each board meeting they attend. The Company's Board of Directors
approved this compensation on April 1, 2004. The company also from time-to-time issues
stock options to members of the Board of Directors.

Other
Arrangements. During 2000, the Company also authorized the issuance of 35 thousand
common shares to Gary Cook, a director, in his capacity as acting Principal Financial
and Accounting Officer and Treasurer. Of the 35 thousand authorized shares, 28 thousand
had been issued as of December 31, 2004. These shares will be issued at a rate of
7 thousand a year as they are earned. These shares were valued at $37 thousand. The
Company compensates certain directors as discussed above and issued a director 100
thousand options during the year ended December 31, 2004. Mr. Cook resigned as the
acting Principal Financial Officer and Treasurer on February 25, 2004. Mr. Cook resigned
as a director on December 16, 2005.

On
November 1, 2002, the Company entered into an Employment Agreement with Dr. Ruxin
for a period of five years commencing August 1, 2003 and ending August 1, 2008. Dr.
Ruxin's salary shall be reviewed on an annual basis and if his performance is deemed
satisfactory, he shall receive a minimum 7.5% cost of living increase, plus any other
increase which may be determined from time to time at the discretion of the Company's
Board of Directors. In addition, Dr. Ruxin shall be eligible for a performance increase.
Pursuant to Dr. Ruxins Employment Agreement, the Company authorized the issuance
to Dr. Ruxin of 500 thousand total incentive stock options and nonqualified stock
options to purchase an aggregate of 500 thousand shares of the Company's common stock.
All of these options are now exercisable. The stock option exercise price shall be
$0.58, which is the closing price on the execution of Dr. Ruxin's Employment Agreement.
Following the termination of this Agreement by the Employer for any reason other
than Cause, Death, or the temporary or permanent disability of Employee, the Employee
shall be entitled to compensation and benefits for twenty-four (24) months following
the date of termination or the remainder of the contract, whichever is less. On December
16, 2005, the Company issued Dr. Ruxin 250 thousand options at an exercise price
of $1.15 per share, the fair market value on the date of grant, all of which vested
immediately.

Dr.
Ruxin may terminate his employment with the Company upon the occurrence of any of
the following events followed by written notice from the employee to the employer:
the sale by Employer of substantially all of its assets; a decision by Employer to
terminate its business and liquidate its assets; the merger or consolidation of Employer
with another entity or an agreement to such a merger or consolidation or any other
type of reorganization; employer makes a general assignment for the benefit of creditors,
files a voluntary bankruptcy petition, there are material reductions in Employee's
duties and responsibilities without his written consent or a demotion from the position
of CEO; termination by the Company of employee's employment with the Company for
any reason other than cause, or a five percent reduction in Employee's base compensation
(not including bonus).

On November
4, 2002, the Company entered into an Employment Agreement with Thomas F. Marcinek
for a period of five years commencing November 2, 2003 and ending November 2, 2008.
Mr. Marcinek's salary shall be reviewed on an annual basis and if his performance
is deemed satisfactory, he may receive a minimum 7.5% cost of living increase, plus
any other increase which may be determined from time to time at the discretion of
the Company's Board of Directors. In addition, Mr. Marcinek shall be eligible for
a performance increase. Following the termination of this Agreement by the Employer
for any reason other than Cause, Death, or the temporary or permanent disability
of Employee, the Employee shall be entitled to compensation and benefits for twenty-four
(24) months following the date of termination or the remainder of the contract, whichever
is less.

Pursuant
to Mr. Marcineks Employment Agreement, the Company authorized the issuance to Mr.
Marcinek of 500 thousand total incentive stock options and nonqualified stock options
to purchase an aggregate of 500 thousand shares of the Company's common stock. All
of these options are now exercisable. The stock option exercise price shall be $0.58,
which is the closing price on the execution of Mr. Marcinek's Employment Agreement.
On December 16, 2005, the Company issued Mr. Marcinek 250 thousand options at an
exercise price of $1.15 per share, the fair market value on the date of grant, all
of which vested immediately.

28

---

On October
31, 2002, the Company entered into an Employment Agreement with Mr. Willman for a
period commencing July 1, 2004 and ending November 1, 2008. Mr. Willmans salary
shall be reviewed on an annual basis and if his performance is deemed satisfactory,
his salary may be increased at least in an amount equal to the cost of living increase
for the prior year, providing that at least one other senior managements salary
(CEO or COO) is increased by a similar cost of living raise. In addition, Mr. Willman
shall be eligible for a performance increase. Pursuant to Mr. Willmans employment
agreement, the Company authorized the issuance to Mr. Willman of 150 thousand incentive
stock options to purchase an aggregate of 150 thousand shares of the Company's common
stock. All of these options are now exercisable. The stock option price shall be
$0.58, which was the closing price on October 31, 2002, the execution of Mr. Willmans
employment agreement. Mr. Willman may terminate his employment with the Company under
the same circumstances as set forth in Dr. Ruxins employment agreement. On December
16, 2005, the Company issued Mr. Willman 200 thousand options at an exercise price
of $1.15 per share, the fair market value on the date of grant, all of which vested
immediately.

