<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q


(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

    FOR THE QUARTER ENDED OCTOBER 31, 1997


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from  ___________  to  ___________


                        COMMISSION FILE NUMBER  0-13608

                          INNOSERV TECHNOLOGIES, INC.
            (Exact name of Registrant as specified in its charter)


            CALIFORNIA                                 95-3619990
 (State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                    Identification No.)


320 WESTWAY, SUITE 530, ARLINGTON, TEXAS                 76018
(Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code: (817) 468-3377


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

   At December 10, 1997, the Registrant had outstanding 3,009,395 shares of
its common stock, $.01 par value.

<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                                   FORM 10-Q
                               OCTOBER 31, 1997


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                               Page
                                                               ----
<S>                                                            <C>
PART I - FINANCIAL INFORMATION

     Item 1.  Financial Statements

          Consolidated Balance Sheets as of October 31, 1997
             and April 30, 1997                                 3

          Consolidated Statements of Operations for the
             three months ended October 31, 1997 and 1996       4

          Consolidated Statements of Operations for the six
             months ended October 31, 1997 and 1996             5

          Consolidated Statements of Cash Flows for the six
             months ended October 31, 1997 and 1996             6

          Notes to Consolidated Financial Statements            7


     Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations        10


PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings                                14

     Item 4.  Submission of Matters to a Vote of Security
          Holders                                              14

     Item 6.  Exhibits and Reports on Form 8-K                 14

SIGNATURES                                                     15

INDEX TO EXHIBITS                                              16

</TABLE>

                                      2
<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                     (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                        October 31,
                                                            1997        April 30,
                                                        (Unaudited)        1997
                                                        -----------     ---------
<S>                                                     <C>             <C>
ASSETS
Current Assets
 Cash and cash equivalents                               $  2,695       $  1,806
 Receivables                                                3,068          3,693
 Inventory:
  Spare parts and supplies, net                             4,547          4,484
  Inventory held for sale                                   1,041            772
 Prepaid expenses                                             251            453
                                                        -----------     ---------
  Total current assets                                     11,602         11,208

Capital equipment, net                                      3,802          4,491
Goodwill, net                                               3,316          3,392
Other assets                                                    7             11
                                                        -----------     ---------
                                                         $ 18,727       $ 19,102
                                                        -----------     ---------
                                                        -----------     ---------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
 Current portion of long-term debt                       $    657       $    629
 Accounts payable                                           4,271          3,658
 Accrued liabilities                                        1,762          2,224
 Deferred revenues                                          4,208          3,719
                                                        -----------     ---------
  Total current liabilities                                10,898         10,230

Long-term debt, less current portion                          155            479

Shareholders' Equity
 Preferred stock, $.01 par value:  5,000,000
  shares authorized; no shares issued                          --             --
 Common stock, $.01 par value:  10,000,000
  shares authorized; 5,035,833 issued                          51             51
 Paid-in capital                                           17,303         17,303
 Accumulated deficit                                       (9,680)        (8,961)
                                                        -----------     ---------
  Total shareholders' equity                                7,674          8,393
                                                        -----------     ---------
                                                         $ 18,727       $ 19,102
                                                        -----------     ---------
                                                        -----------     ---------
</TABLE>

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

                                       3
<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                October 31,
                                                         -----------------------
                                                            1997          1996
                                                         --------       --------
<S>                                                      <C>            <C>
Revenues:
 Service                                                 $  7,761       $  8,644
 Sale of parts and equipment                                1,446          2,040
                                                         --------       --------
 Total revenues                                             9,207         10,684

Costs:
 Cost of service                                            7,283          7,755
 Cost of parts and equipment                                  651          1,366
                                                         --------       --------
 Total cost of operations                                   7,934          9,121

  Gross profit                                              1,273          1,563

Depreciation and amortization                                 430            505
Selling and administrative expenses                         1,307          1,445
                                                         --------       --------

Loss from operations                                         (464)          (387)

Interest expense, net                                           3             69
                                                         --------       --------

Loss before income taxes                                     (467)          (456)

Provision for income taxes                                     --             --
                                                         --------       --------

Net loss                                                 $   (467)      $   (456)
                                                         --------       --------
                                                         --------       --------

Per share information:
 Net loss                                                $   (.09)      $   (.09)
                                                         --------       --------
                                                         --------       --------

Weighted average shares outstanding                         5,036          5,036
                                                         --------       --------
                                                         --------       --------
</TABLE>

