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                    U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB

(MARK ONE)
[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE ACT
           OF 1934 [Fee Required]

        For the fiscal year ended   DECEMBER 31, 1996
                                  ----------------------------------------------

[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE
       ACT OF 1934 [No Fee Required]

For the transition period from                         to

                        Commission file number   0-28170
                                               ------------

                        OACIS HEALTHCARE HOLDINGS CORP.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

          DELAWARE                                             04-3229774
          --------                                             ----------
(State or other jurisdiction                                (I.R.S. Employer
incorporation or organization)                           Identification Number)

100 DRAKE'S LANDING ROAD, SUITE 100, GREENBRAE, CA                94904
--------------------------------------------------              ----------
Address of principal executive offices)                         (Zip Code)

Issuer's Telephone Number         (415) 925-0121
                          ------------------------------------------------------

Securities registered pursuant to Section 12(b) of the Act:  NONE
                                                            --------------------
Securities registered pursuant to
Section 12(g) of the Act:   COMMON STOCK, $0.01 PAR VALUE
                          ------------------------------------------------------

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

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

         The Registrant's revenues for its fiscal year ended December 31, 1996
were $20.4 million.

         The aggregate value of voting stock held by non-affiliates of the
Registrant was approximately $24,000,000 as of March 21, 1997, based upon
the closing sale price of the Registrant's Common Stock reported for such date
on the Nasdaq National Market.  Shares of Common Stock held by each executive
officer and director and by each person who owns 10% or more of the outstanding
Common Stock have been excluded in that such persons may be deemed to be
affiliates.  The determination of affiliate status is not necessarily a
conclusive determination for other purposes.

         As of March 21, 1997, the Registrant had outstanding 10,066,796 shares
of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

         Certain information is incorporated into Part III of this report by
reference to the Proxy Statement for the Registrant's 1996 annual meeting of
stockholders to be filed with the Securities and exchange Commission pursuant
to Regulation 14A not later than 120 days after the end of the fiscal year
covered by this Form 10-KSB.

 Transitional Small Business Disclosure Format (check one):  Yes     ;  No   X
                                                                 ----      -----

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                        OACIS HEALTHCARE HOLDINGS CORP.

                               TABLE OF CONTENTS
<TABLE>
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                                                                                                                            Page
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PART I

      Item 1.    Description of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                3
      Item 2.    Description of Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               11
      Item 3.    Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               11
      Item 4.    Submission of Matters to a Vote of Security Holders  . . . . . . . . . . . . . . . . . . . .               11

PART II

      Item 5.    Market for Common Equity and Related Stockholder Matters . . . . . . . . . . . . . . . . . .               12
      Item 6.    Management's Discussion and Analysis or Plan of Operations . . . . . . . . . . . . . . . . .               13
      Item 7.    Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               25
      Item 8.    Changes In and Disagreements with Accountants on Accounting and
                      Financial Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               42

PART III

      Item 9.    Directors, Executive Officers, Promoters and Control Persons; Compliance
                      With Section 16(a) of the Exchange Act  . . . . . . . . . . . . . . . . . . . . . . . .               43
      Item 10.   Executive Compensation.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               43
      Item 11.   Security Ownership of Certain Beneficial Owners and Management.  . . . . . . . . . . . . . .               43
      Item 12.   Certain Relationships and Related Transactions.  . . . . . . . . . . . . . . . . . . . . . .               43
      Item 13.   Exhibits and Reports on Form 8-K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               43

SIGNATURES        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               45
</TABLE>

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This report on Form 10-KSB including the discussions in Part I Item 1
"DESCRIPTION OF BUSINESS", and Part II Item 6 "MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS" contains certain forward-looking statements
which involve risks and uncertainties, such as statements of the Company's
plans, objectives, expectations and intentions.  The Company's actual results
could differ materially from the results anticipated in these forward-looking
statements as a result of a variety of factors, including those set forth in
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS."


                                     PART I

ITEM 1.          DESCRIPTION OF BUSINESS

Oacis Healthcare Holdings Corp., through its wholly owned subsidiary, Oacis
Healthcare Systems, Inc. (together, the "Company") develops, markets, licenses,
installs and supports flexible, open architecture clinical information systems
("Oacis" or the "System").  Oacis is an "electronic medical record" that
collects and transmits clinical, financial and demographic data from multiple
information systems within a large hospital or integrated healthcare delivery
system ("IDS"), integrates data from these systems into a patient-centered
clinical data repository and provides applications with graphical user
interfaces which enable physicians, nurses and other clinicians to view,
manipulate and act on the information in real time at the point of care.

Oacis is:

o   Designed on a flexible, open architecture that is designed to work with
    existing departmental and legacy systems enabling institutional providers
    of care to preserve their investments in information systems rather than
    purchase entirely new systems.

o   Based on a client server model and is designed to be scaleable from a few
    users to several thousand users in multiple provider locations.

o   Designed to provide information to clinicians in a more efficient manner
    than paper based records.

o   Designed to integrate efficiently with clinician practice routines by
    providing care management information in user-defined formats to improve
    clinical efficiency and medical outcomes.

The Company's products are in use by major medical centers, large hospitals and
IDS's in the United States, Canada, Europe and Australia.

Oacis Healthcare Systems, Inc. was founded as a California Corporation in 1984
under the name Simborg Systems, Inc.  In 1990, Bell Atlantic Systems Group,
Inc. purchased all of the outstanding stock of Simborg Systems and renamed the
company Bell Atlantic Healthcare Systems, Inc.  In April 1994, Oacis Healthcare
Holdings Corp. was formed as a Delaware corporation and in May 1994 Oacis
Healthcare Holdings Corp. purchased all of the outstanding stock of Bell
Atlantic Healthcare Systems, Inc. (the "Acquisition") and renamed the company
Oacis Healthcare Systems, Inc.

The Company's executive offices are located at 100 Drakes Landing Road, Suite
100, Greenbrae, California, 94904.  Its telephone number is (415) 925-0121.

PRODUCTS

Existing Products

         Oacis.  The Oacis clinical information system incorporates both
software and hardware systems that collect clinical, financial and demographic
data from departmental information systems within a hospital or IDS, and
integrates that data into a patient-centered clinical data repository.  This
repository typically contains a wide variety of data gathered from existing
departmental information systems, such as registration, scheduling, laboratory,
radiology, pharmacy and accounting systems, as well as information entered by
clinicians at the point of

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care.  Oacis provides access to this information through applications with
graphical user interfaces that enable physicians, nurses and other clinicians to
input, view and act on the data on a real-time basis.

         The Oacis system is comprised of two elements: the Oacis Healthcare
Network, which supports the connectivity (integration) and storage (data
repository) function of the system, and Oacis Clinical Care applications, which
facilitate the input and delivery of clinical information at the point of care.
The Oacis Healthcare Network and Oacis Clinical Care applications are typically
integrated and licensed as a system although they each contain a number of
modules.  Customers may license all or some combination of the modules.  For
the years ended December 31, 1996, 1995 and 1994, substantially all of the
Company's revenues were generated through licensing, installing and supporting
the Oacis system.

         The Oacis Healthcare Network modules which are commercially available
include:

<TABLE>
<CAPTION>
MODULE                                                  DESCRIPTION
------                                                  -----------
<S>                                        <C>
Oacis Data Repository                      The Oacis Data Repository ("ODR") is
                                           a relational database designed to
                                           store and manage a full range of
                                           clinical, financial, and demographic
                                           data.  The ODR organizes its data by
                                           patient rather than by encounter and
                                           therefore is designed to provide the
                                           basis for building longitudinal,
                                           patient-centered electronic medical
                                           records across the continuum of care.
                                           The ODR data schema, called the
                                           "Service Model," provides Oacis with
                                           the flexibility and scalability
                                           required to meet the changing
                                           information requirements of hospitals
                                           and IDSs.  The ODR can be configured
                                           and maintained using the Oacis System
                                           Assistant, a database extension and
                                           management tool that configures the
                                           ODR and generates software code that
                                           operates on the database.

Gateway++                                  Gateway++ is an open architecture
                                           integration engine that is designed
                                           to enable the exchange of data among
                                           the many different information
                                           systems within a hospital or IDS,
                                           such as registration, scheduling,
                                           laboratory, radiology, pharmacy and
                                           accounting systems.  Gateway++
                                           accepts, translates, reformats and
                                           routes data between various
                                           information systems located
                                           throughout a hospital or IDS while at
                                           the same time updating the ODR using
                                           the Company's proprietary Data Base
                                           Loader technology. Gateway++
                                           performance, feeder system status and
                                           transaction flows are monitored using
                                           the Gateway Monitor application.


Enterprise Member/                         The Enterprise Member/Patient Index
Patient Index                              ("EMPI") is designed to manage and
                                           reconcile duplicate medical records
                                           coming from disparate information
                                           systems that use different patient
                                           identifiers.  EMPI is designed to
                                           support those healthcare
                                           organizations which have multiple and
                                           changing sources of patient
                                           identification and registrations and
                                           other situations where the same
                                           population is served by more than one
                                           care provider.  EMPI is designed to
                                           detect multiple patient identifiers
                                           across an enterprise for the same
                                           patient or member, assigns a single
                                           patient identifier for such patient
                                           or member and merges patient data
                                           from multiple sources into one
                                           comprehensive record in the clinical
                                           database.  EMPI is based on licensed
                                           technology.
</TABLE>

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         The Oacis Clinical Care applications which are commercially available
include:

<TABLE>
<CAPTION>
MODULE                                                  DESCRIPTION
------                                                  -----------
<S>                                        <C>
Clinical Display                           Clinical Display integrates all
                                           elements of the ODR into a highly
                                           summarized patient roster form with
                                           "drill-down" capabilities to access
                                           more detailed information.  This
                                           patient roster format allows
                                           clinicians to prioritize work upon
                                           sign-on to the system, highlights
                                           user-defined critical data and
                                           contains time indicators for the age
                                           of data and a viewed/not viewed
                                           status.  Graphs and lists can be
                                           customized to match each clinical
                                           user's method of practicing medicine.
                                           Clinical Display also provides
                                           clinical users with schedules that
                                           contain clinical interventions to be
                                           performed for each patient.  The
                                           schedules can be configured by
                                           disease, provider or location so the
                                           clinical user can more effectively
                                           manage specific patient populations
                                           over a period of time.

Clinical Documentation
         - Clinical Data Entry             Clinical Data Entry, the first in a
                                           series of applications addressing
                                           Clinical Documentation, enables a
                                           clinical user to  enter clinical
                                           data, such as notes, results, vital
                                           signs, functional  status, and
                                           outcomes directly into  the ODR.
                                           Clinical Documentation is designed
                                           for keyboard, mouse or  pen-based
                                           input.

Order Entry                                Order Entry enables a clinical user
                                           to order or schedule medical services
                                           provided in a hospital or IDS,
                                           including clinical laboratory tests,
                                           diagnostic tests, prescriptions and
                                           medical procedures. Order Entry can
                                           be customized to reflect individual
                                           user or institutional protocols of
                                           care.  This application is intended
                                           to be superseded by Oacis Order
                                           Management, an Oacis application
                                           currently in beta release.

Workstation Tools                          OaBuilder enables customers to
                                           configure workstations for use with
                                           the Oacis System.  Other tools
                                           include Workstation Security System,
                                           On-Line Help, Site Defined Reporting
                                           and Softcopy, an on-line
                                           documentation program.  The Form
                                           Wizard, another Oacis application
                                           tool, was phased out as a product
                                           offering during 1996.

StatLAN. The initial version of the Company's open architecture clinical
information system, StatLAN was introduced in 1986.  StatLAN collects
and presents, but does not store, medical record information from existing
legacy and departmental systems.  StatLAN incorporates a minicomputer-based
interface engine along with the software required to retrieve data on a
network of PC-based workstations. The Company is no longer marketing StatLAN,
but is continuing to support and may continue to enhance StatLAN.

</TABLE>

Products in Beta Release

         The Company has developed and is currently in the process of
installing the beta version of the following new Oacis Clinical Care
Applications:

                                      -5-
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<TABLE>
<CAPTION>
MODULE                                                  DESCRIPTION
------                                                  -----------
<S>                                        <C>
Oacis Order Management
(formerly named Enhanced
Order Entry)                               Oacis Order Management is designed to
                                           provide capability for the clinician
                                           to request services or place clinical
                                           orders as clinical decisions are
                                           being made.  This application is
                                           designed using a "trees and tabs"
                                           interaction model which provides for
                                           improved user navigation and is
                                           designed to be highly intuitive,
                                           thereby requiring minimal physician
                                           training and use of the keyboard.
                                           The application includes an order
                                           communication function that is
                                           tightly integrated with the Clinical
                                           Display application allowing the
                                           physician to place an order while
                                           reviewing clinical results and
                                           eliminates the need to learn multiple
                                           systems.

Oacis Census Management                    Oacis Census Management is designed
                                           to provide capability for the
                                           clinician to perform patient
                                           admission, discharge and transfer
                                           ("ADT") functions directly into the
                                           Oacis Data Repository with no
                                           interruptions to workflow or
                                           dependent external systems.  This
                                           application interacts with the
                                           customer's legacy ADT system through
                                           the Oacis Gateway ++.

</TABLE>
                                      -6-



























































Product Development

         The Company is currently developing the following new modules for the
Oacis Healthcare Network and new Oacis Clinical Care applications:

<TABLE>
<CAPTION>
MODULE                                                  DESCRIPTION
------                                                  -----------
<S>                                        <C>
Oacis Passport                             The Company is currently completing
                                           the development of its Internet based
                                           application - Passport. Passport is
                                           designed to enable clinicians to
                                           explore the electronic medical record
                                           from remote locations including over
                                           the Internet.  Passport is designed
                                           to provide access to the Oacis Data
                                           Repository from multiple personal
                                           computing hardware platforms using
                                           the Oacis Application Server and
                                           standard browser technology thereby
                                           reducing the need to replace existing
                                           desktop or laptop technology.
                                           Passport is based on many of the
                                           design principals found in Oacis
                                           Clinical Display and enables patient
                                           data to be configured and viewed
                                           according to each clinicians practice
                                           patterns.

Oacis II Architecture                      The Company is currently modifying
                                           its technology architecture to
                                           take greater advantage of available
                                           industry standards including the use
                                           of Corba distributed obects and to
                                           utilize a three-tier or multi-tier
                                           technology. The re-architecture to
                                           Oacis II is designed to internet-
                                           enable Oacis applications developed
                                           for this new architecture, enhance
                                           system scaleability and performance
                                           in larger installations, and
                                           facilitate expanding the systems
                                           functionality through partnering with
                                           other vendors.

