U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE 
     ACT OF 1934

                  For The Fiscal Year Ended: December 31, 1998

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.
                  --------------------------------------------
                 (Name of small business issuer 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)

Issuer'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
                     --------------------------------------
                     Class A Common Stock Purchase Warrants
                     --------------------------------------

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  pursuant to Item 405 of
Regulation  S-B  contained  herein,  and will not be  contained,  to the best of
Registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year: $4,787,000

Aggregate  market value of voting stock held by  non-affiliates  as of March 15,
1999: $11,583,816

Shares  of Common  Stock,  $.01 par  value,  outstanding  as of March 15,  1999:
8,881,879

Documents incorporated by reference:

    Exhibits to Issuer's Registration Statement on Form SB-2, No. 333-52761.



<PAGE>



                                TABLE OF CONTENTS

                                     PART I

Item                                                                        Page

     1.       Description of Business                                          3

     2.       Description of Property                                          9

     3.       Legal Proceedings                                                9

     4.       Submission of Matters to a Vote of Security Holders             10

                                     PART II

     5.       Market for Common Equity and Related Stockholder Matters        10

     6.       Management's Discussion and Analysis                            11

     7.       Financial Statements                                            16

     8.       Changes In and Disagreements with Accountants on Accounting and 
              Financial Disclosure                                            18

                                    PART III

     9.       Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16 (a) of the Exchange Act              19

     10.      Executive Compensation                                          23

     11.      Security Ownership of Certain Beneficial Owners and Management  31

     12.      Certain Relationships and Related Transactions                  36

                                     PART IV

     13.  Exhibits and Reports on Form 8-K                                    37

     14.  Signatures                                                          38





                                        2

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                              Business Development

Global Med  Technologies,  Inc. (the Company or Global) was organized  under the
laws of the State of Colorado  in  December  1989.  The  Company  completed  its
initial public  offering of securities in the first quarter of 1997,  from which
it received net proceeds of approximately  $8,200,000 from the sale of 1,456,988
Units,  each of which  consisted  of two shares of Common  Stock and one Class A
Common Stock Purchase Warrant (the Class A Warrants).

Formerly  known as National MRO,  Inc.,  which was founded in 1989,  the Company
changed its name to Global Data  Technologies,  Inc. in 1995, in connection with
the merger of National MRO, Inc. and The Wyndgate Group, Ltd.  (Wyndgate) in May
1995. The Company changed its name again in May 1996 to Global Med Technologies,
Inc.

Wyndgate operates as a division of Global,  and designs,  develops,  markets and
supports  information  management software products for blood banks,  hospitals,
centralized transfusion centers and other healthcare related facilities.

The National MRO, Inc. business operated as the DataMed International  (DataMed)
division of the Company, and managed and marketed a variety of services that are
designed  to  assist  companies  with  administering   substance  abuse  testing
programs.  Effective  December  15,  1997,  the Company  sold  DataMed for gross
proceeds of $1,200,000  and the  assumption of certain  liabilities  and capital
leases (the DataMed Sale).

FINANCING AGREEMENTS - 1999

In March 1999, the Company entered into agreements for a comprehensive financing
package that  includes:  (1) an $8,000,000  preferred  stock  private  placement
through  American  Fronteer  Financial   Corporation   (AFFC),  a  wholly  owned
subsidiary  of  Fronteer  Financial  Holdings  Ltd.  (Fronteer  Financial);  (2)
exercise of 2,000,000  warrants at $0.25 per warrant;  (3) extending the balance
on the line of credit with eBanker USA.Com,  Inc.  (eBanker),  formerly Fronteer
Development  Finance,  Inc., a majority owned subsidiary of Fronteer  Financial,
until April 15, 2000,  with a change in the default  conversion  rate from $0.05
per share contained in the original loan agreement to $0.25 per share; and (4) a
$750,000  bridge  loan,  which  bears  interest  at 12% per  annum  (March  1999
Financing Agreements).

The Company executed a letter agreement with AFFC for an $8,000,000  convertible
preferred  stock private  placement.  The  convertible  preferred  stock will be
convertible into common stock at $2.50 per share any time after twelve months of
the closing date of the sale of the stock.  There will be a forced conversion of
the  convertible  preferred  stock into  common  stock if the closing bid market
price of the common stock is at $4.00 or more for at least 15 business days. The
convertible  preferred stock will carry a 15% coupon paid  semi-annually  in the
Company's common stock.

Heng Fung  Finance  Company,  Ltd.  (Heng  Fung  Finance)  is in the  process of
surrendering  the  promissory  note in the amount of $500,000 in exercise of the
warrants  to  acquire  2,000,000  shares of common  stock of the  Company.  This
transaction is expected to be completed in April 1999.

The  remaining  $2,650,000  loan from eBanker  will be extended  until April 15,
2000, with the previous  conversion  price of $0.05 per share increased to $0.25
per share. In consideration for the extension, the Company paid a 2% fee to AFFC
of $53,000, payable in shares of the Company's common stock.


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The $750,000 bridge loan bears interest at 12% and is convertible 6 months after
the loan is drawn  into  shares of common  stock of the  Company  at the  15-day
average  closing bid price  prior to the date of  closing.  The loan has not yet
been drawn.

In April 1999, the Company  entered into an agreement with Heng Fung Finance for
a bridge loan in the amount of $2,000,000 (April 1999 Financing Agreement).  The
agreement  provides a line of credit,  with  interest  at 12% per annum  payable
monthly,  due April 12,  2000.  As  consideration  for the line of  credit,  the
Company agreed to pay a fee equal to 5% of the total line of credit in shares of
common stock of the  Company.  The line of credit will be  convertible,  at Heng
Fung's option, into shares of the Company's common stock at a price based on the
average  closing  bid  price of the  Company's  common  stock for a period of 15
business days prior to April 13, 1999.

With the above financing packages,  the Company and AFFC have mutually agreed to
withdraw the $20,000,000 bond offering, which was previously announced.

FINANCING AGREEMENTS - 1998

On April 14, 1998,  Fronteer Capital,  Inc. (Fronteer  Capital),  a wholly owned
subsidiary of Fronteer Financial,  and Heng Fung Finance committed to provide to
the Company lines of credit for up to $1,650,000 and  $1,500,000,  respectively,
for a total  combined loan  commitment of $3,150,000  over the following  twelve
months (April 1998 Financing Agreements).  The loans bear interest calculated at
a rate of 12% per annum, and were originally due on April 15, 1999 but have been
extended to April 15, 2000.

Pursuant to the loan commitment  provided by Heng Fung Finance,  the Company had
agreed that the Company's board of directors would not exceed nine and Heng Fung
Finance had the option to cancel all the Company's then existing  management and
employee contracts. Heng Fung Finance has appointed five members to the board of
directors  of  the  Company.  Since  completion  of  the  April  1998  Financing
Agreements and the appointment of the additional directors by Heng Fung Finance,
new employment contracts, approved by the Board, have been entered into with Dr.
Michael I. Ruxin,  Chairman and Chief Executive Officer,  and Messrs.  Thomas F.
Marcinek,  President  and Chief  Operating  Officer,  and Alan K.  Geddes,  Vice
President and Chief Financial Officer.

For issuing the  commitment,  Heng Fung  Finance  received  warrants to purchase
6,000,000  shares of the Company's common stock. The warrants are exercisable at
$0.25 per share for up to 10 years and the Company  registered  the Warrants and
the  underlying  shares for resale under the  Securities Act of 1933, as amended
(1933 Act). Using the  Black-Scholes  model for estimating the fair value of the
warrants to purchase 6,000,000 shares of the Company's common stock, the Company
recorded  $5,340,000  as deferred  financing  costs as of April 14, 1998,  to be
amortized  straight-line  over the term of the loan. For issuing its commitment,
Fronteer Capital received warrants to purchase 1,000,000 shares of the Company's
common stock.  When the line of credit was drawn upon in October 1998,  Fronteer
Capital  received  additional  warrants  to  purchase  5,000,000  shares  of the
Company's  common stock.  The warrants are exercisable at $0.25 per share for up
to 10 years and the Company  registered the warrants and the  underlying  shares
for resale under the 1933 Act. Using the Black-Scholes  model for estimating the
fair value of the warrants to purchase  1,000,000 shares of the Company's common
stock, the Company recorded $890,000 as deferred financing costs as of April 14,
1998,  to be  amortized  straight-line  over the  term of the  loan.  Using  the
Black-Scholes  model for  estimating  the fair value of the warrants to purchase
5,000,000  shares  of the  Company's  common  stock,  the  Company  recorded  an
additional  $4,450,000 as deferred financing costs as of October 30, 1998, to be
amortized  straight-line  over the  remaining  term of the loan.  The  Company's
Registration Statement which included the 12,000,000 warrants and the underlying
shares became effective February 16, 1999.

The loan  commitment  provided by Fronteer  Capital has  substantially  the same
terms and conditions as the loan commitment provided by Heng Fung Finance except
that, if Heng Fung Finance had not appointed directors to the Company's board of
directors,  Fronteer Capital had the right to appoint a maximum of three members
to the board of  directors  of the  Company.  Dr.  Michael I.  Ruxin,  the Chief


                                       4
<PAGE>



Executive  Officer  of the  Company,  has  agreed to  personally  guarantee  the
repayment of $1,650,000 of the Fronteer Capital line of credit. The guarantee is
limited to certain of Dr. Ruxin's assets.

If the Company  defaults on the repayment of any amount  borrowed by the Company
pursuant to the Heng Fung Finance  commitment,  all original existing members of
the board of  directors of the Company will have to resign and Heng Fung Finance
will have the right to appoint  all new members to the board of  directors;  and
all employment  contracts of the management and officers of the Company  entered
into prior to the financing  agreements will be invalid  immediately,  and their
employment will be subject to reconfirmation by Heng Fung Finance.  Prior to the
Financing  Agreements executed in March 1999, Heng Fung Finance had the right to
convert the outstanding  amount of the loan into shares of the Company's  common
stock at a  conversion  price of $0.05  per  share.  The  March  1999  Financing
Agreements  increased the  conversion  price to $0.25 per share.  If there is no
default on the repayment to Heng Fung Finance, or if there is a default and Heng
Fung Finance does not exercise its rights on default, Fronteer Capital will have
the same rights on default on the repayment of any amounts borrowed  pursuant to
the Fronteer Capital commitment as Heng Fung Finance as are specified above.

On September 11, 1998,  Fronteer Capital entered into an agreement with eBanker,
whereby  Fronteer  Capital  agreed  to  assign  to  eBanker  its  rights  to and
obligations  in the loan  commitment to the Company.  On September 28, 1998, the
Company approved the Assignment, Assumption and Consent Agreement by and between
the  Company,  Dr.  Ruxin,  Fronteer  Capital  and  eBanker  whereby the Company
consented to the assignment by Fronteer Capital to eBanker of all of the rights,
duties and  obligations  under the  Fronteer  Capital  line of credit  agreement
described above.

In October 1998, the Company,  Heng Fung Finance and eBanker entered into a Loan
and Warrant  Purchase and Sale  Agreement  whereby Heng Fung Finance  sold,  and
eBanker  purchased,  $1,000,000  of the Heng Fung  Finance  loan and warrants to
purchase  4,000,000  shares of the Company's  common stock.  Heng Fung agreed to
return the original  notes and its warrant to purchase  6,000,000  shares of the
Company's  common  stock to the  Company,  and the Company has issued a $500,000
promissory  note and a warrant to  purchase  2,000,000  shares of the  Company's
common stock to Heng Fung Finance and a $1,000,000 promissory note and a warrant
to purchase 4,000,000 shares of the Company's common stock to eBanker.

As of December  31,  1998,  the Company  owed  $500,000 to Heng Fung Finance and
$2,200,000  to  eBanker.  On March 19,  1999,  the  Company  drew the  remaining
$450,000  available on the line of credit with eBanker  thereby  owing eBanker a
total of $2,650,000.

The Company  agreed to pay a cash  finder's  fee of 9% of the  Fronteer  Line of
Credit to AFFC,  payable as the eBanker line of credit is drawn.  As of December
31, 1998, the Company had paid AFFC $108,000 under the agreement. In March 1999,
in  consideration  for the extension of the eBanker line of credit for one year,
the Company paid AFFC a fee of 2% or $53,000,  payable in share of the Company's
common stock.

                             Business of Registrant

Principal Products and Their Markets

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  are  derived  from the
licensing of software, the provision of consulting and other value added support
services and the resale of hardware  and  software  obtained  from  vendors.  On
December 15, 1997, the Company sold its DataMed International division (DataMed)
which was in the business of substance abuse testing management services.

Founded in 1984,  Wyndgate  initially  developed  a Student  Information  System
(SIS),  an integrated  software  package for colleges and  universities to track
student  information.  Pursuant  to an  agreement  with eight  California  blood
centers (the Royalty  Group),  Wyndgate  began  development  of a blood tracking
system called SAFETRACE(R) 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 FDA for the collection and management of blood and blood
products.

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<PAGE>


The Company continues to concentrate its development  efforts on enhancements to
its existing  SAFETRACE(R)  blood bank product and on  development  of SAFETRACE
TX(TM),  Wyndgate's  transfusion  management information system software product
completed   in  1998.   Both   products  are  approved  by  the  Food  and  Drug
Administration  (FDA) for sale in the United States.  Wyndgate's  development of
SAFETRACE TX(TM) began in 1996.

Status of SAFETRACE TX

Wyndgate has  completed  the  development  of SAFETRACE  TX(TM),  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(TM) provides  electronic  cross-matching
capabilities to help insure blood compatibility with patient-recipients and will
track, inventory,  bill and document 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.  Management  expects  SAFETRACE  TX(TM) will
complement  SAFETRACE(R)  as the  combined  SAFETRACE  TX(TM)  and  SAFETRACE(R)
software  system  will be able to  integrate  hospitals  with blood  centers and
provide a  "vein-to-vein"(TM)  tracking of the blood  supply.  SAFETRACE  TX(TM)
entered beta testing on April 6, 1998. Upon completion of beta testing, a 510(k)
submission of SAFETRACE TX(TM) was made to the FDA.  SAFETRACE TX(TM) could only
be marketed by the Company outside the United States until FDA 510(k)  clearance
was received. FDA clearance was received January 29, 1999.

Competition

Currently,  Wyndgate is aware of four primary  competitors  to its  SAFETRACE(R)
software  product,  including  MAK-SYSTEM  Corp. from France,  Information  Data
Management,  Inc.,  Blood Bank  Computer  Systems,  Inc.,  and  Systec  Computer
Associates  from the United  States.  There are two primary  competitors  in the
United States to its SAFETRACE  TX(TM) product,  MEDIWARE  Information  Systems,
Inc.  and Cerner  Corp.  Some of these  competitors  are larger and have greater
resources  than the Company.  The Company  believes it is able to compete on the
basis of the capabilities of the technology  currently available in SAFETRACE(R)
and SAFETRACE TX(TM).

Dependence on Major Customers

The  Company,  through  its  Wyndgate  division,   currently  has  26  customers
(including  the Royalty  Group) and intends to continue to target  domestic  and
international blood centers, plasma centers and hospital donor centers.

During the year ended  December 31, 1998,  three  customers,  The  Institute for
Transfusion  Medicine,  Pittsburgh,  Pennsylvania,  Gulf  Coast  Regional  Blood
Center, Houston, Texas, and Haemonetics Corporation,  Braintree,  Massachusetts,
each  accounted for 19%,  12%, and 12%,  respectively,  of the  Company's  total
revenues  from  continuing  operations.   Accounts  receivable  from  the  above
customers  as of December  31, 1998 was  approximately  $198,000.  There were no
accrued revenues from the above customers as of December 31, 1998.

During the year ended December 31, 1997, two customers,  Belle Bonfils  Memorial
Blood  Center,  Denver,   Colorado  and  Haemonetics   Corporation,   Braintree,
Massachusetts,  each  accounted for  approximately  10% and 33% of the Company's
total revenues from continuing  operations.  Accounts  receivable from the above
customers  as of  December  31,  1998 and 1997 was  approximately  $150,000  and
$60,000,   respectively.   Accrued   revenues  from  the  above  customers  were
approximately  $160,000 as of December 31,  1997.  In order to reduce its credit
risks,  the Company  generally  requires  substantial down payments and progress
payments during SAFETRACE(R) implementations.


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<PAGE>

In April 1999,  the Company  entered into a termination  agreement with a former
customer who had previously  licensed  SAFETRACE(R).  The agreement resolves all
outstanding contractual issues and will result in payments to the Company during
1999 of approximately $1,019,000.

Royalty Agreements

The Royalty Group.  Pursuant to a development agreement between Wyndgate and the
Royalty Group, Wyndgate developed SAFETRACE(R) and must make royalty payments to
the Royalty Group based on a percentage of Wyndgate's  SAFETRACE(R) license fees
collected, measured by cash received from SAFETRACE(R) licensees, net of certain
fees and charges.  The time period under the royalty  schedule is based upon the
first date of SAFETRACE(R) license invoicing,  which was September 14, 1995. The
royalty amounts are computed as a percentage of software license fees collected.

Institute  For  Transfusion  Medicine.   Pursuant  to  a  Development  Agreement
(Development  Agreement) dated July 1996,  between the Company and The Institute
for Transfusion Medicine (ITxM), the Company agreed to develop and has completed
the   development  of  Commercial   Centralized   Transfusion   System  Software
(Commercial  CTS  Software),  which  is  Wyndgate's  SAFETRACE  TX(TM)  software
product.  The Development  Agreement  provided for a royalty payment to ITxM for
revenues  received from the sale of the Commercial CTS Software,  net of certain
fees and charges.  The royalty period starts with the first commercial  transfer
for value of the Commercial CTS Software, which was on March 31, 1999.

The Development  Agreement  further granted ITxM a non-exclusive,  perpetual and
fully-paid license to operate SAFETRACE TX (TM) for internal use, which includes
companies  which  ITxM  controls  as defined in the  Development  Agreement  and
companies  which ITxM has the  ability  to cause the  direction  of  management,
whether through ownership of voting securities, by contract or otherwise.

In January 1998, the Company and ITxM agreed (the January 1998  Agreement)  that
the Company would not be required to pay monetary penalties, accrued in 1997, in
the approximate amount of $485,000,  to ITxM, which were incurred as a result of
delays in  development  of SAFETRACE  TX(TM),  in  consideration  of the Company
providing  to ITxM  additional  maintenance  services  and product  upgrades and
substitute liquidated damage provisions for delays.

With receipt of FDA clearance,  the Development  Agreement with ITxM expired and
is survived by certain provisions regarding royalty payments, operating license,
indemnification and confidentiality.

Ortho-Clinical   Diagnostics,   Inc.  In  1996,  the  Company  entered  into  an
Exclusivity and Software Development agreement (the Exclusivity  Agreement) with
Ortho-Clinical  Diagnostics,  Inc. (OCD),  successor to Ortho Diagnostic Systems
Inc., a wholly-owned  subsidiary of Johnson & Johnson. The Exclusivity Agreement
provided OCD the exclusive  right to negotiate  with the Company with respect to
the  Company's  activities  and  developments  in  information   technology  and
intellectual  property relating to donor and transfusion medicine. In connection
with this agreement, the Company received $500,000 in 1996.

In May 1997, the Company  received a request from OCD to continue its evaluation
of the  Company's  technology,  on a  non-exclusive  basis,  with the  intent of
responding  to the Company by July 14, 1997  regarding  whether or not OCD would
propose  some form of  transaction  with the  Company.  The Company  received an
additional  $500,000 from OCD during 1997. The Company and OCD agreed to further
extensions of this  non-exclusive  agreement through December 31, 1998 to enable
OCD to complete  its  strategic  evaluation.  The Company also agreed to perform
certain  software  development  services.  In  connection  with the extension to
December 31, 1998, the parties agreed that OCD has until June 30, 1999, to elect
to require the Company to provide the software  development  services as defined
in the  Exclusivity  Agreement.  The  Company  anticipates  finalizing  a Sales,
Distribution  and Development  Agreement  during the second quarter of 1999. The
total of $1,000,000 is included in deferred revenue as of December 31, 1998.



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Government Approval and Regulation

With the spread of AIDS and  Hepatitis-B,  stringent  FDA  guidelines  have been
imposed on  domestic  blood  centers in order to improve the quality of the U.S.
blood  supply.  Several  domestic  blood  centers have been cited by the FDA for
noncompliance  and  certain  blood  centers  have  been  closed  as a result  of
non-compliance with FDA requirements. Management believes numerous blood centers
throughout the worldwide blood bank industry have internally developed their own
software   applications  and  systems  to  track  blood   collection,   testing,
processing,  distribution and transfusion activities. These internally developed
systems  which  have been  developed  for  domestic  blood  center  use are also
designed to comply with FDA  requirements.  The Company believes that most blood
center  developed  systems  are  not  fully  integrated  and  do not  offer  the
capabilities  required by the FDA in view of the fact that many of the Company's
current  SAFETRACE(R)  customers  have or intend  to  replace  their  internally
developed blood tracking systems with SAFETRACE(R). While laboratory information
system  providers  have  developed  automated  testing and reporting  procedures
designed for a portion of the blood tracking process, these systems address only
the laboratory management function and are not fully integrated with other blood
tracking  functions required for effective FDA compliant blood tracking systems.
The Company  believes  that blood  centers  and  laboratory  information  system
providers  are looking  for a way to meet the FDA  guidelines  while  minimizing
their risks and costs.