Following
the termination of the agreement by the Company for any reason other than cause,
death, or the temporary or permanent disability, Mr. Willman shall be entitled to
compensation and benefits for nine (9) months following the date of termination or
the remainder of the agreement, whichever is less.

During
1999, the Board of Directors approved bonuses for Dr. Ruxin and Mr. Marcinek in amounts
of $50 thousand and $25 thousand respectively, payable when the Company has achieved
positive cash flow from operations and subject to the approval of the Board of Directors.
As of December 31, 2005, these bonuses had been approved by the Companys Board of
Directors for payment. The Company is required to make these bonus payments no later
than January 31, 2007.

During
2001, the Board of Directors authorized that $50 thousand be paid to Dr. Ruxin and
$25 thousand be paid to Mr. Marcinek of the accrued salaries due them. During 2001,
Dr. Ruxin received $27 thousand dollars and Mr. Marcinek received $14 thousand of
the accrued salaries due them. During 2002, Dr. Ruxin was paid approximately $23
thousand of the accrued salary increase due him and Mr. Marcinek was paid approximately
$11 thousand of the accrued salary due him. As of December 31, 2002, the Company
had paid Dr. Ruxin $50 thousand and Mr. Marcinek $25 thousand of the salary increases
due them.

On April
14, 2004, the Dr. Ruxin agreed to convert outstanding accrued vacation and accrued
wages as of February 29, 2004, with a book value of approximately $284 thousand into
approximately 675 thousand shares of Series BB Preferred Stock. The Series BB Preferred
Stock was converted into Common Stock in December 2004. See the accompanying financial
statements for further discussion.

ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS

# PRINCIPAL
SHAREHOLDERS

The following
table presents certain information regarding the beneficial ownership of all shares
of common stock at January 17, 2006 for each executive officer and director of our
company and for each person known to us who owns beneficially more than 5% of the
outstanding shares of our common stock. The percentage ownership shown in such table
is based upon the January 17, 2006 common shares outstanding at January 17, 2006
and ownership by these persons of options or warrants exercisable within 60 days
of such date. Also included is beneficial ownership on a fully diluted basis showing
all authorized, but unissued, shares of our common stock at January 17, 2006 as issued
and outstanding. Unless otherwise indicated, each person has sole voting and investment
power over such shares.

29

---

|                            | Amount and Nature of Beneficial Ownership(1) |                |  |            |     |   
|--------------------------- | -------------------------------------------- | -------------- |  | ---------- | --- | --
|
|Michael I. Ruxin, M.D       |                                              | Chairman of    |  | 932,148    |     | 4 
|12600 W. Colfax             |                                              | the Board and  | 
|Suite C-420                 |                                              | Chief          | 
|Lakewood, CO 80215          |                                              | Executive      | 
|                            |                                              | Officer and    | 
|                            |                                              | Director and   | 
|                            |                                              | Acting         | 
|                            |                                              | Principal      | 
|                            |                                              | Accounting and | 
|                            |                                              | Financial      | 
|                            |                                              | Officer        | 
|Thomas F. Marcinek          |                                              | President and  |  | 20,500     |     | 0 
|4925 Robert J. Mathews      |                                              | Chief          | 
|Parkway, Suite 100          |                                              | Operating      | 
|El Dorado Hills, CA 95762   |                                              | Officer        | 
|Kim Geist                   |                                              | Secretary      |  | -0-        |     | 0 
|12600 W. Colfax             |                                             
|Suite C-420                 |                                             
|Lakewood, CO 80215          |                                             
|Gerald F. Willman, Jr       |                                              | Director and   |  | 882,514    | (2) | 3 
|4925 Robert J. Mathews      |                                              | Senior Vice    | 
|Parkway, Suite 100          |                                              | President of   | 
|El Dorado Hills, CA 95762   |                                              | International  | 
|                            |                                              | Business       | 
|                            |                                              | Development    | 
|                            |                                              | for Wyndgate   | 
|                            |                                              | Technologies   | 
|All Directors and Executive |                                              |                |  | 1,835,162  |     | 8 
|Officers as a group (4)     |                                             
|persons)                    |                                             
|Magnetar Capital Master,    |                                              | None           |  | 2,286,000  |     | 9 
|Fund Ltd.                   |                                             
|1603 Orrington Avenue       |                                             
|13th Floor                  |                                             
|Evanston, IL 60201          |                                             
|Crestview Capital Master,   |                                              | None           |  | 2,032,000  |     | 8 
|LLC                         |                                             
|95 Revere Drive, Suite A    |                                             
|Northbrook, IL 60062        |                                             
|Shepherd Investments        |                                              | None           |  | 1,524,000  |     | 6 
|International, Ltd.         |                                             
|3600 South Lake Drive       |                                             
|St. Francis, WI 53235       |                                             
|Futuristic Image Builder    |                                              | None           |  | 3,050,000  |     | 13
|Ltd.                        |                                             
|34 Woodlands Industrial     |                                             
|Park E-1                    |                                             
|Singapore 757747            |                                             
|                            |                                              |                |  |            |     |   
|Totals                      |                                              |                |  | 10,727,162 |     | 46
|                            |                                              |                |  |            |     |   