Enhancements to Oacis
Order Manangement                          The Company is currently working with
                                           another healthcare information
                                           systems vendor to incorporate their
                                           pharmacy vocabulary management
                                           application and Drug Toolkit
                                           application into the Oacis Order
                                           Management product.  This application
                                           is being designed to provide
                                           medication ordering capability at the
                                           point of care. A further extension

</TABLE>
                                      -7-
<PAGE>   7
<TABLE>
<S>                                        <C>
                                           of this relationship and product
                                           enhancement is expected to be the
                                           addition of an "expert patient
                                           dosing" application which takes
                                           advantage of the vendor's knowledge
                                           server (rules engine and database) to
                                           assist caregivers as they construct
                                           patient specific dosages of
                                           medications.

Enhancement to EMPI                        The Company is currently develping
                                           an enhancement to EMPI that
                                           incorporates both a 32 bit
                                           architecture and enhanced user
                                           interaction model to the workstation
                                           and adds an unmerge capability to the
                                           EMPI and Oacis Data Repository
                                           products.

</TABLE>

         Other Oacis Clinical Care applications that are in various stages of
design and are planned for future development by the Company include the
following enhancements to the Clinical Documentation and Order Management
applications: Problem Management, Vocabulary Management, Clinical Design Support
and Protocols, Care Guidelines and Patient Care Planning applications.
Additionally, the Company is in the process of designing a distributed
architecture model for the Oacis Data Repository.

SERVICES

         The Company provides installation and support services to its
customers.  An Oacis installation typically requires approximately nine to 18
months and involves tasks which usually are performed by a complement of
personnel from the Company's installation organization and the customer's
internal information services department, sometimes with assistance from outside
consulting companies.  Typical installation services include project planning,
hardware integration, interface development and testing, database specification
and configuration, workflow engineering, screen design and configuration,
integration testing and tuning, and training customer personnel in system
operation, maintenance and use. To improve the efficiency of the installation
process and to reduce installation times, the Company and its customers have
developed a set of predefined display and data entry screens that provide
templates for customizing the system for the customer's specific needs.

         The Company also provides telephone and other support services to its
customers 24 hours a day, seven days a week, after installation is complete, as
well as other services such as customization services, technical and user
training programs, network analysis and troubleshooting.

CUSTOMERS

         The Company's customers include hospitals, major medical centers and
IDSs throughout the United States, Canada, Europe and Australia.

         The Company licenses its Oacis and StatLAN systems and provides
installation, training and support services to customers pursuant to the terms
of a software license and support agreement.  Under the software license and
support agreements, the Company generally grants to the customer a
non-exclusive and non-transferable right to use the system for data processing
and related operations, and data storage, retrieval and manipulation, all in
connection with providing health care services.  In addition, the Company
provides installation and training services pursuant to a workplan mutually
created by the Company and the customer, and maintenance and support services
which typically are provided on a renewable annual basis.  In exchange, the
customer is obligated to pay to the Company a fixed software license fee
(payable in increments depending on the achievement of certain installation
milestones), installation and training fees, and fixed maintenance and support
fees.  The term of the software license is perpetual, although either party can
generally terminate the license upon the material default, bankruptcy or
insolvency of the other.  The Company typically indemnifies its customers
against all costs, damages and losses it may suffer based on a claim that the
system infringes a third party's trade secret, U.S. patent or U.S. copyright,
and each customer typically indemnifies the Company against all costs, damages
and losses incurred by the Company in connection with any claim arising out of
or resulting from the use or operation of the system by the customer, including
claims based on any theory of product liability.  In addition, the Company


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<PAGE>   8
typically warrants that its system will meet certain performance criteria,
including criteria concerning response time and system availability.


SALES AND MARKETING

         The Company sells its systems in North America through 8 direct sales
personnel supported by a staff of 3 clinical sales specialists and 4 client
services account executives who conduct in-depth system presentations and
demonstrations, and 5 sales support personnel who prepare sales proposals.
Additionally, the Company has entered into a marketing agreement with VHA,
Inc. to market certain of the Company's products to its membership of
approximately 1400 healthcare organizations in the United States. The
sales cycle for health care information systems is typically 12 to 18 months
from initial contact to contract execution and can be lengthened by a number of
factors, including merger and acquisition activity and general consolidation of
healthcare organizations.

         Outside of North America, the Company's products are sold through
distribution arrangements which typically require minimal sales support from
the Company.  The Company currently has formal distribution and marketing
relationships in Australia, New Zealand, and Norway.

         The Company's marketing organization is responsible for product
management including the development of new product specifications, oversight
of the products development progress, product marketing, positioning and
pricing strategies and product introduction including support in the
development of sales strategy.  In addition, the marketing organization is
responsible for corporate marketing and advertising and customer interaction
through coordination of both a customer operated User Group and a selected
customer Quality Council.

TECHNOLOGY

         General Architecture.  The Oacis system is based on a client-server
model utilizing object-oriented programming.  This model enables Oacis to
distribute information processing across multiple computers and scale server
and client hardware in increments to accommodate expansion and contraction in
utilization.  Servers perform all data management functions for the Oacis
system and client workstations support the user interface for all application
functions.  Application logic is distributed across both servers and
workstations.  This architecture is designed to provide remote access to
clinical information through various technologies, including LANs, WANs, phone
lines, and the Internet.

         Hardware Platform.  The Oacis Healthcare Network operates on Sun
Microsystems and Hewlett-Packard servers designed for high volume, on-line
transaction processing.  The Company believes that it can port the Oacis
Healthcare Network to other hardware platforms and intends to do so
commensurate with market demand.  The Oacis Clinical Care applications operate
on Intel-based 486 and Pentium class PC workstations.

         Software Architecture.  The Company uses industry standard software
whenever possible to minimize development and maintenance costs.  The Oacis
Healthcare Network operates on a UNIX operating system.  The ODR is built on
Sybase Structured Query Language ("SQL") Server relational database management
software.  Sybase's SQL server provides the throughput and functional
characteristics necessary to deliver large scale, high performance database
management.  The PC workstation operating system is Microsoft Windows.  All
major Oacis software components are written in C++, the workstation user
interface is written in Visual Basic and C++, the database is accessed with
SQL, and application logic is created with a combination of Sybase stored
procedures, C++ and Visual Basic.  All software components are assembled in a
layered architecture to facilitate the replacement of layers, such as the
relational database, as new technology becomes available and as market demand
dictates.

         The Company's systems also incorporate a number of third-party
computer software products.  In particular, both the Gateway++ and Oacis Data
Repository components of Oacis incorporate a Sybase relational database.  In
addition, Oacis includes a number of embedded software products licensed from
third parties.

RESEARCH AND DEVELOPMENT


                                      -9-
<PAGE>   9
         The Company's research and development efforts focus on (i) extending
the functionality of Oacis through the development or integration of new
applications, extensions to existing applications and integration of
third-party technologies, (ii) ongoing efforts to enhance system performance
and reliability as the number of users, interfaces and databases grows, (iii)
extending the Oacis Healthcare Network architecture to give Oacis more
flexibility and the ability to service increasingly large IDSs and (iv) staying
current with advancing technologies.

         As of December 31, 1996, the Company had 57 employees engaged in
research and development activities.  For the years ended December 31, 1996,
1995, and 1994, the Company's research and development expenditures before
capitalization of development costs were approximately $6.9 million, $6.4
million and $7.3 million, respectively. The Company capitalized $506,000 and
$275,000 of research and development expenses associated with the development
of certain components of Oacis after technological feasibility had been
established in 1996 and 1995, respectively.  The Company did not capitalize
software development costs in 1994.  The Company anticipates capitalizing
additional software development costs in the future.

COMPETITION

         The Company believes that the principal competitive factors for
selecting a clinical information system are the system's ability to operate
with and preserve existing departmental and legacy systems, ease of
installation, clinical focus, reliability, ease of use, functionality and price
as well as the reputation, breadth of product offerings, size and financial
stability of the system vendor.

         Competition in the market for clinical information systems and
services is intense and is expected to increase.  The Company's competitors
include other providers of health care information systems and services, and
health care consulting firms.  The Company's principal competitors include 3M
Health Information Systems, Cerner Corporation, Epic Systems Corporation, HBO &
Company, HealthVISION, Inc. and Shared Medical Systems Corporation.
Furthermore, other major health care information companies not presently
offering clinical information systems may enter the Company's markets.  Many of
the Company's competitors and potential competitors have significantly greater
financial, technical, product development, marketing and other resources and
market recognition than the Company.  Many of the Company's competitors also
currently have, or may develop or acquire, substantial installed customer bases
in the health care industry.  As a result of these factors, the Company's
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements or to devote greater resources to the
development, promotion and sale of their products than the Company.

PROPRIETARY RIGHTS

         The Company relies on a combination of trade secrets, copyright and
trademark laws, nondisclosure and other contractual provisions to protect its
proprietary rights.  The Company has not filed any patent applications covering
its technology or registered any of its copyrights with state or federal
agencies.  There can be no assurance that measures taken by the Company to
protect its intellectual property will be adequate or that the Company's
competitors will not independently develop systems and services that are
substantially equivalent or superior to those of the Company.

GOVERNMENT REGULATION

         The United States Food and Drug Administration (the "FDA") is
responsible for assuring the safety and effectiveness of medical devices under
the Federal Food, Drug and Cosmetic Act.  Computer products are subject to
regulation when they are used or are intended to be used in the diagnosis of
disease or other conditions, or in the cure, mitigation, treatment or
prevention of disease, or are intended to affect the structure or function of
the body.  The FDA could determine in the future that predictive applications
of the Company's systems and applications make them clinical decision tools
subject to FDA regulation.  Medical devices are subject to regulation by the
FDA, which requires, among other things, premarket notifications or approvals
and compliance with labeling, registration and listing requirements, good
manufacturing practices and records and reporting requirements.  Compliance
with


                                      -10-
<PAGE>   10
these regulations could be burdensome, time consuming and expensive.  The
Company also could become subject to future legislation and regulations
concerning the manufacture and marketing of medical devices and health care
software systems.  These could increase the cost and time necessary to market
new products and could affect the Company in other respects not presently
foreseeable.  The Company cannot predict the effect of possible future
legislation and regulation.

         The confidentiality of patient records and the circumstances under
which such records may be released for inclusion in the Company's databases is
subject to substantial regulation by state governments.  These state laws and
regulations govern both the disclosure and use of confidential patient medical
record information.  Although compliance with these laws and regulations is
principally the responsibility of the hospital, physician or other health care
provider with access to the Company's information system, regulations governing
patient confidentiality rights are evolving rapidly.  Additional legislation
governing the dissemination of medical record information has been proposed at
both the state and federal level.  This legislation may require holders of such
information to implement security measures that may be of substantial cost to
the Company.  There can be no assurance that changes to state or federal laws
will not materially restrict the ability of health care providers to submit
information from patient records to the Company's systems.

EMPLOYEES

         As of December 31, 1996, the Company had 172 employees, including 57
in research and development, 60 in installation and support services, 35 in
sales and marketing and 20 in finance and administration.  None of the
Company's employees is represented by a labor organization, and the Company is
not a party to any collective bargaining agreement.  The Company has never had
any employee strike or work stoppages and considers its relations with its
employees to be good.  The Company is reliant on highly skilled personnel in
all facets of its business.  Particularly with respect to research and
development and installation personnel who typically have a mixture of computer
programming and clinical skills, the market for such highly skilled personnel
is extremely competitive and there can be no assurance that the Company will be
able to hire the personnel it requires to complete its product development
activities or install its products in accordance with its business plan either
of which could result in a material adverse affect on the Company's business,
financial condition and results of operations.


ITEM 2.          DESCRIPTION OF PROPERTY


         The Company leases approximately 33,946 square feet of office space in
Greenbrae, California for its corporate headquarters.  The Company also leases
approximately 10,518 square feet of office space in Atlanta, Georgia for
installation and support services.  These leases expire on February 28, 1998.
In March 1997, the Company entered into a lease for approximately 55,000 square
feet of office space located in San Rafael, California, where it plans to
relocate is corporate headquarters upon expiration of its existing lease.  The
Company is not required to pay rent on this facility until April 1998 at which
time it plans to take occupancy of the new facility.  The Company is currently
negotiating with its current landlord for the extension of its existing lease
in Greenbrae, California to accommodate its planned relocation in April 1998.

ITEM 3.          LEGAL PROCEEDINGS

         There are no material legal proceeding involving the Company pending
at this time.

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

         Not applicable.


                                      -11-
<PAGE>   11
                                    PART II

ITEM 5.          MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "OCIS."  As of March 21, 1997 there were approximately 78
holders of record of the Company's Common Stock.  The Company has never paid
any cash dividends on its capital stock.  The Company currently intends to
retain any future earnings to fund operations and, therefore, does not
anticipate paying any cash dividends in the foreseeable future.

         The Company consummated its initial public offering on May 21, 1996.
The following table sets forth, for the periods indicated, the range of the low
and high sales prices for the Company's Common Stock as reported on the Nasdaq
National Market for the quarters ended since consummation of the initial public
offering.

<TABLE>
<CAPTION>
                                                              HIGH              LOW
                                                               ----              ---
                       <S>                                    <C>               <C>
                       Fiscal 1996:
                          Second Quarter  . . . . . . . .     18 1/4            10 1/4
                          Third Quarter . . . . . . . . .     13 1/8             7 1/4
                          Fourth Quarter  . . . . . . . .     12 1/2             6 1/2
</TABLE>


                                      -12-
<PAGE>   12
                      SELECTED CONSOLIDATED FINANCIAL DATA

         The following table summarizes certain financial data for the Company
and Bell Atlantic Healthcare Systems, Inc., the predecessor to the Company (the
"Predecessor").  The results of operations for the Predecessor for the period
January 1, 1994 through May 13, 1994 and the Company for the period May 14,
1994 through December 31, 1994 have been determined based upon the historical
cost bases of the Predecessor and the Company, and have been combined to
facilitate presentation of the results of operations on a calendar year basis.
The selected financial data should be read in conjunction with "Management's
Discussion and Analysis or Plan of Operations" and the Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Form 10-KSB.  The
Company's historical operating results are not necessarily indicative of the
results for any future period.