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,  the Company 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,  the  Company's  Wyndgate
division  received  notification  from the FDA of its  finding  of  "substantial
equivalence" of SAFETRACE(R). This determination provides a 510(k) clearance and
permits the Company to continue to market SAFETRACE(R). On January 29, 1999, the
510(k) clearance was received for SAFETRACE TX(TM).

The  Company'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.  The  Company  will also be
required to follow applicable Good Manufacturing  Practices (GMP) regulations 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.

Research and Development

During  the years  ended  December  31,  1998 and  1997,  the  Company  incurred
approximately  $1.97 million and $3.76 million,  respectively,  for research and
development  expenses associated with the Company's software products.  Research
and development expenses are anticipated to continue to be a substantial portion
of the Company's  operating  expenses.  The Company's  SAFETRACE  TX(TM) product
achieved technological  feasibility in April 1998, and accordingly,  the Company
capitalized $1.104 million associated with this product in 1998.

Employees

As of December 31, 1998, the Company had 49 full-time employees, consisting of 2
employees in the  corporate  offices in Denver,  Colorado  and 47 at  Wyndgate's
offices near Sacramento,  California. The Company has employment agreements with
certain personnel.  The Company's employees are not represented by a labor union
or  subject to  collective  bargaining  agreements.  In March  1998,  management


                                       8
<PAGE>


implemented a cost reduction  program which initially  resulted in a substantial
decrease to its previous employee base. The Company has never experienced a work
stoppage and believes that its employee relations are satisfactory.

ITEM 2. DESCRIPTION OF PROPERTY

During 1998, the Company  occupied two primary  locations.  The Company occupied
approximately  3,439 square feet of office space in Lakewood,  Colorado pursuant
to a  lease  that  expires  on  December  31,  2000.  The  Company  also  leased
approximately  22,000 square feet of office space in Rancho Cordova,  California
for its  Wyndgate  division  pursuant  to a lease  that  would  have  expired on
September  7, 2002.  Effective  November  1, 1998,  the  Company  had  subleased
approximately 11,000 square feet of its facility in Rancho Cordova, California.

In January 1999, the Company re-negotiated its lease in Lakewood,  Colorado. The
new lease is for  approximately  1,252 square feet of office space and the lease
expires on February 14, 2002.  The former  office space has been  subleased.  In
February  1999,  the  Company  terminated  its lease of  office  space in Rancho
Cordova,  California.  The Company  leased  approximately  15,000 square feet of
office space in El Dorado  Hills,  California,  at a lower rate for a term of 86
months,  ending  May  31,  2006.  Neither  of  these  transactions  resulted  in
significant lease termination penalties or costs.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings which management believes to
be  material,  and  there  are  no  such  proceedings  which  are  known  to  be
contemplated.









                                       9
<PAGE>


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 COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                               Market Information

The Units sold by the  Company in its  initial  public  offering,  each of which
consisted of two shares of common stock and one  warrant,  commenced  trading on
the Nasdaq  Small-Cap Market on February 12, 1997. On March 13, 1997, the common
stock and warrants included in the Units began to trade separately and the Units
ceased to trade.  On February 9, 1998,  the Company's  common stock and warrants
were delisted from the Nasdaq  Small-Cap  Market,  and commenced  trading on the
Bulletin Board.

The  following  table sets  forth the high and low bid prices for the  Company's
common stock since the common  stock  commenced  trading on March 13, 1997.  The
quotations  reflect  inter-dealer  prices,  with  retail  markup,   markdown  or
commissions,  and  may  not  represent  actual  transactions.   The  information
presented has been derived from the National Quotation Bureau, Inc. Library.

                                  COMMON STOCK


          Fiscal Quarter Ended:                  High             Low
          --------------------                   ----             ---

              December 31, 1998               $ 1.063            0.531
              September 30, 1998                1.313            0.656
              June 30, 1998                     1.781            1.000
              March 31, 1998                    2.000            0.781
              December 31, 1997                 3.063            2.125
              September 30, 1997                2.938            1.813
              June 30, 1997                     3.000            2.750
              March 31, 1997                    3.875            3.000

                                     Holders

As of December 31, 1998, the Company had  approximately 116 holders of record of
the Company's common stock.

                                    Dividends

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.

There have been no recent sales of unregistered securities.



                                       10
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL

Global Med Technologies,  Inc. (the Company), through its one operating division
Wyndgate  Technologies  (Wyndgate),  designs,  develops,  markets  and  supports
information management software products for blood banks, hospitals, centralized
transfusion  centers  and other  healthcare  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.  On December  15,  1997,  the Company  sold its DataMed
International  division  (DataMed)  which is in the business of substance  abuse
testing  management  services.  The  audited  financial  statements  and related
footnotes herein reflect DataMed as discontinued operations.

On April 14, 1998, the Company entered into two debt financing  agreements which
provided the Company up to  $3,150,000  in gross  proceeds in exchange for up to
12,000,000 warrants convertible into common stock at $0.25 per share. Should the
Company not repay the  financing  proceeds  and accrued  interest  thereon on or
before April 15, 1999, the convertible  financing  proceeds,  including interest
thereon,  would have been convertible into  approximately  70,000,000  shares of
common stock at $0.05 per share.

In March 1999, the Company entered into agreements for a comprehensive financing
package that  includes:  (1) an $8,000,000  preferred  stock  private  placement
through  American  Fronteer  Financial   Corporation   (AFFC),  a  wholly  owned
subsidiary  of  Fronteer  Financial  Holdings  Ltd.  (Fronteer  Financial);  (2)
exercise of 2,000,000  warrants at $0.25 per warrant;  (3) extending the balance
on the line of credit with eBanker USA.Com,  Inc.  (eBanker),  formerly Fronteer
Development  Finance,  Inc., a majority owned  subsidiary of Fronteer  Financial
until April 15, 2000,  with a change in the default  conversion  rate from $0.05
per share contained in the original loan agreement to $0.25 per share; and (4) a
$750,000 bridge loan which bears interest at 12% per annum.

Heng Fung Finance is in the process of  surrendering  the promissory note in the
amount of $500,000 in exercise of the  warrants to acquire  2,000,000  shares of
common stock of the  Company.  This  transaction  is expected to be completed in
April 1999.

The  remaining  $2,650,000  loan from eBanker  will be extended  until April 15,
2000, with the previous  conversion  price of $0.05 per share increased to $0.25
per share. In consideration for the extension, the Company paid a 2% fee to AFFC
of $53,000, payable in shares of the Company's common stock.

The $750,000 bridge loan bears interest at 12% and is convertible 6 months after
the loan is drawn,  into  shares of common  stock of the  Company  at the 15-day
average  closing bid price  prior to the date of  closing.  The loan has not yet
been drawn.

In April 1999, the Company  entered into an agreement with Heng Fung Finance for
a bridge loan in the amount of $2,000,000 (April 1999 Financing Agreement).  The
agreement  provides a line of credit,  with  interest  at 12% per annum  payable
monthly,  due April 12,  2000.  As  consideration  for the line of  credit,  the
Company agreed to pay a fee equal to 5% of the total line of credit in shares of
common stock of the  Company.  The line of credit will be  convertible,  at Heng
Fung's option, into shares of the Company's common stock at a price based on the
average  closing  bid  price of the  Company's  common  stock for a period of 15
business days prior to April 13, 1999.

The Company  completed  its initial  public  offering of securities in the first
quarter of 1997, from which it received net proceeds of approximately $8,200,000
from the sale of  1,456,988  Units,  each of which  consisted  of two  shares of
Common Stock and one Class A Common Stock  Purchase  Warrant (the  February 1997
Public  Offering).  The uses of  proceeds  were  principally  expended  to repay
short-term debt, notes payable,  accounts payable and other accrued expenses; to
fund  Wyndgate's  research  and  development  of  the  transfusion  management's
information  software product (SAFETRACE  TX(TM));  to fund Wyndgate's sales and
marketing efforts, as well as for general working capital purposes.


                                       11
<PAGE>


YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

RESULTS OF OPERATIONS

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

Revenues from software  sales and  consulting  increased by $2.230  million,  or
101%, to $4.439  million for the year ended December 31, 1998 compared to $2.209
million for the year ended  December 31, 1997.  This increase in software  sales
and consulting revenue is primarily the result of substantially  increased sales
and related deliveries of Wyndgate's SAFETRACE(R) software product.

Revenues  from the  re-sale of  hardware  and  software  obtained  from  vendors
increased by $51,000,  or 17%, to $348,000 for the year ended  December 31, 1998
compared to $297,000 for the year ended  December 31,  1997.  This  increase was
primarily  due to increases in the average  price per order and in the number of
Wyndgate  customers  which  ordered  third party  hardware and software  through
Wyndgate.

Cost Of Revenues. Cost of revenues as a percentage of total revenues was 47% and
64% for the year ended December 31, 1998 and 1997, respectively.

Cost of software sales and  consulting,  as a percentage of the related  revenue
was 44% and 62% for the years ended  December  31, 1998 and 1997,  respectively.
This  decrease  was  primarily  a  result  of  increased   sales  of  Wyndgate's
SAFETRACE(R)  software  product  licenses,  which  typically  have higher profit
margins than revenues from  consulting,  and  implementation  related  services.
Additionally,  relative  decreases in personnel  and related  benefit and travel
expenses  incurred during 1998 for the number of  SAFETRACE(R)  implementations,
customer training and customer support services also contributed to the decrease
in the cost of software sales and consulting.

Cost of hardware and software,  obtained  from  vendors,  as a percentage of the
related  revenue  was 86% and 75% for 1998 and  1997,  respectively.  Typically,
revenues  from the re-sale of hardware and  software,  obtained from vendors are
priced at lower profit margins than revenues from software sales and consulting.

Gross Profit.  Gross profit as a percentage of total revenue was 53% and 36% for
1998 and 1997,  respectively.  This  increase  in gross  profit was  primarily a
result  of the  increased  sales  of the  higher  margin  SAFETRACE(R)  software
products discussed above.  Additionally,  relative increases in revenues derived
from higher margin  software  license fees also  contributed  to the increase in
gross profit experienced by the Company during 1998.

General  and  Administrative.  General  and  administrative  expenses  decreased
$933,000,  or 35%,  to $1.769  million for 1998  compared to $2.702  million for
1997.  The  decrease in general and  administrative  expenses  was  attributable
primarily  to  the  restructuring   and   reorganization  in  March  1998  which
significantly  reduced payroll,  outside contract  services,  various  insurance
related  items,  leased  office  space  and  other  general  and  administrative
activities.  The decrease  was  partially  offset by general and  administrative
expenses  associated with the grants of certain options and warrants to purchase
shares of the Company's common stock.

Sales and  Marketing.  Sales and  marketing  expenses  were  $975,000 and $1.458
million for 1998 and 1997, respectively, a decrease of $483,000, or 33% compared
1997.  The decrease in sales and  marketing  expenses was  primarily  due to the
restructuring and cost reduction activities undertaken in March 1998.

Research and  Development.  Research and development  expenses  decreased $1.784
million,  or 47%,  from 1998 to 1997.  The decrease in research and  development
expenses  was  primarily  due  to  SAFETRACE  TX(TM)   achieving   technological
feasibility  during  1998  and the  resulting  ability  to  capitalize  software
development  costs  until such time as the  product is  released  to the general
public. Capitalized software costs increased to $920,000 net, from $136,000 net,
as of December 31, 1998 and 1997, respectively.  Management anticipates research
and development  costs will continue to be substantial.  Management's  plans for


                                       12
<PAGE>

Wyndgate's future software products and services require continual  research and
development  expenditures  in order to  continue  to  capitalize  on  Wyndgate's
existing technological base and its existing software development talent.

Depreciation  and  Amortization.  Depreciation  and  amortization  increased  to
$567,000 from $409,000 during 1998. The increase of $158,000,  or 39%, from 1998
to 1997 is primarily due to the increase in fixed assets.

Restructuring  Charges. In March 1998, the Company underwent a restructuring and
reorganization  which was  implemented  to  reduce  general  and  administrative
expenses in such areas as payroll,  outside  contract  services,  various health
related items,  leased office space and others as well.  Restructuring  expenses
were  incurred in the amount of $132,000  for the year ended  December 31, 1998.
All of these expenses had been paid as of December 31, 1998.

Interest  Income.  Interest  income  decreased  $150,000 from 1997 to 1998. This
decrease was primarily due to interest  income earned on the net proceeds of the
February 1997 Public Offering.

Interest  Expense.  Interest expense  increased  $14,000 from 1997 to 1998. This
increase was primarily due to the 1998 Financing Agreements.

Other. Other income (expense)  increased to $355,000 income from $81,000 expense
or a total change of $436,000 from 1997 to 1998. This increase was primarily due
to an adjustment in 1998 for potential  estimated  losses accrued in prior years
in connection  with the  discontinued  operations of DataMed.  During 1998,  the
provision for estimated losses of $421,000 was reversed.

Financing  Costs.  On April 14, 1998,  the Company  entered  into two  financing
agreements  that  provided  for the  issuance of warrants to purchase a total of
12,000,000 shares of the Company's common stock at $0.25 per share, for a period
of ten years. The issuance of the warrants resulted in deferred costs related to
the  financing of $10.680  million being  amortized to financing  costs over the
term of the  agreements  that both expire on April 15, 1999.  For the year ended
December 31, 1998,  the company  recognized  $6.031  million in financing  costs
expense.

Loss from Continuing  Operations.  The Company's loss from continuing operations
during 1998 as compared to 1997 increased $1.221 million. However, the loss from
continuing  operations  includes the  recognition of $6.031 million of financing
costs. Loss from continuing  operations before other income (expense)  decreased
$4.538  million to $2.879  million from the $7.417  million loss for 1997 due to
increased sales and significantly reduced expenses.  During the first quarter of
1998,  management began the implementation of a cost reduction program which, as
it was  anticipated,  assisted in  management's  efforts to reduce the Company's
operating expenses and operating losses.

Loss from Discontinued  Operations and Gain on Sale of Discontinued  Operations.
The Company's loss from discontinued operations and gain on sale of discontinued
operations during 1997 were attributable to the sale of DataMed to NMRO that was
effective on December 15, 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and cash  equivalents  of $821,000 as of December  31, 1998
compared to $2.370 million at December 31, 1997,  none of which was  restricted.
In light of the  Company's  current cash  position,  financing  activities,  and
projected  cash  flow,   management  believes  the  Company  has  the  financial
resources,  or can obtain the financial resources, to maintain its planned level
of operations for the next twelve months,  although the Company anticipates that
it will  continue to incur  operating  losses,  negative  cash flows and capital
expenditures during that period.


                                       13
<PAGE>


It is expected that the net proceeds generated by the March 1999, April 1999 and
April  1998  Financing  Agreements  and the  customer  contract  settlement  for
$1,019,000  are   sufficient  to  fund  the  Company's   liquidity  and  capital
requirements  in the  short and long term  excluding  acquisitions  or major new
product development  initiatives.  Management  anticipates that the net proceeds
from the 1999 and April 1998 financing agreements, proceeds from the exercise of
warrants, and any future financing activities will be used to fund the Company's
anticipated  research and development costs,  sales and marketing  efforts,  and
negative cash flows during the remainder of 1999 and for general working capital
purposes.

The Company had a net working  capital  deficit of $2.528 million as of December
31, 1998 and $2.582 million at December 31, 1997.

The Company  used $3.228  million in net cash for  operating  activities  during
1998,  compared to $5.300  million of net cash used during 1997.  These  amounts
include $631,000 and $1.255 million of net cash used by discontinued  operations
during 1998 and 1997,  respectively.  The cash used in continuing  operations of
$2.597 million during 1998 consisted  primarily of the net loss from  continuing
operations  of $8.637  million,  net of the  amortization  of non-cash  deferred
financing costs of $6.031 million.

Net cash used by investing activities was $1.101 million during 1998 compared to
net cash provided by investing  activities during 1997 of $161,000.  The Company
invested $1.104 million in software development during 1998.

Net cash provided by financing  activities was $2.780 million and $7.020 million
during 1998 and 1997,  respectively.  These amounts  primarily  include proceeds
from the April 1998  Financing  Agreements  in 1998 of $2.7 million and proceeds
from the February 1997 Public Offering in 1997 of $8.200 million.

EFFECT OF INFLATION AND FOREIGN CURRENCY EXCHANGE FLUCTUATIONS

The Company has not experienced  material  unfavorable effects on its results of
operations,  cash flows or financial  position due to foreign currency  exchange
fluctuations  or due to domestic  inflation.  It is not  anticipated to have any
material effect in the near future.

USE OF PROCEEDS

In  February  1997,  the  Company   completed  an  initial  public  offering  of
securities, from which it received net proceeds of approximately $8,200,000 from
the sale of  1,456,988  Units (the  February  1997 Public  Offering).  Each Unit
consisted of two shares of Common  Stock and one Class A Common  Stock  Purchase
Warrant.  On March 13, 1997,  the common stock and the  warrants  began  trading
separately.

The net  proceeds  to the Company  from the  February  1997  Public  Offering of
approximately $8,200,000 have been applied as follows:  approximately $2,700,000
for research and development costs, including  approximately $481,000 in capital
expenditures,  incurred  primarily for the  development of Wyndgate's  SAFETRACE
TX(TM) software;  $860,000 for sales and marketing  expenses  incurred for sales
and  marketing for  Wyndgate's  software  products and  services;  approximately
$300,000 of other capital expenditures for general operating purposes related to
the  increased  number of  employees  assigned  to  customer  support,  customer
implementations,  customer training and general operating purposes for Wyndgate;
approximately $1,874,000 for the principal repayment of certain short-term debt,
approximately $181,000 of which was paid, under the same terms and conditions as
nonaffilates,  to certain  significant  owners,  directors,  officers  and other
related parties of the Company, who held 10% notes; approximately $1,046,000 for
general working capital  requirements for the Company's  continuing  operations;
and approximately $1,420,000 for the Company's DataMed International division.



                                       14
<PAGE>


RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

In June 1998,  SFAS No. 133,  Accounting for Derivative  Instruments and Hedging
Activities,  was issued which is effective for all fiscal years  beginning after
June 15, 1999. The Company  currently does not  participate in these  activities
and consequently  does not believe adoption of the statement will have an effect
on the financial statements.

On December 22, 1998,  the  Accounting  Standards  Executive  Committee  (AcSec)
issued  Statement of Position 98-9,  Modification of SOP 97-2,  Software Revenue
Recognition,  With  Respect  to  Certain  Transactions,  (SOP  98- 9),  which is
effective for transactions entered into in fiscal years beginning after December
15, 1998.  The Company does not believe that the adoption of the statement  will
have a significant  effect on the  disclosures  in its financial  statements and
will adopt it when required.

YEAR 2000 COMPLIANCE

The Year  2000  issue  refers  to the  fact  that  many  computer  systems  were
originally  programmed  using two digits rather than four digits to identify the
applicable  year.  When the year 2000 occurs,  these systems could interpret the
year as 1900 rather than 2000. Unless hardware, system software and applications
are corrected to be Year 2000 compliant,  computers and the devices they control
could generate miscalculations and create operational problems.  Various systems
could be affected  ranging from complex  information  technology  (IT)  computer
systems to non-IT  devices such as an individual  machine's  programmable  logic
controller.

To address this issue,  the Company  developed a corporate  plan  including  the
formation of a team consisting of internal  resources and, as deemed  necessary,
third-party experts. The phases of the plan include: conducting inventory of the
affected technology and assessing the impact of the Year 2000 issue;  developing
solution  plans;  modification or replacement;  testing and  certification;  and
developing  contingency  plans.  All  components of software and hardware of the
Company are presently in various phases. The Company expects to have critical IT
systems tested and  installed,  and expects to be Year 2000 compliant by the end
of the third quarter of 1999.

The Company  relies on  third-party  suppliers for many services and the Company
will be adversely  impacted if these suppliers do not make the necessary changes
to their own systems  and  products  successfully  and in a timely  manner.  The
Company has  implemented a plan to communicate  with its customers and suppliers
on this  issue in an effort  to  minimize  any  potential  Year 2000  compliance
impact; however, it is not possible to guarantee their compliance.

The total cost of the program is  estimated  to be  approximately  $250,000,  of
which approximately $50,000 has been spent through December 31, 1998.

Management  of the  Company  believes  it has an  effective  program in place to
resolve  the  Year  2000  issues.  Nevertheless,  since  it is not  possible  to
anticipate  all possible  future  outcomes,  especially  when third  parties are
involved,  there could be  circumstances in which the Company would be unable to
take customer  orders,  or collect  payments.  In addition,  disruptions  in the
economy  generally  resulting from Year 2000 issues could  materially  adversely
affect the  Company.  The Company  could be subject to  litigation  for computer
systems product failure, for example,  equipment shutdown or failure to properly
date  transaction  records.  The amount of potential  liability and lost revenue
cannot be reasonably estimated at this time.

The Company is in the process of establishing a formal  contingency plan for its
applications.  The Company is working continually with the third party suppliers
of software and related  services in resolving  Year 2000 issues.  The Company's
formal contingency plans are currently being developed in conjunction with these
suppliers. The Company will continue to monitor the progress of the suppliers in
the  resolution of Year 2000 issues and continue to evaluate the necessity of an
independent contingency plan.