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

                                       4
<PAGE>


                          INNOSERV TECHNOLOGIES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                     (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                            Six Months Ended
                                                               October 31,
                                                        ------------------------
                                                           1997           1996
                                                        ---------      ---------
<S>                                                     <C>            <C>
Revenues:
 Service                                                $  15,295      $  17,783
 Sale of parts and equipment                                3,056          4,689
                                                        ---------      ---------
 Total revenues                                            18,351         22,472

Costs:
 Cost of service                                           14,393         16,165
 Cost of parts and equipment                                1,142          2,979
                                                        ---------      ---------
 Total cost of operations                                  15,535         19,144

  Gross profit                                              2,816          3,328

Depreciation and amortization                                 824          1,016
Selling and administrative expenses                         2,691          3,299
                                                        ---------      ---------

Loss from operations                                         (699)          (987)

Interest expense, net                                          20             96
                                                        ---------      ---------

Loss before income taxes                                     (719)        (1,083)

Provision for income taxes                                     --             --
                                                        ---------      ---------

Net loss                                                $    (719)     $  (1,083)
                                                        ---------      ---------

Per share information:
 Net loss                                               $    (.14)     $    (.22)
                                                        ---------      ---------
                                                        ---------      ---------

Weighted average shares outstanding                         5,036          5,036
                                                        ---------      ---------
                                                        ---------      ---------
</TABLE>

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

                                       5
<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (In thousands)

<TABLE>
<CAPTION>

                                                             Six Months Ended
                                                                October 31,
                                                         ------------------------
                                                            1997          1996
                                                         ---------     ----------
<S>                                                      <C>           <C>
Cash flows from:
Operations -
Net loss                                                 $   (719)     $  (1,083)
Adjustments to reconcile net loss to
 net cash flows from operations:
  Depreciation and amortization                               824          1,016
  Changes in assets and liabilities:
   Receivables                                                625          1,025
   Inventory                                                 (332)         1,189
   Prepaid expenses                                           202            (68)
   Other assets                                                 3             37
   Accounts payable                                           613           (488)
   Accrued liabilities                                       (462)          (609)
   Deferred revenues                                          490           (542)
                                                         ---------    ----------
Net cash provided by operations                             1,244            477

Investments and acquisitions -
  Purchase of capital equipment                               (59)          (163)
                                                         ---------    ----------
Net cash used for investments and acquisitions                (59)          (163)

Financing activities -
  Borrowings from line of credit                               --            242
  Principal payments of long-term debt                       (296)          (331)
                                                         ---------    ----------
Net cash used for financing activities                       (296)           (89)
                                                         ---------    ----------


Net increase in cash and cash equivalents                     889            225

Cash and cash equivalents at beginning of period            1,806            941
                                                         ---------    ----------

Cash and cash equivalents at end of period               $  2,695      $   1,166
                                                         ---------    ----------
                                                         ---------    ----------
</TABLE>

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

                                       6

<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               OCTOBER 31, 1997
                                  (UNAUDITED)


1.   GENERAL

     The consolidated financial statements included herein have been prepared 
by InnoServ Technologies, Inc. ("InnoServ") without audit, include all 
adjustments which are, in the opinion of management, necessary for a fair 
presentation of the results of operations for the three months and six months 
ended October 31, 1997 and 1996, pursuant to the rules and regulations of the 
Securities and Exchange Commission, and include the accounts of InnoServ and 
its consolidated subsidiaries.  All significant intercompany accounts and 
transactions have been eliminated. Any and all adjustments made are of a 
normal and recurring nature in accordance with Rule 10-01(b)(8) of Regulation 
S-X. Certain information and footnote disclosures normally included in 
financial statements prepared in accordance with generally accepted 
accounting principles have been condensed or omitted pursuant to such rules 
and regulation, however, InnoServ believes that the disclosures in such 
financial statements are adequate to make the information presented not 
misleading.  These financial statements should be read in conjunction with 
InnoServ's annual report on Form 10-K for the fiscal year ended April 30, 
1997, filed with the Securities and Exchange Commission.  The results of 
operations for the six months ended October 31, 1997, are not necessarily 
indicative of the results that may be expected for the year ending April 30, 
1998.

     Certain reclassifications have been made in the prior year's 
consolidated financial statements to conform to the fiscal 1998 presentation.