<TABLE>
<CAPTION>                                                                               Predecessor
                                                                                          and the
                                                                                          Company
                                                                The Company               Combined
                                                        ---------------------------     ----------
                                                                   Year Ended December 31,
                                                        ------------------------------------------
                                                           1996             1995            1994
                                                           ----             ----            ----
 <S>                                                    <C>
 Statement of Operations Data:
 -----------------------------
 (In thousands, except per share data)
 Total revenue                                            $20,444          $13,554         $9,301
 Gross profit                                              10,063            4,434          1,422
 Operating expenses                                        15,480           13,635         13,797
 Loss from operations                                      (5,417)          (9,201)       (12,375)
 Interest income/(expense), net                               844             (123)          (337)
 Net loss                                                  (4,573)          (9,324)       (12,712)
 Pro forma net loss per share                               (0.48)           (1.22)            *
 Weighted average number of common and
 common equivalent shares                               9,431,277        7,667,243
</TABLE>

<TABLE>
<CAPTION>
                                                                          December 31,
 Balance Sheet Data:                                  -------------------------------------------
                                                             1996             1995           1994
 -------------------
 (In thousands)                                        ------------------------------------------
 <S>                                                      <C>               <C>             <C>
 Cash and short term investments                          $23,141           $3,900           $201
 Working capital                                           23,840            1,704           (493)
 Total assets                                              32,712           11,878          7,383
 Long term debt                                               669            3,000          4,735
</TABLE>

*        Pro Forma Net loss per share for 1994 is not presented since such
         amounts are not deemed meaningful due to the change in ownership
         of Oacis on May 13, 1994.


ITEM 6.          MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

OVERVIEW

Background

         The Company develops, markets, licenses, installs, and supports
clinical information systems primarily for major medical centers, hospitals and
integrated healthcare delivery systems.  In 1986, the Company introduced
StatLAN, the initial version of the Company's clinical information system.  In
1994, the Company introduced


                                      -13-
<PAGE>   13
Oacis.  Oacis is comprised of the Oacis Healthcare Network, which includes an
interface engine, a clinical data repository and an Enterprise Member/Patient
Index, and Clinical Care applications, which facilitate the input and delivery
of information at the point of care.

         Substantially all of the Company's revenues are currently derived from
licenses of Oacis.  The Company intends to focus its sales and marketing
efforts on Integrated Delivery Systems ("IDSs"), which are a relatively new
type of organization and which currently account for a small portion of the
overall market for clinical information systems.  The formation of IDSs and a
general consolidation in the healthcare industry has a number of effects which
include the creation of larger healthcare networks with greater market
concentration.  The Company believes that while such consolidation may result
in an increase in demand for open architecture clinical information systems
such as the Company provides, the near term effect of such consolidation
reduces the resources available for IDSs to invest in clinical information
systems until such time as the rate of consolidation slows.  Accordingly, the
Company believes that the market for the Company's products may continue to
develop slowly in the near term and that sales cycles will continue to be long.

         The Company's future success and financial performance depends in
large part upon the Company's ability to provide the increasing system
functionality required by its customers through the timely development and
successful introduction of new applications and enhancements to Oacis.  The
Company has historically devoted significant resources to system enhancements
and research and development and believes that significant continuing
development efforts will be required to sustain the Company's operations.
Additionally, the Company's ability to develop, market, sell and install its
systems depends on the Company's ability to retain, recruit and hire highly
skilled personnel in a number of technical and clinical fields.  The market for
this highly skilled workforce is extremely competitive.

Revenue Recognition

         The Company's revenues consist of license fees for the perpetual use
of its software, installation revenues associated with installing and
configuring the software to meet specific customer needs, revenues from the
sale of third-party hardware and software, and ongoing support services.  The
price of an Oacis system varies depending on a number of factors, including the
modules licensed and the volume of outpatient visits and inpatient days for the
customer organization, and generally ranges from more than six hundred
thousand dollars to a few million dollars.  The Company resells third-party
hardware and software pursuant to standard reseller agreements.

         Software license fee and installation services revenues from contracts
where Oacis is actively involved in the installation of the system, which are
primarily in the United States and Canada, are recognized on a percentage of
completion basis measured by the ratio of (i) labor hours incurred to install
and configure the system to (ii) total estimated labor hours.  The Company
generally bills its installation services as the services are provided.
Software license fees are generally billed in accordance with installation
milestones.  Accordingly, revenues recognized in advance of achieving billing
milestones are recorded as unbilled accounts receivable and collections
resulting from billing milestones achieved in advance of recognizing revenues
are recorded as unearned revenues on the consolidated balance sheet.  If the
total estimated cost of a contract is expected to exceed the contract price,
determined primarily by the installation component of the contract, the total
estimated loss is charged to expense in the period the loss is identified.

         Software license revenues from contracts where Oacis is not actively
involved in the installation of the system, primarily contracts outside of
North America, are typically recognized as contract amounts become due and
payable on a milestone basis.  Because Oacis is not actively involved in
these international installations, milestone attainment and consequently
revenue recognition on these contracts may be delayed for reasons which include
delays caused by the customer, or Oacis' international partner, both of which
are beyond the control of Oacis.

         The Company also recognizes revenues from support fees and sales of
third-party hardware and software.  Support agreements generally cover a one
year period and the associated revenues are recognized ratably over the period
of the support agreement.  Third-party hardware and software revenues are
recognized upon delivery of the

                                      -14-
<PAGE>   14
related hardware and software.  Third-party hardware and software are generally
sold pursuant to a purchase order and are not governed by the terms of the
software license and services agreement.

Sales to Major Customers

         During 1996, two customers accounted for 17% and 11%, respectively,
of the Company's revenue and at December 31, 1996, these customers accounted
for 5% and 7%, respectively, of total receivables.  One additional customer
accounted for 10% of total receivables at December 31, 1996.  The Company
anticipates that its concentration of revenues and accounts receivable will
decline in future periods as the Company generates additional customers.

Backlog

         The Company had backlog of $13.8 million and $11.4 million at December
31, 1996 and 1995, respectively.  Backlog consists of the unrecognized portion
of contractually committed software license fees, estimated installation fees,
and maintenance and support fees.  The Company adjusts the timing of an
installation to accommodate customer needs and because a typical installation
requires nine to 18 months to complete, there can be no assurance that the
amounts in backlog will be recognized in the next 12 months.  Due to the
relative size of a typical system sale and installation contract compared to
the Company's annual revenues, a termination or installation delay of one or
more contracts could have a material adverse effect on the Company's business,
financial condition, results of operations and cash flows.

RESULTS OF OPERATIONS

        The following table sets forth the results of operations for the
Company and the Predecessor expressed as a percentage of total revenues.
The results of operations for the Predecessor for the period January 1, 1994
through May 13, 1994 and the Company for the period May 14, 1994 through
December 31, 1994 have been determined based upon the historical cost bases of
the Predecessor and the Company, and have been combined to facilitate
presentation of the results of operations on a calendar basis.  The Company's
historical operating results are not necessarily indicative of the results for
any future period.

<TABLE>
<CAPTION>
                                                                                      Predecessor and
                                                                                        The Company
                                                               The Company                Combined
                                                         --------------------------    --------------
                                                                     Year Ended December 31,
                                                         --------------------------------------------
                              Revenues:                   1996             1995             1994
                                                          ----             ----             ----
     <S>                                               <C>          <C>     <C>             <C>
     Revenues:
       Software licenses   . . . . . . . . . . .            38.6%            25.0%            24.8%
       Installation and support services   . . .            32.4             43.0             41.5
       Third-party hardware and software   . . .            29.0             32.0             33.7
                                                       ---------         --------         --------
                     Total revenues  . . . . . .           100.0            100.0            100.0
                                                        --------          -------          -------
     Cost of revenues:
       Software licenses   . . . . . . . . . . .             1.2              1.0              1.4
       Installation and support services   . . .            27.5             38.6             48.1
       Third-party hardware and software   . . .            22.1             27.7             35.2
                                                       ---------          -------         --------
                    Total cost of revenues   . .            50.8             67.3             84.7
                                                       ---------          -------         --------
       Gross profit  . . . . . . . . . . . . . .            49.2             32.7             15.3
                                                       ---------          -------         --------
     Operating expenses:
       Sales and marketing   . . . . . . . . . .            27.4             35.9             30.1
       Research and development  . . . . . . . .            31.2             44.9             79.0
       General and administrative  . . . . . . .            17.1             19.8             39.3
                                                            ----             ----             ----
                    Total operating expenses   .            75.7            100.6            148.4
                                                        --------          -------          -------
</TABLE>

                                      -15-
<PAGE>   15
<TABLE>
     <S>                                               <C>              <C>             <C>
     Loss from operations  . . . . . . . . . . .           (26.5)           (67.9)          (133.1)
     Interest income/(expense), net. . . . . . .             4.1             (0.9)            (3.6)
                                                       ---------         ---------       ----------
     Net loss  . . . . . . . . . . . . . . . . .           (22.4)%          (68.8)%         (136.7)%
                                                        ----------        ---------       ----------
</TABLE>

YEAR ENDED DECEMBER 31, 1996 AND 1995

         Revenues

         In the year ended December 31, 1996, total revenues increased 51% to
$20.4 million from $13.6 million in the year ended December 31, 1995.  Of these
amounts, software license fee revenues increased 133% to $7.9 million,
installation and support service revenues increased 14% to $6.6 million and
third-party hardware and software revenues increased 37% to $5.9 million.  The
increase in software license fee and installation and support services revenue
in 1996 was due to an increase in the average selling price of installations in
progress, a higher component of international software license fee revenue, and
the number of installations in progress during the year ended December 31,
1996.  The increase in the average selling price of installations in progress
was due to a combination of factors including the size of the customer and an
expanded product offering.  During 1996, the international component of total
revenues accounted for 4% of total revenues.  The Company expects that
international revenues will continue to be less than 10% of revenues in the
coming year.  The increase in third-party hardware and software revenue was due
to an increase in the average size of third-party sales transactions.

         Cost of Revenues

         Cost of revenues were $10.4 million, or 51% of total revenues in the
year ended December 31, 1996, compared to $9.1 million, or 67% of total
revenues in the year ended December 31, 1995.  Cost of software license fee
revenue increased 103% to $252,000 in the year ended December 31, 1996, due
to an increase in amortization of capitalized software development costs in
1996 as well as distributor fees related to international sales.  Cost of
installation and support services increased 7% to $5.6 million in the year
ended December 31, 1996 from $5.2 million in the year ended December 31, 1995,
due to an increase in the average cost of installation and support personnel,
as well as an increase in the average number of such personnel during 1996.
Gross profit as a percentage of revenue increased to 49% in the year ended
December 31, 1996 from 33% in the year ended December 31, 1995, due to a shift
in the mix of revenue to higher margin software license fee revenue as well as
an increase in gross margins from third-party hardware and software product
sales.  Gross profit for software license fees, installation and support
services, and third-party hardware and software products totaled 97%, 15% and
24% respectively during the year ended December 31, 1996 as compared to 96%,
10% and 13%, respectively, during the year ended December 31, 1995.  Gross
profit on installation and support service revenues increased due to an
increase in the billable component of installation services as well as improved
implementation methodologies during 1996 offset by the impact of delays in
closing new business, the hiring and training of new employees and a focus on
methodology development for new product releases.  Gross profit on third-party
hardware and software products increased due to improved pricing programs and
the mix of third-party products sold.  The Company anticipates that its third-
party hardware and software product gross margins will approximate lower,
historical levels in future periods due to increased competitive pressures for
third-party pricing as well as changes in certain third-party pricing programs.

         Sales and Marketing

         Sales and marketing expenses increased 15% to $5.6 million in the year
ended December 31, 1996 from $4.9 million in the year ended December 31, 1995,
and decreased as a percentage of total revenue from 36% in 1995 to 27% in 1996.
The increase in sales and marketing expenses was a result of an increase in
personnel, an increase in travel related expenses resulting from increased
sales prospecting activity, and an increase in consulting and advertising
related expenses offset by a decrease in commission expenses resulting from
changes in the Company's sales incentive compensation programs. In 1996, the
Company implemented a new commission structure which extended the period over
which commissions are earned. Accordingly, the Company will recognize
commission expenses as earned over the contract term.  The Company expects that
it will continue to increase its

                                      -16-
<PAGE>   16
staffing of the sales and marketing organization in 1997 and that accordingly,
sales and marketing expenses will increase in 1997.

         Research and Development

         Research and development expenses increased 5% to $6.4 million in the
year ended December 31, 1996 from $6.1 million in the year ended December 31,
1995 and decreased as a percentage of total revenues from 45% in the year ended
December 31, 1995 to 31% in the year ended December 31, 1996.  The increase in
research and development expenses was primarily attributable to the acquisition
(license) costs of certain technology which forms the basis of the Oacis
Enterprise Member/Patient Index ("EMPI"), a component of the Oacis Healthcare
Network, and the costs associated with the continuing development of that
technology offset by increased levels of software capitalization during 1996.
Because the licensed technology had not reached technological feasibility and
had no alternative future use when it was acquired, the $700,000 license fee was
charged to expense in the first quarter of 1996.  Additionally, during 1996 the
Company capitalized $506,000 of software development costs representing 7% of
total 1996 development expenditures.  During 1995, the Company capitalized
$275,000 in software development costs representing 5% of 1995 development
expenditures.  Excluding the impact of the licensed technology and software
capitalization, research and development expenses decreased 3% in the year
ended December 31, 1996 over the same period in 1995 as a result of lower
personnel costs partially offset by higher consulting costs.  The Company
expects that it will increase its research and development expenditures during
1997 and that software capitalization will also be increased in future periods.

         General and Administrative

         General and administrative expenses increased 30% to $3.5 million in
the year ended December 31, 1996 from $2.7 million in the year ended December
31, 1995, but decreased as a percentage of total revenues to 17% in the year
ended December 31, 1996 from 20% in the year ended December 31, 1995.  The
increase in general and administrative expenses was a result of an increase in
personnel, increased corporate recruiting expenses as well as increased
consulting expenses related in part to certain process improvement initiatives.

YEAR ENDED DECEMBER 31, 1995 AND 1994

         Revenues

         In 1995, total revenues increased 46% to $13.6 million from $9.3
million in 1994.  Of these amounts, software license revenues increased 47% to
$3.4 million and installation and support service revenues increased 51% to
$5.8 million due to an increase in the number of installations in progress in
1995, a generally higher level of productivity on those installations, and an
increased average contract price.  Third-party hardware and software revenues
increased 39% reflecting an increase in the number of contracts signed during
1995.