                                       15
<PAGE>

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-KSB contains  certain  forward-looking  statements
within the meaning of Section 27A of the  Securities  Act and Section 21E of the
Securities  Exchange Act of 1934, as amended  ("Exchange  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:  (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,  (viii) the ability
of the  Company and its  customers  to  successfully  and timely  implement  the
Company's  software  products,  and (ix) possible  changes in customer  software
buying patterns due to Year 2000 issues.

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 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 the "Risk Factors"  section of 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.

ITEM 7. FINANCIAL STATEMENTS.

The Financial  Statements that constitute Item 7 are attached at the end of this
Annual Report on Form 10-KSB.



                                       16
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page

Independent Auditors' Report - KPMG LLP                                     F-1

Independent Auditor's Report - Ernst & Young LLP                            F-2

Balance Sheets as of December 31, 1998 and 1997                             F-3

Statements of Operations for the years ended December 31, 1998 and 1997     F-5

Statements of Stockholders' Equity (Deficit) for the years ended 
December 31, 1998 and 1997                                                  F-6

Statements of Cash Flows for the years ended December 31, 1998 and 1997     F-7

Notes to Financial Statements                                               F-9








                                       17
<PAGE>


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

(a) (i) On June 19,  1998,  in response to a request for  proposal by Global Med
Technologies,  Inc. (the Company) for auditing services,  the accounting firm of
Ernst & Young LLP  notified  the Company  that Ernst & Young LLP had declined to
stand for  re-election  to perform the Company's  1998 audit and had resigned as
the Company's  auditor.  Ernst & Young LLP acted as the independent  accountants
for the Company for the years ended December 31, 1994, 1995, 1996 and 1997.

(ii) Ernst & Young  LLP's  reports on the  Company's  financial  statements  for
either of the two most recent fiscal years did not contain an adverse opinion or
disclaimer  of  opinion,  or was  modified  as to  uncertainty,  audit  scope or
accounting principles.

(iii) Not applicable.

(iv) In connection with the audits of the Company's financial statements for the
fiscal years ended December 31, 1997 and 1996, and any subsequent interim period
through June 19, 1998, there were no disagreements with Ernst & Young LLP on any
matters of accounting  principles or practices,  financial statement disclosure,
or auditing scope and procedures  which, if not resolved to the  satisfaction of
Ernst & Young LLP,  would have caused Ernst & Young LLP to make reference to the
matter  in their  report.  There  were no  "reportable  events"  as that term is
described in Item 304(a)(1)(iv) of Regulation S-B. The Company received a letter
from Ernst &Young LLP  addressed to the  Commission  stating that it agreed with
the above statements.  A copy of that letter,  dated June 30, 1998, was filed as
Exhibit 16 to the Current Report on Form 8-K.

(b) On October 2, 1998, the Company engaged KPMG LLP certifying  accountants for
the year ended December 31, 1998.









                                       18
<PAGE>

                                    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.
<TABLE>
<CAPTION>

                                                                                      Officer or
       Name                   Age                Position                           Director Since
------------------------      ---         ---------------------------               --------------

<S>                            <C>        <C>                                           <C>
Michael I. Ruxin, M.D.         53         Chairman of the Board and                      1989
                                            Chief Executive Officer

Fai H. Chan                    54         Director                                       1998

Robert H. Trapp                43         Director                                       1998

Kwok Jen Fong                  49         Director                                       1998

Jeffrey M. Busch               41         Director                                       1998

Gary L. Cook                   41         Director                                       1998

Gordon E. Segal, M.D.          47         Director                                       1997

Gerald F. Willman, Jr.         41         Director and Wyndgate Vice                     1995
                                            President-Product Management

Thomas F. Marcinek             45         President and Chief Operating                  1998
                                            Officer

Alan K. Geddes                 49         Vice President Finance, Chief                  1998
                                            Financial Officer and Treasurer

William J. Collard (1)         57         Wyndgate President                             1995

Bruce Daniels                  53         Wyndgate Vice President -                      1998
                                            Sales and Marketing

James R. Flynt                 43         Wyndgate Vice President -                      1998
                                            Operations
</TABLE>
--------------
(1)  Mr.  Collard  retired as an officer of the  Company  effective  February 4,
     1999.  He had been on  leave  since  November  20,  1998 and the  Company's
     president and other employees are performing his duties.

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



                                       19
<PAGE>


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

Michael I.  Ruxin,  M.D.,  the founder of the  Company,  has been an officer and
director of the Company  since its  incorporation  in 1989 and is currently  the
Chairman  and Chief  Executive  Officer of the Company.  From 1982 to 1994,  Dr.
Ruxin  was  a  director  of  GeriMed  of  America,   Inc.,  a  private   company
administering  senior health care centers.  From 1985 to 1993,  Dr. Ruxin was an
officer and director of CBL Medical, Inc. (CBL), a public company, which managed
multiple medical groups,  including Medcomp Medical Group,  which was a group of
small clinics owned by Dr. Ruxin.  CBL focused on providing  second  opinions on
workers  compensation claims. Dr. Ruxin left CBL management in 1988 to found the
Company although he remained on the board of CBL due to his continued  ownership
of clinics until 1993. 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.  He is a member of the
American Association of Medical Review Officers.

Fai H. Chan,  has been a Director of the Company  since May 1998.  He has been a
Director of Fronteer Financial  Holdings,  Inc.  ("Fronteer") since December 26,
1997, and Chairman of the Board of Directors and President  since February 1998.
Mr. Chan is the  Chairman and Managing  Director of Heng Fung  Holdings  Company
Limited  and has been a Director of Heng Fung  Holdings  Company  Limited  since
September 2, 1992. Mr. Chan was elected Managing  Director of Heng Fung Holdings
Company  Limited on May 1, 1995 and Chairman on June 3, 1995. Heng Fung Holdings
Company Limited's primary business activities include real estate investment and
development, merchant banking, the manufacturing of building material machinery,
pharmaceutical  products and retail fashion. Mr. Chan has been the President and
a Director of Powersoft Technologies, Inc. (formerly, Heng Fai China Industries,
Inc.),  which  owns  various  industrial  companies,  since  June 1994 and Chief
Executive  Officer  thereof since June 1995; a Director of Intra-Asia  Equities,
Inc., a merchant banking  company,  since June 1993;  Executive  Director of Hua
Jian International Finance Co., Ltd. from December 1994 until December 1996; and
Chairman of the Board of Directors of American Pacific Bank since March 1988 and
Chief Executive Officer thereof between April 1991 and April 1993.

Robert H. Trapp has been a Director of the Company since May 1998. He has been a
Director of Fronteer  Financial  since  December 1997 and the Managing  Director
since February 1998. Mr. Trapp has been a director of Heng Fung Holdings Company
Limited  since May 1995;  a Director of  Inter-Asia  Equities,  Inc., a merchant
banking company, since February 1995 and the Secretary thereof since April 1994;
Director,  Secretary and Treasurer of Powersoft  Technologies,  Inc., which owns
various industrial  companies;  and the Canadian  operational manager of Pacific
Concord  Holding  (Canada)  Ltd. of Hong Kong,  which  operates in the  consumer
products industry, from July 1991 until November 1997.

Kwok Jen Fong has been a Director  of the Company  since May 1998.  Mr. Fong has
been a Director of Fronteer Financial since February 1998 and a Director of Heng
Fung Holdings  Company  Limited  since May 1995.  Mr. Fong has been a practicing
solicitor in Singapore for at least the last five years.

Jeffrey M. Busch has been a Director of the Company  since May 1998.  Mr.  Busch
has been a practicing  attorney  for over five years.  Mr. Busch has also been a
Director of Fronteer Financial since February 1998.

Gary L. Cook has been a Director of the Company since  November 19, 1998.  Since
1996, he has been Secretary,  Treasurer and Chief Financial  Officer of Fronteer
Financial  Holdings,  Ltd. and oversees  all  accounting,  internal and external
reporting, treasury and cash management functions. Mr. Cook also is Treasurer of
eBanker  USA.Com,   Inc.,   formerly   Fronteer   Development   Finance,   Inc.,
Vice-President  and Chief  Financial  Officer  of  American  Fronteer  Financial
Corporation and a Director of Secutron Corporation.  From 1994 to 1996, Mr. Cook
was  self-employed  as  the  principal  of All  Tune  and  Lube,  LLC  where  he


                                       20
<PAGE>


researched,  directed and managed the successful  start up and  development of a
small business.  From 1982 to 1994, he was a Senior Manager at KPMG Peat Marwick
and was  responsible  for all auditing  services for several  clients in various
financial and other industries. Mr. Cook also directed the training,  management
and  evaluation  of  staff  developed  and  implemented  accounting,   financial
reporting  and SEC  reporting  systems  for major  growth  companies.  Mr.  Cook
received a B.A. in Accounting  from Bringham  Young  University in 1982 and is a
member of the Colorado Society of Certified Public  Accountants and the American
Institute of Certified Public Accountants.

Gordon E. Segal,  M.D.,  has been a director  of the  Company  since April 1997.
Since December 1995, he has been  co-founder and principal of M & S Ventures,  a
privately held investment venture capital firm specializing in biotechnology and
health care  companies.  From  January  1992 to December  1995,  Dr. Segal was a
private  venture  capitalist.  Dr.  Segal  received  a B.A.  degree in 1973 from
Southern  Methodist  University and a M.D. degree in 1978 from the University of
Tennessee.  Dr.  Segal  is a  licensed  physician  in New  York  and is a  board
certified anesthesiologist.

Gerald F. Willman, Jr. has been a director of the Company and the 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 was elected as President and Chief Operating Officer in March
1998.  From 1994 until  joining the Company,  he was the  President and owner of
Prax Information  Systems,  Wantagh,  New York, a practice  management  software
consulting  company.   From  1990-1994,   he  was  the  President  of  the  Data
Technologies Group, a division of Henry Schein, Inc.,  Melville,  New York. From
1985-1990, he was the Vice President of MIS for that same company.

Alan K. Geddes was elected as Vice President - Finance,  Chief Financial Officer
and Treasurer of the Company in August 1998. He was also a financial  consultant
to the Company.  Mr. Geddes was Vice  President and Chief  Financial  Officer of
EDnet,  Inc., a publicly held company based in San Francisco,  California,  from
1996 to 1997. From 1986 to 1996, Mr. Geddes was the Chief  Financial  Officer of
Oncogenetics,   Inc.,  Phoenix,  Arizona  and  IMAR  Corporation,   San  Rafael,
California,  both  emerging  companies  in medical  technology,  in  addition to
founding  his  own  company,  California  Pacific  Leasing,  Inc.,  San  Rafael,
California.  Previously,  he served as Corporate  Controller  at  Fiberplastics,
Inc., Corte Madera, California, in corporate management at Bio-Rad Laboratories,
Richmond,  California,  as Plant Controller with Abbott Laboratories,  Pasadena,
California  and as Financial  Analyst with Litton  Industries,  Woodland  Hills,
California.  Mr. Geddes received a B.A. degree from the University of California
and a M.B.A. degree in finance from Utah State University.

William  J.  Collard,  who  retired  February  4, 1999,  was a director  and the
Secretary/Treasurer  of the  Company  from  May  1995  to May  1998  and was the
President of the Wyndgate  division since May 1995. From 1984 to May 1995 he was
president  and a director of The  Wyndgate  Group,  Ltd.,  and  responsible  for
directing  the sales,  operations  and research and  development  efforts of The
Wyndgate Group,  Ltd. From 1976 to 1984, Mr. Collard was the executive  director
of Sigma Systems,  Inc., a company that provides colleges and other institutions
with administrative computer applications. Mr. Collard received a B.S. degree in
Business  Administration  (Finance) and a M.S. degree in Business Administration
(Quantitative Methods) from California State University.

Bruce Daniels has been Vice President,  Sales and Marketing of the Company since
August 1998.  Mr.  Daniels has  extensive  knowledge in both  hospital and blood
center  transfusion  practices.  From 1994 to 1998,  Mr. Daniels was President -
Pall Biomedical  Products Company division,  Pall  Corporation,  East Hills, New


                                       21
<PAGE>


York (NYSE:  PLL).  In this  capacity he directed  the sales and  marketing  for
Pall's  hospital  products  in North  America.  These  products  included  blood
processing and transfusion sets for general use and leukocyte removal. From 1975
to 1994, Mr. Daniels was Vice President  Sales and Marketing at Kentec  Medical,
Inc., Irvine, California, a regional specialty distributor, for medical devices,
equipment  and services.  Mr.  Daniels has a B.A.  degree in  economics,  with a
chemistry  minor,  from Marietta  College,  Marietta,  Ohio, and has completed a
Medical Marketing Program at the University of California, Los Angeles.

James R. Flynt has been Vice  President,  Operations of the Company since August
1998. Mr. Flynt has held significant  domestic and  international  positions for
companies in both Healthcare and Information Systems.  From August 1997 to March
1998,  Mr. Flynt was Director of Laboratory  Implementation  at ADAC  Healthcare
Information  Systems,  Houston,  Texas.  From May 1996 to  August  1997,  he was
Director of Client Service for Soft Computer  Consultants,  Palm Harbor Florida.
From October 1995 to May 1996, Mr. Flynt was Channels  Solutions Manager for IBM
Healthcare Solutions, IBM Asia Pacific, Brisbane,  Australia, where he performed
market feasibility analysis and business development in the Pacific Rim. Between
1984 and 1994, Mr. Flynt worked at Sunquest Information  Systems,  Inc., Tucson,
Arizona,  where he held  position of  increasing  responsibility  including  LIS
Marketing Consultant, Assistant VP - Client Support and Senior Product Director.
Mr.  Flynt has a B.S.  degree in  microbiology,  with  emphasis  in organic  and
biochemistry,  from the University of Arizona and is a registered Microbiologist
with the American Society of Clinical Pathologists (ASCP).

                              Family Relationships

There  are no  family  relationships  among any of the  Company's  officers  and
directors.

                    Involvement In Certain Legal Proceedings

No officer,  director,  significant employee,  promoter or control person of the
Company has been  involved in any event of the type  described in Item 401(d) of
Regulation S-B during the past five years.

                Compliance With Section 16(A) Of The Exchange Act

To the Company's  knowledge,  during the Company's year ended December 31, 1998,
there were no directors or officers or more than 10%  shareholder of the Company
that  failed to timely  file a Form 3, Form 4 or Form 5,  other than Fai H. Chan
who failed to timely file a Form 3 and Form 4, and  Jeffrey  Busch who failed to
timely  file a Form 3, and Robert H.  Trapp who timely  failed to file a Form 3,
and Heng Fung Holdings Company Limited,  Heng Fung Finance Company Limited,  and
Heng Fung Capital Private Limited who failed to timely file a Form 4.








                                       22
<PAGE>


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 $100,000  of salary and bonus from the  Company  during the year ended
December 31, 1998:
<TABLE>
<CAPTION>

                                      Annual Compensation                                Long-Term Compensation
                            ------------------------------------------    -------------------------------------------------
                                                                            Restricted
  Name and Principal                                                         Stock           Options           All Other
      Position                  Year         Salary        Bonuses ($)        Awards          & SARs          Compensation
-----------------------      ----------   ------------    ------------     ------------    -----------       --------------

<S>                            <C>          <C>           <C>              <C>              <C>               <C>
Michael I. Ruxin,              1998         $190,000          ---             ---            1,250,000        $131,736   (1)
   Chairman and CEO            1997          190,000          ---             ---            ---                17,936   (2)
                               1996          195,000          ---             ---            ---                16,520   (3)

Thomas F. Marcinek,            1998          125,000          ---             ---              500,000           5,400   (4)
   President and COO           1997           22,000          ---             ---            ---               ---
                               1996          ---              ---             ---            ---               ---

Gerald F. Willman, Jr.         1998           95,000          ---             ---              150,000         ---       (5)
  Director and                 1997           95,000          ---             ---            ---                25,000   (5)
  Vice President,              1996           95,000          ---             ---            ---                 8,000   (5)
  Product Management

William J. Collard,            1998          100,000          ---             ---            ---                 5,400   (6)
  Wyndgate President           1997          100,000          ---             ---            ---                16,400   (6)
  and Director (through        1996          100,000          ---             ---            ---               188,400   (6)
  February 4, 1999)
</TABLE>

(1)  Dr. Ruxin received $3,800 per annum in life insurance premiums,  $1,078 per
     month car allowance and $115,000 under his non-compete agreement.

(2)  Dr. Ruxin received $5,000 per annum in life insurance premiums and a $1,078
     per month car allowance.

(3)  Dr. Ruxin received  $5,000 per annum in life insurance  premiums and a $960
     per month car allowance.

(4)  Mr. Marcinek received a $450 per month car allowance.

(5)  In 1997, Mr. Willman  received $25,000 for tax expenses related to the 1995
     Wyndgate merger. In 1996, Mr. Willman received $8,000 for reimbursement for
     a vacation.

(6)  Mr. Collard received a $450 per month car allowance in 1996, 1997 and 1998.
     In 1996, Mr. Collard received $175,000 under his non-compete  agreement and
     reimbursement for a vacation in the approximate  amount of $8,000. In 1997,
     Mr. Collard received  approximately $11,000 for tax expenses related to the
     May 1995 Wyndgate merger.





                                       23
<PAGE>


                               Stock Option Plans

The Second  Amended and Restated  Stock Option Plan provides for the issuance of
options  to  purchase  up to  2,200,000  shares  of common  stock to  employees,
officers,  directors and  consultants of the Company.  Options may be granted as
incentive stock or as non-qualified stock options. Only employees of the Company
are eligible to receive Incentive Options.  Unless sooner  terminated,  the Plan
will  expire on May 31,  2000.  As of  December  31,  1998,  options to purchase
1,821,216  shares of the Company's  common stock at exercise prices ranging from
$0.75 to $3.75 per share  through  2008 were  outstanding,  of which  options to
purchase 393,900 shares were exercisable.

The Employee Stock Compensation Plan of 1997, as amended during 1998, includes a
maximum  of 200,000  shares of the  Company's  common  stock as  authorized  for
issuance.  As of December 31, 1998,  options to purchase  100,000  shares of the
Company's common stock were outstanding.  Effective August 27, 1998, the Company
issued 50,000 shares of its common stock to a director in exchange for services.
The fair value of the stock on August 27,  1998 was  $33,000  and is recorded as
general and administrative expense.

1998 and 1997 Activity

On May 27, 1998,  incentive  options to purchase 350,000 shares of the Company's
common stock and  non-qualified  options to purchase 5,000 shares were issued to
certain  officers at an exercise price of $0.75 per share,  and are  exercisable
for ten years. The options vest at the rate of 20% per year.

On May 27,  1998,  the  board of  directors  granted a  non-qualified  option to
purchase 55,248 shares of the Company's  common stock to a former officer of the
Company.  The  exercise  price  is  $0.92  per  share,  the  option  was  vested
immediately  and is exercisable for ten years. In accordance with the provisions
of  Statement  of  Financial   Accounting   Standard  No.  123,  Accounting  for
Stock-Based  Compensation,  the fair value of the option was recorded as general
and administrative expense in the amount of $41,000.

On June 3, 1998, the Company  authorized the issuance of incentive stock options
to purchase  340,000 shares of the Company's  common stock at $1.0625 per share,
exercisable for ten years, to certain employees. The options become fully vested
on March 3, 1999.

On August 27, 1998, the Company  authorized the issuance of non-qualified  stock
options to purchase an aggregate of 900,000 shares of the Company's common stock
at $0.75 per  shares,  exercisable  for ten  years,  to  members of the Board of
Directors  in  consideration  for  serving  on the  Board  and on the  Executive
Committee of the Board.  The Company also  authorized  the issuance of incentive
options to certain  officers of the Company to  purchase  600,000  shares of the
Company's common stock and non-qualified  stock options to purchase an aggregate
of 32,000  shares of the  Company's  common stock to certain  employees.  All of
these grants are at $0.75 per share and exercisable  for ten years.  The options
vest at the rate of 20% per year.

Pursuant  to Dr.  Ruxin's  Employment  Agreement,  the  Company  authorized  the
issuance to Dr.  Ruxin of a  non-qualified  stock  option to purchase  1,000,000
shares of the  Company's  common stock at $0.75 per share,  exercisable  for ten
years.  The Company is in the process of amending the grant so the option may be
exercisable  only when the  Corporation's  annual audited  financial  statements
reflect  earnings of $0.01 per share, or after a vesting period of sixty months,
whichever occurs first.

Also on August 27, 1998, non-qualified options to purchase 250,000 shares of the
Company's  common  stock at $0.75 per  share,  for a period of ten  years,  were
issued to certain  officers for the year ended  December  31, 1998.  The options
vest at the rate of 33-1/3% per year.

On October 14, 1998, the Company authorized the issuance of non-qualified  stock
options to purchase an aggregate of 130,000 shares of the Company's Common Stock
at $0.75 per share,  exercisable  for ten years, to two officers of the Company.
On November 19, 1998,  non-qualified  options to purchase  25,000  shares of the


                                       24
<PAGE>


Company's  Common  Stock at $0.85 per  share,  exercisable  for ten  years  were
granted to an employee.  On December 17, 1998, options to purchase 40,000 shares
of the  Company's  Common  Stock at $0.76 per share were granted to an employee.
The options vest at the rate of 20% per year.