2.   INTEREST EXPENSE, NET

     Interest expense is net of interest income of $18,000 and $8,000 for the 
three months ended October 31, 1997 and 1996, respectively.

     Interest expense is net of interest income of $34,000 and $23,000 for 
the six months ended October 31, 1997 and 1996, respectively.

3.   SUPPLEMENTAL CASH FLOW DISCLOSURE

     Interest and income taxes paid in the six months ended October 31, 1997 
and 1996 were as follows:

                                             Six Months Ended
                                               October 31,
                                          ---------------------
                                             1997        1996
                                          --------    ---------

       Interest                           $ 48,000    $ 124,000
       Income taxes                       $  5,000    $  53,000


                                      7
<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               OCTOBER 31, 1997
                                  (UNAUDITED)


4.   EARNINGS PER SHARE

     Earnings per share amounts are computed based upon the weighted average 
shares of common stock and common stock equivalents outstanding during each 
period.  Outstanding stock options are included as common stock equivalents 
using the treasury stock method.  If the computation of fully diluted 
earnings per share is anti-dilutive, only primary earnings per share amounts 
are presented.
                                       
5.    LONG-TERM DEBT

     On April 14, 1997 InnoServ entered into a new loan agreement with a bank 
pursuant to which amounts outstanding under InnoServ's prior revolving line 
of credit and term loan agreements with the bank were converted into a new 
term loan aggregating $1,198,000. Borrowings under the new term loan bear 
interest at the rate of prime (8.5% at October 31, 1997) plus 1% per annum. 
Monthly principal installments of $54,000 plus interest are required through 
January 8, 1999.  Obligations under the loan agreement are secured by a 
security interest in InnoServ's accounts receivable, inventory and capital 
equipment.  The loan agreement contains financial covenants including 
maintenance of certain financial ratios, net worth requirements and 
restrictions on future borrowings and payment of dividends.  As a result of 
the loss for the period, InnoServ failed to meet the net worth covenant under 
the loan agreement as of October 31, 1997. InnoServ's bank waived this event 
of default and has amended the net worth covenant effective October 31, 1997 
through the expiration date of the loan agreement of January 8, 1999.  
InnoServ was in compliance with the financial covenants, as amended, at 
October 31, 1997.

6.    SUBSEQUENT EVENT

     Pursuant to a Stock Purchase Agreement dated November 13, 1997 
("Agreement"), among InnoServ, a California corporation, MEDIQ Incorporated 
("MEDIQ") and MEDIQ Investment Services, Inc. ("MIS" and together with MEDIQ, 
collectively the "Seller"), each a Delaware corporation, InnoServ reacquired 
from Seller 2,026,438 shares of InnoServ's common stock ("Shares") and a 
warrant to purchase 325,000 shares of  InnoServ's common stock ("Warrant"). 
Such 2,026,438 shares represented approximately 40% of the then outstanding 
shares of common stock of InnoServ.  The Shares and Warrant had been issued 
to MEDIQ in connection with InnoServ's acquisition of MEDIQ Equipment and 
Maintenance Services, Inc., a wholly-owned subsidiary of MEDIQ, in August 
1994.


                                      8
<PAGE>

                          INNOSERV TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               OCTOBER 31, 1997
                                  (UNAUDITED)


      Under the terms of the Agreement, no cash payment was made for the 
reacquisition of the Shares and Warrant.  However, in the event of a change 
of control of InnoServ prior to April 1, 1998, Seller will be entitled to 
certain payments from the acquiring party as if 100% of the Shares remained 
outstanding.  In the event of a change of control of InnoServ from and after 
April 1, 1998 and through September 30, 1998, Seller will be entitled to 
certain payments as if 50% of the Shares remained outstanding.

     Additionally, in connection with the transaction, MEDIQ and InnoServ 
agreed to terminate certain continuing arrangements including the right to 
designate two directors.  Consequently, Thomas E. Carroll, President and 
Chief Executive Officer of MEDIQ, who had been serving at MEDIQ's 
designation, resigned from InnoServ's Board of Directors.  Michael Sandler, 
the former Chief Financial Officer of MEDIQ, who also had been serving at 
MEDIQ's designation, will continue as a director of InnoServ.