30

---

|(1) |  | Applicable percentage of ownership is based on 22,989,471 shares of common stock outstanding
     as of January 17, 2006, together with securities exercisable or convertible into shares of common stock within 60 days of January 17, 2006, for each stockholder.
     Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power
     with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable
     or exercisable within 60 days of January17, 2006 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the
     percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Note that
     affiliates are subject to Rule 144 and Insider trading regulations  percentage computation for form purposes only.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes 346,481 shares owned by Lori J. Willman, the spouse of Mr. Willman.
|--- |  | ----------------------------------------------------------------------------

|(3) |  | Includes 30,000 shares underlying options owned by Lori J. Willman, the spouse of
     Mr. Willman.
|--- |  | ---------------------------------------------------------------------------------------------------

|(4) |  | Includes (i) 4,125,000 shares of common stock underlying warrants and 5,500,000 shares
     of common stock underlying 3,960 shares of Series A preferred stock.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Includes (i) 2,833,334 shares of common stock underlying warrants and 3,777,778 shares
     of common stock underlying 2,720 shares of Series A preferred stock.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | Includes (i) 2,125,000 shares of common stock underlying warrants and 2,833,333 shares
     of common stock underlying 2,040 shares of Series A preferred stock.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) |  | Includes 1,000,000 shares underlying warrants.
|--- |  | ----------------------------------------------

|(8) |  | In accordance with the terms of the Companys underlying agreements with this
     investor, Magnetar Capital Master Fund, Ltd, Crestview Capital Master LLC, and Shepherd Investments International, Ltd. have instructed the corporation not
     to convert Series A preferred stock or warrants if such conversion results in the investor owning more than 4.99% of the Companys common stock immediately
     after such conversion. Therefore, the beneficial ownership of these investors may significantly overstate these investors ability to convert their Series
     A preferred stock or exercise their warrants.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

---

ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Board
of Directors of the Company has adopted resolutions that no business transaction,
loan or advance will be made by the Company to any officer, director or holder of
more than 5% of the Companys common stock, or any affiliate thereof, unless
it has been established that a bona fide business purpose exists, that all future
transactions between the Company and its officers, directors, or principal shareholders,
or any affiliate of any of such person, must be approved or ratified by a majority
of the disinterested directors of the Company, and the terms of such transaction
must be no less favorable to the Company than could have been realized by the Company
in an arms-length transaction with an unaffiliated person. The Company believes that
all ongoing transactions with the Companys affiliates are on terms no less
favorable than could be obtained from unaffiliated third parties.

The Board
of Directors of the Company adopted a resolution in July 1996 that provides
that the areas of business in which the Company shall be interested for the purpose
of the doctrine of corporate opportunities shall be the business of information management
software products and services. Any business opportunity which falls within such
areas of interest must be brought to the attention of the Company for acceptance
or rejection prior to any officer or director of the Company taking advantage of
such opportunity. Any business opportunity outside such areas of interest may be
entered into by any officer or director of the Company without the officer or director
first offering the business opportunity to the Company.

As of December
16, 2005, in conjunction with the Companys repayment of its outstanding debt
and the redemption of the Series AA Convertible Preferred Stock, the Company terminated
its relationship with eVision and paid them $45 thousand for all accrued services
dating back to February of 2002. During 2005 and 2004, the Company incurred $76 thousand
and $229 thousand, respectively, in interest charges from debt originally financed
by eBanker, and subsequently transferred to GMCAL and then GMIL. eBanker, GMCAL,
and GMIL are entities that are controlled by China Credit. Global Med International
Holdings Limited (GMIHL) is a subsidiary of eBanker.

As of December 16,
2005, Dr. Ruxins personal guarantee of $650 thousand plus pro rata interest
of the outstanding loan balance with GMIL, originally associated with the November 19,
2000 eBanker Loan Agreement was terminated as a result of repayment of the debt and
all outstanding interest to GMIL. The personal guarantee was limited to certain of
Dr. Ruxins assets.

Pursuant
to a Stock Purchase Agreement, dated as of December 16, 2005 between the Company
and GMIL, the Companys outstanding debt with GMIL in the amount of $528,700,
the outstanding Series A Preferred Stock in the amount of $3.5 million, outstanding
common shares numbering 4.360 million and the outstanding warrants to purchase 11.186
million shares of common stock were paid off, redeemed, or repurchased, respectively,
for $8 million. In addition, the investors purchases 6.350 million common shares
from GMIL directly. In addition all of the six members of the Companys Board
of Directors nominated by GMIL resigned. As a result of the above, GMIL is no longer
a considered a related party of the Company.