On January 4, 1999,  the board of directors  authorized  incentive  stock option
grants to purchase a total of 45,000  shares of the  Company's  common  stock to
three  employees  at $0.78 per share.  The market  price of the common  stock on
January 4, 1999, the date of the grant was $0.84375,  resulting in  compensation
expense of $2,900. The options are for ten years and 25,000 vest at 20% per year
beginning in September 1999 and the remaining  options for 20,000 shares vest at
the rate of 50% immediately and 50% on March 28, 1999.

Also on January 4, 1999,  non-qualified options to purchase 60,000 shares of the
Company's  common stock at $.78 per share were granted to two employees,  one of
which is an officer,  and  non-qualified  options to purchase  500 shares of the
Company's  common  stock at $.78 per share  were  granted to a  consultant.  The
employee  grants  vest at the rate of 20% per year  beginning  in 1999,  and the
consultant  options  were 100% vested on the grant date.  All of the options are
for a term of ten years.  Compensation  expense  associated  with the consultant
options of $500 was recorded as of January 4, 1999.

On February 16, 1999,  the board of directors  approved a resolution to register
1,829,788 shares of the Company's common stock underlying the outstanding  Class
A Warrants  (1,456,988  shares at $4.55),  10% Note Warrants  (187,800 shares at
$3.75), and specified  non-qualified  stock options (185,000 shares at $2.50 and
$1.81). As an incentive to exercise of the aforementioned  warrants and options,
the board of directors  agreed to discount  the  exercise  price per share by an
amount up to 33-1/3% of the bid price on the common stock on the effective  date
of  the  registration   statement.   Under  current  accounting  guidance,  this
transaction  will result in a  significant  non-cash  charge to the statement of
operations on the effective  date of the  registration  statement.  However,  if
exercised it would result in a  significant  infusion of cash to the Company for
its operations.

Unless  otherwise  stated,  options to purchase  shares of the Company's  common
stock are granted at the fair market value of the common stock on the  effective
date of the grant.

During  1997,  the Company  recognized  expense of  $314,000  related to certain
grants of stock  options  within the  Company's  Stock Option Plan.  This amount
consists of  approximately  $146,000  included in sales and  marketing  expense,
$136,000  included in general and  administrative  expense,  $22,000 included in
research and development expense and $10,000 included in costs of revenue in the
accompanying 1997 statement of operations.


Warrants

On August 27, 1998,  pursuant to the  provisions of an agreement for  consulting
services with a Director of the Company,  the Company authorized the issuance of
warrants to purchase  600,000 shares of the Company's common stock, at $0.75 per
share,  exercisable for ten years. Using the Black-Scholes  model for estimating
the fair value of the  warrants  to  purchase  600,000  shares of the  Company's
common stock, the Company recorded  $247,000 as consulting  expense as of August
25, 1998.

On December 17, 1998, the warrants issued as of January 23, 1997 relating to 12%
notes were  amended.  The board of  directors  agreed to issue  warrants  to two
individuals  to  purchase  563,624  shares of the  Company's  common  stock at a
discount of 25% of the market price per share,  or $0.55 per share.  The Company
received  cash  proceeds of  approximately  $311,000 on December 17,  1998,  and
recorded a noncash charge to general and administrative expense of $104,000.



                                       25
<PAGE>

Other Option Activity

In addition to the options  granted  pursuant to the Second Amended and Restated
Stock  Option  Plan,  the Company has issued  non-qualified  options to purchase
2,542,000 shares of the Company's  common stock,  exercisable for ten years from
the date of grant,  pursuant to the terms of the stock  option  agreements.  The
information  regarding  the  specific  grants is  included  in the 1998 and 1997
Activity above.  The common stock  underlying the options is not included in the
Company's  effective  registration  statement  on Form  S-8  registering  shares
authorized pursuant to the Second Amended and Restated Stock Option Plan.

                               Option Grants Table

The following table sets forth certain information regarding options to purchase
shares of the Company's common stock issued to Executive Officers of the Company
during the year ended December 31, 1998:

<TABLE>
<CAPTION>

                                     Number of             % of Total
                                     Securities             Options
                                     Underlying            Granted to
                                      Options              Employees        Exercise       Expiration
           Name                       Granted               in 1998           Price           Date
--------------------------      --------------------     --------------    -----------    -------------

<S>                             <C>                           <C>         <C>                  <C>
Michael I. Ruxin                1,000,000(1)(3)(4)            33%         $   0.75             08/27/08
                                  250,000(1)                   8%             0.75             08/27/08

Thomas F. Marcinek                350,000(1)                  11%             0.75             08/27/08
                                  150,000(1)(4)                5%             0.75             08/27/08

Alan K. Geddes                    250,000(1)                   8%             0.75             08/27/08
                                  100,000(1)(4)                3%             0.75             08/27/08

Bruce Daniels                     250,000(1)                   8%             0.75             08/27/08

James R. Flynt                    100,000(1)                   3%             0.75             08/27/08

Gerald F. Willman                  60,000(1)(4)                2%             0.75             08/27/08
                                   90,000(2)                   3%             0.75             12/17/08
</TABLE>

(1)  On August  27,  1998,  the above  named  individuals  received  options  to
     purchase the stated  number of shares of common stock of the Company;  such
     options have vesting periods ranging from three to five years,  exercisable
     for ten years. The exercise price of the options is $0.75 per share,  which
     was equal to the market value of the share on the date of the grant.

(2)  On December 17, 1998,  Mr.  Willman,  received  options to purchase  90,000
     shares of common stock; such options vest over three years and the exercise
     price of the  options  is $0.75 per  share,  which was equal to the  market
     value of the shares on the date of the grant.

(3)  On August 27, 1998,  Dr.  Ruxin was issued an option to purchase  1,000,000
     shares of the common  stock of the Company at $0.75 per share,  exercisable
     ten years from the date of the  grant.  The  Company  is in the  process of
     amending the grant to include exercisability only when the Company's annual
     audited  financial  statements  reflect  earnings of $0.01 per share, or 60
     months, whichever occurs first.

(4)  These  options to purchase  shares of the  Company's  common  stock are not
     registered  in the  Company's  effective  Form S-8  registering  authorized
     shares under the Second Amended and Restated Stock Option Plan.





                                       26
<PAGE>

Aggregated Option Exercises In 1998 And Year-End Option Values/Table

<TABLE>
<CAPTION>
                                                                                               Value of
                                                                                              Unexercised
                                                                       Number of             In-the-Money
                                                                      Unexercised             Options at
                                                                       Options at              year-end
                                 Shares                                 Year-end                  ($)
                                Acquired             Value            Exercisable/           exercisable/
          Name                 on Exercise         Realized          Unexercisable           unexercisable
-------------------------    ---------------     -------------    --------------------    -------------------

<S>                              <C>                <C>            <C>                   <C> 
Michael I. Ruxin                   ---                ---              0 / 1,250,000      $     0 / 937,500

Thomas F. Marcinek                 ---                ---          120,000 / 380,000       90,000 / 285,000

Alan K. Geddes                     ---                ---           83,333 / 266,667       62,500 / 150,000

Bruce Daniels                      ---                ---           50,000 / 200,000       37,500 / 150,000

James R. Flynt                     ---                ---           20,000 /  80,000       15,000 /  60,000

Gerald F. Willman                  ---                ---            2,000 / 148,000        1,500 / 111,000

</TABLE>

No options were exercised during 1998 by the Company's executive officers.

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

No long term  incentive  plan awards  were  granted by the Company to any of the
executive  officers or directors of the Company  during the year ended  December
31, 1998.

                            Compensation Of Directors

Standard  Arrangements.  Members of the  Company's  board of  directors  are not
compensated  in  their  capacities  as  board  members.   However,  the  Company
reimburses all of its officers, directors and employees for accountable expenses
incurred  on behalf of the  Company.  Currently,  the  Company  does not pay any
directors fees for attendance at board meetings.

Other Arrangements.  The Company has no other arrangements pursuant to which any
director of the Company was compensated during the year ended December 31, 1998,
for services as a director.

On August 1, 1998,  the Company  entered into an employment  agreement  with Dr.
Ruxin for a period of three years commencing August 1, 1998. The initial term of
this agreement can be extended at the close of the second year for an additional
two years beyond the initial term  (creating a term of five years from August 1,
1998). Under the agreement, Dr. Ruxin receives a salary of $190,000 per year and
certain other fringe  benefits.  Dr.  Ruxin's  employment  agreement  includes a
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.  Dr. Ruxin's
employment  under the  employment  agreement may be terminated by Dr. Ruxin upon
the sale by the Company of  substantially  all of its assets,  a decision by the
Company to  terminate  its  business  and  liquidate  its assets,  the merger or
consolidation  of the Company  with  another  entity or an  agreement  to such a
merger or consolidation or any other type of  reorganization,  or if the Company
makes a general  assignment  for the benefit of  creditors,  files for voluntary
bankruptcy  or if a petition for the  involuntary  bankruptcy  of the Company is
filed in which an order for relief is entered and remains in effect for a period
of thirty days or more, or if the Company  seeks,  consents to, or acquiesces in
the  appointment  of a trustee,  receiver  or  liquidator  of the Company or any
material  part of its  assets.  Dr.  Ruxin's  employment  under  the  employment
agreement also may be terminated by reason of Dr. Ruxin's death or disability or
for cause as set  forth in the  employment  agreement.  If the  Company  for any
reason other than cause or permanent  disability  terminates the agreement,  the
Company must pay Dr. Ruxin compensation,  benefits and incentives at the rate in


                                       27
<PAGE>


effect at termination for twenty-four  months following the date of termination.
Pursuant  to Dr.  Ruxin's  Employment  Agreement,  the  Company  authorized  the
issuance to Dr.  Ruxin of a  non-qualified  stock  option to purchase  1,000,000
shares of the  Company's  common stock at $0.75 per share,  exercisable  for ten
years.  The Company is in the process of amending the grant so the option may be
exercisable  only when the  Corporation's  annual audited  financial  statements
reflect  earnings of $0.01 per share, or after a vesting period of sixty months,
whichever occurs first.

On August 1, 1998,  the Company also entered into an employment  agreement  with
Alan K.  Geddes  for a period of three  years  commencing  August 1,  1998.  The
initial term of this  agreement  can be extended at the close of the second year
for an  additional  two years beyond the initial  term  (creating a term of five
years from August 1, 1998). Under the agreement, Mr. Geddes receives a salary of
$125,000  per year and certain  other fringe  benefits.  Mr.  Geddes  employment
agreement includes an annual  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.  The agreement  also contains a  non-solicitation  provision
which prohibits Mr. Geddes from  soliciting  employees  and/or  customers of the
Company  to enter  the  employ or to do  business  with any  business  entity in
competition  with the Company during Mr. Geddes'  employment and for a period of
twelve months after the  cessation  thereof.  The  agreement  also provides that
annually, while the employment agreement is in effect, solely at the sole option
of the Company,  Mr. Geddes may receive  incentive  compensation of up to 50% of
his then current annual base salary. The incentive compensation will be based on
objectives  established  by the  Company  and Mr.  Geddes on December 31 of each
year.

Pursuant to the agreement, Mr. Geddes received incentive stock options under the
Company's  Stock  Option Plan,  as amended,  to purchase an aggregate of 250,000
shares of the Company's  common  stock.  The options vest at the rate of 20% per
year over a period of five years. If the Company (i) sells substantially all its
assets,  or (ii)  mergers  or  consolidates  with  another  entity or  otherwise
reorganizes  whereby  the total  value of the  Company's  Common  Stock  exceeds
$100,000,000 as a result of such  transaction or (iii) terminates Mr. Geddes for
any reason other than for cause prior to the expiration of the  agreement,  then
the  entire  250,000  in  options  shall  become  100%  vested  and  immediately
exercisable.

Mr. Geddes'  employment under the employment  agreement may be terminated by Mr.
Geddes  under  the same  circumstance  as set  forth in Dr.  Ruxin's  employment
agreement.  If Mr. Geddes' employment agreement is terminated by the Company for
any reason  other than cause or permanent  disability,  the Company must pay Mr.
Geddes  compensation,   benefits  and  incentives  at  the  rate  in  effect  at
termination  for twelve months  following the date of  termination.  The Company
also paid Mr. Geddes'  temporary living expenses  associated with his relocation
to Sacramento, California.

On August 1, 1998,  the Company also entered into an employment  agreement  with
Thomas F. Marcinek for a period of three years  commencing  August 1, 1998.  The
initial term of this  agreement  can be extended at the close of the second year
for an  additional  two years beyond the initial  term  (creating a term of five
years from August 1, 1998). Under the agreement,  Mr. Marcinek receives a salary
of $125,000 per year and certain other fringe benefits.  Mr. Marcinek employment
agreement includes an annual  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.  The agreement  also  contains  non-solicitation  and annual
incentive compensation provisions which are similar to those set forth in Mr.
Geddes' employment agreement.

Pursuant to the agreement,  Mr. Marcinek received  incentive stock options under
the Company's Stock Option Plan, as amended, to purchase an aggregate of 350,000
shares of the Company's  Common  Stock.  The options vest at the rate of 20% per
year over a period of five years. If the Company (i) sells substantially all its
assets,  or (ii)  mergers  or  consolidates  with  another  entity or  otherwise
reorganizes  whereby  the total  value of the  Company's  Common  Stock  exceeds
$100,000,000  as a result of such  transaction or (iii)  terminates Mr. Marcinek
for any reason other than for cause prior to the  expiration  of the  agreement,
then the entire  350,000 in options  shall  become 100%  vested and  immediately
exercisable.


                                       28
<PAGE>

Mr.  Marcinek's  employment under the employment  agreement may be terminated by
Mr.  Marcinek  under the same  circumstance  as set  forth in Dr.  Ruxin and Mr.
Geddes'  employment  agreements.  If  Mr.  Marcinek's  employment  agreement  is
terminated  by the  Company  for  any  reason  other  than  cause  or  permanent
disability,  the  Company  must  pay Mr.  Marcinek  compensation,  benefits  and
incentives at the rate in effect at termination for twelve months  following the
date of termination.

On February 1, 1999, the Company entered into an employment agreement with James
R. Flynt.  The agreement  commenced  February 1, 1999 and ends January 31, 2002,
unless at the close of the second year of the initial term, the agreement  shall
be automatically extended for an additional two years.

As compensation for services rendered under the agreement,  Mr. Flynt receives a
salary at the rate of $100,000 per annum.  Mr.  Flynt's salary shall be reviewed
on an  annual  basis  (from  July 6,  1998)  and if his  performance  is  deemed
satisfactory,  his salary  shall 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 CFO) is increased by a similar cost of living
raise. In addition, Mr. Flynt shall be eligible for performance increases.

Annually, on July 6 of each year, solely at the option of the Company, Mr. Flynt
may be  entitled  to  receive  incentive  compensation  of up to 50% of his base
salary of  $100,000  per year.  This  incentive  compensation  shall be based on
objectives  that shall be established by the senior officers and/or the board of
directors.

When the agreement was executed,  Mr. Flynt received  nonqualified stock options
to purchase an aggregate of 50,000  shares of the  Company's  common  stock,  in
addition to the nonqualified stock options granted to purchase 100,000 shares of
the Company's common stock previously granted. Twenty percent (20%) of the total
options granted shall vest and become  exercisable  upon the anniversary date of
the initial stock option grant.

If the Company  (i) sells  substantially  all of its  assets,  or (ii) merges or
consolidates  with  another  entity or otherwise  reorganizes  whereby the total
market value of the Company's  common stock exceeds  $100,000,000 as a result of
such  transaction  or (iii)  terminates  Mr.  Flynt for any  reason  other  than
malfeasance  prior to Mr. Flynt's  contract  expiration;  then the total options
granted to Mr.  Flynt  shall  become  immediately  100%  vested and  immediately
exercisable  on the date  preceding  the  effective  date of such sale,  merger,
consolidation or other reorganization.

Upon the occurrence of any of the following events the employment  agreement may
be terminated by Mr. Flynt: (i) the sale by the Company of substantially  all of
its  assets;  (ii) a decision  by the  Company to  terminate  its  business  and
liquidate  its assets;  (iii) the merger or  consolidation  of the Company  with
another  entity or an agreement to such a merger or  consolidation  or any other
type of  reorganization;  (iv) the Company  makes a general  assignment  for the
benefit of creditors, files a voluntary bankruptcy petition, files a petition or
answer  seeking  a  reorganization,   arrangement,  composition,   readjustment,
liquidation,  dissolution or similar relief under any law, there shall have been
filed any petition or application for the involuntary bankruptcy of the Company,
or other  similar  proceeding,  in which an order for relief is entered or which
remains  undismissed  for a period of thirty days or more, or the Company seeks,
consents  to, or  acquiesces  in the  appointment  of a  trustee,  receiver,  or
liquidator  of the Company or any  material  party of its assets;  (v) there are
material  reductions  in Mr.  Flynt's  duties and  responsibilities  without his
written consent or a demotion from his current position; (vi) termination by the
Company of Mr.  Flynt's  employment  with the Company for any reason  other than
cause;  (vii) a five percent  reduction in Mr.  Flynt's base  compensation  (not
including bonus),  other than any such reduction which is part of, and generally
consistent with, a general reduction of salaries; (viii) a material reduction by
the  Company in the kind or level of  employee  benefits  (other than salary and
bonus) to which Mr. Flynt is entitled  immediately  prior to such reduction with
the result that Mr.  Flynt's  overall  benefits  package  (other than salary and
bonus) is  substantially  reduced (other than any such  reduction  applicable to


                                       29
<PAGE>

others in the Company  generally);  (viv) the Company does not provide Mr. Flynt
with  commercially  reasonable  staffing,  tools,  or  other  necessary  support
resources  to  implement  and support the Company  developed  products in manner
consistent  with  industry  standards  resulting in a mutually  defined level of
customer satisfaction.

Mr. Flynt's employment under the employment  agreement also may be terminated by
reason  of Mr.  Flynt's  death or  disability  or for  cause as set forth in the
employment  agreement.  Following the termination of the employment agreement by
the  Company  for any reason  other  than  cause,  death,  or the  temporary  or
permanent  disability of Mr. Flynt,  Mr. Flynt shall be entitled to compensation
and benefits for eight months following the date of termination.

As a condition  to the April 1998  Financing  Agreements  each of the  Company's
Officers and certain  employees  provided  the lenders with undated  releases of
their  respective  employment  agreements and tendered  resignations,  which are
being held in escrow.  Until the  releases  are  accepted  or  rescinded  by the
lenders,  the  following  employment  agreements  between  the  Company  and its
Officers are still in effect.

On May 24, 1995, the Company had entered into a five year  employment  agreement
with  William  J.  Collard.  The  agreement  provided  for an  annual  salary of
$100,000. Mr. Collard's employment agreement included a cost-of-living  increase
at the  rate of 2 1/2%  per  annum,  plus  any  other  increase  which  had been
determined  from  time to time  at the  discretion  of the  Company's  board  of
directors. Mr. Collard's agreement also contained a covenant not to compete. The
covenant not to compete would terminate the later of five years from the date of
the agreement or the term of the agreement; hence, the Company would not receive
any benefit from the covenant not to compete unless the agreement was terminated
prior to May 24, 2000. If Mr. Collard's  agreement was terminated by the Company
for any reason other than cause or permanent  disability,  the Company  would be
required to pay him a lump sum severance payment of $2.5 million.

Mr.  Collard  and  the  Company  reached  an  agreement  whereby  Mr.  Collard's
employment  agreement would be terminated and Mr. Collard would retire effective
February 4, 1999.  The Company  agreed to pay Mr.  Collard  $64,000,  in monthly
installments of $3,000 per month for approximately 22 months commencing December
30,  1998.  In addition,  the Company  agreed to pay Mr.  Collard  approximately
$237,500, in 42 monthly installments, also commencing December 30, 1998.

The Company also has an employment  agreement with Gerald F. Willman,  Jr. which
contains an extension  provision  for the term of the  agreement and reasons for
termination  similar to those of Mr.  Collard with an annual  salary of $95,000,
except the  initial  term is for three  years  commencing  May 24,  1995 and the
extension is for an additional two years.  Mr.  Willman's  employment  agreement
includes a  cost-of-living  increase  at the rate of 2 1/2% per annum,  plus any
other  increase  which may be determined  from time to time in the discretion of
the Company's Board of Directors.  The employment  agreement requires that if he
is  terminated  by the  Company  for any reason  other  than cause or  permanent
disability,  the Company must pay Mr.  Willman a lump sum  severance  payment of
$1.0 million.  Mr. Willman  received  approximately  $8,000 for vacation related
expenses in 1996.  During 1997, Mr. Willman received  approximately  $25,000 for
tax expenses related to the May 1995 Wyndgate merger.

                        Reporting On Repricing Of Options

Effective  February 20, 1998, the board of directors granted an incentive option
to  purchase  350,000  shares of the  Company's  common  stock to Mr.  Thomas F.
Marcinek at $0.92 per share. On August 27, 1998, the board of directors  amended
the price of the  incentive  option to $0.75 per share,  the market price of the
Company's  common stock on that date.  During the period from the original grant
to the amendment,  the Company  experienced the Changes in Control, as described
below.  The new board of  directors  believe it was in the best  interest of the
Company to reprice the option as a further incentive to Mr. Marcinek.