         Cost of Revenues

         Cost of revenues increased to $9.1 million, or 67% of total revenues
in 1995, compared to $7.9 million, or 85% of total revenues, in 1994.  Cost of
software licenses remained relatively unchanged in 1995 at $124,000 as compared
to $125,000 in 1994.  Cost of installation and support services increased 17%
in 1995 to $5.2 million from $4.5 million in 1994, as a result of an increase
in the number of installation and support personnel.  Gross profit as a
percentage of total revenues increased to 33% in 1995 from 15% in 1994.  The
improvement in gross profit as a percentage of total revenues resulted
primarily from an increase in the billable component of installation services
in 1995 over 1994.  In 1994, and to a lesser degree in 1995, the Company was
required to complete certain contracts entered into by the Predecessor which
reflected lower margins.  In addition, gross profit on third-party hardware and
software increased to 13% in 1995 from a loss of 5% in 1994, due primarily to
improved pricing programs from third-party hardware and software vendors.
Additionally, during the period January 1, 1994 to May 13, 1994, the
Predecessor recorded $250,000 in hardware losses resulting from the Predecessor
having to purchase computer hardware upgrades for certain of its customers.

                                      -17-
<PAGE>   17
         Sales and Marketing

         In 1995, sales and marketing expenses increased 74% to $4.9 million
from $2.8 million in 1994, and increased as a percentage of total revenues to
36% in 1995 from 30% in 1994.  The increase in sales and marketing expense was
a result of an increase in personnel as well as an increase in commission
payments due to the increase in contract signings in 1995 over 1994.  In 1995
and 1994, sales commissions were earned and recognized upon contract signing.
In addition, during 1995, the Company incurred additional sales and marketing
expenses in connection with the initiation of a marketing campaign.

         Research and Development

         In 1995, research and development expenses decreased 17% to $6.1
million from $7.3 million in 1994 and decreased as a percentage of total
revenues to 45% in 1995 from 79% in 1994.  In 1994, the Company charged to
operations in-process research and development totaling $1.4 million in
connection with the Acquisition.  Excluding this charge, research and
development expenses increased 2% to $6.1 million from $5.9 million due
primarily to costs of performing the alpha testing on certain Oacis modules.
During 1995, the Company capitalized $275,000 of direct costs associated with
the development of a component of Oacis after technological feasibility had
been established.

         General and Administrative

         In 1995, general and administrative expenses decreased 27% to $2.7
million from $3.7 million in 1994, and decreased as a percentage of total
revenues to 20% in 1995 from 39% in 1994.  The decrease in general and
administrative expenses was due to the write off in 1994 of certain accounts
receivable and losses related to a customer contract aggregating $1.2 million.
This decrease was offset in part by increased personnel costs resulting from
the need to rebuild the Company's administrative support services which were
depleted prior to the Acquisition.

QUARTERLY RESULTS OF OPERATIONS

         The following table presents the Company's operating results for the
eight quarters in the period ended December 31, 1996.  The information for each
of these quarters is unaudited and has been prepared on the same basis as the
audited financial statements appearing elsewhere in this Form 10-KSB.  In the
opinion of management, all necessary adjustments (consisting only of normal
recurring adjustments) have been included to present fairly the unaudited
quarterly results when read in conjunction with the audited Consolidated
Financial Statements of the Company and the Notes thereto appearing elsewhere
in this Form 10-KSB.  These operating results are not necessarily indicative of
the results for any future period.

         The Company's quarterly revenues and operating results have varied
significantly in the past and are likely to vary substantially from quarter to
quarter in the future.  Quarterly revenues and operating results may fluctuate
as a result of a variety of factors, including the following: the Company's
long sales cycle; demand for the Company's systems, applications and services,
including variability in demand and orders for the third-party hardware and
software; the number, timing and significance of announcements and releases of
system enhancements and new applications by the Company and its competitors;
the termination of, or a reduction in, offerings of the Company's systems,
applications and services; the loss of customers due to consolidation in the
healthcare industry or caused by other factors; the timing of revenue
recognition; the amount of backlog at the beginning of any particular quarter;
customer budgeting cycles and changes in customer budgets; investments by the
Company in marketing, sales, research and development and administrative
personnel necessary to support the Company's anticipated operations; marketing
and sales promotional activities; software defects and other system quality
factors; and general economic conditions.

                                      -18-
<PAGE>   18
<TABLE>
<CAPTION>
                                                Quarterly Financial Results
                                           (In thousands, except per share data)
-----------------------------------------------------------------------------------------------------------
 1996 Quarter Ended                            March 31        June 30        September 30      December 31
-----------------------------------------------------------------------------------------------------------
 <S>                                            <C>             <C>                <C>              <C>
 Total revenue                                  $3,905          $4,097             $6,651           $5,791
 Gross margin                                    1,735           1,871              2,888            3,569
 Net income (loss)                              (2,850)         (1,989)              (246)             512
 Pro forma net income (loss) per share           (0.37)          (0.23)             (0.02)            0.05
-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
 1995 Quarter Ended                            March 31        June 30        September 30      December 31
-----------------------------------------------------------------------------------------------------------
 <S>                                            <C>             <C>                <C>              <C>
 Total revenue                                  $2,426          $3,247             $4,564           $3,317
 Gross margin                                      468           1,104              1,739            1,123
 Net income (loss)                              (2,107)         (2,160)            (1,484)          (3,573)
 Pro forma net income (loss) per share           (0.29)          (0.29)             (0.19)           (0.46)
-----------------------------------------------------------------------------------------------------------
</TABLE>


Liquidity and Capital Resources

         At December 31, 1996 the Company's cash and cash equivalents and
short-term investments totaled $23.1 million as compared to $3.9 million at
December 31, 1995.  The Company completed an initial public offering of
3,220,000 shares of Common Stock on May 16, 1996 at $10.00 per share resulting
in net proceeds to the Company of $28.9 million.  Subsequent to the closing of
this offering,  the Company repaid $4.0 million in long-term obligations.

         In April 1996, the Company entered into a master lease agreement with
Comdisco, Inc. which enables the Company to finance the purchase of new
equipment, or sell and lease back certain existing equipment, up to an
aggregate of $1.0 million.  The lease term is 42 months from the date of
funding, and the annual interest rate is 8.5%.  As of December 31, 1996,
$578,000 of new equipment was financed under this agreement.

         In April 1996, the Company borrowed $1.0 million pursuant to a Loan
and Security Agreement with Comdisco, Inc. which was secured by all property
and equipment of the Company.  In June 1996, the Company repaid the outstanding
principal balance of this loan with a portion of the proceeds of the initial
public offering.

         During 1996, the Company invested $922,000 in capital expenditures
primarily related to computers and office equipment.  Of this amount $578,000
was purchased under the capital lease agreement with Comdisco.  The Company
expects that its capital expenditures will increase in 1997 due to increased
investment in computers and technology and in 1998 due to anticipated
expenditures for leasehold improvements associated with the relocation of the
Company's Corporate headquarters.

         The Company's working capital and capital requirements will depend
upon numerous factors including possible customer installation delays, lengthy
sales cycles, the Company's plans for developing, acquiring or licensing new
applications and technologies, the Company's requirements to purchase
additional capital equipment and the level of resources that the Company
devotes to its sales and marketing activities.  The Company believes that its
existing capital resources and available equipment lease financing arrangements
will be adequate to fund its current operations for at least the next 18
months.  Thereafter, the Company may require additional funds to support its
operations and may seek to raise such additional funds through public or
private equity financing or from other sources.  There can be no assurance that
additional financing will be available at all or that, if available, such
financing will be obtainable on terms favorable to the Company.

New Accounting Pronouncements

        In March 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share" and SFAS No. 129, "Disclosure of Information
about Capital Structure".  The Statements are both effective for periods ending
after December 15, 1997. The Company has not yet determined the impact on its
consolidated financial statements.

                                      -19-
<PAGE>   19
FACTORS AFFECTING OPERATING RESULTS

This report on Form 10-KSB contains forward-looking statements which involve
risks and uncertainties.  The Company's actual results could differ materially
from those anticipated by such forward-looking statements as a result of
certain factors including those set forth below.

HISTORY OF OPERATING LOSSES; UNCERTAIN PROFITABILITY.  The Company has incurred
net losses of $4.6 million, $9.3 million and $12.7 million for the years ended
December 31, 1996, 1995 and 1994, respectively and at December 31, 1996 had an
accumulated deficit of $22 million.  The Company has not achieved consistent
profitability on a quarterly basis and has not achieved annual profitability.
The Company's prior operating history, consolidation and uncertainty in the
healthcare industry, depencence on the emerging market for IDSs, dependence on
Oacis as its principal product, long sales and installation cycles, and
dependence upon key personnel and third parties, competition, and general
economic and other factors make the prediction of future operating results
difficult.  There can be no assurance that any of the Company's business
strategies will be successful or that the Company will be able to achieve
consistent revenue growth or achieve profitability on a quarterly or annual
basis.

CONSOLIDATION AND UNCERTAINTY IN THE HEALTH CARE INDUSTRY, DEPENDENCE ON
EMERGING MARKET FOR IDSS.  Many health care providers are consolidating to
create larger health care networks and IDSs with greater market concentration.
The Company focuses its sales and marketing efforts primarily on IDSs, which
are a relatively new type of organization and currently account for a
small portion of the overall market for clinical information systems.  The
Company believes that consolidation and formation of IDSs will continue and may
ultimately result in an increase in demand for open architecture clinical
information systems such as the Company provides, and accordingly focuses its
sales and marketing efforts on this market.  However, the near term effect of
such consolidation includes reducing the resources available for IDSs to invest
in clinical information systems until such time as the rate of consolidation
slows.  Accordingly, the Company believes that the market for the Company's
products may continue to develop slowly in the near term and that sales cycles
will continue to be long. In addition, continued consolidation could erode the
Company's existing customer base and reduce the size of the Company's target
market.  Additionally, the resulting enterprises could have greater bargaining
power, which could lead to price erosion of the Company's systems and services.
The reduction in the size of the Company's target market resulting from
industry consolidation or delays in purchasing clinical information systems
due to industry consolidation or the failure of the Company to maintain
adequate price levels could have a material adverse effect on the Company's
business, financial condition and results of operations.  The health care
industry also is subject to changing political, economic and regulatory
influences that may affect the procurement practices and operation of health
care industry participants.  During the past several years, the United States
health care industry has been subject to an increase in governmental
regulation and reform proposals.  These reforms may increase governmental
involvement in health care, lower reimbursement rates and otherwise change the
operating environment for the Company's customers.  Health care industry
participants may react to these proposals and the uncertainty surrounding such
proposals by curtailing or deferring investments, including those for the
Company's systems and services.  The failure of the Company to maintain
adequate price levels or sales as a result of legislative or market-driven
reforms could have a material adverse effect on the Company's business,
financial condition and results of operations.

DEPENDENCE ON OACIS; MARKET ACCEPTANCE; SYSTEM ENHANCEMENTS.  Substantially all
of the Company's revenues are currently derived from licenses of Oacis.
Therefore, any significant reduction in licensing of Oacis could have a
material adverse effect on the Company's business, financial condition and
results of operations.  The Company's future success and financial performance
depends in large part upon the Company's ability to provide the
increasing system functionality required by its customers through the timely
development and successful introduction of new applications and enhancements to
Oacis.  The Company has historically devoted significant resources to system
enhancements and research and development and believes that significant
continuing development efforts will be required to sustain the Company's
operations.  There can be no assurance that the Company will successfully
develop, introduce, market and sell new system enhancements or applications,
or that system enhancements or new applications developed by the Company will
meet the requirements of health care providers and achieve market acceptance.

                                      -20-
<PAGE>   20
LONG SALES AND INSTALLATION CYCLES.  The sales cycle for large scale clinical
information systems is lengthy.  The Company's sales cycle is subject to delays
associated with the lengthy approval process that typically accompanies
significant capital expenditures, customer budgeting cycles and changes in
customer budgets, changes or the anticipation of changes in the regulatory
environment affecting healthcare organizations, changes in the customer's
strategic information system initiatives, competing information systems
projects within the customer organization, consolidation in the health care
industry in general, the highly sophisticated nature of the Company's products
and competition in the market for clinical information systems.  Additionally,
during the sales process, the Company expends substantial time, effort and
funds preparing a contract proposal, demonstrating the system, arranging visits
to customer reference sites and negotiating the contract.  For these and other
reasons, the Company's sales cycle is lengthy and the Company does not have the
ability to predict when or if the sales process with a prospective customer
will result in a signed contract.

The time required to install the Company's systems can vary significantly
depending on the needs and skill sets of its customers.  Installation of an
Oacis system typically requires nine to 18 months, depending on a number of
factors including the size of the customer, the system licensed, the number of
legacy systems to be interfaced, the degree of customization requested by the
customer and the customer's installation schedule.  This period may be longer
if unforeseen technical, integration or other problems arise during the
installation process, if the Company has insufficient trained installation
personnel to handle several installations simultaneously or if a customer
decides to delay the installation schedule.  Due to this long installation
cycle, the Company's future results of operations depend in large part on
maintaining efficient and timely installation procedures, particularly since a
typical system license and installation contract is relatively large compared
to the Company's annual revenues.  In addition, payments to the Company are
dependent upon achievement of certain milestones the achievement of which is
generally dependent upon the customer and other third-parties. If installation
is delayed, then payments and revenue recognition will also be delayed.  Any
failure by the Company to install its clinical information systems on a timely
basis could have a material adverse effect on the Company's business,
financial condition and results of operations.

INTERNATIONAL SALES.  The Company has licensed clinical information systems to
customers located outside of the United States and expects to continue
marketing its systems to foreign customers. In 1994 and 1995, revenues from
international customers were immaterial, however, revenues from international
customers accounted for approximately 4% of the total revenues in 1996.  The
Company anticipates that international revenues may account for a larger
percentage of total revenues in future  periods. The Company's operating
results may be subject to the risks inherent in international transactions,
including difficulties in staffing and managing foreign sales operations,
changes in regulatory requirements, exchange rates, tariffs or other barriers,
and other factors including dependence on third-party distributors and
installers of the Company's products.