As of December 31,
2002, the Companys Board of Directors had approved borrowings to a related
party totaling $370 thousand. During the year ended December 31, 2002, the Companys
Notes Receivable, related party balance, increased $290 thousand to a total of $370
thousand as a result of funds advanced in the form of promissory notes to this entity
controlled by a, now formerly, director of the Company, Jeff Busch. The notes bear
interest at 12% per year and mature in 2006. During the year ended December 31,
2001, the Company had lent $80 thousand to this entity. In addition, the CEO and
Chairman of Global Med, Michael I. Ruxin, was also on the board of directors of this
entity controlled by Jeff Busch. Dr. Ruxin resigned as a director of the related
entity effective December 12, 2002. Jeff Busch resigned his position as a director
of the Company and PeopleMed effective December 12, 2002. As a result, Jeff
Busch and the entity controlled by Jeff Busch are no longer related parties of the
Company. On March 10, 2003 the Companys Board of Directors approved and
subsequently funded additional borrowings to this entity controlled by Jeff Busch
in the amount of $30 thousand.

See also
ITEM 1 FINANCING AGREEMENTS WITH RELATED PARTIES.

32

---

ITEM
13. EXHIBITS

(a)
Current Reports on Form 8-K:

A Current
Report on Form 8-K was filed October 24, 2005 announcing the Companys financial
statement results for the period ended September 30, 2005.

A Current
Report on Form 8-K was filed December 19, 2006 announcing $2.1 million in one-time
expenses to be recognized during the fourth quarter of 2006.

A Current
Report on Form 8-K was filed December 20, 2006 announcing the sales of $9.975 million
in Series A Convertible Preferred Stock and the repurchase of certain financial instruments
from Global Meds parent company.

ITEM
14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following
table presents fees for professional services rendered by Ehrhardt Keefe Steiner
& Hottman P.C. for the audit of the Companys consolidated financial statements
as of and for the years ended December 31, 2005 and 2004 and fees billed for other
services rendered by Ehrhardt Keefe Steiner & Hottman PC during those periods.

|                       | Years Ended |        
|---------------------- | ----------- | -------
|
|Audit Fees             |             | $42,000
|Audit related fees (1) |             | $81,945
|Tax Fees (2)           |             | $20,800

|(1) |  | Audit related fees are for assurance related services. The primary component of these
     fees was research activity with respect to certain accounting issues in 2005 and 2004. In 2005, these fees related primarily to quarterly reviews, work on the
     Companys form S-1 filings, certain research associated with the Companys issuance of Series A Convertible Preferred stock. In 2004, these fees primarily
     related to quarterly filings, and S-1 and S-8 filings.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Tax fees in 2005 primarily related to advice and assistance with respect to tax compliance
     matters the Companys 2004 tax returns.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

33

---

SIGNATURES

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

| | GLOBAL MED TECHNOLOGIES, INC.A Colorado Corporation
| | ---------------------------------------------------

Date:  March
30, 2006

| | By: /s/ Michael I. Ruxin      Michael I. Ruxin, Chairman of the Board      and
     Chief Executive Officer and Director
| | ------------------------------------------------------------------------------------------------------------------------

Pursuant
to the requirements of the Securities Exchange Act of 1934, the following persons
on behalf of the Registrant and in the capacities and on the dates indicated have
signed this report below.

Date:  March
30, 2006

| | By: /s/ Michael I. Ruxin      Michael I. Ruxin, Chairman of the Board      and
     Chief Executive Officer and Director      and Acting Principal Accounting and Financial Officer
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:  March
30, 2006

| | By: /s/ Thomas F. Marcinek      Thomas F. Marcinek, President and Chief      Operating
     Officer
| | ---------------------------------------------------------------------------------------------------

Date:  March
30, 2006

| | By: /s/ Gerald F. Willman, Jr.      Gerald F. Willman, Jr., Director and Senior Vice      President
     of International Business Development      for Wyndgate Technologies
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

34

---

# UNITED
STATES SECURITIES AND EXCHANGE COMMISSION

# Washington,
D.C. 20549

# EXHIBITS

# TO

# FORM
10-KSB

# GLOBAL
MED TECHNOLOGIES, INC.

# and
SUBSIDIARY

# EXHIBIT
INDEX

Exhibit     Number                          
               
                
               