                                      9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

SECOND QUARTER FISCAL 1998 COMPARED TO SECOND QUARTER FISCAL 1997

     Consolidated revenues for the second quarter of fiscal 1998 were 
$9,207,000 as compared to $10,684,000 in the same period of fiscal 1997, a 
decline of $1,477,000, or 14 percent.  The decline in revenues is primarily 
attributable to a decrease of $1,200,000 resulting from the disposition of 
substantially all of the revenue producing assets of Advanced Imaging 
Technologies ("AIT"), a wholly owned subsidiary of InnoServ, on March 17, 
1997.  Revenues from computerized tomography ("CT") maintenance service 
agreements decreased approximately $650,000 primarily as a result of the 
continued decline in the number and average contract amount of CT maintenance 
service agreements in effect as older equipment is being upgraded or removed 
from service by customers and InnoServ's decision to not renew certain CT 
maintenance agreements in unprofitable locations. Offsetting these declines, 
revenues from comprehensive asset management services ("Asset Management") 
and multi-vendor services increased approximately $290,000 as InnoServ 
continues to focus on the growing market for these type services.  In 
addition, after taking into effect the disposal of AIT, sales of spare parts 
increased by approximately $170,000.

     Cost of operations decreased $1,187,000 from the same period in the 
prior fiscal year primarily as a result of the disposition of AIT.  As a 
percent of on-going revenues, cost of operations for the second quarter of 
1998 was 85%, unchanged from the same period of fiscal 1997.

     Selling and administrative expenses decreased $138,000, or 10 percent, 
from the prior year primarily as a result of reductions in InnoServ's 
administrative functions resulting from the disposal of AIT. Depreciation and 
amortization expenses decreased by $75,000 due to the completed depreciation 
of certain capital equipment and a change in the estimated remaining  life of 
certain other assets.

     The loss before income taxes for the second quarter of fiscal 1998 was 
$467,000 as compared to a loss of $456,000 in the second quarter of fiscal 
1997.  The loss for fiscal 1998 was primarily the result of unfavorable 
operating margins associated with InnoServ's maintenance business.  Because 
InnoServ employs field service engineers over a wide geographic area, the 
current level of revenues are not sufficient in certain locations to cover 
the direct and indirect costs of providing maintenance and repair services.

     In February 1997, the Financial Accounting Standards Board ("FASB") 
issued Statement of Financial Accounting Standards ("SFAS") No. 128, 
"Earnings per Share".  InnoServ is required to adopt SFAS No. 128 in the 
third quarter of fiscal 1998.  The adoption of this standard is not expected 
to materially impact InnoServ's earnings per share calculations. The adoption 
will have no impact on InnoServ's results of operations.


                                      10
<PAGE>

     In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive 
Income", and No. 131, "Disclosures about Segments of an Enterprise and 
Related Information."  SFAS No. 130 requires that an enterprise  report, by 
major component and as a single total, the change in its equity during the 
period from nonshareholder sources, and SFAS No. 131 establishes annual and 
interim reporting requirements for an enterprise's operating segments and 
related disclosures about its products and services, geographical areas in 
which it operates and major customers.  Both statements are effective for 
fiscal years beginning after December 15, 1997, with earlier application 
permitted. Adoption of these statements is not expected to materially impact 
InnoServ's consolidated financial position or statements of operations, 
shareholders' equity and cash flows. Effects of the adoption of these 
statements, if any, will primarily be limited to the form and content of 
InnoServ's disclosures.

SIX MONTHS FISCAL 1998 COMPARED TO SIX MONTHS FISCAL 1997

     Consolidated revenues for the first six months of fiscal 1998 were 
$18,351,000 as compared to $22,472,000 in the same period of fiscal 1997, a 
decline of $4,121,000, or 18 percent.  The decline in revenues is primarily 
attributable to a decrease of $2,900,000 resulting from the disposition of 
substantially all of the revenue producing assets of AIT on March 17, 1997.  
Revenues from CT maintenance service agreements decreased approximately 
$1,800,000 primarily as a result of the continued decline in the number and 
average contract amount of CT maintenance service agreements in effect as 
older equipment is being upgraded or removed from service by customers and 
InnoServ's decision to not renew certain CT maintenance agreements in 
unprofitable locations.  Offsetting these declines, revenues from Asset 
Management and multi-vendor services increased approximately $370,000 as 
InnoServ continues to focus on the growing market for these type services.   
In addition, after taking into effect the disposal of AIT, sale of spare 
parts increased by approximately $420,000.

     Cost of operations decreased $3,609,000 from the same period in the 
prior fiscal year, primarily as a result of the disposition of AIT and the 
decline in on-going revenues.  As a percent of on-going revenues, cost of 
operations for the first six months of 1998 was 85%, unchanged from the first 
six months of fiscal 1997.