POTENTIAL VARIABILITY IN QUARTERLY OPERATING RESULTS. The Company's quarterly
revenues and operating results have varied significantly in the past and are
likely to vary substantially from quarter to quarter in the future.  Quarterly
revenues and operating results may fluctuate as a result of a variety of
factors, including the following: the Company's long sales cycle; demand for
the Company's systems, applications and services, including variability in
demand, orders for and shipment of hardware; the number, timing and
significance of announcements and releases of system enhancements and new
applications by the Company and its competitors; the termination of, or a
reduction in, offerings of the Company's systems, applications and services;
the loss of customers due to consolidation in the health care industry; delays
in installations requested by customers or caused by other factors; the timing
of revenue recognition; the amount of backlog at the beginning of any
particular quarter; customer budgeting cycles and changes in customer budgets;
investments by the Company in marketing, sales, research and development, and
administrative personnel necessary to support the Company's anticipated
operations; marketing and sales promotional activities; software defects and
other system quality factors; and general economic conditions.  In particular,
the timing of revenue recognition can be affected by many factors, including
the timing of customer installation of the Company's systems.  As a result of
the relatively large size of each customer contract, combined with the
Company's method of revenue recognition, quarterly results are likely to be
significantly affected by small changes in the number of customer contracts in
process during a particular quarter.  There can be no assurance that the
Company will not experience delays in recognizing revenue in the future,
particularly considering the complexity and large scale of installations of
the Company's systems.  In addition, since purchase of the
Company's systems generally involves a significant commitment of capital, any
downturn in any potential customer's business or the economy in general,
including changes in the health care market, could have a material adverse
effect on the Company's business, financial condition and results of
operations.  Moreover, the Company's operating expense levels are relatively
fixed and, to a large degree, are based on anticipated revenues.  If revenues
are below expectations, net income is likely to be disproportionately affected.
Further, it is likely that in some future quarter the Company's unit sales
volume, revenue, backlog or operating results will be below the expectations of
public market analysts and investors.  In such event, the trading price of the
Company's Common Stock would likely be materially adversely affected.

                                      -21-
<PAGE>   21

HIGHLY COMPETITIVE MARKET.  Competition in the market for clinical information
systems and services is intense and is expected to increase.  The Company's
competitors include other providers of health care information systems and
services, and health care consulting firms.  The Company's principal
competitors include 3M Health Information Systems, Cerner Corporation, Epic
Systems Corporation, HBO & Company, HealthVISION, Inc. and Shared Medical
Systems Corporation.  Furthermore, other major health care information
companies not presently offering clinical information systems may enter the
Company's markets.  Increased competition could result in price reductions,
reduced gross margins, and loss of market share, any of which could materially
adversely affect the Company's business, financial condition and results of
operations. In addition, many of the Company's competitors and potential
competitors have significantly greater financial, technical, product
development, marketing and other resources and market recognition than the
Company.  Many of the Company's competitors also currently have, or may develop
or acquire, substantial installed customer bases in the health care industry.
As a result of these factors, the Company's competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements or to devote greater resources to the development, promotion and
sale of their products than the Company.  There can be no assurance that the
Company will be able to compete successfully against current and future
competitors or that competitive pressures faced by the Company will not
materially adversely affect its business, financial condition and results of
operations.

NEED TO MANAGE CHANGING OPERATIONS; DEPENDENCE UPON KEY PERSONNEL.  The
Company's anticipated future operations may place a strain on its management
systems and resources.  The Company expects that it will be required to
continue to improve its financial and management controls, reporting systems
and procedures, and will need to expand, train and manage its work force.
There can be no assurance that the Company will be able to effectively manage
these tasks, and the failure to do so could have a material adverse effect on
the Company's business, financial condition and results of operations.  The
Company intends to hire a significant number of additional installation,
research and development and sales personnel in 1997 and beyond.  Competition
for such personnel is intense, and there can be no assurance that the Company
will be able to attract, assimilate or retain additional highly qualified
employees in the future.  If the Company is unable to hire and retain such
personnel, particularly those in key positions, the Company's business,
financial condition and results of operations could be materially adversely
affected.  The Company's future success also depends in significant part upon
the continued service of its executive officers and other key sales, marketing,
development and installation employees.  The loss of the services of any of its
executive officers or other key employees could have a material adverse effect
on the Company's business, financial condition and results of operations.
Since acquisition of the Predecessor in May 1994, the Company has experienced
turnover in certain key positions of the Company and high turnover in general.
Additions of new and departures of existing personnel can be disruptive and
could have a material adverse effect on the Company's business, financial
condition and results of operations.

DEPENDENCE ON THIRD PARTY PRODUCTS.  The Company's systems are dependent upon a
number of third-party computer hardware and software products.  There can be no
assurance that financial or other difficulties experienced by third-party
providers will not have an adverse impact upon the technologies incorporated by
the Company's systems, or that, if such technologies become unavailable, the
Company will be able to find suitable alternatives.  In particular, both the
Gateway++ and Oacis Data Repository components of Oacis incorporate a Sybase
relational database.  Any significant failure by Sybase to meet the Company's
database requirements could have a material adverse effect on the Company's
business, financial condition and results of operations.  A decline in Sybase's
reputation could reduce the appeal of the Company's products to its potential
customers.  Although the Company believes that it can port Oacis to other
relational database platforms, such efforts would require substantial time and
investment and would have an adverse affect on the Company's operations,
including its ability to complete other product development.  In addition,
Oacis includes a number of embedded software products licensed from third
parties.  Failure of such third parties to maintain or enhance their products
could impair the functionality of Oacis and could require the Company to obtain
alternative products from other sources or to develop such software internally,
either of which could involve costs and delays as well as diversion of
engineering resources.  In addition, modifications or enhancements by these
third-party vendors often require that the Company modify its own software
products to operate with these enhancements or modifications.  There can be no
assurance

                                      -22-
<PAGE>   22
that the Company will be able to modify its own software to accommodate
third-party changes or that the effort to make such changes will not adversely
affect the Company's other development projects.

RISK OF SYSTEM DEFECTS; FAILURE TO MEET PERFORMANCE CRITERIA.  Systems as
complex as those offered by the Company frequently contain errors or failures,
especially when first introduced or when new versions are released.  Although
the Company conducts extensive testing, the Company has in the past released
systems that contain defects, has discovered software errors in certain of its
enhancements and applications after their introduction and, as a result, has
experienced delays in recognizing revenues and incurred higher than expected
operating expenses during certain periods in order to correct these errors.
The Company's systems are intended for use in a clinical health care setting,
to collect and display clinical information used in the diagnosis and treatment
of patients.  As a result, the Company expects that its customers and potential
customers have a greater sensitivity to system defects than the market for
software products generally.  In addition, customer contracts typically provide
that the Oacis system is warranted to meet certain performance criteria
concerning response time and system availability.  The Company also will
generally recommend hardware configurations that it believes will be adequate
to achieve user acceptable response time performance and system availability.
Failure of a customer's system to meet these performance criteria could
constitute a material breach under such contracts, and could delay revenue
recognition and require that the Company incur additional expense in order to
make the system meet these performance criteria or to purchase additional
hardware where the recommended hardware configurations have been determined to
be inadequate.  Although to date the Company has not experienced material
adverse effects resulting from any software errors or performance failures,
there can be no assurance that, despite testing by the Company and by current
and potential customers, errors or performance failures will not occur in new
enhancements or applications after commencement of commercial shipments,
resulting in loss of revenue or delay in market acceptance, diversion of
development resources, damage to the Company's reputation, or increased service
and warranty costs, any of which could have a material adverse effect upon the
Company's business, financial condition and results of operations.

LIMITED PROPRIETARY RIGHTS; RISK OF INFRINGEMENT.  The Company relies on a
combination of trade secrets, copyright and trademark laws, nondisclosure and
other contractual provisions to protect its proprietary rights.  The Company
has not filed any patent applications covering its technology or registered any
of its copyrights with state or federal agencies.  There can be no assurance
that measures taken by the Company to protect its intellectual property will be
adequate or that the Company's competitors will not independently develop
systems and services that are substantially equivalent or superior to those of
the Company.  Substantial litigation regarding intellectual property rights
exists in the software industry, and the Company expects that software products
may be increasingly subject to third-party infringement claims as the number of
competitors in the Company's industry segment grows and the functionality of
systems overlap.  Although the Company believes that its systems and
applications do not infringe upon the proprietary rights of third parties,
there can be no assurance that third parties will not assert infringement
claims against the Company in the future or that a license or similar agreement
will be available on reasonable terms in the event of an unfavorable ruling on
any such claim.  In addition, any such claim may require the Company to incur
substantial litigation expenses or subject the Company to significant
liabilities and could have a material adverse effect on the Company's business,
financial condition and results of operations.

PRODUCT LIABILITY.  The Company's clinical information systems provide clinical
information used by clinicians in the diagnosis and treatment of patients.  Any
failure by the Company's systems to provide accurate, reliable and timely
information, or to adequately protect the confidentiality of the information,
could result in claims against the Company.  The Company maintains insurance to
protect against claims associated with the use of its systems, but there can be
no assurance that its insurance coverage would adequately cover any claims
asserted against the Company.  A successful claim brought against the Company
in excess of its insurance coverage could have a material adverse effect on the
Company's business, financial condition and results of operations.  Even
unsuccessful claims could result in the Company's expenditure of funds in
litigation and diversion of management time and resources.  There can be no
assurance that the Company will not be subject to product liability claims that
will result in liability in excess of its insurance coverage, that the
Company's insurance will cover such claims or that appropriate insurance will
continue to be available to the Company in the future at commercially
reasonable rates.

                                      -23-
<PAGE>   23

GOVERNMENT REGULATION.  The United States Food and Drug Administration (the
"FDA") is responsible for assuring the safety and effectiveness of medical
devices under the Federal Food, Drug and Cosmetic Act.  Computer products are
subject to regulation when they are used or are intended to be used in the
diagnosis of disease or other conditions, or in the cure, mitigation, treatment
or prevention of disease, or are intended to affect the structure or function
of the body.  The FDA could determine in the future that predictive
applications of the Company's systems and applications make them clinical
decision tools subject to FDA regulation.  Medical devices are subject to
regulation by the FDA, which requires, among other things, premarket
notifications or approvals and compliance with labeling, registration and
listing requirements, good manufacturing practices and records and reporting
requirements.  Compliance with these regulations could be burdensome, time
consuming and expensive.  The Company also could become subject to future
legislation and regulations concerning the manufacture and marketing of medical
devices and health care software systems.  These could increase the cost and
time necessary to market new products and could affect the Company in other
respects not presently foreseeable.  The Company cannot predict the effect of
possible future legislation and regulation.

The confidentiality of patient records and the circumstances under which such
records may be released for inclusion in the Company's databases is subject to
substantial regulation by state governments.  These state laws and regulations
govern both the disclosure and use of confidential patient medical record
information.  Although compliance with these laws and regulations is
principally the responsibility of the hospital, physician or other health care
provider with access to the Company's information system, regulations governing
patient confidentiality rights are evolving rapidly.  Additional legislation
governing the dissemination of medical record information has been proposed at
both the state and federal level.  This legislation may require holders of such
information to implement security measures that may be of substantial cost to
the Company.  There can be no assurance that changes to state or federal laws
will not materially restrict the ability of health care providers to submit
information from patient records to the Company's systems.

RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS.  The Company may in the future
pursue acquisitions of complementary products, technologies or businesses.
Future acquisitions by the Company may result in potentially dilutive issuances
of equity securities, the incurrence of additional debt and amortization
expenses related to goodwill and other intangible assets, which could adversely
affect the Company's results of operations.  In addition, acquisitions involve
numerous risks, including difficulties in the assimilation of the operations,
products and personnel of the acquired company, the diversion of management's
attention from other business concerns, risks of entering markets in which the
Company has no direct prior experience, and the potential loss of key employees
of the acquired company.  There can be no assurance that the Company will ever
successfully complete an acquisition.

                                      -24-
<PAGE>   24
ITEM 7.          FINANCIAL STATEMENTS

Report of Independent Accountants

Consolidated Financial Statements:*

         Balance Sheets - December 31, 1996 and 1995

         Statements of Operations for the years ended December 31, 1996, 1995
         and 1994

         Statements of Shareholders' Equity for the years ended December 31,
         1996, 1995 and 1994

         Statements of Cash Flows for the years ended December 31, 1996, 1995
         and 1994

         Notes to Consolidated Financial Statements

*        Note:  Consolidated Financial Statements for 1996 and 1995 represent
the results of the Company whereas the consolidated financial statements for
1994 represent the combined results of the Company and the Predecessor.

(All other schedules are omitted because they are not applicable, not required
or the information required to be set forth therein is included in the
financial statements or in the notes thereto.)

                                      -25-
<PAGE>   25
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Oacis Healthcare Holdings Corp.

         We have audited the accompanying consolidated balance sheets of Oacis
Healthcare Holdings Corp. (the "Company") and its subsidiary as of December 31,
1996 and 1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1996 and
1995 and for the period from May 14, 1994 through December 31, 1994.  We have
also audited the accompanying statements of operations, stockholders' equity
and cash flows of Bell Atlantic Healthcare Systems, Inc. (a wholly-owned
subsidiary of Bell Atlantic Systems Group, Inc.) for the period from January 1,
1994 through May 13, 1994.  These financial statements are the responsibility of
the Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the financial statements audited by us present fairly,
in all material respects, the financial position of the Company at December 31,
1996 and 1995, and the results of operations and cash flows of the Company and
Bell Atlantic Healthcare Systems, Inc. for the periods described in the first
paragraph above, in conformity with generally accepted accounting principles.




PRICE WATERHOUSE LLP
San Jose, California
January 10, 1997

                                      -26-
<PAGE>   26
                        OACIS HEALTHCARE HOLDINGS CORP.