             DESCRIPTION

|3.1 |  | Amended and Restated Articles of Incorporation, filed June 2, 1995 (1)
|--- |  | ----------------------------------------------------------------------

|3.2 |  | Articles of Amendment to the Articles of Incorporation, filed March 5, 1996 (1)
|--- |  | -------------------------------------------------------------------------------

|3.3 |  | Articles of Amendment to the Articles of Incorporation, filed May 30, 1996 (1)
|--- |  | ------------------------------------------------------------------------------

|3.4 |  | Bylaws, as amended (1)
|--- |  | ----------------------

|3.5 |  | Amended and Restated Articles of Incorporation, dated April 16, 2001 (10)
|--- |  | -------------------------------------------------------------------------

|4.1 |  | Form of Representative's Warrants to Purchase Units (1)
|--- |  | -------------------------------------------------------

|4.2 |  | Form of Class A common stock Purchase Warrant Certificate (1)
|--- |  | -------------------------------------------------------------

|4.3 |  | Specimen copy of stock certificate for common stock, $.01 par value (1)
|--- |  | -----------------------------------------------------------------------

|10.1 |  | Lease Agreement, dated April 15, 1992, and Lease Addendums, dated April 8, 1992 and
     October 21, 1994 (1)
|---- |  | -------------------------------------------------------------------------------------------------------------

|10.2 |  | Lease Agreement, dated July 19, 1995, and Lease Addendum (1)
|---- |  | ------------------------------------------------------------

|10.3 |  | Employment Agreement, dated May 24, 1995, between the Company and Michael I. Ruxin,
     as amended July 8, 1995, August 1, 1995, September 21, 1995 and July 15, 1996 (1)
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Employment Agreement, dated May 24, 1995, between the Company and William J. Collard,
     as amended July 22, 1996 (1)
|---- |  | -----------------------------------------------------------------------------------------------------------------------

|10.5 |  | Employment Agreement, dated June 28, 1995, between the Company and Joseph F. Dudziak
     (1)
|---- |  | ---------------------------------------------------------------------------------------------

|10.6 |  | Employment Agreement, dated February 8, 1996, between the Company and L.E. "Gene"
     Mundt (1)
|---- |  | ------------------------------------------------------------------------------------------------

|10.7 |  | Amended and Restated Stock Option Plan, as amended on May 5, 1995, May 29, 1996 and
     December 11, 1996 (1)
|---- |  | --------------------------------------------------------------------------------------------------------------

|10.7 | (A) | Amendment dated March 31, 1997, to the Amended and Restated Stock Option Plan. (2)
|---- | --- | ----------------------------------------------------------------------------------

|10.8 |  | Voting Agreement, dated May 23, 1995 (1)
|---- |  | ----------------------------------------

|10.9 |  | Shareholders Agreement dated August 16, 1991, as amended on May 5, 1995 September
     1996, June 24, 1996, July 25, 1996, Consent and Waiver, dated July 12, 1996, and Rescission of Shareholder's Agreement, dated June 22, 1996 (1)
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

35

---

|10.10 |  | Agreement dated April 8, 1996, between the Company and LMU & Company, and Stock
     Purchase Option, dated April 8, 1996 (1)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Form of Drug Testing Service Contract (1)
|----- |  | -----------------------------------------

|10.12 |  | Form of License Agreements (1)
|----- |  | ------------------------------

|10.13 |  | Warrant Agreement, dated February 11, 1997, between Global Med and American Securities
     Transfer & Trust, Inc. (1)
|----- |  | ----------------------------------------------------------------------------------------------------------------------

|10.14 |  | Exclusivity and Software Development Agreement, dated November 14, 1996, between and
     among Global Med and Ortho Diagnostic Systems Inc. (1)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | Amendment, dated November 14, 1996, to Agreement dated April 8, 1996, between the
     Company and LMU & Company, and Stock Purchase Option, dated April 8, 1996 (1)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Amendment, dated January 14, 1997, to Agreement dated April 8, 1996, between the Company
     and LMU & Company, and Stock Purchase Option, dated April 8, 1996 (1)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Interim Management Agreement, dated July 7, 1997, between the Company and National
     Medical Review Offices, Inc. (1)
|----- |  | ------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Asset Purchase Agreement, dated August 18, 1997, between the Company and National
     Medical Review Offices, Inc. (1)
|----- |  | -----------------------------------------------------------------------------------------------------------------------

|10.19 |  | Third Amendment to Exclusivity and Software Development Agreement, dated September
     17, 1997 between Global Med and Ortho Diagnostic Systems, Inc. (1)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Second Amended and Restated Stock Option Plan, as amended October 3, 1997 and December
     2, 1997 (3)
|----- |  | -------------------------------------------------------------------------------------------------------

|10.21 |  | Fourth Amendment to Exclusivity and Software Development Agreement, dated December
     22, 1997 between Global Med and Ortho Diagnostic Systems, Inc. (4)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | Development Agreement, dated July 12, 1996 between Global Med and The Institute for
     Transfusion Medicine, dated July 12, 1996, as amended January 12, 1998 (4)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | Loan Commitment, dated April 14, 1998, between Heng Fung Finance Company Limited and
     the Company, as amended on April 16, 1998 (4)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | Loan Commitment, dated April 14, 1998, between Fronteer Capital, Inc. and the Company,
     as amended on April 16, 1998 (4)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------

|10.25 |  | Amendment to Loan Commitment, dated April 16, 1998, between Heng Fung Finance Company
     Limited and the Company (4)
|----- |  | ----------------------------------------------------------------------------------------------------------------------

|10.26 |  | Amendment to Loan Commitment, dated April 16, 1998, between Fronteer Capital, Inc.
     and the Company (4)
|----- |  | -----------------------------------------------------------------------------------------------------------

|10.27 |  | Second Amendment to Loan Commitments, dated April 20, 1998 between the Company, Heng
     Fung Finance Company Limited and Fronteer Capital, Inc. (4)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | Employment Agreement, dated August 1, 1998, between the Company and Michael I. Ruxin
     (5)
|----- |  | ---------------------------------------------------------------------------------------------