                                       30
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company is currently  controlled by Heng Fung Holdings Company Limited (Heng
Fung Holdings) and its principals,  Fai H. Chan, Kwok Jen Fong,  Robert H. Trapp
and Jeffrey M. Busch.  Heng Fung Holdings and its principals have appointed five
of eight members of the Board of Directors of the Company,  i.e., Messrs.  Chan,
Fong, Trapp, Busch, and Gary L. Cook. In addition, Heng Fung Holdings owns 98.6%
of Heng Fung Capital (S) Limited, which, in turn, owns 100% of Heng Fung Finance
Company  Limited  (Heng Fung  Finance).  In  connection  with an April 14, 1998,
$1,500,000  million loan to the Company,  Heng Fung Finance was issued a warrant
to purchase 6,000,000 shares of the Company's Common Stock, exercisable at $0.25
per share until April 14, 2008. Heng Fung Holdings also owns  approximately  31%
(beneficially  approximately  76%) of the  outstanding  common stock of Fronteer
Financial.  Fronteer  Financial  owns 100% of the  outstanding  common  stock of
American Fronteer  Financial  Corporation  (AFFC),  formerly named RAF Financial
Corporation, the underwriter of the Company's initial public offering. AFFC owns
warrants to purchase 46,100 units at $11.55 per unit,  exercisable until January
14, 2002,  each unit  consisting  of two shares of Common Stock and a warrant to
purchase  one share of Common  Stock at $7.51,  exercisable  until  February 11,
2000.  Fronteer  Financial  also owns 100% of the  outstanding  common  stock of
Fronteer Capital and the majority of the outstanding common stock of eBanker. In
connection  with an April 14, 1998,  $1,650,000  line of credit  extended to the
Company,  Fronteer Capital was issued a warrant to purchase  1,000,000 shares of
the Company's Common Stock, exercisable at $0.25 per share until April 14, 2008,
and the right to receive a warrant to purchase an additional 5,000,000 shares of
the Company's Common Stock, exercisable at $0.25 per share until April 14, 2008,
if the line of credit was drawn upon by the Company. In September 1998, pursuant
to an Assignment, Assumption, Assumption and Consent Agreement, Fronteer Capital
assigned all its rights  duties and  obligations  under the  $1,650,000  line of
credit to  eBanker.  In October  1998,  the  Company  borrowed  $400,000  on the
$1,650,000  line of credit and issued  eBanker a warrant to  purchase  5,000,000
shares of the Company's Common Stock, exercisable at $0.25 per share until April
14, 2008.

Also,  in  October  1998,  pursuant  to a Loan  and  Warrant  Purchase  and Sale
Agreement,  Heng Fung Finance sold eBanker $1,000,000 of the April 14, 1998 loan
and  warrants  to  purchase  4,000,000  shares of the  Company's  common  stock,
exercisable  at $0.25 per share until  April 14,  2008.  Therefore,  through its
subsidiaries, Heng Fung Holdings and its principals beneficially own warrants to
purchase  12,000,000 shares of the Company's common stock,  exercisable at $0.25
per share until April 14, 2008, and warrants to purchase  46,100 units at $11.55
per unit, exercisable until January 14, 2002, each unit consisting of two shares
of common  stock and a warrant to purchase  one share of common  stock at $7.51,
exercisable until February 11, 2000.

                     Security Ownership of Beneficial Owners

The  following  table sets forth,  as of the date hereof,  the  ownership of the
Company's  Common Stock,  based upon 8,881,879  common shares  outstanding as of
March 15, 1999, by (i) each director and executive officer of the Company,  (ii)
all executive  officers and  directors of the Company as a group,  and (iii) all
persons known by the Company to  beneficially  own more than 5% of the Company's
Common Stock.






                                       31
<PAGE>

<TABLE>
<CAPTION>
                                                                      Amount and Nature of              Percent of
         Name                     Position With Company               Beneficial Ownership(1)              Class
-----------------------------     ---------------------               -----------------------           -----------
<S>                                  <C>                                 <C>                             <C> 
Fai H. Chan                             Director                           12,388,300(8)(9)(10)(11)        58.2%
30 Wall Street, 11th Floor
New York, NY 10005

Kwok Jen Fong                           Director                           12,288,300(8)(13)               58.0%
7 Tamasek Boulevard
#43-03 Suntec Tower One
Singapore 038987

Robert H. Trapp                         Director                           12,138,300(8)(10)(11)           57.7%
1700 Lincoln Street
32nd Floor
Denver, Colorado 80202

Michael I. Ruxin, M.D.                  Chairman of the Board and             934,050(2)                   10.5%
12600 W. Colfax, Suite C-420              Chief Executive Officer
Lakewood, CO 80215

Jeffrey M. Busch                        Director                            1,938,300(12)                  18.0%
Suite 204 B, Oxford Plaza
University Plaza
Newark, DE 19702

Gerald F. Willman, Jr.                  Director and Vice President -         952,514(5)                   10.6%
11463 Forty-Niner Circle                  Product Management
Gold River, CA                          (Wyndgate Technologies, Inc.)

Lori J. Willman                         None                                  952,514(6)                   10.6%
11463 Forty-Niner Circle
Gold River, CA

William J. Collard (1)                  President through February 4, 1999
4925 Robert J. Matthew's Pkwy.          (Wyndgate Technologies, Inc.)         613,006(4)                    6.9%
Suite 100
El Dorado Hills, CA 95762

Gordon E. Segal, M.D.                   Director                              312,250(7)                    3.5%
3850 Kim Lane
Encino, CA 91436

Thomas F. Marcinek                      President and Chief Operating         140,500(3)                    1.6%
1026 Folsom Ranch, Apt. #303              Officer
Folsom, CA 95630

Alan K. Geddes                          Vice President Finance, Chief         103,833(14)                   1.2%
6 Barrie Way                              Financial Officer and Treasurer
Mill Valley, CA 94941

Bruce Daniels                           Vice President Sales                   10,000(15)                   0.1%
4925 Robert J. Matthew's Pkwy.           and Marketing
Suite 100                               (Wyndgate Technologies)
El Dorado Hills, CA 95762

Kim Geist                               Secretary of Global Med                 2,000(17)                  0.02%
13400 Clayton Street                    Technologies, Inc.
Thornton, CO 80241

Gary L. Cook                            Director                                   ---                      0.0%
1700 Lincoln Street
32nd Floor
Denver, Colorado 80203

James R. Flynt                          Vice President Operations               1,488(18)                   0.0%
4925 Robert J. Mathews Pkwy.            (Wyndgate Technologies)
Suite 100
El Dorado Hills, CA 95762

All Directors and Executive                                                    16,407,941                  72.0%
  Officers as a group (14 persons)
</TABLE>
-----------------

                                       32
<PAGE>

(1)  Calculated  pursuant to Rule  13d-3(d) of the  Securities  Exchange  Act of
     1934.  Unless otherwise stated below,  each such person has sole voting and
     investment  power with  respect to all such  shares.  Under Rule  13d-3(d),
     shares not outstanding  which are subject to options,  warrants,  rights or
     conversion privileges exercisable within 60 days are deemed outstanding for
     the purpose of calculating the number and percentage  owned by such person,
     but  are  not  deemed  outstanding  for  the  purpose  of  calculating  the
     percentage owned by each other person listed.
(2)  Includes 6,250 shares  underlying  warrants  issued in connection  with the
     purchase of 10% Notes and 250,000 shares underlying  currently  exercisable
     options.   Does  not  include  1,000,000  options  which  will  not  become
     exercisable for more than 60 days of the date hereof.
(3)  Includes 120,000 shares underlying currently  exercisable options. Does not
     include  380,000  options which will not become  exercisable  for more than
     sixty days of the date hereof.
(4)  Includes  15,000 shares  underlying  warrants issued in connection with the
     purchase of 10% Notes.  Mr.  Collard has granted  individual  options to an
     employee of  Wyndgate  Technologies,  Inc.  to purchase  all or any part of
     1,633 of his shares of the Company, exercisable until September 21, 2005.
(5)  Includes  346,481 shares owned by Lori J. Willman,  the spouse of Gerald F.
     Willman,  Jr., and 70,000 shares underlying currently  exercisable options.
     Does not include  26,000  shares  underlying  options which will not become
     exercisable for more than sixty days of the date hereof. Gerald F. Willman,
     Jr.  has  granted  individual  options  to certain  employees  of  Wyndgate
     Technologies,  Inc. to purchase all or any part of 109,434 of his shares of
     the Company, exercisable until September 21, 2005.
(6)  Includes 536,033 shares and 70,000 shares underlying currently  exercisable
     options  owned by Gerald F.  Willman,  Jr., the spouse of Lori J.  Willman.
     Does not  include  26,000  shares  underlying  options  owned by  Gerald F.
     Willman,  Jr. which will not become exercisable for more than sixty days of
     the date hereof.
(7)  Includes 6,250 shares  underlying  warrants  issued in connection  with 10%
     Notes and 56,000 shares underlying currently  exercisable options. Does not
     include 24,000 shares underlying  options which will not become exercisable
     for more than sixty days of the date hereof.
(8)  Includes  2,000,000  shares which may be acquired upon exercise of warrants
     to purchase Common Stock,  which are currently  exercisable,  owned by Heng
     Fung Finance  Company  Limited,  as to which he is a director and 9,000,000
     shares  which may be acquire upon  exercise of warrants to purchase  Common
     Stock, which are currently owned by Fronteer Development  Finance,  Inc., a
     majority-owned subsidiary of Heng Fung Finance Company Limited.
(9)  Includes 250,000 shares underlying currently exercisable options.
(10) Includes  1,000,000  shares which may be acquired upon exercise of warrants
     to  purchase  Common  Stock,  which  are  currently  exercisable,  owned by
     Fronteer Capital, Inc., as to which he is a director.
(11) Includes  138,300  shares  underlying  currently  exercisable  warrants  to
     purchase  46,100 units,  each unit consisting of two shares of common stock
     and one currently exercisable warrant, owned by American Fronteer Financial
     Corporation, of which he is a director.
(12) Includes:   (i)  50,000  shares,   150,000  shares   underlying   currently
     exercisable  options and 600,000 shares  underlying  currently  exercisable
     warrants;  (ii)  1,000,000  shares which may be acquired  upon  exercise of
     warrants to purchase Common Stock, which are currently  exercisable,  owned
     by Fronteer Capital,  Inc., which is a wholly-owned  subsidiary of Fronteer
     Financial  Holdings,  Ltd., of which he is a director;  and,  (iii) 138,300
     shares underlying currently  exercisable warrants to purchase 46,100 units,
     each  unit  consisting  of two  shares of  common  stock and one  currently
     exercisable  warrant,  owned by American  Fronteer  Financial  Corporation,
     f.k.a.  RAF Financial  Corporation,  which is a wholly-owned  subsidiary of
     Fronteer Financial Holding, Ltd., of which he is a director.


                                       33
<PAGE>


(13) Includes: (i) 150,000 shares underlying currently exercisable options; (ii)
     1,000,000  shares  which may be  acquired  upon  exercise  of  warrants  to
     purchase Common Stock, which are currently  exercisable,  owned by Fronteer
     Capital,  Inc.,  which is a wholly-owned  subsidiary of Fronteer  Financial
     Holdings, Ltd., which is a partially-owned  subsidiary of Heng Fung Finance
     Company  Limited,  of which he is a director;  and,  (iii)  138,300  shares
     underlying  currently  exercisable  warrants to purchase 46,100 units, each
     unit consisting of two shares of common stock and one currently exercisable
     warrant,  owned by  American  Fronteer  Financial  Corporation,  which is a
     wholly-owned  subsidiary of Fronteer  Financial  Holding,  Ltd., which is a
     partially-owned  subsidiary of Heng Fung Finance Company Limited,  of which
     he is a director.
(14) Includes 83,333 shares underlying currently  exercisable options.  Does not
     include 266,667 shares underlying options which will not become exercisable
     for more than 60 days from the date hereof.
(15) Does not include  250,000 shares  underlying  options which will not become
     exercisable for more than 60 days from the date hereof.
(16) Does not include  100,000 shares  underlying  options which will not become
     vested for more than 60 days from the date hereof.
(17) Includes 2,000 shares underlying currently  exercisable  options.  Does not
     include 13,000 shares  underlying  options which will not become vested for
     more than 60 days of the date hereof.
(18) Does not include  50,000  shares  underlying  options which will not become
     vested for more than 60 days from the date hereof.

Changes In Control

On April 14, 1998,  Fronteer Capital,  Inc. (Fronteer  Capital),  a wholly owned
subsidiary of Fronteer Financial Holdings,  Ltd. (Fronteer Financial),  and Heng
Fung Finance  Company  Limited (Heng Fung  Finance)  committed to provide to the
Company lines of credit for up to $1,650,000 and $1,500,000, respectively, for a
total combined loan commitment of $3,150,000 over the following twelve months.

Pursuant  to the loan  commitment  provided  by Heng Fung  Finance,  the Company
agreed that the Company's board of directors would not exceed nine and Heng Fung
Finance had the option to cancel all the Company's then existing  management and
employee  contracts.  Heng Fung Finance  appointed  five members to the board of
directors  of  the  Company.  Since  completion  of  the  April  1998  Financing
Agreements and the appointment of the additional directors by Heng Fung Finance,
new employment contracts, approved by the Board, have been entered into with Dr.
Michael I. Ruxin,  Chairman and Chief Executive Officer,  and Messrs.  Thomas F.
Marcinek,  President  and Chief  Operating  Officer,  and Alan K.  Geddes,  Vice
President and Chief Financial Officer.

For issuing the  commitment,  Heng Fung  Finance  received  warrants to purchase
6,000,000  shares of the Company's common stock. The warrants are exercisable at
$0.25 per share for up to 10 years and the Company  registered  the warrants and
the  underlying  shares for resale under the 1933 Act.  Using the  Black-Scholes
model for estimating the fair value of the warrants to purchase 6,000,000 shares
of the  Company's  common  stock,  the Company  recorded  $5,340,000 as deferred
financing  costs as of April 14, 1998,  to be amortized  straight-line  over the
term of the loan.

For issuing  the  commitment,  Fronteer  Capital  received  warrants to purchase
1,000,000  shares of the  Company's  common  stock.  When the line of credit was
drawn upon,  Fronteer Capital received additional warrants to purchase 5,000,000
shares of the Company's  common stock. The warrants are exercisable at $0.25 per
share  for up to 10  years  and the  Company  registered  the  warrants  and the
underlying shares for resale under the 1933 Act. Using the  Black-Scholes  model
for  estimating the fair value of the warrants to purchase  1,000,000  shares of
the Company's common stock, the Company recorded $890,000 as deferred  financing


                                       34
<PAGE>


costs as of April 14, 1998, to be amortized  straight-line  over the term of the
loan.  Using  the  Black-Scholes  model  for  estimating  the fair  value of the
warrants to purchase 5,000,000 shares of the Company's common stock, the Company
recorded an additional  $4,450,000 as deferred financing costs as of October 30,
1998, to be amortized straight-line over the remaining term of the loan.

The Company's  Registration Statement which included the 12,000,000 warrants and
the underlying shares became effective February 16, 1999.

The loan  commitment  provided by Fronteer  Capital has  substantially  the same
terms and conditions as the loan commitment provided by Heng Fung Finance except
that, if Heng Fung Finance had not appointed directors to the Company's board of
directors,  Fronteer Capital had the right to appoint a maximum of three members
to the board of  directors  of the  Company.  Dr.  Michael I.  Ruxin,  the Chief
Executive  Officer  of the  Company,  has  agreed to  personally  guarantee  the
repayment of $1,650,000 of the Fronteer Capital line of credit. The guarantee is
limited to certain of Dr. Ruxin's assets.

If the Company  defaults on the repayment of any amount  borrowed by the Company
pursuant to the Heng Fung Finance  commitment,  all original existing members of
the board of  directors  of the Company  will have to resign,  Heng Fung Finance
will have the right to appoint  all new members to the board of  directors,  all
employment  contracts of the management and officers of the Company  existing at
the time of the financing will be invalid immediately, and their employment will
be subject to reconfirmation by Heng Fung Finance. If there is no default on the
repayment to Heng Fung  Finance,  or if there is a default and Heng Fung Finance
does not  exercise  its rights on default,  Fronteer  Capital will have the same
rights on default on the  repayment  of any  amounts  borrowed  pursuant  to the
Fronteer Capital commitment as Heng Fung Finance as are specified above.

On September 11, 1998,  Fronteer  Capital entered into an agreement with eBanker
USA.com, Inc. (eBanker), formerly known as Fronteer Development Finance, Inc., a
majority owned subsidiary of Fronteer Financial, whereby Fronteer Capital agreed
to assign to eBanker its rights to and obligations in the loan commitment to the
Company. On September 28, 1998, the Company approved the Assignment,  Assumption
and Consent  Agreement by and between the Company,  Dr. Ruxin,  Fronteer Capital
and eBanker whereby the Company  consented to the assignment by Fronteer Capital
to  eBanker of all of the  rights,  duties and  obligations  under the  Fronteer
Capital line of credit agreement described above.

In October 1998, the Company,  Heng Fung Finance and eBanker entered into a Loan
and Warrant  Purchase and Sale  Agreement  whereby Heng Fung Finance  sold,  and
eBanker  purchased,  $1,000,000  of the Heng Fung  Finance  loan and warrants to
purchase 4,000,000 shares of the Company's Common Stock. Heng Fung has agreed to
return the original  notes and its warrant to purchase  6,000,000  shares of the
Company's  Common  Stock to the  Company,  and the Company has issued a $500,000
promissory  note and a warrant to  purchase  2,000,000  shares of the  Company's
Common Stock to Heng Fung Finance and a $1,000,000 promissory note and a warrant
to purchase 4,000,000 shares of the Company's Common Stock to eBanker.

In March 1999, the Company entered into agreements for a comprehensive financing
package that  includes:  (1) an $8,000,000  preferred  stock  private  placement
through  American  Fronteer  Financial   Corporation   (AFFC),  a  wholly  owned
subsidiary  of  Fronteer  Financial  Holdings  Ltd.  (Fronteer  Financial);  (2)
exercise of 2,000,000  warrants at $0.25 per warrant;  (3) extending the balance
on the line of credit with eBanker USA.Com,  Inc.  (eBanker),  formerly Fronteer
Development  Finance,  Inc., a majority owned  subsidiary of Fronteer  Financial
until April 15, 2000,  with a change in the default  conversion  rate from $0.05
per share contained in the original loan agreement to $0.25 per share; and (4) a
$750,000 bridge loan which bears interest at 12% per annum.


                                       35
<PAGE>

Heng Fung Finance is in the process of  surrendering  the promissory note in the
amount of $500,000 in exercise of the  warrants to acquire  2,000,000  shares of
common stock of the  Company.  This  transaction  is expected to be completed in
April 1999.

The remaining  $2,650,000  loan from eBanker has been  extended  until April 15,
2000, with the previous  conversion  price of $0.05 per share increased to $0.25
per share. In consideration for the extension, the Company paid a 2% fee to AFFC
of $53,000, payable in shares of the Company's common stock.

The $750,000 bridge loan bears interest at 12% and is convertible 6 months after
the loan is drawn  into  shares of common  stock of the  Company  at the  15-day
average  closing bid price  prior to the date of  closing.  The loan has not yet
been drawn.

In April 1999, the Company  entered into an agreement with Heng Fung Finance for
a bridge loan in the amount of $2,000,000 (April 1999 Financing Agreement).  The
agreement  provides a line of credit,  with  interest  at 12% per annum  payable
monthly,  due April 12,  2000.  As  consideration  for the line of  credit,  the
Company agreed to pay a fee equal to 5% of the total line of credit in shares of
common stock of the  Company.  The line of credit will be  convertible,  at Heng
Fung's option, into shares of the Company's common stock at a price based on the
average  closing  bid  price of the  Company's  common  stock for a period of 15
business days prior to April 13, 1999.

The Company  agreed to pay a cash  finder's  fee of 9% of the  Fronteer  Line of
Credit to American Fronteer  Financial  Corporation  (AFFC),  formerly named RAF
Financial  Corporation,  payable as the eBanker  line of credit is drawn.  As of
December 31, 1998, the Company had paid AFFC $108,000 under the agreement.  AFFC
is a majority-wholly owned subsidiary of Fronteer Financial.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Dr. Ruxin has personally  guaranteed the Company's  $1,650,000  Fronteer Line of
Credit.

In August 1997, the Company entered into a four year  employment  agreement with
Hollis Gailey,  the spouse of William J. Collard,  a former officer and director
of  the  Company.  Ms.  Gailey  provided  international  business  services  for
Wyndgate. During 1997, the Company also paid Ms. Gailey $30,000 in consideration
of her entering into the employment  agreement  with the Company,  and agreed to
pay $60,000 in deferred compensation, payable in three equal annual installments
in 1998, 1999, and 2000. In January 1998, the Company paid Ms. Gailey $20,000 in
connection with the deferred  compensation amount. In September 1998, Ms. Gailey
resigned  from  the  Company  pursuant  to  terms  contained  in the  employment
agreement.