                          CONSOLIDATED BALANCE SHEETS
                   (Amounts in thousands, except share data)


<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                            ----------------------------------
                                                                               1996                    1995
                                                                               ----                    ----
<S>                                                                         <C>                     <C>
                                             ASSETS
Current assets:
    Cash and cash equivalents . . . . .  . . . . . . . . . . . . . . . . .   $   4,307               $   3,900
    Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .      18,834                       -
    Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . .       6,449                   5,105
    Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .         308                     327
                                                                             ---------               ---------
         Total current assets  . . . . . . . . . . . . . . . . . . . . . .      29,898                   9,332
Property and equipment, net  . . . . . . . . . . . . . . . . . . . . . . .       2,143                   2,296
Other assets, net  . . . . . . . . . . . . . . . . . . . . . . . . . . . .         671                     250
                                                                             ---------               ---------
         Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . .   $  32,712               $  11,878
                                                                             =========               =========


                              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .   $     620               $   1,725
    Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .       3,113                   2,652
    Unearned revenues  . . . . . . . . . . . . . . . . . . . . . . . . . .       2,325                   3,251
                                                                             ---------               ---------
         Total current liabilities   . . . . . . . . . . . . . . . . . . .       6,058                   7,628
                                                                             ---------               ---------
Long-term obligations  . . . . . . . . . . . . . . . . . . . . . . . . . .         669                   3,000
                                                                             ---------               ---------

Commitments (Note 13)

Stockholders' equity:
    Preferred Stock, $0.01 par value; 5,000,000 shares
    authorized; none issued or outstanding;
    (1995 - 10,400,000 authorized: 10,067,000 issued and outstanding)               --                     100
    Common Stock, $0.01 par value, 30,000,000 shares
    authorized; 10,064,000, shares issued and outstanding
    (1995 - 1,732,000) . . . . . . . . . . . . . . . . . . . . . . . . . .         101                      17

    Additional paid-in capital   . . . . . . . . . . . . . . . . . . . . .      47,905                  18,631
    Accumulated deficit  . . . . . . . . . . . . . . . . . . . . . . . . .     (21,871)                (17,298)
    Deferred stock compensation . . . . . . . . . . . .  . . . . . . . . .        (150)                   (200)
                                                                             ---------               ---------
    Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . .      25,985                   1,250
                                                                             ---------               ---------
         Total liabilities and stockholders' equity  . . . . . . . . . . .   $  32,712               $  11,878
                                                                             =========               =========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.

                                      -27-
<PAGE>   27
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (Amounts in thousands, except share data)


<TABLE>
<CAPTION>
                                                                    The Company                       Predecessor
                                                   ---------------------------------------------      -----------
                                                                                       May 14           January 1
                                                      Year Ended December 31,          through           through
                                                   ----------------------------     December 31,         May 13,
                                                      1996              1995             1994              1994
                                                      ----              ----             ----              ----
                                                                                                   |
<S>                                                <C>              <C>              <C>           |   <C>
Revenues:                                                                                          |
    Software licenses   . . . . . . . . . . . . .  $     7,887      $     3,388      $     1,371   |   $       938
    Installation and support services   . . . . .        6,626            5,825            2,551   |         1,312
    Third-party hardware and software   . . . . .        5,931            4,341            1,770   |         1,359
                                                   -----------      -----------      -----------   |   -----------
         Total revenues . . . . . . . . . . . . .       20,444           13,554            5,692   |         3,609
                                                   -----------      -----------      -----------   |   -----------
                                                                                                   |
Costs of revenues:                                                                                 |
    Software licenses   . . . . . . . . . . . . .          252              124               54   |            71
    Installation and support services   . . . . .        5,610            5,237            2,751   |         1,724
    Third-party hardware and software   . . . . .        4,519            3,759            1,687   |         1,592
                                                   -----------      -----------      -----------   |   -----------
         Total cost of revenues . . . . . . . . .       10,381            9,120            4,492   |         3,387
                                                   -----------      -----------      -----------   |   -----------
Gross profit  . . . . . . . . . . . . . . . . . .       10,063            4,434            1,200   |           222
                                                   -----------      -----------      -----------   |   -----------
Operating expenses:                                                                                |
    Sales and marketing   . . . . . . . . . . . .        5,614            4,874            1,605   |         1,196
    Research and development  . . . . . . . . . .        6,375            6,080            4,916   |         2,424
    General and administrative  . . . . . . . . .        3,491            2,681            2,418   |         1,238
                                                   -----------      -----------      -----------   |   -----------
         Total operating expenses . . . . . . . .       15,480           13,635            8,939   |         4,858
                                                   -----------      -----------      -----------   |   -----------
                                                                                                   |
Loss from operations  . . . . . . . . . . . . . .      (5,417)          (9,201)          (7,739)   |       (4,636)
                                                                                                   |
Interest income(expense), net   . . . . . . . . .          844            (123)            (235)   |         (102)
                                                   -----------      -----------      -----------   |   -----------
Net loss  . . . . . . . . . . . . . . . . . . . .  $   (4,573)      $   (9,324)      $   (7,974)   |   $   (4,738)
                                                   ===========      ===========      ===========   |   ===========

Pro forma:
Net loss per common and common
    equivalent share  . . . . . . . . . . . . . .  $    (0.48)      $    (1.22)
                                                   ===========      ===========
Weighted average number of common
    and common equivalent shares  . . . . . . . .    9,431,277        7,667,243
                                                   ===========      ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      -28-
<PAGE>   28
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   (Amounts in thousands, except share data)


<TABLE>
<CAPTION>

                                     Preferred Stock         Common Stock     Additional              Deferred       Total
                                     ---------------         ------------       Paid-in   Accumulated   Stock    Stockholders'
                                     Shares    Amount    Shares      Amount     Capital     Deficit  Compensation   Equity
                                     ------    ------    ------      ------     -------     -------  ------------   ------
<S>                                              <C>                  <C>       <C>        <C>          <C>         <C>
Balance at December 31, 1993  .                                   1             $ 41,343   $ (40,268)               $  1,075
Capital contribution  . . . . .                                                    9,990                               9,990
Net loss  . . . . . . . . . . .                                                               (4,738)                (4,738)
                                                         ---------   -----      --------   ---------                -------
Balance at May 13, 1994 . . . .                                   1             $ 51,333   $ (45,006)               $  6,327
                                                         ==========  ======     ========   =========                ========

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

Issuance of Series A
     Preferred Stock, net   . .      2,950,000   $   29                         $  5,222                            $  5,251
Issuance of Common Stock, net .                           1,327,000   $  13          570                                 583
Net loss  . . . . . . . . . . .                                                            $  (7,974)                (7,974)
                                    ----------   ------  ---------   -----      --------   ---------                -------
Balance at December 31, 1994  .      2,950,000       29   1,327,000      13        5,792      (7,974)                (2,140)

Issuance of Series A
     Preferred Stock, net . . .        838,000        8                            1,499                               1,507
Issuance of Series B
     Preferred Stock, net . . .      6,229,000       62                           10,875                              10,937
Issuance of Common  Stock, net                              377,000       3          167                                 170
Exercise of stock options . . .         50,000        1      28,000       1           98                                 100
Deferred stock compensation . .                                                      200                $(200)            -
Net loss  . . . . . . . . . . .                                                               (9,324)                (9,324)
                                    ----------   ------  ---------   -----      --------   ---------    -----       -------
Balance at December 31, 1995  .     10,067,000      100   1,732,000      17       18,631     (17,298)    (200)        1,250
                                    ----------   ------  ---------   -----      --------   ---------    -----       -------
Conversion of Series A Preferred
     Stock to Common Stock. . .    (3,838,000)      (38)  1,919,000      19           19                                 --
Conversion of Series B Preferred
     Stock to Common Stock. . .    (6,229,000)      (62)  3,115,000      31           31                                 --
Issuance of Common Stock, net .                           3,220,000      32       28,865                             28,897
Net loss  . . . . . . . . . . .                                                               (4,573)                (4,573)
Common Stock issued for services                              5,000
Exercise of stock options . . .                              28,000       1           12                                 13
Employee Stock Purchase Plan  .                              45,000       1          347                                348
Amortization of deferred
     stock compensation . . . .                                                                             50           50
                                    ----------   ------  ---------   -----      --------   ---------    -----       -------
Balance at December 31, 1996  .             --   $   --  10,064,000   $ 101     $ 47,905   $ (21,871)   $ (150)     $25,985
                                    ==========   ======  =========   =====      ========   =========    =====       =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      -29-
<PAGE>   29
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)


<TABLE>
<CAPTION>

                                                                    The Company                      Predecessor
                                                   --------------------------------------------      -----------
                                                                                       May 14          January 1
                                                      Year Ended December 31,          through          through
                                                   ----------------------------     December 31,        May 13,
                                                      1996              1995             1994             1994
                                                      ----              ----             ----             ----

<S>                                                <C>              <C>              <C>              <C>
Cash flows from operating activities:
Net loss  . . . . . . . . . . . . . . . . .        $    (4,573)      $   (9,324)      $   (7,974)      $   (4,738)
Adjustments to reconcile net loss to
    net cash used in operating activities:
    Depreciation and amortization   . . . .              1,164            1,535            1,174              514
    Stock compensation expense  . . . . . .                 50               --               --               --
    Acquired in-process research
       and development  . . . . . . . . . .                700               --            1,399               --
Changes in assets and liabilities:
    Accounts receivable, net  . . . . . . .             (1,344)          (1,129)           1,563            1,149
    Other assets  . . . . . . . . . . . . .                 15             (209)              46              112
    Accounts payable  . . . . . . . . . . .             (1,105)             515              690              176
    Accrued expenses  . . . . . . . . . . .                (92)           1,060              578             (703)
    Unearned revenues   . . . . . . . . . .               (926)           1,265             (286)             881
    Other liabilities   . . . . . . . . . .                 --               --               --             (629)
                                                   -----------      -----------      -----------      -----------
Net cash used in operating activities . . .             (6,111)          (6,287)          (2,810)          (3,238)
                                                   -----------      -----------      -----------      -----------

Cash flows from investing activities:
    Purchase of property and equipment  . .               (344)            (718)            (325)            (116)
    Purchase of short-term investments  . .            (22,769)              --               --               --
    Sale of short-term investments  . . . .              3,935               --               --               --
    Capitalized software development costs                (506)            (275)              --               --
    Acquisition of Bell Atlantic Healthcare
    Systems, Inc., net of cash acquired   .                 --               --           (2,498)              --
                                                   -----------      -----------      -----------      -----------
Net cash used in investing activities . . .            (19,684)            (993)          (2,823)            (116)
                                                   -----------      -----------      -----------      -----------

Cash flows from financing activities:
Net proceeds from Common Stock
    issuance  . . . . . . . . . . . . . . .             28,897              170              583               --
Net proceeds from Preferred Stock
    issuance  . . . . . . . . . . . . . . .                 --           12,444            5,251               --
Proceeds from employee stock purchase plan                 348               --               --               --
Proceeds from options exercises . . . . . .                 13              100               --               --
Principal payment on note payable . . . . .             (4,000)          (1,735)              --               --
Payments under capital leases . . . . . . .                (56)              --               --               --
Proceeds from notes payable . . . . . . . .              1,000               --               --               --
Proceeds from borrowings from affiliate . .                 --               --               --           (6,636)
Capital contributions from parent . . . . .                 --               --               --            9,990
                                                   -----------      -----------      -----------      -----------
Net cash provided by financing
    activities  . . . . . . . . . . . . . .             26,202           10,979            5,834            3,354
                                                   -----------      -----------      -----------      -----------
Increase in cash and cash equivalents . . .                407            3,699              201               --
Cash and cash equivalents,
    beginning of period   . . . . . . . . .              3,900              201               --                2
                                                   -----------      -----------      -----------      -----------
Cash and cash equivalents,
    end of period   . . . . . . . . . . . .        $     4,307      $     3,900      $       201      $         2
                                                   ===========      ===========      ===========      ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      -30-
<PAGE>   30
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


1.    DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

         Oacis Healthcare Holding Corp. (the Company) was incorporated in
Delaware on April 18,1994.  On May 14, 1994, the Company acquired 100% of the
outstanding common stock of Bell Atlantic Healthcare Systems, Inc. (a
wholly-owned subsidiary of Bell Atlantic Systems Group, Inc.) and renamed it
Oacis Healthcare Systems, Inc. (Oacis).  Prior to the acquisition of Oacis, the
Company had no substantive operations.  Through Oacis, the Company develops,
markets, licenses, installs and supports clinical information systems primarily
for major medical centers, hospitals and integrated healthcare networks.

         The Oacis acquisition was accounted for as a purchase with the
purchase price consisting of $2,710 in cash (including direct acquisition
costs), issuance of a $4,500 promissory note and issuance of warrants to
purchase 293,211 shares of the Company's Common Stock with an exercise price of
$0.44 per share.  At the acquisition date, the warrants were considered to have
nominal fair value.  The purchase price was allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed on the basis of
their fair values at the acquisition date.  Approximately $1,399 of the
purchase price was allocated to in-process research and development.  Because
such in-process technology had not reached the stage of technological
feasibility and had no alternative future use, the amount was immediately
charged to operations.

         The accompanying financial statements present the consolidated
accounts of the Company and Oacis for the years ended December 31, 1996, 1995
and the period from May 14, 1994 to December 31, 1994, after elimination of all
intercompany accounts and transactions, and the accounts of Bell Atlantic
Healthcare Systems, Inc. (the "Predecessor") for the period from January 1,
1994 to May 13, 1994.  The accompanying financial statements reflect the
historical cost bases under the periods of different ownership and the
segregation of operating activities for such periods.  See Note 14 -- Related
Party Transactions.


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         REVENUE RECOGNITION

         The Company's revenues consist of license fees for the perpetual use
of its software, installation revenues associated with installing and
configuring the software to meet specific customer needs, revenues from the
sale of third-party hardware and software, and ongoing support services.

         Revenues from contracts where Oacis is actively involved in the
installation of the system, which are primarily in the United States and
Canada, are recognized for software license fees and installation services
under the percentage of completion method using labor hours incurred as a
measure of progress toward completion.  Revenues recognized in advance of
achieving billing milestones are recorded as unbilled accounts receivable and
collections resulting from billing milestones achieved in advance of
recognizing revenues are recorded as unearned revenues on the consolidated
balance sheet.  Provisions for contract adjustments and losses are recorded in
the period such items are identified.

         Software license revenues from contracts where Oacis is not actively
involved in the installation of the system, primarily international contracts,
are typically recognized as contract amounts become due and payable on

                                      -31-
<PAGE>   31
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


a milestone basis.

         The Company also recognizes revenues from support fees and sales of
third-party hardware and software.  Support agreements generally cover a one
year period and the associated revenues are recognized ratably over the period
of the support agreement.  Third-party hardware and software revenues are
recognized upon delivery of the related hardware and software.

         CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

         All highly liquid investments with a maturity of three months or less
when purchased are considered to be cash equivalents and those with maturities
greater than three months are considered short-term investments.

         The Company has classified all short-term investments as
available-for-sale in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities".  At December 31, 1996, the estimated fair value of the
investments approximated cost, and the amounts of gross unrealized gains and
losses were not significant.