36

---

|10.29 |  | Employment Agreement, dated August 1, 1998, between the Company and Alan K. Geddes
     (5)
|----- |  | -------------------------------------------------------------------------------------------

|10.31 |  | Consultancy Agreement, dated August 1, 1998, between the Company and Jeffrey M. Busch,
     Esq. (5)
|----- |  | ----------------------------------------------------------------------------------------------------

|10.32 |  | Warrant to Purchase Common Shares dated April 20, 1998, issued by the Company to Heng
     Fung Finance Company Limited (5)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Warrant to Purchase Common Shares dated April 20, 1998, issued by the Company to Fronteer
     Capital, Inc.(5)
|----- |  | ---------------------------------------------------------------------------------------------------------------

|10.34 |  | Loan Agreement, dated August 12, 1998, between the Company and Heng Fung Finance Company
     Limited (5)
|----- |  | ---------------------------------------------------------------------------------------------------------

|10.35 |  | Loan Agreement, dated August 12, 1998, between the Company and Fronteer Capital, Inc.
     (5)
|----- |  | ----------------------------------------------------------------------------------------------

|10.36 |  | Personal Guaranty, dated August 12, 1998, by Michael I. Ruxin, M.D. as Guarantor,
     the Company as Debtor and Fronteer Capital, Inc. as Beneficiary (5)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | Assignment, Assumption and Consent Agreement, dated September 28, 1998, by the Company,
     Michael I. Ruxin, M.D., Fronteer Capital Inc. and Fronteer Development Finance, Inc. (5)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Loan and Warrant Purchase and Sale Agreement, dated October 7, 1998, between the Company,
     Heng Fung Finance Company Limited and Fronteer Development Finance (5)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | Promissory Note, dated October 30, 1998, by the Company as Maker and Fronteer Development
     Finance as the Holder (5)
|----- |  | ------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Warrant to Purchase Common Shares, dated October 30, 1998, issued by the Company to
     Fronteer Development Finance Inc. (5)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | Promissory Note, dated October 26, 1998, by the Company as Maker and Fronteer Development
     Finance, Inc. as the Holder (5)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | Promissory Note, dated October 26, 1998, by the Company as the Maker and Heng Fung
     Finance Company Limited as the Holder (5)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Warrant to Purchase Common Shares, dated October 26, 1998, issued by the Company to
     Fronteer Development Finance, Inc. (5)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------

|10.44 |  | Warrant to Purchase Common Shares, dated October 26, 1998, issued by the Company to
     Heng Fung Finance Company Limited (5)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------

|10.45 |  | Employment Agreement, dated February 1, 1999, between the Company and James Flynt
     (6)
|----- |  | ------------------------------------------------------------------------------------------

|10.46 |  | Bridge Loan Agreement, dated March 18, 1999, between the Company and eBanker USA.Com,
     Inc. (6)
|----- |  | ---------------------------------------------------------------------------------------------------

|10.47 |  | First Amendment to Loan Agreement among the Company, Michael I. Ruxin, M.D., eBanker
     USA.Com, Inc. and Heng Fung Finance Company Limited, dated March 18, 1999 (6)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.48 |  | Office Lease between the Company and Golden Hill Partnership, dated January 11, 1999
     (6)
|----- |  | ---------------------------------------------------------------------------------------------

|10.49 |  | Standard Industrial/Commercial Multi-Tenant Lease between the Company and James W.
     Cameron, Jr., dated February 8, 1999 (6)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------

|10.50 |  | Settlement Agreement and Release of All Claims between the Company and William J.
     Collard and Hollis Gailey, dated December 22, 1998 (6)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