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.


                                       36
<PAGE>

                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

     See "EXHIBIT INDEX" on page 40

(b) Current Reports on Form 8-K:

A Current Report on Form 8-K dated October 2, 1998 was filed on October 7, 1998.
The Current Report contained information pursuant to Regulation S-K Item 30. The
Company  made the  following  representations:  Effective  October 2, 1998,  the
Company  engaged KPMG Peat  Marwick LLP as  certifying  accountant  for the year
ended  December 31, 1998. The Company did not consult with KPMG Peat Marwick LLP
with regard to any matter concerning the application of accounting principles to
any specific  transactions,  either completed or proposed,  or the type of audit
opinion  that  might  be  rendered  with  respect  to  the  Company's  financial
statements prior to engaging the firm.












                                       37
<PAGE>


                                   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: April 14, 1999                     By /s/ Michael I. Ruxin
                                        ----------------------------------------
                                         Michael I. Ruxin, Chairman of the Board
                                         and Chief Executive Officer

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

Dated:  April 14, 1999                  /s/ Michael I. Ruxin
                                        ----------------------------------------
                                        Michael I. Ruxin, Chairman of the Board
                                        and Chief Executive Officer and Director

Dated:  April 14, 1999                  /s/ Thomas F. Marcinek
                                        ----------------------------------------
                                        Thomas F. Marcinek, President and Chief
                                        Operating Officer

Dated:  April 14, 1999                  /s/ Gerald F. Willman, Jr.
                                        ----------------------------------------
                                        Gerald F. Willman, Jr., Director
                                        and Wyndgate Vice President -
                                        Product Management

Dated:  April 14, 1999                  /s/ Alan K. Geddes
                                        ----------------------------------------
                                        Alan K. Geddes, Chief Financial Officer,
                                        Vice President, Finance and Treasurer

Dated:  April 15, 1999                  /s/ Fai H. Chan
                                        ----------------------------------------
                                        Fai H. Chan, Director

Dated:  April 15, 1999                  /s/ Robert H. Trapp
                                        ----------------------------------------
                                        Robert H. Trapp, Director

Dated:  April 15, 1999                  /s/ Kwok Jen Fong
                                        ----------------------------------------
                                        Kwok Jen Fong, Director

Dated:  April 14, 1999                  /s/ Jeffrey M. Busch
                                        ----------------------------------------
                                        Jeffrey M. Busch, Director


Dated:  April 15, 1999                  /s/ Gary L. Cook
                                        ----------------------------------------
                                        Gary L. Cook, Director

Dated:  April 15, 1999                  /s/ Gordon E. Segal
                                        ----------------------------------------
                                        Gordon E. Segal, Director


                                       38
<PAGE>





                          Independent Auditors' Report




Board of Directors
Global Med Technologies, Inc.


We have audited the accompanying balance sheet of Global Med Technologies,  Inc.
as of December 31, 1998, and the related statements of operations, stockholders'
equity  (deficit)  and cash  flows  for the year  then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Global Med Technologies,  Inc.
as of December 31, 1998,  and the results of its  operations  and its cash flows
for the year  then  ended  in  conformity  with  generally  accepted  accounting
principles.

                                            
                                            KPMG LLP




Denver, Colorado
April 9, 1999


                                       F-1

<PAGE>



                         Report of Independent Auditors




Board of Directors
Global Med Technologies, Inc.

We have audited the accompanying balance sheet of Global Med Technologies,  Inc.
as of December 31, 1997, and the related statements of operations, stockholders'
equity  (deficit),  and cash  flows for the year  then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Global Med Technologies,  Inc.
at December 31, 1997,  and the results of its  operations and its cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

                                            /s/ Ernst & Young LLP


Denver, Colorado
April 10, 1998


                                       F-2


<PAGE>



PART I - FINANCIAL INFORMATION

ITEM 7.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                         GLOBAL MED TECHNOLOGIES, INC.
                                                BALANCE SHEETS
                                 (In thousands, except per share information)


                                                                                 December 31,
                                                                              -----------------
                                                                              1998         1997
                                                                              ----         ----
ASSETS

CURRENT ASSETS:

<S>                                                                         <C>          <C>  
   Cash and cash equivalents ............................................   $   821      2,370
   Accounts receivable-trade, net of allowance for uncollectible accounts
       of $50 and $175 at December 31, 1998 and 1997, respectively ......       413        175
   Accrued revenues, net of allowance for uncollectible accounts of
       $15 and $125 at December 31, 1998 and 1997 .......................        43        158
   Prepaid expenses and other assets ....................................       118        256
                                                                            -------    -------

Total current assets ....................................................     1,395      2,959

EQUIPMENT, FURNITURE AND FIXTURES, AT COST:
   Furniture and fixtures ...............................................       229        367
   Machinery and equipment ..............................................       308        303
   Computer hardware and software .......................................     1,145      1,166
                                                                            -------    -------
                                                                              1,682      1,836
   Less accumulated depreciation and amortization .......................    (1,117)      (665)
                                                                            -------    -------

Net equipment, furniture and fixtures ...................................       565      1,171

DEFERRED FINANCING COSTS,
   net of accumulated amortization of $6,031 at
   December 31,1998  ....................................................     4,649       --

CAPITALIZED SOFTWARE DEVELOPMENT COSTS,
   net of accumulated amortization of $653 and $403 at
   December 31, 1998 and 1997, respectively .............................       920        136

OTHER ASSETS ............................................................        60       --
                                                                            -------    -------


Total assets ............................................................   $ 7,589      4,266
                                                                            =======    =======



See accompanying notes to the financial statements.


                                       F-3


<PAGE>


<CAPTION>


                                           GLOBAL MED TECHNOLOGIES, INC.
                                            BALANCE SHEETS (CONTINUED)
                                   (In thousands, except per share information)



                                                                                   December 31,
                                                                                -----------------
                                                                                1998         1997
                                                                                ----         ----
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:

<S>                                                                          <C>              <C>
   Accounts payable ......................................................   $    234         324
   Accrued expenses ......................................................        637         599
   Accrued payroll .......................................................         53         398
   Accrued compensated absences ..........................................        438         449
   Noncompete accrual ....................................................         35         150
   Deferred revenue ......................................................      1,935       2,761
   Financing agreement ...................................................        500        --
   Current portion of capital lease obligations ..........................         91         229
   Net liabilities of discontinued operations ............................       --           631
                                                                             --------    --------

Total current liabilities ................................................      3,923       5,541

CAPITAL LEASE OBLIGATIONS, less current portion ..........................        105         198

FINANCING AGREEMENT ......................................................      2,200        --
                                                                             --------    --------
Total liabilities ........................................................      6,228       5,739
                                                                             --------    --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):

   Preferred stock, $.01 par value: Authorized shares - 10,000;
      None issued or outstanding .........................................       --          --
   Common stock, $.01 par value: Authorized shares - 40,000;
      Issued and outstanding shares - 8,882 and 8,148 at December 31, 1998
      and 1997, respectively .............................................         89          82
   Additional paid-in capital ............................................     24,884      13,420
   Accumulated deficit ...................................................    (23,612)    (14,975)
                                                                             --------    --------

Total stockholders' equity (deficit) .....................................      1,361      (1,473)
                                                                             --------    --------

Total liabilities and stockholders' equity (deficit) .....................   $  7,589       4,266
                                                                             ========    ========

</TABLE>


See accompanying notes to the financial statements.


                                       F-4


<PAGE>

<TABLE>
<CAPTION>
                                           GLOBAL MED TECHNOLOGIES, INC.
                                             STATEMENTS OF OPERATIONS
                                    (In thousands, except per share information)


                                                                          Year Ended December 31,
                                                                          ----------------------
                                                                             1998        1997
                                                                             ----        ----
REVENUES:
<S>                                                                       <C>          <C>  
   Software sales and consulting ......................................   $ 4,439      2,209
   Hardware and software sales, obtained from vendors .................       348        297
                                                                          -------    -------
                                                                            4,787      2,506
                                                                          -------    -------

COST OF REVENUES:
   Software sales and consulting ......................................     1,950      1,373
   Hardware and software sales, obtained from vendors .................       300        224
                                                                          -------    -------
                                                                            2,250      1,597
                                                                          -------    -------

Gross profit ..........................................................     2,537        909

OPERATING EXPENSES:
   General and administrative .........................................     1,769      2,702
   Sales and marketing ................................................       975      1,458
   Research and development ...........................................     1,973      3,757
   Depreciation and amortization ......................................       567        409
   Restructuring charges ..............................................       132       --
                                                                          -------    -------

Loss from continuing operations before other income (expense)..........    (2,879)    (7,417)

OTHER INCOME (EXPENSE):
   Interest income ....................................................        18        168
   Interest expense ...................................................      (100)       (86)
   Financing costs ....................................................    (6,031)      --
   Other ..............................................................       355        (81)
                                                                          -------    -------

Loss from continuing operations .......................................    (8,637)    (7,416)

Loss from discontinued operations .....................................      --         (880)
Gain on sale of discontinued operations ...............................      --        1,013
                                                                          -------    -------

Net loss ..............................................................   $(8,637)    (7,283)
                                                                          =======    =======

Basic and diluted loss per common share:
   Loss from continuing operations ....................................   $ (1.05)     (0.96)
   Gain from discontinued operations ..................................      --         0.02
                                                                          -------    -------

        Loss per share ................................................   $ (1.05)     (0.94)
                                                                          =======    =======

Weighted average number of common shares outstanding ..................     8,228      7,728
                                                                          =======    =======
</TABLE>



See accompanying notes to the financial statements.


                                       F-5


<PAGE>

<TABLE>
<CAPTION>

                                                    GLOBAL MED TECHNOLOGIES, INC.
                                            STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                                           (In thousands)


                                                                             Common Stock        Additional
                                                                           -------------------     paid-in    Accumulated
                                                                           Shares      Amount      capital      Deficit       Total
                                                                           ------      ------    -----------  -----------     -----

<S>                                                                         <C>       <C>           <C>         <C>          <C> 
Balances, December 31, 1996 .........................................       4,994     $    50       4,282       (7,692)      (3,360)

Issuance of warrants related to
     January 1997 12% notes .........................................        --          --            79         --             79
Issuance of common stock related to
    conversion of certain 10% notes .................................          93           1         348         --            349
Initial public offering including
    underwriter's over allotment option-
    net of offering expenses ........................................       2,914          29       8,197         --          8,226
Share adjustments related to May
    1995 private placement of common stock ..........................         120           1          (1)        --           --
Issuance of common stock from exercise of
    stock options under Company's stock
    option plan .....................................................          15        --            21         --             21
Issuance of common stock to a corporate
    marketing enterprise ............................................          12           1          25         --             26
Option grants under the Company's
    stock option plan ...............................................        --          --           314         --            314
Option grants to a business advisory enterprise .....................        --          --           155         --            155
Net loss ............................................................        --          --          --         (7,283)      (7,283)
                                                                          -------     -------     -------      -------      -------

Balances, December 31, 1997 .........................................       8,148          82      13,420      (14,975)      (1,473)

Issuance of common stock from exercise of warrants ..................         564           5         410         --            415
     related to January 1997 12%  notes

Issuance of common stock for services ...............................         170           2         123         --            125

Fair value of warrants associated with financing agreements .........        --          --        10,680         --         10,680

Warrants issued for consulting services .............................        --          --           210         --            210

Fair value of options issued to former officer ......................        --          --            41         --             41

Net loss ............................................................        --          --          --         (8,637)      (8,637)
                                                                          -------     -------     -------      -------      -------

Balances, December 31, 1998 .........................................       8,882     $    89      24,884      (23,612)       1,361
                                                                          =======     =======     =======      =======      =======
</TABLE>


See accompanying notes to the financial statements.


                                       F-6

<PAGE>

<TABLE>
<CAPTION>

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


                                                                                                  Year Ended December 31,
                                                                                                ---------------------------
                                                                                                1998                   1997
                                                                                                ----                   ----
<S>                                                                                          <C>                     <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss .............................................................................       $(8,637)                (7,283)
Adjustments to reconcile net loss to net cash used
  in operating activities:
     Loss from discontinued operations ...............................................          --                      880
     Gain on sale of discontinued operations .........................................          --                   (1,013)
     Depreciation and amortization ...................................................           567                    409
     Amortization of software development costs ......................................           320                    240
     Amortization of financing costs .................................................         6,031                   --
     Changes in allowances for uncollectible amounts .................................          (235)                  --
     Loss on disposal of assets ......................................................            35                      2
     Issuance of common stock, options and warrants
       for services and other ........................................................           419                    549
     Other ...........................................................................           (61)                  --
     Changes in operating assets and liabilities:
        Accounts receivable-trade ....................................................          (113)                   700
        Accrued revenues, net ........................................................           225                    168
        Prepaid expenses and other assets ............................................           201                    (60)
        Accounts payable .............................................................           (90)                  (159)
        Accrued expenses .............................................................            38                   (132)
        Accrued payroll ..............................................................          (345)                   155
        Accrued compensated absences .................................................           (11)                    97
        Noncompete accrual ...........................................................          (115)                  --
        Deferred revenue .............................................................          (826)                 1,402
                                                                                             -------                -------

Net cash used in continuing operations ...............................................        (2,597)                (4,045)
Net cash used in discontinued operations .............................................          (631)                (1,255)
                                                                                             -------                -------

Net cash used in operating activities ................................................        (3,228)                (5,300)
                                                                                             -------                -------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of equipment and fixtures ..................................................           (77)                  (781)
Proceeds from sales of property and equipment ........................................            80                   --
Capital expenditures of discontinued  operations .....................................          --                      (58)
Net proceeds from sale of discontinued operations ....................................          --                    1,000
Increase in software development costs ...............................................        (1,104)                  --
                                                                                             -------                -------

Net cash provided by (used in) investing activities ..................................        (1,101)                   161
                                                                                             -------                -------




See accompanying notes to the financial statements.


                                       F-7

<PAGE>

<CAPTION>

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



                                                                                                  Year Ended December 31,
                                                                                                ---------------------------
                                                                                                1998                   1997
                                                                                                ----                   ----
<S>                                                                                          <C>                     <C> 
CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings on financing agreements ...................................................       $ 2,700                    450
Principal payments on short-term debt ................................................          --                   (1,547)
Principal payments under capital lease obligations ...................................          (231)                  (207)
Principal payments under capital lease obligations
  of discontinued operations .........................................................          --                     (107)
Principal payments on notes payable ..................................................          --                     (327)
Issuance of common stock, net offering costs .........................................           311                  8,272
Deferred offering costs ..............................................................          --                      486
                                                                                             -------                -------

Net cash provided by financing activities ............................................         2,780                  7,020
                                                                                             -------                -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................................        (1,549)                 1,881

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR .......................................         2,370                    489
                                                                                             -------                -------

CASH AND CASH EQUIVALENTS AT END OF YEAR .............................................       $   821                  2,370
                                                                                             =======                =======

</TABLE>

SUPPLEMENTAL DISCLOSURES:

The Company entered into capital lease obligations of approximately  $130,000 in
1997.

During 1997, convertible 10% notes payable of approximately $324,000 and related
accrued interest of  approximately  $25,000 were converted into 93,003 shares of
common stock at $3.75 per share.

Cash paid for interest in 1998 and 1997 was $100,00 and $86,000, respectively.






See accompanying notes to the financials statements.


                                       F-8

<PAGE>


                          GLOBAL MED TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND LIQUIDITY

On May 23, 1995, The Wyndgate  Group,  Limited  (Wyndgate)  merged with National
MRO,  Inc.  (National  MRO) in  accordance  with the terms and  provisions of an
Agreement   of  Merger  and  National  MRO  changed  its  name  to  Global  Data
Technologies,   Inc.,  which  subsequently   changed  its  name  to  Global  Med
Technologies,  Inc. (the Company).  Subsequent to the merger,  the businesses of
both Wyndgate and National MRO were operated as divisions of the Company.

The Company, through Wyndgate, provides information management software products
and services to the health care  industry and operates in one business  segment.
The Company,  through its DataMed division, which was discontinued in 1997, (see
Note 2), was in the business of providing  substance  abuse  testing  management
services.

During 1998 and 1997, the Company incurred losses and used  significant  amounts
of  cash in  operations.  Heng  Fung  Finance  Company  Limited,  a  significant
shareholder,  has committed,  in writing,  to provide the Company with financial
support which, with the proceeds from the financing agreements discussed in Note
6, will be  sufficient  to fund the Company's  operations  through  December 31,
1999.

CASH AND CASH EQUIVALENTS

For purposes of the accompanying statements of cash flows, 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, 1998 and 1997 are derived from SAFETRACE(R)
sales and  related  services  and  re-sales of  hardware  and  software to blood
centers  and blood  center  service  providers  located  in the  United  States.
Historically,  the Company  does not  require  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 sales are not concentrated in any geographic or economic region.

ACCRUED REVENUES

Accrued  revenues  at  December  31, 1998 and 1997 are  generally  billable  and
collectible within one year.



                                       F-9


<PAGE>


                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


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.

LONG-LIVED ASSETS

The Company  accounts for long lived assets under the provisions of Statement of
Financial  Accounting  Standards  No.  121,  Accounting  for the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to Be  Disposed Of (SFAS No. 121)
which  requires that  long-lived  assets and certain  identifiable  intangibles,
including  goodwill,  held and used by an  entity  be  reviewed  for  impairment
whenever events or changes in circumstances  indicate that the carrying value of
an asset may not be recoverable. An impairment loss is recognized when estimated
undiscounted  future cash flows  expected to be  generated  by the asset is less
than its carrying value. Measurement of the impairment loss is based on the fair
value of the asset,  which are generally  determined using valuation  techniques
such as discounted present value of expected future cash flows.

SOFTWARE DEVELOPMENT COSTS

The Company capitalized  certain software  development and production costs once
technological  feasibility  had been  achieved  through  release to the  general
public.  Software  development  costs incurred prior to achieving  technological
feasibility are included in research and development expense in the accompanying
statement 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 the  straight-line  method  over the  estimated  life of the
product,  generally two to five years. For the years ended December 31, 1998 and
1997, the Company recorded  approximately $320,000 and $240,000 of amortization,
respectively.  Amortization of capitalized software costs is included in cost of
revenues in the accompanying statements of operations.

DEFERRED REVENUE

At December 31, 1998 and 1997,  $1,000,000  of the deferred  revenue  balance is
related to an  agreement  between the Company  and  Ortho-Clinical  Diagnostics,
Inc., successor to Ortho Diagnostic Systems,  Inc., a wholly owned subsidiary of
Johnson & Johnson.  At December  31, 1998 and 1997,  approximately  $485,000 and
$885,000, respectively, of the deferred revenue balance is related to agreements
between The Institute for Transfusion Medicine and the Company for a transfusion
services software product to be known as SAFETRACE TX(TM) development agreement.
The  remaining  deferred  revenue  balances  at  December  31,  1998 and 1997 of
$450,000 and $876,000, respectively,  primarily consist of unearned SAFETRACE(R)
maintenance  revenue,  sales of SAFETRACE(R)  licenses and related  postcontract
customer  support,  and  re-sales of hardware  and  software  which were not yet
recognizable as revenue pursuant to the Company's revenue recognition accounting
policies discussed below.


                                      F-10


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

INCOME TAXES

The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards No. 109 (SFAS No. 109),  Accounting  for Income
Taxes. Under the asset and liability method of SFAS No. 109, 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.

FINANCIAL INSTRUMENTS

The carrying  amounts of the Company's  financial  instruments  approximate fair
value due to the short-term maturities of these items.

REVENUE RECOGNITION

Effective  January 1, 1998,  the Company  adopted the provisions of Statement of
Position 97-2,  Software  Revenue  Recognition  (SOP 97-2),  which requires that
revenue  for  licensing,  selling,  leasing,  or  otherwise  marketing  computer
software be recognized when evidence of an arrangement  exists,  delivery of the
product has occurred,  collectibility  of the related  receivable is assured and
the vendor's fee is fixed or  determinable.  In addition,  revenue is recognized
for the multiple elements of software  arrangements based upon the fair value of
each element. Accordingly, revenue from products or services is recognized based
upon  shipment of products or  performance  of services.  License fee revenue is
recognized  upon  completion  of signed  contract and shipment of the  software.
Revenue from royalties is recognized upon receipt of payment or according to the
payment terms specified in the contract.  Revenue from maintenance  contracts is
deferred   and   recognized   ratably   over  the   period  of  the   agreement.
Implementation, training and consulting revenue is recognized upon completion of
the training and course or performance of services, respectively.

Prior to 1998,  revenue  from sales of software  licenses,  included in software
sales and  consulting  revenue,  was  recognized  upon  delivery of the software
product to the  customer,  unless the Company  had  significant  related  vendor
obligations remaining.  When significant obligations remained after the software
product had been delivered,  revenue was not recognized  until such  obligations
had been completed or were no longer significant. The costs of any insignificant
obligations  were accrued  when the related  revenue was  recognized.  Under SOP
97-2,  revenue from software  licenses is  recognized  upon  delivery,  when all
elements of a software arrangement, as described above, have been established.

Revenue from  software  development  contracts,  included in software  sales and
consulting  revenue,  is  recognized on a  percentage-of-completion  method with
progress to completion  measured  based upon labor costs incurred or achievement
of contract milestones.