         UNBILLED ACCOUNTS RECEIVABLE

         Unbilled accounts receivable represent the amount of licensing and
installation fees for delivered products and services recognized as revenue
under the percentage-of-completion method but not yet billed to the customer.
Unbilled accounts receivable are billable and collectible by the Company within
one year in accordance with contract provisions.

         PROPERTY AND EQUIPMENT

         Property, equipment and leasehold improvements are recorded at cost.
Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets which range from three to four years.  Amortization
of leasehold improvements is calculated using the straight-line method over the
shorter of the remaining economic life or the lease term.  Additions and
improvements are capitalized, while repairs and maintenance are charged to
expense as incurred.

         SOFTWARE DEVELOPMENT COSTS

         Software development costs not qualifying for capitalization are
expensed as research and development costs.  Capitalized costs are amortized on
a product-by-product basis in accordance with SFAS No. 86.  The Company
evaluates the estimated net realizable value of each software product at each
balance sheet date and records a write-down to net realizable value for any
products for which the net book value is in excess of net realizable value
in the future.

The Company capitalized $506 and $275 of software development costs in 1996 and
1995, respectively.  No software development costs were capitalized in 1994.
Capitalized software development costs arise from the development of certain
components of the Oacis Healthcare Network and are being amortized on a
straight-line basis over the estimated future life of these products. During
the year ended December 31, 1996, 1995 and the period from January 1, 1994
through May 13, 1994, amortization of software development costs totaled $89,
$25 and $36, respectively.

                                      -32-
<PAGE>   32
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


         INCOME TAXES

         The provision for income taxes is calculated in accordance with SFAS
No. 109, "Accounting for Income Taxes." Under SFAS No. 109, a current tax
liability or asset is recognized for the estimated taxes payable or refundable
on tax returns for the current period.  A deferred tax liability or asset is
recognized for the estimated future tax effects attributable to temporary
differences between the carrying amount and tax bases of assets, liabilities
and tax carryforwards.  The measurement of deferred tax assets is reduced, if
necessary, by the amount of any tax benefits that, based on available evidence,
are not expected to be realized.

         For the period from January 1, 1994 through May 13,1994, Bell Atlantic
Healthcare Systems, Inc. was included in the federal consolidated tax returns
of Bell Atlantic Systems Group, Inc. and was allocated income tax benefits
under an intercompany tax sharing arrangement.  The tax provision for these
periods have been computed on a separate return method in accordance with SFAS
No. 109 and the differences between such provisions and the amounts allocated
have been reflected as capital contributions.

         PRO FORMA NET LOSS PER SHARE

         Pro forma net loss per share is computed using the weighted average
number of common and common equivalent shares outstanding during the period.
Common equivalent shares, consisting of stock options and warrants (using the
treasury stock method), are excluded from the computation if their effect is
anti-dilutive.

         Prior to May 17, 1996, the effective date of the Company's initial
public offering, common equivalent shares consisting of Preferred Stock (using
the if-converted method), and stock options and warrants (using the treasury
stock method) are anti-dilutive and excluded from the weighted average share
computation, except that pursuant to a Securities and Exchange Commission Staff
Accounting Bulletin, shares of Common Stock and common stock equivalents issued
within 12 months prior to the Company's initial public offering have been
included in the computation as if they were outstanding for each period
presented.

         Net loss per share for periods prior to December 31, 1995, have not
been presented since such amounts are not deemed meaningful due to the change
in ownership of Oacis on May 13, 1994, and the significant change in the
Company's capital structure that occurred in connection with the initial public
offering.

         CONCENTRATION OF CREDIT RISK

         Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of bank deposits,
short-term investments and accounts receivable.  The Company places its cash
and cash equivalents and short-term investments primarily in checking and money
market accounts, certificates of deposits, United States treasury bills and
high grade corporate instruments.  The Company's accounts receivable are
derived from revenues earned from customers located primarily in the United
States and Canada.  The Company performs ongoing evaluations of its customers'
financial condition and maintains an allowance for doubtful accounts based upon
the expected collectibility.

         During 1996, two customers accounted for 17% and 11%, respectively, of
the Company's revenue and at December 31, 1996, these customers accounted for
5% and 7%, respectively, of total receivables.  One additional

                                      -33-
<PAGE>   33
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


customer accounted for 10% of total receivables at December 31, 1996.

         STOCK BASED COMPENSATION

         In October 1995, the Financial Accounting Standards Board issued
SFAS No. 123 "Accounting for Stock Based Compensation" which establishes a
fair value based method of accounting for stock-based compensation, also
permits an election to continue following the accounting requirements of APB
Opinion No. 25, "Accounting for Stock Issued to Employees," with disclosures of
pro forma net income and net income per share under the new method.  The
Company has elected to continue accounting for stock-based compensation in
accordance with APB No. 25 and has included the disclosure provisions of SFAS
No. 123 in the footnotes to the consolidated financial statements.

         USE OF ESTIMATES

         The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenue and
expenses.  Significant estimates used in the preparation of these financial
statements include those relating to the percentage-of-completion of
installations in process which determine revenue recognition during the
reporting period as well as estimates relating to the capitalization and
related amortization of software development costs.  The estimate of a product's
useful life and its net realizable value may be affected by increased
competitive pressures and developing technologies.  These factors could result
in a significant reduction in the amount of capitalized software development
costs in the future.

         NEW ACCOUNTING PRONOUNCEMENTS

         In March 1997, the Financial Accounting Standards Board issued
SFAS No. 128, "Earnings per Share" and SFAS No. 129, "Disclosure of
Information about Capital Structure".  The Statements are both effective for
periods ending after December 15, 1997. The Company has not yet determined the
impact on its consolidated financial statements.

         RECLASSIFICATION

         Certain balance sheet items have been reclassified to conform with
current year presentation.

                                      -34-
<PAGE>   34
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


3.    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         Cash paid for interest for the years ended December 31, 1996 and 1995
was $149 and $253, respectively.  There was no cash interest paid in 1994.

         NONCASH FINANCING ACTIVITIES

         Equipment purchased under capital lease obligations for the year ended
December 31, 1996 was $578.

         During 1994, in conjunction with the Oacis acquisition, assets
acquired and liabilities assumed were as follows:

<TABLE>
         <S>                                                                                  <C>
         Fair value of assets acquired:
                 Tangible assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $   9,642
                 In-process research and development  . . . . . . . . . . . . . . . . . .         1,399
                 Cash paid from common stock and acquisition costs  . . . . . . . . . . .        (2,710)
                 Promissory note issued from common stock . . . . . . . . . . . . . . . .        (4,500)
                                                                                              --------
                          Liabilities assumed . . . . . . . . . . . . . . . . . . . . . .     $   3,831
                                                                                              =========
</TABLE>

         During 1994, $235 of accrued interest on the note payable to Bell
Atlantic Systems Group, Inc. was converted into note principal.


4.    ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:
<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                     ---------------------
                                                                                       1996         1995
                                                                                       ----         ----
    <S>                                                                              <C>          <C>
    Accounts receivable   . . . . . . . . . . . . . . . . . . . . . . . . . . .      $  4,288     $  4,035
    Unbilled accounts receivable  . . . . . . . . . . . . . . . . . . . . . . .         2,694        1,692
                                                                                     --------     --------
                                                                                        6,982        5,727
    Less:  Allowance for doubtful accounts  . . . . . . . . . . . . . . . . . .          (533)        (622)
                                                                                     --------     --------
                                                                                     $  6,449     $  5,105
                                                                                     ========     ========
</TABLE>

                                      -35-
<PAGE>   35
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


5.    PROPERTY AND EQUIPMENT

Property and equipment consist of the following:
<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                     ---------------------
                                                                                       1996         1995
                                                                                       ----         ----
    <S>                                                                              <C>          <C>
    Computer and office equipment   . . . . . . . . . . . . . . . . . . . . . .      $ 4,583      $  3,727
    Equipment and fixtures  . . . . . . . . . . . . . . . . . . . . . . . . . .          752           686
    Leasehold improvements  . . . . . . . . . . . . . . . . . . . . . . . . . .          568           568
                                                                                     -------      --------
                                                                                       5,903         4,981
    Accumulated depreciation and amortization   . . . . . . . . . . . . . . . .       (3,760)       (2,685)
                                                                                     -------      --------
                                                                                     $ 2,143      $  2,296
                                                                                     =======      ========
</TABLE>

         Included in property and equipment at December 31, 1996 is $578 of
computer and office equipment acquired under capital leases.  Depreciation
expense for the year ended December 31, 1996, 1995, and 1994 was $1,075, $1,510
and $1,174, respectively including $62 of amortization of capital leases in
1996.

6.    ACCRUED EXPENSES

Accrued expenses consist of the following:
<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                     ---------------------
                                                                                       1996         1995
                                                                                       ----         ----
    <S>                                                                              <C>          <C>
    Compensation and benefits   . . . . . . . . . . . . . . . . . . . . . . . .      $ 1,306      $  1,086
    Hardware and other contract-related   . . . . . . . . . . . . . . . . . . .          898           922
    Other   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          909           644
                                                                                     -------      --------
                                                                                     $ 3,113      $  2,652
                                                                                     =======      ========
</TABLE>


7.    LONG-TERM OBLIGATIONS

         TECHNOLOGY LICENSE

         In February 1996, the Company licensed technology from an independent
party that was incorporated into the Enterprise Member/Patient Index (EMPI), a
component of the Oacis Healthcare Network. Because the technology had not yet
reached technological feasibility at the date of license, and had no alternative
future use, the $700 license fee was charged to research and development
expense.

         The license fee is payable without interest at varying amounts through
June 1998, based upon the volume of Oacis contracts that include the EMPI
product.  Payment obligations through August 1997 total $400 and are included in
accrued expenses.  An additional $300 is due between September 1997 and August
1998 which is included in long-term obligations.

                                      -36-
<PAGE>   36
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


         NOTE PAYABLE

         In connection with the Oacis acquisition, the Company issued a $4,500
note payable to Bell Atlantic Systems Group, Inc.  Interest on the note was at
8% per annum payable quarterly and was secured by the Common Stock of Oacis.
At the completion of the Company's initial public offering in May, 1996, the
note was repaid.

8.    INCOME TAXES

         No provision for income taxes has been recorded for any of the periods
presented since the Company and its Predecessor incurred net operating losses
for tax purposes.

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                        --------------------
                                                                           1996        1995
                                                                           ----        ----
<S>                                                                     <C>          <C>
Deferred tax assets are comprised of the following:
    Net operating loss carryforwards  . . . . . . . . . . . . . .       $   8,300    $ 6,400
    Tax credit carryforwards  . . . . . . . . . . . . . . . . . .             620        200
    Non-deductible accruals   . . . . . . . . . . . . . . . . . .           1,490        830
    Depreciation  . . . . . . . . . . . . . . . . . . . . . . . .             240        110
                                                                        ---------    -------
                                                                           10,650      7,540
    Deferred tax valuation allowance  . . . . . . . . . . . . . .         (10,650)    (7,540)
                                                                        ---------    -------
                                                                        $      --    $    --
                                                                        =========    =======
</TABLE>

         Based on a number of factors including the lack of a history of
profits and the fact that the market in which the Company competes is intensely
competitive and characterized by rapidly changing technology, management
believes that there is sufficient uncertainty regarding the realizability of
deferred tax assets such that a full valuation allowance has been provided.

         At December 31, 1996, the Company had federal and California net
operating loss carryforwards of approximately $21,000 and $8,000, respectively,
which expire in varying amounts through 2011 and 2001, respectively.  The
difference between the federal and California net operating loss carryforwards
results primarily from apportionment and a 50 percent limitation on the
California loss carryforward amounts.

At December 31, 1996, federal net operating loss carryforwards and net deferred
tax assets include pre-acquisition net operating loss carryforwards of $3,200,
which expire in varying amounts through 2002.  Under the Tax Reform Act of 1986,
the benefit from net operating loss carryforwards are restricted by cumulative
ownership changes of 50 percent or more over a three-year period, as defined.
Due to cumulative changes in the Company's ownership, utilization of the
Company's pre-acquisition net operating loss carryforwards are subject to annual
limitation of approximately $400 a year. In addition, due to cumulative changes
in the Company's stock ownership from May 14, 1994 to the issuance of Series B
Preferred Stock in May 1995, approximately $9,340 of federal post-acquisition
operating losses and $2,141, of California post-acquisition operating losses may
also be subject to annual limitation.

                                      -37-

<PAGE>   37
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


9.    STOCKHOLDERS' EQUITY

         In May 1996, the Company completed its initial public offering of
3,220,000 shares of its Common Stock at a per share price of $10.00.  At
December 31, 1995, the Company's capitalization included 10,067,000 shares of
Series A and B Convertible Preferred Stock and 1,732,000 shares of Common
Stock.  The Series A and B Convertible Preferred Stock automatically converted
- at a ratio of 2 to 1 - into newly issued shares of Common Stock upon closing
of the Company's initial public offering.

10.    COMMON STOCK WARRANTS

         In connection with the Oacis acquisition, the Company issued warrants
to purchase 293,211 shares of Common Stock.  The warrants are exercisable at a
price of $0.44 per share and expire on May 13, 2000.  At the date of
acquisition, the exercise price of the warrants approximated the fair market
value of the underlying equity instruments.  In April 1996, the Company issued
warrants to purchase 19,133 shares of Common Stock at $7.84 per share in
connection with a capital lease arrangement and a secured loan agreement.  The
exercise price of these warrants, which expire in May 1998, approximated their
fair value at the date of issuance.

11.    STOCK COMPENSATION PLANS

In 1996, the Company adopted the 1996 stock option plan (the "1996 Plan") which
provides for the grant of incentive stock options to employees and nonstatutory
stock options and stock purchase rights to employees and consultants.  A total
of 850,000 shares of Common Stock have been reserved for issuance under the
1996 Plan, 432,750 of which are available for grant at December 31, 1996.  The
Company has also issued incentive stock options under prior option plans
referred to as the 1995 Plan and 1994 Plan.  There are no shares available for
grant under either the 1995 Plan or 1994 Plan.  The exercise price of options
granted under all of these Stock Compensation Plans is determined by the Board
of Directors and is generally not less than the fair market value of the stock
at the date of the grant.  Options granted under these plans are exerciseable
for periods not exceeding 10 years from the date of grant.  Options granted
under the 1995 Plan have an acceleration feature in the event of the sale of
the Company.