37

---

|10.51 |  | Bridge Loan Agreement, dated April 13, 1999, between the Company and Heng Fung Finance
     Company Limited (7)
|----- |  | ---------------------------------------------------------------------------------------------------------------

|10.52 |  | Revised Bridge Loan Agreement, dated May 7, 1999, between the Company and eBanker
     USA.com, Inc. (7)
|----- |  | --------------------------------------------------------------------------------------------------------

|10.53 |  | Loan Agreement dated April 12, 2000 between the Company and eBanker (8)
|----- |  | -----------------------------------------------------------------------

|10.54 |  | Loan Agreement dated April 14, 2000 between the Company and eBanker (8)
|----- |  | -----------------------------------------------------------------------

|10.55 |  | Loan extension dated April 14, 2000 between the Company and eBanker (8)
|----- |  | -----------------------------------------------------------------------

|10.56 |  | Loan Agreement dated November 19, 2000 between the Company and eBanker (9)
|----- |  | --------------------------------------------------------------------------

|10.57 |  | Interest payment option dated March 21, 2001 between the Company and eBanker (9)
|----- |  | --------------------------------------------------------------------------------

|10.58 |  | 2001 Stock Option Plan (11)
|----- |  | ---------------------------

|10.59 |  | Amended and Restated 1997 Stock Compensation Plan (12)
|----- |  | ------------------------------------------------------

|10.60 |  | Employment Agreement, executed October 31, 2002, between the Company and Gerald F.
     Willman Jr, effective July 1, 2004 and ending November 1, 2008 (13)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|10.61 |  | Employment Agreement, executed November 1, 2002, between the Company and Michael I.
     Ruxin, effective August 1, 2003 and ending August 1, 2008 (13)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

|10.62 |  | Employment Agreement, executed October 31, 2002, between the Company and Tim Pellegrini,
     effective April 1, 2004 and ending November 1, 2008 (13)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|10.63 |  | Employment Agreement, executed October 31, 2002, between the Company and Miklos Csore,
     effective November 1, 2003 and ending November 1, 2008 (13)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

|10.64 |  | Employment Agreement, executed November 4, 2002, between the Company and Thomas F.
     Marcinek, effective November 2, 2003 and ending November 2, 2008 (13)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.65 |  | Termination Agreement, executed December 19, 2002, between the Company and a significant
     customer. (14)
|----- |  | ------------------------------------------------------------------------------------------------------------

|10.66 |  | Amendment to the Loan Restructuring and Restatement Agreement. (14)
|----- |  | -------------------------------------------------------------------

|10.67 |  | Fourth Amendment to the Loan Restructuring and Restatement Agreement.
|----- |  | ---------------------------------------------------------------------

|10.68 |  | Global Med Technologies, Inc. 2003 Stock Option Plan.
|----- |  | -----------------------------------------------------

|10.69 |  | Articles of Amendment to Articles of Incorporation - Preferred Stock (16)
|----- |  | -------------------------------------------------------------------------

|10.70 |  | Common Stock Purchase Agreement, dated October 8, 2004 by and between the Company
     and Fusion Capital Fund II, LLC (17)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------

|10.71 |  | Form of Company Resolution Approving the Registration Statement dated September 28,
     2004 (17)
|----- |  | --------------------------------------------------------------------------------------------------

|10.72 |  | Code of Ethics and Conduct for Global Med Technologies, Inc. (18)
|----- |  | -----------------------------------------------------------------

|10.73 |  | Value Ventures Agreement (18)
|----- |  | -----------------------------

38

---

|10.74 |  | Termination Agreement, dated March 15, 2005 by and between the Company and Fusion
     Capital Fund II, LLC (19)
|----- |  | ----------------------------------------------------------------------------------------------------------------

|10.75 |  | Common Stock Purchase Agreement, dated March 16, 2005 by and between the Company and
     Fusion Capital Fund II, LLC (19)
|----- |  | --------------------------------------------------------------------------------------------------------------------------

|10.76 |  | Registration Rights Agreement, dated March 16, 2005 by and between the Company and
     Fusion Capital Fund II, LLC (19)
|----- |  | ------------------------------------------------------------------------------------------------------------------------

|10.78 |  | Registration Rights Agreement between the registrant and the purchasers dated December
     16, 2005. (20)
|----- |  | ----------------------------------------------------------------------------------------------------------

|10.79 |  | Stock Purchase Agreement between the Company and GMIL dated December 16, 2005. (20)
|----- |  | -----------------------------------------------------------------------------------

|10.80 |  | Certificate of Designation of Preferences Rights and Limitations of Series A Convertible
     Preferred Stock between the registrant and the purchasers dated December 16, 2005. (20)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.81 |  | Common Stock Purchase Warrant between the Company and the purchasers dated December
     16, 2005. (20)
|----- |  | -------------------------------------------------------------------------------------------------------

|10.82 |  | Private Placement Agreement between the Company and purchasers dated December 16,
     2005. (20)
|----- |  | -------------------------------------------------------------------------------------------------

|10.83 |  | Right of First Notice Agreement between Futuristic Image Builder, Ltd., the purchasers
     and the Company dated December 16, 2005. (20)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------

|10.84 |  | Right of First Notice Agreement between the shareholders, the purchasers and the Company
     dated December 16, 2005. (20)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------

|10.85 |  | Private Stock Purchase and Escrow Agreement between the investors, GMIL, and the Company
     dated December 16, 2005. (20)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------

|10.86 |  | Termination Agreement between Fusion Capital Fund II LLC and the Company of the Common
     Stock Purchase Agreement dated December 16, 2005. (20)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