     Selling and administrative expenses decreased $608,000, or 18 percent, 
from the prior year primarily as a result of reductions in InnoServ's 
administrative functions resulting from the disposal of  AIT and cost 
containment activities.  Depreciation and amortization expenses decreased 
$192,000 from fiscal 1997 due to the completed depreciation of certain 
capital equipment and a change in the estimated remaining life of certain 
other assets.

     The loss before income taxes for the first six months of fiscal 1998 was 
$719,000 as compared to a loss of $1,083,000 in the first six months of 
fiscal 1997.  The loss in fiscal 1998 was primarily the result of unfavorable 
operating margins associated with InnoServ's maintenance business.  Because 
InnoServ employs field service engineers over a wide geographic area, the 
current level of revenues are not sufficient in certain locations to cover 
the direct and indirect costs of providing maintenance and repair services.  
InnoServ is continuing to implement plans to reorganize its service 
operations to more cost effectively provide the services required by its 
customers and to discontinue service in selected locations upon the 
expiration of the existing maintenance agreements in those locations. 
InnoServ believes these actions, coupled with strategic changes it is making 
in the operations of the CT and Asset Management business and efforts to 
expand the revenue base, will improve InnoServ's operations.


                                      11

<PAGE>

     InnoServ did not recognize a tax benefit from the operating loss for the 
first six months of fiscal 1998.  Under SFAS No. 109,  "Accounting for Income 
Taxes", net operating losses enter into the calculation of deferred tax 
assets and liabilities.  At October 31, 1997, InnoServ had an estimated net 
deferred tax asset of $5,800,000, primarily as a result of net operating 
losses.  In accordance with SFAS No. 109, InnoServ recorded a valuation 
allowance for the full amount of the net deferred tax asset. The ultimate 
realization of the deferred tax asset depends on the ability of InnoServ to 
generate sufficient taxable income in the future. While InnoServ believes the 
deferred tax asset will be substantially realized by future operating 
results, due to the cumulative losses incurred in recent years the deferred 
tax assets do not currently meet the criteria for recognition under SFAS No. 
109.

LIQUIDITY AND CAPITAL RESOURCES

     At October 31, 1997, InnoServ had working capital of $704,000, of which 
$2,695,000 was in cash and cash equivalents.  Operations provided $1,244,000 
of cash for the six months ended October 31, 1997, primarily as a result of a 
$625,000 reduction in accounts receivable due to successful collection 
activities and lower revenues, an increase in accounts payable of $613,000 
due to the timing of cash disbursements, and an increase in deferred revenues 
of $490,000 as payments received for services to be provided exceeded 
services provided during the period.  These cash increases were offset by a 
reduction of accrued liabilities of $462,000 and an increase in inventory of 
$332,000 due to the purchase of spare parts and x-ray tubes required to 
service newer technology CT and magnetic resonance imaging scanners.  Cash 
provided by operations was used to fund $59,000 of capital equipment 
purchases  and $296,000 of principal payments of long-term debt during the 
period.

     InnoServ's allowance for doubtful accounts at October 31, 1997 was 
$851,000, or 22 percent of gross accounts receivable.  InnoServ's customers 
include hospitals, physician practices, outpatient clinics and 
entrepreneurial operations.  Some of these customers are thinly capitalized, 
operate on small margins and experience cash flow difficulties due to the 
lengthy time required to receive reimbursements from Medicare and insurance 
companies.  Factors impacting InnoServ's allowance for doubtful accounts 
include the changes occurring in the healthcare industry, primarily the move 
to managed care, which has weakened healthcare providers' ability to honor 
their debts and have forced some of the providers out of business.

     On April 14, 1997 InnoServ entered into a new loan agreement with a bank 
pursuant to which amounts outstanding under InnoServ's prior revolving line 
of credit and term loan agreements with the bank were converted into a new 
term loan aggregating $1,198,000. Borrowings under the new term loan bear 
interest at the rate of prime (8.5% at October 31, 1997) plus 1% per annum. 
Monthly principal installments of $54,000 plus interest are required through 
January 8, 1999.  Obligations under the loan agreement are secured by a 
security interest in InnoServ's accounts receivable, inventory and capital 
equipment.  The loan agreement contains financial covenants including 
maintenance of certain financial ratios, net worth requirements and 
restrictions on future borrowings and payment of dividends.  As a result of 
the loss for the period, InnoServ failed to meet the net worth covenant under 
the loan agreement as of October 31, 1997. InnoServ's bank waived this event 
of default and has amended the net worth covenant effective October 31, 1997 
through the expiration date of the loan agreement of January 8, 1999.  
InnoServ was in compliance with the financial covenants, as amended, at 
October 31, 1997.