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



                                      F-11


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIGNIFICANT CUSTOMERS

During 1998, three customers, The Institute for Transfusion Medicine, Gulf Coast
Regional Blood Center and Haemonetics  Corporation,  accounted for approximately
19%, 12%, and 12%, respectively,  of the Company's total revenue from continuing
operations.

During 1997, two customers,  Haemonetics  Corporation and Belle Bonfils Memorial
Blood  Center,  each  accounted for  approximately  33% and 10% of the Company's
total revenues from continuing operations.

LOSS PER COMMON SHARE

Loss per share is  computed  under the  provisions  of  Statement  of  Financial
Accounting  Standard  No. 128 (SFAS No. 128),  Earnings Per Share.  SFAS No. 128
requires  the  presentation  of basic and  diluted  earnings  per  share.  Basic
earnings  per share  excludes  any  dilutive  effects of options,  warrants  and
convertible  securities,  or other potential common stock  instruments.  Diluted
earnings per share includes the dilutive  effect of these  instruments.  In 1998
and 1997, the effect of all potential common stock instruments was antidilutive.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  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.

STOCK BASED COMPENSATION

The Company has adopted the  "disclosure  method"  provisions  of  Statement  of
Financial Accounting Standards No. 123, Accounting for Stock-Based  Compensation
(SFAS No.  123).  As  permitted  under SFAS No. 123,  the Company  continues  to
account  for  stock-based  compensation  costs 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.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

In June 1998,  SFAS No. 133,  Accounting for Derivative  Instruments and Hedging
Activities,  was issued which is effective for all fiscal years  beginning after
June 15, 1999. The Company  currently does not  participate in these  activities
and consequently  does not believe adoption of the statement will have an effect
on the financial statements.

On December 22, 1998,  the  Accounting  Standards  Executive  Committee  (AcSec)
issued  Statement of Position 98-9,  Modification of SOP 97-2,  Software Revenue
Recognition,  With  Respect  to  Certain  Transactions,  (SOP  98-9),  which  is
effective for transactions entered into in fiscal years beginning after December
15, 1998.  The Company does not believe that the adoption of the statement  will
have a significant  effect on the  disclosures  in its financial  statements and
will adopt it when required.


                                      F-12


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

RECENTLY ADOPTED FINANCIAL ACCOUNTING STANDARDS

The Financial  Accounting  Standards Board (FASB) issued  Statement of Financial
Accounting Standard (SFAS) No. 131,  Disclosures about Segments of an Enterprise
and Related  Information,  which was required to be implemented  during the year
ended  December 31,  1998.  The adoption of this  statement  had no  significant
effect on the disclosures in the financial statements.

The Company was also required to implement SFAS No. 130, Reporting Comprehensive
Income,  during the year ended December 31, 1998. The adoption of this statement
had no significant effect on the financial statements.

RESTRUCTURING CHARGES

In March 1998, the Company  underwent a restructuring and  reorganization  which
was implemented to reduce general and  administrative  expenses in such areas as
payroll, outside contract services,  various health related items, leased office
space and others as well.  Restructuring expenses were incurred in the amount of
$132,000 for the year ended  December 31, 1998.  All of these  expenses had been
paid as of December 31, 1998.

2. DISCONTINUED OPERATIONS

On August 18, 1997, the Company  entered into an asset  purchase  agreement with
National  Medical Review Offices,  Inc.  (NMRO) to sell its DataMed  division to
NMRO.  In  conjunction  with the sale,  the Company and NMRO also entered into a
management  agreement  where NMRO  agreed  effective  July 1, 1997 to assume the
direction and control of the business and  operations  of DataMed.  Accordingly,
NMRO  managed  the  business  and  assumed  ownership  responsibilities  for the
operational  results  from  July 1, 1997  through  the date of final  close.  On
December 15, 1997, upon stockholders'  approval,  the Company finalized the sale
of the assets and operations of DataMed to NMRO for  approximately $1 million in
proceeds net of various closing costs and the assumption of certain liabilities.

The accompanying  financial  statements and related footnotes reflect DataMed as
discontinued operations.

The operating results of the discontinued  operations reflected in the Company's
Statement  of  Operations  as of June 30,  1997 are  summarized  as follows  (in
thousands):


     Substance abuse testing and other revenue                    $  2,953
     Cost of revenue                                                (2,151)
                                                                   -------

     Gross profit                                                 $    802
                                                                   =======

     Net loss                                                     $   (880)
                                                                   =======

The net  liabilities  of the  discontinued  operations  as of December  31, 1997
consisted solely of net current liabilities of $631,000.

3.  NONCOMPETE AGREEMENTS

The Company has entered into noncompete agreements with three key employees, two
of which also served on the  Company's  Board of Directors,  for  $350,000.  The
terms of the  agreements  are for the  greater  of five years or the term of the
related employee's  employment contract.  At December 31, 1998 and 1997, $35,000
and $150,000  remain  payable,  respectively,  whenever  sufficient cash flow is
available as determined by the Company's Board of Directors.



                                      F-13


<PAGE>
                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4.  INCOME TAXES

The Company has net operating loss  carryforwards of approximately  $15,367,000,
which expire in the years 2006 to 2013.  Such net operating  loss  carryforwards
are subject to limitation  under Section 382 of the Internal Revenue Code due to
the  change  in  ownership  resulting  from the  February  1997  initial  public
offering.

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

                                                          1998            1997
                                                          ----            ----

Expected tax benefit                                 $  (2,937)          (2,476)
Effect of permanent differences                          2,061               17
Change in valuation allowance for deferred tax assets    1,401            2,792
State tax benefit, net of federal benefit                 (136)            (401)
Other                                                     (389)              68
                                                      --------           -------

                                                     $   ---               ---
                                                      ========           =======

The  components  of the deferred tax assets and  liabilities  as of December 31,
1998 and 1997 are as follows (in thousands):


                                                          1998            1997
                                                          ----            ----

Deferred tax assets:
  Net operating loss carryforward                    $   6,070            4,059
  Allowance for uncollectible accounts receivable          125              217
  Unearned revenue and accrued expenses                  1,161            1,466
  Excess of capital losses over capital gains             ---                79
                                                      --------            ------

     Gross deferred tax assets                           7,356            5,821
     Valuation allowance                                (6,977)          (5,576)
                                                      --------           ------

     Net deferred tax asset                                379              245
                                                      --------           ------

Deferred tax liabilities:
  Capitalized software development costs                   363              (54)
  Accelerated depreciation for tax purposes                 16              299
                                                      --------           ------

     Gross deferred tax liabilities                        379              245
                                                      --------           ------

Deferred tax asset, net                              $   ---               ---
                                                      ========           ======

In assessing the  realizability  of deferred tax assets,  management  considered
whether  it is more  likely  than not  that  the  deferred  tax  asset  would be
realized. The ultimate realization of the deferred tax asset 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 full amount of the deferred

                                      F-14


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


tax asset will be utilized.  In determining the valuation allowance,  management
considered factors including the reversal of existing temporary  differences and
estimates of future taxable income.

5.  LEASES

The Company leases  equipment and office space.  Rental expense under  operating
leases,  included in general  and  administrative  expenses in the  accompanying
statements  of  operations,  for the years ended  December 31, 1998 and 1997 was
approximately  $343,000,  net of  sublease  income  of  $35,000,  and  $325,000,
respectively. Certain leases of equipment and fixtures are classified as capital
leases.  A  principal  stockholder  of the  Company  has  personally  guaranteed
repayment  of certain  capital  lease  obligations.  Included in  equipment  and
fixtures in the accompanying  balance sheets are the following assets held under
capital leases (in thousands):

                                                     December 31,
                                               ----------------------
                                               1998              1997
                                               ----              ----

Furniture and fixtures                       $  127               127
Machinery and equipment                         179               179
Computer hardware and software                  518               582
                                              -----             -----

Assets under capital lease                      824               888
Less accumulated amortization                  (669)             (468)
                                              -----             -----

Assets under capital lease, net              $  155               420
                                              =====             =====

The following  represents  the minimum lease  payments  remaining  under capital
leases and the future  minimum lease  payments for all  noncancelable  operating
leases included in continuing operations at December 31, 1998 (in thousands):

                                                             Capital   Operating
                                                              Leases     Leases
                                                             -------   ---------

                  1999                                      $  116     $   201
                  2000                                          73         192
                  2001                                          37         171
                  2002                                          19         157
                  2003 and thereafter                           -          485
                                                             -----      ------

Total minimum lease payments                                $  245     $ 1,206
                                                             -----      ======
Less amount representing interest                              (49)
                                                             -----
Present value of minimum lease payments                        196
Less current portion of obligations under capital lease        (91)
                                                             -----

Obligations under capital lease, less current portion       $  105
                                                             =====


                                      F-15

<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

During the first  quarter of 1999,  the Company  relocated  its Rancho  Cordova,
California  office to another  location in El Dorado  Hills,  California  with a
lower lease payment.  The Company terminated its previous lease. Also during the
first quarter, the Company relocated its Lakewood, Colorado office to a smaller,
less  expensive  location.  The previous  location has been sublet for an amount
that approximates the lease obligation.  These transactions are reflected in the
minimum lease payments for operating leases above.

6. FINANCING AGREEMENTS

On April 14, 1998,  Fronteer Capital,  Inc. (Fronteer  Capital),  a wholly owned
subsidiary of Fronteer Financial Holdings,  Ltd. (Fronteer Financial),  and Heng
Fung Finance  Company  Limited (Heng Fung  Finance)  committed to provide to the
Company lines of credit for up to $1,650,000 and $1,500,000, respectively, for a
total combined loan commitment of $3,150,000  over the following  twelve months.
The loans bear  interest  calculated  at a rate of 12% per annum and  originally
matured April 15, 1999. The loans have been extended to April 15, 2000.

Pursuant  to the loan  commitment  provided  by Heng Fung  Finance,  the Company
agreed that the Company's board of directors would not exceed nine and Heng Fung
Finance had the option to cancel all the Company's then existing  management and
employee  contracts.  Heng Fung Finance  appointed  five members to the board of
directors  of  the  Company.  Since  completion  of  the  April  1998  Financing
Agreements and the appointment of the additional directors by Heng Fung Finance,
new employment contracts, approved by the Board, have been entered into with the
Chairman  of the Board and Chief  Executive  Officer;  the  President  and Chief
Operating Officer; and the Chief Financial Officer, Vice President,  Finance and
Treasurer.

For issuing the  commitment,  Heng Fung  Finance  received  warrants to purchase
6,000,000  shares of the Company's common stock. The warrants are exercisable at
$0.25 per share for up to 10 years and the Company  registered  the warrants and
the  underlying  shares for resale under the  Securities Act of 1933 (1933 Act.)
Using the  Black-Scholes  model for estimating the fair value of the warrants to
purchase  6,000,000  shares of the Company's  common stock, the Company recorded
$5,340,000  as deferred  financing  costs as of April 14, 1998,  to be amortized
straight-line over the term of the loan.

For issuing  the  commitment,  Fronteer  Capital  received  warrants to purchase
1,000,000  shares of the  Company's  common  stock.  When the line of credit was
drawn upon, in October 1998,  Fronteer Capital received  additional  warrants to
purchase  5,000,000  shares of the  Company's  common  stock.  The  warrants are
exercisable at $0.25 per share for up to 10 years and the Company registered the
warrants  and the  underlying  shares for resale  under the 1933 Act.  Using the
Black-Scholes  model for estimating the fair value of the warrants,  the Company
recorded  $890,000  as  deferred  financing  costs as of April 14,  1998,  to be
amortized  straight-line  over the term of the loan and  $4,450,000  as deferred
financing costs as of October 30, 1998, to be amortized  straight-line  over the
remaining term of the loan.

The Company's  Registration  Statement  registering the 12,000,000  warrants and
underlying shares became effective February 16, 1999.

The loan  commitment  provided by Fronteer  Capital has  substantially  the same
terms and conditions as the loan commitment provided by Heng Fung Finance except
that, if Heng Fung Finance had not appointed directors to the Company's board of
directors,  Fronteer Capital had the right to appoint a maximum of three members
to the board of  directors  of the  Company.  Dr.  Michael I.  Ruxin,  the Chief

                                      F-16


<PAGE>
                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Executive  Officer  of the  Company,  has  agreed to  personally  guarantee  the
repayment of $1,650,000 of the Fronteer Capital line of credit. The guarantee is
limited to certain of Dr. Ruxin's assets.

If the Company  defaults on the repayment of any amount  borrowed by the Company
pursuant to the Heng Fung Finance  commitment,  all original existing members of
the board of directors of the Company would have to resign and Heng Fung Finance
would have the right to appoint all new members to the board of directors;  Heng
Fung Finance would also have the right to convert the outstanding  amount of the
loan into shares of the  Company's  common stock at a conversion  price of $0.05
per share which has  subsequently  been increased to $0.25 per share in the 1999
Financing Agreement described below, all employment  contracts of the management
and  officers  of the  Company  existing  at the time of the  financing  will be
invalid  immediately,  and their employment will be subject to reconfirmation by
Heng Fung Finance. If there is no default on the repayment to Heng Fung Finance,
or if there is default and Heng Fung  Finance  does not  exercise  its rights on
default, Fronteer Capital will have the same rights on default.

On September 11, 1998,  Fronteer  Capital entered into an agreement with eBanker
USA.com, Inc. (eBanker), formerly known as Fronteer Development Finance, Inc., a
majority owned subsidiary of Fronteer Financial, whereby Fronteer Capital agreed
to assign to eBanker its rights to and obligations  under the loan commitment to
the  Company.  On  September  28, 1998,  the Company  approved  the  Assignment,
Assumption and Consent Agreement by and between the Company, Dr. Ruxin, Fronteer
Capital and eBanker whereby the Company  consented to the assignment by Fronteer
Capital to  eBanker  of all of the  rights,  duties  and  obligations  under the
Fronteer Capital line of credit agreement described above.

In October 1998, the Company,  Heng Fung Finance and eBanker entered into a Loan
and Warrant  Purchase and Sale  Agreement  whereby Heng Fung Finance  sold,  and
eBanker  purchased,  $1,000,000  of the Heng Fung  Finance  loan and warrants to
purchase  4,000,000 shares of the Company's common stock. Heng Fung has returned
the original notes and its warrant to purchase 6,000,000 shares of the Company's
common  stock to the Company,  and the Company has issued a $500,000  promissory
note and a warrant to purchase 2,000,000 shares of the Company's common stock to
Heng Fung  Finance and a  $1,000,000  promissory  note and a warrant to purchase
4,000,000 shares of the Company's common stock to eBanker.

The Company  agreed to pay a cash  finder's  fee of 9% of the  Fronteer  Line of
Credit to American Fronteer Financial Corporation (AFFC), payable as the eBanker
line of credit is drawn.  As of  December  31,  1998,  the Company had paid AFFC
$108,000  under the agreement.  AFFC is a  majority-wholly  owned  subsidiary of
Fronteer Financial.

On March 19, 1999, the Company drew the remaining $450,000 available on the line
of credit  with  eBanker.  Also on March 19,  1999,  the  Company  entered  into
agreements  for  a  comprehensive   financing  package  that  includes:  (1)  an
$8,000,000 preferred stock private placement through American Fronteer Financial
Corporation (AFFC); (2) exercise of 2,000,000 warrants at $.25 per warrant;  (3)
extension of the balance on the $2,650,000 line of credit with eBanker  USA.Com,
Inc. (eBanker),  formerly Fronteer  Development  Finance,  Inc., until April 15,
2000,  with a change in the default  conversion rate from $0.05 contained in the
original loan agreement to $0.25 per share; and (4) a $750,000 bridge loan which
bears interest at 12% per annum.

The Company executed a Letter Agreement with AFFC for an $8 million  convertible
preferred  stock private  placement.  The  convertible  preferred  stock will be
convertible into common stock at $2.50 per share any time after twelve months of

                                      F-17


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

the closing  date of the stock sale.  There will be a forced  conversion  of the
convertible preferred stock into common stock if the closing bid market price of
the  common  stock  is at $4.00 or more  for at  least  15  business  days.  The
convertible preferred will carry a 15% coupon paid semi-annually in free trading
Company common stock.

Heng Fung Finance is in the process of  surrendering  the promissory note in the
amount of $500,000 in exercise of the  warrants to acquire  2,000,000  shares of
common stock of the  Company.  This  transaction  is expected to be completed in
April 1999.

The remaining $2,650,000 loan from eBanker will be extended until April 15, 2000
with the previous  conversion  price of $0.05 per share being increased to $0.25
per share. Accordingly, the balance on the loan from eBanker of $2,200,000 as of
December  31,  1998  has  been  classified  as  a  long-term  liability  in  the
accompanying balance sheet.

The $750,000  bridge loan bears  interest at 12% and is  convertible in 6 months
into  shares of common  stock of the Company at the 15-day  average  closing bid
price prior to the date of closing.

In April 1999, the Company  entered into an agreement with Heng Fung Finance for
a bridge  loan in the amount of  $2,000,000.  The  agreement  provides a line of
credit,  with  interest  at 12% per annum  payable  monthly,  due April 12, 2000
(April 1999 Financing  Agreement).  As consideration for the line of credit, the
Company agreed to pay a fee equal to 5% of the total line of credit in shares of
common stock of the  Company.  The line of credit will be  convertible,  at Heng
Fung's option, into shares of the Company's common stock at a price based on the
average  closing  bid  price of the  Company's  common  stock for a period of 15
business days prior to April 13, 1999.

7. STOCKHOLDERS' EQUITY

On September 1, 1998,  the Company  issued 120,000 shares of its common stock to
an escrow  account,  in exchange for services.  The cost of the services and the
fair  market  value of the shares  were  $93,750  and the cost was  recorded  in
prepaid  expenses  pending  completion  of the  services.  During the year ended
December 31, 1998,  40,000 shares were  released from escrow,  valued at $31,250
and have been expensed to general and administrative expense.

In December  1998,  the Company  issued a total of 563,624  shares of its common
stock in  connection  with the  exercise of certain  warrants at $0.55 per share
which was 75% of the market  value of the shares on the date of the grant of the
warrants.  The Company received $311,000 in cash proceeds and recognized general
and administrative expenses in the amount of $104,000.

During the first quarter of 1997,  certain note holders converted  approximately
$349,000 of principal  and accrued  interest into 93,003 shares of common stock.
Common stock issuable related to the detachable warrants provided in conjunction
with the 10% Notes amounts to 187,800  shares.  During January 1997, the Company
received  $450,000  from  two  unaffiliated  investors  related  to an  offering
consisting of notes which accrued  interest at an annual rate of twelve  percent
(the 12% Notes).  In connection  with the 12% Notes,  the Company issued 150,000
common stock warrants which are exercisable at eighty-five  percent of the price
per share of the Company's  common stock included in the Offering.  In the first
quarter of 1997, the Company  incurred $79,000 of expense in connection with the
issuance and  registration of the 150,000  warrants,  which is included in other
expenses in the accompanying 1997 statement of operations.

During  February  1997, the Company  completed an initial  public  offering (the
Offering)  whereby it issued 1,337,000 units, each unit consisting of two shares
of common stock and one common stock purchase warrant (the Units),  at $7.00 per
Unit.  Net  proceeds  from  the  Offering   (including  net  proceeds  from  the
underwriter's  overallotment  option) were  approximately  $8.2 million.  During
February  1997, the Company used a portion of the net proceeds from the Offering
to repay $450,000, plus accrued interest of approximately $5,000, related to the

                                      F-18


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


12% Notes.  In March 1997,  the Company paid  approximately  $355,000 to certain
holders  of the 10%  Notes,  who did not  convert  their 10%  Notes and  accrued
interest into common stock,  from a portion of the net proceeds of the Offering.
Approximately  $190,000 of the  $355,000 was paid to  affiliates  of the Company
under the same terms and conditions as nonaffiliates.

Stock Compensation Plan

In the fourth quarter of 1997,  the Company  adopted a stock  compensation  plan
(the Stock Compensation  Plan). The Stock Compensation Plan, as amended in 1998,
provides for the issuance of up to 200,000  shares of common stock to employees,
consultants  and others  involved in the Company's  business.  During the fourth
quarter of 1997, the Company issued 12,500 shares of common stock to a corporate
marketing  enterprise.  These  shares were issued  under the Stock  Compensation
Plan.  Effective August 27, 1998, the Company issued 50,000 shares of its common
stock to a director in exchange for services. The fair value of the stock on the
date of the grant was $33,000 and is reflected in the statement of operations as
general and  administrative  expenses.  These shares were issued pursuant to the
Stock  Compensation  Plan,  as  amended.  As of  December  31,  1998  and  1997,
respectively,  there were a total of 100,000 and 87,500  shares of common  stock
reserved for future issuance under the Stock Compensation Plan.

8. STOCK OPTION PLANS AND WARRANTS

The Amended and Restated  Stock Option Plan Provides for the issuance of options
to purchase  up to  2,200,000  shares of common  stock to  employees,  officers,
directors and consultants of the Company. Options may be granted as incentive or
non-qualified  stock  options.  Only  employees  of the Company are  eligible to
receive Incentive Options. Unless terminated sooner, the Plan will expire on May
31, 2000. As of December 31, 1998,  options to purchase  1,821,216 shares of the
Company's  common stock at exercise prices ranging from $0.75 to $3.75 per share
through 2008 were outstanding,  of which options to purchase 393,900 shares were
exercisable.