|10.87 |  | First
     Amendment to Securities Purchase Agreement
|----- |  | -----------------------------------------------------

|10.88 |  | Amended and
      Restated  Certificate  of  Designation  of  Preferences,  Rights and  Limitations of the Series A
      Convertible Preferred Stock
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|10.89 |  | Amended and Restated Common Stock Purchase Warrant
|----- |  | --------------------------------------------------

|10.90 |  | First Amendment to the Registration Rights Agreement
|----- |  | ----------------------------------------------------

|21 |  | List of Global Med Technologies, Inc. subsidiaries.
|-- |  | ---------------------------------------------------

|23 |  | Consent of Independent Registered Public Accounting Firm - Ehrhardt Keefe Steiner & Hottman PC
|-- |  | ----------------------------------------------------------------------------------------------

|31.1 |  | Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a- 14(a)
     or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification of the Acting Chief Financial Officer pursuant to Rule 13a- 14(a) or
     Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certification of the Chairman and Chief Executive Officer pursuant to U.S.C. Section
     1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 |  | Certification of Acting Chief Financial Officer pursuant to U.S.C. Section 1350, as
     adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|99 |  | Proxy and Right of First Refusal Agreement, dated November 14, 1996, between and among
     Ortho Diagnostic Systems Inc. and Michael I. Ruxin, William J. Collard, Gerald F. Willman, Jr., Lori J. Willman, Timothy Pellegrini and Gordon Segal (1)
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | The documents identified are incorporated by reference from the Company's Registration
     Statement on Form SB-2 (No. 333-11723).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Incorporated by reference from the Company's Registration Statement on Form S-8 (No.
     333-28155).
|--- |  | -----------------------------------------------------------------------------------------------------

|(3) |  | Incorporated by reference from the Company's Registration Statement on Form S-8 (No.
     333-45031).
|--- |  | -----------------------------------------------------------------------------------------------------

|(4) |  | Incorporated by reference from the Company's Annual Report on Form 10-KSB for the
     year ended December 31, 1997.
|--- |  | --------------------------------------------------------------------------------------------------------------------

|(5) |  | Incorporated by reference from the Company's Registration Statement on Form SB-2 (No.
     333-52761).
|--- |  | ------------------------------------------------------------------------------------------------------

39

---

|(6) |  | Incorporated by reference from the Company's Annual Report on Form 10-KSB for the
     year ended December 31, 1998.
|--- |  | --------------------------------------------------------------------------------------------------------------------

|(7) |  | Incorporated by reference from the Company's Form 10-QSB for the quarterly period
     ended March 31, 1999.
|--- |  | ------------------------------------------------------------------------------------------------------------

|(8) |  | Incorporated by reference from the Company's Form 10-QSB for the quarterly period
     ended March 31, 2000.
|--- |  | ------------------------------------------------------------------------------------------------------------

|(9) |  | Incorporated by reference from the Company's Form 10-Q for the quarterly period ended
     March 31, 2001.
|--- |  | ----------------------------------------------------------------------------------------------------------

|(10) |  | Incorporated by reference from the Company's definitive Proxy Statement on Schedule
     14A dated March 15, 2001.
|---- |  | ------------------------------------------------------------------------------------------------------------------

|(11) |  | Incorporated by reference from the Company's Registration Statement on Form S-8 (No.
     333-60674)
|---- |  | ----------------------------------------------------------------------------------------------------

|(12) |  | Incorporated by reference from the Company's Registration Statement on Form S-8 (No.
     333-60672)
|---- |  | ----------------------------------------------------------------------------------------------------

|(13) |  | Incorporated by reference from the Companys Form 10-Q for the quarterly period ended
     September 30, 2002.
|---- |  | --------------------------------------------------------------------------------------------------------------

|(14) |  | Incorporated by reference from the Companys Form 10-K for the year ended December
     31, 2002.
|---- |  | -------------------------------------------------------------------------------------------------

|(15) |  | Incorporated by reference from the Companys Form 10-K for the year ended December
     31, 2003.
|---- |  | -------------------------------------------------------------------------------------------------

|(16) |  | Incorporated by reference from the Company's Form 10-Q for the quarterly period ended
     June 30, 2004.
|---- |  | ---------------------------------------------------------------------------------------------------------

|(17) |  | Incorporated by reference from the Company's Form 8-K filed on October 12, 2004.
|---- |  | --------------------------------------------------------------------------------

|(18) |  | Incorporated by reference from the Company's Form S-1 (No. 333-121030).
|---- |  | -----------------------------------------------------------------------

|(19) |  | Incorporated by reference from the Company's Form 8-K filed on March 16, 2005.
|---- |  | ------------------------------------------------------------------------------

|(20) |  | Incorporated by reference from the Company's Form 8-K filed on December 20, 2005.
|---- |  | ---------------------------------------------------------------------------------

40

---