                                      12

<PAGE>

     InnoServ does not foresee the need to make significant amounts of 
capital purchases in the next twelve months and believes sufficient funds 
will be available from its operations to meet its working capital 
requirements.  Should cash flows from operations not be sufficient to meet 
all of InnoServ's cash requirements, InnoServ would attempt to obtain a line 
of credit to provide the necessary funds.

CAUTIONARY STATEMENT

     The statements in this Management's Discussion and Analysis and 
elsewhere in this report that are forward looking are based on current 
expectations which involve numerous risks and uncertainties. InnoServ's 
future results of operations and financial condition may differ materially 
due to many factors including InnoServ's ability to attract and retain Asset 
Management contracts, competitive and regulatory conditions in the healthcare 
industry generally, and other factors, many of which are beyond the control 
of InnoServ.


                                      13

<PAGE>

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

       InnoServ is party to a lawsuit filed on April 12, 1995 in Superior 
Court in the County of Riverside, California, by two former employees who 
have claimed wrongful termination in retaliation for filing a claim with the 
U.S. Department of Labor.  The plaintiffs have sought damages in the amount 
of approximately $1,000,000 in the aggregate.  In July 1997, one of the 
plaintiffs accepted an offer of compromise made by InnoServ for significantly 
less than the damages sought by such plaintiff. InnoServ funded this 
settlement in early September 1997.  The amount of the settlement was accrued 
in a previous period and did not impact the earnings of the three months and 
six months ended  October  31, 1997. InnoServ continues to defend itself 
against the other plaintiff and believes the ultimate liability related to 
this matter will not exceed amounts currently accrued in the financial 
statements.

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

       The annual meeting of shareholders was held on September 15, 1997. At 
the annual meeting the shareholders elected directors to hold office until 
the 1998 annual meeting of shareholders and until their successors are 
elected and qualified.  The following directors were elected:

                                            VOTES CAST
                                    -------------------------
      DIRECTOR                         FOR           WITHHELD
     -------------------            ---------        --------

     Thomas E. Carroll              3,651,302          9,025
     Bernard J. Korman              3,651,902          8,425
     Michael G. Puls                3,651,902          8,425
     Dudley A. Rauch                3,651,902          8,425
     Michael M. Sachs               3,651,902          8,425
     Samuel Salen, M.D.             3,651,902          8,425
     Michael F. Sandler             3,651,302          9,025
     David A. Wegmann               3,651,902          8,425

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

     (a)    Exhibits:

     The information required by this portion of Item 6 is set forth in the 
Index to Exhibits beginning on page 16.

     (b)    Reports on Form 8-K:

     During the three months ended October 31, 1997 no reports were filed by 
the Registrant on Form 8-K.


                                      14
<PAGE>

                                 SIGNATURES



     Pursuant to the requirements 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.


                                   DATED:  December 10, 1997

                                   INNOSERV TECHNOLOGIES, INC.



                                   By:  /s/ Thomas Hoefert
                                      ------------------------
                                      Thomas Hoefert
                                      Vice President and Chief 
                                      Financial Officer
                                        (Duly Authorized Officer and
                                        Principal Financial and 
                                        Accounting Officer)



                                      15
<PAGE>

                               INDEX TO EXHIBITS

  Exhibit
    No.                      Description of Exhibit
    ---                      ----------------------

   10.1   Letter  Agreement of Employment dated September 10, 1997 by
          and between Registrant and Thomas E. Hoefert.
 
   10.2   Indemnity Agreement dated as of September 29, 1997 by and
          between Registrant and Thomas E. Hoefert.
 
   10.3   Bonus Agreement dated as of September 29, 1997 between
          Registrant and Thomas E. Hoefert.
 
   10.4   Letter Agreement dated December 5, 1997 amending the Loan
          Agreement dated as of April 14, 1997, by and between Registrant
          and Overton Bank & Trust, N.A.
 
   11.1   Computation of Per Share Earnings.
 
   27.1   Financial Data Schedule.

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