1998 and 1997 Activity

On May 27, 1998,  incentive  options to purchase 350,000 shares of the Company's
common stock and  non-qualified  options to purchase 5,000 shares were issued to
certain  officers at an exercise price of $0.75 per share,  and are  exercisable
for ten years. The options vest at the rate of 20% per year.

On May 27,  1998,  the  board of  directors  granted a  non-qualified  option to
purchase 55,248 shares of the Company's  common stock to a former officer of the
Company.  The  exercise  price  is  $0.92  per  share;  the  option  was  vested
immediately  and is exercisable for ten years. In accordance with the provisions
of  Statement  of  Financial   Accounting   Standard  No.  123,  Accounting  for
Stock-Based  Compensation,  the fair value of the option was recorded as general
and administrative expense in the amount of $41,000.

On June 3, 1998, the Company  authorized the issuance of incentive stock options
to purchase  340,000 shares of the Company's  common stock at $1.0625 per share,
exercisable for ten years, to certain employees. The options become fully vested
on March 3, 1999.

On August 27, 1998, the Company  authorized the issuance of non-qualified  stock
options to purchase an aggregate of 900,000 shares of the Company's common stock
at $0.75 per  shares,  exercisable  for ten  years,  to  members of the Board of
Directors  in  consideration  for  serving  on the  Board  and on the  Executive
Committee of the Board.  The Company also  authorized  the issuance of incentive
options to certain  officers of the Company to  purchase  600,000  shares of the
Company's common stock and non-qualified  stock options to purchase an aggregate
of 32,000  shares of the  Company's  common stock to certain  employees.  All of
these grants are at $0.75 per share and exercisable  for ten years.  The options
vest at the rate of 20% per year.

                                      F-19


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Pursuant  to Dr.  Ruxin's  Employment  Agreement,  the  Company  authorized  the
issuance to Dr.  Ruxin of a  non-qualified  stock  option to purchase  1,000,000
shares of the  Company's  common stock at $0.75 per share,  exercisable  for ten
years.  The Company is in the process of amending the grant so the option may be
exercisable only when the Company's annual audited financial  statements reflect
earnings of $0.01 per share or after a vesting period of sixty months, whichever
occurs first.

Also on August 27, 1998, non-qualified options to purchase 250,000 shares of the
Company's  common  stock at $0.75 per  share,  for a period of ten  years,  were
issued to certain  officers for the year ended  December  31, 1998.  The options
vest at the rate of 33-1/3% per year.

On October 14, 1998, the Company authorized the issuance of non-qualified  stock
options to purchase an aggregate of 130,000 shares of the Company's Common Stock
at $0.75 per share,  exercisable  for ten years, to two officers of the Company.
On November 19, 1998,  non-qualified  options to purchase  25,000  shares of the
Company's  Common  Stock at $0.85 per  share,  exercisable  for ten  years  were
granted to an employee. On December 17, 1998,  non-qualified options to purchase
40,000 shares of the  Company's  Common Stock at $0.76 per share were granted to
an employee. The options vest at the rate of 20% per year.

On January 4, 1999,  the board of directors  authorized  incentive  stock option
grants to purchase a total of 45,000  shares of the  Company's  common  stock to
three  employees  at $0.78 per share.  The  options are for ten years and 25,000
vest at 20% per year beginning in September  1999 and the remaining  options for
20,000 shares vest at the rate of 50% immediately and 50% on March 28, 1999.

Also on January 4, 1999,  non-qualified options to purchase 60,000 shares of the
Company's  common stock at $.78 per share were granted to two employees,  one of
which is an officer,  and  non-qualified  options to purchase  500 shares of the
Company's  common  stock at $.78 per share  were  granted to a  consultant.  The
employee  grants  vest at the rate of 20% per year  beginning  in 1999,  and the
consultant  options  were 100% vested on the grant date.  All of the options are
for a term of ten years.

On February 16, 1999,  the board of directors  approved a resolution to register
1,829,788 shares of the Company's common stock which underlie  outstanding Class
A Warrants  (1,456,988  shares at $4.55),  10% Note Warrants  (187,800 shares at
$3.75), and specified  non-qualified  stock options (185,000 shares at $2.50 and
$1.81). As an incentive to exercise of the aforementioned  warrants and options,
the board of directors  agreed to discount  the  exercise  price per share by an
amount up to 33-1/3% of the bid price on the common stock on the effective  date
of  the  registration   statement.   Under  current  accounting  guidance,  this
transaction  will result in a  significant  non-cash  charge to the statement of
operations on the effective date of the registration statement. However, it also
results in a significant infusion of cash to the Company for its operations.

Unless  otherwise  stated,  options to purchase  shares of the Company's  common
stock are granted at the fair market value of the common stock on the  effective
date of the grant.

During  1997,  the Company  recognized  expense of  $314,000  related to certain
grants of stock  options  within the  Company's  Stock Option Plan.  This amount
consists of  approximately  $146,000  included in sales and  marketing  expense,
$136,000  included in general and  administrative  expense,  $22,000 included in
research and development expense and $10,000 included in costs of revenue in the
accompanying 1997 consolidated statement of operations.  During 1997, holders of
14,000 common stock options,  which were  originally  within the Company's Stock

                                      F-20


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Option Plan,  exercised  their options at an exercise  price of $1.54 per share.
The  Company  recognized  approximately  $26,000  in  expense  related  to  this
issuance.

Pro forma disclosures

The fair value of options granted during 1998 and 1997 were determined using the
following assumptions:

A risk-free rate of approximately 4.6% and 5.8% for the years ended December 31,
1998 and 1997, respectively;  and an average expected life of five years and ten
years,  respectively,  and a dividend  yield of 0%; and  volatility  of 208% and
139.4% for the years ended December 31, 1998 and 1997, respectively.

For the  purposes  of pro forma  disclosures,  the  estimated  fair value of the
employee options is amortized to expense over the options'  vesting period.  Pro
forma information is as follows (in thousands, except per share amounts):

                                                     1998             1997
                                                     ----             ----

Pro forma net loss                               $ (8,985)           (7,513)
Pro forma net loss per share                        (1.09)            (0.97)

The  weighted  average  fair  value of  options  granted  during  the year ended
December 31 were:


                                                     1998             1997
                                                     ----             ----

Stock price equals exercise price                $   0.90             1.96
Stock price greater than exercise price              0.70             1.89
Stock price less than exercise price                 0.82             1.85

Because  Statement No. 123 is applicable only to options  granted  subsequent to
December 31, 1994, its pro forma effect will not be fully reflected until 2001.



                                      F-21


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Summary of Stock Option Activity

A summary  of the  Company's  stock  option  activity  and  related  information
regarding the Stock Option Plan are as follows:

<TABLE>
<CAPTION>

                                                       Incentive Stock                    Non-qualified Stock
                                                         Option Plan                          Option Plan
                                             -----------------------------------    --------------------------------
                                                                      Stock                                Stock
                                                Number of            Option           Number of           Option
                                                  Stock               Price             Stock              Price
                                                 Options              Range            Options             Range
                                             ----------------    ---------------    ----------------   ---------------

<S>                                          <C>             <C>                     <C>             <C> 
Outstanding, December 31, 1996               504,100         $    1.00 - 3.75          63,529         $   1.54 - 3.75
  Granted                                    371,248              1.54 - 2.00         381,691             1.00 - 2.875
  Exercised                                  (14,000)                 1.54             ---                    ---
  Forfeited                                 (421,350)             1.00 - 3.75         (25,000)                2.50
                                           ---------              -----------        --------             ------------

Outstanding, December 31, 1997               439,998              1.81 - 3.75         420,220             1.00 - 3.75
  Granted                                  1,647,000              0.75 - 1.81          55,248                 0.92
  Forfeited                                 (615,498)             0.92 - 3.75        (125,752)            1.81 - 3.75
                                           ---------              -----------        --------             ------------

Outstanding, December 31, 1998             1,471,500         $    0.75 - 3.75         349,716          $  0.92 - 3.75
                                           =========              ===========        ========             ============
</TABLE>

During the second quarter of 1996, the Company  entered into an agreement with a
business advisory  enterprise (the 1996 Stock Option  Agreement).  In connection
with the 1996 Stock Option Agreement,  the Company granted 160,000 stock options
at an  exercise  price of $2.50 per share.  During  1997,  the  Company  and the
business  advisory  enterprise  agreed to change certain terms and conditions of
the 1996 Stock Option Agreement.  As a result, the Company recognized expense in
1997 of $155,000.  These amounts are included in sales and marketing  expense in
the  accompanying  statements of  operations.  These options were not granted as
part of the  Company's  Stock Option Plan and are not included in the summary of
the Company's  stock option  activity table above. To date, no options have been
exercised as a result of the 1996 Stock Option Agreement.

Warrants

On August 27, 1998,  pursuant to the  provisions of an agreement for  consulting
services with a Director of the Company,  the Company authorized the issuance of
warrants to purchase  600,000 shares of the Company's common stock, at $0.75 per
share,  exercisable for ten years. Using the Black-Scholes  model for estimating
the fair value, the Company recorded $247,000 as consulting expense as of August
27, 1998.

Other Option Activity

In addition,  to the options granted pursuant to the Second Amended and Restated
Stock  Option  Plan,  the Company has issued  non-qualified  options to purchase
2,542,000 shares of the Company's  common stock,  exercisable for ten years from
the date of grant,  pursuant to the terms of the stock  option  agreements.  The

                                      F-22


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

details of these  options are  included  in 1998 and 1997  Activity  above.  The
common stock  underlying the options is not included in the Company's  effective
registration statement on Form S-8 registering shares authorized pursuant to the
Second Amended and Restated Stock Option Plan.

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  1998  or  1997.  The  Company  paid  401(k)  Plan
administrative  expenses  of  approximately  $500 and $4,000 for the years ended
December 31, 1998 and 1997 respectively.  Such 401(k) Plan expenses are included
in  general  and  administrative  expenses  in the  accompanying  statements  of
operations.

10. EMPLOYMENT AGREEMENTS

On August 1, 1998,  the Company  entered into an employment  agreement  with Dr.
Ruxin  for a period  of  three  years  commencing  August  1,  1998.  Under  the
agreement,  Dr. Ruxin  receives a salary of $190,000 per year and certain  other
fringe  benefits.  If the  agreement is terminated by the Company for any reason
other  than  cause or  permanent  disability,  the  Company  must pay Dr.  Ruxin
compensation,  benefits and incentives at the rate in effect at termination  for
twenty-four months following the date of termination.

On August 1, 1998,  the Company also entered into an employment  agreement  with
Alan K. Geddes for a period of three years commencing  August 1, 1998. Under the
agreement,  Mr. Geddes  receives a salary of $125,000 per year and certain other
fringe benefits.  Mr. Geddes'  employment under the employment  agreement may be
terminated by Mr. Geddes under the same circumstance as set forth in Dr. Ruxin's
employment  agreement.  If Mr. Geddes' employment agreement is terminated by the
Company for any reason  other than cause or  permanent  disability,  the Company
must pay Mr. Geddes compensation,  benefits and incentives at the rate in effect
at termination for twelve months following the date of termination.  The Company
also paid Mr. Geddes'  temporary living expenses  associated with his relocation
to Sacramento, California.

On August 1, 1998,  the Company also entered into an employment  agreement  with
Thomas F. Marcinek for a period of three years commencing  August 1, 1998. Under
the agreement,  Mr. Marcinek  receives a salary of $125,000 per year and certain
other fringe benefits.  Mr. Marcinek's employment under the employment agreement
may be terminated by Mr.  Marcinek under the same  circumstance  as set forth in
Dr. Ruxin and Mr. Geddes' employment  agreements.  If Mr. Marcinek's  employment
agreement  is  terminated  by the  Company  for any  reason  other than cause or
permanent disability,  the Company must pay Mr. Marcinek compensation,  benefits
and incentives at the rate in effect at termination for twelve months  following
the date of termination.

On February 1, 1999, the Company entered into an employment agreement with James
R. Flynt. As compensation for services  rendered under the agreement,  Mr. Flynt
receives a salary at the rate of  $100,000  per annum.  Mr.  Flynt's  employment
under the  employment  agreement also may be terminated by reason of Mr. Flynt's
death or  disability  or for  cause as set  forth in the  employment  agreement.
Following the  termination  of the  employment  agreement by the Company for any

                                      F-23


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

reason other than cause, death, or the temporary or permanent  disability of Mr.
Flynt, Mr. Flynt shall be entitled to compensation and benefits for eight months
following the date of termination.

As a condition to the April 14, 1998 Financing Agreements, each of the Company's
Officers and certain  employees  provided  the lenders with undated  releases of
their  respective  employment  agreements and tendered  resignations,  which are
being held in escrow.  Until the  releases  are  accepted  or  rescinded  by the
lenders,  the  following  employment  agreements  between  the  Company  and its
Officers are still in effect.

On May 24, 1995, the Company had entered into a five year  employment  agreement
with  William  J.  Collard.  The  agreement  provided  for an  annual  salary of
$100,000.  If Mr.  Collard's  agreement  was  terminated  by the Company for any
reason other than cause or permanent  disability,  the Company would be required
to pay him a lump sum  severance  payment  of $2.5  million.  During  1997,  Mr.
Collard received  approximately $11,000 for tax expenses related to the May 1995
Wyndgate  merger.  Mr. Collard and the Company reached an agreement  whereby Mr.
Collard's  employment agreement would be terminated and Mr. Collard would retire
effective  February 4, 1999. The Company agreed to pay Mr. Collard  $64,000,  in
monthly  installments of $3,000 per month for approximately 22 months commencing
December  30,  1998.  In  addition,  the  Company  agreed  to  pay  Mr.  Collard
approximately $237,500, in 42 monthly installments, also commencing December 30,
1998.

The Company also has an employment agreement with Gerald F. Willman, Jr. with an
annual  salary of  $95,000.  The  employment  agreement  requires  that if he is
terminated  by the  Company  for  any  reason  other  than  cause  or  permanent
disability,  the Company must pay Mr.  Willman a lump sum  severance  payment of
$1,000,000.  Mr.  Willman  received  approximately  $8,000 for vacation  related
expenses in 1996.  During 1997, Mr. Willman received  approximately  $25,000 for
tax expenses related to the May 1995 Wyndgate merger.

11. COMMITMENTS AND CONTINGENCIES

Insurance. The Company maintains malpractice insurance coverage on a claims made
basis through a commercial  insurance  carrier.  Should the current  claims made
policy not be renewed or replaced  with  equivalent  insurance at a future date,
claims based on occurrences  during its term but  subsequently  reported will be
uninsured. Based upon historical experience, management believes the Company has
adequately provided for the ultimate  liability,  if any, from the settlement of
such potential claims.

The Company  maintains  product  liability  insurance  for  Wyndgate's  software
related products. To date, no claims have been filed against the Company related
to its  Wyndgate  developed  SAFETRACE(R)  software  product and services or any
other of its software-related products and services.

Royalty  Group.  As part of the  consideration  for the  Royalty  Group  funding
approximately  $1,100,000 of the development of SAFETRACE(R)  Wyndgate agreed to
pay the Royalty Group certain royalty  payments on future software license fees.
All  payments  are due 30 days  after  each  quarter  and are based on  software
license  fees  collected.  Royalty  expenses  related  to  this  agreement  were
approximately  $60,000 and $65,000  for the years  ended  December  31, 1998 and
1997,  respectively,  and are  included in cost of revenues in the  accompanying
statements of  operations.  The time period under the royalty  schedule is based
upon the first date of customer  invoicing,  which was September  14, 1995.  The
royalty payment schedule is as follows: From September: 1995 - 1997, 12 percent;
1997 - 1998, 9 percent; 1998 - 1999, 6 percent; 1999 - thereafter, 3 percent.

                                      F-24


<PAGE>

                          GLOBAL MED TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Institute  For  Transfusion  Medicine.   Pursuant  to  a  Development  Agreement
(Development  Agreement) dated July 1996,  between the Company and The Institute
for Transfusion Medicine (ITxM), the Company agreed to develop and has completed
the   development  of  Commercial   Centralized   Transfusion   System  Software
(Commercial  CTS  Software),  which  is  Wyndgate's  SAFETRACE  TX(TM)  software
product.  The Development  Agreement  provided for a royalty payment to ITxM for
revenues  received from the sale of the Commercial CTS Software,  net of certain
fees and charges.  The royalty period starts with the first commercial  transfer
for  value of the  Commercial  CTS  Software  which  was  March  31,  1999.  The
Development  Agreement  further  granted  ITxM a  non-exclusive,  perpetual  and
fully-paid  license to operate SAFETRACE TX(TM) for internal use, which includes
companies  which  ITxM  controls  as defined in the  Development  Agreement  and
companies  which ITxM has the  ability  to cause the  direction  of  management,
whether through ownership of voting securities, by contract or otherwise.

In January 1998, the Company and ITxM agreed (the January 1998  Agreement)  that
the Company would not be required to pay monetary penalties, accrued in 1997, in
the approximate  amount of $485,000 to ITxM,  which were incurred as a result of
delays in  development  of SAFETRACE  TX(TM),  in  consideration  of the Company
providing  to ITxM  additional  maintenance  services  and product  upgrades and
substitute liquidated damage provisions for delays.

Ortho-Clinical   Diagnostics,   Inc.  In  1996,  the  Company  entered  into  an
Exclusivity and Software Development agreement (the Exclusivity  Agreement) with
Ortho-Clinical  Diagnostics,  Inc. (OCD) successor to Ortho  Diagnostic  Systems
Inc., a wholly-owned  subsidiary of Johnson & Johnson. The Exclusivity Agreement
provided OCD the exclusive  right to negotiate  with the Company with respect to
the  Company's  activities  and  developments  in  information   technology  and
intellectual property relating to donor and transfusion medicine.

In May 1997, the Company  received a request from OCD to continue its evaluation
of the  Company's  technology,  on a  non-exclusive  basis,  with the  intent of
responding  to the Company by July 14, 1997  regarding  whether or not OCD would
propose  some form of  transaction  with the  Company.  The  Company and OCD had
agreed to further  extensions of this  non-exclusive  agreement through December
31, 1998 to enable OCD to complete its  strategic  evaluation.  The Company also
agreed to perform certain software development  services. In connection with the
extension to December 31, 1998,  the parties  agreed that OCD has until June 30,
1999 to elect to  require  the  Company  to  provide  the  software  development
services as defined in the Exclusivity Agreement.




                                      F-25


<PAGE>








                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    EXHIBITS

                                       TO

                                   FORM 10-KSB

                          GLOBAL MED TECHNOLOGIES, INC.








                                       39
<PAGE>


                                  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)

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 Registrant 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 Registrant and
          William J. Collard, as amended July 22, 1996 (1)

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

10.6      Employment  Agreement,  dated February 8, 1996, between the Registrant
          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)

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

10.11      Form of Drug Testing Service Contract (1)


                                       40
<PAGE>

10.12      Form of License Agreements (1)

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

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

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

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

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

10.19     Third  Amendment to Exclusivity  and Software  Development  Agreement,
          dated  September 17, 1997 between  Global Med  Technologies,  Inc. 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  Technologies,  Inc. and
          Ortho Diagnostic Systems, Inc. (4)

10.22     Development  Agreement,   dated  July  12,  1996  between  Global  Med
          Technologies,  Inc. 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 Registrant and
          Michael I. Ruxin (5)

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




                                       41
<PAGE>


10.30     Employment Agreement, dated August 1, 1998, between the Registrant and
          Thomas F. Marcinek (5)

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

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

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

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

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

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

10.37     Assignment,  Assumption  and Consent  Agreement,  dated  September 28,
          1998, by the Registrant, 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 Registrant, Heng Fung Finance Company Limited and Fronteer
          Development Finance (5)

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

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

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

10.42     Promissory  Note,  dated  October 26, 1998,  by the  Registrant 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 Registrant to Fronteer Development Finance, Inc. (5)

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

10.45     Employment  Agreement,  dated February 1, 1999, between the Registrant
          and James Flynt

10.46     Bridge Loan  Agreement,  dated March 18, 1999,  between the Registrant
          and eBanker USA.Com, Inc.

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




                                       42
<PAGE>


10.48     Office Lease between the Registrant and Golden Hill Partnership, dated
          January 11, 1999

10.49     Standard   Industrial/Commercial   Multi-Tenant   Lease   between  the
          Registrant and James W. Cameron, Jr., dated February 8, 1999

10.50     Settlement  Agreement and Release of All Claims between the Registrant
          and William J. Collard and Hollis Gailey, dated December 22, 1998

21        Subsidiaries of the Company (1)

23        Consent of Independent Auditors--KPMG LLP

23.1      Consent of Independent Auditors--Ernst & Young LLP

27        Financial Data Schedule

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).

     (a)  During the last  quarter  of the year ended  December  31,  1997,  the
          Company filed one Current Report on Form 8-K, dated December 15, 1997,
          reporting   the  closing  of  the  sale  of  the   Company's   DataMed
          International division under Item 2 thereof.

     (b)  Required   exhibits  are  attached  hereto  or  are   incorporated  by
          reference.

(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. 3- 52761).



                                       43