The Company's Director Stock Option Plan (the "Director Plan") provides each
nonemployee director with an option to purchase 10,000 shares of common stock.
In addition, on the first day following each annual meeting of stockholders,
each re-elected nonemployee director who has served as a Director for at least
six months will receive an option to purchase 2,500 shares of Common Stock.
The exercise price of all options granted under the Director Plan will be the
fair market value of the Company's Common Stock on the date of grant.  Options
granted under the Director Plan vest monthly over twelve months from the date
of grant.  A total of 200,000 shares of Common Stock have been reserved for
issuance under the Director Plan, 150,000 of which are available for grant at
December 31, 1996.

                                      -38-
<PAGE>   38
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


The Company's employee stock purchase plan (the "Purchase Plan") permits
eligible employees to purchase Common Stock through payroll deductions of up to
15% of an employee's compensation, up to a maximum of $21,250 for all purchases
ending within the same calendar year.  The price at which Common Stock will be
purchased under the Purchase Plan is equal to 85% of the fair market value of
the Common Stock on the first day of the applicable offering period or the last
day of the applicable purchase period, whichever is lower. A total of 250,000
shares of Common Stock have been reserved for issuance under the Purchase Plan,
204,676 of which are available for purchase at December 31, 1996.

         During 1995, the Company recorded $200 of deferred stock compensation
expense for the excess of the deemed fair market value over the exercise price
at the date of grant related to certain options granted in 1995.  The
compensation expense is being recognized over the option vesting period of four
years.  During 1996, the Company recognized $50 compensation expense related to
deferred stock compensation.

         During 1994, the Board of Directors granted non-qualified stock
options to purchase 58,600 shares of Preferred Stock and 26,340 shares of
Common Stock to certain members of the Company's management.  During 1995,
46,880 and 21,072 options to purchase Preferred Stock and Common Stock,
respectively, were exercised.  The remaining unexercised options expired during
1995.

      Stock option transactions under the 1994 Plan, the 1995 Plan, the 1996
Plan and the Director's Plan for the year ended December 31, 1996, 1995 and
the period from May 14, 1994 through December 31, 1994 are summarized below:

<TABLE>
<CAPTION>
                                                                                                Weighted
                                                                          Exercise         Average Exercise
                                                         Shares             Price                Price
                                                         ------             -----                -----
    <S>                                                <C>              <C>                     <C>
      Granted                                            348,185        $0.44                   $0.44
                                                         -------        -------                 -----
    Outstanding at December 31, 1994                     348,185        0.44                     0.44
      Granted                                            875,384        0.44 - 1.50              0.62
      Exercised                                           (4,587)       0.44                     0.44
      Canceled                                           (25,462)       0.44 - 1.50              0.57
                                                        --------        -------------            ----
    Outstanding at December 31, 1995                   1,193,520        0.44 - 1.50              0.57
      Granted                                            650,775        2.50 - 15.00             7.58
      Exercised                                          (27,946)       0.44                     0.44
      Canceled                                          (149,643)       0.44 - 6.70              1.38
                                                       ---------        -----------              ----
    Outstanding at December 31, 1996                   1,666,706        $0.44 - 15.00            3.31

    Options exercisable at December 31, 1996             648,992        $0.44 - 15.00           $1.58
</TABLE>

                                      -39-
<PAGE>   39
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


The following tables summarize information about stock options outstanding at
December 31, 1996:

                    Options Outstanding at December 31, 1996

<TABLE>
<CAPTION>
                                                                      Weighted
                                                                  Average Remaining       Weighted Average
          Range of Exercise Prices        Number Outstanding      Contractual Life         Exercise Price
          ------------------------        ------------------      ----------------         --------------
            <S>         <C>                   <C>                       <C>                   <C>
            $  0.44 -   $0.44                   898,457                 8.5                   $ 0.44
               1.50 -   2 .50                   150,907                 9.0                     1.58
               6.00 -   10.00                   568,092                 9.4                     7.36
              10.01 -   15.00                    49,250                 9.5                    14.09
                                              ---------
                                              1,666,706
                                              =========
</TABLE>

                    Options Exercisable at December 31, 1996

<TABLE>
<CAPTION>
                                                                  Weighted Average
          Range of Exercise Prices        Number Exercisable       Exercise Price
          ------------------------        ------------------       --------------
            <S>         <C>                     <C>                  <C>
            $  0.44 -   $0.44                   511,723              $ 0.44
               1.50 -   2 .50                    48,525                1.76
               6.00 -   10.00                    83,361                7.64
              10.01 -   15.00                     5,383               13.92
                                               --------
                                                648,992
                                               ========
</TABLE>

         Had compensation cost for the Company's 1996 Plan, 1995 Plan and 1994
Plan been determined based on the fair value at the grant dates, as prescribed
in SFAS 123, the net loss and pro forma net loss per share would have been as
follows:

<TABLE>
<CAPTION>
                                               December 31, 1996         December 31, 1995
                                               -----------------         -----------------
<S>                                               <C>                        <C>
Net Loss
         As reported                              $   4,573                  $  9,324
         Pro Forma                                $   5,095                  $  9,341
Pro Forma Net Loss Per Share
         As reported                              $    0.48                  $   1.22
         Pro forma                                $    0.54                  $   1.22
</TABLE>

        The Company calculated the fair value of each option grant on the date
of grant using the Black Scholes binomial pricing method with the following
assumptions: dividend yield at 0%; weighted average expected option term of 4
years; risk free interest rate of 5.25% to 6.6% and 5.63% to 6.77% for the year
ended December 31, 1996 and 1995, respectively.  The Company also assumed a
volatility factor of approximately 40% for the period subsequent to May 17,
1996, the date of its initial public offering.  The weighted average fair value
of options, granted during 1996 and 1995 was $7.58 and $0.62, respectively.
Additionally, the fair value of the shares granted under the Purchase Plan is
considered to have an immaterial impact on the calculation.

                                      -40-

<PAGE>   40
                        OACIS HEALTHCARE HOLDINGS CORP.

                                      AND

                     BELL ATLANTIC HEALTHCARE SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (Amounts in thousands, except share data)


12.    EMPLOYEE BENEFIT PLANS

         On May 14, 1994, the Company adopted the Oacis Healthcare Systems,
Inc. 401(k) Plan (the "401 (k) Plan") covering all eligible employees.  Under
the 401 (k) Plan provisions, participants may elect to contribute up to 15
percent of their salary, subject to statutorily prescribed annual limits, on a
tax deferred basis. The 401 (k) Plan permits, but does not require, employer
matching and profit sharing contributions.  All administrative expenses of the
401 (k) Plan are paid by the Company.  During 1996, the Company contributed $46
to the 401 (k) Plan.


13.    COMMITMENTS

         The Company leases its office facilities under noncancelable operating
lease agreements which expire in February 1998 and certain computer and office
equipment under capital leases which expire through July 2000.  Future minimum
payments under noncancelable operating leases and capital leases as of December
31, 1996 are as follows:
<TABLE>
<CAPTION>
                                                                            Operating         Capital
                                                                              Leases           Leases
                                                                              ------           ------
           <S>                                                               <C>              <C>
           1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $  1,008         $    190
           1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . .           193              190
           1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --              186
           2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . .            --               27
                                                                             --------         --------
           Total Minimum Lease Payments . . . . . . . . . . . . . . . .      $  1,201              593
                                                                             ========
           Less amount representing interest  . . . . . . . . . . . . .                            (71)
           Amount due within one year . . . . . . . . . . . . . . . . .                           (153)
                                                                                              --------
           Present value of future minimum lease payments,
              less amounts due within one year  . . . . . . . . . . . .                       $    369
                                                                                              ========
</TABLE>

         Rent expense under noncancelable operating leases totaled $1,096 and
$1,133 for the year ended December 31, 1996 and 1995, $687 for the period from
May 14, 1994 through December 31, 1994, and $378 for the period from January 1,
1994 through May 14, 1994.  In March 1997, the Company entered into a lease in
anticipation of the relocation of its corporate headquarters.  Rent under this
lease is expected to commence in early 1998 when the facility is ready for
occupancy.

14.    RELATED PARTY TRANSACTIONS

         During the period from January 1, 1994 through May 13, 1994, Bell
Atlantic Systems Group, Inc. provided a working capital line of credit to Bell
Atlantic Healthcare Systems, Inc. and charged interest of $102.

         During the period from January 1, 1994 through May 13, 1994, capital
contributions totaled $9,990 from Bell Atlantic Systems Group, Inc.,
including $9,158 for working capital and $832 for intercompany tax benefits.

                                      -41-
<PAGE>   41
ITEM 8.          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                 FINANCIAL DISCLOSURE


         NOT APPLICABLE

                                      -42-
<PAGE>   42
                                    PART III

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

         Information concerning the directors and executive officers of the
Company is incorporated by reference to the sections entitled "Proposal No. 1:
Election of Directors - Nominees" and "Management - Executive Officers"
contained in the Company's definitive proxy statement with respect to the
Company's 1997 Annual Meeting of Stockholders to be filed with the Securities
and Exchange Commission not later than 120 days after the end of the fiscal
year covered by this form 10-KSB (the "Proxy Statement").  Information
concerning compliance with Section 16(a) of the Exchange Act of 1934 is
incorporated by reference to the section entitled "Compliance with Section
16(a) of the Exchange Act" contained in the Company's Proxy Statement.


ITEM 10.         EXECUTIVE COMPENSATION

         Information concerning executive compensation is incorporated by
reference to the sections entitled "Proposal No. 1: Election of Directors -
Director Compensation," "Management - Summary Compensation Table," "Management
- Option Grants in Last Fiscal Year," "Management - Aggregated Option Exercises
in Last Fiscal year and Fiscal Year-End Option Values" and "Management -
Employment Agreement" contained in the Company's Proxy Statement.


ITEM 11.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information concerning the security ownership of certain beneficial
owners and management is incorporated by reference to the section entitled
"Information Concerning Solicitation and Voting - Security Ownership of Certain
Beneficial Owners and Management" contained in the Company's Proxy Statement.


ITEM 12.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information concerning certain relationships and related transactions
is incorporated by reference to the section entitled "Certain Transactions"
contained in the Company's Proxy Statement.

ITEM 13.         EXHIBITS AND REPORTS ON FORM 8-K

                 (a)      Exhibits:
                          3.1*    Certificate of Incorporation of Registrant
                          3.2x    Bylaws of Registrant.
                          4.1+    Form of Common Stock certificate.
                          10.1+   1996 Stock Plan and form of agreement
                                  thereunder.
                          10.2+   1996 Director Option Plan and form of
                                  option agreement thereunder.
                          10.3+   1996 Employee Stock Purchase Plan and form of
                                  subscription agreement thereunder.
                          10.4+   Form of Indemnification Agreement entered
                                  into between Registrant and its directors and
                                  executive officers.
                          10.5+   Restated Stockholders Agreement dated as of
                                  April 8, 1996 between the Registrant and
                                  certain stockholders.

                                      -43-
<PAGE>   43
                          10.6+   Lease dated August 30, 1990 for facilities
                                  located at 100 Drake's Landing Road,
                                  Greenbrae, California, together with related
                                  expansion and extension agreements and work
                                  agreements.
                          10.7+   Lease dated July 10, 1992 for facilities
                                  located in Atlanta, Georgia, together with
                                  an addendum thereto dated March 29, 1993.
                          10.8+   Employment Agreement dated May 17, 1995
                                  between Jim McCord and Oacis Healthcare
                                  Systems, Inc., a wholly-owned subsidiary of
                                  the Registrant ("Subsidiary").
                          10.9+   Master Lease Agreement and Equipment Schedule
                                  VL-1, each dated as of March 1, 1996, between
                                  Comdisco, Inc. and Subsidiary.
                          10.11+  Standard form of Software License Agreement
                                  for the Oacis System.
                          10.12   Lease dated March 19, 1997 for Facility
                                  located at 1101 5th Avenue, San Rafael,
                                  Marin County, California
                          11.1    Computation of Pro Forma Net Loss Per Share.
                          21.1+   Subsidiaries of the Registrant.
                          23.1    Consent of Independent Accountants
                          24.1    Power of Attorney (see page 45)
                          27.0    Financial Data Schedule.

*   Incorporated by reference to Exhibit 3.2 previously filed with the
    Company's Registration Statement on Form SB-2 (No. 333-02804-LA)
x   Incorporated by reference to Exhibit 3.3 previously filed with the Company's
    Registration Statement on Form SB-2 (No. 333-02804-LA)
+   Incorporated by reference to the same numbered exhibit previously filed with
    the Company's Registration Statement on Form SB-2 (No. 333-02804-LA)

         (b)     Reports on Form 8-K

                 No reports on Form 8-K were filed by the Company during the
                 three months ended December 31, 1996.

                                      -44-
<PAGE>   44
                                   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, in the City of
Greenbrae, California, on March 30, 1997.


                                        OACIS HEALTHCARE HOLDINGS CORP.

                                        By: /s/ Stephen Ghiglieri
                                        ---------------------------------
                                        Stephen Ghiglieri, Vice President of
                                        Finance and Administration, Chief
                                        Financial Officer and Secretary

                               POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jim McCord and Stephen Ghiglieri, and
each of them acting individually, as his attorney-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any and all
amendments to this Report, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

         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.

<TABLE>
<CAPTION>
                Signature                                          Title                                   Date
                ---------                                          -----                                   ----
<S>                                     <C>                                                          <C>

/s/ Jim McCord                          Chairman of the Board and Chief Executive Officer            March 30, 1997
-------------------------------------   (Principal Executive Officer)
Jim McCord

/s/ John Kingery                        President, Chief Operating Officer and Director              March 30, 1997
-------------------------------------
John Kingery

/s/ Stephen Ghiglieri                   Vice President of Finance and Administration, Chief          March 30, 1997
-------------------------------------   Financial Officer and Secretary (Principal Financial
Stephen Ghiglieri                       and Accounting Officer)
                                        Director


/s/ Alan W. Crites                      Director                                                     March 30, 1997
-------------------------------------
Alan W. Crites

/s/ David Dominik                       Director                                                     March 30, 1997
-------------------------------------
David Dominik

/s/ Fred Goad                           Director                                                     March 30, 1997
-------------------------------------
Fred Goad

/s/ Dennis Sisco                        Director                                                     March 30, 1997
-------------------------------------
Dennis Sisco

/s/ William H. Younger, Jr.             Director                                                     March 30, 1997
-------------------------------------
William H. Younger, Jr.
</TABLE>

                                      -45-